20110530-NEWS--0001-NAT-CCI-CD_-- 5/27/2011 6:46 PM Page 1 ® www.crainsdetroit.com Vol. 27, No. 22 MAY 30 – JUNE 5, 2011 $2 a copy; $59 a year ©Entire contents copyright 2011 by Crain Communications Inc. All rights reserved Page 3 Tech ‘thieves’ billed for map Private money use. How’s $9 sound? Energy drink king on the line behind $100M fund Woodward rail donors wait for layout they like Bhargava sets up tech park for new firms BY BILL SHEA CRAIN’S DETROIT BUSINESS BY DANIEL DUGGAN Until an accord is reached on critical aspects AND DUSTIN WALSH of the Woodward light-rail line, a consortium of Tax overhaul? Check. Border private-sector donors who have pledged $100 CRAIN’S DETROIT BUSINESS He’s been very successful bridge next on Calley’s list “ million toward the project’s $528 million capital Crain’s has learned that the anonymous in- with 5-Hour Energy, and costs won’t commit any money. vestor behind a $100 million investment fund “We’ll wait to see if there’s a project that announced at Automation Alley last week is we’ve seen him as an investor makes sense and is viable. Then we’ll be pre- Focus: Defense Industry Manoj Bhargava, the CEO of Living Essentials pared to invest,” said Matt Cullen, CEO of M1 LLC, maker of the popular 5-Hour Energy here as his wealth grows. Rail, the coalition of project financial backers Some contractors have drink. ” who mainly favor a curbside Local investment HE FUND Paul Brown, MEDC alignment for the line rather formula for dodging cuts, bankers say the move is a T than the median-running lay- chance for Bhargava to go Stage 2: At least ington Hills that will house companies seeded out apparently preferred by Page 9 from being a small player 10 apply for help, by the Stage 2 Innovations LLC fund along the city. in the local investment Page 17 with his existing Lifeline Ventures LLC fund and And until the debate is re- scene to a more visible ETC Capital LLC fund. solved, the $100 million exists player with former Chrysler Group LLC CEO Kenneth Massey, director of research and largely as just a series of in- Tom LaSorda co-founding the initiative. clinical operations for MicroDose Life Sciences formal “soft” commitments Bhargava and his team would not confirm LLC, a company involved with several of the from donors, some of which or deny his involvement funds, said Bhargava is supporting Lifeline have lapsed because the 9.3- Cullen in the Stage 2 Innova- Ventures with a $100 million fund. That mon- mile, streetcar-style line be- tions LLC fund. The ey is combined with a $50 million medical de- tween Hart Plaza and Eight Mile Road still re- fund plans to collab- vice incubator fund and, additionally, $100 mains in the planning stages. Crain’s Lists orate with Troy- million for Stage 2 Innovations. “It isn’t like this money was in a box,” Cullen based Automa- said. tion Alley on The M1 money accounts for 47 percent of the Largest engineering placing in- Fund in overdrive project’s $210 million required local match companies, Page 13 vestments. This latest move is being viewed in local needed to leverage $318 million in federal fund- However, a private equity circles as a way to boost Bhar- ing to build the line. member of his gava’s visibility, in part through the stature The impasse over the line’s alignment — M1 This Just In team con- LaSorda brings. Rail prefers slower curbside service that deliv- firmed he is Scott Eisenberg, managing partner at Birm- ers people to the sidewalk, while the Detroit De- setting up a ingham-based Amherst Partners LLC, said if partment of Transportation is pushing for a purely BorgWarner to supply technology center-of-street line that travels at higher turbochargers to IndyCar park in Farm- See Fund, Page 17 speeds — continues behind the scenes, sources familiar with the situation told Crain’s. Auburn Hills-based Borg- Manoj Bhargava started his career in the plastics industry Until those details are resolved, M1 Rail isn’t Warner Inc. will be the exclu- before buying a hangover drug formula and later creating going to firm up its financing commitment, sive provider of turbocharg- 5-Hour Energy. Cullen said, nor will the group commit money ers for the Izod IndyCar See Rail, Page 16 Series starting next year. COURTESY OF BEVNET.COM The deal runs through the 2016 season. BorgWarner’s Engineered for Racing (EFR) turbocharg- ers introduce Gamma titani- Next brick in Gilbert’s real estate empire: First National um-aluminide wheels, stain- less-steel turbine housing and ceramic ball bearings. BY DANIEL DUGGAN again in July when he expects to Because the EFR turbocharg- CRAIN’S DETROIT BUSINESS close on the 800,000-square-foot ers were originally designed First National for performance enthusiasts, In his career as a Detroit land- ALSO MOVING Building in De- BorgWarner used weight-re- lord, Dan Gilbert had a milestone troit. duction techniques and end- last week with the signing of the BodyPartChart: Gilbert said Royal Oak advertising firm Skid- Graphics maker each move in De- housings to ensure racing- looks for quality performance. more Studio to one of his buildings downtown site, troit has created IndyCar hasn’t allowed — the first tenant outside his Page 17 more momen- group of businesses. tum, and he ex- See This Just In, Page 2 And he’ll need the momentum, pects Skidmore to be the first of as his portfolio is set to expand several companies to take space in his buildings. “Once a deal is signed, it creates another brick in the wall and it gets people looking up, saying, ‘Hey, I want to be part of that,’ ” he said. Gilbert, through his Rock Ven- tures LLC group of companies, re- PAUL SANCYA/THE ASSOCIATED PRESS NEWSPAPER Dan Gilbert has moved Quicken Loans’ corporate campus from Livonia (seen See Gilbert, Page 17 here) to Detroit, where he continues to build real estate holdings. 20110530-NEWS--0002-NAT-CCI-CD_-- 5/27/2011 5:35 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS May 30, 2011 The first floor will serve as a The trial is of a therapy called troit Pistons owner and Guardian In- angel investors to the local in- THIS JUST IN dining room and bar, and the sec- ixmyelocel-T, which is derived dustries Inc. Chairman William vestment community June 9 at ond floor will feature a rooftop from human bone marrow. Davidson. the school’s business incubator. ■ From Page 1 patio with seven lounge areas Critical limb ischemia is a dis- Gov. Rick Snyder last week The cost is $150, with a conti- complete with fire pits. ease of the circulation system signed the law naming the route nental breakfast and lunch pro- turbochargers since its separa- This is Kramer’s second Canti- that often ends up with the ampu- in the city the “William Davidson vided. The number of partici- tion from Championship Auto Rac- na Diablos location. The other is tation of extremities. Memorial Highway.” pants will be capped at 25. ing Teams Inc. in 1996. The league two miles away in Ferndale, but — Tom Henderson Davidson, a major donor to the The seminar will be led by vet- decided to allow turbochargers to Kramer is not concerned the new University of Michigan and Jewish eran investor John May, a board generate greater competition and restaurant will eat into original Huron Capital invests causes locally and in Israel, died member of the national Angel Cap- enhance fuel economy. location’s bottom line. in March 2009. ital Association of Overland Park, The 2012 IndyCar engine manu- Royal Oak is one of the highest- in fire-protection firm — Bill Shea Kan. facturers (Chevrolet, Honda and Lo- grossing cities for restaurant Detroit-based Huron Capital Part- For information or to register, tus) can use single- or twin-turbo sales in Michigan, Kramer said ners LLC, Michigan’s busiest pri- Seminar set for angel investors call Lori Kerch, senior finance and arrangements. in a press release. “There is a vate equity company in recent investment capital adviser on BorgWarner has deep ties to In- high concentration of local pa- years, is expected to announce Oakland University and the Michi- SmartZone development at the dyCar, and the trophy named for trons clamoring for authentic Tuesday that it has closed on its gan Economic Development Corp. incubator, at (248) 648-4800, or it has been the annual prize for Tex-Mex cuisine, and we feel that third investment of the year, in are holding a one-day educational email [email protected]. the Indianapolis 500 race since we can fill a serious void in the Baltimore-based Hughes Associ- seminar designed to recruit more — Tom Henderson 1936. The nearly 5-foot-4-inch-tall market.” ates Inc., a global provider of engi- sterling silver trophy has the — Nathan Skid neering services for fire protec- ORRECTIONS name, average speed, date of vic- tion. C tory and portrait of every winner Huron committed $40 million In the May 23 story “Feeling the pressure” on Page 3, incorrect in- since 1911. Nonprofit to help Aastrom from its third fund of $350 million formation was given about the Wayne County Four Star Health Program, — Crain News Service Arbor-based Aastrom Bio- to assume majority control of the which offers health care coverage for the working uninsured in sciences Inc. (Nasdaq: ASTM), firm, said Huron partner Peter Wayne County.