New Push for Tax on Online Sales

20130211-NEWS--0001-NAT-CCI-CD_-- 2/8/2013 6:36 PM Page 1

www.crainsdetroit.com Vol. 29, No. 6 FEBRUARY 11 – 17, 2013 $2 a copy; $59 a year

©Entire contents copyright 2013 by Crain Communications Inc. All rights reserved Page 3 New VC fund targets firms on the grow Beringea co-directs Revival under the radar on $180 million pot artists’ block near market BY TOM HENDERSON CRAIN’S DETROIT BUSINESS CRAIN’S PHOTO ILLUSTRATION/JEFF JOHNSTON, CDB* The formation of a $180 million MICHIGAN BUSINESS fund to invest in state companies looking to grow is expected to be formally announced today. Growing like a The Michigan Growth Capital Part- ners II LP will be co-managed by Farmington Hills-based Beringea Exit left LLC, the state’s largest venture capital firm, with $490 million under management, and Credit Suisse’s The business of pot, Page 11 New York City-based Customized With ‘War Room’ over, what’s Granholm’s next act? Fund Investment Group. The $180 million is from the This Just In BY CHRIS GAUTZ ambassador to Canada and for state of Michigan’s retirement sys- CAPITOL CORRESPONDENT Cabinet secretary positions in La- tem and follows an investment of TechTown, partners get $1M Her audience ... bor or Energy for President $150 million that the retirement Dressed in a military-style “ Barack Obama. system committed in 2008 to the to start tech exchange jacket, giving her liberal troops expected her to be a If Granholm, 54, does end up first Michigan Growth Capital Fund, their marching orders in last Detroit-based TechTown will with a post in the Obama admin- also co-managed by Beringea and fall’s presidential election, for- announce today that it and its firebrand to draw istration, it will be a return to the Credit Suisse. mer Gov. Jennifer Granholm en- partners, Bizdom and Invest De- type of traditional career path Officials at Beringea and Credit thusiastically urged her televi- troit, have received a $1 mil- blood at every many expected for her after being Suisse say they sion audience on “The War lion grant from the Michigan term-limited out as governor. hope to boost Room” to defeat the “enemy”: opportunity. Strategic Fund to launch the De- In fact, upon leaving Lansing the size of the Mitt Romney and the Republican ” troit Technology Exchange. in early 2011, Granholm did start second fund in Party. Craig Ruff, Public Sector Consultants The grant is expected to down that path — taking appoint- coming months “We’re going into battle here, lead to the creation of 15 comments to the boards of Dow Chemi- by bringing in people! Suit up and get ready to Her last show — which is end- panies and 25 jobs, the reten- cal Co. and the Fincantieri Marine other limited- roll out!” Granholm shouted. ing in the wake of Al Jazeera’s tion of 35 jobs and the genera- Group. She also joined the Pew partner in- Now Granholm herself is get- purchase of Current TV — was tion of nearly $900,000 in new Charitable Trusts’ clean energy pro- vestors. ting ready to roll out, but the des- Thursday. In the meantime, her investments. Charles Roth- tination is unclear. name has surfaced as a possible See Granholm, Page 30 stein, senior Plans for the exchange in- Rothstein managing direc- clude a 10-week summer boot *Foreground: AP photo by J. Scott Applewhite | Background: Google Image search camp to help college students tor at Beringea, said the fund learn how to launch tech- would consider companies across based companies, an execu- a broad range of industries. tive-in-residence program to “We’re pretty agnostic on indus- bring experienced entrepre- tries, but we do expect to do a fair neurs to Detroit who will help amount of deals in areas that mine underdeveloped intellec- New push for tax on online sales Michigan has a focus on, including tual property to create compa- advanced manufacturing, health nies, raise outside venture care and clean tech,” he said. The capital and place experienced fund also will look at retail compa- people in Detroit’s startups to Whether it can be collected is another question nies. help their development. Rothstein said a typical invest- BY SHERRI WELCH headquartered here or have a at the point of sale. Invest Detroit is affiliated ment would range between $3 mil- CRAIN’S DETROIT BUSINESS physical presence, such as a But can the state enforce the with Business Leaders for lion and $12 million. He said com- store. proposed regulations? Michigan and invests in pro- panies interested in getting capital Michigan could bring in tens of House Bill 4202 would expand The Michigan Department of Trea- jects or companies through a to grow should contact him at (248) millions of dollars in new sales that pool to include retailers who sury and Washington, D.C.-based variety of funds. Bizdom is a 489-9000 or at crothstein@ tax revenue if legislation intro- don’t have a direct physical pres- National Retail Federation aren’t creation of Dan Gilbert and beringea.com or Sean O’Donnell, a duced last week to level the play- ence in the state, but who work sure, given a 1992 U.S. Supreme serves as incubator in the principal in the Birmingham office ing field between brick-and- mor- with Michigan-based people and Court ruling that states do not Madison Building downtown of Credit Suisse, at (248) 792-6671 or tar and online retailers is passed. web affiliates who refer cus- have the authority to require re- to help turn interesting ideas sean.o’[email protected]. Currently, online retailers are tomers to the retailers’ websites mote sellers to collect sales tax into businesses. “We’re very collaborative, and only required to collect tax on for a fee. The retailers would be — Tom Henderson Michigan purchases if they are responsible for collecting the tax See Sales tax, Page 31 See VC, Page 29

Crain’s is seeking nominations for entrepreneurs Nominees will be judged for their innovation, problem-solving ability or sheer relentlessness. Additional categories include social entrepreneurs and entrepreneurial spirit.

NEWSPAPER Deadline: March 18 | www.crainsdetroit.com/nominate 20130211-NEWS--0001-NAT-CCI-CD_-- 2/8/2013 6:48 PM Page 1

® Cwww.crainsdetroit.comRAIN Vol. 29, No. 6 ’SDETROITFEBRUARY 2013 BUSINESS$2 a copy; $59 a year ©Entire contents copyright 2013 by Crain Communications Inc. All rights reserved Inside Michigan New VC fund Growing like a targets firms

The business of pot, Page 11 on the grow

Q&A: GR’s Mayor Heartwell Beringea co-directs on sustainability, Page 15 $180 million pot

BY TOM HENDERSON World Watch: PHOTO ILLUSTRATION/JEFF JOHNSTON, CDB* CRAIN’S DETROIT BUSINESS Spotlight on The formation of a $180 million fund to invest in state companies Michigan biz looking to grow is expected to be in the U.K., Page 16 formally announced today. The Michigan Growth Capital Part- ners II LP will be co-managed by Crain’s List Farmington Hills-based Beringea Exit left LLC, the state’s largest venture capital firm, with $490 million under Largest physician management, and Credit Suisse’s organizations, Page 22 New York City-based Customized With ‘War Room’ over, what’s Granholm’s next act? Fund Investment Group. The $180 million is from the This Just In BY CHRIS GAUTZ ambassador to Canada and for state of Michigan’s retirement sys- CAPITOL CORRESPONDENT Cabinet secretary positions in La- tem and follows an investment of TechTown, partners get $1M Her audience ... bor or Energy for President $150 million that the retirement Dressed in a military-style “ Barack Obama. system committed in 2008 to the to start tech exchange jacket, giving her liberal troops expected her to be a If Granholm, 54, does end up first Michigan Growth Capital Fund, their marching orders in last Detroit-based TechTown will with a post in the Obama admin- also co-managed by Beringea and fall’s presidential election, for- announce today that it and its firebrand to draw istration, it will be a return to the Credit Suisse. mer Gov. Jennifer Granholm en- partners, Bizdom and Invest De- type of traditional career path Officials at Beringea and Credit thusiastically urged her televi- troit, have received a $1 mil- blood at every many expected for her after being Suisse say they sion audience on “The War lion grant from the Michigan term-limited out as governor. hope to boost Room” to defeat the “enemy”: opportunity. Strategic Fund to launch the De- In fact, upon leaving Lansing the size of the Mitt Romney and the Republican ” troit Technology Exchange. in early 2011, Granholm did start second fund in Party. Craig Ruff, Public Sector Consultants The grant is expected to down that path — taking appoint- coming months “We’re going into battle here, lead to the creation of 15 comments to the boards of Dow Chemi- by bringing in people! Suit up and get ready to Her last show — which is end- panies and 25 jobs, the reten- cal Co. and the Fincantieri Marine other limited- roll out!” Granholm shouted. ing in the wake of Al Jazeera’s tion of 35 jobs and the genera- Group. She also joined the Pew partner in- Now Granholm herself is get- purchase of Current TV — was tion of nearly $900,000 in new Charitable Trusts’ clean energy pro- vestors. ting ready to roll out, but the des- Thursday. In the meantime, her investments. Charles Roth- tination is unclear. name has surfaced as a possible See Granholm, Page 30 stein, senior Plans for the exchange in- Rothstein managing direc- clude a 10-week summer boot *Foreground: AP photo by J. Scott Applewhite | Background: Google Image search camp to help college students tor at Beringea, said the fund learn how to launch tech- would consider companies across based companies, an execu- a broad range of industries. tive-in-residence program to “We’re pretty agnostic on indus- bring experienced entrepre- tries, but we do expect to do a fair neurs to Detroit who will help amount of deals in areas that mine underdeveloped intellec- New push for tax on online sales Michigan has a focus on, including tual property to create compa- advanced manufacturing, health nies, raise outside venture care and clean tech,” he said. The capital and place experienced fund also will look at retail compa- people in Detroit’s startups to Whether it can be collected is another question nies. help their development. Rothstein said a typical invest- BY SHERRI WELCH headquartered here or have a at the point of sale. Invest Detroit is affiliated ment would range between $3 mil- CRAIN’S DETROIT BUSINESS physical presence, such as a But can the state enforce the with Business Leaders for lion and $12 million. He said com- store. proposed regulations? Michigan and invests in pro- panies interested in getting capital Michigan could bring in tens of House Bill 4202 would expand The Michigan Department of Trea- jects or companies through a to grow should contact him at (248) millions of dollars in new sales that pool to include retailers who sury and Washington, D.C.-based variety of funds. Bizdom is a 489-9000 or at crothstein@ tax revenue if legislation intro- don’t have a direct physical pres- National Retail Federation aren’t creation of Dan Gilbert and beringea.com or Sean O’Donnell, a duced last week to level the play- ence in the state, but who work sure, given a 1992 U.S. Supreme serves as incubator in the principal in the Birmingham office ing field between brick-and- mor- with Michigan-based people and Court ruling that states do not Madison Building downtown of Credit Suisse, at (248) 792-6671 or tar and online retailers is passed. web affiliates who refer cus- have the authority to require re- to help turn interesting ideas sean.o’[email protected]. Currently, online retailers are tomers to the retailers’ websites mote sellers to collect sales tax into businesses. “We’re very collaborative, and only required to collect tax on for a fee. The retailers would be — Tom Henderson Michigan purchases if they are responsible for collecting the tax See Sales tax, Page 31 See VC, Page 29

1 Crain’s is seeking nominations for entrepreneurs Nominees will be judged for their innovation, problem-solving ability or sheer relentlessness. Additional categories include social entrepreneurs and entrepreneurial spirit.

NEWSPAPER Deadline: March 18 | www.crainsdetroit.com/nominate 71486 02858 0 20130211-NEWS--0002-NAT-CCI-CD_-- 2/8/2013 3:17 PM Page 1

Page 2 CRAIN’S DETROIT BUSINESS February 11, 2013

MICHIGAN BRIEFS American Axle expansion means etable production in Michigan slipped about 2 percent in 2012 from 500 more jobs in Three Rivers A bigger B.O.B.: Hot spot in downtown GR to expand 2011, while the combined value of Detroit-based American Axle & Man- the crop rose 3 percent. ufacturing Holdings Inc. plans to invest A popular downtown Grand Rapids entertain- Greg Gilmore, managing partner for The Gilmore Ⅲ Allegan-based Perrigo Co. more than $100 million at its plant in ment spot is set to embark on a new expansion and Collection, discussed his expansion ambitions for plans to acquire Yardley, Pa.- Three Rivers, south of Kalamazoo, renovation project. The B.O.B. in the June 13, 2011, issue of Crain’s based Velcera Inc., which makes pet the Kalamazoo Gazette reported. The B.O.B., a property of The Gilmore Collection, Michigan Business. health products, for $160 million in That project is expected to mean 500 announced last week that it was adding an Phase one of the project will include a renovation cash, the Grand Rapids Business more jobs, which would bring total “outdoor festival marketplace” and beer garden as of Gilly’s restaurant street-level space into a new ca- Journal reported last week. employment to about 1,300. part of a multimillion-dollar expansion project that sual restaurant set to debut July 1. Ⅲ Delphi Automotive PLC’s Flint The growth comes from new was also set to include new dining options and con- A later phase to be completed by June 1 next year East plant will close in November. product lines at the maker of driv- cert and event space with seating for up to 2,000 is expected to include the event space, beer garden The plant employs about 40 man- eline and drivetrain systems. The people. and piazza, featuring low-cost space that vendors agers and nearly 290 hourly work- Three Rivers plant, one of four The B.O.B., which stands for Big Old Building, is could rent as a way to test out a food business, for ex- ers. The instrument cluster work American Axle operations in across the street from Van Andel Arena and only a ample, according to a statement. done there is going to Mexico, UAW Michigan, saw its workforce drop short walk from DeVos Hall. — MiBiz officials told MLive.com. from 790 to 465 from 2008 to 2009. Ⅲ Bobby Mason, the founder of After an 87-day strike in the sum- Michigan Brewing Co., has taken the Judge Robert Jonker can increase In the long term, the develop- That means seven straight years of mer of 2008, UAW members in Webberville-based company into the award. Zimmer plans to appeal. ment of shale gas and oil is expect- growth. Alticor employs about Three Rivers made concessions Chapter 7 bankruptcy, the Lansing ed to fuel economic growth in the 5,000 in West Michigan, including during contract negotiations. State Journal reported. Court fil- region through lower energy costs. at plants in Ada and three hotels. ings indicate that the biggest indi- Despite low water levels, hopes That said, the lower water levels Ⅲ Dallas-based Southwest Airlines vidual losers were Mason’s par- Stryker wins $70M from Ind. firm are high for Great Lakes shipping of lakes Michigan and Huron could Inc. plans to double daily service to ents, Robert and Brenda, who lent at trial for patent infringement increase costs because ships would Gerald Ford International Airport in their son millions and lost it all, The Economist reported last be unable to carry full loads. Grand Rapids to six flights after said another son, Brian Mason. Warsaw, Ind.-based Zimmer Hold- week that “North America’s liquid Last week, the U.S. Army Corps of buying AirTran Airways and absorb- ings Inc. was told to pay $70 million superhighway” — what we call the Engineers Detroit District office ing its routes. The change takes ef- Find business news from to Kalamazoo-based Stryker Corp. St. Lawrence Seaway — “should said preliminary reports for fect Aug. 11. Southwest also will around the state at crainsdetroit for infringing on patents related to witness the greatest renewal of its Michigan and Huron show aver- absorb AirTran flights from Bishop .com/crainsmichiganbusiness. a Stryker device that removes shipping fleet in 30 years.” age January water levels were an International Airport in Flint. Sign up for Crain's Michigan damaged tissue and cleans bones About 30 ships are being built inch below the lowest monthly av- Ⅲ Figures from the U.S. Depart- Business e-newsletter at crains during joint replacement surgery, to handle the expected uptick in erage ever recorded since records ment of Agriculture indicate veg- detroit.com/emailsignup. Bloomberg News reported last shipping, said Craig Middlebrook, were kept beginning in 1918. week. deputy administrator of the St. The jury found that almost $255 Lawrence Seaway Development CORRECTION million of the $386 million in sales Corp., which operates the Ameri- MICH-CELLANEOUS Ⅲ Ⅲ A Q&A interview in the Feb. 4 edition with Matthew Elliott, presi- generated from Zimmer’s surgical can portion of the seaway. Amway parent Alticor Inc. last dent of the Michigan market for the Bank of America, should have said unit were based on the infringe- Middlebrook told the Economist week reported record global sales that J.P. Morgan Chase had $2.3 trillion in assets as of June 30. The arti- ment. The federal jury in Kalama- that American heavy manufactur- of $11.3 billion for 2012, compared cle also included an incorrect headquarters city for Auburn Hills- zoo also found the infringement ing, led by the auto industry, has with $10.9 billion in 2011, the Grand based George P. Johnson Co. was willful, meaning U.S. District kept shipping afloat. Rapids Business Journal reported.

The firm worth listening to is the firm that listens to you.SM UNIVERSITY OF MICHIGAN - ANN ARBOR CAMPUS POSITION DESCRIPTION SM EXECUTIVE DIRECTOR,DIVISION OF PUBLIC SAFETY AND SECURITY Talk to Foley. We’re listening. Position: The Executive Director of the Division of Public Safety and Security reports to the President of the University and is responsible for all security functions related to the University’s Ann Arbor campus, including the University of Michigan Police Department, the Hospitals and Health Centers Security Services, the Housing Security and Safety Services, the University Security Services, and other campus-wide security functions. The For 170 years, Foley has made it our mission to find Division of Public Safety and Security was created in October of 2012 to unify security functions that were out exactly what our clients want and deliver it. So previously embedded and reporting within different University vice presidential areas, in order to develop a more when our Detroit clients asked for local access to integrated approach to safety and security and to improve efficacy and consistency in incident response protocols and procedures, and to continue to build partnerships that support campus safety across the institution. The the strength of a national law firm, Foley recruited Executive Director will be responsible for continuing the development and implementation of this new division the city’s top talent to establish our Detroit office and which encompasses a staff of 310 and a budget of approximately $23.5 million. provide trusted local advisors who could leverage Experience: The successful candidate will have extensive organizational leadership and law enforcement our national resources. It’s one more reason Foley experience, with increasing levels of responsibility, and with demonstrated knowledge of, and ability to, implement best practices in a complex, multi-faceted organizational environment. Proven ability in leading organizational has been recognized as one of the elite BTI Client transformation, with capacity to effect change in the institutional culture and operations in a decentralized, multi- Service 30 for nine of the past 10 years in a survey* function environment; capacity to effectively lead a merged division and to promote shared understanding among of Fortune 1000 corporate counsel. diverse functional units. A bachelor’s degree is required; a master’s degree, or other advanced degree is preferred.

Search Firm: The University of Michigan has retained the executive search firm SJG-The Spelman & Johnson Learn more about how Foley can add value to your business. Contact Group to assist with the Executive Director, Division of Public Safety and Security Search Advisory Committee Detroit Ofﬁce Managing Partner Daljit S. Doogal at [email protected]. with this search. Mark Hall and Ellen Heffernan from SJG will be lead consultants on the search. For more information about SJG visit: www.spelmanandjohnson.com. Foley.com Applications and Nominations: Application review will begin March 5, 2013 and continue until the position is filled. A resume with an accompanying cover letter may be submitted via the SJG--Spelman and Johnson Group website at www.spelmanandjohnson.com under the link Open Positions. Nominations for this position may be emailed to Mark Hall at [email protected] or to Ellen Heffernan at [email protected]. If you are unable to submit materials electronically, please call SJG at 413-529-2895. The University of Michigan is an equal opportunity, affirmative action employer. #5*$MJFOU4FSWJDF"5FBN 5IF#5*$POTVMUJOH(SPVQ 8FMMFTMFZ ." Please visit http://www.umich.edu for more information about the University of Michigan and http://www.umich.edu/pres/committees/edpss.php for information regarding the search. #0450/t#3644&-4t$)*$"(0t%&530*5t+"$,40/7*--&t-04"/(&-&4 ."%*40/t.*".*t.*-8"6,&&t/&8:03,t03-"/%0t4"$3".&/50 4"/%*&(0t4"/%*&(0%&-."3t4"/'3"/$*4$0t4)"/()"*t4*-*$0/7"--&: 5"--")"44&&t5".1"t50,:0t8"4)*/(50/ %$

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February 11, 2013 CRAIN’S DETROIT BUSINESS Page 3 Medicaid Health Care expansion has skeptics in biz groups Long-term costs among concerns Accounting for ACOs, Page 17

BY JAY GREENE Company index AND CHRIS GAUTZ These companies have significant mention in this CRAIN’S DETROIT BUSINESS week’s Crain’s Detroit Business: While small-business groups in 1xRun ...... 32 Michigan support Gov. Rick Sny- 2:1 ...... 32 AAA Hydroponics ...... 12 der’s budget proposal to expand A123 Systems ...... 24 Medicaid to at least 500,000 unin- ARA HOWRANI Arboretum Ventures ...... 29 sured people in 2014, two of the Sculptor Lois Teicher (left) has worked in the six-story Atlas building near Eastern Market since 1983. Artist Bethany Atomic Object ...... 4 state’s largest business associa- Shorb has had a studio there since 2002. Both enjoy being part of an arts community centered on the brick Service Street. Beringea ...... 1, 16, 29 tions — the Detroit Regional Cham- Bingo Pet Salon ...... 4 Bissell Homecare ...... 16 ber and Business Leaders for Michi- Blue Cross Blue Shield of Michigan ...... 25 gan — haven’t taken a position. Bonai International ...... 4 If the state Legislature approves, Business Leaders for Michigan ...... 3 Michigan could receive $2 billion Center for Healthcare Research & Transformation . 31 in federal funds over the next 10 Ciena Healthcare Management ...... 21 Clark Hill ...... 11, 31 years to finance the newly Medic- Compuware ...... 16 aid-eligible. From 2014 to 2016, the Renaissance Credit Suisse ...... 1, 29 federal government will pay 100 Cyberoptix ...... 33 percent of the costs, a number that Detroit Institute of Arts ...... 10 will drop slowly to 90 percent by Detroit Medical Center ...... 21 Detroit Regional Chamber ...... 3 2022. Detroit Zoo ...... 10 But Republican leaders in the Eagle Ottawa ...... 16 Michigan House and Senate have Eastern Market ...... 3 expressed skepticism about the Edwards Brothers ...... 16 artists Florence Cement ...... 24 long-term costs to the state of expanding Medicaid. About 1.9 mil- Ford Motor ...... 16 ForeSee Results ...... 16 lion people, or 20 percent of the Creative community revives overlooked block near Eastern Market Fourteen-Eighty Gratiot Gallery ...... 32 state’s population, already receive General Motors ...... 16 health insurance from Medicaid, George P. Johnson Co...... 16 which now costs the state $12.75 bil- BY GARY ANGLEBRANDT Russell Eastern That’s understandable. Most of Glencoe Capital Michigan ...... 29 SPECIAL TO CRAIN’S DETROIT BUSINESS the block’s Gratiot-facing façades Good Guy Electric ...... 32 lion of its $51 billion fiscal 2013-14 Jay Market Orleans Guardian Industries ...... 16 budget. have looked dormant for years. Turnover of buildings on one But that’s changing. Of the 13 Henry Ford Health System ...... 21 Last week, Snyder became the Herman Miller ...... 16 block of Gratiot Avenue has set buildings on the block, six have sixth Republican governor, and Fisher Fwy. Gratiot Hort Services ...... 12 the stage changed hands in the past three IAC Group ...... 16 Michigan the 21st state, to back ex- Artists own or for a trans- years. A seventh was sold in 2006. Lear ...... 29 panding Medicaid, a key provision LOSER LOOK live in most of C formation The six recent sales went to Medical Network One ...... 19 under the Patient Protection and the 13 buildings Service See the buildings, of an area on this block. artists or businesses engaged in MediSwipe ...... 11 Affordable Care Act. Last summer, Antietam meet the residents, familiar to the arts — a fitting takeover for a Meritor ...... 16 the U.S. Supreme Court upheld the Pages 32, 33 CDB Michigan AIDS Coalition ...... 21 health reform act and ruled Medi- anyone block that’s harbored artists and Michigan Business and Professional Association . . 31 Russell Street lining its western caid expansion was up to individ- who regu- their studios since the 1970s. All Michigan Cannabis Physicians Group ...... 13 flank. Most visitors probably pay Michigan Infrastructure and Transportation Assn. . 24 ual states. larly visits Eastern Market for but a handful of buildings in the it little mind, other than to con- Michigan Pioneer ACO ...... 17 Eleven Republican governors weekend shopping or Detroit Lions block have artists as owners, ten- tailgating. trast the daytime bustle on one ants or both. Michigan Retailers Association ...... 31 have said their states will not ex- MSX International ...... 16 The block is across the street side of the street with the appar- Oakwood ACO ...... 17 See Medicaid, Page 31 from Gratiot Central Market, with ent emptiness of the other. See Artists, Page 32 O’Connor Realty Detroit ...... 32 Oxford Inn ...... 4 ReapSo ...... 4 Renaissance Venture Capital Fund ...... 29 Rocky Investment ...... 32 St. John Providence Partners in Care...... 19 Small Business Association of Michigan...... 31 Wayne State plans $170M in building projects by 2015 TechTown ...... 1 Trinosophes ...... 32 University of Michigan Faculty Practice Group . . . . 19 BY CHAD HALCOM America Corp. as underwriter. The University of Michigan Health System ...... 17, 19 CRAIN’S DETROIT BUSINESS bonds are financed through future U. of Michigan IHA Health Services Pioneer ACO . . 19 In three or four years we will be at or near general fund revenue outside of Wayne State University ...... 3 In the next three years, Wayne “ the university’s state budget ap- State University could complete al- our highest level of construction activity. propriation, said Rick Nork, Department index most $170 million in planned con- ” Wayne State’s vice president of fi- BANKRUPTCIES ...... 6 struction in Detroit and Warren, Rick Nork, Wayne State University nance and business operations. adding 115,000 square feet of new Contractors and architects for BUSINESS DIARY ...... 27 building space along with research year, according to reports fur- provements at Manoogian Hall, the planned projects are not yet se- CALENDAR ...... 26 labs, classrooms, parking areas nished to the university’s board of the school’s center for linguistics lected. RFPs are to be issued soon. CAPITOL BRIEFINGS...... 6 and a new vehicle technology cen- governors last week. and international language pro- The largest capital project is the CLASSIFIED ADS ...... 29 ter. Most have a science and technol- grams. $93 million Multidisciplinary Bio- JOB FRONT ...... 28 The university expects to spend ogy education focus, with modest The board of governors autho- medical Research Building pro- about that sum across six capital funding for campus electrical grid rized a $90 million sale of 30-year KEITH CRAIN...... 8 projects by the 2015-16 academic improvements and classroom im- bonds this spring, using Bank of See WSU, Page 33 LETTERS...... 8 OPINION ...... 8 Start your day Crain’s Michigan Business OTHER VOICES ...... 8 THIS WEEK @ Want business news from around the state sent to Sign up for the roundup of statewide PEOPLE ...... 28 your email by 7 a.m. daily? Sign up for the Michigan news delivered to email inboxes every WWW.CRAINSDETROIT.COM Morning newsletter at crainsdetroit.com/morning. Wednesday: crainsdetroit.com/getemail. RUMBLINGS ...... 34 WEEK ON THE WEB ...... 34 20130211-NEWS--0004-NAT-CCI-CD_-- 2/8/2013 6:02 PM Page 1

Page 4 CRAIN’S DETROIT BUSINESS February 11, 2013 New biz offers alternative to Groupon-style rewards

“We know literally hundreds of ReapSo uses local and national deal sites that have been acquired or folded in the last few years,” said Julie mobile to Mossier, director of communications for Chicago-based Groupon Inc. (Nasdaq: GRPN). “The barri- dish out deals ers of entry in the deal business are low, but it’s incredibly tough to BY TOM HENDERSON build momentum and sustain.” CRAIN’S DETROIT BUSINESS For the first nine months of 2012, Groupon’s reported revenue grew William Wildern decided to prac- from $1.1 billion to $1.7 billion, and tice what he preached. The result, it had net income of $29 million launched last week, is Farmington compared to a net loss of $238.1 Hills-based ReapSo LLC, which man- million the year before. ages mobile-device-based customer By sharp contrast, ReapSo’s rewards and deals programs and is Wildern projects revenue of taking aim locally at such deal- $225,000 this year and just over $3 based companies as Groupon Inc. million in 2014. The plan is to sign and LivingSocial. up 300 merchants and 75,000 users The company got final approval by the end of this year, and have for its free app from Apple Inc. last more than 2,000 merchants and week, going live in the iTunes app 900,000 users by the end of 2014. store on Monday. By Thursday, Wildern said merchants don’t without publicity, 200 users had al- pay set-up or membership fees to ready downloaded the app. ReapSo. They only pay a fee if a cus- In contrast to the model used by tomer comes in and uses the app. other deal companies, ReapSo does- He said the first 100 merchants to n’t send out offers via email blast. ARA HOWRANI President Steve Valentine (left), CEO William Wildern and Director of Sales and Technology Jeff Heng aim to build ReapSo sign up will pay 10 cents to ReapSo Instead, those who download the LLC into a rival to deal-based companies such as Groupon Inc. for each offer that is redeemed. app sign up to receive offers from Most merchants will pay on a merchants they like or are interest- Farmington Hills-based Hydra Pro- Wildern decided to reinvent him- Grand Rapids, where Atomic Ob- sliding scale depending on the aver- ed in. By scanning a merchant’s fessionals LLC. self. The result is ReapSo, a play on ject is headquartered, by the be- age ticket price at their restaurant quick response code or going to the That firm’s heyday came on May the saying “reap what you sow.” ginning of summer. or shop. Depending on that price, ReapSo website, customers can 4, 2009, the day after Chrysler LLC Wildern said the company was In fact, Carl Erickson, Atomic the fee to ReapSo will be 25 cents, 50 check for specials of the day, which filed for Chapter 11 bankruptcy pro- launched with $575,000 in startup Object’s president and co-founder, cents or $1 for each redemption. might be half off an appetizer or a tection. Hydra’s phone began ring- funding, including $135,000 from likes ReapSo enough to have com- Brian Lane is the owner of the beer for $1. ing off the hook, and its cadre of sev- himself and co-founder Steve mitted $100,000 toward the funding Bingo Pet Salon, on 4th Street in They can also find specials en advisors was in battle mode by Valentine and $440,000 from angel round of $500,000 it is now raising. Royal Oak, which he opened in Oc- through Facebook, Twitter, Insta- May 5 as banks that had loans and investors. It also got $14,100 from One of ReapSo’s first customers tober 2011. He said the cost of gram and at www.reapso.com. lines of credit out to Chrysler’s sup- the Michigan Business Accelerator is the Oxford Inn on Main Street in Groupon and other coupon com- The advantage to the merchant pliers began calling them in. Fund. That seed round paid for de- Royal Oak. petitors was too expensive, but is being able to offer less of a dis- Hydra helped save those it could. velopment of ReapSo’s app and “In my business, I’m always that the modest deals offered count than typical of Groupon or Often, there was no way out. website and the hiring of Jeff Heng looking for new ways to reach and through ReapSo are cost-effective. LivingSocial and offering it to a Wildern and his team had no as director of sales and technology. retain customers,” said Joe Fran- What really sold him, though, customer who is more likely to choice but to usually tell the busi- Heng is an app and code develop- cis, the restaurant’s general man- was the ability through ReapSo to come back regularly. ness owner to quit fighting the in- er who has worked for several ager. offer customers free collectibles to ReapSo has signed up 30 mer- evitable and to prepare for an or- web-based companies, is an ad- He said he tried Groupon when store in their mobile devices. With chants in its roll-out city of Royal derly wind-down. junct professor at Troy-based Inter- he ran Bullfrog’s Bar and Grill in Or- each visit, a customer will get a Oak. A meeting was scheduled last Business boomed for Hydra. national Academy of Design and Tech- tonville and wouldn’t use it again. cute photo of one of the dogs who week with merchants in Clarkston Briefly. nology and active in the Detroit “Groupon’s great for customers, frequent the salon. and others are set up for Waterford But Chrysler and General Motors Lean Startup Circle, a group that but it’s not great for business. You “They’re cute. I’ll take pictures Township, Ferndale and Oxford. Corp. emerged from bankruptcy helps companies validate their get what I call coupon hunters. of clients’ dogs, and my dog, and Wildern is a former turnaround faster than expected, the domestic business models and get to market They’ll come once and never come it’ll give me a chance to show peo- specialist at Southfield-based con- auto industry returned quickly to quicker and cheaper. back. Groupon’s greatest pitch is, ple what our groomers can do,” sulting firm BBK Ltd. who was profitability, and soon there was In addition, ReapSo’s app and ‘We’ll fill your seats,’ but filling Lane said. named to the 2008 class of Crain’s no need for turnaround specialists website developers in the Detroit seats has to be economically Tom Henderson: (313) 446-0337, 40 under 40 after co-founding his in the supply chain. office of Atomic Object are planning sound. You need to be able to make [email protected]. Twitter: own turnaround consulting firm, Rather than fight the inevitable, to help Wildern expand into money,” Francis said. @tomhenderson2

Changing the odds Bonal Int’l to consider in our clients’ favor buyer’s offer to go private Royal Oak-based Bonal Interna- tional Inc. may become a private subsidiary of DePierre Management & Manufacturing LLC, under an offer to buy out the company’s shareholders for about $1.5 million. Bonal (OTC: BONL) — one of the smallest local public companies, with 15 employees and $2.3 million revenue in the fiscal year that ended last March — announced Fri- day that its board had approved an “agreement and plan of merger” with DePierre subsidiary DMM Ac- quisition Corp. this month. Securities fraud and shareholder rights DePierre Management was Automotive supplier disputes Shareholder and partnership disputes formed in 2011 by former Henniges Automotive Holdings Inc. CEO Rob Commercial and business lawsuits Family law and probate litigation DePierre. The deal still requires approval 248-841-2200 of Bonal shareholders after a proxy millerlawpc.com solicitation and a shareholder meeting, expected in mid-March. — Chad Halcom DBpageAD_DBpageAD.qxd 1/29/2013 1:10 PM Page 1

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Page 6 CRAIN’S DETROIT BUSINESS February 11, 2013 A NEW SEASON TO CELEBRATE Snyder’s budget bigger, will 20I3 SEASON TICKETS ON SALE NOW! others think it’s also better? Gov. Rick Snyder’s state has an Aa2 rating, the pump. proposed budget for the which is two spots away When then-Gov. John Engler upcoming fiscal year as- Capitol from the top rating. last raised the gas tax in 1997, he sumes that his fellow Re- Briefings Nixon said it is going sold it as a net tax cut for the mid- publicans will go along to take a while to get dle class, by pairing it with tax de- with more than $1 billion back to AAA status, but ductions such as a child care tax in tax and fee increases the ratings agencies credit and further deductibility of and allow a federal ex- know that is the state’s college tuition. pansion of Medicaid, goal. But several months after Snyder which is why this budget He said passage of this took office, he eliminated those de- is nearly 6 percent larger budget will put Michigan ductions to pay for the business tax than what he proposed in a good spot to ask for cut. Since Snyder is going to need last year. an upgrade. Democratic votes to pass some Now that his plan is Chris Gautz Nixon said he and the pieces of the budget, expect Democ- out there, the real work governor will go to New rats to urge Snyder to make his begins on getting the Legislature York soon and talk through some plan look a little more like Engler’s to pass its own version, then bring of the changes in this budget and to give them a reason to support it. it all together in a package Snyder the state’s revenues, but added Another aspect of the budget, expects to sign by June 1. there are other concerns outside of quite noticeable by its absence, is At $50.9 billion, Snyder’s budget the state’s control that impact its cuts. GREAT BENEFITS* INCLUDINGCLLUDING: also includes modest increases in rating. Chief among them: how the After two years of cost-cutting, education spending, a major in- federal government continues to and tax shifts from businesses to • Season Ticketholder discountunt crease in early childhood educa- deal with sequestration and the individuals, and years of budget tion and big investments in im- fiscal cliff. cuts before they arrived in Lans- • OpeningOpening Day tickets with planlann proving the state’s transportation While there are fees and tax in- ing, Snyder and Nixon said there infrastructure. creases baked into this budget, are no real cuts in this budget. • PostseasonPostsea ticket priority Budget Director John Nixon Nixon said they were not added to While some departments or pro- said it is one of the best budgets balance the overall budget but are grams are projected to see overall • ComplimentaryComplim food vouchersers he’s worked on. user fees that go directly to sup- decreases from last year, it’s be- *Some*Some restrestrictionsr apply “I would put it up against any port specific programs. cause Snyder has separated ongo- other budget that’s out there in the Democrats noted there is no real ing spending and “one-time” ap- country as far as being an AAA tax relief for the middle class in propriations. TICKET PACKAGES budget,” Nixon said. this budget. Snyder also called for adding $75 But Michigan is still an AA- Snyder’s transportation plan million to the rainy day fund. AS LOW AS $374 state — at least in the eyes of Stan- calls for a higher increase in regis- If his proposal is accepted, it dard & Poor’s and Fitch Ratings Ltd. tration fees for cars than it does for would put the total in the fund at 313.471.BALL31313.473.471.BALL71.BALLALL (2255) That’s three spots away from an commercial trucks, and also in- $580 million. When he took office, AAA rating. With Moody’s, the creases the cost consumers pay at the fund was at $2.2 million. Sny- der said his goal is to eventually get that fund above $1.2 billion. Both Democrats and Republi- cans have been critical of Snyder continuing to add to the fund as he either makes cuts to social programs or asks for tax increases to fix the roads. To which Snyder says, basically: Bring it on. “If someone is going to criticize me for adding to the rainy day fund, I think that’s a great thing,” Snyder said. “Have then come up and keep on criticizing me.” Chris Gautz: (517) 403-4403, [email protected]. Twitter: @chrisgautz Did you kknow?? The Health Care industry drives 1/6 of the U.S. economy. BANKRUPTCIES The following businesses filed for ® Chapter 11 or Chapter 7 protection in TCF Bank in Michigan has lent over $100 million to U.S. Bankruptcy Court in Detroit Feb. 1-7. Under Chapter 11, a company files for reorganization. Chapter 7 involves health care related businesses. total liquidation. The following entities at 6053 Chase Road, Dearborn, filed voluntary Chap- Did you know that TCF Bank®: ter 11: A & G Land Co. Assets and liabilities s Has health care banking experts on its team? not available. C & H Land Co. LLC. Assets and liabili- s Is committed to growing its loan portfolio in the health care segment? ties not available. s Fordson Consumer Center Inc. Assets: Finances medical practices? $93,000; liabilities not available. s Finances long term care projects? Hadi Group Distributors Inc. Assets: $11,350,618; liabilities not available. s Finances the senior-living industry? Hadi Petroleum Transporter LLC. Assets: $900,000; liabilities not available. Other filings: To learn more, contact: Elkins & Johnson Inc., 110 N. Main St., Chelsea, voluntary Chapter 7. Assets Janet Pasco at 248-740-1622 or [email protected] and liabilities not available. Sylvan Center Inc., 5153 Clarendon Crest St., Bloomfield Hills, voluntary Chapter 11. Assets and liabilities not ©2012 TCF National Bank. Member FDIC. www.tcfbank.com available. — Ryan Felton DBpageAD_DBpageAD.qxd 2/6/2013 3:07 PM Page 1 20130211-NEWS--0008,0009-NAT-CCI-CD_-- 2/8/2013 3:18 PM Page 1

Page 8 CRAIN’S DETROIT BUSINESS February 11, 2013 OPINION OTHER VOICES: TRANSPORTATION Expanding Medicaid is Gov’s road map Fix more than sound economic choice worth following beaten track The Michigan Chamber of Commerce strongly The editorial “Road funding must get up to speed” ov. Rick Snyder broke ranks with the majority of Repub- supports Gov. Rick Snyder’s call for transportation (Jan. 21) rightly calls for quick action to invest in im- investment. proving Michigan’s roads. Howev- lican governors last week when he called for an expan- Study upon study have shown er, a much broader strategic focus G sion of Medicaid eligibility in his 2014 budget address. us that there is a real need for in- on transportation is necessary if The expansion has been controversial among Republicans, creased funding to improve the we really want to bring our infra- in part for ideological reasons because of its ties to federal health entire transportation system of structure into the 21st century and care reform, but also because of concerns about long-term costs. Michigan. Good roads and grow our economy. bridges drive jobs. While Michigan’s roads and The plan would expand Medicaid eligibility up to 133 per- Without increased investment, bridges certainly need attention, to cent of the federal poverty limit. In exchange, the federal gov- our transportation system will say nothing of the need for a ernment has promised to fully cover the additional cost through continue to drive companies away streamlined crossing to Canada 2016 and limit the state’s liability to 10 percent after that. from Michigan and to states that through the New International Not everyone believes that commitment is enforceable have taken the appropriate steps Rich Studley Trade Crossing, any serious infra- Jim Byrum over the long term, but Snyder regards it as an opportunity as to provide the annual revenue structure plan must also include needed to have a first-class system of roads, bridges, railroads and ports. Michigan agriculture, for exam- the state is estimated to save about $1 billion over the next transit, rail, ports and aeronautics. ple, depends on a reliable transportation system to decade in Medicaid costs it now picks up. The governor outlined a reasonable proposal in ship food, agricultural commodities, fertilizer and oth- Snyder proposes depositing half of the savings into a new his State of the State address that will save money er products both around the state and across the globe. health savings account that could be used to begin paying the and save lives. The Legislature must act now, during Over the past decade, agriculture has been one of the state’s share when the federal government no longer pays 100 a non-election year, to implement a solution. No fastest-growing sectors of Michigan’s economy. Ac- more studies. No more task forces. We know what cording to a study by Michigan State University, one percent of the cost. the problem is, and we just need to face up to it. As in four Michiganians is now employed because of the We believe this is the correct decision on several fronts, the governor said, we need to use common sense and food and agriculture industry, and the industry is posi- but the big one is that the health care costs still exist, even if do something about the problem that faces us: a $1.6 tioned to continue growing. A broad transportation in- the state doesn’t expand coverage. They’re paid by employers billion annual shortfall in transportation funding. frastructure strategy is the key to making that happen. and the insured in the form of higher premiums, and by Each year that we wait, that shortfall grows and our Improvements in rail and water transportation providers who end up giving care for no compensation. roads and bridges continue to decline. could substantially boost business in Michigan. Doing something about the funding crisis will not Using rail to transport goods is much less expensive Insured care is care that can be monitored, which can help only improve our transportation system, it will cre- and more efficient than using trucks. For example, keep people healthier. ate an estimated 11,000 new jobs for the state that put moving Michigan’s annual corn crop by truck would That, coupled with Snyder’s prudence in saving for the fu- See Studley, Page 9 See Byrum, Page 9 ture, makes this a plan the Legislature should approve. Zoo, arts taxes meant for zoo, arts Voters in Southeast Michigan have taxed themselves to LETTERS help support two cultural institutions: the Detroit Zoo and the Detroit Institute of Arts. But some Wayne County communities and taxing authorities have been withholding small portions of those taxes — as Game room story misleading they have from other taxes levied. Editor: from Michigan Gaming Control Interestingly, only communities in Wayne County have Crain’s Detroit Business Thank you for the Feb. 4 article Board Executive Director Rick welcomes letters to the editor. pursued this strategy. “State wants in on games for chari- Kalm that blackjack causes chari- And those communities have filed a joint lawsuit against All letters will be considered for ties,” but I felt your article was bit publication, provided they are ties to sometimes lose thousands County Treasurer Ray Wojtowicz as well as the local zoo and misleading when stating: “Last signed and do not defame of dollars. museum authorities to preserve their right to take a portion of year, charities that hosted million- individuals or organizations. A group may lose one day, but the taxes collected. aire parties collectively raised Letters may be edited for length are they losing over the four days more than $15.6 million. Charity their event runs? That’s the impor- The money so far comes to about $800,000. But those are and clarity. suppliers or game operators made tant question. Our charity groups Write: Editor, Crain’s Detroit dollars that voters clearly intended for the zoo and museum — the same amount as the charities.” all benefit from blackjack when not projects for downtown development or other purposes led Business, 1155 Gratiot Ave., Yes, charities did rake in $15.6 Detroit, MI 48207-2997. looking at the four-day event. If by the taxing authorities. million for their organizations. the state were to ask any of my Email: [email protected] A Wayne County Circuit judge should decide this matter However, even though the other nonprofit groups, I’m extremely quickly. $15.6 million does go to charity confident they all would want it. suppliers and game operators, largely eaten up by paying for la- Per your article, if the state The money should be collected and distributed as the vot- these groups are responsible for bor and other operating expenses. were to impose additional fees on ers intended. 100 percent of the expenses related A couple of other points: to the events, so their share is I disagree with the statement See Letters, Page 9 KEITH CRAIN: Let’s build on success of auto show There shouldn’t be doubt in any- County Convention Cen- tion facility. Now we the nation, Pure Michigan, for Automotive Engineers World Con- one’s mind that the North Ameri- ter is able to compete have to learn how to tourist and economic develop- gress and Exhibition, we’ve got a can International Auto Show at with anything in the capitalize on this im- ment. We should all see if there is great beginning that should be tak- Cobo Center was a great success country, including Las proved Cobo and go af- some way to take advantage of it en advantage of during the rest of by just about every standard. Vegas. Chicago has lost ter a lot of new conven- for the benefit of Cobo and conven- the year. And now that there is continu- a couple of conventions tions and events. That’s tions in our city. It makes a lot of The Cobo leadership is doing a ing upgrading and expansion of to Orlando because they a way to bring in some sense to maximize the impact of great job of improving and expand- Cobo, I hope the boat show and Au- are very competitive. real economic develop- that great campaign. It doesn’t ing the hall. Now we need aggres- toRama are able to enjoy the im- Our events in Detroit ment to our communi- matter that it’s about Michigan. I sive marketing to keep it filled all provements that are making Cobo tend to be very local in ty, not to mention hav- am sure the state and its ad agency year long. a world-class facility. nature, and it would be ing a chance to promote can figure out how to adapt it to Let’s hope the Detroit Metropoli- Last week, I was in Orlando for very difficult, if not im- our entire community the needs of Detroit. tan Convention & Visitors Bureau another convention, and I must say possible, to move them for economic develop- In the beginning of the year with can come up with a great cam- that its convention center is noth- outside metro Detroit. ment. It is a win-win situation. the NAIAS, followed by the boat paign with the help of the folks in ing short of breathtaking. The city We have the beginnings of a This state has developed one of show and the famous AutoRama Lansing. has lots of hotels, and the Orange great improvement in our conven- the best advertising campaigns in and, in just a bit, the Society for Now that would be exciting. 20130211-NEWS--0008,0009-NAT-CCI-CD_-- 2/8/2013 11:02 AM Page 2

February 11, 2013 CRAIN’S DETROIT BUSINESS Page 9 LETTERS CONTINUED Studley: Gov has map Byrum: Roads a start ■ From Page 8 ■ From Page 8 ■ From Page 8 room operators and at the same time take away revenue streams the world on wheels. In the legislation begins to move require about 81,255 loads, com- able use of Michigan ports. such as blackjack, it would com- fierce war Michigan is waging through the House and Senate, pared with just 30,000 railroad cars. Gov. Rick Snyder has listed pletely handicap a lot of the rooms. with other states and foreign this spirit of cooperation will Investing in rail transportation growing Michigan’s agricultural I know some rooms are against be- countries for jobs, investing in continue for the good of busi- and enhancing water transporta- exports as one of his top economic ing regulated more, but in terms of transportation will have a snow- ness, labor and the citizens of tion options would also take some of priorities. To do so, we must have blackjack, I don’t have an issue. In ball effect. If we build it, they Michigan. the pressure off roads and bridges. a solid, diverse and reliable trans- our room, we feel we have the will come: job providers. If we The Chamber supports Sny- The least expensive way to move portation system. proper infrastructure and staff to build it, economic growth will der’s call for relentless positive agricultural products like corn, Funding improvements in Michi- prevent wrongdoing, and it shows come, and so too will more job action toward the goal of saving soybeans and fertilizer is by water. gan’s roads and bridges is an impor- in our numbers. providers. We all win if we in- lives and money, and we look Investing in port facilities and in- tant priority. However, if we are se- I believe the state is doing vest now in Michigan’s roads forward to helping the Legisla- frastructure would take traffic off rious about growing business in charities a favor by having a mora- and bridges. ture make it happen. We can’t roads, reduce transportation costs Michigan, we can’t lose sight of our torium on new venues and suppli- The good news is that histori- wait any longer to bring busi- and make Michigan companies broader needs when it comes to ers. cally in Michigan, business, la- nesses and jobs back to Michi- more competitive. We must modi- transportation infrastructure, and Even though there aren’t bor, Republicans and Democ- gan. fy outdated Coast Guard regula- rail and water transportation must enough rooms to support chari- rats have worked together for Rich Studley is the CEO and tions on the use of barges, dredge be part of the equation. ties’ demand, I feel there are transportation funding. It is president of the Michigan Cham- commercial harbors and place a Jim Byrum is president of the enough rooms to support the pub- hoped that throughout 2013, as ber of Commerce. priority on the safe and sustain- Michigan Agri-Business Association. lic demand. When there is no moratorium, you have dozens and dozens of new rooms; most fail because of the expenses. With the current setup, charities are for the most part assured a positive experience. I think the best thing for the industry would be to cap the number of rooms allowed at a time in the state, similar to liquor licenses. By doing so, you The new face of protect charities and allow the state to properly monitor a prede- termined number of rooms. nursing education In addition, you will have room operators that will value their license more and abide by state rules knowing they can’t reopen down the street under another name if closed down for a violation. If the n recent years the increasing sophistication of state were to attach a more significant price tag to the license, it simulation labs has revolutionized nursing education. would help generate funds to hold In a realistic clinical setting, nursing students now room operators more accountable. I The more these rooms are moni- learn even the most complex techniques of patient tored and managed, the better off care with remote-controlled the charities will be. mannequins that mimic It would be a complete shame if the Gaming Control Board doesn’t practically everything a real speak to room owners and/or the person might do short of Michigan Charitable Gaming As- sociation before making changes. filing an insurance claim. Thus far, I don’t feel those lines of communication have been open. The Wayne State University There are so many easy ways that everybody can benefit from College of Nursing has these rooms, but it requires some a pair of world-class communication. As a room owner for four years, I don’t have any is- simulation labs, among sues with changes to protect the the finest in the nation. charities, the public, the industry They are part of our and the state. I just hope they don’t destroy the program in the process steadfast commitment by making the wrong changes. to excellence in clinical Scott Menser Doc’s Sports Retreat-Poker Room practice, scholarship Livonia and research. Dream big for island Sooner or later, most of us will need a Editor: I would suggest that Belle Isle be nurse. And at the Wayne State University given to developers to develop the College of Nursing, we’re graduating proposed Motor City theme park. I the best. would suggest that a study be done to see if it is feasible to enclose the island within a geodesic dome (Google Buckminster Fuller, inventor of the geodesic dome). Fuller once envisioned enclosing the entire city of East St. Louis, Ill., within a geodesic dome. If this is possible, it and the theme park would be one of the greatest attractions in the U.S., and people worldwide would come to Detroit to see it. Within a geodesic dome, the Motor City theme park could be open year round. Just a thought from someone in the ’burbs who would like to see nursing.wayne.edu Detroit come alive again. David Rich Clarkston 20130211-NEWS--0010-NAT-CCI-CD_-- 2/8/2013 10:37 AM Page 1

Page 10 CRAIN’S DETROIT BUSINESS February 11, 2013 Biz webinars on social media 7 cities sue to Crain’s Detroit Business and propriate social network, train- the Social Media Group of Crain ing employees and creating an keep part of Communications Inc. are present- editorial calendar. Level One Bank’s new headquarters ing a free seven-webinar series Creating content that converts in Farmington Hills. on effective use of social media followers into customers, May 1. for businesses. Learn to consistently keep foll- DIA, zoo taxes The webinars will be hosted by lowers engaged by repurposing Tracy Schmidt, director of train- existing content, as well as quick- BY CHAD HALCOM ing and strategy for the Social ly create blog posts, photos and CRAIN’S DETROIT BUSINESS Media Group. videos to share. Also learn how to The first webinar, Intro to Social use a social media dashboard to Seven suburban cities and 12 Media for Businesses, will be noon- manage content strategy. local finance authorities in 1 p.m. Feb. 20. The seminar will Building and managing an en- Wayne County want a judge to Born here. Based here. show gaged online community, June 12. hold a hearing in the next few how to TO REGISTER Learn how to use polls, contests, weeks to determine whether build live chats, tweet-ups and more. they can hold onto some proper- Building our Bank here. and www.crainsdetroit.com Social sales: Using social me- ty taxes they collect for the De- start ex- /events dia to prospect and build relation- troit Institute of Arts and Detroit ecuting ships, July 24. Learn how to inte- Zoo. 5 Star Rated Bank - BauerFinancial ∫ Top 50 Michigan Companies to a social media strategy. It also grate social media into the sales Officials in those communities filed a joint lawsuit late last Watch - Edward Lowe Foundation ∫ Community Lender of the Year - SEM will focus on the challenges that cycles as well as use it to deepen face B2B companies in social me- relationships with clients. This week against Wayne County REsource Capital ∫ Mergers and Acquisitions Award - Crain’s Detroit dia marketing. webinar will focus specifically on Treasurer Raymond Wojtowicz Business ∫ Top 20th Percentile of U.S. Banks for Financial Performance Topics for the first session: LinkedIn and Twitter. as well as the Wayne County Zoo- logical Authority and Art Institute - Independent Community Bankers of America 10 ways social media can add Social results: Tracking and an- to the bottom line. alyzing social media metrics, Sept. Authority, both of which were cre- Best business practices for 18. Almost everything you do in ated to collect regional millages. the top social networks. social media is measurable. Suing are Dearborn, Dearborn How to design a customized Learn how to use both free and Heights, Belleville, Wyandotte, business social media strategy. premium tools to track the suc- Romulus, Northville and Taylor, Before joining Crain last year, cess of your social media strategy along with some local district au- Schmidt created ChicagoNow, — as well as how to tie efforts di- thorities for downtown develop- the network of 350 blogs owned rectly to increased revenue. ment, brownfield redevelopment by the Tribune Co., and designed a Your social media brand: Man- and other local tax capture in social media education program aging your personal reputation, Oct. those cities and in Van Buren for Tribune readers and advertis- 30. Learn how to take control of and Plymouth townships. ers. your personal online reputation At issue in the lawsuit are tax The remaining seminars are: by tracking your personal search capture districts such as tax in- Designing a social media strat- results and creating positive con- crement finance authorities, cre- egy for your company, March 20. tent about yourself that will be ated by legislation dating from The seminar will include identi- seen by clients, potential clients the 1970s. Such tax districts cap- fying audiences, selecting the ap- and peers. ture a share of property taxes levied in a defined district to fund capital improvement projects there, except for certain taxes that are exempt. In 2008, voters in the region approved a 10-year, 0.1-mill tax levy for local authorities — in this case, the Wayne County Zoologi- cal Authority, which in turn supports the Detroit Zoo. A similar 10-year, 0.2-mill levy passed at the ballot last year for county authorities to collectively fund the DIA. But since 2008, various Wayne County communities have held back a small share — nearly $800,000 to date — of the tax revenue for the zoo on the theory that it was captured to fund those local authorities. The rest is forwarded to the county. Wojtowicz has contended that the zoo and DIA revenue is not subject to authority tax capture and relies in part on a legal opinion from then-Attorney General Mike Cox in 2009 regarding the zoo millage. The communities contend in part that the new authorities are not one of the ex- emptions carved out of the original tax increment finance laws. Wojtowicz has said he’s “con- vinced ... these taxes should benefit the zoo and the art institute.” The art museum millage was approved in November by voters in all three counties. The communities in the lawsuit want a Wayne County Cir- cuit Court judge to convene a hearing soon to consider their argument due to impending tax collections. Chad Halcom: (313) 446-6796, [email protected]. Twitter: @chadhalcom The Associated Press contributed to this report. 20130211-NEWS--0011,0012,0013,0014-NAT-CCI-CD_-- 2/8/2013 12:06 PM Page 1

February 11, 2013 CRAIN’S DETROIT BUSINESS Page 11

PUBLISHER’S NOTEBOOK

Contact Mary Kramer at mkramer @crain.com. CRAIN’S MICHIGAN BUSINESS Mary Kramer Blame game easy to lose As Detroit spins around the drain of financial ruin, it has been tempting for some elected officials to blame the city’s problems on the dramatic cut in state revenue sharing. “If only the state gave us what it owes us,” the story goes. “We would be fine. We wouldn’t be in this mess.” The reasons Detroit is in a mess are too many to list in this column. But blaming revenue sharing cuts is an insult to the rest of the state, where other cities laid off workers and cut budgets to cope with their cuts. A quick primer in revenue sharing from the folks at the nonpartisan Citizens Research Council: The state shares revenue it collects through the statewide sales tax and returns it to local governments. The money is in two buckets. The first is a constitutional share: 15 percent of sales tax (calculated under the old 4 percent levy prior to the increase to 6 percent). This is distributed on a per capita basis. Based on population loss, Detroit’s share is now 7 percent because it has 7 percent of the state’s T.J. HAMILTON population. Todd Herrick (right), creator of Potter’s Gold potting soil, unloads a shipment with help from Anthony Cardosa, owner of two AAA Hydroponics “hydro shops” in the Grand Rapids area. Herrick sells an average of more than 600 bags a month to shops that help customers set up marijuana growing operations. The other pool is statutory, and it’s a sum determined annually. Detroit’s share of this second pool is a whopping 58 percent. According to Bettie Buss of the Citizens significant majority in 2008. Research Council, Detroit got MediSwipe Inc. — a small, publicly $319 million in 2003 from both Growing like a traded company (OTCQB: MWIP) that revenue sharing pools combined; in provides digital identification cards for 2012, that had dropped to $172 million. That is a huge hit. But medical marijuana patients and ATM- proportionally, other cities got like kiosks to handle cashless transac- hammered, too. tions at marijuana dispensaries — relocated its headquarters from South Complicating all this is an Florida to Birmingham “based on re- agreement in 1998 between then- cent and favorable state legislation re- Gov. John Engler and then-Mayor Dennis Archer. garding medical marijuana and dispensary laws” (Crain’s, Feb. 4). If Detroit gradually reduced its It remains to be seen how Fri- 3 percent income tax, the state day’s court decision will affect would kick up its revenue sharing MediSwipe’s business plans. Lawyers payments. Unfortunately for Detroit, who specialize in medical marijuana that agreement wasn’t binding on laws say it probably will be up to the future administrations. And Detroit was to meet certain criteria for the Michigan businesses sprout, flourish Legislature to define the limits of busi- higher payments to kick in. It met ness transactions under the state’s laws. that criteria in six of the years since Local companies that make supplies 1998. to supply marijuana users for hydroponic growing and retail “hydro shops” report strong sales, especial- The constant bleating that ly in the wake of the elections in Grand Detroit’s problems would be solved if BY MATTHEW GRYCZAN hurdles appear to be more delays of the Rapids, Detroit, Flint, Ypsilanti and the state coughed up the money is CRAIN’S MICHIGAN BUSINESS inevitable rather than showstoppers. Kalamazoo. Physician groups that spe- wrong for two reasons. First, it But rulings such as the one passed cialize in certifying that patients have perpetuates the “it’s not our fault, all it “cannabiz” — a budding new down Friday by the Michigan Supreme ailments qualifying for the Michigan it’s somebody else’s fault” mentality industry for Michigan in the produc- Court, effectively outlawing dispen- Medical Marihuana Program registry that pervades Detroit’s so-called C tion and distribution of marijuana saries of medical marijuana, continue cards are doing good business, usually leadership. for medicinal and recreational use. to styme the industry. charging about $150 per consultation. Second, the city might not want to Both aboveboard and underground, a Public sentiment appears to favor Private equity and venture capital call attention to the fact that it well-established business model exists more relaxed laws. In November, five funds want in on the action, but it’s already is getting nearly 60 percent for marijuana, complete with a means metropolitan areas representing about risky even by their standards. of one pool and now only has 7 of production, channels of distribution 1.1 million people passed laws that in West Michigan financiers “want to be percent of the state’s population. and a marketplace that reacts quickly one form or another loosened the reins on the bleeding edge of where this is go- It might invite more debate in to business conditions. of marijuana use. More than 124,000 ing,” said Joseph Voss, an attorney in Lansing that the city doesn’t really So far, legal wrangling has kept a lid people in Michigan already carry cards the corporate practice of group/debt want to hear. on the pent-up demand from an estimat- for the medicinal use of cannabis, ed 1 million users in the state. Legal which Michigan voters approved by a See Growing, Page 12 20130211-NEWS--0011,0012,0013,0014-NAT-CCI-CD_-- 2/8/2013 12:01 PM Page 2

Page 12 February 11, 2013 Advertisement Crain’s Michigan Business THANKS FOR LISTENING, MICHIGAN! YOU’VE HELPED “THE PROSPERITY AGENDA”RADIO SHOW ON NEWS/TALK 760 WJR WIN INTERNATIONAL ACCLAIM.

The Michigan State Housing Development Authority (MSHDA) and the Michigan Municipal League understand that civic engagement is a key part of having vibrant communities. That’s why MSHDA and the League co-sponsor “The Prosperity Agenda” that airs at 7 p.m. on the fourth Wednesday of each month on News/Talk 760 WJR. We are proud to announce that “The Prosperity Agenda” T.J. HAMILTON has won a 2012 MarCom Gold Award for outstanding After AAA Hydroponics in Grand Rapids opened a second store in October, pot- growing products flew off the shelves to the degree that the store supplanted its creative achievement and broadcast excellence from November sales target. By mid-December, November’s sales had been exceeded. the Association of Marketing and Communication Professionals. Growing: Marijuana biz The MarCom Awards is an international creative competition that recognizes outstanding achievement by marketing and communication professionals. The competition is believed to be the largest of its kind in the world. undeterred by risks In 2012, there were more than 6,000 entries submitted in multiple categories. ■ From Page 11

The MarCom Award is a reﬂection of a Michigan job well done. and equity financing in the Grand na confirmed Herrick’s belief that Rapids office of Clark Hill PLC. the market was ready for a locally We’re not resting on our laurels, however. “But we have to say to the produced, high-quality soil. nonaggressive money — which is Herrick sources and checks the In 2013, we’ll continue challenging listeners to help make Michigan a better place most of the money — that it is real- ingredients, blends the soil and to live, work and play by creating vibrant and prosperous local communities. ly difficult to do this without the packages the product in Hud- threat of seizure of all the assets sonville in bags holding 1.5 cubic Programs like “The Prosperity Agenda” help MSHDA, the League, the Small for businesses that lean to the dis- feet. “The business has gotten so Business Association of Michigan (SBAM) and other thought leaders communicate tribution side. It’s ‘Take stuff first large, I can’t do it by myself any- and figure out the case later’ in more, so my wife and my son help to a broad audience about the importance of such issues as placemaking, drug enforcement circles. when it comes to bagging the prod- economic gardening and entrepreneurial growth. “The specter of a federal prose- uct,” he said. cution hangs over everybody, even Herrick does much of his own “The Prosperity Agenda” has aired on News/Talk 760 WJR at 7 p.m. on the fourth those who are complying with the distribution of the soil, which can Wednesday of each month since January 2010. letter of the law in Michigan.” cost $15 to $20 per bag — more ex- That hasn’t stopped people from pensive than ordinary potting soil asking. Voss said he has fielded sold in home improvement centers about 10 inquiries from private eq- but midpriced for specialty soils. uity funds since November, double Potter’s Gold is far from the only such inquiries from the entire Michigan-made product that pot year prior. growers buy, said Anthony Car- dosa, owner of AAA Hydroponics, which recently opened a second lo- Having a green thumb cation to go along with the first With a master’s degree in soil one in Grand Rapids. science from the University of Ver- “The market has exponentially mont and a bachelor’s in ornamen- grown just in the last two years,” tal horticulture from the University said Cardosa, a Grand Rapids na- of Wisconsin, Todd Herrick knows tive who opened his first grow shop what pot plants need to grow. in 2010. “But this is something He has put years of training and that’s been going on inside of Michi- horticulture experience to use de- gan for years. It’s no news that a lot veloping Potter’s Gold, a premium, of genetics (seeds and plant cut- Edwin Harlin (left) of the Michigan State Housing Development Authority is among the guests who join Michigan Municipal League Executive Director and custom-blended soil well-suited for tings) come from Michigan. We CEO Dan Gilmartin on “The Prosperity Agenda,” a MarCom Award–winning customers who visit West Michigan know how to grow things here.” public affairs show broadcast by News/Talk 760 WJR. hydro shops to set up marijuana AAA Hydroponics does not sell growing operations. After launch- genetics but does supply Michi- ing the product in March, Herrick gan-made products including Pot- Dan Gilmartin, executive director and CEO of the Michigan Municipal League, sells an average of more than 600 ter’s Gold; hormones that promote bags a month to about 16 shops asexual propagation or “cloning” hosts the hour-long show. Guests have ranged from Michigan Gov. Rick Snyder throughout the area. He hopes to of plants, made by Hydrodynamics and national experts to inﬂuential policymakers and journalists who shape boost sales by reaching stores on International Inc. in Lansing; natur- placemaking and regional development strategies. the eastern side of Michigan. al fertilizers; and pesticides. “Grow stores are popping up all Certainly, business has been To learn more about placemaking and “The Prosperity Agenda,” visit over the place, and there’s oppor- good for Cardosa, who said he took tunity for people like myself who courses in hydroponics and gar- www.mml.org/radioshow/prosperity-agenda.html. have more of a specialized product dening right after Michigan passed to offer to the market segment,” the medical marijuana law in 2008. MSHDA and SBAM congratulate the Michigan Municipal League and said Herrick, a Grand Haven na- He opened his second store in sub- thank listeners for making “The Prosperity Agenda” a Pure Michigan tive whose primary job is consult- urban Grand Rapids in October ing on soil science through his with the hopes of hitting a sales radio success story on WJR, the Great Voice of the Great Lakes. firm, Hort Services LLC. target, only to double it by Novem- “I decided to launch this know- ber. By mid-December, he already ing full well that there was a great had surpassed November’s sales. deal of uncertainty in this green About three-fourths of his cus- SMALL BUSINESS industry sector. There aren’t any tomers are interested in growing AssociationA of MICHIGAN leaves or buds on the bag — I want- marijuana. It costs less than $2,500 Focusing the power of small business. ed to make sure that I could cross to get a basic outfit of lights, air- over to their traditional garden moving equipment and supplies to center market if I needed to.” grow 12 plants at one time indoors But rising sales and feedback — the maximum allowed by law from growers of medical marijua- See Next Page 20130211-NEWS--0011,0012,0013,0014-NAT-CCI-CD_-- 2/8/2013 12:01 PM Page 3

February 11, 2013 CRAIN’S DETROIT BUSINESS Page 13 Crain’s Michigan Business

From Previous Page medical marijuana cards, manage- for a patient certified to use med- ment of chronic pain or suboxone ical marijuana. Michigan permits therapy for narcotics addiction. a person certified to be a caregiver Last year he put nearly 50,000 to grow 72 plants at one time — 12 miles on his vehicle traveling to 17 plants for the caregiver as a pa- storefront locations in Upper tient and five other patients who Peninsula communities and cities may not want to grow their own. served by Denali Healthcare in A popular website, growstore Portage, which has offices in Stur- finder.com, lists more than 225 hy- gis, Cutlerville, Coldwater, Kent- dro shops throughout the state, wood, Albion, Holland, Grandville from Mr. Grow-It-All in Holland to Hy- and Jenison. dro Giant in Detroit. “I discovered the medical bene- One needn’t look farther than fits of marijuana in 2007 when I was the Maximum Yield Indoor Gardening doing suboxone therapy for nar- Expo, held in June at the Suburban cotics addiction,” said Townsend, Collection Showplace in Novi, to get who holds a bachelor’s degree in bi- a sense of the scope of the industry. ological sciences from Michigan “Michigan Jim,” writing for State University and a medical de- BigBuds — billed as the “World’s gree from the Southeastern College of #1 Medical Marijuana Website” — Osteopathic Medicine in North Mia- estimated that hundreds of visi- mi Beach, Fla. tors attended the show, where “I began to notice that as I was dozens of vendors displayed the weaning people off of narcotic pain latest in hydroponic gardening, medications, those that were using with an emphasis on pot growing. marijuana illegally, and then with medical marijuana cards af- What’s in your I discovered ter 2008, “ weaned very, wallet? the medical very well.” After seeing Along with benefits of thousands of selling hydro- patients over ponic supplies, marijuana the past five another rela- years, tively safe in 2007. Townsend has haven for profit ” concluded that is certification Robert “Dr. Bob” marijuana has of medical mar- Townsend a deserved ijuana patients place in a doc- so they can receive reg- tor’s black bag. istry cards. “I discovered that people were “Those are the places that I see coming off using handfuls of Vi- where you can currently — safely codin a month — high doses of Vi- — make money without the uncer- codin every day — strictly through tainty of which way the legislation the use of medical marijuana,” said is going to be interpreted,” said Townsend, who termed himself one Clark Hill’s Voss. “The physician of the biggest advocates for it in the (service) is probably the safest way state — but never has used it. to make money right now in med- “It’s very good for the treatment ical marijuana. There’s no question of Crohn’s disease, excellent for under the legislative framework of nausea, very useful for treatment the patient-doctor relationship.” of glaucoma and Parkinson’s dis- Websites in Michigan advertise ease,” he said. “I’ve seen it stop a a number of physicians’ offices seizure in front of me.” that specialize in assessing pa- Of the approximately 30,000 ac- tients for medical marijuana tive doctors in Michigan, only cards. Some offer a money-back about 1,900 have written a single guarantee for patients who aren’t medical marijuana certification, accepted for the Michigan medical Townsend said. When analyzed marijuana card registry. further a year ago, 55 doctors in Michigan Cannabis Physicians Michigan wrote 70 percent of the Group — with locations in Detroit, certifications, with Townsend be- Sterling Heights, Flint, Kalama- ing in that group. zoo, Grand Rapids, Ann Arbor and The Department of Licensing and East Lansing — states on its web- Regulatory Affairs reported on its site that patients fill out forms, website about 124,000 active regis- provide valid identification, have tered, qualified patients and about their blood pressure taken, then 26,000 active registered primary have a 10-minute interview with a caregivers as of November. Of the physician. 344,000 original and renewal appli- “After the interview is complet- cations received since April 2009, ed, you will be given your recom- about 31,000 were denied, most be- Reliable, modernized grid mendation and the packet to mail cause of an incomplete application off to the state to get your official or missing documentation. medical marijuana card,” the site As a percentage of people who Energy is essential to the way we live, work and play. says. “That’s all there is to it!” have obtained medical marijuana The center generally charges a cards to the general population, $150 fee, while the state generally Michigan trails Colorado, Wash- ITC operates, builds and maintains the region’s electric charges $100 to file an application. ington, Oregon and California. To be eligible for a card, patients About 2.1 percent of Colorado’s transmission infrastructure. We’re a Michigan-based company “must suffer from a debilitating residents have medical marijuana medical condition,” such as severe cards, compared with about 1.2 working hard to improve electric reliability and increase electric and chronic pain, severe nausea, se- percent in Michigan. vere or persistent muscle spasms, Townsend said he rejects pa- transmission capacity throughout the Midwest. seizures or Crohn’s disease, accord- tients who don’t have medical ing to the Michigan Department of Li- records from their primary physi- censing and Regulatory Affairs. cians or who suffer from condi- Robert “Dr. Bob” Townsend has tions that don’t fall within the cri- logged nearly 5,000 miles on his teria of state law. But he favors www.itctransco.com GMC Yukon since January, criss- expanding the list to include con- crossing the state in visits to 24 offices to certify patients seeking See Growing, Page 14 20130211-NEWS--0011,0012,0013,0014-NAT-CCI-CD_-- 2/8/2013 12:01 PM Page 4

Page 14 CRAIN’S DETROIT BUSINESS February 11, 2013 Crain’s Michigan Business Growing: Medical marijuana industry starts to take root in state ■ From Page 13 ditions such as Parkinson’s dis- Voss said. “For a commercial are legal was lifted Friday when the ease. He testified in late January lender type to do some type of fi- Supreme Court affirmed an appeals before the Michigan Medical Mari- State report: Medical marijuana nancing, however, you have to court finding that Michigan’s 2008 huana Review Panel to add post- show the source of repayment if medical marijuana law does not al- traumatic stress syndrome to the you are doing any financial analy- low people to sell pot to each other, state’s list of debilitating medical a $10 million boost for budget sis,” he said. even if they’re among the tens of conditions. That becomes difficult when thousands who have state-issued While he was generally pleased Medical marijuana is turning pay a fee. state law is fuzzy about the point marijuana cards, according to an As- with the package of bills passed out to be a windfall for Michigan The report shows the number where accepting “reasonable com- sociated Press report. last year regulating medical mari- state government. of registered marijuana users pensation for services” turns into Although it has been a risky en- juana that take effect in April, A report issued last week by was up 44 percent in Muskegon selling marijuana for a profit. deavor, entrepreneurs have pushed Townsend said he was troubled by the Michigan Department of Licens- County last fall compared with The blurred legal questions the envelope of commerce in an new restrictions on telemedicine ing and Regulatory Affairs said the previous 12-month period. haven’t stunted the growth of dis- area where public sentiment has regarding consultative visits for nearly $10 million in revenue Kent and Ottawa counties’ num- pensaries that essentially act as changed markedly over the past patients. Physicians have been al- was collected from applicants — bers were up at least 20 percent. brokers for growers and users. One decade. Delivery services such as lowed to use Internet tools such as more than double the cost of run- In Michigan’s southwestern popular website, PotLocator.com, Michigan A-Grade have sprouted up Skype to interview patients who ning the medical marijuana pro- corner, the number of registered lists more than 215 medical mari- all over the state, and it’s clear that have been seen by their primary gram. marijuana users was up 56 per- juana dispensaries in Michigan. distribution will continue either physicians and have medical The report covers the state’s cent in Cass County and 37 per- “Being a dispensary is a scary aboveboard or underground. records to determine eligibility for most recent budget year, which cent in Berrien County. business,” said Cardosa of AAA According to the website the MMMP program. ended Sept. 30. Voters in 2008 approved mari- Hydroponics. “Your inventory is at THCfinder.com, Michigan A-Grade “There’s no real physical exam A medical marijuana applica- juana for treatment of some risk all the time. If you have five bills itself as “the only marketplace for a number of the approved condition costs $100. Caregivers who health problems. patients and yourself, you are only that combines West Michigan’s tions,” Townsend said. “How can grow marijuana for people also — Associated Press allowed to have 15 ounces at any finest farmers, local caregivers and you do a physical exam for seizures? time in your possession. But a dis- patients, eliminating the need for There isn’t one unless a patient has er support services for marijuana specialists who make house calls pensary obviously carries more dispensaries.” a seizure right in front of you. ” growers and users, such as shops to set up hydroponics equipment than 15 ounces. Quite literally, A group, West Michigan Medical According to a study published selling “consumption devices,” for do-it-yourself marijuana grow- they (law enforcement agencies) Marijuana Caregivers, functions as “a in 2007 by the federal Substance criminal defense attorneys who spe- ers and community banks that fi- can walk inside and take every- network and delivery service for Abuse and Mental Health Services Ad- cialize in drug laws, and laborato- nance caregiver operations for thing.” qualifying patients,” serving Kent, ministration, nearly 1 million people ries that test for concentration lev- which equipment alone can exceed The city of Ann Arbor has had Kalamazoo, Montcalm, Muskegon, in Michigan illegally use marijua- els of tetrahydrocannabinol and the $20,000. dispensaries for medical marijua- Mecosta and Newaygo counties. na at least once a year, and more presence of pesticides or fungicides. MediSwipe entered the financing na for years, and voters in Kalama- Minimum donations are required than half use it once a month. Tetrahydrocannabinol — more sector when bank card companies zoo passed a charter amendment in and mileage charges may apply. commonly known as THC — is the stopped servicing dispensaries. November that tried to regulate In the future, the group plans on primary intoxicant in marijuana. But any commercial operation dispensaries for medical marijua- “making healthy clones and Doing business in the shadows Voss said the market may be involved with obtaining money to na. seedlings available to members, Michigan’s medical marijuana ripe for other services that don’t distribute marijuana to patients Some experts think that murky le- holding grow-your-own classes, laws have spurred demand for oth- touch marijuana directly, such as quickly gets into the dicey area, gal question of whether dispensaries personal grow coaching, discounts on grow room equipment/nutes (nutrients) and an Internet forum for members.” Said Clark Hill’s Voss: “I get the sense there’s a lot going on that most of us have no idea what’s happening. It is kind of like the Wild West out there.” Is it time for Early adopters and bleeding-edge entrepreneurs may gain proprietary knowledge, market share and early branding. But they also risk a checkup? sudden changes in the business landscape because of court rulings, Make your appointment now law enforcement directives — even Internal Revenue Service rules. “The federal side of this makes for a healthier 2013. me think this is a conversation that’s going to take place over sev- Complicated changes and reduced eral years — not election cycles,” Voss said. For instance, entrepre- reimbursements dot the healthcare landscape. neurs likely can’t take write-offs Our team of professionals can go beyond on their costs for tax purposes for starting a larger-scale growing op- traditional tax and accounting services to help eration. medical practices navigate these changes and “The law is pretty clear that there’s no legalization of a com- achieve a clean bill of financial health. mercial transaction — cash for weed,” Voss said. “And if that’s Contact me to learn more. happening, we need to tell you straight away that every penny that happens as a drug dealer

CPAs & needs to be declared as miscella- Consultants neous income on a tax return, with a large degree of certainty guaran- More Ideas teeing an audit, which then re- One Tom Mulvihill, CPA, CGMA quires audit representation.” Team Regardless of the legal wran- Your More Service Future Corporate Principal gling, it probably is as hard to pare Investigators [email protected] back the pot industry in Michigan Wealth More Experience as it is to eradicate the vigorous Advisors 248.579.1136 weed itself. “The genie has been out of the bottle for lots and lots of years,” Cardosa said. “All the way around, Ann Arbor Detroit Farmington Hills Troy it is a lucrative business for Michi- gan — and it is already here.” Matthew Gryczan: (616) 916-8158, rehmann.com [email protected]. Twitter: @mattgryczan 20130211-NEWS--0015-NAT-CCI-CD_-- 2/7/2013 2:56 PM Page 1

February 11, 2013 CRAIN’S DETROIT BUSINESS Page 15 Crain’s Michigan Business Grand Rapids mayor: Growth is sustained with sustainability

Grand Rapids Mayor George tools that we had prior to the Sny- business community? Heartwell has been leading Michi- der administration. My hope is What we want to be sure of is that gan’s second-largest city down the that we are well enough anchored the kind of jobs we are attracting to path of “sustainability” since he be- and far enough along on this jour- Grand Rapids and the companies gan serving his first of three terms ney to economic viability that it that we are supporting with what in office in 2004. Grand Rapids is in doesn’t set us back. incentive tools we have left are com- the final two years of a four-year panies that are paying good wages plan to become even more sustain- Are you afraid it will set you back? to people. ... We are an income tax able. It is built on the premise of the In the last decade, if memory is city. So I like good-paying jobs in “triple bottom line” — with bench- serving me correctly, we did a bil- Grand Rapids because they are also marks for economic, social and en- lion and a half dollars in new eco- good income tax-paying jobs. vironmental outcomes. nomic development that made use The plan includes everything of brownfield tax credits. Now all Would you agree that Grand Rapids from investing $200 mil- we have to make use of is has a conservative, parochial and lion in business develop- a little pot of appropria- even “churchy” reputation? ment tax incentives; to tions for brownfield pro- I think Grand Rapids has grown improving access to arts, jects in Lansing. When I out of that old conservative, entertainment and com- look at surrounding states parochial city that we once were. munity gardens; to reduc- and the tax incentives in However, I think the perception ing the city’s carbon foot- Indiana, for example, I am certainly does linger on the east print by cutting down on concerned that we ... are side of the state that this is a closed, the emission of green- not as competitive. conservative, parochial city. And it house gases. just isn’t true. For one thing, one in Television journalist The sustainability plan 10 of us living in Grand Rapids now and talk show host Bill also targets the growth of was born outside of the U.S. Moyers has listed Grand small and midsize business- Look who they voted in three Rapids as one of the 12 Q&A es. Are you doing some eco- times for their mayor? ... This is a cities leading the way in nomic gardening? Why is community that really has em- sustainability. George Heartwell, that good for Grand Rapids? braced a whole new progressive Heartwell has a history Grand Rapids Well, look at us now. We ethic. of social service as an or- mayor have a small handful of dained United Church of very large companies, and You endorsed a ballot proposal that Christ minister who spent 14 years we have a larger handful of compa- eased the city’s marijuana ordinance. as a pastor to the homeless in nies of substantial size. But far and The sustainability plan calls for 100 Grand Rapids’ Heartside district. away, the business community con- miles of on-street bike lanes. Does He also has business experience as sists of small businesses. They are that all fall under a progressive ethic? the former CEO of Heartwell Mort- employing five people or 25 people. Take a look at the cities that are gage Co., a family business. And he That is our bread and butter. on the Bill Moyers list. All of those is a strong environmental advo- We also have a reputation in cities are cities that I would consid- cate. The U.S. Conference of Mayors Grand Rapids of being entrepre- er to be progressive. ... They are the placed him first in the large-city neurial, and we are a community cities that young people want to live category for the 2012 Mayor’s Cli- of innovators. We are spinning off in today. ... So I say our progressive mate Protection Awards. new companies all of the time that ethic here is integral to our eco- Heartwell sat down with free- start with one or two or three em- nomic growth and development. lance writer Rod Kackley to talk ployees and a great idea. We want about how sustainability applies to help grow those companies. Would you describe yourself as one to running Grand Rapids. of those mayoral risk-takers? Don’t you risk City Hall’s picking I would. And I think my history Your sustainability plan is set up with winners and losers instead of leaving even going back to City Commis- a triple-bottom-line philosophy. Why? that to the natural order of business? sion days with a gay rights ordi- In my very first year as mayor, We have had a growth philoso- nance that we adopted in the very we abandoned what we called the phy for a number of years about same year that San Francisco did, strategic plan and replaced it with building on (business) clusters. You 1994. I think of what we have done the sustainability plan. I suggested get a strong and growing cluster in the area of civil rights but also that was a way to organize our around medical technologies, and in environmental issues. I think I work in City Hall and that every de- you build on that cluster. You in- have been a thoughtful risk-taker, partment needed to be concerned vest in that cluster and grow it. The and it has paid off for the city. not only with its economic bottom story I love is the spinoff company line but also with what environ- that came out of the Van Andel Insti- Congressman Justin Amash and mental impact it could have and tute, Grand River Aseptic Manufactur- Gov. Rick Snyder. Let’s rate them. what social impact it could have ei- ing. They started with 13 or 15 em- We have developed a very good ther on the customer base or on employees just about two years ago. working relationship with Gov. ployees within the organization. Today, they have something like 65 Snyder. We work closely with him employees and have moved some of at the policy level, … and that has Let’s define “sustainability.” their operations from other parts of paid dividends for us. It is a way of living in the world the country to Grand Rapids. Let me contrast Congressman that creates economic vitality, pre- Amash to former Congressman serves economic resources and rec- Is that a viable economic develop- Vern Ehlers. Congressman Ehlers ognizes that there is an inherent ment strategy? understood that in order to get equality among people. If we are When you look at our clusters, things done for his district, he going to be a sustainable city in the we still have a strong, strong clus- needed to be flexible. He needed to long run, we have to do the things ter around automotive. And we be adaptable. He needed to be able that make us economically strong, now have this emerging health to work with Democrats. He needed environmentally sustainable, and care industry cluster on Medical to work within the regulatory agen- we also have to ensure that all peo- Mile. I think you build on that. cies and bodies. ple come along on the ride. Congressman Amash came in The sustainability plan also targets saying: “No earmarks. We are go- Washington doesn’t seem to like tax an increase of 20 percent in the num- ing to reduce government. We are incentives. Lansing doesn’t like tax in- ber of jobs created that pay greater going to reduce taxes.” ... Ear- centives. Yet $200 million in tax incen- than or equal to the cost-of-living in- marks were good for this communi- tives is the first target in the Grand dex by June 30, 2015. Aren’t we really ty. Congressman Ehlers understood Rapids sustainability plan. Why? talking about a living-wage proposal? that. Congressman Amash is not We don’t have the tax incentive What message does this send to the willing to go there. 20130211-NEWS--0016-NAT-CCI-CD_-- 2/7/2013 3:27 PM Page 1

Page 16 CRAIN’S DETROIT BUSINESS February 11, 2013

United Monthly U.K. Kingdom WHERE MICHIGAN DOES BUSINESS

ith a 2011 GDP of about $2.28 trillion, the United Kingdom had the ninth- Crain’s monthly World Watch re- W largest economy in the world and the port showcases Michigan compa- SCOTLAND second-largest in Europe, behind Germany. It nies leading the way in internation- is recognized for machine tools, automation al business, as well as those equipment, electric power equipment, ship- expanding their global operations. building, textiles and more. Each World Watch Monthly fea- Sunderland An austerity program aims to reduce the tures a different country. If you N. IRELAND country’s budget deficit from more than 10 per- know of a Michigan company that ENGLAND exports, manufactures abroad or cent of GDP in 2010 to nearly 1 percent of GDP Ellesmere Goole, by 2015, according to the CIA’s World Factbook. has facilities abroad, email Jennette IRELAND Port Scunthorpe Smith, managing editor, at The United Kingdom had a 2011 unemploy- Coventry Elmdon ment rate of 8.1 percent, on par with that of the [email protected]. WALES Colchester London, Beringea LLC’s London office U.S. Cwmbran, Bridgend Bath Dunton, Agriculture remains integral to the econo- COMING UP Kingston my, producing almost 60 percent of the coun- Plymouth, Upon Beringea LLC March: Netherlands Millbrook Southampton Thames try’s food with less than 2 percent of the labor April: Saudi Arabia Based: Farmington Hills force. U.K. operations: London, England Herman Miller Inc. Employees: 20 Products: Late-stage venture capital, Edwards Brothers Inc. ufactures the Astra five-door, Astra Sports Based: Zeeland growth capital and mezzanine debt financing Tourer and the light commercial vehicle U.K. operations: Bath and Chippenham, Top executive: Malcolm Moss, co-founder Based: Ann Arbor Vauxhall/Opel Vivaro. It also sells the full England and senior managing director U.K. operations: Digital book manufactur- European Opel/Vauxhall product portfolio Employees: 200 More information: Beringea is an interna- ing center in Plymouth, England badged as Vauxhall Motors Ltd. Products: Full range of furniture tional private equity firm that offers advice, Employees: Three Top executive: Duncan Aldred, chairman Top executive: Andy Lock, president of guidance and capital to growing businesses. Products: Softcover books for NBN Interna- and managing director, Vauxhall Motors Herman Miller International Portfolio companies range from health care tional, trade publishing for university press- More information: In 2012, the U.K. secured and life sciences to clean technology, ades and education publishers in the U.K. lead manufacturing plant status in GM Europe International Automotive vanced manufacturing, media and Internet Industries served: Trade, scholarly and ed- for the next-generation Astra in 2015 and the technologies. Beringea in the U.K. manages ucation market publishers next-generation Vivaro in 2014. The Luton Components Group the ProVen Venture Capital Trusts. Top executive: Pete Shima, director of cus- plant is the only commercial vehicle manu- Based: Global headquarters in Luxem- tomer service, pre-press and digital opera- facturing plant in GM Europe’s portfolio. bourg; North American headquarters in Bissell Homecare Inc. tions Southfield. More information: Recently formed a global U.K. operations: Manufacturing plants in Based: Grand Rapids distributed print partnership, Global Print Coleshill, Elmdon, Halewood, Scunthorpe U.K. operations: Berkshire, England Solutions, with three other leading book and and Sunderland, England; customer center Employees: 27 journal manufacturers, including CPI Group. in Basildon, England Products: Subsidiary Bis- Employees: 1,200 sell U.K. distributes vacu- Ford Motor Co. Products: Trunk liners, trim, interior parts um cleaners, carpet wash- Top executive: Jonas Nilsson, senior vice Based: Dearborn ers, sweepers, steam president of operations for IAC Europe U.K. operations: Ford of Britain, the British cleaners and hard-floor More information: IAC Group’s clients in- subsidiary of Ford of Europe, has around 550 units. The Berkshire loca- clude The Land Rover brand of Tata Motors dealerships, a commercial vehicle assembly tion also focuses on sales Ltd., Jaguar, Nissan Motor Co., Toyota Motor Co., plant in Southampton, England; a stamping and marketing. Honda Motor Co. and Vauxhall Motors Ltd. Top executive: Alistair plant and engine plant in Dagenham, Eng- Staff members meet at George P. Johnson Co. in Roberts, managing direc- land; a transmission plant in Halewood, Kingston Upon Thames. Roberts tor, U.K. England; an engine plant in Bridgend, Meritor Inc. More information: Bissell is the fastest-grow- Wales; and a research and development fa- George P. Johnson Co. Based: Troy ing floor care brand in the U.K. cility in Dunton, England. Ford of Britain’s U.K. operations: Technical center and produc- headquarters is in Brentwood, England. Based: Auburn Hills tion plant in Cwmbran, Wales; aftermarket-re- Compuware Corp. Employees: 14,500 U.K. operations: Full-service creative stu- manufacturing site in Redditch, England Products: Ford Transit, panels, subassem- dio and event operations hub in Kingston Employees: 480 Based: Detroit blies, engines, transaxles and transmissions upon Thames, England Products: Heavy-vehicle braking systems, U.K. operations: Compuware Ltd. is in Berk- Top executive: Joe Greenwell, chairman, Employees: 85 remanufactured brakes shire, England Ford of Britain Products and services: Account manage- Top executive: Dietrich Zaps, general man- Employees: 151 ment and an event operations team that cre- ager Products: Marketing, sales and customer ates public and business-to-business mar- support for proprietary software products, ForeSee Results Inc. keting campaigns. Events include festivals, Covisint cloud services, Compuware applica- Based: Ann Arbor sponsorship and B2B events ranging from MSX International Inc. tion performance management solutions U.K. operations: London, England trade shows and conferences to briefing Based: Warren and mainframe products Employees: Eight centers and road shows. U.K. operations: Headquarters in Colch- Top executive: Philippe Llorens, senior vice Products: Satisfaction analytics for the Web, Top executive: Laurence S. Vallee, presi- ester, England president, Europe, Middle East and Africa mobile, store, contact centers, customer rela- dent and CEO, Project: WorldWide EMEA Employees: 330 tionships and social media (Europe, Middle East and Africa) Products: Parts and accessories sales pro- Eagle Ottawa LLC Top executive: Larry Freed, president and More information: Targeted industries in- grams, dealer standards and process improve- CEO clude consumer packaged goods, automo- ment, training, technical support services Based: Auburn Hills tive, technology, financial services and life and warranty solutions to vehicle manufac- U.K. operations: Sales office in Coventry, sciences turers, workforce management assistance, England General Motors Co. vendor management system Employees: Nine Based: Detroit Top executives: Felix Serrano, managing di- Products: Luxury automotive leather inte- U.K. operations: GM has manufacturing Guardian Industries Inc. rector of retail network solutions division for riors plants in Luton, England, Based: Auburn Hills U.K., Iberia and South America; Paul Dyer, Top executive: Jeff and Ellesmere Port, Eng- U.K. operations: Yorkshire, England, the U.K. operations director for retail network Creese, director of sales land; a parts warehouse in location of Guardian’s U.K. glass division solutions division; James Lever, U.K. busi- and design Toddington, England; head- Employees: 300 ness development director for retail network More information: Eagle quarters in Luton, England Products: Clear float glass, laminated solutions division; David Ballew, European also has production facili- that house sales and mar- glass, sound control laminated glass, ener- director of human capital solutions sector ties in North America, keting operations; and the gy-efficient “low-e” glass, mirrors and More information: Customers include Ford South America, Europe Millbrook Proving Ground more Motor Co., Jaguar Land Rover Group of Tata Mo- and Asia. Eagle Ottawa in Millbrook, England. Top executives: Pablo Isasmendi, manag- tors Ltd., Peugeot Citroen, BMW, Fiat and Volvo leather is used in more Employees: 4,000 ing director, and Mark Bristow, regional Car Corp. and Mondelez International. than 100 vehicles globally. Eagle Ottawa LLC’s office in Coventry Products: Vauxhall man- manager for the U.K. and Ireland — Ryan Felton 20130211-NEWS--0017-NAT-CCI-CD_-- 2/7/2013 5:05 PM Page 1

February 11, 2013 CRAIN’S DETROIT BUSINESS Page 17

People

DeAngelis Hall “Right now I am trying to both figure out where we are in year one (financially) and make decisions for year two. Ross Kumar ” Stuart Lockman, Ⅲ Oakwood Healthcare has made several board appointments. Michigan Pioneer ACO To the Oakwood Healthcare System board: Christopher DeAngelis, M.D. A former member of the Oakwood Southshore Medical Center board of trustees, he is an internist at Mainstreet Internal Medicine in Woodhaven. To the Oakwood Healthcare Inc. board: Ronald Hall Jr., vice president and general counsel for Detroit-based Bridgewater Interiors LLC, and Ram Prasad, M.D., an internist who specializes in nephrology. Also, Mike Ross, a current member of GLENN TRIEST Stuart Lockman is president of Michigan Pioneer Accountable Care Organization, one of three ACOs in Michigan operating under a model in the Oakwood Healthcare Foundation which they each assume financial risk for thousands of patients. board, was appointed chairperson of the foundation board and a member of the Oakwood Healthcare Inc. board of trustees. To the Oakwood Health System board of trustees: Neelam Kumar, M.D., a pathologist, and Cheryl Phillips-Thill, vice president of the Masco Foundation. Ⅲ Two St. John Tracking the ACO remedy Hospital and Medical Center physicians have been recognized by the Michigan chapter of Execs say early reports show savings, improved patient care the American College of BY JAY GREENE halfway point in their three- patients under their care. The ners in Care ACO, a joint Physicians. Francis CRAIN’S DETROIT BUSINESS year contracts, data should be other two are University of venture with St. John Provi- Wilson, M.D., past available to demonstrate Michigan Health System ACO in dence Health System and 2,300- chairman of medicine, has or the eight accountable- clear savings and quality Ann Arbor and Genesys Physi- member The Physician Alliance. Wilson received the Great care organizations in improvements. cian Hospital Organization in Internist of Michigan Award; and Henry F Southeast Michigan, “We are excited about the Grand Blanc Township. Bone, M.D., chief of the division of building the information progress we have made. We Lockman said Michigan Pi- Knowing their patients endocrinology and metabolism, has technology infrastructure, continue to be challenged by oneer is just starting year two ACOs are scrambling to received the Laureate Award. Also, Louis hiring staff and collecting the number of issues we have, under its three-year contract. complete three main tasks as Saravolatz, M.D., has been elected quality and cost information but we believe strongly in Three other ACOs — they care for patients under governor of the Michigan chapter of the on more than 100,000 what we are doing,” said Dearborn-based Oakwood ACO the risk-based or shared sav- American College of Physicians. He will officially become governor-elect at the Medicare patients is the easy Stuart Lockman, president of and Southeast Michigan Ac- ings model — collect complete next internal medicine national meeting part. Michigan Pioneer ACO, which is countable Care and East Lans- claims data on patients, in San Francisco in April. Some six months to a year owned by Detroit Medical ing-based Accountable Health- develop information technol- Ⅲ Herb Aronow, into their contracts with the Center. care Alliance PC — are ogy systems and, the most dif- M.D., a cardiologist Centers for Medicare and Medic- “Right now I am trying to operating under shared-sav- ficult, coordinate care of pa- at Michigan Heart of aid Services, most Detroit-area both figure out where we are ings contracts and do not as- tients between inpatient and St. Joseph Mercy Ann ACOs don’t know — from a in year one (financially) and sume financial risk. outpatient settings — said Arbor, has been quantitative perspective — make decisions for year two,” In January, Medicare ap- Richard Weil, a partner in the elected the next how much they have reduced Lockman said. “We had so proved two other shared sav- health and life sciences prac- Michigan governor of the American costs or improved quality for many issues in year one.” ings ACOs in Southeast tice of Chicago-based Oliver College of the patient populations under Michigan Pioneer is one of Michigan — the Physician Wyman, which is affiliated Cardiology. their care. three ACOs in Michigan oper- Organization of Michigan ACO, with Mercer in Detroit. Ⅲ Peter McCullough, But most ACO executives ating under the risk-based which is a joint venture with “To coordinate care and re- M.D., was recently told Crain’s they believe they pioneer model, in which they the University of Michigan duce costs, you need to know Aronow appointed to are on the right track. They have agreed to assume finan- and eight physician groups, Atherotech Diagnostics Lab’s medical say once they get to the cial risk for the thousands of and St. John Providence Part- See ACOs, Page 18 advisory board. 20130211-NEWS--0017,0018,0019-NAT-CCI-CD_-- 2/7/2013 4:17 PM Page 2

Page 18 CRAIN’S DETROIT BUSINESS February 11, 2013 Health Care ACOs: Execs say early results show lower costs, better care ■ From Page 17 who they are seeing for care and develop relationships with those THE ABCSOFACOS providers,” Weil said. “Not all physicians and (health care facili- What is an accountable-care more than 250 ACOs nationally with 57 percent to nearly $900 billion in What is a Shared Savings ACO ties) will be in your network. This organization? An ACO is a group of 4 million total Medicare 2020, up from about $570 billion in model? Of the 250 ACOs, about hospitals, physicians or other health beneficiaries. There are eight 2011. With ACOs and other cost 220 are under shared savings is evolutionary and takes time.” care providers that agree to manage approved ACOs in Michigan. Another containment mechanisms, the CBO contracts. These contracts allow Most ACOs have basic informa- care, share savings and improve 100 to 200 ACOs are expected to be said, Medicare spending growth is ACOs to split savings with Medicare tion technology systems in place to quality for a minimum of 5,000 added in the next two years. expected to average 6.3 percent from if the ACO holds future annual cost track patient data and exchange Medicare patients in a contract with How much can ACOs save? 2013 to 2020. Much of the growth, increases for the patient group information with primary care the U.S. Centers for Medicare and Medicare predicts ACOs could save aside from typical inflation, includes between 2 percent and 10 percent. physicians and specialists. Medicaid Services. taxpayers up to $1 billion over the millions of aging baby boomers. ACOs do not receive any funds if Next, ACOs identify the small Why were ACOs created and how first three years of the program and What are the different types of savings are below 2 percent. subset of high-acuity patients, or many are there? ACOs were $4.9 billion through 2019. Experts ACOs? Medicare’s two primary What is a Pioneer ACO model? those who are very sick, who ac- creations of the Patient Protection give rough estimates of savings models are Shared Savings ACOs Designed for ACOs that have more count for more than 60 percent of and Affordable Care Act of 2010. between 2 percent and 10 percent and Pioneer ACOs. Medicare’s experience in managing costs, costs, he said. They are part of an effort by Medicare over traditional Medicare costs. Innovation Center also is testing the Pioneer ACOs stand to lose money if to reduce rising health care costs by These ACOs do not include patients Advance Payment ACO model, which cost savings fail to materialize over For example, Weil said, “If you providing incentives for hospitals, enrolled in Medicare Advantage is designed to provide additional the contract period. However, Pioneer care for 13,000 people, ACOs must physicians and other providers to managed care health plans. Even with financial and operational support to ACOs could earn greater returns than find the 3 percent (to 5 percent) of coordinate care and reduce service projected ACO savings, the physician-owned and rural providers the Shared Savings ACOs. patients who are very sick. Typi- duplication. From late 2011 to early Congressional Budget Office who participate in the shared cally they are the patients who are 2013, Medicare has contracted with estimates Medicare spending will rise savings program. — Jay Greene going to die in two years. They might have (up to six) chronic dis- ACOs are seeking to contract with tients under its care in year one Like other ACOs, Michigan Pio- ing well. eases and are very expensive.” post-acute care providers to help and placed those patients in four neer develops care plans and pro- “They have been a very good Last year, Michigan Pioneer manage their sickest patients. categories of care management. vides services for those patients partner with us,” he said. “The contracted with a subsidiary of De- Working with patient claims The @Home program is designed based on their relative health. (contract) is an evolving process troit-based Hospice of Michigan to data and Hospice of Michigan’s to identify, monitor and treat pa- For example, first-tier patients, that is very important to what we identify the sickest patients under @Home Support program, Pioneer tients with advanced chronic who are the healthiest, account for are trying to do in managing their care, Lockman said. Most Michigan analyzed the 12,900 pa- illnesses. 50 percent of ACO patients but costs.” only 5 percent of costs. Those pa- During the first year, Lockman tients are managed mainly by pri- said, preliminary data shows cost mary care physicians. expenditures on the 12,900 patients “We rely on doctors for preven- have remained flat compared with tive care when patients make of- the baseline data given to the ACO fice visits to manage their dia- from Medicare. betes, talk with them about weight Lockman said Michigan Pio- control, smoking cessation and neer’s patients averaged $17,000 make sure they have all the recom- per year in costs compared with a mended vaccines,” Lockman said. $10,000 per-year average in Michi- gan and $9,500 average nationally for the 65-and-older group. More sickness, higher cost Studies have shown medical Patients categorized in the sec- costs during the last year of life ac- ond tier account for 40 percent of count for 10 percent of the nation’s ACO patients and 31 percent of $2.6 trillion health care budget. costs. Some are assigned nurse For those 65 years and older, the care managers to monitor their last 12 months of life account for 27 care, depending on the number of percent of total costs in that age chronic conditions they have and group, said the U.S. Department of the risk of hospital readmission. Health and Human Services. “Patients have a lot of misunder- “We are not spending any more standings when they are dis- on patients than we have histori- charged from hospitals,” Lockman cally spent,” Lockman said. “This said. “We want to make sure pa- is quite an accomplishment. Be- tients follow their medication in- yond that, how that translates into structions and go back for follow- performance outcomes, we aren’t up appointments with their yet in a position to say (until physicians.” April).” Tier-three patients — who account for only 10 percent of the ACO patients but 64 percent of Changes in numbers costs — are assigned nurse case One of the challenges in manag- managers to make sure those pa- ing Medicare patients in the ACO tients see their doctors to mini- pilot program is that the numbers mize emergency department visits of patients change constantly, and hospitalizations, when either through death or because possible. new physicians are added. The contract with @Home In year two, Michigan Pioneer works directly with a subset of the has grown to 224 physicians with tier-three patients — more than 18,500 patients. Deremo said the 235 advanced-illness patients who number of advanced illness have been determined to have less patients under @Home’s care also than 24 months to live. These is expected to increase. patients are provided comprehen- “Since we are dealing with a sive medical services in their sicker population, there are a lot of homes, said Hospice of Michigan deaths. People join (Medicare CEO Dottie Deremo. Advantage health plan) or move Research conducted by Hospice out of the area, and we don’t find of Michigan has shown that its out about it for six months or special program for advanced or more,” Lockman said. “We are end-stage illness patients — who constantly challenged to keep up account for 5 percent of ACO to date.” patients but 50 percent of total At Oakwood ACO, Bill Isenstein, costs — has saved 36 percent in senior vice president of managed medical costs, provides higher care, said it is too early to estimate quality care and reduces stress for cost savings or quality improve- caregivers during the patients’ ments. Oakwood’s shared savings last 24 months of life, Deremo said. Lockman said @Home is work- See Next Page 20130211-NEWS--0017,0018,0019-NAT-CCI-CD_-- 2/7/2013 4:43 PM Page 3

February 11, 2013 CRAIN’S DETROIT BUSINESS Page 19 Health Care

From Previous Page contract became effective July 1. “Because claims are delayed after services are rendered, we Region’s 2 new ACOs push state total to 8 don’t know where we are for 2012 until July, August or September,” Scott Eathorne, M.D., president NetOne, said the 750-physician or- other two-thirds are taken care at Isenstein said. BY JAY GREENE CRAIN’S DETROIT BUSINESS of Partners in Care, said the St. ganization hopes to file for an other hospitals.” Oakwood’s ACO has 380 physi- John Providence ACO will care ACO application sometime in The other medical groups affili- cians, including 115 primary care Medicare approved two new ac- for 11,000 patients with 141 physi- 2014. ated with UM’s ACO are United doctors and 265 specialists, who countable-care organizations in cians, including 53 specialists, “We are not ready to file for an Physicians, Bingham Farms; UM are now caring for 13,500 patients. Southeast Michigan last month who are on the medical staffs of ACO. We really don’t have the to- Faculty Group Practice, Ann Originally, the ACO had 14,000 pa- under the shared savings contract St. John Providence hospitals. tal partnership we need between Arbor; Oakland Southfield Physi- tients, but 500 patients died the model, bringing the total to eight “We have been working toward finance, those (who) deliver care cians, Southfield; Olympia Medical first year, which is illustrative of ACOs in Michigan. this with a subset of our doctors and those (who) receive care,” Services, Livonia; Advantage the challenges the ACOs face with The University of Michigan Health the past year,” Eathorne said. Matuszewski said. “Our physi- Health/Saint Mary’s Care Network, an aging population with high lev- System garnered its second ACO “We know these patients from our cian community wants to have a Livonia; Crawford Mercy Physician els of chronic disease. — the Physician Organization of own internal data from the physi- close integration of medicine and Hospital Organization, Grayling; “One of the challenges in man- Michigan ACO, a joint venture with cians, and we have already begun behavioral health to address the Lakeshore Health Network, aging this population is that the se- eight physician groups located the work to prepare” for the con- transitions of care.” Muskegon; Physicians’ Organization nior population spends a lot of across the state. The ACO has a tract. Matuszewski said MedNetOne of Western Michigan, Grand time out of the state,” he said. three-year contract to improve Eathorne said the ACO most is developing a behavioral health Rapids; and Wexford Physician Hos- “Some 20 percent of the people care for 81,000 patients with 1,800 likely will hire additional nurse network of psychologists and so- pital Organization, Cadillac. aren’t in the immediate area of physicians. care managers to supplement the cial workers. The physician orga- Like other ACOs, Eathorne Michigan year-round.” Also approved was St. John Prov- physician team. nization also is seeking hospital- said, St. John will consider sign- Isenstein said Oakwood has idence Partners in Care, a joint ven- “We are using patient (disease) based systems and health ing contracts with post-acute care been spending time the first seven ture with St. John Providence Health registries and electronic medical insurers with whom to work providers, including home health, months building the information System and The Physician Alliance, a records” to track and coordinate closely on the ACO. hospice and durable medical technology systems, including a physician organization with more patient care, he said. “We need the behavioral health equipment companies, to help data warehouse and population than 2,300 physicians in South- Now that the St. John ACO has network, health system and manage the sickest patients. management software system. east Michigan. the contract, Eathorne said, the health insurance partners before “Our ultimate goal is we think “We have hired two nurse case Several other physician and organization is seeking approval we apply for an ACO,” she said. we can improve quality and cost managers and are looking to hire hospital systems in Southeast from the Medicare beneficiaries David Spahlinger, M.D., the of care positively,” he said. “We four more, not just for the ACO but Michigan are preparing their or- to participate in the program. ACO’s director and executive di- will use the data to find the most for all our (managed care) con- ganizations for ACO contracting. Over the next 90 days, “we will rector of the University of Michigan efficient and effective way of tracts,” he said. “Our biggest prob- They include Henry Ford Health use the Medicare claims data to Faculty Practice Group, said UM’s working with individual lem is identifying and caring for System, Beaumont Health System engage those patients and (begin second ACO broadens the scope of providers to affect outcomes.” the high-cost, high-acuity patients. and Oakland Township-based to) manage their chronic dis- coverage to the entire state. Jay Greene: (313) 446-0325, Many slip through the cracks and MedNetOne, a physician organiza- ease,” he said. “One-third of patients are cared [email protected]. Twitter: don’t have care coordinated be- tion. Ewa Matuszewski, CEO of Med- for at our hospitals,” he said. “The @jaybgreene tween primaries and specialists.” Another issue is working with physicians to track the 33 quality some time to ramp up and get care group practice Medicare project) we have trouble with,” he said. For bottom number may fall, and they measurements that Medicare re- coordinated. We are making and we already reduced costs. We example, one quality measure are susceptible to falls and break- quires ACOs to monitor. Some doc- progress.” have to save even more to come calls for patients’ blood pressure to ing hips. We don’t want to do more tors have electronic medical out ahead,” he said. be under 140/90. harm than good, so we do the best record systems and disease reg- Finding a baseline On hitting the 33 quality mea- “Older patients have problems we can with that measure.” istry programs that help identify sures, Spahlinger said the ACO is on with the top number and can be up Jay Greene: (313) 446-0325, and track patients. Last year, the University of target for 95 percent to 98 percent. to 160,” Spahlinger said. “We try to [email protected]. Twitter: “Some quality measurements bring that number down and the @jaybgreene But the biggest challenge for Michigan formed the University of ACOs is coordinating care among Michigan IHA Health Services Pioneer primary care physicians, special- ACO, which mostly covers patients ists, home health agencies, hos- in Southeast Michigan. UM has an affiliation with IHA, an Ann Ar- pices, rehabilitation and nursing SCHOOL OF BUSINESS ADMINISTRATION homes. bor-based multi-specialty group “You can have all the data you practice with 175 doctors and 45 want, but if you can’t change the nurse practitioners. OAKLAND UNIVERSITY “We don’t have the data and behavior of the clinical team, it is don’t know how we will end up,” all for naught,” Weil said. “It takes Spahlinger said. “I believe we have building trust, buy-in and aligning reduced costs and improved quali- incentives. This can take two to ty, but my biggest concern is the 39 three years unless you have an patients in our ACO who (were in- ACO that is part of an established fected) with fungal meningitis” medical group that already has from tainted steroid injections for worked through this.” back pain. David Spahlinger, M.D., direc- “This was an unforeseen thing tor of the University of Michigan’s and those patients became very two ACOs and director of the Uni- sick,” he said. “We don’t know versity of Michigan Faculty Practice how that will affect” the ACO’s to- Group, said successful ACOs must tals. make sure office physicians buy In the first year, the UM ACO into the concept of using best prac- took care of 21,000 patients, but be- tices and coordinating care. cause several dozen physicians “We have been operating as a joined the ACO, Spahlinger said group practice for some time and the ACO now cares for 24,000 pa- are fairly conservative in how we tients. approach medicine. Those ACOs “The number of patients is con- who have just formed with physi- stantly changing and so is our cians who haven’t worked togeth- baseline (starting point to calcu- er will be challenged,” Spahlinger late cost savings and quality im- said. “Eventually we want to provement),” Spahlinger said. “So change the way things are done, far, we only have second-quarter but this is a learning process for (2012) results. We are three to six everybody. In the end, everybody months behind in collecting will benefit from it.” claims data. This is a major chal- During the past year, lenge in managing your popula- Spahlinger said, the ACO placed tion.” nurse case managers in some prac- Early data shows that the ACO tices to track care for less severe saved about 2.2 percent of average patients. historic costs in the first six “We have a central group of care months, Spahlinger said. managers to track care for our “That is not bad. We have been high-acuity patients,” he said. “We working with these patients for a think it is working out. It takes number of years (in a medical 20130211-NEWS--0020-NAT-CCI-CD_-- 2/7/20133:11PMPage1 Page 20

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February 11, 2013 CRAIN’S DETROIT BUSINESS Page 21 Health Care Henry Ford, DMC help test bundled payment program

BY JAY GREENE Kelly said about 650 Medicare CRAIN’S DETROIT BUSINESS patients a year undergo total knee or hip replace- Waste in the health care system ment surgery at can be found when patients suffer- Henry Ford West ing from chronic conditions or re- Bloomfield Hospi- covering from injuries from auto tal, Henry Ford accidents use a variety of hospi- Wyandotte Hospi- tals, physicians and testing facili- tal and Henry ties that independently bill for ser- Ford Macomb vices without coordination of Hospital. care. Under the Duplicated tests and unneces- contract, if total Kelly sary hospitalizations occur, dri- costs for hospi- ving up costs and lowering quali- tal and post-acute-care services ty. are less than the target price for To provide financial incentives the bundled services during a 30- for hospitals, physicians and other or 60-day period, Henry Ford and providers to coordinate care, its provider partners keep the dif- Medicare in late January an- ference. If the costs are above the nounced it would contract with target price, Henry Ford writes a more than 500 health care organi- check to Medicare for the differ- zations over the next three years ence. in the Bundled Payments for Care “Once we know the price, we Improvement program. come up internally with opportu- In Michigan, Henry Ford Health nities to drive out waste and re- System and the Detroit Medical Cen- duce costs,” Kelly said. ter are two of seven hospital-based Henry Ford is working with systems that will be part of the about 25 nursing homes and home payment bundling initiative, one health agencies to develop care co- of several cost-containment pro- ordination procedures and best grams that are part of the Patient medical care practices, he said. Protection and Affordable Care Other hospital systems in the Act. bundled payment program in Medicare is offering four pay- Michigan include Borgess Medical ment models for providers, de- Center and Bronson Methodist Hospi- pending on which one of the 48 tal in Kalamazoo and Sparrow bundled services they select and Health System in Lansing. whether they are a hospital, physi- Also selected for the program cian organization or other were four post-acute-care provider of post-acute care. providers: the Marvin and Betty Dan- “We will have a contract for fi- to Family Health Care Center in West nancial risk that will start in July Bloomfield Township, Ann Inc. in for total joint replacement of all Bingham Farms, Muksi LLC Medicare beneficiaries” at three of Providers in Lathrup Village and 13 Henry Ford’s hospitals, said clinics owned by Austin-Texas Chuck Kelly, D.O., CEO of the Hen- based Heartland Health Care Center. Have a specific need? Our candidates have specific training. ry Ford Physician Network, which is Jay Greene: (313) 446-0325, coordinating the Medicare con- [email protected]. Twitter: tract. @jaybgreene

Michigan AIDS Coalition promotes Ryan to CEO

The Ferndale-based Michigan Michigan AIDS Coalition, has AIDS Coalition has named Terry worked in the HIV/AIDS field for Ryan as its new CEO. nearly 25 years. Ryan had He began in 1985 as a volunteer served as inter- at Wellness Networks (now AIDS im CEO since Partnership Michigan) and later last summer, held various staff positions there. when former ex- Since 1997, he has worked in the ecutive director grant-making area and as Ameri- Helen Hicks left Corps City supervisor first at to lead Macomb Michigan AIDS Fund and subse- County Habitat quently at the Michigan AIDS Business Computers Health Engineering/ Education & Technology for Humanity Inc. Coalition, created through the Human Services in Mt. Clemens. 2009 merger of the Michigan AIDS Ryan Ryan, 68, who Fund and Midwest AIDS Preven- When you have a position to fill, you want someone previously served as director of tion Project. who’s qualified and ready to hit the ground running. grants and special projects for the — Sherri Welch Baker College’s HireQualified® can help. Our candidates are highly trained in very specific areas by instructors who are working professionals. They know what’s needed in their industries and teach practical experience Ciena to open rehab facility in West Bloomfield Twp. over theory. The service is free—the result is just the A manager and operator of least 150 full- and part-time jobs. person you are looking for. skilled nursing and rehabilitation The facility has 94 short-term re- To learn more about how we can help you find the best facilities is opening a new $12 mil- habilitation and long-term care candidate for your needs, or to schedule a meeting at lion facility in West Bloomfield suites, including 56 private suites, your place of business, visit HireQualified.com. Township. and offers medical services follow- Free recruiting services from Southfield-based Ciena Health- ing surgery or a hospital stay. The America’s leading career college. care Management Inc. said Notting aim is to provide hotel-style ser- X6406HQ Hill of West Bloomfield will create at vices and amenities. 20130211-NEWS--0022-NAT-CCI-CD_-- 2/7/2013 2:57 PM Page 1

Page 22 CRAIN’S DETROIT BUSINESS February 11, 2013

CRAIN'S LIST: LARGEST PHYSICIAN ORGANIZATIONS Ranked by number of physicians

Number of Number of hospital Number of Company physicians/board- inpatient managed-care Address certified admissions/ covered lives/ Type of Rank Phone; website Top executive(s) physicians outpatient visits contracts organization Physician hospital affiliations United Physicians Inc. Michael Williams 2,260 NA 140,000 IPA Beaumont Health System, Botsford General Hospital, Cataract Specialty Center, 30800 Telegraph Road, Suite 2800, Bingham Farms 48025 president and CEO NA 9 Children's Hospital of Michigan, Crittenton Hospital and affiliates, Detroit Medical (248) 593-0100; www.updoctors.com Deborah Tasich Center hospitals, Doctor's Hospital of Michigan, Garden City Osteopathic Hospital, Withrow Henry Ford Health System, Karmanos Cancer Center, McLaren Health System, 1. executive vice Oakland Regional Hospitals, Oakwood Healthcare Inc., Select Specialty Hospitals, president and COO St. John Providence Health System, St. Joseph Hospital - Tawas, St. Joseph Mercy Health System, St. Mary Mercy Hospital of Livonia, Straith Hospital For Special Surgery, Triumph Hospital of Detroit, UM Hospital, VA Medical Center Wayne State University Physician Group Robert Frank 2,256 NA NA Group Beaumont Health System, Children's Hospital of Michigan, Crittenton Hospital 540 E. Canfield Ave., Detroit 48201 CEO 2,256 752,018 practice Medical Center, Detroit Receiving Hospital, DMC Surgery Hospital, Doctors' (877) 978-3627; www.wsupgdocs.org Hospital of Michigan, Garden City Hospital, Harper University Hospital, Havenwyck Hospital, Heartland Health Care Center, Henry Ford Health System, Huron Valley-Sinai Hospital, Hutzel Women's Hospital, Karmanos Cancer Center, 2. McLaren-Macomb, McLaren-Oakland, Oakwood Healthcare System, Rehabilitation Institute of Michigan, Select Specialty Hospital, Sinai-Grace Hospital, St. Joseph Mercy Health System, St. Mary Mercy-Livonia, St. John Providence Health System, Straith Hospital for Special Surgery, Triumph Hospital Detroit, UM Health System, VA Medical Center, Vibra Hospital of SE Detroit The Physician Alliance LLC Michael Madden 2,203 50,141 268,080 IPA St. John Hospital and Medical Center, Providence Hospital, Providence Park 3. 20952 12 Mile Road, Suite 130, St. Clair Shores 48081 president and CEO 2,191 1,157,320 Hospital, St. John Macomb-Oakland Hospital, St. John River District Hospital and (586) 498-3555; www.thephysicianalliance.org Brighton Center for Recovery Consortium of Independent Physician Mark Casmer 2,200 NA NA IPA ProMedica Bixby Hospital, ProMedica Herrick Hospital, ProMedica Toledo interim president and NA Hospital, Hillsdale Community Health Center, Port Huron Hospital, St. Joseph 4. Associations COO Mercy Hospital, Oakwood Healthcare System, Henry Ford Health System, St. Mary 101 N. Main St., Suite 430, Ann Arbor 48104 Mercy Hospital (734) 302-2128; www.medadvgrp.com/cipa Henry Ford Physician Network Charles Kelly 1,763 NA 28,100 IPA Henry Ford Health System, others 5. 1 Ford Place, Detroit 48202 president and CEO NA 1 (313) 874-1466; henryfordphysiciannetwork.com University of Michigan Faculty Group Practice David Spahlinger 1,732 45,412 9,958 Group University of Michigan Health System 6. 4101 Medical Science Building I, Ann Arbor 48109-0624 senior associate dean 1,536 1,938,541 1 practice (800) 211-8181; www.med.umich.edu/medschool/fgp for clinical affairs McLaren Physician Hospital Organization Gary Wentzloff 1,511 NA NA PHO McLaren-Bay Region, McLaren-Bay Special Care, McLaren-Central Michigan, 7. 2701 Cambridge Court, Suite 200, Auburn Hills 48326 president and CEO NA McLaren-Greater Lansing, McLaren-Orthopedic, McLaren-Lapeer Region, (248) 484-4928; www.mclarenpho.org McLaren-Clarkston, McLaren-Flint, McLaren-Macomb, McLaren-Northern Michigan, McLaren-Oakland DMC PHO LLC Steven Grant 1,300 NA 53,000 PHO Detroit Medical Center 8. 28411 Northwestern Highway, Suite 750, Southfield 48034 executive director 1,260 4 (248) 262-7369; www.dmcpho.com Henry Ford Medical Group Bill Conway 1,220 95,690 109,333 Group Henry Ford Hospital, Henry Ford West Bloomfield Hospital 1 Ford Place, Detroit 48202 CEO, Henry Ford 1,220 1,929,367 6 practice (800) 436-7936; www.henryford.com Medical Group and 9. executive vice president, Henry Ford Health System Oakwood ACO LLC William Isenstein 942 NA 94,110 PHO Oakwood Hospital and Medical Center, Oakwood Annapolis Hospital, Oakwood 10. 15500 Lundy Parkway, Dearborn 48126 executive director 873 13 Heritage Hospital, Oakwood Southshore Medical Center (313) 253-6058; oakwoodaco.org United Outstanding Physicians LLC Y.T. Hammoud 927 NA 150,000 IPA St. Mary, Henry Ford Wyandotte, St. Joseph Mercy, Oakwood Healthcare Inc., 11. 330 Town Center Drive, Suite 900, Dearborn 48126 medical director and 886 19 Detroit Medical Center, and hospitals designated by health plans with which UOP (313) 240-9867; www.uopdocs.com CEO physicians are contracted MedNetOne Health Solutions Ewa Matuszewski 750 B NA NA IPA Crittenton Hospital and Medical Center, Henry Ford Health System, Beaumont 12. 4986 N. Adams Road, Suite D, Rochester 48306-1416 CEO NA Health System, Mercy Memorial Monroe, McLaren Health System, St. John (248) 475-4701; www.mednetone.net Providence Health System, Detroit Medical Center Huron Valley Physicians Association PC Jack Carman 580 NA 40,000 IPA St. Joseph Mercy Health System, Chelsea Community Hospital 13. 2002 Hogback Road, Suite 3, Ann Arbor 48105 president NA 5 (734) 973-0137; www.hvpa.com Olympia Medical Services PLLC Randall Bickle 550 NA NA IPA Botsford, Garden City, St. Mary-Livonia, Providence Park, St. Joseph-Ann Arbor 14. 33300 Five Mile Road, Suite 210, Livonia 48154 president and CEO 550 (313) 357-1215 Greater Macomb PHO Jerome Finkel 517 NA 30,000 PHO Henry Ford Macomb Hospital-Clinton Township 15. 43421 Garfield, Suite 203, Clinton Township 48038 medical director 492 7 (586) 263-2620; greatermacombpho.com Professional Medical Corp. Tom Wolff 450 NA 50,000 IPA Hurley Medical Center, McLaren, Genesys 101 N. Main St., Suite 430, Ann Arbor 48104 Robin Ricketts NA 9 16. (517) 336-1400; www.pmcpo.com managing executives Asif Ishaque president Oakland Physicians Network Services Rodger Prong 450 NA 80,000 IPA St. Joseph Mercy Hospital Oakland, Huron Valley-Sinai DMC, Doctor's Hospital of 16. 3901 Highland Road, Suite C, Waterford Township 48328 executive director 445 14 Michigan (248) 682-0088; www.opns.org Bashar Succar president Oakland Southfield Physicians PC Jerome Frankel 322 NA 143,249 IPA Botsford Hospital, Children's Hospital of Michigan, Crittenton Hospital and 29200 Northwestern Highway, Suite 325, Southfield 48034 medical director 297 10 Medical Center, Doctors' Hospital of Michigan, Garden City Osteopathic Hospital, (248) 357-4048; www.ospdocs.com Harper University Hospital, Henry Ford Health System, Huron Valley Sinai 18. Hospital, Oakwood Healthcare Inc., McLaren-Oakland, Sinai Grace Hospital, St. John Providence Health System, St. Joseph Mercy Health System, St. Mary Mercy Hospital, Beaumont Health System Accountable Healthcare Alliance Robert Jackson 303 NA 20,000 IPA Henry Ford Wyandotte Hospital, St. Mary Mercy-Livonia, Oakwood Hospitals, 19. 7445 Allen Park Road, Suite 250, Allen Park 48101 president and 298 7 Mercy Hospital Port Huron (734) 302-2123 medical director Integrated Health Associates Inc. William Fileti 288 NA 74,000 Group St. Joseph Mercy Health System, University of Michigan Health System 20. 24 Frank Lloyd Wright Drive, Lobby J2000, Ann Arbor president and CEO 238 567,000 11 practice 48106-0446 (734) 747-6766; www.ihacares.com Michigan Health Care Professionals PC Jeffrey Margolis 243 NA NA Group Beaumont Health System, Botsford General Hospital, Crittenton Hospital, Detroit 30000 Northwestern Highway, Farmington Hills 48334-3292 president NA practice Medical Center hospitals, Garden City Hospital, Henry Ford Hospital West (248) 851-1430; www.mhppc.com Bloomfield, Huron Valley-Sinai Hospital, McLaren-Macomb, McLaren-Oakland, 21. McLaren-Lapeer, Doctors' Hospital of Michigan, Oakwood Healthcare Inc., Port Huron Hospital, St. John Providence Health System, St. Joseph Mercy Oakland, St. Mary Mercy Hospital DMC Primary Care Physicians PC Kenneth Dziuba 96 NA NA IPA Detroit Receiving Hospital, Children's Hospital of Michigan, Harper-Hutzel, Sinai- 21519 Harper Ave., Suite 107, St. Clair Shores 48080 president and 89 Grace Hospital, St. John Providence, Beaumont Health System, Botsford Hospital, 22. (586) 498-8922; www.dmcpcp.com medical director Garden City Hospital, Oakwood Healthcare Inc., Henry Ford Health System, Crittenton Hospital, Huron Valley Hospital, Karmanos Cancer Center, Rehabilitation Institute of Michigan Livingston Physician Organization Debbie Bernstein 84 NA NA IPA St. Joseph Mercy Livingston Hospital 23. 620 Byron Road, Howell 48843 COO 83 5 (517) 545-6337; www.livingstonphysicians.com

This list of physician organizations encompasses physician hospital organizations and independent practice associations and is an approximate compilation of the largest such groups in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. IPA = Independent practice association. PHO = Physician hospital organization. ACO = Accountable care organization. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the organizations. NA = not available. B MedNetOne Health Solutions is no longer aligned with Wayne State Physicians Group as of Jan. 1, 2013. LIST RESEARCHED BY BRIANNA REILLY DBpageAD_DBpageAD.qxd 11/15/2012 3:09 PM Page 1

KNOWLEDGE-POWERED MEDICINE

Leaders in the field of medicine. Training the doctors of the future. Cutting edge research that creates the new standards of medical care. All the reasons you want your doctor to be a Wayne State University Physician Group doctor. Visit upgdocs.org or call 877-WSU-DOCS to find your physician. 20130211-NEWS--0024-NAT-CCI-CD_-- 2/8/2013 11:47 AM Page 1

Page 24 CRAIN’S DETROIT BUSINESS February 11, 2013 Clean-air grants give lift to heavy construction industry

BY JAY GREENE of Florence Cement in Shelby Town- pillars (backhoe for digging sewer smith said. pumps, hydraulics and tracks. CRAIN’S DETROIT BUSINESS ship, said that last year he took ad- pipes),” Pittiglio said. “We had Of about 70 qualifying applica- “It was well worth the cost,” he vantage of a federal anti-pollution bought it new in 1990 and were at a tions, Coppersmith said 35 engines said. “We have use of it for another Business in the highway con- program to retrofit one of the com- point where we needed to replace were replaced, cutting particulate 20 years and we are reducing pol- struction industry has been slow pany’s backhoes and saved about it or rebuild it.” emissions by nearly 40 tons per lution.” to recover in Southeast Michigan $30,000. Pittiglio said Florence has cut year and significantly reducing ni- Nationally, the EPA estimates after the 2008-09 economic down- “We heard about a program fuel costs by more than 15 percent trogen oxide and carbon monoxide there are 20 million older diesel en- turn, and capital expenditures for through (the Michigan Infrastructure and reduced air pollution with the emissions. gines that contribute to higher lev- newer, less polluting diesel en- and Transportation Association) more energy-efficient motor. The average cost of a tier-three els of air pollution. In the Midwest, gines has lagged. where they could replace the mo- “Business is starting to pick up, But Mike Pittiglio Sr., co-owner tor in one of our excavator Cater- replacement diesel engine is the EPA estimates there are ap- but the work is still not up there to about $30,000, Coppersmith said. proximately 3.3 million. justify spending a lot of money on However, cranes, which require “We are going to apply for an- equipment,” Pittiglio said. “It was two engines, cost $80,000 to other EPA grant because there is a nice we had this program to re- $100,000, he said. The EPA pays big demand from Southeast Michi- 60$//2)),&(Ř+20(2)),&( place our backhoe.” 75 percent of the replacement gan companies,” Coppersmith Rob Coppersmith, MITA’s vice Michigan’s Best Selection For costs. said. president of member services, said Small Professional Ofﬁce or Home Ofﬁce Pittiglio said Florence paid Jay Greene: (313) 446-0325, the heavy construction industry  about $20,000 for its share of the en- [email protected]. Twitter: Free Design Assistance experienced about a 15 percent gine and to upgrade the backhoe’s @jaybgreene  Customization - Sizes & Finishes drop in hours worked over the last  Professional Installation several years.  Contemporary or Traditional “The grant from the Environmen- tal Protection Agency was good tim- ing and helped some companies in- A federal grant saved Florence vest in equipment they might not Cement in Shelby Township about have been able to,” Coppersmith $30,000 on a new diesel engine for said. a backhoe like this one. The Since 2010, MITA received two cleaner-burning engine reduces air grants totaling $1.26 million from polution and saves the company the EPA Midwest Clean Diesel Ini- about 15 percent on fuel costs. tiative to repower heavy construction diesel engines, said Copper- smith, who was the grant FEATURING administrator for the project. “Heavy construction equipment lasts for a long time. The tier-zero 6287+),(/'ō752< equipment is older than 1996. Com- 129,ō/$.(6,'( panies are producing tier-four *5$1'5$3,'6 www.gormans.com equipment now that emit lower jesper_B levels of particulates,” Copper- COURTESY OF MICHIGAN INFRASTRUCTURE AND TRANSPORTATION ASSOCIATION Unsecured creditors of A123 may get Evan Kaploe, now 65 cents on a dollar

® Unsecured creditors of A123 Sys- In Your Corner. tems Inc., a bankrupt maker of batteries for electric cars with facilities in Michigan that had U.S. Varnum is pleased to welcome Evan Kaploe to the firm. government backing, will likely collect around 65 cents for each I Litigation of civil and criminal tax controversies with dollar they are owed, according to the state and federal government, and litigation of recent court documents. commercial disputes. The money largely comes from the sale of most of the company’s I Representing small to large companies, their assets to a unit of China’s largest officers, and other professionals in difficult tax and auto parts firm, Wanxiang Group. business matters, whether in a transactional or The deal had the support of litigation setting A123’s committee of unsecured creditors and was approved by a I In Your Corner. U.S. government panel that oversees foreign investment. The company filed for bankruptcy last year. A123 makes lithium- ion batteries for Fisker Automotive, BMW hybrid 3- and 5-series cars, and General Motors Co.’s all-electric Chevrolet Spark, which is scheduled for release later this year. Wanxiang beat out the only other active bidder, Johnson Controls Inc., in a court-supervised auction for the assets of A123. A123 said in its disclosure statement, which de- scribes its plan for paying off debts, that holders of unsecured claims will receive about 65 percent of what they are owed. First Tier Ranking Once the disclosure statement is in Tax Litigation approved by the bankruptcy court, the plan will be sent to creditors Evan Kaploe for their approval. I I I I I Metro Detroit Grand Rapids Kalamazoo Grand Haven Lansing [email protected] — Automotive News and Bloomberg News 20130211-NEWS--0025-NAT-CCI-CD_-- 2/8/2013 10:10 AM Page 1

February 11, 2013 CRAIN’S DETROIT BUSINESS Page 25 Blue Cross conversion could cost it $4 million in yearly property taxes

BY JAY GREENE Ⅲ Oakland Macomb Office, 6100 CRAIN’S DETROIT BUSINESS Auburn Road, Utica. Appraised value, $940,000. Taxes, $28,251. Blue Cross Blue Shield of Michigan Under the conversion proposal, stands to pay about $4 million in Blue Cross would be one of about annual property taxes on 10 build- 20 mutual companies in Michigan. ings it owns in Michigan if the It would be owned by the compa- state Legislature gives final ap- ny’s 4.4 million policyholders in proval to bills that would allow the Michigan and 1.1 million policy- state’s largest health insurer to holders in other states. convert into a nonprofit mutual, Blue Cross also would con- according to tribute $1.56 billion over 18 years data provided to to a nonprofit foundation that Crain’s Detroit would provide a variety of services Business. to the community. “This legisla- Taxes paid to state and local gov- represents tion ernments by Blue Cross would a tremendous amount to an average of $100 mil- economic devel- lion over the next 20 years. Taxes opment opportu- paid to state government, includ- nity for local ing the Michigan Business Tax, governments,” would start at about $89 million said Andy Het- Hetzel and grow over time. zel, Blue Cross vice president of As a 501(m) corporation, Blue corporate communications. “It Cross has paid federal income tax- creates a brand-new revenue es since 1986. In 2011, Blue Cross stream that didn’t exist before to paid $74 million in federal income fund essential services and other taxes on net income of $114.4 mil- priorities. It is an opportunity to lion. generate additional tax dollars Jay Greene, (313) 446-0325, without raising taxes.” [email protected]. Twitter: @jay- The annual property taxes are bgreene estimates based on 2009 assessed values, 2011 tax rates and 2012 company assets. Blue Cross estimated the appraised value of the 10 buildings at $105.45 million, with a taxable value of $52.725 million and total projected property taxes of $3.986 million. Here are the properties and the estimated taxes: Ⅲ Detroit Tower Parking Deck, 651 E. Congress St., Detroit, 600,000 square feet. Appraised value, $10.8 million. Taxes, $930,535. Ⅲ Detroit Tower Service Center, 600 E. Lafayette Blvd., Detroit, 758,000 square feet. Appraised value, $16.1 million. Taxes, $691,992. Ⅲ Lansing Capital Avenue Building, 232 S. Capitol Ave., Lansing (former Accident Fund Holding Inc. site), 193,000 square feet. Ap- praised value, $18.35 million. Tax- es, $597,712. Ⅲ Bricktown Customer Service Center, 500 E. Lafayette, Detroit, 160,000 square feet. Appraised value, $13.3 million. Taxes, $571,645. Ⅲ Jefferson Building, 441 E. Jeffer- son Ave., Detroit, 178,000 square feet. Appraised value, $11 million. Taxes, $472,789. Ⅲ Metro Service Center, 20500 Civic Center Drive, Southfield. Ap- praised value, $11 million. Taxes, $335,631. Ⅲ Lyon Meadows Conference Cen- ter, 5320 Grand River Ave., New Hudson, 166,000 square feet. Ap- praised value, $6.5 million. Taxes, $196,595. Ⅲ Grand Rapids Building, 86 Mon- roe Center N.W., Grand Rapids, 79,000 square feet. Appraised value, $5.3 million. Taxes, $125,930. Ⅲ Marquette Service Center, 415 S. McClellan Ave., Marquette, 15,000 square feet. Appraised value, $1.3 million. Taxes, $35,410. 20130211-NEWS--0026-NAT-CCI-CD_-- 2/8/2013 10:11 AM Page 1

Page 26 CRAIN’S DETROIT BUSINESS February 11, 2013

CALENDAR

Entrepreneur – You: A Day of Educa- TUESDAY tion and Resources for Women Entre- FEB. 12 preneurs. 8:30 a.m.-3 p.m. Michigan BING AMONG SPEAKERS AT Women’s Foundation. With Lori Blak- Economic Update. 7-9 a.m. Association er, president and CEO, TTi Global, DETROIT POLICY CONFERENCE for Corporate Growth Detroit, RMA Rochester Hills. Walsh College, Troy Detroit Mayor Dave Bing is among Michigan. With Douglas Cote, U.S. campus. $40. Contact: Jacqueline the keynote speakers at the chief market strategist, ING Investment Northrop, (313) 962-1920, Ext. 204; Detroit Regional Chamber’s 2013 Management. Glen Oaks Country email: [email protected]; website: Detroit Policy Conference, 8 a.m.- Club, Farmington Hills. $30 ACG mem- www.miwf.org. 4:30 p.m. Feb. 28 at MotorCity bers, $30 RMA members, $50 nonmem- Casino Hotel, Detroit. He will be bers. Contact: (877) 894-2754. Detroit Economic Club Luncheon. joined by Matt Cullen, president 11:30 a.m.-1:30 p.m. With Jay Timmons, and CEO of Rock Ventures, Detroit, Macomb Business Awards. 8-10 a.m. president and CEO, National Associa- and Richard Florida, director of the Macomb County Department of Plan- tion of Manufacturing. Discussion will Martin Prosperity Institute and ning & Economic Development. Cele- focus on the role of manufacturing in professor of business and brate county businesses that lead in revitalizing the economy. MotorCity creativity at the Rotman School of Casino Hotel. $45 members, $55 guests energy efficiency, diversification, Management, University of of members, $75 nonmembers. Con- workforce development and corporate Toronto. tact: (313) 963-8547; email: citizenship. With Fox 2’s Huel [email protected]; website: Other speakers and panelists at Perkins, Macomb County Executive www.econclub.org. this event dedicated to Detroit’s Mark Hackel and former Detroit comeback will include Larry Tigers pitcher Dan Petry. Best Western Networking to Provide Productive, Alexander, chairman of the Detroit Sterling Inn Banquet & Conference Regional Convention Facility Center, Sterling Heights. $20. Contact: Long-Lasting Relationships. 11:30 a.m.- 1:30 p.m. The Community House. Lec- Authority; Faye Nelson, president Maria Zardis, (586) 469-5285; email: and CEO of the Detroit RiverFront [email protected]; web- ture focuses on defined tools to help you develop a network and outlines Conservancy; and Dan Carmody, site: www.macombcountymi.gov/Bus disciplined, methodical, process- president of the Eastern Market inessDevelopment/business_awards. based approaches. With Camille Corp. Jayne, president and CEO of The Com- Tickets are $75 for Detroit munity House and former chairman Regional Chamber members and and CEO of Universal Electronics Inc. $125 for nonmembers. WEDNESDAY The Community House, Birmingham. For more information, contact FEB. 13 $35; $45 with lunch. Contact: Program Department, (248) 644-5842; email: pro- Beverly Maddox at (313) 596- 0343; email to Talent Townhall. 8-10 a.m. Auburn [email protected]; website: [email protected], or Hills Chamber of Commerce. Forum www.tchbulletproof.org. visit www.detroitchamber.com. for business leaders to discuss the issues of attraction, development and Business Women’s Networking and retention of talent in this region. Oak- Dinner. 6-8:30 p.m. American Business Novi. $18.50. Advance registration re- land Community College, Auburn Women’s Association, Novi Oaks quired. Contact: Holly Hengstebeck, Hills. Auburn Hills chamber members chapter. Demonstration and training (734) 634-8383; email: publicity@abwa- $25, nonmembers $35. Contact: program on the Women’s Instruction- novi.org; website: www.abwa- novi.org. Rachael Jay, rjay@auburnhillscham al Network, an online suite of profes- ber.com. Website: www.auburnhills sional development tools available to chamber.com. ABWA members. DoubleTree Hotel, UPCOMING EVENTS IMPACT 2013. 1-7 p.m. Feb. 21. Au- tomation Alley. Conference explores taking advantage of key resources for business growth and connecting with clients, colleagues and customers. Sterling Inn Conference Center, Ster- ling Heights. $39 early-bird preregistered members, $59 preregistered members, $79 members at the door, $59 early-bird preregistered nonmembers, $79 preregistered nonmembers, $99 nonmembers at the door. Contact: Automation Alley Resource Center, (800) 427-5100; email: info@auto mationalley.com; website: www.au tomationalley.com.

How Can Your Personal Brand Serve You? 3-5 p.m. Feb. 21. Commercial Real Estate Women, Detroit. Learn to develop or enhance your personal brand by leveraging your strengths and experiences and aligning your personal brand with that of your company. With Jill Jordan, founder, Get Ahead by Getting Known. CREW De- troit members will receive a signed copy of GPS (Goals and Proven Strate- gies) for Success, published by talk show host and life coach Sallie Felton and others. Books will be available for sale to guests. $40 CREW members, $60 nonmembers. Baldwin Public Li- brary, Birmingham. Register by Feb. 15 or pay additional $5. Contact: www.crewdetroit.org.

Third Thursday Networking. 4:30-6:30 p.m. Feb. 21. Southfield Area Cham- ber, city of Southfield, Engineering Society of Detroit. Appetizers, cash bar. Embassy Suites, Southfield. Free. Membership not required. Contact: Tanya Markos-Vanno, (248) 557-6661; email: tanya@southfieldchamber. com; website: www.southfieldcham ber.com.

Detroit Economic Club Luncheon. 11:30 a.m.-1:30 p.m. Feb. 27. With Mark Bertolini, chairman, CEO and president of Aetna Inc. The Westin South- field. $45 members, $55 guests of members, $75 nonmembers. Contact: (313) 963-8547; email: jvergote@econ club.org; website: www.econclub.org. 20130211-NEWS--0027-NAT-CCI-CD_-- 2/8/2013 10:11 AM Page 1

February 11, 2013 CRAIN’S DETROIT BUSINESS Page 27

BUSINESS DIARY

ACQUISITIONS MOVES prospective buyers interactive home NEW SERVICES Capital America Corp., is offering video tours anywhere. Website: equipment financing to complement ProQuest LLC, Ann Arbor, signed an Dallo Law, from 101 W. Big Beaver Bright House Networks, Detroit, added agreement to acquire Ebook Library www.total3dsolutions.com. its traditional revolving lines of cred- Road, Suite 1400, Troy, to 255 S. Old TV One, a real-life entertainment net- it. Website: www.hennesseycap.com. from Ebooks Corp. Ltd., Claremont, Woodward Ave., Suite 310, Birming- Brasscraft Manufacturing, a Novi- work targeting African American Australia, which will expand its e- ham. Telephone: (248) 283-7000. Web- based manufacturer of products for adults, to its lineup. Website: Arrow Strategies LLC, a Bingham- book delivery and aggregation capa- site: www.dallolaw.com. use in the construction and repair www.tvone.tv. based staffing firm, announced the bilities. formal launch of its health care markets, released a 3-minute video de- DMC Sinai-Grace Hospital, Detroit, Agree Realty Corp., Farmington Hills, scribing the new federal no-lead law. staffing division, which specializes in NEW PRODUCTS is offering a new, free diabetes testing the staffing of contract and permanent has acquired Dick’s Sporting Goods Website: www.brasscraft.com. and prevention program called and Petsmart in St. Joseph, Mo., for Humantech Inc., Ann Arbor, released health care professionals. Website: an e-book, Five Steps to Improve Er- RouteOne LLC, Farmington Hills, and Discover Diabetes. Website: www.arrowstrategies.com. the approximate aggregate cost of $8.5 Adam Systems, Spanish Fort, Ala., an- www.sinaigrace.org. gonomics in the Office, detailing er- Plumbing Professors Inc., Canton million. nounced a joint data integration sys- gonomic principles to help establish a Proquest LLC, Ann Arbor, unveiled its Township, announced the addition of tem for their common customers, CONTRACTS productive, comfortable place to updated ProQuest Congressional ser- septic system services to its service work. Website: www.humantech.com. which provides a bi-directional con- vice, which provides users with a center in Windsor. It is now licensed Loc Performance Products Inc., Ply- Total 3D Solutions LLC, Auburn Hills, nection between RouteOne’s Web- comprehensive collection of historic in Canada to perform septic system in- mouth, will provide design, testing a business partner of Carl Zeiss Group, based credit application management and current congressional informa- spections, maintenance and system and prototype development services Oberkochen, Germany, has released system and the Adam Systems Dealer tion. Website: www.proquest.com. design and installations. Phone num- to BAE Systems Inc., Arlington, Va., its new multimedia video eyeglasses Management System. Website: Hennessey Capital LLC, Rochester, a ber: (734) 416-4221. Website: for final drive assemblies on the U.S. that allow real estate agents to show www.routeone.com. division of Connecticut-based Hitachi www.plumbingprofessors.com. Army’s Paladin self-propelled howitzer and ammunition supply-vehicle fleet. QEK Global Solutions Inc., Warren, was selected to support BMW of North America LLC, Woodcliff Lake, N.J., with fleet development, administration and enforcement of policy and procedures for BMW’s company- owned vehicles in the U.S. Qualitech, Bingham Farms, was selected by the Shops of Marquette, Ish- peming, to provide and install Qualitech’s Skyline property management system. The Shutter Co., Pleasant Ridge, will manage the window treatment program for World of Floors, Sterling Heights, inside Art Van Furniture stores. Signature Associates Inc., Southfield, was awarded the representation of a 172,000-square-foot industrial building in Auburn Hills Corporate Park, 2705 Commerce Parkway, Auburn Hills. TRW Automotive Holdings Corp., Livo- nia, was tapped by Chrysler Group LLC to bring its passive entry system to 2013 Ram trucks. The system unlocks the door when a person carrying the key fob approaches the door sensor and when the door handle is grabbed, with no need to press the key-fob buttons. Greg Frazier, CPA, PLLC, Detroit, an accounting firm, completed the development of a virtual warehouse management system in the Microsoft Azure cloud, for Plymouth-based Mo- tor City Performance Cycle, an international retail distributor of motorcy- Local matters. cle parts and accessories. Fisher/Unitech Inc., Troy, a product life cycle management company, an- But, you already knew that. nounced a partnership with Stratasys Ltd., the result of the merger of Strata- sys and Objet, and is authorized to expand its product line of 3D printers and production products to include all Objet products. EXPANSIONS Altair Engineering Inc., Troy, expanded its HyperWorks Partner Alliance with Ann Arbor-based Michigan Engi- neering Services LLC, which made its Energy Finite Element Analysis Solver for noise vibration harshness analysis available within the program. Website: www.altair.com. PM Environmental Inc., Berkley, We like this state. No, we love this state. It’s who we are. It’s what drives us. opened its 15th regional office, in Montville, N.J., to serve the mid- Atlantic region. Website: We also like proving that a bank from right here is better for your business. www.pmenv.com. Not always an easy task. There isn’t a mold, only a model — work harder. UHY LLP, Sterling Heights, opened two member firms in the Bahamas and Uzbekistan. Website: www.uhy.com. Because local matters today and tomorrow. Thanks for letting us prove it. Personal • Mortgage • Business • Commercial DIARY GUIDELINES Send news releases for Business Diary to Departments, Crain’s Detroit Business, 1155 Gratiot Partner with us today. Ave., Detroit, MI 48207-2997 or (888) 324-4100 send e-mail to cdbdepartments@ crain.com. Use any Business Diary flagstar.com/business item as a model for your release, Like us on and look for the appropriate category. Without complete information, your item will not run. Member FDIC Photos are welcome, but we cannot guarantee they will be used. 20130211-NEWS--0028-NAT-CCI-CD_-- 2/8/2013 10:12 AM Page 1

Page 28 CRAIN’S DETROIT BUSINESS February 11, 2013

Crain’s Job Front, College Top Talent Visit crainsdetroit.com/jobfront and crainsdetroit.com/toptalent to search for jobs, post a résumé or find talent. Job Front PEOPLE

Financial, Ann Arbor, from territory MEDIA IN THE SPOTLIGHT sales manager, Monarch Community Dan Zako to re- Bank, Coldwater. Henry Ford West Bloomfield gional sales man- Hospital has named MaryClaire ager, Pandora Radio Central Re- Dangel-Palmer COO. She succeeds HEALTH CARE gion, Birming- , Mary Vidaurri, William Porter ham, from senior who retired. R.N., to director sales manager, Vidaurri will of clinical ser- Detroit. continue to vices, MedNetOne work part time Health Solutions, NONPROFITS with Henry Ford Rettich Oakland Town- Thomason-Redus Calhoun West Karan Bates- Piech ARCHITECTURE Bloomfield and ship, from hybrid Zako Gasior to deputy ficer, Sphinx Organization, Detroit, Henry Ford care manager. director, Macomb from director of patron relations; also Patrick Calhoun and Kevin Rettich County Habitat for Health System Kelli Lawrence to Caen Thomason-Redus to manager of promoted to principals, SHW Group, Humanity, from corporate partnerships, from assis- Berkley, from associate principals. on strategic residential case projects director of strate- tant to the executive and artistic di- manager, Rose gic programs. Dangel-Palmer through her Porter rector, Early Music Now, Milwaukee, REAL ESTATE Hill Center, Holly, Novi company, Mark Heppner to Wis. Renee de Spelder MSV & Associates LLC, of which from case manager, Hope Network Be- vice president, historic resources to senior associ- she is president. havioral Health, Flint. REAL ESTATE ate at Lee & Asso- and visitor expe- ciates of Michi- Dangel-Palmer, 54, most recently Fran Dombrowski to director of care rience, Edsel & Garrett Mid- gan, Southfield, had been administrator for center, Hospice of Michigan, Detroit, Eleanor Ford dlekauff to vice from vice presi- surgical, anesthesia and cardiac from manager of call center, Health House, Grosse president, office dent at CBRE services. Alliance Plan of Michigan, Detroit. Bates-Gasior Pointe Shores, properties divi- Group Inc., South- She earned her master’s and from executive di- sion, from sales field. bachelor’s degrees in nursing from LAW rector, Salisbury House & Gardens, associates, and Des Moines, Iowa. Oakland University in Rochester David Eberhard to partner, Warner Garry Rogers to CONSULTING Hills. Wendy Brightman to executive director, vice president, in- de Spelder Norcross & Judd LLP, from senior United Methodist Retirement Commu- Dawn Sayn to se- dustrial proper- counsel, remaining at the firm’s Clin- nities Heritage Foundation, Chelsea, nior manager, specializing in person- ties division, L. ton Township office. from managing director, Ele’s Place, al, estate, gift and trust planning and FINANCE Ann Arbor, a support center for griev- Mason Capitani tax compliance, ShindelRock, Novi, Darryl Bressack to partner, Fink & As- Middlekauff to vice president of ing children. Inc., Troy. from senior manager, Plante & Moran Casey Daniels sociates Law, Bloomfield Hills, from business development, Huron Valley associate. Alison Piech to chief advancement of- PLLC, Southfield. RETAIL Doreen Mancini to senior account manager, Kentwood Office Furniture, Novi, from account executive, Facility Matrix Group, Pontiac.

SERVICES Charlie Moret to managing director, entrepreneurial programs, TechTown, De- troit, from managing director, PROUDTO BE IN business development, Connecti- cut Innovations Inc., Rocky Hill, Conn. Moret Larisa Walega to director of field marketing, Ziebart Interna- tional Corp., Troy, from manager, advertising and local store promo- DETROIT tions. Seth VanderVlucht to business development executive, When you’re serious about intellectual property law … Walega Innovative Learn- ing Group Inc., Royal Oak, from COO, E7Solutions, Troy. Use Brinks, now in Detroit. Brinks is a recognized national leader in intellectual property law. With its new Detroit Office located in the same EOPLE GUIDELINES building as a U.S. Patent and Trademark Office, domestic P Announcements are limited to and international clients can participate in on-site patent management positions. Send examination and administrative trial proceedings. submissions to Departments, Crain’s Detroit Business, 1155 Gratiot Ave., Detroit, MI 48207- Serving innovators in Michigan and beyond: 2997, or send e-mail to [email protected]. Detroit Ofﬁ ce Ann Arbor Ofﬁ ce Releases must contain the person’s U.S. Patent Suite 1775 Suite 200 name, new title, company, city in No. 129,843 which the person will work, former Steam engine 300 River Place Drive 524 South Main Street Detroit, MI 48207 Ann Arbor, MI 48104 title, former company (if not lubricator by promoted from within) and former Detroit inventor 313.393.5400 734.302.6000 city in which the person worked. Elijah J. McCoy, Photos are welcome, but we cannot granted in 1872. Chicago | Ann Arbor | Detroit | Indianapolis | Research Triangle Park Area | Salt Lake City | Washington, DC | www.usebrinks.com guarantee they will be used. 20130211-NEWS--0029-NAT-CCI-CD_-- 2/8/2013 6:24 PM Page 1

February 11, 2013 CRAIN’S DETROIT BUSINESS Page 29 VC: Beringea co-directs $180M fund Lear shares rise after investor ■ From Page 3 we’re all on deal-flow alert,” Roth- group aims for board seats stein said. First fund invested $185M in 28 companies “This is very significant for a BY MARK CLOTHIER ulatory filing. The group, which couple of reasons,” said Chris Fund managers at Farmington Mophie LLC, a maker of exter- BLOOMBERG NEWS didn’t provide more details on Rizik, fund man- Hills-based Beringea LLC and Cred- nal batteries for the iPhone and the candidates they may propose ager and presi- Shares of Southfield-based Lear for the board, said they bought it Suisse’s New York-based Cus- the iPod and portable magnetic Corp. rose the most in more than dent of the Ann tomized Fund Investment Group say strip readers for secure debit- shares in Lear because they Arbor-based Re- two years Friday after an in- deem the stock undervalued. they have reviewed more than and credit-card transactions with vestor group said it would nomi- naissance Ven- 1,200 deals since the inception of a manufacturing and distribu- On Feb. 1, Lear said its board ture Capital Fund, nate directors and push the auto increased a share repurchase Michigan Growth Capital Partners I tion center in Paw Paw, near parts maker to return more cash which raised its LP in 2008. Kalamazoo. program by $800 million to $1 bil- second fund of to shareholders. lion, to be completed over three “We’ve had a very robust deal Beringea and CFIG also co- Lear (NYSE: LEA) gained 3.6 $65 million last years. On Thursday, Lear said it flow,” said Charles Rothstein, se- manage the $130 million Invest- percent to $52.62 at 11:08 a.m., after year. would buy $600 million worth of nior managing director at Michigan! Mezzanine Fund, estab- reaching $54.99 for the biggest in- “First, for a its shares this year and boosted Beringea. lished in July 2011 with $20 traday jump since May 2010 and Rizik long time, there the quarterly dividend 21 percent They invested the $185 million million from the state’s retire- the highest price in 11 months. It was a perception that there wasn’t fund in 28 companies that employ ment system, $15 million from the to 17 cents a share. Lear’s enter- enough deal flow in Michigan. closed Friday at $53.98. more than 5,000 in Michigan. Michigan Natural Resources Trust Investors Marcato Capital Man- prise value to sales is 0.28, the With their first fund, they dis- Current portfolio companies Fund, $15 million from Midland- second-lowest among global auto (See story, agement LLC, founded by Mick proved that,” he said. include: based Dow Chemical Co. and an $80 suppliers, data compiled by this page.) McGuire, and Oskie Capital Manage- Sakti3 Inc., a University of million match from the U.S. Small ment LLC said they intend to nomi- Bloomberg show. “Second, the fact they raised Michigan spinoff developing sol- Business Administration through its “The market has perceived this (new fund) is part of a number nate directors at Lear’s annual id-state batteries to extend the $1 billion Start-Up America Impact meeting this year. The group, rep- management to have been lethar- of real good things that have hap- range of electric vehicles and al- Investment program. gic in its actual repurchase of pened in the last year. While na- resenting 5.6 percent of shares out- low other electronic devices to CFIG also manages three other standing, said they spoke with shares,” Matthew Stover, an auto tionally, the number of venture run longer between charges. state funds: the $109 million 21st management Wednesday about analyst with Guggenheim Securities capital funds has gone down by 10 Delphinus Medical Technolo- Century Investment Fund, the $95 ways to boost shareholder value, in Boston, wrote in a research percent, and states surrounding gies Inc., a Plymouth Township- million Venture Michigan I fund including share repurchases. The note titled “Let the Activism Be- Michigan have seen a decline, we based Karmanos Cancer Institute and the $120 million Venture next day, Lear said it would accel- gin.” Including debt and an esti- had our best year in a decade. You spinoff, which has developed a Michigan Fund II. All three are erate a buyback program and mated $1 billion in cash by year’s see a pathway for Michigan to con- machine that uses ultrasound to funds of funds that invest in ven- raised its dividend. end, Lear could return as much as tinue moving up the rankings na- detect early-stage breast cancer. ture capital funds, in-state and The investor group plans to $1.5 billion in capital to sharehold- tionally.” Relume Technologies Inc., an out-of-state, that, in turn, invest have further talks with Lear ers, said Stover, who recommends According to the Arlington, Va.- Oxford-based maker of street in Michigan companies. management, according to a reg- buying the shares. based National Venture Capital Asso- lighting that uses environmen- Credit Suisse, the giant Swiss ciation, venture capital investing tally friendly light-emitting bank, announced in July that, nationally shrunk by 10 percent in diodes for illumination. pressed to raise capital, it would dollar volume in 2012 and by 6 per- ReCellular Inc., an Ann Ar- sell CFIG, which has $29 billion cent in the number of deals, but it MARKET PLACE bor-based recycler of cellphones. under management. grew in Michigan. gloStream Inc., a Bloomfield Kelly Williams, CFIG’s manag- In 2011, Michigan ranked No. 31 Hills-based electronic medical ing director, said a sale could be BUSINESSES FOR SALE BUSINESS SERVICES nationally in VC investing, with records vendor and consulting announced soon. $84.8 million going into 36 deals. In firm. — Tom Henderson BUSINESS FOR SALE 2012, it ranked 23rd, with $232.3 Well established Ohio retailer, with 2 prime lo- WANTED! million going into 47 deals. cations within Cleveland metro, specializing in SUCCESS-MINDED INDIVIDUALS! Learn how! “The venture world has been Credit Suisse and Beringea in Del- to the Michigan Opportunities Fund, army-navy surplus, work wear, and outdoor consolidating over the last three to phinus Medical Technologies Inc., a managed by Glencoe Capital Michi- products. Company has clean financials and To get your FREE " Success Secrets Revealed" CD, five years, so it’s harder for compa- Plymouth Township-based maker gan LLC, a Birmingham-based pri- strong growth potential. Price: $575K Terms: Cash. May consider partial owner finance over Please call 248-254-6405 nies to find capital to fund later in- of a device that uses ultrasound to vate equity firm. The other half two years. Seller will stay on as consultant for 3 vestment rounds as they grow. So detect early-stage breast cancer. went to Beringea and Credit Su- months. Only pre-qualified buyers will be con- this fills a hole,” said Jan Garfin- The Michigan Growth Capital isse, with other partners investing sidered. FINANCIAL SERVICES kle, managing director of Ann Ar- Partners II follows the early suc- an additional $35 million. Email: [email protected] or call bor-based Arboretum Ventures LLC, cessful returns of the $185 million Beringea and Credit Suisse in- 800-880-2485.. generally regarded as the state’s Michigan Growth Capital Fund vested in 28 companies from the most successful VC firm in recent that Beringea and Credit Suisse first fund. According to O’Donnell, years, with such major exits as the also co-managed. That fund was the first fund has had five exits, in- sales of Accuri Cytometers Inc., launched in 2008 as part of the $300 cluding Accuri Cytometers Inc., an REAL HandyLab Inc. and HealthMedia Inc. million InvestMichigan! program. Ann Arbor-based medical device Arboretum, which raised its Funding for InvestMichigan! company that was sold in 2011 to third and largest fund of $140 mil- also came from the state pension New Jersey-based Becton, Dickin- ESTATE lion in 2011, is a co-investor with fund. Half of the $300 million went son and Co. for $205 million. While he declined to disclose COMMERCIAL PROPERTIES JOB dollar totals, O’Donnell said the five companies that were sold returned more than twice their origi- "CTPMVUF"VDUJPO FRONT &+FĎFSTPO"WFr(SPTTF1PJOUF .* nal investments for an annualized return of more than 40 percent, a GENERAL level of return that led to the COORD/DEVELOPMENT & EVENTS, SE (73800) state’s retirement system approv- P&A-97 / Position is located in Troy, MI ing an investment of $180 million Special Olympics. Responsible for major event planning & logistics including overseeing the Detroit in the second fund. Polar Plunge, and other Polar Plunges and special Glencoe Capital Michigan isn’t events in southeast Michigan. Responsible for quite ready to start raising a new +FĎFSTPO$POEPNJOJVNT generating and growing revenue and sponsors by 4"563%": ."3$)UIBUBN coordinating special event fundraising in southeast fund, but it should be soon, thanks Sunday Open Houses: Michigan. Recruits, trains and oversees committees to a busy 2012, especially late in to direct & support fundraising events. Responsible Feb. 24UI .BSDIrd /PPOQN for corporate sponsorship support. Identifies the year, when in December alone, opportunities for cash and in-kind (budget relieving) it bought two companies, merged Retire in luxury at Jefferson sponsorships. two together and did a refinancing Condominiums and change your Required qualifications include bachelor’s degree life with style! This 1,800+/- sq. ft or equivalent; one year of experience in fund raising, for another. condominium has been completely event management and volunteer administration; ability to communicate effectively and professionally Managing director Jason Duzan updated w/granite countertops in the both verbally and in writing; demonstrated positive said the current fund has enough upgraded kitchen and bathrooms, interpersonal skills; demonstrated ability to project a left to make three more acquisi- new paint, carpet, custom drapery positive image; ability to travel& work evenings and throughout and beautiful hardwood weekends as needed. proficiency with computers; tions this year at about $10 million ÀRRUV(QWHUWDLQ\RXUJXHVWVLQWKH specifically Microsoft Suite. each, with some money left for ad- comfort of your living room with gas Desired qualifications include Experience & working knowledge of Special Olympics Michigan; ditional investments into current ¿UHSODFH DOOWKHDPHQLWLHVRQH would expect in Grosse Pointe with experience working with donor management portfolio companies. YDOHWFDUVHUYLFHGRRUPDQ software. Wage: commensurate with qualifications. Hours: Fundraising for a new fund could security. Selling to the highest Primarily Mon-Fri (8-5); evening/weekends as start later this year or early next. bidder, regardless of price! necessary. Screening begins immediately and Tom Henderson: (313) 446-0337, continues until filled. #FUI3PTF $"*"VDUJPOFFS Applicants must apply on-line at [email protected]. Twitter: 3PTF"VDUJPO(SPVQ --$ www.jobs.cmich.edu. CMU, an AA/EO institution, @tomhenderson2 strongly & actively strives to increase diversity ]3PTF"VDUJPO(SPVQDPN within its community (see www.cmich.edu/aaeo/). 20130211-NEWS--0030-NAT-CCI-CD_-- 2/8/2013 6:37 PM Page 1

Page 30 CRAIN’S DETROIT BUSINESS February 11, 2013 Granholm: What’s next move for ex-gov after ‘War Room’? ■ From Page 1 gram as a senior adviser and be- Granholm in 2008 after retiring rector or press secretary. She said gan teaching at the University of Cal- from Chrysler Group LLC as director Granholm is smart, interested in ifornia, Berkeley. of state relations. policy and passionate about the is- In late 2011, Granholm began re- Granholm still has that same sues she cares about. signing from her board positions passion, but when she’s on TV, she “Those are the core qualities to host “The War Room” on what has “different volume settings,” he that I saw in her as governor and was then Al Gore’s Current TV, a said. that I see in her as a talk show progressive news channel that has Craig Ruff, a senior policy fellow host,” Boyd said. struggled to attract viewers since at Public Sector Consultants, said While she may be the first its inception. only Granholm can answer Michigan governor to jump into Granholm declined through her whether she always felt so strong- TV after leaving office, Boyd said, communications director to be in- ly about certain issues but her job it is not uncommon as former gov- terviewed about her future plans, as governor kept her from speak- ernors Sarah Palin of Alaska, but when the Current TV sale was ing out. TV is a different animal. Mike Huckabee of Arkansas, Ed announced, she wrote on her Face- “Her audience now expected her Rendell of Pennsylvania and Eliot book page that she planned to stay to be a firebrand to draw blood at Spitzer of New York either have on through the transition and every opportunity,” Ruff said. had their own shows or have been would then go “back to teaching, Former Gov. Jennifer Granholm, dressed in a military-style jacket, urged viewers To some degree, Granholm has regular television commentators speaking and other things.” of “The War Room” to defeat the “enemy,” Mitt Romney and the Republican still used her soapbox to build her after leaving office. Party. political legacy. “She’s not the only governor to On the show, she often talked be sought after in this world of me- Partisan persona Granholm seems like an act. publicans on her show, and one of about the Chevy Volt and her sup- dia commentary,” Boyd said. When Granholm’s campaign for “I think she’s kind of gone out its stated goals, Granholm said, port of bringing the electric bat- governor began a decade ago, the on a limb in terms of her parti- was to re-elect Obama — hence the tery industry to Michigan. Also, state’s first female attorney gener- sanship,” he said. “Whatever pre- military shtick. like she did as governor, What’s next? al was billed as a moderate, and tense she had of being a moderate A small symbol perhaps is what Granholm continues to advocate Every time a Cabinet post opens governed that way more or less as or centrist person like when she remained of candidate Granholm for jobs, economic development up in the Obama administration, the state’s first female governor. came in as governor, that’s gone. could be found on the show set — a and a positive future for the next there are stories that include Her show provided an oppor- It’s just destroyed.” prop, a weathered green door with generation. Granholm’s name. tune forum for Granholm to un- Saul Anuzis, who served as “Granholm for governor” printed Jill Alper, Granholm’s outside Those closest to Granholm don’t leash her inner partisan after two chairman of the Michigan Republi- on the glass that was a part of the campaign strategist during her believe her statements on the show terms of trying to make peace with can Party for much of Granholm’s set since the show began. two terms as governor, not only would hurt her during a Senate legislative Republicans. second term as governor, said he It was clear she whipped into watched the show but occasionally confirmation hearing, but would The response to Granholm’s in- has not been surprised by the wide campaign mode during the presi- appeared as a guest on it, most re- provide Republicans with plenty creasingly unfiltered style has range of performances Granholm dential election season when cently as last week. of fodder. drawn strong reactions, typically has given. Romney talked about the auto “She’s still the same person. The “It was designed to be a very par- along party lines. “She always wanted to be an ac- bailout, saying he was pushing range of things she is talking about tisan program,” former Lt. Gov. Bill Ballenger, a former state tress,” Anuzis said. “She clearly his home state over the ledge is broader,” Alper said. “She’s al- John Cherry said. “People at that Republican lawmaker and the ed- has the ability to be anywhere while others were trying to help. ways been progressive and prag- level do under- itor of the Lansing-based Inside from a fairly serious person to be “Now you have the nerve to matic.” stand that these Michigan Politics newsletter, said (Howard) Dean-like crazy.” claim credit for the auto indus- Still, Granholm’s career choices talking heads some of what he’s seen from Granholm often poked fun at Re- try’s rebound?” Granholm said differ dramatically from her De- have to speak to on the show. “It’s a joke, right?” mocratic and Republican prede- a certain market Granholm was always quick to cessors. niche, so you remind viewers it was Romney When the man she followed, for- give it a little who wanted Detroit to go bank- mer Gov. John Engler, left office, slack.” rupt, and she defended Obama’s he went into the private sector as While in Lans- record. an executive with the computer ing, Cherry said Her defense of Obama was on company Electronic Data Systems. Granholm, like Cherry display in full over-the-top mode Later, he headed up the National As- any other gover- at last fall’s Democratic National sociation of Manufacturers and is nor, has to be cautious in choosing Convention that became one of now president of the Business words and which issues to speak the most talked about speeches Roundtable. out on — it’s just part of the job. there and an Internet sensation. Before Engler, former Gov. Jim “As a governor, your first con- “(Romney) loves our cars so Blanchard went to work at a Wash- cern is issues you face as a gover- much they even have their own ington, D.C., law firm and then nor within the state,” he said. elevator,” Granholm said in her took a job in the Clinton adminis- “You really don’t want to have na- convention speech. “But the peo- tration as Ambassador to Canada. tional politics make things more ple who design and build and sell He tried his hand at politics again difficult. You have to work with those cars — well, in Romney’s and ran for another term as gover- Republican legislators so you obvi- world, the cars get the elevator nor, but Granholm defeated him in ously temper what you say and and the workers get the shaft!” the 2002 Democratic primary. you say things perhaps a bit differ- Former Democratic U.S. Rep. Schauer said he wasn’t sur- ently, more diplomatically. She’s Mark Schauer, who served as Sen- prised Granholm followed a less playing to a different audience ate minority leader for several traditional path and moved into now and so that is liberating from years when Granholm was gover- hosting a political television show. a partisan point of view.” nor, said she could always excite a While the ratings for the show But Greg McNeilly, who served crowd, but the convention speech were low, on a network with low as campaign manager for Dick De- reached a new level. overall ratings, it did cause Vos in the 2006 gubernatorial race Her performance drew obvious Granholm’s national presence to against Granholm, said the TV criticism from Republicans, and rise, along with her occasional ap- persona has likely left the former was mocked on “The Daily Show pearances on the Sunday morning governor unable to nab any seri- with Jon Stewart,” with Stewart talk shows. ous position in the Obama admin- referring to her as being “the win- “She’s always been telegenic istration. ner of prestigious 2012 gesticula- and very at ease with speaking “It’s just hard to take someone tors invitational.” without notes,” Schauer said. serious after some the antics she “She appears to be a drunk “She’s a natural. Knowing her as has put forward,” McNeilly said. flight attendant,” Stewart said. well as I do, it’s been fun to watch “It seems sometimes she is com- Granholm later told CNN she her grow in that format.” peting with Rachel Maddow for was simply “high on democracy.” He said the show brought out who is the craziest loon on TV.” some of her best qualities. Ballenger agreed that Obama “Her real strengths come out as would be inviting criticism if he Against the grain an issue expert that has truly lived were to nominate her for a post in The dramatics were surprising the political and governing administration, but said he has to some, but those close to process,” he said. “Sometimes you always felt she would make a Granholm say her demeanor as can see her legal training come great chair of the Democratic Na- governor and TV host are part and into play, as if she’s talking to a tional Committee. parcel of the same person. witness.” “She is partisan, charismatic “It’s a continuing evolution of Liz Boyd was one of Granholm’s and a good fundraiser,” he said. her passion for public policy that closest advisers and served with Chris Gautz: (517) 403-4403, she’s always had,” said Fred Hoff- her for all eight years while gover- [email protected]. Twitter: man, who went to work for nor as either communications di- @chrisgautz 20130211-NEWS--0031-NAT-CCI-CD_-- 2/8/2013 6:28 PM Page 1

February 11, 2013 CRAIN’S DETROIT BUSINESS Page 31 Sales tax: Collectible? Medicaid: Some in business skeptical ■ From Page 1 ■ From Page 3 from their residents unless the collecting sales tax goes back to pand Medicaid; Republican Gov. ments with thousands of newly in- seller has a physical presence in the days when paper catalogs John Kasich of Ohio recently re- sured patients who could not find the state. were king, said J. Craig Shear- versed position and said his state Expanding health primary care doctors. The ruling, Quill Corp. v. North man, vice president for govern- will. “ But a survey last month by the Dakota, came before widespread ment affairs, public relations at A recent report by the Ann care Center for Healthcare Research use of the Internet and was based the National Retail Federation. Arbor-based Center for Health- found that more than 81 percent of in part on the physical shipment And the fight for sales tax fair- care Research & Transformation programs to doctors said they would be willing of equipment needed to conduct ness has been going on actively concluded that Michigan to accept Medicaid patients if the business not being sufficient to in Washington for more than a could save $983 million in those in need state expanded the program. establish physical presence. decade, he said, with new legisla- projected health care expen- Jack Billi, M.D., a board mem- But the Michigan Retailers Asso- tion introduced but never acted ditures from 2014 to 2023. is good for ber of the Michigan State Medicaid ciation believes Michigan can on every year. The hoped-for fed- As part of his budget plan, Society and a physician executive force some out-of-state retailers eral legislation would give states Snyder said he is calling for business, the at the University of Michigan Health to pay up. the authority to require collec- depositing 50 percent of the state economy System, said it is possible that “That was an old physical lo- tion of taxes by remote sellers, savings — $103 million in 2014 — some physicians could stop accept- cation test,” said but in exchange, into a new health savings account and its citizens. ing Medicaid in 2016, when rates James Harlan, states have to pass for seven years. That money would ” drop about 30 percent from president and There doesn’t legislation to be used to pay the state’s share of Jennifer Kluge, Michigan Business Medicare levels. CEO of the Lans- “ make sales tax col- the expansion when the federal and Professional Association “We will have a temporary im- ing-based retail- seem to be any lection easier for government no longer pays full provement in reimbursement for ers association. retailers. costs. failed to mention that Medicaid office visit codes for primary care “What these bills impetus on the That has led to Snyder said if the plan stays as it rates for primary care physicians physicians,” Billi said. “Medicaid do, and it’s been the creation of the is now, the state would not have to will rise to equal Medicare rates rates do not cover costs now. Many done in a number part of Congress Streamlined Sales contribute to the costs for 21 years. for only two years. doctors accept Medicaid because of other states, is Tax Project, of Rob Fowler, president of the “The end result of that will be they see it as a duty for the under- establish a new to take care of which 30-some Small Business what? The physicians will stop see- served and for the community.” electronic nexus states, including Association of ing the patients,” Kahn said. “Be- Some of the groups that support (presence) defini- this. Michigan, are Michigan in cause an insurance card is not ac- Medicaid expansion include AARP tion” and associat- ” members, Stanton Lansing, said cess, it’s having someone take care Michigan, Michigan Association of ed requirement to Eileen Kowall, R-White Lake said. expanding Med- of you — that’s access.” Community Mental Health Boards, collect sales tax. “It’s been a bit icaid will reduce At that point, people may then Michigan Association of Health Plans, “How does (Treasury) enforce of a chicken-and-egg thing,” business costs. go back to using the emergency Michigan Health and Hospital Associ- the collection of corporate in- Shearman said. The legislation He said unin- room as their primary care ation, Michigan Osteopathic Associa- come tax? They do it through hasn’t passed Congress because sured patients provider, and then the uncompen- tion, Michigan Primary Care Associa- their enforcement division.” only half of the states have seek free or re- sated care costs rise again, negat- tion, Michigan State Medical Society, Republican Reps. Eileen passed their end of the agree- duced cost care ing some business savings, Kahn the Detroit Wayne County Health Au- Kowall, White Lake, and Rob ment, and only half the states Fowler at hospitals, said. thority and the Greater Detroit Area VerHuelen, Walker, last week have done it because legislation which then cost-shift those uncom- Over the last several months, Health Council. sponsored HB 4202 and its com- hasn’t yet passed Congress. pensated care costs to health in- Snyder had expressed concern Jay Greene: (313) 446-0325, panion, HB 4203, under a “Main While a federal answer hangs surers and companies. The cost that expanding Medicaid would [email protected]. Twitter: Street Fairness” label. in the balance, more than two shifting drives up insurance costs flood hospital emergency depart- @jaybgreene “We can’t keep putting brick- dozen states have taken their by more than $1,500 per family. and-mortar folks at ... a 6 percent own action to collect taxes on re- “I consider it a kind of organiza- disadvantage,” Kowall said. mote retailers. As many as half of tional epiphany about a decade “It’s becoming an ever-increas- those have passed legislation ago when we came to realize that ing problem when people will go similar to Michigan’s bills, the uninsured really matter to to use someone’s showroom to which in turn, are modeled after business,” said Fowler. touch and feel a product” and New York’s so-called “Amazon “Expanding health care pro- then buy it online for a cheaper Tax,” which expands the defini- grams to those in need is good for price, she said. tion of a state presence to include business, the state economy and A federal fix is needed, “but physical and web-based affiliates, its citizens,” said Jennifer Kluge, there doesn’t seem to be any im- Shearman said. CEO of the Warren-based Michigan petus on the part of Congress to Many states that have passed Business and Professional Associa- take care of this.” such legislation are now facing tion. HB 4203 doesn’t change existing legal challenges based on the U.S. But Doug Rothwell, president of law, but it re-establishes con- Supreme Court ruling, Shearman Detroit-based Business Leaders sumers’ responsibility to pay tax said. for Michigan, said his group hasn’t on remote transactions — catalog, The degree of the problem has taken a position on Medicaid ex- telephone or Internet orders, been growing with the pace of on- pansion. when the retailer doesn’t collect it. line sales. Internet sales have “We haven’t analyzed (it) to take In 2011, Michigan brought in gone from essentially nothing a a position,” he said. nearly $23 million in taxes on re- little over a decade ago to billions The Detroit Regional Chamber mote transactions, according to of dollars and a large percentage also hasn’t yet taken a position. the treasury. of all sales today, he said. “The … chamber’s board has not Of the total, $16.8 million came “Ideally, Congress should ad- taken a position on this particular through voluntary collections of dress the issue, but what we’re issue. However, the governor is the sales tax by out-of-state retail- finding is that’s a false hope,” driving a discussion worthy of ers who belong to a state compact, Hallan said. consideration,” said Jim Martinez, the Streamlined Sales Tax Pro- “There comes a time when the chamber’s director of commu- ject, which is seeking uniform Michigan has to take its destiny nications. federal action on the matter. in its own hands as other states Snyder said expanding Medic- The state estimates that in fis- have done. ... These bills are to aid will also help some small busi- cal 2013 it will lose about $460 mil- add equity and parity.” nesses with 50 or more eligible em- lion in unpaid taxes on remote The bills would collect a tax ployees avoid paying a transactions, with $249.3 million that people should be paying but $2,000-per-employee penalty if they of that coming through e-com- aren’t, said Paul Magy, a retail decide not to offer health insur- merce and $210.4 million through specialist and member at Clark ance to their workforce in 2014. traditional mail order and phone Hill PLC. Senate Appro- transactions, said Terry Stanton, “We rely on the collection of priations Chair- director of communications for these taxes to pay for a variety of man Roger the Department of Treasury. services — education, police, Kahn, R-Sagi- The Michigan Retailers Asso- fire. ... If everyone just did on- naw Township, ciation believes the state could line purchasing, we would not be said he is not capture about $40 million of that. able to afford so many things we sold on the idea But “the biggest issue related look toward our state to pro- of Medicaid ex- to this revenue loss is the state vide.” pansion. He said simply doesn’t have the authori- Sherri Welch: (313) 446-1694, he needs to ty to require that remote sellers [email protected]. Twitter: know more collect and remit the tax,” Stan- @sherriwelch about what Kahn ton said. Ryan Felton contributed to this risks are associated with it. The issue of remote sellers not story. Kahn, a physician, said Snyder 20130211-NEWS--0032,0033-NAT-CCI-CD_-- 2/8/2013 6:26 PM Page 1

Page 32 CRAIN’S DETROIT BUSINESS February 11, 2013

Renaissance artists

THE LINEUP Here’s a look at who’s who — and where — in the Service Street block facing Gratiot Avenue from Riopelle to Russell streets: Transmat, a Trans-Love A spring Music café Building Building Atlas building, longtime home to Loft building Two New home Building housing techno Energies, a opening is Trinosophes purchased purchased artists; also original home of developed in buildings of 1xRun, an Discount Candles music label medical planned for is expected by loft by Hernan Made in Detroit. the late bought last art print shop and lofts; run by marijuana Fourteen- to open here developer Bas, an 1970s by year by artist business owned by Sandy Derrick May dispensary. Eighty this year. Pat Deegan artist photographer Greg Holm, recently and Mike Novak, since the Gratiot in 2006. originally Ameen who plans to relocated members of the 1980s. Gallery. from Miami, Howrani. open a café; from Royal same family that in 2010. details still Oak. owns Busy Bee Façade murky. Hardware across obscuring a the street. courtyard

PHOTO COLLAGE/ARA HOWRANI Artists: Spark of creativity kindles revival on overlooked block ■ From Page 3 The new owners are making im- What might surprise passers-by provements to their buildings, and is that, behind the boards and cin- many plan to install new business- der blocks, artists have been es in them. The block is set to take bustling all along for decades. The on a brighter look as façades im- Gratiot-side improvements will just prove and doors reopen through- let the rest of the world know it. out this year. The investment will The block never has gone dead in bring more attention to a creative all its years, despite how it’s looked community that has flourished un- from the outside, said Roger Gentry, der wraps for decades. property manager for Rocky Invest- ment Co. LLC, owner of four buildings on the block, including the tallest, Artistic acquisitions the six-story Atlas building, former Among the newcomers is Miles home of the Atlas Furniture Co. Michael. The Royal Oak native left “It’s been that way so long, peo- the Detroit area in 2001 to work in ple don’t even look up anymore. set design and construction in When I tell people that there’s peo- New York and Los Angeles. He ple in the Atlas building, their re- came back when it looked like sponse is, ‘I thought that building Michigan’s film incentives would was empty,’ ” Gentry said. spur work in his field. The Service Street name refers Seeking raw commercial space, to the brick-paved alley behind the Michael in 2010 bought a one-story buildings, where hints of the activ- building toward the eastern end of ity can be seen as people gather the block from Butcher & Packer outside to chat and go about their Supply Co. for $40,000. “It was a business. Even most of Butcher & great steal,” he said. Packer’s business took place in the The space previously had served back, not in the Gratiot storefront, as an adjoining storefront area for locals said. Butcher & Packer’s main building ARA HOWRANI Most occupants maintain their Musician Djallo Djakate Keita and his wife, Felicia Patrick, who owns Midtown clothing shop Flo Boutique, have a loft on before the butcher supply business the Service Street block. entrances on Service Street. One of moved to Madison Heights in 2010. the people who can be seen enter- The icing on the cake for reach of increasingly popular through his entity, Crow Lodge LLC, story building toward the western ing her studio most mornings is Michael was the unexpected cre- Eastern Market and could add an- with help from Eastern Market Corp., end of the block by Market Holdings Lois Teicher, a sculptor who ative atmosphere. He’d been eye- other destination spot to Detroit’s which, acting as a fiduciary, LLC, an entity set up by the owners makes large-scale outdoor pieces. ing another building on the block, greater downtown. bought the property from Butcher of Royal Oak-based art print busi- One local example is a 14-foot tall but then found out Hernan Bas, a “It’s one of the coolest things go- & Packer and sold it to Crow Lodge ness 1xRun LLC. Owners Jesse Cory stainless steel piece behind the nationally recognized painter ing on in Detroit right now,” said on a land contract, said Randall Fo- and Dan Armand are moving the Scarab Club at John R and from Miami, had just purchased it. Ryan Cooley, owner of O’Connor Re- gelman, vice president of business business into their new space to Farnsworth streets. Bas did not respond to requests alty Detroit LLC, which represented development for Eastern Market. accommodate growing demand. Teicher has been working from for comment. According to Wayne many of the recent buyers. “When Meanwhile, Gregory Holm, a pho- Cory said they paid $400,000 on a the first floor of the Atlas building County records, he bought a two- it’s all said and done, it’s going to tographer and concept artist, is re- land contract for the property. (Ar- since 1983. She said Service Street story building in the block in 2010 be one of the most active blocks in habbing two buildings he purchased mand, a 2011 Crain’s “20 in their has been full of artists throughout for $40,000. the city.” last spring for a total of $37,500. 20s” honoree, left his position as art her time there, even though the For Michael, this was one of first The other recent ownership Under the entity 2:1 LLC, Holm is director at Team Detroit last year.) Gratiot side might have looked clues that he’d just bought a slice changes also illustrate the creative combining the two buildings into The business is an offshoot of their empty. The first floor of the Atlas of an artists’ island. class investment interest. one and bringing back its art deco gallery, 323East Gallery, which building was bricked up a few “I didn’t know much about the Musician Joel Peterson bought past, paying close attention to de- closed last month. They plan to years ago after a break-in occurred block,” Michael said. “It’s a special the former Butcher & Packer tails such as period window han- open a gallery in their new space. in her space, she said. place. The neighbors are awesome. building next to Michael’s in De- dles, tiles, woodworking and Further back in 2006, Pat Deegan She was drawn to the block be- There’s such a creative mix of cember 2011. With his partner Re- decor. He plans to open a café bought a one-story building and cause of the artists and enjoyed the great people.” becca Mazzei, deputy director at called Frontera that will “take a runs his electrician business, Good parties they had, but at the same Michael plans to open a gallery the Museum of Contemporary Art De- very conceptual approach to food.” Guy Electric LLC, from there. He paid time, everyone was given space to and event space called Fourteen- troit, he plans to turn it into a mu- He said the Detroit Economic $75,000, according to county proper- focus on their work. Eighty Gratiot Gallery that will be a sic café under the name Tri- Growth Corp. helped him secure ty records. Deegan, who also is a loft “There was a feeling of cama- “a portal between New York and nosophes LLC sometime this year. $50,000 in federal grant money to developer with an artistic bent, said raderie and support — we’re all in Detroit” street artists and curated He said they are spending $60,000 bring up the energy efficiency of he has spent $85,000 on renovations. this together,” Teicher said. “We by longtime associate Andrew renovating the building. Peterson the building by at least 15 percent. all did our own work but would Shirley. Renovations are under also said he has received grant Holm expects the total renovation, hang out outside and drink beer.” way, and a first official show is funding but would not disclose the including grant money and the ‘Artists’ colony’ The same holds true for a tentatively planned for spring. sources or amounts, saying “phil- building purchase price, to come From the Gratiot side, the view younger generation of artists. The addition of Michael’s anthropic groups need to start tak- to at least $300,000. of what locals call Service Street Bethany Shorb, artist and owner gallery and several other arts-re- ing their names off of stuff.” The most recent purchase on seems to be that of another deso- lated businesses will extend the He purchased the building Service Street was that of a three- late Detroit block. See Next Page 20130211-NEWS--0032,0033-NAT-CCI-CD_-- 2/8/2013 6:04 PM Page 2

February 11, 2013 CRAIN’S DETROIT BUSINESS Page 33 WSU: www.crainsdetroit.com EDITOR-IN-CHIEF Keith E. Crain GROUP PUBLISHER Mary Kramer, (313) 446-0399 or [email protected] Adding on ASSOCIATE PUBLISHER Marla Wise, (313) 446- 6032 or [email protected] ■ EXECUTIVE EDITOR Cindy Goodaker, (313) 446- An introduction to Service Street From Page 3 0460 or [email protected] MANAGING EDITOR Jennette Smith, (313) 446- posed on the grounds of the former 1622 or [email protected] Eastern Market’s Service was a manager for Made in Detroit eral years and plans to open a Dalgleish Cadillac Building on MANAGER, DIGITAL CONTENT STRATEGY Nancy Street block contains a wealth of in the 1990s when the Detroit ap- music café on Service Street. Hanus, (313) 446-1621 or [email protected] Cass Avenue in Detroit. Some $31 DEPUTY MANAGING EDITOR Daniel Duggan, (313) creative connections and people: parel company operated from Gregory million for that project comes from 446-0414 or [email protected] SENIOR EDITOR Bob Allen, (313) 446-0344 or Paul Freel is owner of Trans- Service Street. Deegan’s fiancée, Holm is a pho- the bond sale, and the university [email protected] Love Energies LLC, a medical mar- Liz Blondy, owns Midtown dog tographer and has a separate $30 million commit- WEST MICHIGAN EDITOR Matt Gryczan, (616) 916- ijuana dispensary that operates day care business Canine to conceptual 8158 or [email protected] ment from the state’s capital im- SENIOR EDITOR Gary Piatek, (313) 446-0357 or out of a building also owned by Five. Phil Cooley also owns artist who provements budget. Wayne State [email protected] Rocky Investment. John Sinclair, Slows Bar-BQ. gained atten- SENIOR DESIGNER Jeff Johnston, (313) 446-1608 expects to cover the rest through or [email protected] a 1960s activist who was a man- Painter Hernan Bas is an tion as the or- private fundraising, Nork said. DATA EDITOR Brianna Reilly, (313) 446-0418, ager of the Detroit punk rock artist from Miami whose works ganizer of con- [email protected] The research building plan in- WEB PRODUCER Norman Witte III, (313) 446- band MC5 and a founder of the have been shown at art shows in ceptual art cludes renovation of the Dalgleish 6059, [email protected] White Panthers, played a role in New York, Paris and Seoul, projects “Ice EDITORIAL SUPPORT (313) 446-0419; YahNica building plus construction of “a Crawford, (313) 446-0329 Trans-Love but is no longer con- South Korea. His building was House De- new facility of approximately NEWSROOM (313) 446-0329, FAX (313) 446- nected to it, said Freel, who is renovated by Nicola Kuperus and Holm troit” and 75,000 square feet” at the same site, 1687 TIP LINE (313) 446-6766 more commonly known by his Adam Lee Miller, the couple be- “Fire House Detroit.” Ice House along with parking space on an ad- REPORTERS nickname, Holice P. Wood. The hind Detroit electronic music Detroit involved encasing an Jay Greene, senior reporter: Covers health care, jacent site where the university insurance, energy utilities and the environment. Trans-Love space also once was act Adult. abandoned Detroit house in ice. plans to demolish a building. (313) 446-0325 or [email protected] home to KMS Records, another Felicia Patrick owns Mid- Fire House Detroit was a series Chad Halcom: Covers litigation, higher education, The university hasn’t seen any non-automotive manufacturing, defense Detroit techno label. town clothing shop Flo Boutique. of sound installations and music significant new development at its contracting and Oakland and Macomb counties. Derrick Her husband, Djallo Djakate Keita performances at a former fire- (313) 446-6796 or [email protected] Midtown campus since 2011, when Tom Henderson: Covers banking, finance, May has run is a drummer who plays in jazz, house. $95 million worth of construction technology and biotechnology. (313) 446-0337 or his techno reggae and world music bands. Christian Fuller is manager of [email protected] wrapped on the Damon J. Keith Kirk Pinho: Covers real estate and the city of music label, Jonathon Taylor is a partner the rock group Electric Six and a Center for Civil Rights at Wayne Detroit. (313) 446-0412 or [email protected] Transmat, from in Yancey Media Group LLC. Taylor Service Street resident for the Bill Shea, enterprise editor: Covers media, State University Law School and an advertising and marketing, the business of sports, a building helps manage the catalog of in- past two years. expansion-renovation to the A. and transportation. (313) 446-1626 or owned by fluential Detroit hip-hop produc- Bethany Shorb, an artist who Paul Schaap Chemistry Building. [email protected] Nathan Skid, multimedia editor. Also covers the Rocky Invest- er James Yancey, better known as sculpts metal, paints and makes “The biomedical research facility food industry and entertainment. (313) 446-1654, ment Co. since J Dilla. electronic music, also runs neck- is the largest single project the uni- [email protected] Dustin Walsh: Covers the business of law, auto 1988. May, a Ron Scott co-founded the De- wear business Cyberoptix LLC versity has ever undertaken, and suppliers and steel. (313) 446-6042 or Crain’s 2001 40 troit chapter of the Black Panther from the Atlas Building and is that in and of itself will mean in [email protected] May Sherri Welch: Covers nonprofits, services, retail under 40 hon- Party in the 1960s and was a past one of the founding members of three or four years we will be at or and hospitality. (313) 446-1694 or oree, is nearly synonymous with host of the Detroit Public Television Eastern Market hackerspace Om- near our highest level of construc- [email protected] LANSING BUREAU Detroit techno because of his pi- show “Detroit Black Journal” niCorpDetroit. tion activity, for all the projects,” Chris Gautz: Covers business issues at the Capitol oneering work in the genre. Lo- (now “American Black Jour- The late Ameen Howrani, a re- Nork said. “But over time, it’s not and utilities. (517) 403-4403 or [email protected]. cal artist Cedric Tai in 2011 bright- nal”). Scott lives on Service spected photographer, is credit- unusual to be involved in two or ADVERTISING ened the building’s façade by Street and is host of the WKBD-TV ed as being at the forefront of De- more major projects at once.” SALES INQUIRIES: (313) 446-6052; FAX (313) painting individual bricks dif- show “For My People,” as well as troit loft developments following The bond sale this spring will 393-0997 ferent colors, a concept he calls co-host of the WDFN 1130 AM ra- his 1970s purchase of a Service also put $9 million toward a $12 mil- SALES MANAGER: Tammy Rokowski SENIOR ACCOUNT EXECUTIVE: Matthew J. “brixels.” dio show “Fighting for Justice.” Street building. His wife, Arlene, lion Advanced Technology Educa- Langan Pat Deegan, son of a retired Joel Peterson is a musician continues to manage the build- tion Center in Warren, on the site of ADVERTISING SALES Christine Galasso, Dale St. Clair County judge, is a co-in- who won a $25,000 Kresge Founda- ing, and his son Ara, also a pho- a shuttered Farmer Jack grocery Smolinski, Sarah Stachowicz vestor with the brothers Phil and tion artist fellowship in 2010. Pe- tographer (who took photos for store the university acquired in CLASSIFIED SALES (313)-446-0351 2011 near the Macomb Community Col- EVENTS DIRECTOR Nicole LaPointe Ryan Cooley, and their father, terson ran a music performance this feature), runs Howrani Stu- DIRECTOR, INTEGRATED MARKETING Eric Cedo Ron, in the nearby Detroit Candy business in Detroit called Bo- dios in the New Center area. lege campus on 12 Mile Road. SALES PROMOTION MANAGER Karin Pitrone Co. Lofts building. Deegan also hemian National Home LLC for sev- — Gary Anglebrandt The new center could either be a ASSISTANT EVENTS MANAGER Kacey Anderson remodel of the existing space or an SENIOR PRODUCER FOR DIGITAL/ONLINE all-new 40,000-square-foot build- PRODUCTS Pierrette Dagg ing, where the university will MARKETING ARTIST Sylvia Kolaski SALES SUPPORT Suzanne Janik, YahNica Crawford house programs on computer sci- From Previous Page western end of the block. PRODUCTION MANAGER Wendy Kobylarz ence, business, and advanced man- PRODUCTION SUPERVISOR Larry Williams His wife, Arlene, took over the of neckwear business Cyberoptix MAKEOVER MONEY ufacturing. It may also include a CUSTOMER SERVICE LLC, has had a studio in the Atlas building after he died in 2010. Ar- The Hudson-Webber Foundation new electric vehicle center for re- MAIN NUMBER: Call (877) 824-9374 or write building since 2002. The block pushed the Service Street lene said her husband bought the search, program development and [email protected] has its social components, such building for $25,000 and borrowed SUBSCRIPTIONS $59 one year, $98 two years. transformation by giving $10,000 delivery of electric and automotive Out of state, $79 one year, $138 for two years. as a fire pit out back where peo- matching grants for façade $100,000 to renovate it and create battery technology. Outside U.S.A., add $48 per year to out-of-state rate for surface mail. Call (313) 446-0450 or ple gather in the summer. For improvements in Eastern Market, four loft units. He’d been to New Another $18 million from the (877) 824-9374. the most part, however, the peo- five of which have gone to Service York and wanted to bring some of bond sale would go to renovate the SINGLE COPIES: (877) 824-9374 ple there are focused on their Street properties. Eastern Market the artsy loft lifestyle he saw to REPRINTS: (800) 290-5460, ext. 125; WSU Student Center building, and (717) 505-9701, ext. 125; or lindsay.wilson craft. Corp. administers the program, Detroit. Artists also were begin- and a third round of grants has $23.5 million would go toward the @theygsgroup.com “We’re all workaholics,” Shorb ning to take over space in the At- TO FIND A DATE A STORY WAS PUBLISHED: been approved, said Randall $33.5 million cost of new laborato- (313) 446-0406 or e-mail [email protected] las building around that time. said. “It’s kind of spartan as far as Fogelman, Eastern Market Corp.’s ry classrooms and renovated re- creature comforts, but for most “The whole block was creative. CRAIN’S DETROIT BUSINESS IS PUBLISHED BY vice president of business search lab space in the physics, en- CRAIN COMMUNICATIONS INC. people who are creating stuff, development. Service Street We used to call it an artists’ gineering and Shapero buildings. CHAIRMAN Keith E. Crain that’s not a priority.” property owners Hernan Bas, Pat colony,” Howrani said. In addition, $8.5 million is desig- PRESIDENT Rance Crain Deegan and Miles Michael each Holm, the photographer who is TREASURER Mary Kay Crain Ron Scott, a Service Street resi- nated to renovate Manoogian Hall Executive Vice President/Operations dent who also happens to have co- have received one grant, and renovating two buildings, is and a separate electrical infra- William A. Morrow Gregory Holm has received two. Group Vice President/Technology, founded the Detroit chapter of the among the latest wave of artists structure upgrade. Manufacturing, Circulation Black Panther Party in the 1960s, attracted to Service Street’s The Macomb center would be Robert C. Adams Vice President/Production & Manufacturing remembers the block from his jRainey Gallery in the lower level of bricks and bohemian atmos- the third phase of a Macomb Coun- Dave Kamis days growing up in the nearby the Atlas building from 1998 to phere. ty expansion the university began Chief Information Officer “The artists, we own this block. Paul Dalpiaz and now gone Black Bottom 2009. It was a fortunate spot for an in 2007. The previous two phases Chief Human Resources Officer neighborhood. Then it was full of art gallery, though she didn’t ... It’s like Europe or Brooklyn involved growing the university Margee Kaczmarek shops doing business in furni- know it the time. She became fa- back there,” he said. presence at the MCC University G.D. Crain Jr. Founder (1885-1973) Occupants expressed mixed Mrs. G.D. Crain Jr. Chairman (1911-1996) ture, clothing and servicing East- miliar with her new neighbors Center in Clinton Township and EDITORIAL & BUSINESS OFFICES: ern Market butchers. through bonfire parties or when emotions about the unplanned re- 1155 Gratiot Ave., Detroit MI 48207-2732; then opening a new Macomb Edu- (313) 446-6000 When Shorb moved in, Eastern doors in the buildings opened and naissance of the block. It’s good to cation Center. Cable address: TWX 248-221-5122 AUTNEW DET Market was less lively than it is she could see DJs and bands prac- see improvements, they said, but The Macomb expansion has bol- CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except for a special issue the today and Service Street “was a ticing. the changes will make the block stered WSU student enrollment in third week of August, and no issue the third week little bit of a secret,” she said. “When I had my opening, all less personal. of December by Crain Communications Inc. at Macomb County. It grew from 880 1155 Gratiot Ave., Detroit MI 48207-2732. Shorb, who also didn’t know any- these artists came to my opening Shorb welcomed the changes. in 2007 to 1,685 in the 2010-11 year, Periodicals postage paid at Detroit, MI and She compared today’s Eastern additional mailing offices. POSTMASTER: Send one on the block at the time, said and said, ‘I live in this building, I and the university expects the address changes to CRAIN’S DETROIT BUSINESS, the concentration of artists hap- live in this building,’ ” Rainey Market atmosphere to how it was Warrem tech center could help en- Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in pened naturally, not by commit- said. before places like Supino Pizzeria rollment grow another 30 percent, U.S.A. tee or an institutional initiative. Artists have been living at Ser- and the Red Bull House of Art or about 500 students, about three Entire contents copyright 2013 by Crain gallery were around. Communications Inc. All rights reserved. “I don’t want to be curated into vice Street in noticeable numbers years after it opens. Reproduction or use of editorial content in any a building,” she said. “It’s not at least since 1978, when photog- “I say I like the monasticism, Chad Halcom: (313) 446-6796, manner without permission is strictly prohibited. forced.” rapher Ameen Howrani bought a but 10 years ago it was lonely,” [email protected]. Twitter: Painter Jocelyn Rainey ran the two-story building toward the Shorb said. @chadhalcom 20130211-NEWS--0034-NAT-CCI-CD_-- 2/8/2013 4:55 PM Page 1

Page 34 CRAIN’S DETROIT BUSINESS February 11, 2013 RUMBLINGS WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF FEB. 2-8

the Detroit Regional sured Guaranty Municipal bers of Business Leaders for Chamber’s 2013 Mackinac Gilbert group Corp., which sued Flagstar Michigan said they plan to More local Policy Conference. over losses suffered from increase hiring this year in Bush mortgage-backed securi- Michigan, according to a will give drives to raise ties. Also, Flagstar said it poll by the organization. the open- agreed to sell $187.6 million Ⅲ The Southeast Michigan ing ad- Greektown stake of commercial and indus- Purchasing Managers Index humor, tanks dress on trial loan agreements in for January rose 3.5 points New England to Pennsylva- May 29, an Gilbert’s Athens Ac- to 55.3, indicating faster nia-based Customers Bank. dis- quisition LLC has growth in the economy. Ⅲ Washington, D.C.- Ⅲ cussing D forged additional The Thomson based private equity firm to ‘Daily Show’ education deals that would give it a Reuters/University of Michi- Carlyle Group LP completed reform, 67.4 percent ownership gan index of consumer sen- immigra- the $4.9 billion acquisition timent climbed to 73.8 in ou know what’s fun- hired to write for TheShad- Bush stake and increased majori- of DuPont Performance Coat- ny? Sixty-ton M1 owLeague.com, a New York tion re- ty voting power in Greek- January from 72.9 in De- ings and its North Ameri- Y Abrams tanks, on oc- City-based sports and cul- form and economic growth. town Superholdings Inc., if cember. can flagship auto paint Ⅲ casion — especially if a lo- ture website launched last Others scheduled speak- approved by the Michigan An official for Livonia- plant in Mt. Clemens. Car- cal defense contractor has month by former ESPN and ers: Michigan Speaker of Gaming Control Board. based Valassis Communica- lyle will rename the paint made more than the U.S. Vibe magazine executive the House Jase Bolger, Sen- In a filing with the U.S. Se- tions Inc., a direct-mail gi- supplier Axalta Coating Sys- Army thinks it needs. Keith Clinkscales. ate Majority Leader Randy curities and Exchange Com- ant, doesn’t expect the tems in the second quarter. Comedy Central’s “The Parker is a native New Richardville, Senate Minori- mission, Athens said it en- decision by the U.S. Postal Ⅲ Amid ongoing litiga- Daily Show” indirectly Yorker who lives in De- ty Leader Gretchen Whitmer tered into two additional Service to end Saturday tion, Marriott International spotlighted Southeast troit. He has written about and House Minority Leader agreements in January that mail delivery starting in extended its licensing Michigan again last week local sports since 1993. Tim Greimel. would give it 76.8 percent of August to have a huge im- For more information or agreement with the owner pact on its business. with a story on the Abrams Parker’s first column for the voting shares of Greek- to register, see of the Courtyard Detroit Ⅲ The Greater Detroit re- tank manufactured and the site, published Thurs- town Superholdings and mpc.detroitchamber.com. Farmington Hills for a mini- gion ranked at or near the sold by Sterling Heights- day, introduced himself 67.4 percent ownership. mum of six months. top in technology employ- based General Dynamics Land and addressed his latest Ⅲ Bloomfield Hills-based ment, education and inno- Systems. journalism brouhaha and All smiles for dental deal private equity firm Alidade vation in the latest report The faux newscast, in a thoughts on race in sports ON THE MOVE The partners at Detroit- Capital LLC purchased eight from Troy-based Automa- segment by funnyman cor- and media. Ⅲ Peter Brown, 64, long- respondent Al Madrigal, did based Huron Capital Partners buildings in Plymouth, to- tion Alley. ESPN, which reportedly time editor and publisher taling 355,524 square feet, for not mention GDLS, a sub- LLC will soon be all smiles, Ⅲ Michigan Opera Theatre has a financial stake in The of Detroit-based Automotive $12.2 million. New York sidiary of Falls Church, in case any of them have has begun a search for a Shadow League, last month News — and founding edi- City-based C-III Capital Part- Va.-based General Dynamics crooked teeth that need successor executive direc- said it wasn’t renewing tor of Crain’s Detroit Busi- ners LLC was the seller of the Corp., but it devoted more straightening. tor to founder David Parker’s contract to appear ness — will retire from three industrial buildings, than four minutes to recent The private equity com- DiChiera. DiChiera, who has on “First Take” in the Crain Communications Inc., one office building and four congressional efforts to pany is expected to an- parent company of both started treatment for wake of his incendiary office/flex buildings. preserve Abrams funding. nounce today that it has publications, effective prostate cancer, will re- comments, during a Dec. 13 Ⅲ NASCAR began its 2013 The segment was the April 30. Jason Stein, 41, as- main in his position for at show, questioning the made its latest acquisition, marketing tour in Detroit most-downloaded portion sociate publisher and edi- least another year before “blackness” of Washington of a Scottsville, N.Y., com- with a pitch for its Gen-6 of that broadcast on the tor, will succeed Brown at transitioning to full-time Redskins rookie quarter- pany named Six Months stock cars, with bodies that show’s website Friday. Automotive News. In addi- artistic director. back Robert Griffin III. Smiles, which makes cos- more closely resemble pro- The National Defense Au- tion, Crain Vice President Ⅲ The Detroit City Council The network on Dec. 20 metic braces for adults. duction vehicles and are thorization Act, signed into KC Crain has been named approved articles of incor- suspended Parker, who The company employs aimed at helping manufac- law by President Barack Oba- group publisher of the Auto- poration to establish a five- apologized for the com- about 50. Neither revenue turers sell more cars. ma last month, authorizes motive Group, which encom- member public lighting au- ments via Twitter. He had nor sales price will be dis- Ⅲ Greektown Casino-Hotel more than $330 million for passes Automotive News, thority in the city. appeared on ESPN since closed, though John Higgins, formally opened five new Abrams — $136 million Automotive News Europe, Ⅲ Ken Harris, president 2003. Parker still writes a a senior partner at Huron, restaurants — a food court more than the president’s Automobilwoche and Au- and CEO of the Detroit- column for WDIV-Ch. 4’s said the deal is one of called Market District — and requested budget allocates toweek. Crain, 33, will con- based Michigan Black Cham- ClickOnDetroit.com and ap- Huron’s smaller acquisi- a valet parking garage, The — even though Army Chief tinue as publisher of Au- ber of Commerce, was in- pears on the network’s Detroit News reported. of Staff Ray Odierno previ- tions. The company gener- toweek and group publisher Ⅲ cluded in a national “40 sports broadcasts. Plastics News European Microsoft Corp. an- ously has said some of the ally invests between $10 of , under 40” list of top eco- He resigned from The De- Plastics News, Rubber & nounced plans to open a budget would refurbish million $70 million to ac- nomic development profes- troit News in January 2009. Plastics News, European store at Troy’s Somerset and return to the fleet “280 quire controlling interest sionals by New York City- Rubber Journal, Plastics Collection. tanks that we simply do not in companies. based Development and Rubber Weekly, Tire need.” Policy conference to The company’s name Counsellors International. refers to the time it claims Business, Waste & Recycling OTHER NEWS Ⅲ A Michigan judge or- News and Urethanes Tech- feature Jeb Bush it will take to straighten dered Terrance Sullivan of nology International. Ⅲ The Michigan Land Bank Parker gets new column Jeb Bush the teeth of those who wear Oak Park and his compa- , governor of Ⅲ David Nicholson, 43, Fast Track Authority board its clear braces. About nies to stop selling without Rob Parker has a new em- Florida from 1999-2007, and vice president of Detroit- voted to enter negotiations 2,500 dentists in the U.S., permission memorabilia ployer. Black Entertainment Televi- based PVS Chemicals Inc., with Magic Plus LLC — the featuring the name, image The Detroit sports sion founder Robert Johnson Canada and the United will fill the remainder of investors group that in- or jersey number of Detroit columnist last week was will be keynote speakers at Kingdom are customers. Danialle Karmanos’ eight- cludes Earvin “Magic” John- year term on the Wayne son — on a proposed rede- Red Wings star Pavel Dat- State University board of velopment of the Michigan syuk. governors. Karmanos, 39, State Fairgrounds property Ⅲ Undeterred by an an- stepped down last month. in Detroit. nouncement that the entire Ⅲ Oakland County met state Democratic congres- or beat its expectations in sional delegation wants him BEST FROM THE BLOGS COMPANY NEWS gone, Michigan Democratic 2012 on local jobs growth, READ THESE POSTS AND MORE AT WWW.CRAINSDETROIT.COM/BLOGS Ⅲ Ann Arbor-based NSF business investment attrac- Party Chairman Mark Brew- International Inc. acquired tion and innovative train- er said he would continue A plate full of all kinds of stuff Stink globally, action locally Ontario-based Guelph Food ing resources, county Exec- his re-election bid. Technology Centre, a food utive L. Brooks Patterson The Great Stuffed Global merger and safety certification, train- said in his annual State of OBITUARIES Burger“ Co. could be a acquisition“ activity in the ing and quality services the County address. major new line for automotive sector is provider, for an undis- Ⅲ Michigan Gov. Rick Ⅲ Arthur Carter III, former Garden Fresh Gourmet looking bleak in 2013, closed amount. With 45 em- Snyder’s 2013-14 budget pro- chairman of the Wayne and a big boost for according to a recent posal (Related story, Page 6) County Commission and restaurateur Brian Ernst & Young study. But ployees, Guelph will oper- Polcyn. experts in Southeast ate as NSF-GFTC. includes $3.7 million annu- longtime educator with De- Michigan feel Ⅲ Troy-based Flagstar ally to operate Belle Isle as a troit Public Schools, died ” optimistic. Bancorp Inc. said it would state park — even though Feb. 1. He was 72. appeal a federal judge’s de- the state withdrew its lease Ⅲ George Hart, a longtime ” cision awarding $90.1 mil- deal after the Detroit City Dearborn-area politician Reporter Nathan Skid’s Detroit-area restaurant blog Reporter Dustin Walsh’s blog on auto suppliers, steel, lion plus interest, attor- Council decided not to act known as the “Singing Sen- can be found at www.crainsdetroit.com/skid higher ed and Livingston and Washtenaw counties can neys’ fees and other costs to on the offer. ator,” died Jan. 31. He was be found at www.crainsdetroit.com/walsh New York City-based As- Ⅲ Sixty percent of mem- 88. DBpageAD_DBpageAD.qxd 1/25/2013 9:34 AM Page 1

LEGAL NOTICE LEGAL NOTICE LEGAL NOTICE To merchants who have accepted Visa and MasterCard at any time since January 1, 2004: Notice of a 6+ billion dollar class action settlement. Si desea leer este aviso en español, llámenos o visite nuestro sitio web.

Notice of a class action settlement authorized by the U.S. &#'Wâa^dc#I]ZkVajZd[ZVX]XaV^b!l]ZgZedhh^WaZ!lâaWZ and taxpayer identification number, (3) the merchant that District Court, Eastern District of New York. WVhZYdcVcZhi^bViZd[dcZ"iZci]d[&d[i]ZbZgX]Vci¼h wishes to be excluded from the Cash Settlement Class This notice is authorized by the Court to inform you about Visa and MasterCard credit card dollar sales volume during (Rule 23(b)(3) Settlement Class), and what position or an agreement to settle a class action lawsuit that may affect i]VieZg^dY#EVnbZcihidbZgX]Vcihl]dÄaZkVa^YXaV^bh[dg authority you have to exclude the merchant, and (4) the you. The lawsuit claims that Visa and MasterCard, separately, Vedgi^dcd[i]Z>ciZgX]Vc\Z;jcYlâaWZWVhZYdc/ business names, brand names, and addresses of any stores and together with banks, violated antitrust laws and caused The money available to pay all claims, or sales locations whose sales the merchant desires to be excluded. merchants to pay excessive fees for accepting Visa and The total dollar value of all valid claims filed, and MasterCard credit and debit cards, including by: Note: OekYWddejX[[nYbkZ[Z\hecj^[Hkb[9^Wd][i The cost of settlement administration and notice, and any I[jjb[c[dj9bWii (Rule 23(b)(2) Settlement Class). Agreeing to set, apply, and enforce rules about merchant attorneys’ fees and expenses that may be approved by the fees (called default interchange fees); Court. EX`[Yj je j^[ i[jjb[c[dj# I]Z YZVYa^cZ id dW_ZXi Limiting what merchants could do to encourage their is: CWo (." (&')# Id aZVgc ]dl id dW_ZXi! hZZ/ Attorneys’ fees and expenses and money awarded to the class lll#EVnbZci8VgYHZiiaZbZci#XdbdgXVaa&"-%%"+'*"+))%# customers to use other forms of payment through, for representatives /;dgldg`YdcZi]gdj\]ÄcVaVeegdkVad[i]Z CdiZ/ >[ ndj ZmXajYZ ndjghZa[ [gdb i]Z 8Vh] HZiiaZbZci example, charging customers an extra fee or offering settlement by the district court, Class Counsel will ask the 8aVhhndjXVccdidW_ZXiidi]ZiZgbhd[i]Viedgi^dcd[i]Z discounts; and Court for attorneys’ fees in an amount that is a reasonable settlement. Continuing that conduct after Visa and MasterCard egdedgi^dcd[i]Z8Vh]HZiiaZbZci;jcY!cdiidZmXZZY&&#* changed their corporate structures. d[i]Z8Vh]HZiiaZbZci;jcYd[+#%*Wâa^dcVcY&&#*d[i]Z ;dgbdgZ^c[dgbVi^dcVWdjii]ZhZg^\]ihVcYdei^dch!k^hî/ lll#EVnbZci8VgYHZiiaZbZci#Xdb# The defendants say they have done nothing wrong. They >ciZgX]Vc\Z;jcYZhi^bViZYidWZ&#'Wâa^dcidXdbeZchViZ all of the lawyers and their law firms that have worked on the say that their business practices are legal and the result of XaVhhXVhZ#;dgVYYî^dcValdgìdVYb^c^hiZgi]ZhZiiaZbZci! competition, and have benefitted merchants and consumers. IF THE COURT APPROVES THE distribute both funds, and through any appeals, Class Counsel The Court has not decided who is right because the parties FINAL SETTLEMENT may seek reimbursement at their normal hourly rates, not agreed to a settlement. On November 27, 2012, the Court id ZmXZZY Vc VYYî^dcVa & d[ i]Z 8Vh] HZiiaZbZci ;jcY gave preliminary approval to this settlement. Members of the Rule Changes Settlement Class are bound d[ +#%* Wâa^dc VcY Vc VYYî^dcVa & d[ i]Z >ciZgX]Vc\Z by the terms of this settlement. Members of the Cash ;jcYZhi^bViZYidWZ&#'Wâa^dc#8aVhh8djchZalâaVahd THE SETTLEMENT Settlement Class, who do not exclude themselves by the request reimbursement of their expenses (not including the deadline, are bound by the terms of this settlement whether administrative costs of settlement or notice), not to exceed Under the settlement, Visa, MasterCard, and the bank or not they file a claim for payment. Members of both )%bâa^dcVcYjeid'%%!%%%eZg8aVhhEaV^ci^[[^chZgk^XZ defendants have agreed to make payments to two settlement classes release all claims against all released parties listed in awards for their efforts on behalf of the classes. funds: the Settlement Agreement. The settlement will resolve and release any claims by merchants against Visa, MasterCard I]Z Äghi ^h V ¹8Vh] ;jcYº · V +#%* Wâa^dc [jcY i]Vi HOW TO ASK FOR PAYMENT will pay valid claims of merchants that accepted Visa or other defendants that were or could have been alleged or MasterCard credit or debit cards at any time between To receive payment, merchants must fill out a claim form. in the lawsuit, including any claims based on interchange January 1, 2004 and November 28, 2012. >[i]Z8djgiÄcVaanVeegdkZhi]ZhZiiaZbZci!VcYndjYdcdi or other fees, no-surcharge rules, no-discounting rules, honor-all-cards rules and other rules. The settlement will also I]Z hZXdcY ^h Vc ¹>ciZgX]Vc\Z ;jcYº · Zhi^bViZY id WZ exclude yourself from the Cash Settlement Class, you will resolve any merchant claims based upon the future effect of Veegdm^bViZan&#'Wâa^dc·i]VilâaWZWVhZYdcVedgi^dc receive a claim form in the mail or by email. Or you may any Visa or MasterCard rules, as of November 27, 2012 and of the interchange fees attributable to certain merchants Vh` [dg dcZ Vi/ lll#EVnbZci8VgYHZiiaZbZci#Xdb! dg XVaa/ not to be modified pursuant to the settlement, the modified that accept Visa or MasterCard credit cards for an &"-%%"+'*"+))%# rules provided for in the settlement, or any other rules Z^\]i"bdci]¹>ciZgX]Vc\ZEZg^dY#º OTHER BENEFITS FOR MERCHANTS substantially similar to any such rules. The releases will not Additionally, the settlement changes some of the Visa and bar claims involving certain specified standard commercial MasterCard rules applicable to merchants who accept their Merchants will benefit from changes to certain MasterCard disputes arising in the ordinary course of business. cards. and Visa rules, which will allow merchants to, among other ;dg bdgZ ^c[dgbVi^dc dc i]Z gZaZVhZ! hZZ i]Z hZiiaZbZci This settlement creates two classes: things: V\gZZbZciVi/lll#EVnbZci8VgYHZiiaZbZci#Xdb# A Cash Settlement Class (Rule 23(b)(3) Settlement Class), Charge customers an extra fee if they pay with Visa or which includes all persons, businesses, and other entities MasterCard credit cards, THE COURT HEARING ABOUT that accepted any Visa or MasterCard cards in the U.S. at Offer discounts to customers who do not pay with Visa or THIS SETTLEMENT any time from January 1, 2004 to November 28, 2012, and MasterCard credit or debit cards, and A Rule Changes Settlement Class (Rule 23(b)(2) Settlement ;dgbWjn^c\\gdjehi]VibZZiXZgiV^cXgîZg^VidcZ\di^ViZ On September 12, 2013, there will be a Court hearing to Class), which includes all persons, businesses, and entities with Visa and MasterCard. decide whether to approve the proposed settlement, class that as of November 28, 2012 or in the future accept any counsels’ requests for attorneys’ fees and expenses, and Visa or MasterCard cards in the U.S. Merchants that operate multiple businesses under different trade names or banners will also be able to accept Visa or awards for the class representatives. The hearing will take MasterCard at fewer than all of the merchant’s trade names place at: WHAT MERCHANTS WILL GET and banners. United States District Court for the FROM THE SETTLEMENT Eastern District of New York LEGAL RIGHTS AND OPTIONS ''*8VYbVcEaVoV Every merchant in the Cash Settlement Class that files a valid 7gddànc!CN&&'%& XaV^blâa\ZibdcZn[gdbi]Z+#%*Wâa^dc8Vh];jcY!hjW_ZXi Merchants who are included in this lawsuit have the legal You do not have to go to the court hearing or hire an attorney. idVYZYjXi^dccdiidZmXZZY'*d[i]Z[jcYidVXXdjci[dg rights and options explained below. You may: 7jindjXVc^[ndjlVciid!VindjgdlcXdhi#I]Z8djgi]Vh merchants who exclude themselves from the Cash Settlement <_b[ W YbW_c je Wia \eh fWoc[dj$ You will receive Class. The value of each claim, where possible, will be based appointed the law firms of Robins, Kaplan, Miller & Ciresi a claim form in the mail or email or file online at: AAE!7Zg\ZgBdciV\jZ!E8!VcYGdWW^ch[ ndj ZmXajYZ ndjghZa[! ndj QUESTIONS? ;jcYlâaWZWVhZYdc/ can sue the Defendants for damages based on alleged conduct occurring on or before November 27, 2012 on ;dgbdgZ^c[dgbVi^dcVWdjii]^hXVhZIn re Payment Card The money available to pay all claims, ndjg dlc Vi ndjg dlc ZmeZchZ! ^[ ndj lVci id# >[ ndj Interchange Fee and Merchant Discount Antitrust Litigation, The total dollar value of all valid claims filed, exclude yourself, you will not get any money from this MDL 1720), you may: I]Z YZYjXi^dc YZhXg^WZY VWdkZ cdi id ZmXZZY '* d[ i]Z hZiiaZbZci# >[ ndj VgZ V bZgX]Vci VcY l^h] id ZmXajYZ 8Vaaidaa"[gZZ/&"-%%"+'*"+))% yourself, you must make a written request, place it in an 8Vh]HZiiaZbZci;jcY!VcY K^hî/lll#EVnbZci8VgYHZiiaZbZci#Xdb envelope, and mail it with postage prepaid and postmarked Write to the Class Administrator: The cost of settlement administration and notice, money no later than CWo (." (&') to Class Administrator, EVnbZci8VgY>ciZgX]Vc\Z;ZZHZiiaZbZci awarded to the class representatives, and attorneys’ fees and EVnbZci8VgY>ciZgX]Vc\Z;ZZHZiiaZbZci!E#D#7dm'*(%! expenses all as approved by the Court. EdgiaVcY! DG .,'%-"'*(%# I]Z lgîiZc gZfjZhi bjhi WZ E#D#7dm'*(% >c VYYî^dc! bZgX]Vcih ^c i]Z 8Vh] HZiiaZbZci 8aVhh signed by a person authorized to do so and provide all of EdgiaVcY!DG.,'%-"'*(% that accept Visa and MasterCard during the eight-month i]Z[daadl^c\^c[dgbVi^dc/&i]ZldgYh¹>cgZEVnbZci :bVâ/^c[d5EVnbZci8VgYHZiiaZbZci#Xdb >ciZgX]Vc\ZEZg^dYVcYÄaZVkVa^YXaV^blâa\ZibdcZn[gdb 8VgY >ciZgX]Vc\Z ;ZZ VcY BZgX]Vci 9^hXdjci 6ciîgjhi EaZVhZX]ZX`lll#EVnbZci8VgYHZiiaZbZci#Xdb[dgVcnjeYViZh i]ZhZeVgViZ>ciZgX]Vc\Z;jcY!Zhi^bViZYidWZVeegdm^bViZan Aî^\Vi^dc!º'ndjg[jaacVbZ!VYYgZhh!iZaZe]dcZcjbWZg! relating to the settlement or the settlement approval process.

www.PaymentCardSettlement.com sINFO 0AYMENT#ARD3ETTLEMENTCOM

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