Wayne Digs Into Pension Deficit

20150216-NEWS--0001-NAT-CCI-CD_-- 2/13/20156:45PMPage1 or (313)446-0416. Haimerl: [email protected] crainsdetroit.com/nominate nations aredue younger beforeJune1.Nomi- ored atafutureawardsevent. the June1editionandhon- entrepreneurship arenas. tries, nonprofitsandsocial ered fromcreativeindus- world, candidatesareconsid- other demonstrableway. made localimpactsinsome as entrepreneurs,orhave shown successororiginality als withinacompany,have ing wavesasyoungprofession- up-and-comers whoaremak- lar fieldoractivitybutinclude are notlimitedtoanyparticu- their 20srecognitionprogram or hermarkintheregion. fessional whoismakinghis nominate a20-somethingpro- Victory Automotive’s pitch College gradsintheshowroom: cuts startlehospitalofficials Snyder’s medicaleducation BACK: LOOKING for Last callfornominations NEWSPAPER to-do liststilllong,Page11 health servicesbetter, but Converging oncare:Mental found profitsinPortaJohns Monday killedanIPO,buthe Health Care Page 3 This JustIn Questions? ContactAmy To fillouttheform,visit Nominees mustbe29or Winners willbeprofiledin Besides thecorporate Candidates for It’s yourlastchanceto Crain’s 20 intheir20s Feb. 20. Black Crain’s ©Entire contentscopyright2015byCrainCommunicationsInc.Allrightsreserved www.crainsdetroit.com Vol.31,No.7 20 in . tem, accordingtoTonySaunders, fall infundingforitspensionsys- sue bondstocoveragrowingshort- for Chapter9bankruptcyortois- revenue-sharing model.Anyone, shares, sellingdebtorcreatinga local investorsbyofferingequity tween $50,000and$2millionfrom low entrepreneurstoraisebe- Gov. RickSnyderin2013thatal- new crowdfundinglawssignedby the websitetakesadvantageof and investorslaunchedonSunday. Michigan small-businessowners platform designedexclusivelyfor Gores Chassix misses2ndbondpayment;creditors concerned platform crowdfunding Pair launchequity in Mich.smallbiz New path toinvest costs, avoidbankruptcy County goals:Cuthealthcare Wayne digsintopension deficit Called MichiganFunders.com, The firstequitycrowdfunding Wayne County CRAIN’S DETROITBUSINESS B CRAIN’S DETROITBUSINESS Y B T Y OM A MY H does notplantofile ENDERSON ward apossiblebankruptcy. serts thatthecompanyistakingstepsto- tain advisers—andacreditor’sfilingas- asked thebondholderstoorganizeandre- to bondholdersthismonth, H AIMERL The Southfield-basedsupplierofchas- After missingapaymentof$17.4million CRAIN’S DETROITBUSINESS AND B Y D C USTIN HAD FEBRUARY 16–22,2015 cent today,withanunfundedlia- percent in2004toaratioof44per- has gonefromafundingratioof95 & YoungLLP Executive WarrenEvansby structuring officerinJanuary. who becamethecounty’schiefre- commerce. Butit’salsojustgood sight becausethereisnointerstate fies thelegalandregulatoryover- vestors toparticipate.Thatsimpli- Michigan companiesandin- tinction isthatitallowsonly Page 21). crowdfunding canwork( ready toacceptthosenewideas.” “There isadiversesupportgroup business developmentofficer. Niles Heron,co-founderandchief build somethingrighthere,”added David Tessler. nities,” saidco-founderandCEO other waytoinvestintheircommu- participate. change Commission credited bythe not justinvestorsconsideredac- H W There areseveralwaysequity “We wantpeopletobeable “We’re excitedtogivepeoplean- According toareportforCounty ALCOM ALSH Chassix Inc. MichiganFunders’ dis- , thepensionsystem See Equity,Page21 Securities andEx- has , willbeableto ruptcy aroundthetimeitsgraceperiod told March, accordingtoa to formulatearestructuringplanbyearly bondholders duringa30-daygraceperiod Gores’ debt itcarries.Chassix,ownedbyTom since Decemberon$525millionofbond not makeascheduledpaymenttwice sis, brakeandpowertraincomponentsdid See story, Sources familiarwiththesituation Crain’s Ernst Platinum EquityLLC Saunders that Chassixmayfilebank- equity stakes. entrepreneurs tooffer that allow crowdfunding laws new state take advantageof Niles Heronhopeto Tessler (right)and co-founders David MichiganFunders.com government pensionfundsareof- tirements forlimitedyearsworked. “Even understandingthatlocal Debtwire , isworkingwith report. erous earlyre- checks” andgen- matches, “13th tory ofgenerous also duetoahis- underfunding is a part,butthe rates haveplayed million. bility of$850 Low interest into bankruptcy;let’sjustsayIhaven’t the factthathedoesnotputcompanies used tohearthatTomGorestookpridein who declinedtobenamedtold declined tocomment. Chassix andPlatinumEquityexecutives senior securednotestobondholders. expires March4on$375millionworthof “This isadelicatesituation,”source contract talkswith11unions.Itis costs itnegotiatesinupcoming through savingsinhealthcare to startmakingupthatshortfall to fundotherservices.” would impactthecounty’sability sister publicationto editor of tio,” saidAmyResnick,executive this isstillaverylowfundingra- ten lesswell-fundedthanstates’, Saunders saidthecountyplans Pensions &Investments, See Pensions,Page24 See Chassix,Page23 $2 acopy;$59year JOHN SOBCZAK Crain’s. “ Crain’s ® . “I It a 20150216-NEWS--0002-NAT-CCI-CD_-- 2/13/2015 3:54 PM Page 1

Page 2 CRAIN’S DETROIT BUSINESS February 16, 2015

MICHIGAN BRIEFS capital firm started three years ago Shield of Michigan agreed to a new by Rick DeVos to seed startups, has five-year agreement that will pre- Kids of Amway’s other (non-DeVos) founder doing OK, too formed the Phase II fund to provide serve access for Blues members at up to $1.5 million per company, the Kalamazoo-based health care Bringing the American way of selling skin care Steve Van Andel, 59, has been Amway chairman three times the previous amount it organization, MiBiz reported. products and vitamins to China helped make Amway since 1995, while two of his siblings sit on Alticor’s MiBiz Ⅲ Trader Joe’s is coming to the Corp. the world’s largest direct seller. It also made board. David Van Andel, 55, leads the Van Andel Insti- would invest, reported. Run- Grand Rapids suburb of Kent- the children of one its co-founders billionaires. tute in Grand Rapids, started by his parents. It focus- ning the new fund is Mike DeVries, wood, after a lease was signed be- Amway Chairman Steve Van Andel and siblings es on biomedical research and science education. who led the Grand Rapids office of tween the grocery chain and David Van Andel, Barb Van Andel-Gaby and Nan Barb Van Andel-Gaby, 52, has six children, lives the Ann Arbor-based venture capi- Grand Rapids-based CWD Real Es- Van Andel own half of Alticor Inc., Amway’s Ada- in Atlanta and has been “a dedicated home-schooler tal firm EDF Ventures. tate Investment, the Grand Rapids based parent. The stake — which they inherited in since 1998,” according to Alticor’s website. She has Ⅲ Two advertising employees of Business Journal reported. equal shares after their father, Jay Van Andel, died been a board member of the Heritage Foundation, a Walker-based Meijer Inc., Tracy Ⅲ Lake Michigan College near in 2004 — is valued at $4 billion, according to the political research firm, since 1996. Christen Gordon and Danny Kraig Benton Harbor is launching the Bloomberg Billionaires Index. Nan Van Andel is the only sibling no longer in- Vandermyde, are accused of em- Great Lakes Wine Institute, which Richard DeVos, 88, owns the other half of Alticor. volved in the family business. She’s president of the bezzling between $50,000 and the school contends will be the He has a $4.5 billion fortune, according to the Silverwing Foundation, also founded by her parents, $100,000 worth of gift cards and Midwest’s first commercial teach- Bloomberg ranking. which donates to religious causes. face as much as 15 years in prison, MLive.com reported. ing winery. Starting this fall, stu- Ⅲ A month after both sides said dents can earn an associate’s degree in the art, science and co-founded. Wood, a 25-year Dow they remained far apart in negotia- Retailer Family Christian files Dow settles with whistleblower business of wine making, the col- employee, also claimed she found tions, Bronson Methodist Hospital lege said in a release. for Chapter 11, owes $100M who claimed CEO spent lavishly millions of dollars in cost overruns and Detroit-based Blue Cross Blue Grand Rapids-based Family Christ- Midland-based Dow Chemical Co. during the renovation of the Dow- ian LLC, which sells Bibles, music, settled lawsuits by former company owned H Hotel in Midland. CORRECTIONS church supplies and other faith-re- fraud investigator Kimberly Wood, lated merchandise in 266 stores in 36 who claimed she was wrongfully MICH-CELLANEOUS Ⅲ A Page 1 story on Michigan’s craft brewing industry in the Feb. 9 issue states, filed for bankruptcy protec- fired for uncovering improper misspelled the last name of Mark Rieth, CEO of Atwater Brewing. tion with a plan to sell all its assets. spending by CEO Andrew Liveris Ⅲ National Cherry Festival officials Ⅲ An editorial on Page 8 of the Feb. 9 issue incorrectly said James Robert- The nonprofit listed assets and and others, Bloomberg News re- want to change their annual eight- son was given a Ford Focus by Suburban Ford. It was a Ford Taurus. debt of less than $100 million each ported. day event to focus more on local Ⅲ The People Spotlight in the Feb. 9 edition should have said that An- gela Hospice is based in Livonia, not Farmington Hills. in Chapter 11 documents filed in Terms are confidential, Rachelle agriculture and culture to revive Ⅲ U.S. Bankruptcy Court in Grand Schikorra, a Dow spokeswoman, community support, the Traverse Mary Kramer’s Publisher’s Notebook, on Page 17 of the Feb. 9 issue, should have said Ralph Slider is president of Michigan Office Solutions. Rapids, Bloomberg News reported. wrote in an email. City Record-Eagle reported. The company’s name was misstated. Family Christian had gross sales Wood alleged Dow paid for Liv- Ⅲ Flint officials have hired con- Ⅲ A Business Diary item in the Feb. 9 issue should have said NBS Con- of about $216 million in 2014. eris family trips to the Super Bowl, sultants from Veolia North America struction Solutions has expanded its services to include the sale of fur- Family Christian entered into World Cup and Masters golf tour- to evaluate the city’s troubled mu- niture, audiovisual and floor covering and building cleaning services. an agreement with a newly formed nament as well as an African sa- nicipal water system, The Flint Ⅲ A story on Page 7 of the Feb. 2 issue should have said the Detroit Em- unit of Family Christian Ministries to fari, prompting the CEO to repay Journal said. An initial report is ployment Solutions Corp. is working with City Connect Detroit to adminis- serve as lead bidder for a court-su- $719,923. She said Dow also was expected in about two weeks. ter Grow Detroit’s Young Talent program, rather than the Detroit Eco- pervised auction, according to “funneling money” to the Hellenic Ⅲ Start Garden LLC, the Grand nomic Growth Corp. court papers. Initiative, a Greek charity Liveris Rapids-based $15 million venture

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February 16, 2015 CRAIN’S DETROIT BUSINESS Page 3 Snyder budget hits medical ed Inside

to help balance the state’s pro- sidies for gradu- Proposed $74M cut in funds posed $54 billion 2016 budget. The ate medical edu- cuts also included financial sup- cation from the port to small hospitals that run ob- general fund,” surprises hospital officials stetrical programs in rural areas. said Conrad The financial hit to the 60 teach- Mallett Jr., BY JAY GREENE millions of dollars in state general ing hospitals is actually much DMC’s chief ad- CRAIN’S DETROIT BUSINESS funds that Gov. Rick Snyder elimi- larger — $163 million — when fed- ministrative of- nated from his proposed budget for eral matching funds are added, ficer, in a state- As the largest recipient of state fiscal 2016. said Laura Appel, senior vice pres- ment. Medicaid graduate medical educa- In a move last week that sur- ident of federal policy and advoca- Johnson Spencer John- tion funding, eight-hospital Detroit prised DMC and other Michigan cy with the Michigan Health and Hos- son, MHA’s In Hockeytown, where kids are Medical Center also stands to lose hospital officials, Snyder cut $74 pital Association. president, said the hospital associ- the most money — $53.3 million — million in general funds for resi- “We are concerned about the on rink, there’s Inc., Page 4 if the Legislature doesn’t reinstate dent physician training programs governor’s plans to eliminate sub- See Medical ed, Page 23

On Feb. 18, 1985, Crain’s reported Porta John owner Company index LOOKING BACK Earl Braxton’s plan to launch an IPO to build a business in These companies have significant mention in this week’s Crain’s Detroit Business: selling urine proteins to drug companies. Here’s what happened. Belle Tire ...... 4 Butzel Long ...... 23 Cascade Partners ...... 25 30 YEARS AGO THIS WEEK Center for Healthcare Research and Transformation . 11 Chassix ...... 1 Come Play Detroit ...... 9 Compuware ...... 4, 18 Detroit Medical Center ...... 3 Detroit Metro Convention & Visitors Bureau ...... 17 Nothing succeeds like failure Det. Wayne County Comm. Mental Health Authority . . 13 Ellis Infinity ...... 21 Ernst & Young ...... 1 Funderbuilt ...... 21 Entrepreneur moved from HoneyBaked Ham ...... 4 Little Caesars ...... 4 Michigan Department of Community Health . 12, 13, 23 urine enzymes to being Michigan Department of Natural Resources ...... 9 Michigan Health and Hospital Association ...... 3 tops in portable toilets Mich. Mental Health and Wellness Commission . 11, 15 Michigan State Medical Society ...... 23 MichiganFunders.com ...... 1 Y ILL HEA B B S Oakland County Comm. Mental Health Authority . 12, 13 CRAIN’S DETROIT BUSINESS Oakland Integrated Healthcare Network ...... 12 arl Braxton could never make pee Olympia Medical Services ...... 23 OU Inc...... 21 pay. Porta John Industries ...... 25 E Thirty years ago this week, the St. John Providence Health System ...... 12 Utica entrepreneur unveiled in the pages Telemus Capital Partners ...... 23 of Crain’s his plan to go public with En- University of Michigan ...... 3, 24 zymes of America, a company he launched Victory Automotive Group ...... 3 to extract enzymes from human urine for medical research purposes. JACOB LEWKOW Department index He got into the urine enzyme business At least Earl Braxton had his Porta John Corp. subsidiary to fall back on when visions of an Enzymes of because he had randomly met a scientist America stock sale came crashing down after Black Monday in 1987. BANKRUPTCIES ...... 18 who needed vast amounts of urine, and BUSINESS DIARY ...... 20 Braxton owned a portable toilet business ing urine-derived enzymes, rather than toilets and attracting interest and funding CALENDAR ...... 19 that had millions of gallons of waste avail- more expensive synthetics, for things from biotech firms, Enzymes of America was CLASSIFIED ADS ...... 21 able from his Porta John Corp. such as blood clotting treatments. ready for its IPO in October 1987. KEITH CRAIN...... 8 The idea was to sell the enzymes to re- After spending more than $1 million on And then came Black Monday. MARY KRAMER ...... 8 research and design on filters for portable search firms, which at the time were us- See Braxton, Page 25 OPINION ...... 8 PEOPLE ...... 20 RUMBLINGS ...... 26 Victory Automotive mines retail talent with UM program WEEK ON THE WEB ...... 26

BY BRADFORD WERNLE stores’ rollout professor. He’s the COO of Victory Au- his MBA and changed careers. CRAIN NEWS SERVICE in Taiwan, Ol- tomotive Group, a Canton Township- “There are some fantastic opportu- son can speak based dealership group that owns 26 nities on the retail side. Every- Rodger Olson is an absolute geek with the author- stores around the country and is body thinks of the greasy, slimy on retailing. And he makes no ity of someone ranked No. 40 on the Automotive used-car salesman who’s in your apologies for that as he lectures un- deeply im- News list of the top 125 dealership face.” dergraduate students in his class mersed in his groups in the country, with 17,999 As guest lecturer, Olson’s mis- on retail sales at the University of chosen subject. new retail vehicles sold in 2013. sion goes beyond just changing Michigan. His fascination “Retail has been something of a perceptions. Victory Automotive Whether it’s comparing the rubs off on his dirty word. We’re trying to change can use his class to mine talent franchise models of Dunkin’ Donuts Olson students — the that,” says Olson, who spent 14 coming out of the university’s and McDonald’s or measuring the mark of a good professor. years working as an engineer for success of 7-Eleven convenience Only Olson, 38, is not actually a auto suppliers before he earned See Victory, Page 22

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Page 4 CRAIN’S DETROIT BUSINESS February 16, 2015 Big business backs little hockey stars in Detroit’s elite leagues

BY BRYAN GRULEY BLOOMBERG NEWS

HoneyBaked Ham Co., Little Cae- sars and Compuware Corp. are widely known for their products and services. What’s lesser known: Together they’ve produced more than 50 players for the National Hockey League. Only in ice hockey — and almost exclusively in Detroit — do large companies lend their brands, and hundreds of thousands of dollars, to individual teams that shape grade-schoolers into college and big-league prospects. Some youth soccer teams wear sponsors’ logos, and companies ALL STAR ACTION PHOTOGRAPHY such as Nike Inc. and McDonald’s The Little Caesars AAA Peewee Major team won the Silver Stick AAA Finals held Corp. subsidize soccer, lacrosse in Port Huron in January. and basketball camps and tourna- ments. But those arrangements occasionally, wealthy “sugar dad- of dollars for development camps, are a far cry from the Motor City’s dy” parents who write checks for skating coaches, goalie coaches, year-round, vertically integrated anything from chartered buses to off-ice physical trainers and nutri- hockey machine. coaching budgets. tionists. Corporate sponsors chip Along with retailer Belle Tire Inc. “It’s unrestricted free agency in to defray parental bills that can and auto dealer Victory Honda, Lit- every year,” said Darren Eliot, di- exceed $15,000 a season for a single tle Caesars, Compuware and Hon- rector of minor hockey for Little player. eyBaked are known in the hockey Caesars and a former NHL goal- John Kay, Belle Tire’s longtime world less for what they sell than tender. director of hockey, said the region- how teams wearing their colors In addition to paying for ice al tire store chain has an annual rank among the best in North time, cross-country tournament budget of up to $500,000 for its 25 America. travel and $200 hockey sticks, moms and dads shell out hundreds See Hockey, Page 6 Hockey mecca Players come from across the U.S. and even Europe to compete for the Detroit teams in elite AAA leagues for girls and boys age 11 to 19. A Florida real-estate mogul mar- ried to supermodel Elle Macpher- son flies his 11-year-old son to De- troit to play for a Belle Tire team ranked No. 1 in the country. Compuware player Blade Jenk- ins, a 14-year-old eighth-grader, recently committed to play for the University of Michigan. The NHL “is definitely the long-term goal,” he said. Detroit hardly has a monopoly on hockey madness. High school hockey reigns supreme in Min- nesota, the nation’s top producer of NHL and NCAA talent. Prep schools and Catholic high schools claim many of the elite skaters in New York and New England. Pri- vate clubs dominate in emerging hockey hubs such as Chicago, Pittsburgh and Dallas. Detroit has a lot going for it on the ice. Young hockey players are drawn by the proximity to Canadi- an competition, the chance to be scouted by the NHL feeder Ontario Hockey League, and Detroit’s repu- tation as “Hockeytown.” Deep pockets The state of youth hockey in De- troit and elsewhere underscores how sophisticated the business of developing teenage athletes has become, and how parents have become ever more eager to see their kids get a chance at college or professional stardom. These boys and girls aren’t yet pros, though sometimes they seem close. Coaches routinely jump from team to team. So do players and, DBpageAD_DBpageAD.qxd 2/10/2015 3:21 PM Page 1

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Page 6 CRAIN’S DETROIT BUSINESS February 16, 2015 Hockey: The big business of supporting little stars on ice ■ From Page 4

AAA and AA teams, covering jer- 2007 AAA national championship company that manages rinks and when teams for Little Caesars, Sla- After Karmanos bought the seys, pants, gloves, some ice time, for 15- and 16-year-olds. “Nineteen of hockey schools. HoneyBaked no sor Heating and Paddock Pools dom- NHL’s Hartford Whalers, now the and salaries that average $5,000 for those 20 kids are still playing” in col- longer contributes money but lets inated. Many vanished while Lit- Carolina Hurricanes, in 1994, Ilitch AAA coaches. lege, minor leagues or the NHL, he teams use its name on their gold- tle Caesars founder Mike Ilitch evicted Karmanos’ youth team Belle Tire executive Don Barnes said, including Boston Bruins de- and-black jerseys stitched with bought the NHL’s Detroit Red from the Joe. Karmanos responded Jr. started sponsoring teams 16 fenseman Torey Krug. pink, hockey-stick-wielding pigs. Wings and poured more dollars by building a $25 million arena in years ago “because he just had a Lou Schmidt Jr., president of The name “has some brand equi- into youth hockey. Caesars alumni Plymouth Township. passion for hockey,” Rob Smith, HoneyBaked Ham’s Michigan ty” in the hockey world, Schmidt include Mike Modano, the retired Karmanos, now retired from the team’s assistant hockey direc- unit, started a single team in 1994 said. Has it helped him sell hams? NHL star who holds the career Compuware, has made plans to tor, says from his cinder-block- for his young son. He began adding “Probably not,” he said. “For record for combined goals and as- sell Compuware Arena to the USA walled office at Belle Tire’s home teams in other age groups and, by every 20 kids you put on the team, sists by a U.S.-born player. Hockey Foundation and this month rink in Fraser. Down the hall, a 2000, HoneyBaked was spending there’s 40 you cut, and they’re Little Caesars’ biggest on-ice ri- sold the OHL’s Plymouth Whalers to sporting goods store sells red-and- $125,000 a year and vying for state pissed.” val emerged in the late 1970s when IMS Hockey Corp. They’ll move to white T-shirts, polos and hoodies and national titles. Compuware co-founder and hock- Flint next season. emblazoned with Belle Tire’s Eleven years ago, Schmidt, 55, de- ey fan Peter Karmanos Jr. started Through a spokeswoman at his script logo. cided to step back and turned the Compuware ties sponsoring teams, one of which new company, MadDog Technology Smith, 54, a retired cop, brandish- hockey program over to Suburban Company-sponsored hockey in skated at Joe Louis Arena, home to LLC, Karmanos said he will contin- es a fat ring signifying Belle Tire’s Sports Group, a Farmington Hills Detroit dates back 50 years to Ilitch’s Red Wings. ue to contribute money to youth hockey. Rich sponsors The sour tang of sweat and leather hangs in the air as John Trouba sits in a Compuware dress- ing room telling of his son’s jour- ney to the Winnipeg Jets in the NHL. Jacob Trouba, now 20, had played for Little Caesars before switching to Compuware. “It was just the best opportunity to play with some better kids,” said the elder Trouba, partner in a marketing firm that’s developing a mobile app around his son. Even with Compuware’s sponsorship, Trouba said he spent about $7,500 a season, more when Jacob traveled to Sweden and Rus- sia. Trouba said the best teams often have a “money guy,” a rich parent who’ll toss cash on top of the sponsor’s contribution. Florida real estate magnate and hockey fanatic Jeffrey Soffer was so eager to have his 11-year-old play in Detroit that last year he reached out to Mike Hamilton, then a highly regarded coach for HoneyBaked. Soffer is chairman and CEO of Turnberry Associates LLC, a multibillion-dollar real estate firm that owns the Fontainebleau Miami Beach resort. He is also the husband of model and businesswoman Macpherson. His son Logan played wing last season for the Snow Kings in As- pen, Colo. Jeffrey Soffer ap- proached Hamilton about bringing Logan and a few teammates to play for the coach in Detroit. Hamilton said he couldn’t work out an arrangement with HoneyBaked, so he migrated to Belle Tire. Florida fundraiser Hamilton, in an interview, said he wasn’t sure how much if any money Soffer has put into the team, though it wasn’t the six-figure sums rumored in Detroit hockey circles. Soffer raised more than $50,000 for the team in a golf outing last summer at a Turnberry property in Aventura, Fla., Hamilton said. Last month, Soffer hosted the Belle Tire squad and rivals from Chicago, New Jersey and Connecticut for a private tournament in Florida. But Hamilton will be movingn on. Earlier this month, he and Sof- fer agreed the coach would finish this season and then step down. “We just differed on how things should be going forward,” Hamil- ton said. “No hard feelings. Every- one has one way they want to do things.” DBpageAD_DBpageAD.qxd 2/6/2015 3:15 PM Page 1 20150216-NEWS--0008,0009-NAT-CCI-CD_-- 2/13/2015 6:21 PM Page 1

Page 8 CRAIN’S DETROIT BUSINESS February 16, 2015 OPINION MARY KRAMER Evans’ goal: Skip Talent starts with a first paycheck Do you remember first job,” says Lena Duggan tweaked the program. Ex- your first paycheck? Barkley, a workforce ample: Grow Detroit’s Young Tal- How old were you? De- initiatives manager at ent will manage recruitment and troit Mayor Mike Dug- CVS Caremark. payroll online. Teens are matched Ch. 9, fix problem gan hopes Detroit em- She estimated that to employers based on geography, ployers give 5,000 teens CVS hired about one- ability and interest. Each employ- and young adults the third of the 68 teens er will have a youth specialist as- t’s becoming clear — if it was ever in doubt — that the lega- chance to make that who worked last sum- signed to help manage any issues. cy of Bob Ficano is going to require the full-time focus of memory this summer. mer from Detroit high And teens have free access to city I new Wayne County Executive Warren Evans. He unveiled the plan schools: Denby, Cody, buses to help them get to work. The high-profile issue throughout the election campaign — dubbed Grow De- University Prep, Ben So what can the teens do? An- was the stalled jail project on Jefferson Avenue downtown. troit’s Young Talent — Carson, Cass, Renais- swer phones, perform data entry, at an employer briefing sance and Martin work on “environmental cleanup” And, indeed, that remains an issue. In an interview last at the Detroit Regional Luther King Jr. (aka mowing grass, cleaning up week with Crain’s, Evans said the project is costing the county Chamber. It targets Detroiters CVS has year-round training parking lots), making document up to $1.3 million a month in interest payments, so a decision ages 14-24 and runs from July 6 to programs, too. One program tar- copies. At General Linen & Uni- about what to do with the project needs to be made soon. Aug. 28. gets 18- to 24-year-olds to “give form Service, for example, teens Less clear is what’s in the county’s best interests, he said, Employers would pay $1,000 — them a chance to learn everything cleaned, sorted and distributed half the payroll cost — for a teen to a new hire would do.” Another uniforms for restaurants, hospi- because it has “$130 million in the ground” on the project, so work 20 hours a week for six program, for teens in school, im- tals and security companies. it’s important to determine if it makes more sense to finish the weeks. (Learn more at gdyt.org.) merses them in career pathway Lots of people want to see Dug- project or accept an offer of about $20 million for the site. Crain’s Detroit Business has preparation. gan succeed. This program seems Looming even larger, of course, is a structural deficit that signed on as a partner — not just “We have kids who soon realize: a modest investment from employ- could exhaust the county’s cash by mid-2016. The deficit is dri- to employ teens this summer but ‘I didn’t know a pharmacist could ers — large and small — to help to get the word out to employers. make $120,000 a year,’ ” Barkley him out. ven largely by pension underfunding and retiree health care An ad about the program is on said. costs. Page 16. CVS also works year round with Mary Kramer is publisher of Pensions everywhere have been hit hard by prolonged low It seems like a pretty simple a training facility at Wayne Coun- Crain's Detroit Business. Catch her interest rates that wreaked havoc with actuarial assumptions proposition. For a thousand bucks, ty Community College’s east-side take on business news at 6:10 a.m. on rates of return. an employer has a chance to campus. Mondays on the Paul W. Smith show change a life. Working with the Detroit Em- on WJR AM 760 and in her blog at But, as Tom Henderson reports on Page 1, Wayne County “There’s nothing better than a ployment Solutions Corp., Skill- www.crainsdetroit.com/kramer. compounded its problems by overgenerous contribution young person experiencing their man Foundation and CityConnect, E-mail her at [email protected]. matches, “13th checks” and buyouts that awarded large pensions to younger employees. Evans and Tony Saunders, his chief restructuring officer, say they are determined to avoid bankruptcy or an emergency manager, but also don’t believe quick tax hikes are the an- TALK ON THE WEB swer. Opportunities for savings include an evaluation of retiree health care and upcoming contract negotiations. From www.crainsdetroit.com We wish Evans and his team Godspeed and help from the would have done well. business community in restoring fiscal stability to the county. Re: Business executives urge more Reader responses to stories and state spending on higher education blogs that appeared on Crain’s Joseph Serwach Metro Detroit doesn’t need another tour in the public eye for website. Comments may be negative reasons. I have owned my own business- edited for length and clarity. Stroh could easily use its origi- es since the mid-1970s but am nal recipe and open its own micro- ready to take some abuse from my for Crain’s in the late 1990s. The brewery. Tell me that wouldn’t Growing state of crowdfunding fellow CEOs for stating what main issue for Stroh’s decline, re- work in the new Red Wings town. should be obvious to all. We in the ally, was it kept buying rivals and Many of us still remember the al- business community are not paying adding failing brands (like Old Mil- lure of “America’s only fire- On the lighter side, we are pleased to see opportunities for our fair share of taxes, which is why waukee) and building this large brewed beer.” entrepreneurial funding continue to grow. state government does not have house of many brands rather than Dukeoftralee As Amy Haimerl reports on Page 1, the first equity crowd- enough money to adequately fund building one strong brand (the public colleges and universities. funding platform custom-made for Michigan is launching this Coors strategy). Another issue Re: Wayne County corruption probe Why would young families want to John Stroh told me about: When week. live in Michigan if we continue to the economy took off in the 1990s, ends; Ficano says name cleared MichiganFunders.com takes advantage of new state crowd- underfund public education? For consumers moved from subpremi- Ficano’s name may have been funding laws, but is different from some other similar plat- the weather? um beers (like Goebel made by cleared, but he has zero credibility. forms because of its focus on Michigan and the ability for Nat Pernick Stroh) to premium brands, and The only accomplishment in his small investors to participate. from premium brands to more ex- years as a county exec was to keep Re: Stroh’s death knell rang in Bell’s pensive imports (and later craft his hands clean of criminal and in- This type of investing comes with some risks, but it’s a new beers). So, I truly believe if the competency charges related to coun- resource both for small companies trying to grow and for Brewery and era of craft beer Stroh family had opened a brew- ty officials who reported to him. small investors wanting to make equity investments. I covered the last days of Stroh pub or two in Detroit in 2008, it George R KEITH CRAIN: Next time, let’s skip the movie stars I am very pleased and proud to at what they do. They in style than substance, ed for a second term despite a very electable rather than how good know that two leaders of our gov- manage government and that means that al- lackluster campaign, is concentrat- and competent they are? Voters ernment, Gov. Rick Snyder and agencies, and they do most inevitably we won’t ing on running the state of Michi- seem to be far more interested in Mayor Mike Duggan, with apologies those tasks very well. pick the best candidate. gan rather than running for office, cute, glib answers rather than to both, would not win a beauty con- As the 2016 presiden- The skills to run a cam- two quite different skill sets. thoughtful reflections on issues. test or be in the running for the an- tial campaign kicks off, I paign, whether it’s for In the next couple of years, we It’s our own fault. That’s what chor seat of NBC’s “Nightly News.” cannot help but, once president, governor or are going to be bombarded with the voters want, and that is the They are both great managers again, be concerned mayor, are quite different slick, very professional commer- way candidates act. If we’re lucky, and are doing a great job repre- with how the appeal of than the ability to run a cials on radio and television and in there is a lot of substance below senting their citizens. They are candidates seems to be government office. print. The way to find out about a those glib one- liners, but we never forceful, dynamic and personable, more important than In my opinion, Mike candidate is to read very boring know until they are elected and we but by no means are they the best their substance. Duggan, who ran a com- papers on positions that they rep- see how they perform. orators as politicians that we have We seem to be far more pletely unlikely cam- resent on significant issues. And I We are lucky to have a governor seen in the last decade or so. interested in how they appear in 30- paign for mayor, has demonstrat- will guarantee you that no one will and mayor who have substance I am not sure either one of them second sound bites on television ed over the last year his ability in read those papers. over style. could be considered great cam- rather than their intellect. running the office. How often do we hear the ques- Pleasant fellows, yes, but good paigners. They simply are the best Voters are far more interested Gov. Snyder, after being re-elect- tion as to whether a candidate is management is far more important. 20150216-NEWS--0008,0009-NAT-CCI-CD_-- 2/13/2015 11:30 AM Page 2

February 16, 2015 CRAIN’S DETROIT BUSINESS Page 9 Food to kayaks: State names Belle Isle vendors

Come this summer, a major overhaul of the City and Faneuil Hall Market- not yet been determined, but the acre park to the state for 30 years visitors to Belle Isle will complex. place in Boston. DNR can issue them for up to sev- beginning in February 2014. Since find kayaking, carriage Small Biz “We’re definitely look- “They are the best in the world at en years before having to go back then, the state has invested nearly rides, food trucks and ing to take the lead on a what they do,” Jacobs said. “In or- to bid. $12 million in the park, including more. fundraising campaign to der for us to do this the right way, “We haven’t made final deci- removing hazardous trees and ren- Last fall, the Michigan completely renovate the we thought it was important to have sions on length, but will most like- ovating and reopening bathrooms. Department of Natural Re- athletic complex and them on board. This project is too ly offer the contracts for an initial Visitors to the park must dis- sources asked area busi- turn it into a state-of-the- important to risk on me learning on three-year term, and then as long play a parks pass, which costs $11 nesses to bid on 12 con- art hub for health and the job for the first time. as the terms of the contract are be- per year and is purchased when tracts for recreational wellness,” Jacobs said. “It sounds great that I get to ing met, extend the additional four residents renew their vehicle reg- and concession opportu- Because that is such a build my own playground, but this years,” said Brenda Mikula, con- istration. Passes are also available nities on the island. In Amy Haimerl significant overhaul, Ja- is more important than Come Play cession/lease manager for the for purchase at the park. There is total, 28 firms entered cobs asked Biederman Detroit. We want to be strategic DNR’s parks and recreation divi- no cost for visitors who walk, bike bids, with 10 Detroit-based compa- Redevelopment Ventures to part- and ensure that this continues to sion. or bus onto the island. nies submitting proposals. (Just as ner with him since it has been in- be an asset for the city of Detroit Belle Isle is a Michigan state This column originally appeared a side note: Where were y’all? How volved with such high-profile pro- and the people of the city.” park. Former Detroit Emergency as an Amy Haimerl blog at crains- could there only be 28 bidders for jects as Bryant Park in New York The length of the contracts has Manager Kevyn Orr leased the 982- detroit.com. 12 plum contracts?) Last week, the DNR released the winners: Ⅲ Athletic complex, including scheduling athletic fields (two bids): Come Play Detroit in partnership with Healthy Detroit and New York City-based Biederman Rede- velopment Ventures Ⅲ Golf driving range (four bids): Francine Pegues, president of De- troit-based Dan Teak LLC, who was most recently responsible for developing “lists of prequalified businesses and general contrac- tors working on the $300 million Wayne County Consolidated Jail Project,” according to her WE BELIEVE LinkedIn page Ⅲ Mobile food services (three bids, two winners): Nancy Kuyk- endall (no further information); PERSONAL ATTENTION Gino Maisano, owner of What’s Up Dawg, which was formerly open in Dearborn Ⅲ Mobile ice cream services IS BEST GIVEN IN PERSON. (five bids, two winners): Hamtram- ck-based NYC Yogurt, owned by Saad Almasmari; Detroit-based Ed- ible Liz, owned by Liz Godwin When you work with the Huntington Private Client Group, we meet with you face-to-face. Ⅲ Kids row food concession (five Using our Listen, Plan, Advise® approach, we work with you to create a clear plan that fits bids): Bert Dearing, owner of Bert’s Warehouse in Eastern Market your needs, giving you meaningful advice about the options available for meeting your Ⅲ Watercraft/bike/snow sport equipment rental (three bids): objectives. As your goals change over time, we help you review your plan to make any Wyandotte-based Riverside Kayak necessary revisions. And we keep you involved every step of the way. Connection Ⅲ Electric carriage ride service (two bids): Farmington Hills-based Andre’s Carriage Tours, owned by Dave Ducharme Ⅲ Porta-potty and handwash station rental (one bid): Ypsilanti- based Parkway Services Inc. Eric W. Dietz Ⅲ Mobile toy sales (two bids): Joselyn Jackson, who owns St. Senior Vice President and Regional Manager Clair Shores-based Glitter-N-Glow Novelties Private Client Group Ⅲ Beach chair/umbrella rental Huntington National Bank (one bid): Detroit-based Caliente Detroit, owned by Alicia Chapman and a brand of her firm Chappy Group Investments LLC 220 Park Street The highest-profile contract is Birmingham, MI 48009 for the athletic complex, which 248.637.8206 phone was awarded to Come Play De- 248.824.4441 cell troit. The De- [email protected] troit-based company has been organizing sports leagues on the island for the past five years and last HUNTINGTON PRIVATE CLIENT GROUP year was award- Jacobs The Huntington Private Client Group is a team of professionals that includes Private Bankers and Personal Trust Administrators and Portfolio Managers from The Huntington ed the contract National Bank and licensed investment representatives of The Huntington Investment Company, who work together to deliver a full range of wealth and financial services.

to manage the permits and sched- ® Member FDIC. , and Huntington® and Listen, Plan, Advise® are federally registered service marks of Huntington Bancshares Incorporated. Huntington® Welcome.™ uling for the playing fields. That is a service mark of Huntington Bancshares Incorporated. ©2014 Huntington Bancshares Incorporated. will continue this year while CPD founder Justin Jacobs will look at DBpageAD_DBpageAD.qxd 2/10/2015 1:42 PM Page 1 20150216-NEWS--0011-NAT-CCI-CD_-- 2/13/2015 11:43 AM Page 1

February 16, 2015 CRAIN’S DETROIT BUSINESS Page 11

People “If I have diabetes, I can go to a primary care physician or a federally qualified health center. But if I

Ⅲ Paul Kellerman, M.D., was named also struggle with depression, I might not be as good about going to that clinic. We want to empower section head of nephrology at Beaumont Hospital, Royal Oak. He will that primary care doctor to take care of that person” with a referral. also serve as medical director of inpatient apheresis, medical director of Lynda Zeller, Michigan Department of Community Health the Beaumont Dialysis Center, Berkley, and co-director of the nephrology course at the Oakland University William Beaumont School of Medicine. Ⅲ Karen Harris, vice president of patient care services and chief nursing officer for Henry Ford West Bloomfield Hospital, was elected president of the Association of Women’s Health, Obstetric and Harris Neonatal Nurses. Ⅲ Michael Chopp, distinguished professor of physics at Oakland University, was given the 2015 Thomas Willis Lecture Award by the American Heart Association for his contributions to Chopp biomedical research. Converging on care Ⅲ Mary Haarman, director of mission relations at Aquinas College, and Doug ISTOCK PHOTO Nouse, a manufacturer’s representative at Birmingham-based Nocran LLC, were elected to the Hospice of Michigan age as an essential benefit to health in- Foundation board. Push improves state surance plans under the Affordable Ⅲ Robert Welch, Care Act and the state’s enhancing M.D., joined the mental health services, Healthy Michigan Medicaid with men- Detroit Medical tal health coverage, experts said. Center as vice chairman of A 2013 survey by the University of obstetrics and but a long road lies ahead Michigan’s Center for Healthcare Re- gynecology clinical BY JAY GREENE search and Transformation found that one operations and in five Michigan residents had been diag- Wayne State CRAIN’S DETROIT BUSINESS University as the nosed with depression at some point in he changes underway in Michi- chief and division their lives, a number comparable with Welch gan’s mental health delivery director of maternal Lt. Gov. Brian Calley and State Sen. Rebekah national averages. fetal medicine. system are being pushed along Warren, members of Gov. Rick Snyder’s But the same survey also found that Ⅲ Margaret Keeler at the top by two unlikely al- mental health commission, are happy with T improvements that have been made to date, 57 percent of primary care physicians in was given the 2015 lies: Republican Lt. Gov. Brian Calley AANP Nurse but also say that real progress will take Michigan said the availability of mental and Democratic Sen. Rebekah Warren. several years of continued efforts. Practitioner State health services in their community was Award for Excellence Although they have taken different inadequate for adults, and 68 percent re- from the American paths, Calley and Warren have been in- They served on Gov. Rick Snyder’s ported it was inadequate for children. Association of terested in improving the delivery of ser- Michigan Mental Health and Wellness Nurse Practitioners. “The commission’s recommendations vices to treat mental health, substance Commission during 2013. Last month, didn’t focus on access to care areas,” said Ⅲ Michele Oliveto abuse and develop- Keeler that group released its first-year report, Marianne Udow-Phillips, the center’s di- has been named mental disabilities COO of AudioNet CLOSING THE GAPS which highlighted legislative actions rector. America Inc., in the state’s chil- and improvements in how the state de- “It is a complex problem because it in- Clinton Township. Healthy Michigan dren and adults for livers publicly funded behavioral health volves workforce issues. We don’t have AudioNet is a Medicaid helps more than a decade. national hearing aid expand behavioral care. enough psychiatrists” and other mental network. She health services, Calley, who has Calley and Warren believe much health professionals. formerly was client Page 13 a child with autism progress has been made the first year af- services officer at Report cites progress and successfully ad- DST Health on mental health ter the commission issued its recommen- Care coordination Solutions LLC, recommendations, vocated in 2011 for dations. But they say real progress will Southfield. Page 15 an autism benefit in- take several years of continued efforts. One of the commission’s main con- Oliveto Ⅲ Joseph Fournier surance mandate, cerns is that care barriers exist between has been named chief human and Warren, who has advocated since the mainstream medical system — led resources officer for the University of Access problems by hospitals and physicians — and Michigan Health System, Ann Arbor. 2008 to expand the federal Mental Health He previously was vice president and Parity Act in Michigan, discovered they Access to providers remains a major providers serving in the behavioral health system. chief human resources officer for could find common ground on behavioral problem, despite the federal govern- UMass Memorial Medical Center in Worcester, Mass. health issues. ment’s adding behavioral health cover- See Care, Page 12 20150216-NEWS--0012,0013-NAT-CCI-CD_-- 2/13/2015 10:36 AM Page 1

Page 12 CRAIN’S DETROIT BUSINESS February 16, 2015 Health Care State expands records exchange to improve care

In the past year, the Michigan De- istration at Community Health. partment of Community Health has Ⅲ The second way is through taken action to improve the coordi- real-time clinical information that nation of physical and behavioral also is becoming available through health care by expanding the ex- the Michigan Health Information Net- 2015 MHA PATIENT SAFETY & QUALITY SYMPOSIUM change of electronic health records work, Zeller said. Leading in the Age of Transformation to providers in two ways. “We have three of the 10 (prepaid Ⅲ The first is to develop an elec- inpatient health plans) online now March 10 and 11 | Detroit Marriott at the Renaissance Center | Detroit tronic data product called Care with the others in process,” she said. Connect 360. The online, claims- Nicole Lawson, manager of clini- Examine the factors driving healthcare transformation, from the shift from volume to value based electronic health record is cal practice and health care innova- toward population health, the demand for greater transparency and cost-effective care, being made available to the state’s tion for the Oakland County Communi- and systems that are the pinnacle of quality and safety improvement 46 community mental health agen- ty Mental Health Authority, said Care cies. The database has information Connect 360 is proving its value. Attendees will not only gain in-depth knowledge about these pressing trends –– but they about paid claims that summarizes “We are seeing hospitalizations will do so at a conference that surrounds them with today’s healthcare leaders and provides patients’ medical and behavioral trending down because people extraordinary benefits: services. have access to care now (with a 24- • Internationally recognized speakers who are healthcare experts “Case managers can see that (a hour crisis center operated by Com- • Case study sessions outlining techniques you can adopt immediately patient has) been hospitalized mon Ground) and are able to receive three times for diabetes and see treatment,” Lawson said. “Before, • Discounted team registration the claims for mental health ser- you had to be in crisis to access • Virtual attendance vices,” said Lynda Zeller, deputy care. Now it is more preventive in • Education credits director of behavioral health and nature.” • Networking opportunities developmental disabilities admin- — Jay Greene • Exhibitors whose products can make your job easier • An immersive preconference • A venue surrounded by big-city fun, cultural wonder and renowned restaurants Care: Mental health moves ■ From Page 11 Visit www.mhakeystonecenter.org to learn more, or call (517) 323-3443 and ask for Janice Jones. Over the past two years, cover- health professional in the same age for behavioral health care has physician clinic increases the improved somewhat, said Lynda chances that a patient needing Zeller, deputy director of behav- those services actually will get help. ioral health and developmental “We are placing more than 200 disabilities administration at the psychotherapists, psychologists Department of Community Health. and social workers into our prac- For example, the Affordable Care tices to increase access to mental Act increased private coverage for health services,” Candela said. “If behavioral health, and Healthy you embed a therapist, a physician Michigan Medicaid added benefits. can let them know there is help “It allows people access to spe- right down the hall.” cialty behavioral services, com- Debbie Brinson, CEO of the Pon- munity mental health networks tiac-based Oakland Integrated Health- and services that wrap around a care Network, a health center with Showcase Your Company’s person,” Zeller said. four locations, said most people Crisis services and prescription with private commercial health in- coverage also are more readily surance coverage now have ex- available, she said. panded behavioral health services. Zeller said the state thinks peo- “Care depends on the level of Healthy Culture ple should be able to access behav- acuity you have with mental ioral health services in multiple health issues,” Brinson said. settings, including primary care. “With mild to moderate problems, Is your workplace the “If I have diabetes, I can go to a it is often difficult to get into the primary care physician or a feder- (public) system.” healthiest in Michigan? ally qualified health center. But if I But Brinson said Oakland Inte- also struggle with depression, I grated’s clinics help break those This award takes a look at the best practices might not be as good about going barriers by offering integrated care used by employers across the state toward the to that clinic,” Zeller said. “We through a health team composed of want to empower that primary combinations of physicians, nurses, goal of creating a healthy workplace. care doctor to take care of that per- psychologists and social workers. son” with a referral. The team evaluates patients and de- ,WŐVIUHHWRHQWHU Steve Candela, director of outpa- vises treatment strategies. tient behavioral health at St. John “The way to make a radical dif- Winners will have their wellness efforts Providence Health ference in mental health services is System, said ef- recognized as part of a print supplement to to co-locate with primary care,” forts started two Brinson said. “Another radical run in Crain’s Detroit Business in June. They years ago to co- piece is to bring mental health ser- locate medical vices to schools.” will also be featured in a video series as well and mental as honored at an event on Wednesday, health professionals in St. Need for intermediate care April 22, 2015 at Henry Ford West John’s 10 outpa- Of $14.3 million allocated last Bloomﬁ eld Hospital in Bloomﬁ eld Hills. tient locations in July by the Michigan Legislature Southeast Michi- Candela in the state’s 2014-15 budget to gan. kick-start several recommenda- “Our biggest barrier is short- tions by Snyder’s commission, $1 NOMINATION DEADLINE: MONDAY, FEB. 16 ages of psychiatrists and access to million was earmarked to expand outpatient care,” especially with intermediate mental health care To make a nomination, visit crainsdetroit.com/nominate the expansion of mental health beds and services. coverage under Obamacare and The commission said intermedi- Medicaid expansion in Southeast ate care beds should be made avail- Michigan, he said. Candela said having a mental See Next Page 20150216-NEWS--0012,0013-NAT-CCI-CD_-- 2/13/2015 10:36 AM Page 2

February 16, 2015 CRAIN’S DETROIT BUSINESS Page 13 Health Care

From Previous Page able regionally for stays of 48 hours Healthy Michigan Medicaid expansion helps thin care gaps to 30 days. Services also should include substance and alcohol use disorder as well as mental health. BY JAY GREENE Health. ager of clinical practice and CRAIN’S DETROIT BUSINESS Since Healthy Michi- health care innovation. “We are Another recommendation: The gan Medicaid went into looking for efficiencies and other state should develop performance We moved rather The disruption of the delivery effect in April 2014, ways to help people.” criteria for adult foster care homes. “ of public mental health services 41,855 en- aggressively to Calley said his No. 1 priority But, overall, Lawson said, the in Southeast Michigan that began rollees, or 10.1 this year is to address the need for state has taken positive steps so far in 2013 because of state budget percent of maximize benefits intermediate care. Community to improve mental health delivery. cuts has been largely alleviated 416,292 total Health is undergoing a thorough “We have seen vast improve- by an expansion of Healthy Michi- enrollees, and capitalize on the review of options, he said. ments in the past year in health gan Medicaid and adjustments have received “It has to be designed with rein- care integration” at the authority, made by regional mental health 453,704 behav- Healthy Michigan tegration into society in mind, not Lawson said. “We have a single authorities, officials told Crain’s. ioral health to just lock people away (in inpa- Medicaid plan. We consent form that takes the burden While gaps in care still exist, services, or tient hospitals) and segregating off a person having to get multiple Lynda Zeller, deputy director of 10.8 services them from society,” he said. are in pretty good releases of information from differ- behavioral health and develop- per enrollee, Calley said Snyder’s new “river ent parties, and we are able to ex- mental disabilities administra- through January, ac- of opportunity” concept calls for shape now. change data to improve health care tion at the Michigan Department of cording to Community the state to design programs ” coordination for people.” Community Health, said more peo- Health. around the needs of people. Tom Watkins, In Oakland County, nearly ple are receiving behavioral Tom Watkins, CEO of “We don’t want to simply feed the Detroit Wayne County Community 36,000 people are enrolled in health services than before. the Detroit Wayne County existing system with more dollars Mental Health Authority Healthy Michigan Medicaid, Law- “We are still looking at gaps” in Community Mental Health unless the outcomes are better,” he son said, and the authority has coverage for people who do not Authority, said the state funding the authority has increased Medic- said. “We can do a lot better with the have Medicaid, Zeller said. “And seen a big increase in patients us- cuts deeply affected service deliv- aid revenue nearly $30 million so resources we have if we design the as the system evolves, there will ing mental health benefits. ery beginning in 2013. But the in- far this fiscal year, Watkins said. program around people.” always be gaps.” Elizabeth Hertel, director of fusion of Healthy Michigan Med- But Watkins said he expects the Zeller said Community Health But Healthy Michigan now cov- health policy and innovation with state to make new cuts this year decided to first focus its review of ers mental health services for icaid funding over the past year Community Health, said that for as it takes steps this spring to ad- intermediate beds on children who about 500,000 new Medicaid en- and efforts by the authority to im- many patients, Healthy Michigan dress a projected $325 million rev- most often have needed hospital- rollees, injecting about $274 mil- prove efficiencies helped mini- Medicaid has helped bridge the enue shortfall. izations. lion in federal funds into the state mize the impact. gap between physical to behav- “Psychiatric hospitals haven’t Medicaid program and eliminat- “We recovered from the cuts “2015 was theoretically going to ioral to substance abuse. been able to meet their (children’s) ing a large number of uninsured faster than I thought we would,” be a pretty good year,” he said. “We use primary care screen- needs. We need something more in residents who had no mental Watkins said. “We moved rather “This just adds a new wrinkle.” ing to identify problems,” she the community,” she said. health coverage. aggressively to maximize benefits The Oakland County Community said. “People don’t know how In Michigan, 60 private psychi- Because Michigan expanded and capitalize on the Healthy Mental Health Authority also ab- many medical problems are creat- atric hospitals with more than Medicaid under the Affordable Michigan Medicaid plan. We are sorbed at least $20 million in cuts ed not having mental health prob- 2,200 beds serve inpatient needs. Care Act, state government was in pretty good shape now.” last year, officials said. lems treated earlier.” Only 200 beds are for children. able to reduce general funding for Despite having to cut its $680 “We are still advocating for ad- Jay Greene: (313) 446-0325, So far, Community Health has is- mental health by about $209 mil- million budget by about $60 mil- ditional state funding,” said [email protected]. Twitter: sued a request for proposal to select lion, according to Community lion general funds dollars in 2013, Nicole Lawson, Oakland’s man- @jaybgreene a contractor that can offer a child behavioral action team to help strengthen existing clinical teams supporting and evaluating children. Another option under study, Zeller said, is to encourage further development of six- to 12-bed child residential treatment facilities. “We are trying to identify if we have gaps and where they are,” she said. Warren said the policy that began in the late 1980s of closing most of the state’s 16 inpatient psychiatric hospitals and opting for community-based care might have gone too far. Only four state-run psychiatric hospitals are open in Michi- gan, including one for children. “We overcorrected,” Warren said. “We still have folks in crisis, and they need intermediate-term beds that we don’t have enough of.” Candela said the $1 million made available by the state for intermediate care and crisis management is urgently needed. “There is a gap of where people can go,” he said. “Some people need inpatient care, and that is limited. Some people need a brief experience, not at a hospital or as an outpatient. We are pushing for providers to create this service.” St. John Providence in South- east Michigan has four inpatient psychiatric units than range between 76 percent to 96 percent capacity and two partial hospitaliza- tion programs that run about 50 percent capacity. “The state (and providers) are moving in the same direction” to improve care coordination of physical and behavioral health care, Candela said. “When it comes to behavioral health, every- body is performing in silos.” Jay Greene: (313) 446-0325, [email protected]. Twitter: @jaybgreene DBpageAD_DBpageAD.qxd 2/12/2015 8:41 AM Page 1

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February 16, 2015 CRAIN’S DETROIT BUSINESS Page 15 Health Care Report cites progress on state mental health recommendations

BY JAY GREENE push for all the recommendations as well as mental health services. riety of purposes, including med- CRAIN’S DETROIT BUSINESS to be carried out in the next two READ THE REPORT Develop performance criteria rules ical, mental health and counseling. years, including intermediate-care The full Mental Health and for adult foster care homes. The state Interagency Council A progress report on the more beds, flexibility in funding special on Homelessness was created to than 60 recommendations made by Wellness Commission 2014 education and job opportunities. annual report is available online at provide statewide planning and Gov. Rick Snyder’s Michigan Mental Calley said working across the michigan.gov/mentalhealth Progress toward goals from development resources for home- Health and Wellness Commission cites aisle with Democrats contributed less Michiganders. progress on more than 20 of them. January 2015 report to better recommendations and a Mental health care is now an The recommendations aim to Promote telehealth services In 2014, the Legislature ap- successful implementation rate. allowable expense under the Michi- eliminate service gaps and pro- for psychiatrists and other health proved a 15-bill package that re- Warren said the panel’s recom- gan Veterans Trust Fund, and pilot pose new models to improve men- professionals to ensure patients moved the words “mental retarda- mendations, which required unan- programs are underway in Battle tal health services in Michigan. have better access to care regard- tion” and other similar phrases imous approval from the six-mem- Creek and Ann Arbor to ensure “The first year, we went around less of their location. from state statutes and replaced de- ber bipartisan group, sought goals vets have full access to services. the state to hold public hearings. It Consider a bundled-payment scriptions with specific diagnoses. that were achievable quickly. The Mental Health Diversion didn’t matter where we were, we model to reimburse providers for The Michigan Department of “We don’t think we can break Council was expanded to find better heard loud and clear: There is too Medicaid and community mental Community Health issued a uniform down the barriers in one year, but ways to help deal with mental much disconnect with mental and health services. A bundled pay- behavioral health consent form to we wanted to show progress,” she health issues and juvenile justice. physical (medical) care, there are said. “We have done that.” ment approach typically ties mul- help patients share information The 2014-15 state budget includ- not enough services, and there are tiple services together in a single with various providers involved in ed $14.3 million to begin 25 recom- transportation problems for ap- reimbursement rate to encourage their care. The single consent form pointments and jobs,” said state mendations that include coordinat- Key recommendations from coordinated care. will save patients and providers Sen. Rebekah Warren, D-Ann Ar- time in filling out duplicate forms. ing care between schools and Begin implementation of a bor, a commission member. December 2013 report The Michigan Health Information providers, increasing housing op- She said people with behavioral Improve coordination of be- Medicaid health home plan to inte- Network now provides both physical portunities, training for law enforce- health problems also face discrimi- havioral health and physical grate physical and behavioral and behavioral electronic health ment, sharing health information nation, problems accessing ser- health and encourage integration health for designated populations. records to providers to support co- exchange data and expanding child vices and financial distress, as do of mental health and medical pro- Authorize intermediate-care ordination of care. Most of the fund- health centers in underserved areas. families with a child with autism fessionals to provide seamless beds for juveniles and adults with a ing came through Community Last week, the governor issued spectrum disorder. care. Chronic or serious physical mental illness for periods of 48 Health from two federal grants. an executive order to cut $2.9 mil- A fellow commission member, health problems can contribute to hours to 30 days and incorporate Schools now can use funds ear- lion from the commission’s budget Lt. Gov. Brian Calley, said he will mental illnesses. substance and alcohol use disorder marked for at-risk students for a va- to implement its recommendations.

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DETROIT EMPLOYERS: Grow Detroit’s Young Talent is a 6-week summer youth employment program that has been re-tooled to ensure PRE-SCREENING and ON-THE-JOB support for teens and employers. Mayor Mike Duggan invites you to help Detroiters, ages 14-24, get ready for the workforce through a summer immersion.

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Grow Detroit’s Young Talent is a City of Detroit-endorsed program operated by the nonprofit organization City Connect Detroit. For questions, contact [email protected]. 20150216-NEWS--0017-NAT-CCI-CD_-- 2/13/2015 11:54 AM Page 1

February 16, 2015 CRAIN’S DETROIT BUSINESS Page 17 Metro Detroit visitors bureau launches new marketing campaign

BY SHERRI WELCH year, about tive vice president and COO. aired on local television stations. Callaghan said. CRAIN’S DETROIT BUSINESS twice the num- “There’s a sense these Midwest- The video features local hospitali- Among the other conventions ber the Super ern destinations are historically ty, restaurant and cultural attrac- coming to Detroit this year are the The Detroit Metro Convention & Bowl drew in very friendly ... that gives us an tion employees and volunteers Shell Eco-marathon Americas, Visitors Bureau is rolling out a new 2006, the con- edge over some of the destinations who’ve been recognized by peers bringing 32,500 in April; the Mid- marketing campaign urging metro vention bureau on the coast like New York, Boston or the convention bureau for out- west Media Expo, 20,000 in April; Detroit to put its best face forward said. or Los Angeles,” he said, and the standing customer service, speak- the USA Volleyball Open National as a surge of new events and visi- The Detroit- campaign’s goal is to reinforce that. ing about the importance of it. Championships and Corporate tors comes to the region. based bureau es- If as a region we wow the meet- Also part of the campaign: Local Meetings, 10,000 in May; the Na- Among them is the so-called Su- timates that the ing planners and visitors, “they’re print advertisements, briefings to tional Baptist Christian Education per Bowl of conferences, the Ameri- O’Callaghan groups hosting a going to go back and say great the hospitality industry before Congress, 25,000 in June; the can Society of Association Executives meeting in De- things about the city and potential- each major event, hospitality Evangelical Lutheran Church of event in August, which is expected troit this year will spend about ly ... generate additional income training for transportation and ho- America Youth Gathering, 36,000 to bring 6,000 meeting planners who $214 million here. and jobs in our community.” tel employees and calls for event in July; and Youmacon, coming in could bring future events to the city. The Detroit area hasn’t seen this Dubbed “2015. One Team, One volunteers. October with 14,000 attendees. In all, the back-to-back conven- much convention business in 20 Dream,” the bureau’s new cam- The convention bureau has in- Sherri Welch: (313) 446-1694, tions and meetings are expected to years or more, said Michael paign will include a 30-second pub- vested about $120,000 to create the [email protected]. Twitter: attract 200,000 new visitors this O’Callaghan, the bureau’s execu- lic service announcement video campaign and program, O’- @sherriwelch

Utah company buys Southfield apartment complex

A Utah multifamily ownership and management company has purchased its first two properties in Michigan, including one in Southfield. Provo-based Peak Capital Part- ners, which has a portfolio of 14,000 units in 17 states under ownership and management, purchased the 256-unit Pebble Creek Apartments complex, southeast of 12 Mile and Inkster roads, and Traditions Town- homes complex in Holland, which has 120 units. Financial terms of the sale were not disclosed. Staff at Pebble Creek said the complex was previously owned by Concord Management Ltd. Pebble Creek one-bedroom units start at $713 per month and have 812 square feet, according to the complex’s website. Two-bedrooms start at $859 and have 1,100 square feet and three-bedrooms start at $992 and 1,300 square feet. Chris Manning, managing director of Peak Capital, said both com- plexes have occupancy rates about 95 percent. Although both are well-main- tained, “light exterior renovations are planned,” Manning said. Those include things like new landscaping, painting touchups and parking lot repairs. Units will also be repaired and updated as they are released. “We really liked the prospects in the economy in Michigan,” Man- ning said. “We think that it’s poised for growth and we really like these properties. … These are clean, safe, well-run properties and we intend to keep them that way.” Traditions Townhomes was sold by Plymouth, Minn.-based Domini- um, according to CoStar Group Inc., a Washington, D.C.-based real estate information service. Both properties were built in 1996, according to CoStar. — Kirk Pinho 20150216-NEWS--0018-NAT-CCI-CD_-- 2/13/2015 11:55 AM Page 1

Page 18 CRAIN’S DETROIT BUSINESS February 16, 2015 Compuware, BMC team up to compete against IBM, CA Tech

BY TOM HENDERSON The two plan to use the agree- puter market and the huge volume The interface will use two of censed software that runs them. CRAIN’S DETROIT BUSINESS ment to cut into the market share of data that segment generates. BMC’s software products and one O’Malley, who joined Com- of their two largest competitors, Compuware and BMC will begin of Compuware’s products. The two puware last summer after a Detroit-based Compuware Corp. New York-based IBM Corp. and marketing a beta version of an in- companies say the three in tandem lengthy career at CA, was named and Houston-based BMC Software New York-based CA Technologies terface for the z13 mainframe at a will make running the z13 as well to head the company in December Inc., longtime competitors in offer- Inc. large IT convention in Seattle as previous z System mainframes after it was ing services and products to users The companies are focused on a March 1-6, with a finished version easier, faster and cheaper. bought by of mainframe computers, will an- new line of mainframe computers scheduled to be available for cus- Even if customers own the z Chicago-based nounce Tuesday that they have an IBM debuted in January called the tomers in June, according to Chris computers instead of leasing them, Thoma Bravo agreement that will allow them to z13 that specifically targets the fast- O’Malley, Compuware’s president they are charged on a metered ba- sell to each other’s customers. growing mobile segment of the com- and CEO. sis for the time spent using the li- LLC. Com- puware now does mainframe services and products exclusively, with cloud-based computer services split off as a separate company, Dynatrace I made LLC of Waltham, “ Mass. the case O’Malley said he ap- for us to proached BMC come in December to plan a strategy together for taking advantage of the and get much bally- hooed upcom- our ing release of the new IBM customers line of main- to buy frames. “I made the each case for us to come together other’s and get our customers to buy tool sets. each other’s ... This tool sets,” O’- Malley told won’t be Crain’s in advance of the for- the last mal announcement. “It made thing we Employment Litigation Experience sense for us to address solu- do ® tions that nei- together. In Your Corner. ther of us could do alone. Ŷ Represents employers in litigation involving “We’ve al- ” ready reached Chris O’Malley, all types of employment and labor claims. out to cus- Compuware Ŷ Advises healthcare organizations in matters tomers and ana- involving peer review activities, professional lysts jointly to tell them about this,” he said. credentialing and discipline. “This won’t be the last thing we do Ŷ Counsels employers regarding employment together.” policies, reductions in force and employment O’Malley declined to project any agreements. revenue increases this could lead to for Compuware, but said: “This will do a lot for us in terms of revenue numbers and bookings. We’re two vendors who are one strata below IBM and CA, and this will help us.” Tom Henderson: (313) 446-0337, [email protected]. Twitter: @tomhenderson2

BANKRUPTCIES

The following business filed for protection in U.S. Bankruptcy Court in De- First Tier Ranking in troit Feb. 6-13. Under Chapter 11, a Labor Law – Management Health Care Law company files for reorganization. Chapter 7 involves total liquidation: Advanced Laboratories Inc., 13201 ■ Metro Detroit ■ Grand Rapids ■ Kalamazoo ■ Grand Haven ■ Lansing Contact Terry Miglio at [email protected] Prospect St., Dearborn, Chapter 7. As- sets: $43; liabilities: $201,310. — Natalie Broda 20150216-NEWS--0019-NAT-CCI-CD_-- 2/13/2015 10:39 AM Page 1

February 16, 2015 CRAIN’S DETROIT BUSINESS Page 19 CALENDAR

and address legal, accounting and risk Funkhouser, executive director of the ers include Claudia Cassa, vice presi- sociation. Keynote speaker Gov. Rick 2014 NEWSMAKER OF THE YEAR considerations, business plans and fi- Nonprofit Network, facilitates a pro- dent and alternate group manager, Snyder among government and indus- nancing options. Spark East, Ypsilan- gram designed to help nonprofit board Comerica Bank; Jenny Meier, executive try leaders. Reception, dinner, enter- Who made news in 2014? Find out ti. $25. Registration ends 24 hours be- members and executive directors bet- vice president and chief revenue offi- tainment. MotorCity Casino Hotel, De- at the Crain’s Detroit Business fore the event. Contact: Alissa Steiner, ter understand legal and fiduciary re- cer, Bank of Birmingham; and Clarissa troit. $250. Register: (248) 918-0391 or Newsmaker of the Year luncheon. (734) 372-4071; email: alissa@annar sponsibilities and more effectively Chartier, chief credit officer and execu- www.dcba.com. Email: milan@dcba. It takes place Feb. 25 from 11:30 berusa.org; website: annarborusa.org. raise funds. Nonprofit Center at the tive managing director, Talmer Bank. com or [email protected]. a.m.-1:30 p.m. Armory, Lansing. $60 MNA members, Crowne Plaza Hotel, Detroit. $40 mem- Java @ the Junction. 8:30-10 a.m. March $80 nonmembers, $30 for additional bers, $75 nonmembers. Register by Feb. Hear the dramatic details from key 3. TechTown. Scott Trossen, founder of members from the same organization. 23. Contact: Norma Lee Beuter, (248) players involved in Detroit’s UPCOMING EVENTS the Michigan HR Group, discusses how Leading Nonprofit Organizations: Contact: (517) 796-4750; website: 646-9629; email: [email protected]; to find the right employees. TechTown, historic bankruptcy as Crain’s nonprofnetwork.org. website: crewdetroit.org. honors the city’s former emergency Training for Executive Directors and Detroit. Free. Contact: (313) 879-5250; Commercial Real Estate Financing A-Z. 19th Chinese New Year Gala. 5-11 p.m. manager, Kevyn Orr, and Judge Boards. 9 a.m.-4 p.m. Feb. 25. Michi- email: [email protected]; web- 4-6 p.m. Feb. 25. CREW Detroit. Speak- Feb. 27. Detroit Chinese Business As- Steven Rhodes of the U.S. gan Nonprofit Association. Regina site: techtowndetroit.org. Bankruptcy Court. Gerald Rosen, chief judge of the U.S. District Court for the Eastern District of Michigan, who also acted as chief bankruptcy mediator, will moderate. Also, 2014’s Best- Managed Nonprofit winner will be honored. The event will be at MotorCity Casino Hotel, 2901 Grand River Ave., Detroit. Individual tickets are Come visit TURCK at the $70, a reserved table of 10 is $750, and student tickets are $60. Preregistration closes Feb. 20 2015 Manufacturing in at 5 p.m. If available, walk-in registration will be $90 per person. America Symposium For more information or to register, contact Kacey Anderson at (313) Ford Field 446-0300 or [email protected], or visit crainsdetroit.com/section March 11th and 12th, 2015 /CrainsEventsUpcoming. Join the conversation: #crainsnewsmaker. Details & Registration: WEDNESDAY www.techtipoff.com FEB. 18 Breakfast of Champions. 7:30-9 a.m. All industrial automation technology parts are not created Leadership Oakland. Jennifer Korman, community relations, Mer- equal; TURCK customers can rest assured that no matter the cedes-Benz Financial Services, moder- application challenges, TURCK works. ates a panel of young professionals who will talk about what it means to be a leader. MSU Management Educa- tion Center, Troy. $25 members, $36 nonmembers. Will take walk-ins, but encourage calls by Tuesday. Contact: (248) 952-6880; email: [email protected]; website: leadershipoakland.com. Branding vs. Marketing. 8-10 a.m. Better Business Bureau. This breakfast and networking session features a presen- A CPA that understands tation by Linda Kleist, owner, Identity Graphic Design, on building a better Medical Practice Management? brand and marketing clearly and effec- Whoa, baby! tively. Better Business Bureau, South- field. Free; walk-ins are allowed. Con- tact: Demitria Robinson, (248) 799-0305; email: drobinson@easternmichigan bbb.org; website: bbb.org. February Economic Development Fo- rum. 8-9:30 a.m. Troy Chamber of Com- merce. Bing Goei, director of the For ShindelRock, advising medical Michigan Office for New Americans, will speak about attracting highly practices on financial and accounting skilled job-creating immigrants to Michigan. Rehmann, Troy. Free for matters means providing timely information chamber members, $15 nonmembers; an additional $5 will be charged to so physician-owner practices can plan those who register day of the event. Contact: Jaimi Brook, (248) 641-8151; accordingly, taking advantage of cost-saving email: [email protected]; website: troychamber.com/events. measures that can affect a practice’s profitably Workplace Strategy Panel. 8-10 a.m. So- ciety for Marketing Professional Ser- and back- office operations. Our medical vices Michigan. Panel features workplace strategy leaders, owners, real practice clients, like Women’s Health estate advisers and workplace trend developers. Panelists include James Consultants, PLC of Novi, rely on the big Meredith, corporate-commercial stu- dio leader-workplace strategy, Harley results ShindelRock delivers, so they can Ellis Devereaux; Heidi Wagner, senior facilities leader, Robert Bosch LLC; Di- focus on the delivery of (much) smaller things. ane Stegmeier, president, Stegmeier Consulting Group; and David Arwady, managing director, CBRE. David Kiwior, president, Airea Inc., will moderate. Schoolcraft College VisTaTech Center, Livonia. $45 SMPS members, $90 nonmembers, $30 students (with current ID); will take walk-ins. Con- tact: smps-mi.org. For medical practice management services, call 248.855.8833 FRIDAY FEB. 20 www.ShindelRock.com | 248.855.8833 Starting Your Own Business. 8:30 a.m.- 28100 Cabot Drive Ste. 102 | Novi, MI 48377 4 p.m. Ann Arbor Spark. Spark and community partners help aspiring entrepreneurs forge a marketing plan 20150216-NEWS--0020-NAT-CCI-CD_-- 2/13/2015 10:41 AM Page 1

Page 20 CRAIN’S DETROIT BUSINESS February 16, 2015

PEOPLE CONSTRUCTION Seth Herkowitz to partner, Hunter Pas- IN THE SPOTLIGHT teur Homes LLC, Farmington Hills, Bloomfield Hills-based TriMas Corp. has named David Rice to the new from manager. position of CFO of the spinoff Cequent organization. He will take the reins once the spinoff from TriMas is complete — expected in EDUCATION mid-2015. He will also assume responsibility for the Daniel Henne to human resources of Cequent businesses. director of auxil- Rice is serving as division finance officer of TriMas’ iary marketing, Office of Student Cequent Performance Products Inc. in Plymouth. Life, University of Rice joined TriMas in 2005 and has been group Michigan, Ann controller and director of corporate audit. He also held Arbor, from cre- divisional controller positions at GKN Sinter Metals and ative director, In- Mueller Industries Inc., and managed international terrupt LLC, Syl- operations finance at The Woodbridge Group. vania, Ohio. Rice, 51, holds a bachelor’s degree in business Henne Rice administration with a concentration in accounting from FINANCE Wayne State University and an executive MBA from the University of Sean Roberts and Matthew Hare to Michigan. He is a certified public accountant. principal, Huron Capital Partners LLC, Detroit, from vice president. Also, from chief human resources officer, nities, Grand Rapids. Brad Barker and Brian Schwartz to University of Cincinnati, Cincinnati. Phil Santer to vice president of busi- vice president, from associate. ness development, Ann Arbor Spark, MARKETING Ann Arbor, from senior business de- LAW Lance Miller to chief technology offi- velopment manager, Ann Arbor cer, McCann Worldgroup Detroit, Spark, Brighton. Birmingham, from director of client Julia DeHart to Rivertown Assisted services, UltraLevel Inc., Southfield. Living administrator, United Methodist Retirement Communities NONPROFITS Inc., Detroit, from property manager, KMG Prestige Inc., Toledo. Neel Hajra to president and CEO, Ann Arbor Area Community Foundation, Ann Arbor, from COO and vice president of community investment. Also, Patricia Walker to COO, from vice president and COO, Michigan Science Toomey Ludden Center, Detroit, and Jillian Rosen to director of community investment, from Erin Toomey to partner, Foley & Lard- program officer. ner LLP, Detroit, from senior counsel. Terri Hamad to corporate director, Luxury suites available: Karen Libertiny Ludden to sharehold- er, Maddin, Hauser, Roth & Heller PC, Cedars of Dexter and Rivertown Assist- ed Living, United Methodist Retirement Southfield, from associate. Kline Santer 2/24 – Pistons vs Cavs @ 7:30 p.m. Communities Inc., Chelsea, from execu- Richard Kline to executive director of tive director, the Cedars of Dexter, Dex- MANUFACTURING the Chelsea Retirement Community, ter. Also, Crystal Collin to executive di- 2/27 – Pistons vs Knicks @ 7:30 p.m. Erin Ascher to vice president-talent de- United Methodist Retirement Commu- rector, the Cedars of Dexter, Dexter, velopment and chief human resources nities Inc., Chelsea, from executive di- from director of operations, the Dispute 3/26 – Bob Seger @ 6 p.m. officer, Gentherm Inc., Northville, rector, Covenant Retirement Commu- Resolution Center, Ann Arbor. 6/14 – Rush @ 6 p.m. BUSINESS DIARY ACQUISITIONS & MERGERS Michigan Women’s Foundation, De- care insurance to its service offerings. troit; and TVStoreOnline.com, Com- Website: doereninsurance.com. Penske Automotive Group Inc., Bloom- merce Township, which also operates field Hills, an international transporta- ProQuest LLC, Ann Arbor, is launch- uglychristmassweater.com. Website: ing in mid-2015 its new e-book plat- tion services company, has completed publiccitypr.net. the acquisition of Freightliner medium form, ProQuest Ebook Central, de- and heavy-duty commercial truck deal- signed to use the strengths of the erships in Chattanooga and Knoxville, EXPANSIONS Ebook Library and e-brary platform to Tenn. Website: penskeautomotive.com. Biggby Coffee, East Lansing, has improve e-book research and manage- opened a franchise at 27735 Harper ment. The patron interface for Ebook CONTRACTS Ave., St. Clair Shores. Telephone: Central and the Ebook Central Reader (586) 859-5352. Website: biggby.com. will be based on e-brary’s modern 700 Credit LLC, Southfield, a provider reader. The librarian portal — Pro- , of credit reporting and compliance Great Expression Dental Centers PC Quest LibCentral— will be based on Bloomfield Hills, announced the open- work for the automotive industry, an- Ebook Library’s newly rebuilt Lib- ing of , nounced an agreement with Deal- West Bloomfield Orthodontics Central administrative module. Web- 3435 Orchard Lake Road, West Bloom- erClick, Santa Ana, Calif., a provider of site: proquest.com. automotive software, to allow Deal- field Township. Telephone: (248) 481- 5227. Website: greatexpressions.com. Fortunatus Investments Inc., Brighton, erClick dealers access to credit reports, an independent investment adviser, compliance and prescreen products has launched its first mutual fund, the from within DealerClick systems. Web- NAME CHANGE Fortunatus Protactical New Opportu- sites: 700credit.com, dealerclick.com. Grosse Pointe Community Rink has nity Fund, that will target small cap ArborMetrix Inc., Ann Arbor, a been renamed the East Side Hockey stocks. Website: fortunatusfunds.com. provider of a cloud-based health care Foundation Ice Arena, 4831 Canyon St., analytics platform, announced that Detroit. Website: eshfoundation.com. NEW SERVICES Vanderbilt University Medical Center, SUITES START AT $999 Nashville, Tenn., will use its Surgical- NEW PRODUCTS Marcus & Grant PLLC, Sterling Metrix to manage performances in its Heights, announced the launch of Including: VIP parking, private restrooms, surgical services lines to improve the Doeren Mayhew Insurance Group LLC, First Call Law, a law firm designed to quality of care and patient outcomes. Troy, a provider of property and casu- match clients with the right attorney. Website: arbormetrix.com. alty, personal, life and disability insur- Telephone: (844) 234-1212. Website: and up to $600 in catering credits! ance, announced it has added health firstcalllaw.com. Barton Malow Co., Southfield, has been approved by the Holland Board of Public Works and Holland City Council for the design and construc- Request for Proposals for General Counsel tion of the new 125-megawatt combined cycle Holland Energy Park nat- for the Police and Fire Retirement System ural gas power plant for the city of of the City of Detroit Holland, replacing the coal-burning The Trustees of the Police and Fire Retirement System of the waterfront James DeYoung plant. The contract calls for generation and test- City of Detroit are seeking proposals for General Counsel Services. ing in late 2016 and substantial com- Individuals or  rms are invited to submit a proposal. The request for proposal pletion by February 2017. Website: will be available on Feb. 9, 2015. The RFP will be posted on the Police and Fire Retirement System of the City of Detroit’s web site at www.pfrsdetroit.org. Pistons.com/premium bartonmalow.com. PublicCity PR LLC, Southfield, a public The RFP will be on the PFRS home page. relations agency, has added clients (248) 377-8477 Gardner-White Furniture Co. Inc., Responses are due on March 2, 2015 by 3 p.m. EST. Auburn Hills; Belle Tire Distributors For all correspondence and inquiries concerning this RFP, contact: Inc., Allen Park; Affinity Tool Works David Cetlinski, Assistant Executive Director, [email protected]. LLC, Troy; InstaBoost, Southfield; 20150216-NEWS--0021-NAT-CCI-CD_-- 2/13/2015 6:37 PM Page 1

February 16, 2015 CRAIN’S DETROIT BUSINESS Page 21 Equity: Investing in a new approach to crowdfunding in Mich. ■ From Page 1 business to Tessler’s mind. route,” Tessler said. “Crowdfund- But if all of your background “There is $400 billion of Gross Do- ing will never be the cheapest mon- checks out, the site won’t turn in- mestic Product contribution com- Like crowdfunding, only you’re an owner ey. This money is always going to vestors away — even if it might be ing from Michigan every year and Equity crowdfunding uses the from nonaccredited investors. be more expensive because your intheir last $5,000. But each business 10 million people,” he said. “If you principles of Kickstarter, in that it Congress asked the U.S. Securi- vestors, the crowd, are taking more raising funds receives a profile of told me I could connect $400 billion allows many people to contribute ties and Exchange Commission to risk. But this is the most valuable investors, and they have the abili- and 10 million people, I would tell money to a project, distributing develop guidelines for those regu- money you can get. Investors are ty to say “no” to someone. you I don’t need to expand. There is the risk among many people. But lar investors, but it has yet to pub- going to be your customers, your Initially, the founders expect enough here to work with. We be- instead of receiving a “reward,” lish them. As a result, many spokespeople. The bank isn’t going mostly accredited investors, lieve in this state.” equity crowdfunding investors states, including Michigan, decid- to go out and build your brand.” though those are harder to come have some sort of ownership stake ed to write their own legislation to by in Michigan than in other Bullish start or a piece of the revenue. allow nonaccredited investors to Investing how-to metro areas. A $200,000 individual That makes the deals more participate in equity crowdfund- income or $300,000 household in- Tessler has always believed in complex and involves significant ing within their borders. One of the selling points for income isn’t outrageous in New Michigan. The Southfield native legal and regulatory oversight. In Michigan, the most active vestors is being able to spend as lit- York City or San Francisco, but in left briefly for Los Angeles but Still a number of platforms have platforms are Indianapolis-based tle as $100 or as much as $10,000, Michigan, less than 5 percent of quickly made his way home. popped up across the country LocalStake LLC and Southfield- which makes this viable for com- households make $200,000, accord- “I thought that I needed to leave and are raising significant cash. based Funderbuilt. Ypsilanti-based munity-oriented projects. If they ing to the U.S. Census Bureau. to see something else and didn’t One of the biggest platforms, Unity Vibration Living Kombucha Tea are accredited, there is no cap. So as word spreads, Heron hopes even make it a year before I was Venice, Calif.-based CrowdFun- LLC, for example, raised $136,300 on To participate, interested in- to see more community-based coming home,” said Tessler, 32. “I der.com, has raised $153.2 million LocalStake to expand its brewing vestors have to self-certify on the fundraising. liked it better here.” for 20,927 businesses since operations and add a tasting room. website that they are a Michigan “Venture capitalists and banks His partner, Heron, 28, stayed launching in 2012. Still, the number of equity resident. After that, they can see have a very strict and limited pro- longer in the City of Angels, having Most sites serve “accredited” crowdfunding deals is hard to all of the potential deals and file of what they like to invest in,” he moved there with Tessler’s younger investors, those who have an an- come by. Michael Melfi, a Birm- choose to make an investment. said. “I don’t know that it is indica- brother. But eventually he came nual income exceeding $200,000 — ingham-based attorney and gen- Once they do that, MichiganFun- tive of public demand, but it’s the home, too. $300,000 for households — or net eral counsel for Funderbuilt, re- ders confirms residency and is- most stability with the highest re- “I was always very sure that I was worth greater than $1 million. cently told Crain’s he estimates sues a questionnaire designed to turn. Tech gets pushed and art does- not going to be here,” said Herron, That’s because the 2012 JOBS Act, that between 15 and 50 equity determine the investor’s profile. n’t. Art doesn’t make anyone any 28. “I think by the time I was 13 or 14 which authorized equity crowd- crowdfunding deals have hap- If that all checks out, the invest- consistent money. Opening a com- I knew I was not staying in Detroit. funding, made it relatively simple pened in Michigan. “It’s definite- ment is transferred to a local bank munity center doesn’t interest ven- What I didn’t anticipate in that to solicit accredited investors but ly not 10,” he said, “and it’s defi- that holds the money in escrow. If ture capitalists. move was how much I would want left strict restrictions on how com- nitely not 100.” the campaign raises its stated “But if you understand that you to come home. Once Detroit started panies can solicit investment — Amy Haimerl fundraising goal, the money is dis- have a revenue model to keep the turning, though, I thought I could tributed; if it doesn’t, the money lights on, pay back investors and come home.” comes back to the investor. make a modest profit, then you The first taste of entrepreneur- making initial angel investments meet Tessler and Heron. She agreed “We will never tell anyone that should have the right to put that on ship came early for Tessler and it through national crowdfunding and they came and toured the facili- this is not high risk,” said Tessler. the table. You should be able to in- came in the form of Red Bull. He sites, but he found that restrictive. ty where she makes the bottled tea “We always lead with that. If this is vest in the future.” was 16 when a friend brought a can So when he read about Michigan that she distributes to Whole Foods your first or last $5,000, you need to Amy Haimerl: (313) 446-0416, of the Austrian energy drink back writing its own crowdfunding laws, and Busch’s markets in Southeast run away. If this is your rent mon- [email protected]. Twitter: from Ireland. They were immedi- he knew what he wanted his next Michigan. ey, you need to go somewhere else.” @haimerlad ately hooked, but they couldn’t company to be. “I had never heard of this,” said find it in Michigan. When they When Heron moved home, they Ellis-Brown, 27. “I was only familiar wrote to Red Bull, the company met for dinner and began dis- with crowdfunding like Kickstarter. said it was seeking distributors. cussing the issue. “Nine months And originally I was opposed to it. “We said, ‘We can distribute it,’ ” later we were starting a company,” Initially, my thing was ‘Why don’t I Tessler said. “We’re kids. We think MARKET PLACE Tessler said. just do a Kickstarter and get money we can do anything. So we went to To date the company has seven donated?’ Why would I choose this the library and online and re- employees, including the found- option and give up equity?” searched.” BUSINESS OPPORTUNITIES OFFICE FURNITURE ers, and has raised about $250,000 But she is also right at the point Eventually, they wrote an 111- using a beta version of Michigan- of expansion and needs more capi- PARTNER / INVESTER WANTED Office Furniture Warehouse Clearance page business plan and incorporat- Funders.com. tal than she might raise from a typ- Stack Chairs, Conference Chairs & Tables ed as an LLC under a friend’s father Now interviewing for future ical Kickstarter campaign. Kroger Panels & Cubicles, Herman Miller, Steelcase, Hon, because they were too young. Red partner/investor to run/takeover is interested in picking up her teas, File & Storage Cabinets, Reception Desks Exec. Bull eventually met with them but, Mining backers established Winery and Pub in Fort Gratiot and Whole Foods would like to dis- Desks, New & Used, Mahogany & Cherry. shocking no one, declined to work and Port Huron (on waterfront). MichiganFunders currently has tribute them throughout the Mid- www.betterbusinesssystems.com with the boys. For more information call 810-434-6551 11 investments in the pipeline, in- west. [email protected] ~ 248-548-6404 But when the company decided to cluding three Detroit firms — Ellis She eventually agreed to move self-distribute in Michigan, Tessler BUSINESSES FOR SALE WEDDING SERVICES Island Tea, Social Sushi and Detroit forward and is seeking to raise said representatives called and Waste Systems — and Bloomfield about $50,000 — though that num- asked him to be involved as a brand Mobile Auto Interior Cleaning Business. Hills-based Ovshinsky Innovation LLC. ber is still being debated — in or- Cash Flow $80,000.Gross Sales $191,000. Est. Waterfront Weddings ambassador because they liked his b2b opp. Work with metro Det. new car dealers. Social Sushi was to go live on der to buy equipment and pay for Straits of Mackinac enthusiasm. [email protected] (248) 714-5532 Feb. 16, while Detroit Waste Sys- the inventory needed to expand. “By the time that all happened, I tems is expected to launch on DestinationWeddingsUpNorth.com was 18 and living downtown,” he “After a few meetings I realized March 2. Another seven businesses that with people owning a small said. “From then on I got involved will launch their campaigns in JOB 906-643-8621 in marketing and advertising.” piece of equity in your company, it March and April. creates brand ambassadors for That turned him into a serial en- To find the deal flow, Tessler trepreneur. He’s been involved your company,” she said. “There FRONT and Heron started by mining area is a sense of pride that comes with REAL with starting or growing 15 busi- tech incubators and accelerators, nesses. He is currently the founder it. To me, that’s worth it. such as OU Inc., an accelerator at Other entrepreneurs see the po- POSITIONS AVAILABLE ESTATE and owner of Jabs Gym in Birming- Oakland University. ham, vice president of Rain Market- tential, too: Tessler said that they “We really like what Michigan- ing Inc. where he manages day-to- are talking to five or six business- ACCOUNTING MANAGER APARTMENT BUILDINGS Funders is doing as far as the com- day financial operations, and is vice es a day. Taylor Truck Dealership. BA with 5+ years munity focus on president of the Aaron Group, which But they are also clear with po- exp. with full charge accounting req., manage MEXICAN VILLAGE ~ 126 UNITS Michigan,” said staff of 5, HR duties. CPA helpful but not req. is an incentive marketing company tential companies. This is risky Amy Butler, ex- ADP experience a plus. Full time. Excellent 3 Buildings ~ All Brick ~ 55% Occupancy for casinos that he said does $17 mil- and not right for every firm. First pay and team. ecutive director Price Reduced to $881,000 lion per year in revenue. and foremost, the minimum Email resumes to: [email protected] of OU Inc. “This Meanwhile, Heron was working amount a company can raise on Call Income Property Organization is a pilot for us in business development in Los An- MichiganFunders is $50,000, oth- 248-932-0300 all. It’s a pilot Call Us For Personalized geles and the two were getting pro- erwise the financials don’t make for our clients to sense. Service: (313) 446-6068 gressively frustrated by the lack of COMMERCIAL PROPERTIES investment opportunity in Michi- see if this is a It costs $1,800, plus monthly fees, FAX: (313) 446-034 7 gan. “I was watching a lot of VCs mechanism for to launch on the platform, and an- E-MAIL: cdbclassified @crain.com them. We’re JEFFERSON AVE - N. of 16 MILE RD play with a lot of money in San Butler other $1,500 if firms choose to have INTERNET: pretty excited.” 10,000 sq. ft. Bldg, Blt. 2001, Like New, Fully Francisco and L.A., and I kept think- MichiganFunders manage the pa- www.crainsdetroit.com/section/classifieds AC’d, 2 Acres w/56 Pking Spaces, $580K O.B.O. Nailah Ellis-Brown, CEO of Ellis ing how awesome it would be if we perwork and logistics after the See 4 Acres of land on Jeff. N of 16, WNS on prop, Infinity LLC, found them through had that same enthusiasm for devel- money has been raised. Crainsdetroit.com/Section/Classifieds can be Condo’s/Apts/Res. Housing $200K. community connections: Dennis opment back home,” Heron said. “If you can get your money from for more classified advertisements BILL McMACHEN Tessler began researching and Archer Jr. told her she wanted to the bank for 3 or 4 percent, go that (586) 915-4441 ~ [email protected] 20150216-NEWS--0022-NAT-CCI-CD_-- 2/13/2015 4:36 PM Page 1

Page 22 CRAIN’S DETROIT BUSINESS February 16, 2015 Victory: Program aims to show grads there’s a future selling cars ■ From Page 3 Ross School of Business, one of until somebody sells something.” Cappo expanded the group to 26 the nation’s most prestigious bus- Cappo, 59, never attended college. dealerships and four pre-owned iness schools. In fact, Olson got If it was my dealership, I would hire He went into business selling vacu- stores in seven states, concentrated his MBA from UM. “ um cleaners door to door right out in the South, the Midwest and Cali- The difficulty in hiring and keep- university graduates. I’d train them. I’d put of high school. fornia. ing good retail sales talent is one of From there, he graduated to sell- In 2010, Cappo moved Victory the industry’s worst-kept secrets. them on a quota. ... There needs to be a ing used cars at Varsity Ford in Ann from its headquarters in Morris- That’s one reason that Olson’s Arbor. Cappo is Exhibit A for any- town to Canton Township. A major boss, Victory CEO Jeffrey Cappo, process that is different from one who needs convincing that reason was to put headquarters donated $3 million to the university selling cars can be lucrative. close to the university and its talent to fund the new sales certificate pro- how many cars you sold. “I was making about 250 grand a pool. Victory ranks third on Crain’s gram, which launched last year. ” year working at Varsity Ford, and List of Largest Auto Dealers, report- Cappo, a big booster of UM ath- Follett Carter, Stephen M. Ross School of Business, University of Michigan my first month owning my own ing $830.1 million in revenue for letics, said he wanted to do some- dealership, I made about 200 2013. thing to let business students UM “asked me what they could heads,” said Cappo. grand,” he said of his early days Cappo doesn’t expect students know that there are opportunities use money for, and I said, ‘Could we But he likes to point out a funda- when he bought East Tennessee will graduate from UM and start outside working on Wall Street or do something in sales?’ They mental truth about business: “When Nissan in Morristown, Tenn., 18 selling cars. becoming an accountant. looked at me like I had three you think about it, nothing happens years ago. “There’s not many kids in that class who have ever had their tank on empty with no money to put in gas,” he said. “Most people who are really good in the car business, at one time they were broke.” But he believes the sales certificate program can help them get an essential understanding of what selling is all about. Follett Carter, adjunct professor “CAN DTE ENERGY in the marketing department at the UM business school who runs the sales certificate program funded by Cappo, shares Cappo’s view: “I don’t think college graduates would go HELP MY BUSINESS into selling cars. But I think there are opportunities in dealerships where they could find meaningful jobs, and knowledge of sales would SAVE MONEY?” be helpful.” Carter says the sales certificate program consists of four courses: DTE Energy wants to help your business manage your energy usage to save money. We marketing, fundamentals of sales offer all kinds of energy efficiency information and tools, plus easy tips to help you be more management, retail sales marketing and consumer behavior. This win- efficient. For instance, you’ll cut heating and cooling costs by simply adding insulation ter term, 65 students are enrolled. where there isn’t any, especially along piping and ductwork. Install a programmable Carter and Olson hope the sales certificate program, with all those thermostat to automatically lower heating and raise air conditioning temperatures during students, might incubate some new off hours. Seal doors and windows to prevent air leaks. You’ll find even more ways to save ideas for dealership sales-compen- sation plans that could reduce the using our Interactive Business tool. And you can find a certified contractor with our Energy notoriously high turnover rate. Efficiency Directory. It’s easy. Just go to dteenergy.com/savenow and start saving today. “If it was my dealership, I would hire university graduates. I’d train them. I’d put them on a quota, maybe a revenue quota. There needs to be a process that is different from how many cars you sold,” said Carter. “These kids can’t be on 100 percent incentive pay. They have to get a portion of their income in salary. That’s a big change. “You can’t revolve over 40, 50, 60 percent of sales reps every year. That’s unsustainable.” Victory already has recruited several UM graduates, including management prospects. Students have done internships at the group’s dealerships. “One guy just wants to be a sales guy and is already selling 25 cars a month,” said Olson. Devin McParlane, a student in Olson’s class from Livonia, said she will be going to work in Ford’s marketing training program after she graduates in June. “I’m going to be a zone manager working with retail managers,” said McParlane, who believes Ol- son’s lessons will help her understand dealers. Olson said he tells students their experience in sales can lead to management: “I really push the Start saving today, visit: fact that the auto industry has so many opportunities, and the pay dteenergy.com/savenow and benefits can be phenomenal. The fact that some of our general managers are making more than $500,000, that opens their eyes.” From Automotive News 20150216-NEWS--0023-NAT-CCI-CD_-- 2/13/2015 6:12 PM Page 1

February 16, 2015 CRAIN’S DETROIT BUSINESS Page 23 Chassix: Leveraged supplier struggles; creditors are concerned ■ From Page 1 heard that in the last few months.” and some were not encouraged by Long PC in Bloomfield Hills, said allows it to stay largely intact, or chine in 2005 by acquiring the as- In November, Chassix urged the results. Classix sued to enforce the fear of a production shutdown get a new infusion of cash from its sets of Howell-based supplier Uni- bondholders to seek advisers as it the contracts. likely has customers and suppliers owners or reach a resolution with Boring Inc. out of bankruptcy and sought to restructure debt, sources “(Our) review of this (financial) working around the clock. creditors outside of court. adding assets from then-bankrupt told Bloomberg News. Moody’s In- information confirmed what has al- “There’s a heavy cost to the sup- While Post is not involved with Metaldyne and Hayes-Lemmerz. vestor Service Inc. downgraded its ready been publicly disclosed — ply chain when a company gets in the Chassix matter, he said Gores’ Diversified Machine generated Chassix credit rating to Caa in No- that Chassix is financially unstable, this situation,” said Newman, who private equity firms are strong fi- $450 million in revenue in 2010 and vember, then withdrew all ratings highly leveraged, engaged in re- is not involved nancial performers and bondhold- $335 million in 2009. Diversified for the company and its bond notes, structuring negotiations with its with the Chas- ers generally have little to fear as and SMW together generated $1.2 saying it did not have sufficient in- bondholders and OEM customers, six situation. secured creditors in a bankruptcy. billion revenue in 2012, which formation to maintain a rating. among others, and is taking steps to “Any produc- “Bondholders are typically se- Chassix looked to grow to as much According to Debtwire, AlixPart- prepare for (an) imminent bank- tion shutdown nior to the equity holders. In order as $1.5 billion in 2013. ners LLC is advising the bondhold- ruptcy filing,” brake parts maker can be devastat- for the (owners’) equity to survive, Around that time, Chassix em- ers, San Francisco-based Golden Akebono Brake Corp. of Farmington ingly costly.” it really comes down to the equity ployed 3,600 worldwide, including Gate Capital, Tokyo-based Nomura Hills states in a late December court Sources con- holder having to come to an agree- 1,200 at 10 Michigan locations. Holdings Inc. and New York City- filing responding to Chassix’s suit. firmed that Ford ment with the creditors. The bond- Then-CEO Robert Remenar told based Oaktree Capital Group LLC. The companies had collectively Motor Co., Gener- holders are senior to (the equity Crain’s the supplier planned to AlixPartners and Nomura sub- claimed more than $23 million al Motors Co. and holders),” he said. Newman hire about 200 in Michigan by this sidiary Nomura Holding America Inc. owed on parts shipped to Chassix, other OEMs year, and spend about $96 million declined to comment on Chassix. with about $2 million of it past due. have been working with Chassix to expand the business. Golden Gate and Oaktree Capital Chassix has settled five of the cas- since September to accelerate pay- A history of debt “We’re expanding our capabili- did not return phone calls last week. es out of court, and a sixth, against ments and make financial accom- Chassix was born leveraged in ties; our capital spending is double Lake Forest, Ill.-based Tenneco Au- modations to keep it operating, or April 2013, when Platinum Equity that of our competitors,” he said at tomotive Operating Co. Ltd., awaits a monitoring the health of its trade formed it by merging Wixom- the time. “Our owners are dou- Turning to court settlement conference Feb. 24 be- creditors, to avoid a supply inter- based Diversified Machine Inc. and Chassix has taken steps to shore fore Oakland County Circuit ruption. SMW Automotive Inc. of Troy. bling down on this business.” up its supply chain. Judge Wendy Potts. Gores, billionaire owner of the It’s unclear whether Chassix fol- The company brought six law- Sources close to the dispute con- Detroit Pistons, acquired Diversi- lowed up on the hiring or invest- suits between Nov. 14 and Dec. 22 firmed that the companies contin- More to come? fied Machine through his equity ments. against its own suppliers at Oakland ue to supply parts to Chassix and Newman agreed bankruptcy is firm from The Carlyle Group in De- Remenar left the company in County Circuit Court after those com- that some have entered into deals an option for Chassix. He added cember 2011. June 2014, replaced by Mark Allan, panies either stopped shipment on that shorten payment timetables. that a breakup is one of the options In 2011, Bloomberg reported that who previously served as the se- parts and materials, threatened to Shorter timetables to pay for bankruptcy offers. Diversified Machine sought $235 nior vice president of operations at do so or moved to discontinue trade parts shipped would mean lower David Post, partner and chief in- million in loans to back the sale to Platinum. credit and require advance pay- outstanding balances that Chassix vestment officer at wealth manage- Platinum. More debt was taken on Chad Halcom: (313) 446-6796, ment on future shipments. can carry, and likely less exposure ment firm Telemus Capital Partners the following year when Platinum [email protected]. Twitter: Most of those suppliers sought for the other companies if Chassix LLC, said a breakup is just one of bought SMW and partially funded @chadhalcom financial disclosures or assur- does proceed to bankruptcy court. several possibilities — the compa- the deal through $150 million in fi- Dustin Walsh: (313) 446-6042, ances from Chassix that it could Max Newman, partner and ny could also have a pre-packaged nancing secured through PNC Bank. [email protected]. Twitter: still perform on its contracts — bankruptcy attorney for Butzel bankruptcy in development that Carlyle formed Diversified Ma- @dustinpwalsh

Medical ed: Tax on hospitals would replace general fund money ■ From Page 3 ation board met last week and found Sny- pital programs. might not be there when they finish, they der’s proposed budget “unacceptable.” MEDICAL EDUCATION MONEY For example, hospitals paid $763.4 million may be reluctant” to come to Michigan. “We’re in the process of analyzing the full in provider taxes this fiscal year to generate “Reducing GME will do nothing but com- State Medicaid graduate medical education impact of the proposal on Michigan hospitals, funding, fiscal 2013-14: additional federal matching dollars. To pay pound the physician shortages for the next the health care community and the patients Total state for the state general fund replacement, hos- generation,” Grant said. they serve,” Johnson said in a statement. “The System GME payments pitals would have to pay an additional $77.1 Over the past four years, Snyder has regu- MHA will consider all its options as the Legis- million, state officials said. larly proposed slashing state GME funding. lature confronts the state’s budget shortfall.” Ascension Health Michigan $14.1 million However, Appel said, MHA estimates hos- The state Legislature has restored most of Officials for two of the state’s other large Beaumont Health System $8.9 million pitals would have to increase provider taxes the proposed cuts, but annual GME funding graduate medical education providers Bronson Methodist Hospital $3.4 million by $109 million to replace the full benefit of to hospitals is still below the level when Sny- (GME) — the University of Michigan Health Sys- Detroit Medical Center $53.3 million all three slashed programs. der took office in 2011, according to a Senate tem, which receives about $32 million in to- Henry Ford Health System $15.9 million Fiscal Agency memo. tal state GME funds, and Ascension Health LifePoint Hospital $451,003 Last week, Snyder began to sign executive Michigan, which receives some $14.1 million Hearings expected in Senate orders that eventually will cut between $289 McLaren Health Care $5.1 million — declined to comment. Republicans in the Michigan House and million to $325 million in this year’s budget MidMichigan Medical Center $304,197 Tim Becker, deputy chief director at the Senate have said they want to finalize the to address a funding shortfall created by an Michigan Department of Community Health, said Munson Medical Center $236,783 2016 state budget in early June. The next fis- increase in redeemed business tax credits. a total of $151 million in budget cuts this year Sparrow Hospital $4.5 million cal year starts Oct. 1. This year’s immediate cuts ordered by to the $18.5 billion department was necessary Spectrum Health $7.4 million Sen. Jim Marleau, R-Orion Township, Snyder include $5 million for hospital GME to address a large deficit in state government. Trinity Health $5.2 million chairman of the Senate health policy commit- programs and $2 million to support small Last week, the House Appropriations University of Michigan $32.8 million tee, said he will hold hearings to delve into and rural hospitals. This amounts to about Committee approved for this year a total of Other $11.3 million how GME funding impacts the quality and ac- $20 million when federal matching shares $169.4 million in additional cuts, including Total $162.9 million cess of health care services for Michiganders. are included, Appel said. the cuts to Community Health and just un- “We need to take a hard look at GME and For fiscal 2016, the $74 million in general der $8 million to the Department of Health and Source: Michigan Department of Community Health whether it leads to better health care services fund cuts to hospitals breaks down this way: Human Services, which will be merging with for our residents,” Marleau said. “GME is $57 million general fund cut to GME, $12 mil- Community Health this year. Snyder earlier original estimates of 322,000. now funded out of general funds. We never re- lion cut for small and rural hospitals, and $5 ordered another $15.5 million in DHS cuts. “That’s significant additional resources ally drilled down into the numbers and where million cut to hospitals that perform obstet- However, Becker said, the Snyder adminis- flowing into hospitals — $80 million plus it goes.” rical services in rural areas. tration is proposing to replace the state’s gen- that hadn’t been accounted for or planned James Grant, M.D., president of the Michi- Randy Bickle, D.O., president of Livonia- eral funds for GME and rural hospitals by in- on earlier,” said Wurfel in an email to gan State Medical Society, said cutting state based Olympia Medical Services PLLC and a fam- creasing hospital provider taxes in 2016. Crain’s. “This helps provide some key off- GME funding could devastate Michigan’s ef- ily practice professor with Michigan State Uni- Snyder administration officials argue that sets for this loss of state specific dollars.” forts to increase the supply of physicians. versity College of Osteopathic Medicine, said hospitals have reaped at least $80 million But Appel said it is difficult to expect hospi- “We just opened three medical schools (Oak- cutting hospital residency programs is short- more in Medicaid revenue than they expected tals to increase provider taxes by millions of land Beaumont Medical School, Central Michigan sighted on the part of politicians. through the expansion of Healthy Michigan. dollars to receive the federal matching share. University and Western Michigan University), and “I believe we don’t spend enough on “We want to see these programs continue “The state is asking us to put up the state cutting residencies creates a bottleneck,” GME,” he said. “Medicare has limited resi- in 2016. We are proposing to reinstate these match (for 2016),” Appel said. “That is $56 Grant said. “When someone goes to residency, dencies since 1997, and we are turning out programs at 2014 levels with (an increase in million to get the $163 million, but our net they usually stay where they train.” more and more medical students with hospital) provider taxes,” Becker said. would only be $107 million. To get to $163 mil- Grant said the state Legislature needs to nowhere to train them. We don’t have In a statement, Sara Wurfel, the gover- lion, we would have to put up much more.” quickly find another way to fund GME. enough primary care doctors in the U.S., nor’s press secretary, said that Healthy Becker said hospitals would have to pay a “Medical students make decisions on and we are cutting training programs.” Michigan enrollment has surged to more 10.1 percent increase in the provider tax to where they want to train and practice,” he Jay Greene: (313) 446-0325, than 549,000 enrollees, much higher than the fully fund GME and the small and rural hos- said. “If they feel the program they choose [email protected]. Twitter: @jaybgreene 20150216-NEWS--0024-NAT-CCI-CD_-- 2/13/2015 6:31 PM Page 1

Page 24 CRAIN’S DETROIT BUSINESS February 16, 2015 Pensions: Trying to tame a funding gap ■ From Page 1 unable to cut pension benefits, which are protected by the Michigan PENSION PARTICULARS Constitution, outside of bankruptcy. Here are current numbers for contributions by Wayne County and its Unfunded pensions and retiree employees for their pensions: 2015 health care account for nearly 70 Ⅲ Union members with less than 20 years of service may contribute not percent of the county’s long-term less than 1 percent and no more than 2.5 percent, with the county making debt of $2.9 billion. The county a match of four times that amount. can’t make up for pension short- Ⅲ Union members with more than 20 years of service can contribute up to UPCOMING falls by taking money from other 3 percent and get a match of 5 to 1, or 15 percent. places, since it has so little money. Ⅲ Appointees subject to what is called the Executive Benefit Plan contribute 4 Evans said the county has been percent, with the county making a match of 2.5 to 1, or 10 percent. PARTNER EVENTS running at an annual deficit of $50 Source: Wayne County million the last three years, its pooled cash was just $49 million last Cause for optimism? could make an interesting case. It’s September, and its general fund open to interpretation,” he said. Marketing & Sales Executives of Detroit could be out of money by mid-2016. Dana Muir, a professor of busi- Saunders thinks the shortfall ness law at the Ross School of Busi- “Ultimately, our target is to get can be alleviated without drastic (MSED) Networking at Valentine Vodka ness at the University of Michigan, pensions funded at 100 percent, but measures, and without filing for Join MSED as we revisit one of our most said the city of Detroit’s recent that is going to take some time,” Chapter 9 bankruptcy protection. popular networking locations at Valentine bankruptcy should work in the said Saunders. “The E&Y report county’s favor during talks with Distilling Co. in Ferndale. Enjoy time said the county needs to con- an array of unions. Past practices with some of the top sales marketing tribute $40 million a year over the “They have contract negotia- next 10 years to hit a funding rate “It’s a dramatic decline. They professionals in Michigan. The evening tions with the unions coming up, did everything wrong,” said an at- of 70 percent. Reducing our health and the county can hold out the includes pizza, networking and cash bar care costs will help us do that.” torney who specializes in public fi- prospect of bankruptcy to bargain nance when asked about the fall in featuring unique cocktail concoctions! Saunders said that because of down pension benefits,” she said. current budget woes, the county is pension funding. He asked not to Feb. 25 • 5 - 7 p.m. Saunders agreed that the recent be named because his firm has Valentine Vodka, Ferndale unlikely to switch soon from a de- bankruptcy should be in the coun- fined benefits retirement plan, done work for Wayne County. MSED Members: $35; non-nembers: $50 ty’s favor. “Thus far, our labor The attorney was critical of the which is the traditional pension partners have been very receptive Register at www.msedetroit.org or call plan for most county employees, county for offering lucrative re- and open to discussing solutions to tirement benefits as a way to in- Meeting Coordinators at (248) 643-6590. current and retired, to the kind of these issues. There’s a sense of re- defined-contributions plan to duce people to take early retire- ality, post-Detroit bankruptcy.” ment. Matthew Schenk, a former which many private-sector busi- Muir said that the ongoing de- chief of staff for former County Ex- Southfi eld State of the City Address nesses have switched. cline in pension funding in Wayne March 13 • 8 – 10 a.m. ecutive Robert Ficano who later “That’s something we might County bucks a recent trend for mu- was COO of the Detroit Water and Westin Southfi eld eventually consider, but if you nicipal pensions, which have seen Sewerage Department, was the high- Members: $35; non-members: $45 close a defined-benefits plan, it ac- their funding percentages increase ly publicized poster child of that. because of a persistent bull market celerates short-term costs, so that In 2013, it came to light that Get your tickets at and sharp stock market rises. has to be handled with extreme Schenk was taking an early retire- www.southfi eldchamber.com “The averages are improving a caution,” he said. “There may be a ment that would pay him an annual bit in the recent results I’ve seen. long-term benefit.” pension of $96,000 beginning at age 3rd Thursday The average, now, is back to about As for issuing bonds to cover the 42, even though he’d only worked 70 percent funded. Wayne County March 19 •4:30 – 6:30 p.m. shortfall sooner, Saunders said: for the country for 8½ years. is well below average. It’s a big Comfort Suites Southfi eld “That’s not something we’re consid- Ficano was generous in other concern any time you see that kind ering right now. That’s something ways, too, with pension money. The No RSVP Necessary of decline,” she said. we’re very cautious about pursu- county made a 5-to-1 contribution One turnaround consultant who ing.” match to his political appointees, worked on Detroit’s bankruptcy, In today’s world we need new practices One last sticking point in the re- and its 4-to-1 match for other em- and asked not to be named because that allow us to thrive in an increasingly cent city of Detroit bankruptcy was ployees was generous, too. he hopes to get work from Wayne how to placate bondholders from a The attorney was also critical of global, constantly changing world, where County, said the decline in pen- $1.4 billion offering the city did in the pension system for issuing what communication is instant, the planet is the sion funding from 95 percent to 43 2005 to cover pension obligations. were called 13th paychecks, in effect percent is likely a result of lower market, and competence is key. The city then entered into a com- a bonus check above the 12 that interest rates and, consequently, plicated series of transactions to were required. The bonus checks lower rates of returns on invest- The Leadership Institute for Women, brought hedge against increases in interest cover shortfalls in cost-of-living in- ments now, compared to 2004. to you by the Center for Empowerment and rates, but when interest rates creases and cost the county $16 mil- The portion of pension money in- crashed during the Great Recession lion a year. Economic Development, is scheduled for vested in fixed-rate-of-return prod- of 2008, the city was left with a liabil- “There were just all kinds of March 5 at Lear Corporation Headquarters ucts such as bonds and U.S. Trea- ity of $439 million as of June 30, 2012. draws that put huge obligations on in Southfi eld, Michigan. suries, which have been at the system. They reopened defined While pension obligation bonds near-record lows for years, is a ma- have been mushrooming across benefits after they’d been closed to The agenda includes a conversation with jor factor. try to get people to retire, and that the country, according to a report He said actuarial rates for both infl uential women business leaders and an last July by the Center for Retire- 13th check just blows my mind. experiential learning exercise led by experts corporate and municipal pension That’s so nuts. It’s just a case of ment Research at Boston College, the plans are notoriously optimistic, in their fi eld featuring world-renowned bonds “offer budget relief and po- current pensioners taking money both in considering higher-than- from future pensioners,” he said. Speaker and Trainer Chris Majer, Founder tential cost savings, but also carry realistic mortality rates of pen- significant risk.” Evans said assumptions for pen- and CEO, Human Potential Project. sioners who live longer now than sion-cost increases remained low The report said that while the they used to, and projected rates of even as Ficano’s practices drove bonds can offer a useful tool for We will look at the whole notion of what it returns for investments. them much higher. municipalities in distress, the ben- really takes to transform an organization, be Saunders said Ernst & Young “The increase in retirement efits often prove illusory. thought rate-of-return assumptions it a small company or a vast enterprise. The benefits was 50 percent, while the In 1985, Illinois and California for the Wayne County pension sys- actuaries were expecting maybe a principles and practices are the same; it is became the first states to issue tem were optimistic. He said cur- 2 percent increase each year,” he merely a matter of scale. pension obligation bonds. In 2012, rent assumptions were for a return said. According to the E&Y report, For more information: Michigan began allowing its mu- of 7.75 percent, while E&Y thought pension costs rose 48 percent be- nicipalities to issue bonds to cover 6.75 percent was more likely. www.miceed.org/2015Leadership/ tween 2004 and 2013, from $88.7 health care and pension costs. The turnaround specialist said million to $131.4 million. The Boston College report said one possibility to shed pension “We’re clear on what happened. that low interest on debt has some obligations would be for Wayne Now we’re focused on how to im- municipalities thinking they can County to take the state of Michigan prove the situation. I’m sick and borrow low, then make a profit by to court over the constitutional pro- tired of people coming down to For more local events, investing in equities that give vision that pensions can’t be cut. Wayne County and fixing problems greater returns, a strategy Saunders He said the issue wouldn’t be we didn’t have the intestinal forti- visit Crain’s Executive Calendar at dismisses. that that provision was illegal; the tude to fix. I can fix it. It’s got to get crainsdetroit.com/executivecalendar “You’d be borrowing money to issue, he said, would be that if the fixed. I don’t want $100 million in at- invest in a system that wasn’t in- state mandates the payments, then torneys’ bills for bankruptcy.” vesting well already,” he said. the state has a fiduciary obligation Tom Henderson: (313) 446-0337, “And what if the stock market in the event of shortfalls. [email protected]. Twitter: tanks again?” “It’s never been litigated. You @tomhenderson2 20150216-NEWS--0025-NAT-CCI-CD_-- 2/13/2015 6:40 PM Page 1

February 16, 2015 CRAIN’S DETROIT BUSINESS Page 25 Braxton: IPO setback couldn’t hold him down www.crainsdetroit.com ■ From Page 3 EDITOR-IN-CHIEF Keith E. Crain GROUP PUBLISHER Mary Kramer, (313) 446-0399 or [email protected] That was the devastating global tions other than to go public for the late 1970s, and when she need- with 51-by-51 Comfort Stations ASSOCIATE PUBLISHER Marla Wise, (313) 446- stock market crash on Oct. 19, 1987, the millions of dollars such a ven- ed to stop to use a bathroom, she that have hot and cold running wa- 6032 or [email protected] EXECUTIVE EDITOR Cindy Goodaker, (313) 446- which saw the Dow Jones industri- ture would need, Gerlach said. completely rejected his suggestion ter, in time for the Irish bar’s mas- 0460 or [email protected] al average plunge 508 points, losing That’s because the sort of super of using one of the thousand or so sive St. Patrick’s Day party. MANAGING EDITOR Jennette Smith, (313) 446- 1622 or [email protected] nearly 23 percent of its value. angel investors who fuel such ven- Porta John portable toilets they “I think it’s one of the top-of-the- DIRECTOR, DIGITAL STRATEGY Nancy Hanus, “That just destroyed me,” Brax- tures today didn’t exist then. had passed. line units,” said Rory Osborne, the (313) 446-1621 or [email protected] MANAGING EDITOR/CUSTOM AND SPECIAL ton said. “I wanted to do the protein busi- Because, she said, portable toi- bar’s property manager. PROJECTS Daniel Duggan, (313) 446-0414 or Analysts told him an initial pub- ness real bad, and I needed the lets are gross. Other Comfort Station cus- [email protected] SENIOR EDITOR/DESIGN Bob Allen, (313) 446- lic offering would have raised $5 portable toilet business to do that. “I said, ‘I’ve got to make one you tomers, Braxton said, include the 0344 or [email protected] million, but the crash killed in- It was just too costly,” he said. “If I can use,’ ” he said. “I wanted to get SENIOR EDITOR Gary Piatek, (313) 446-0357 or president of Haiti and the U.S. [email protected] vestor interest, he said. had my druthers and the money, rid of the portable toilet no one presidents using Camp David, the WEB EDITOR Kristin Bull, (313) 446-1608 or But unlike other businesses that I’d get right back into it. But this is wanted to use.” presidential retreat. [email protected] RESEARCH AND DATA EDITOR Sonya Hill, (313) went under that year, Braxton so easy.” After that, Braxton had the idea He said he also sells to the U.S. 446-0402 or [email protected] could fall back on his temporary- of manufacturing and selling Navy, widely to the oil industry, WEB PRODUCER Norman Witte III, (313) 446- toilet company for sustained rev- portable toilets that are much more 6059, [email protected] Portable toilet king of Utica and to upward of 80 Fortune 500 EDITORIAL SUPPORT (313) 446-0419; YahNica enue. Porta John was a subsidiary like a bathroom you’d find at a companies. Crawford, (313) 446-0329 NEWSROOM (313) 446-0329, FAX (313) 446- of Enzymes of America. Porta John kept Braxton from home or business — an idea he kept “The one percent can afford 1687 TIP LINE (313) 446-6766 “We survived because we had a becoming another of the Black on the back burner, tinkering with me,” he said, chuckling. REPORTERS Monday casualties. core business that made money,” ideas and designs over the years. The oil industry is his largest Jay Greene, senior reporter: Covers health care, he said. He started his business career “I had a lot of flops. Nothing client, and his products are used insurance, energy utilities and the environment. It wasn’t long after that, Braxton as a tax accountant in metro De- works the first time,” he said. (313) 446-0325 or [email protected] on ocean oil platforms and in re- Amy Haimerl, entrepreneurship editor: Covers said, that he gave up on the urine troit, mainly for The general mote drilling locations such as entrepreneurship and city of Detroit. (313) 446- business to concentrate on small hospitals and idea came to 0416 or [email protected] Africa, he said. Chad Halcom: Covers litigation and the defense portable toilets. businesses, and he It may be that be a ceramic His former toilet rental business industry. (313) 446-6796 or [email protected] In 1991, he closed out Porta John said he bought what flush toilet Tom Henderson: Covers banking, finance, “ was used for the masses. At one technology and biotechnology. (313) 446-0337 or Corp. and created Porta John Indus- was then and sink, a [email protected] they didn’t point, it had 85 branches across 26 tries Inc. as an entirely new compa- called Porta mirror, and a Kirk Pinho: Covers real estate, higher education, states, he said. Oakland and Macomb counties. (313) 446-0412 or ny. John Corp. water hookup [email protected] have enough The 1996 Summer Olympics in While Braxton’s voice is cheer- for $5,000 in so that mal- Bill Shea, enterprise editor: Covers media, Atlanta used his portable toilets, advertising and marketing, the business of sports, ful, there’s a distant hint of frus- 1969 from a data to odorous and transportation. (313) 446-1626 or and the games grossed $3 million, tration that forces beyond his con- client who chemicals are [email protected] he said. His temporary lavatories Dustin Walsh: Covers the business of law, auto trol kept Enzymes of America owned part of convince unnecessary suppliers, manufacturing and steel. (313) 446- were used at Woodstock 1999 in from becoming a major player. it and owed and all waste 6042 or [email protected] Rome, N.Y., which attracted more Sherri Welch, senior reporter: Covers nonprofits, Even before the crash, Braxton Braxton that anyone it was moves outside services, retail and hospitality. (313) 446-1694 or faced an uphill climb in going to much money. the unit to a than 200,000 music fans. [email protected] market because he wasn’t a scien- Portable hard sewer or a His products also are used at nu- ADVERTISING tist, and biotech companies were toilets then were holding or clear plants, and for emergency SALES INQUIRIES (313) 446-6052; FAX (313) wary of buying into products their mostly wooden sheds science. septic tank. and disaster relief agencies, he 393-0997 ” said. SALES MANAGER Tammy Rokowski own labs hadn’t invented. with a steel floor, a Third-party SENIOR ACCOUNT EXECUTIVE: Matthew J. “We were naïve. It’s irrelevant if slat seat, and a cut- Mac Gerlach, Cascade Partners companies Porta John had a franchise busi- Langan ness, which Braxton sold to about ADVERTISING SALES Christine Galasso, Joe you have a better product,” he said. down 55-gallon steel later dispose Miller, Sarah Stachowicz “Our problem was, we were more drum used to collect the waste. of the waste for the units that need 20 different buyers in 2006 so he CLASSIFIED SALES MANAGER Angela Schutte, cost efficient but we couldn’t get They were delivered to clients in it. could entirely concentrate on (313) 446-6051 CLASSIFIED SALES Lynn Calcaterra, (313) 446- past the not-invented-here stigma.” the summer and picked up the fol- The units, called the Comfort Comfort Station as a direct sales 6086 Braxton, 74, said he was able to lowing March. Station, come in a range of product. But today, he’s mulling AUDIENCE DEVELOPMENT DIRECTOR Eric Cedo raise about $3 million privately, “It was kind of repulsive, to be portable and permanent models, the idea of franchising again. EVENTS MANAGER Kacey Anderson While the Comfort Station is the CREATIVE SERVICES DIRECTOR Pierrette Dagg but he thought he needed the IPO honest with you,” Braxton said. from modest stalls to larger, tiled SENIOR ART DIRECTOR Sylvia Kolaski to have the cash on hand to for- “My wife almost left me.” luxury lavatories. Units that ac- backbone of his business, Braxton MARKETING COORDINATOR Ariel Black malize research and marketing He didn’t do anything with the commodate people with disabili- said his product line is 22 items, SPECIAL PROJECTS COORDINATOR Keenan Covington efforts. company until a couple of years ties are available. and he has patent applications in SALES SUPPORT Suzanne Janik, YahNica Crawford “We raised a lot of money, we later when he discovered at the Li- The average retail price of a Por- the works that could add another EDITORIAL ASSISTANT Nancy Powers went to the drug companies and brary of Congress that portable ta John lavatory stall is $3,860, and 10. PRODUCTION MANAGER Wendy Kobylarz they gave us a lot of money,” he toilets were about to be governed Braxton said he expects that to in- Even larger money is out there, PRODUCTION SUPERVISOR Andrew Spanos CUSTOMER SERVICE said. “The Japanese do a billion a by the federal Occupational Safety crease to $4,200 later this year. but Braxton said he no longer MAIN NUMBER: Call (877) 824-9374 year off urine collected in Asia.” and Health Administration — creat- The priciest single stall is $9,000, wants the hassle of becoming the or [email protected] After the crash, he didn’t have ing a legislated market — that he while a three-stall building retails much larger company he envi- SUBSCRIPTIONS $59 one year, $98 two years. the desire to start over, he said, decided real money could be made for $33,000. The cheapest is $2,800, sioned a few years ago. Out of state, $79 one year, $138 for two years. and in retrospect he’s glad the IPO from Porta John. he said. For example, the company had a Outside U.S.A., add $48 per year to out-of-state rate for surface mail. Call (313) 446-0450 or didn’t happen. “I said, ‘I am going to make this He did $1.4 million in 2014 sales tentative agreement for a $130 mil- (877) 824-9374. Mac Gerlach, managing direc- into a hell of a business,’ ” he said. to 640 different clients, he said. lion contract that fell apart with SINGLE COPIES: (877) 824-9374 tor and partner at Southfield- He began experimenting with He’s working on an online market- REPRINTS: (212) 210-0750; the Saudi Arabian military for or Alicia Samuel at [email protected] based investment banking and fiberglass stalls to replace the ing strategy with a goal of boosting Comfort Stations in 2010 after the TO FIND A DATE A STORY WAS PUBLISHED: venture capital firm Cascade Part- wooden units, and later switched sales to $4.5 million by 2017. Arab Spring uprisings roiled the (313) 446-0406 or e-mail [email protected] ners LLC, isn’t surprised at Brax- to the cheaper and safer heat- Braxton designed and patented CRAIN’S DETROIT BUSINESS IS PUBLISHED BY Middle East, he said. CRAIN COMMUNICATIONS INC. ton’s story. shaped plastic stalls that are so what would become the Comfort That’s OK, he said. CHAIRMAN Keith E. Crain Bringing anything to market in well known today. Station, and went to market with The booming market — and a PRESIDENT Rance Crain biotech is difficult and expensive, Working with fiberglass was a the first units in 2003. He got his TREASURER Mary Kay Crain lack of personal business stress — Executive Vice President/Operations and Braxton not being a scientist health risk, and he said he gets patent a year later. over high-end portable toilets has William A. Morrow would have exacerbated the com- multiple medical tests annually as The company manufactures its Executive Vice President/Director of Strategic Braxton cheerful. Operations Chris Crain plexity, said Gerlach, who has de- a result. toilets and ancillary products “I don’t want to build the busi- Executive Vice President/Director of Corporate grees in chemistry and Braxton had to learn woodwork- (such as hand-washing stations, Operations KC Crain ness where I need 100 employees. Vice President/Production & Manufacturing cellular/molecular biology from ing and other physical skills from showers, decontamination stalls, Been there, done that, and I don’t Dave Kamis the University of Michigan. He’s also scratch. and toilets designed to double as Chief Financial Officer need the pain,” he said. been part of biotech startups and “I was a desk jockey before that,” hunting blinds) at a thermoform- Thomas Stevens Braxton also has proved Inter- Chief Information Officer also invested in them. he said, laughing. He and his coming plant in Utica that employs a Anthony DiPonio “It may be that they didn’t have pany manufactured about 10,000 dozen people. net savvy. In the 1990s, he said, he G.D. Crain Jr. Founder (1885-1973) bought a thousand domain names. Mrs. G.D. Crain Jr. Chairman (1911-1996) enough data to convince anyone it fiberglass stalls before the switch to “I’ve been kicking ass and tak- EDITORIAL & BUSINESS OFFICES: was hard science. It probably did- plastic molded stalls in 1977. ing numbers ever since,” he said. Among them was the URL that is 1155 Gratiot Ave., Detroit MI 48207-2732; his primary business link online: (313) 446-6000 n’t help that he wasn’t a scientist,” Along the way, he was sued by “My phone rings off the hook. I get Cable address: TWX 248-221-5122 AUTNEW DET Gerlach said. “It’s more of a risk Johnny Carson — who eventually 20-30 emails a day for orders.” Toilets.com. CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 He said he’s been offered $4 mil- is published weekly, except for a special issue the problem than anything. Every- prevailed — after Porta John be- In one week earlier this month, third week of October, and no issue the fourth body wants the product that has gan using the iconic “Here’s John- Porta John sold 58 toilets for lion for the name, and another week of December by Crain Communications Inc. $200,000 for PortableRestrooms.com, at 1155 Gratiot Ave., Detroit MI 48207-2732. the least amount of risk.” ny” slogan to market its toilets. $191,000, he said. Periodicals postage paid at Detroit, MI and Companies that buy biotech By the 1980s, Braxton was doing Braxton said he’s backed up but he’s not selling. He’s a toilet additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, technology typically do so after the upwards of $5 million annually with two months’ worth of orders. guy. Circulation Department, P.O. Box 07925, Detroit, “It’s an interesting life. I am re- MI 48207-9732. GST # 136760444. Printed in inventors have spent millions on from selling, leasing or franchis- One of those orders is for a pair U.S.A. the science and also on due dili- ing portable toilets, he said. of Comfort Stations for the third ally proud of the products I make,” Entire contents copyright 2015 by Crain he said. Communications Inc. All rights reserved. gence for intellectual property Braxton tells an amusing story floor of the Old Shillelagh bar in Reproduction or use of editorial content in any rights and other legal issues, Ger- about how he got into upscale downtown Detroit. Bill Shea: (313) 446-1626, manner without permission is strictly prohibited. lach said. portable toilets: He was traveling In March, Porta John is sched- [email protected]. Twitter: In the 1980s, Braxton had few op- through Phoenix with his wife in uled to replace a pair of older stalls @bill_shea19 20150216-NEWS--0026-NAT-CCI-CD_-- 2/13/2015 6:51 PM Page 1

Page 26 CRAIN’S DETROIT BUSINESS February 16, 2015 RUMBLINGS WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF FEB. 7-13 Gourmet, is the former owner of Inn Season vegetarian Duggan appoints Medicaid HMOs restaurant in Royal Oak. FIRST LOOK AT TECH CENTER Macomb biz honored planning head; to fight state on The third annual Macomb Business Awards were pre- from New Orleans sented last week, and the following companies walked aurice Cox is com- pharmacy plan away as winners: ing north from PTI Engineered Plastics, M New Orleans as Detroit’s new planning and n a surprise announce- Jon Cotton, president of Macomb Township: Cham- development director. The ment last week, the Meridian Health Plan Michigan, pion of workforce develop- weekly City Council book I Michigan Department of said that, among other prob- ment; for the launch of its includes his signed ap- Community Health pro- lems, the state could face in- technical academy for high COURTESY OF LOVIO GEORGE COMMUNICATIONS pointment letter. posed removing pharmacy creased financial risks. school students. A red brick exterior, decorative fences and landscaping to management from Michi- For more on this story, First State Bank, St. Clair Cox, who has been direc- match the feel of the surrounding neighborhood are part of the gan’s Medicaid health plans see crainsdetroit.com. Shores: Corporate citizen; tor of the Tulane City Center design of the new M-1 Rail Penske Tech Center, according to and contracting out to a na- for community initiatives. and associate dean for com- newly released conceptual renderings. The 19,000-square-foot tional pharmacy benefit Coliant Corp., Warren: Di- munity engagement at the facility, under construction east of Woodward Avenue between Bethune Avenue and Custer Street, will store the vehicles and management company in a Restaurant idea comes versification leader; for deep- Tulane University School of Ar- ening its work with the De- chitecture, will be paid streetcar technology systems, as well as house the operations move they say will save tax- team for the rail system. The facility, expected to cost from the heart partment of Defense and $147,500 in the post. payer money. $6.9 million, is expected to be completed by the end of this Medicaid HMOs say A cardiology-designed efforts to make inroads in year. The rail line, along Woodward from downtown Detroit to they’ll fight the state’s pro- restaurant is expected to other industries. It makes the New Center area, is to start running in 2016. For more posal because they say it open in Ferndale in April. rugged electrical accessories. ON THE MOVE renderings, visit crainsdetroit.com. will cause layoffs at many of Joel Kahn, M.D., a cardiolo- Shelby Foam Systems, Madonna University in the 13 Medicaid health gist on staff at several hospi- Magna, Shelby Township: Livonia hired its first lay building in Southfield. The Michigan Senate voted to plans, which contract with tals in Southeast Michigan Energy efficiency. president, Michael Grandillo, company plans to move schedule a presidential pri- Community Health for the and a profes- Chaldean Community to replace Sister Rose Marie into the 339,000-square-foot mary for March 2016, AP re- state’s nearly 2 million Med- sor at the Foundation, Sterling Heights: Kujawa, who is retiring. building over several years. ported. The action next will icaid beneficiaries. They Wayne State Model of One Macomb; for Grandillo, 57, most recently Brew Detroit, which be considered by the House. also said the plan could in- University advancing Chaldean-Ameri- was interim vice president bills itself as the largest au- School of crease pharmacy costs. can community needs at St. Mary’s College of Mary- tomated brewery in the “This is a huge issue (that Medicine, co- through education, charita- land, and had been presi- city, opened to the public at OTHER NEWS is) opposed by every one of owns the ble giving and advocacy. dent and CEO of Lakeland 1401 Abbott St. The 68,000- In his second State of my member CEOs,” said Rick GreenSpace SkyBlade Fan Co., War- College in Sheboygan, Wis. square-foot facility is capa- the City address, Detroit Murdock, executive director Cafe with his ren: Startup business of the Denver-based Digital ble of producing close to 1 Mayor Mike Duggan said he of the Michi- son Daniel, year; it makes high-volume, million cases of beer a year. gan Associa- Joel Kahn First Media named Jeannie will focus on inclusion, who with low-speed ceiling fans. Haven Inc. is $500,000 tion of Health Parent as publisher for its from affordable housing his MBA in finance and Detroit Regional Chamber: shy of raising the $5 million Plans in an Michigan region, which in- and home improvement aid restaurant experience will Named the Macomb County it needs to round out fund- email to run the business side. cludes The Oakland Press to funding for startups. economic development part- ing for the new domestic vi- Crain’s. “Re- “It’s a health restaurant and The Macomb Daily. Former Wayne County ner of the year. olence and sexual abuse moving the serving liquor,” said Kahn, Most recently senior vice Executive Robert Ficano shelter and services center pharmacy an author and local Fox 2 president of sales for Digital said his “good name” had it is building in Pontiac. benefit takes News medical expert who is BITS &PIECES First’s corporate division, been cleared after federal She has held management The new site is set to be away the known as “America’s Holis- agents closed a corruption Murdock largest tool tic Heart Doctor.” Vivian Rogers Pickard, di- positions with the Detroit Me- completed in October. investigation that had led health plans have to manage The 1,700-square-foot rector of corporate relations dia Partnership and Observer General Motors Co. con- to convictions against a key care and meet expectations restaurant at 215 W. Nine for General Motors Co. and and Eccentric Newspapers. firmed that it will make a aide and four other people, under Healthy Michigan Act Mile Road inhabits the for- president of its foundation, Greg Auner, a Wayne production version of the AP reported. The Network and Medicaid.” mer space of Maria’s Front was named to State University engineering Chevrolet Bolt concept it un- U.S. Bankruptcy Judge Journal’s 2015 list of “25 In- Community Health said Room. It will seat about 60 in- professor, was named re- veiled last month, with plans Steven Rhodes approved fluential Black Women in in a statement the purpose side at tables and the bar, search director of the De- to build the electric vehicle $178 million in fees charged Business.” of the plan is to consolidate and 40 on an extended patio. troit Institute of Ophthalmolo- at its Orion Assembly and Pon- by law firms and other pro- Denise Ilitch will be rec- the HMOs’ rosters of drugs, “We are working on the gy, part of the Henry Ford tiac Metal Center plants, Au- fessionals in the Detroit ognized in May with Universi- called formularies, into one. menu now. It will be vegan, Health System. He will re- tomotive News reported. bankruptcy, AP reported. ty Liggett School’s Distin- “The present arrange- plant-based and organic as main WSU’s director of Meanwhile, GM is rolling The state’s economic re- guished Alumni Award. The ment with a mix of fee-for- much as possible with a smart sensors and integrat- back controversial changes covery is hinged on the suc- award is presented each year service and managed care portion that is no-oil,” said ed microsystems and a pro- it made last year to its pur- cess of its higher education formularies adds adminis- to an alum for leadership, Daniel Kahn. “We will fessor in the surgery and chasing contract, including institutions, a report from trative costs and complexi- professional achievements serve vegan wine and or- biomedical engineering de- terms that some suppliers the Lansing-based Business ties that can be simplified and civic contributions. Il- ganic beer with all the partments. believed exposed them to Leaders for Michigan said. The with a single formulary itch, a 1973 Liggett grad, is liquor as local as possible.” Paul Hillegonds, a former greater warranty liability. state ranks 36th in the U.S. with fewer administrative president of Ilitch Enterprises Chef George Vutetakis, di- state legislator and retired in per capita income and 31st layers,” the statement said. LLC and partial owner of 220 rector of product research at corporate affairs executive in educational attainment. If the plan goes into effect, Restaurant Hospitality. STATE GOVERNMENT Ferndale-based Garden Fresh with DTE Energy Co., will be The Southeast Michigan CEO of the Lansing-based The Michigan Depart- Purchasing Managers Index Michigan Health Endowment ment of Environmental Quali- had a steep drop in January, Fund, effective March 16. ty plans new rules related falling 14.2 points to 50, the to advance notification and break-even level between an COMPANY NEWS precautions for oil and gas expanding economy and a BEST FROM THE BLOGS companies seeking to put shrinking economy. Ann Arbor-based Elec- new wells in the Detroit Southeast Michigan READ THESE POSTS AND MORE AT WWW.CRAINSDETROIT.COM/BLOGS tric Field Solutions, a Universi- area, AP reported. They ranks No. 1 nationally in the ty of Michigan startup that would require more resi- number of advanced auto- Jumping on bike night idea John Waters eluded me again uses technology first devel- dents and government offi- motive industry jobs (67,825) oped for measuring electric cials be told about prospec- and businesses (462) and in An investor in the The filmmaker was fields caused by dust storms tive drilling. architectural and engineer- on the surface of Mars, was downtown Pontiac in Detroit to kick off the Gov. Rick Snyder pro- ing jobs (78,740), said an an- “ “ acquired by New York City- Indian Hill annual The Dirty Show posed a $54 billion state nual report by the Anderson redevelopment plan and erotic art exhibition, based Premier, a service com- Economic Group of East Lans- pany for the gas and electri- budget that he said priori- a downtown shop owner now in its 16th year, ing that ranked 15 nationally cal industries that is a unit tizes education and health are in the early stages with a performance of recognized technology hubs. of organizing a bike an updated version of of Houston’s Willbros Group. services, including focus- night event for his one-man show “This Terms were not released. ing on improved reading downtown Pontiac this Filthy World: Filthier and Accretive Health Inc., a for third-graders, more OBITUARIES summer. Dirtier.” Chicago-based hospital rev- training in the skilled enue-cycle management trades and increased dental Ernest Nagy, former Kirk Pinho’s “Big City, Big Deals” blog” on real estate Bill Shea’s “For Immediate Release”” blog on the company, will lease about coverage for low-income publisher of Heritage News- and metro Detroit can be found at media, transportation and marketing can be found 107,000 square feet in the children, AP reported. papers and Mellus Newspa- www.crainsdetroit.com/section/blogKirkPinho at www.crainsdetroit.com/shea Travelers Tower II office The Republican-led pers, died Feb. 11. He was 85. DBpageAD_DBpageAD.qxd 2/5/2015 9:59 AM Page 1

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