20100712-NEWS--0001-NAT-CCI-CD_-- 7/9/2010 7:01 PM Page 1 ® www.crainsdetroit.com Vol. 26, No. 28 JULT 12 – 18, 2010 $2 a copy; $59 a year ©Entire contents copyright 2010 by Crain Communications Inc. All rights reserved Page 3 iNetworks fund to invest Suppliers see in life science, health firms St. Mary Hospital seeks to add $81.8 million wing profits amid Inside JOHN SOBCZAK Co-owner Randy Lewarchik says plans to turn the Detroit Elevator Building into small office space are starting to pay off. low volumes Adapting to ‘the new normal’ LeBron saga just part Elevator Building rides BY JAMES TREECE of picture for Dan Gilbert, CRAIN NEWS SERVICE Page 18 If you’ve survived Auto parts suppliers have “ ups, downs of market emerged from the recession so far, you’ve with an unfamiliar prospect Jobs/Economy amid lower volumes: prof- got a pretty itability. Owners scrap Parts makers are poised for good chance Staffing strong — perhaps even companies condo plan, try record — profits because of of survival. lower breakevens, several ” answer business’ supplier CEOs say. Tim Manganello, small offices Profits are possible at to- BorgWarner Inc. call for IT employees, day’s North American vol- BY DANIEL DUGGAN umes of 11 million to 12 million Warner Inc. During the recession Page 11 CRAIN’S DETROIT BUSINESS COURTESY OF RANDY LEWARCHIK units annually, compared with 17 the maker of powertrain parts laid Though bank financing was se- ABOUT THE BUILDING million units seen at the start of off 6,000 employees, or about one- cured and interest from potential the decade. third of its workforce. Since then, Shown in a “before” photo, the Crain’s List buyers was strong, the owners of But realizing those profits will BorgWarner has rehired about building on Franklin Street next to the require continued discipline. 3,000 hourly workers, CEO Tim the Detroit Elevator Building Dequindre Cut Greenway was owned Largest logistics companies, made a tough decision in 2007 to by the Detroit Elevator Co. from the Five CEOs interviewed by Auto- Manganello said. pull the plug on their riverfront 1940s to 2007 and was also used motive News agreed that the re- Now, “If we hit the high-end Page 13 condo development. as a Studebaker factory and by the structurings that got them range of our guidance,” he said, Changing course, owners of Purple Gang as a bootlegging hub. It through the past two years have “we’ll have a record year — main- the 102-year-old building pursued is being redeveloped for $500,000 left them leaner and stronger. ly because we lowered our cost This Just In a commercial use and have been as small offices. “We’re definitely experiencing structure.” Part of Manganello’s optimism renovating the interior to be used to flock to the riverfront never the new normal,” said Kevin reflects what he called steady pro- as small office spaces. materialized. Baird, CEO of coated-trim maker Aviation fuel supplier lands duction levels by automakers in And as they’ve slowly remod- The gamble is starting to pay SRG Global Inc. based in Warren. North America and robust growth $5.2M military contract eled, they’ve watched plans for off, said Randy Lewarchik, one of “We’ve all scaled our business to allow us to ensure profitability at a in China. Ann Arbor-based aviation the other five residential devel- the owners. A certificate of occu- much lower level than before.” fuels suppler AvFuel Corp. re- opments in the neighborhood fiz- See Elevator Building, Page 22 Take Auburn Hills-based Borg- See Suppliers, Page 20 ceived a four-year fuels con- zle as buyers who were expected tract worth up to $5.2 million through the federal Defense Energy Support Center at Ft. Belvoir, Va., last week. The fixed-price fuel con- Arts, Beats & Eats festival has high hopes in new home tract with economic price contracts runs through BY CHAD HALCOM Presented by Citizens Bank, the festi- Associates Inc., also faces a few Oak), but it comes with a lot of new March 2014 and will service CRAIN’S DETROIT BUSINESS val has added sponsors, charities challenges that didn’t come up in responsibility,” Witz said. “To the U.S. Army, Navy, Air Force and attrac- the event’s 12- keep things consistent with the and Marine Corps. Almost every aspect of the 13th tions as fast year run in Pon- new level of commitment and ex- AvFuel has 120 employees annual Arts, Beats & Eats festival SUPPORTING ROLE as the ap- tiac. There is an pectations means we are on the and supplies aviation fuels will ratchet up a notch when the A record: Festival pendages to outdoor music hook to deliver a greater show, and and fueling services to com- festival reaches downtown Royal involves nearly 60 its name. It stage and seat- the logistics all have to be in or- Oak in a few weeks — including nonprofits, Page 21 debuts Sept. ing to build der.” See This Just In, Page 2 the expectations of its producer. 3-6 with from the ground The four-day event is expected Now called Ford Arts, Beats & Eats measureable increases in its oper- up, a sizable res- to generate a $10 million economic ating budget (now $1.35 million), ident population impact on downtown Royal Oak corporate sponsorship (now near downtown between parking, guest attendance around $900,000), booked musi- with parking is- and purchases, and could raise cians and entertainment acts Witz sues to manage, more than $300,000 for various (more than 200), food vendors (now pre-show hype to live up to, and a nonprofit organizations that col- 56) and projected attendance new host city that made a greater lect a share of festival gate fees, (300,000-400,000, compared with investment in the event — and ex- beverage sales, performance fees 225,000 in 2009). pects a return. or other revenue. NEWSPAPER But festival producer Jonathan “It’s an incredible opportunity Witz, president of Jonathan Witz and for the festival to be (in Royal See Festival, Page 21 20100712-NEWS--0002-NAT-CCI-CD_-- 7/9/2010 6:33 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS July 12, 2010 www.dp2a.org or call (248) 559- $247.1 million; No. 229, Center for rules were “illegal, invalid and THIS JUST IN The way it was: 1989 2095. Financial Planning Inc., Southfield, unenforceable.” —Dustin Walsh $221.2 million; No. 264, William The Michigan Court of Appeals ■ From Page 1 Throughout our 25th-anniversary Mack & Associates Inc., Troy, vacated that order in a divided year, Crain’s will use this space $174.2 million; No. 297, Northern Fi- ruling, but the three-judge panel mercial airlines, freight and car- to look at interesting items from Dover Realty opens Ohio office nancial Advisors Inc., Franklin, could not agree on a legal ratio- go companies, airports and mu- past issues. Dover Realty Advisors LLC has $150.4 million; No. 299, Vintage Fi- nale in its findings. The new rul- nicipalities, crop dusters, heli- opened an office in Cincinnati as nancial Services LLC, Ann Arbor, ing finds that the OFIS commis- copters and the U.S. military. There is no part of an expansion through the $149.3 million; and No. 311, Mutual sioner exceeded her authority New defense contracts for the “ Midwest. Fund Management Co., Troy, and reinstates the original court company totaled $10.4 million sense of space. The Bingham Farms-based $141.8 million. order. during fiscal 2009, according to multifamily real estate advisory — Tom Henderson — Chad Halcom federal data. You eliminate company plans to expand into — Chad Halcom Ohio, Kentucky and Indiana out all sensory input. … You float of the new office, said Principal State high court upholds using Oakland County Emerging Terry Schwartz. credit scores for insurance rates Sectors reports strong June ‘Passport’ program again effortlessly. The firm, with 150 employees, offers discounted tickets ” manages 6,500 units and has oper- Insurance companies cannot Oakland County’s Emerging ated solely out of Bingham Farms be barred from tying their auto- Sectors program reports four The Detroit Passports to the Arts, Jocelyn Granger, Peak Performance in the past. motive and homeowner coverage new business development deals an initiative to attract a younger Center Inc., Ann Arbor — Daniel Duggan rates to customers’ personal cred- worth a combined $24 million in audience to Detroit’s cultural in- it scores, the Michigan Supreme high-growth segments of the From a June 5, 1989, article about stitution, is again offering dis- Court has ruled. economy in June, adding up to the trend of flotation tank stress counted ticket packages for the reduction therapy, in which a Two area investment adviser The high court came down 4-3 532 new jobs and bringing the 2010-2011 season. person — say, a busy executive — firms make top 25 list last week in favor of The Insurance program’s year-to-date total In its second year, the program floats in saltwater in an enclosed Institute of Michigan, Farm Bureau ahead of 2009 as a whole. lets Passport holders attend six tank for relaxation. Granger, Two metro Detroit firms were General Insurance Co., Hastings Mu- The county also reported two performances produced by seven founder and director of the Ann ranked in the top 25 of the July is- tual Insurance Co., Frankenmuth Ca- deals in traditional economic seg- different local organizations. Arbor Institute of Massage sue of Financial Advisor maga- sualty Insurance, Citizens Insurance ments during June, totaling Performances include: “The Therapy, says flotation “never zine’s list of the largest indepen- Co.