DETROIT BUSINESS MAIN 04-07-08 A 1 CDB 4/4/2008 6:35 PM Page 1 ® www.crainsdetroit.com Vol. 24, No. 14 APRIL 7 – 13, 2008 $2 a copy; $59 a year ©Entire contents copyright 2008 by Crain Communications Inc. All rights reserved THIS JUST IN Michael DeVos was hired to NCAA regional semifinals make unpopular decisions On tap: More give Detroit hotels a boost and change the The NCAA regional semi- finals brought a boost to the downtown Detroit ho- state’s system for tel market March 28 and 29, according to statistics re- leased to Crain’s by the awarding low- Hendersonville, Tenn.- could get based hospitality research firm Smith Travel Research. income housing Detroit’s hotel occupan- cy was 85 percent on March projects. He did 28, when there were two Sweet 16 games at Ford Field. And in preparation both and ran afoul of MEGA credits for March 30’s Elite 8 game, Saturday’s occupancy was 75 percent. entrenched interests. Was The city’s average occu- Need to look outside state may be cut pancy is 55 percent. his resignation a The entire region had a BY AMY LANE passed the Senate near-unanimously, small bump with Friday CAPITOL CORRESPONDENT and all are designed to give the 13- and Saturday occupancy at year-old tax credit and incentive pro- 61 percent and 62 percent, LANSING — Michigan businesses gram new competitiveness and rele- the company reported, may no longer have to shop outside vance. compared to the average of Culture clash the state for another location to quali- The timing is opportune, as the im- 59 percent. fy for Michigan Economic Growth Author- pact of Michigan’s new business-tax Ford Field hosts the ity tax credits. structure continues to unfold and one NCAA Final Four men’s A new bill, which has passed the neighboring state has stepped up its basketball games in 2009. state Senate and moves on to the efforts to woo Michigan business. (See — Daniel Duggan House, is one of several new weapons story, Capitol Briefings, Page 33.) or power play? the state may add in its battle with Senate Bill 1189, sponsored by Borders enhances other states for jobs and investment. Hansen Clarke, D-Detroit, would Beyond that, there are several oth- make more businesses eligible for bonuses for top execs er changes on tap to the MEGA pro- MEGA incentives, including elimi- BY DANIEL DUGGAN Key Borders Group Inc. ex- gram. Two await Gov. Jennifer CRAIN’S DETROIT BUSINESS See MEGA, Page 33 ecutives will be eligible for Granholm’s signature, others have doubled bonuses under a hen the state’s housing authority set out to find plan filed April 4 with the a new director in 2005, a memo crafted for the U.S. Securities and Exchange headhunter laid out the expectations. Commission. W Develop an urban housing agenda, it stated. The bonus hikes are Change the process for choosing low-income housing develop- aimed at retaining key ex- ers who receive federal tax incentives. Be able to make “un- Hail to the victors solvent: ecs during the Ann Arbor- popular decisions.” based bookseller’s strate- By all accounts, Michael DeVos nailed those goals as executive gic review process director of the Michigan State Housing and Development Authority. announced last month, But DeVos was pressured to resign March 14 after his ef- UM bests Buckeyes at bonds which may include the sale forts to change MSHDA’s policies caused a rift in the low-in- of the company or some come housing development community. Borders divisions, accord- Those close to MSHDA say it was a case of a passionate out- BY BILL SHEA risk of defaulting. It also means the ing to the SEC filing. sider coming into an organization hell-bent on changing it — CRAIN’S DETROIT BUSINESS school gets among the lowest interest Under the plan, execu- while the interests who have benefited over the years pushed rates possible, something unavailable Unable to conquer the Buckeyes on tive officers performing at back. to other universities and municipali- the gridiron in recent years, the Uni- or above target levels may “He just gave up at the end,” said Kathy Makino, president ties with lesser ratings. versity of Michigan can take solace in have doubled bonus-partici- of Wayne-based Shelborne Development, which has done a lot of The subprime mortgage crisis last the fact it is bucking the crisis in the pation levels. The current MSHDA development work. “He felt like he was being at- year spilled into the municipal bond municipal bond market better than plan allows execs who meet tacked in all areas.” market, and some municipalities its counterpart to the south. performance goals to re- The proposed changes revolved around the distribution of have halted or scaled back projects Why? Because it’s the University of ceive a cash award based on money through the federal Low Income Housing Tax Credit out of fear of higher interest rates. Michigan, and Wall Street loves it. a percentage of base salary program. Michigan, like every state, allocates developer in- Universities, which can issue bonds, The school is one of just three pub- at one of three levels — centives according to the guidelines of a Qualified Allocation generally have been less affected. lic universities in the country to have threshold, target and maxi- Plan written at the state level. Developers follow the QAP as a UM in January issued $224 million the elite AAA bond rating from Stan- mum — corresponding to 20 guide to propose low-income housing projects. in general obligation bonds to finance dard & Poor’s and Moody’s Investors percent, 80 percent and 160 The incentives for developers are tax credits they can sell to parts of several major capital pro- Service. The other two are the univer- percent of salary. investors to offset the costs of housing projects. Investors buy jects, including the ongoing renova- sities of Texas and Virginia. The arrangement was the credits at a discount but can apply them at face value to tion of Michigan Stadium. The aver- Such a rating tells investors that their own tax obligations. age daily interest rates on those UM is the safest bet for their money — See This Just In, Page 2 See DeVos, Page 32 that the university is basically at zero See Credit, Page 30 Brighton company takes Labor’s hero undervalued golf courses falls from grace, NEWSPAPER to the leader board, Page 19 Page 3 DETROIT BUSINESS MAIN 04-07-08 A 2 CDB 4/4/2008 6:00 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS April 7, 2008 ceremony at NextEnergy. The event is spon- pects to complete the project in the spring THIS JUST IN sored by the Bank of America, the Detroit Eco- of 2009, said director of communications CORRECTIONS nomic Growth Corp. and Detroit Renaissance. Barbara Lewis. ■ From Page 1 — Nancy Kaffer — Sherri Begin One of the people chosen for last week’s 20 in their 20s, which honors achievers under 30, approved Monday by the compensation Con-way hiring 50 for sales is not eligible for inclusion because he gave in- committee of the company’s board of di- Science Center to get addition Ann Arbor-based Con-way Freight Inc. on correct information about his age. rectors. The Detroit Science Center plans to break Friday said it plans to hire 50 new sales Dwight Zahringer, chosen for his efforts to Also last week, the retailer announced it ground April 30 on an 80,000-square-foot, employees as it continues its redevelop- funnel used wireless devices to charities, is would delay filing its annual report form $15 million addition to its building. ment plans. actually 32, according to two online public The four-story attached structure, for fiscal year 2007, which ended Feb. 2. The new hires will bring the freight record databases. which extends into the center’s parking The late filing, according to a press re- transportation company’s employment to Zahringer gave his age as 29 on the form lease, is to allow Borders to complete its nearly 400 in the region. lot, will house leased space for the Thomp- he filled out to be considered for 20 in their Crain’s Detroit evaluation of financing alternatives. Bor- In August, Conway centralized its three son Educational Foundation-backed University 20s and verified it to two Business ders officials expect to make that filing regional companies into a single unit Preparatory Science-Math Middle School and a staff members afterward. April 17. headquartered in Ann Arbor as part of a new lobby, gift shop and café for the sci- Assistant Managing Editor Jennette Smith Crain’s Borders announced last month that it reorganization. ence center. reviewed an e-mail sent to last week had retained advisers on plans for a possi- The company plans to begin its hiring at The science center expects the project asserting that Zahringer was over 30. Smith then left a message for Zahringer requesting ble sale and that it had received a commit- a job fair set for 5-8 p.m. Tuesday at the will be finished by May of 2009, said Kelly proof of age. Zahringer on Thursday faxed a ment for a $42.5 million loan from Pershing company’s office at 4880 Venture Drive in Fulford, director of public relations and Square Capital Management L.P., which has Ann Arbor. Parent company Con-way Inc. letter withdrawing from events surrounding marketing for the science center. 20 in their 20s “for personal reasons.” offered to buy Borders’ international hold- (NYSE: CNW) is a $4.4 billion freight trans- — Sherri Begin Crain’s uses a lengthy multi-stepped ings.