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NEWSPAPER State’s cash-strapped cities take aim at Proposal A’s limits. EMPOWERING WOMEN
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More trouble for Technology Russell owner drove year’s Kefallinos’ tenants biggest moves want money in Michigan back from landlord, A look at Crain’s Biggest Page 5 Deals for 2016, Page 8
Government Real estate Strapped Many bridges le to cross cities take aim at Proposal A
By Lindsay VanHulle Crain’s Detroit Business/Bridge Magazine LANSING — Dan Gilmartin has a warning for Michigan’s policymak- ers: e way the state funds its cities is squeezing them dry. Local governments across the state need to do a better job at shar- ing services and cutting costs, said Gilmartin, executive director and CEO of the Michigan Municipal League, which advocates on behalf of cities and villages. But cities also are limited in how much money they can bring in, even if residents were willing to tax themselves more — and that, he said, is something Lan- sing has to x. Gilmartin and some other lead- LARRY PEPLIN ers are oating a politically tricky The Central Transport trucking terminal on Je erson Avenue is owned by Ambassador Bridge owner Manuel “Matty” Moroun, a prominent foe of a new publicly owned bridge. x: An update to Proposal A, the voter-approved 1994 Michigan constitutional amendment that MDOT not paying enough for parcels in Delray, businesses say caps property tax increases. By Chad Livengood property that matches what I have,” at solution would be a hard sell, [email protected] said Ebsch, who has operated his but the fact that they’re talking about On a narrow and mostly deserted business in southwest Detroit since it at all is telling. street in southwest Detroit’s Delray 1988. “ ere’s such a big gap here. I It’s part of a backdrop of other neighborhood, Gordy Ebsch has run don’t know how it’s going to get extreme money measures being a small machine shop since 1999, solved.” bandied about in Lansing, includ- tailoring his services to nearby heavy More likely than not, the gap be- ing proposals to roll back or elimi- industrial clients. tween MDOT’s market-rate o er nate the state’s income tax — to the But the 20,000-square-foot build- and the cost of Ebsch to uproot his concern of Gov. Rick Snyder — and ing on South Post Street that houses small business will be decided by a restructure public retirement plans Ebsch’s Delray Mechanical Corp. sits Wayne County Circuit Court judge. that have become a nancial crisis. at the base of where the new Gordie “We’re going to litigate that for the e outcome will have rami ca- Howe International Bridge is sup- rest of our lives when they nally le tions for Michigan’s competitive- posed to land in Michigan. it,” said Alan Ackerman, an eminent ness nationally, not least of which at puts Ebsch’s business in the KURT NAGL/CRAIN’S DETROIT BUSINESS domain attorney who is represent- are the long-term scal health of crosshairs of the Michigan Depart- Delray Mechanical Corp. sits at the base of where the proposed Gordie Howe ing Delray Mechanical and several the state’s cities and their ability to ment of Transportation, which is in International Bridge is supposed to land in Michigan. other businesses in the pathway of attract talent. the midst of a massive undertaking to the bridge. Backers of updating Proposal A buy up 634 parcels of residential and fer for his building is not matching tion space in southwest Detroit near MDOT’s land acquisition for the are aiming for changes they say commercial land for the bridge, a the cost of relocating his welding his clients in the cement, asphalt, ag- bridge — estimated to cost upward won’t change the law’s original in- plaza and connection to I-75. fabrication and custom machining gregate, steel and railroad industries. of $370 million — faces a big and tent. Adopted partly to rein in bal- For Ebsch, MDOT’s purchase of- business to another suitable produc- “It’s very di cult in Detroit to nd SEE DELRAY , PAGE 25 looning property tax bills in the 1990s, the provision works by cap- ping annual growth in property values, but some local leaders say United Way turns 100 — and takes over our front page it’s holding down revenue in a way that hadn’t been seen until the re- he cover of this week’s Crain’s is a bit di erent. cession sent property values plum- e 30 companies whose logos are featured on this week’s Page 1 sponsored the eight-page meting. Tsection inside this week’s issue, which was produced by United Way for Southeastern Michigan in In exchange for limiting annual partnership with Crain Content Studio, the custom publishing division of Crain’s Detroit Business. growth in homeowners’ property tax In other words, these companies paid for an unprecedented takeover of our cover to celebrate a bills, voters agreed to raise the state’s milestone for an organization that has a history of building relationships that improve lives in met- sales tax by two percentage points — ro Detroit. it has been 6 percent ever since — ose companies are a small fraction of the more than 650 Detroit-area businesses that partner and dedicate the money to K-12 with United Way through corporate gifts, workplace campaigns or by encouraging employees to schools. volunteer. SEE PROPOSAL A, PAGE 29 e United Way tribute section paid for by those logos appears after Page 12. 4 CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017
INSIDE MICHIGAN BRIEFS BANKRUPTCIES 30 CALENDAR 23 State Senate passes more than 3,000 across the U.S., has store company and took over opera- CLASSIFIED ADS 25 browneld cleanup bill locations in Troy, Taylor and Sterling tion of its three stores, in Muskegon, Heights, according to its website. It North Muskegon and Whitehall, DEALS & DETAILS 24 Michigan municipalities moved a also sells products online and MLive.com reported. Plumb Inc. KEITH CRAIN 6 step closer to getting incentives for through catalogs, and has run a vari- ceased operations Feb. 12 after more OPINION 6 developers to redevelop brown eld ety of charitable initiatives. than 80 years. Plumb’s assets were OTHER VOICES 7 sites, as the state Senate passed leg- FILE PHOTO Family Christian struggled after it seized by secured creditor L.M. islation last week that assists devel- The stalled Wayne County jail site, led for bankruptcy in 2015, compa- Foods, but the assets’ value did not PEOPLE 24 opers with the nancial burden of ny President Chuck Bengochea said satisfy the debts owed. which has been proposed as a new RON FOURNIER 6 cleaning up such sites. home of a professional soccer facility, is in a statement. It had become a non- J e city of Muskegon continues to RUMBLINGS 31 e legislation would let develop- a potential browneld cleanup locale. pro t business two years before pay infrastructure costs for a lan- ers keep a portion of taxes collected that. guishing proposed casino site down- WEEK ON THE WEB 31 after the projects are completed to they were substantially changed town, and the property owners con- recoup some costs of cleaning up the from bills that failed to clear the Leg- MICH-CELLANEOUS tinue to not pay property taxes that COMPANY INDEX: site. islature last year. MI rive adjusted J e Republican-controlled Michi- would o set those costs, MLive.com SEE PAGE 30 MI rive is a coalition of eco- the focus of the campaign from De- gan House last week failed to ap- reported. e Harbor 31 SmartZone nomic development organizations, troit and Gilbert to other Michigan prove an income tax cut, rejecting will cost the West Michigan city’s tax-exempt status on a medical cen- cities and chambers of commerce cities, in part to convince outstate the plan after a lengthy session and general fund an anticipated $275,000 ter in Grand Rapids Charter Town- from around the state that supports lawmakers and their constituents to the unsuccessful cajoling of some re- this year. e lack of development, ship, MiBiz reported. A Michigan Tax the legislation. Several projects in support the incentive. e bills now sistant members of the majority. e and accompanying property taxes, Tribunal judge ruled Spectrum Detroit could bene t, and Dan Gil- move to the House, where they died legislation would lower the 4.25 per- resulted in the city being saddled Health Medical Group’s Integrated bert and his team were among the last year. cent tax to 4.05 percent by 2019 and with most of the payments on bonds Care Campus meets state law and a leading architects of the bills last then to 3.9 percent by 2021 as long as that were sold to develop the area for Michigan Supreme Court ruling on year, before they failed to advance at Family Christian Stores the state savings, or rainy-day, fund a technology business park. e what constitutes a charitable health the end of the legislative term. to cease operations is not below $1 billion, AP reported. SmartZone is located at the former care venture deserving of tax-ex- e incentive would require de- e 52-55 vote — three short of the Teledyne Continental Motors indus- empt status. e township was or- velopers to meet minimum invest- Family Christian LLC, a faith-re- minimum number needed to move trial site. dered to return property taxes col- ment thresholds to qualify for the tax lated retail company with more than the bill to the GOP-led Senate — J Spectrum Health stands to regain lected on the $48 million care capture, starting at $500 million in 240 locations in 36 states, is shutting came at 1:45 a.m. ursday after the more than $747,000 it paid in prop- campus that Spectrum opened in Detroit and are lower based on a its doors. e Grand Rapids-based measure again underwent revisions. erty taxes after successfully earning 2014. city’s population. Tax captures book, music and religious supply Republican Gov. Rick Snyder had would be capped at $40 million an- seller announced last week it was voiced concerns about the budget Correction nually, and the state could approve ending its 85 years in business, due implications of a tax cut. no more than ve projects per year. to falling sales and changing shop- J Menominee-based L.M. Foods An item on Page 23 of the Feb. 20 issue incorrectly named the owner of GOP Sen. Ken Horn of Franken- per behaviors. LLC claimed the assets of the former Grosse Pointe Woods-based Marathon Cable Co. His name is Jud Utley. muth, who introduced the bills, said e company, which employs Muskegon-based Plumb grocery
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Development Russell Industrial Center’s owner has issues at other buildings Pioneer Detroit real estate investor Kefallinos hit with class-action lawsuit in 2014
By Kirk Pinho was ordered evicted last week due to [email protected] safety concerns. Michael Byrd’s 85-year-old moth- Now Byrd, and dozens of other er, who uses a wheelchair, can’t visit current and former tenants in Kefall- him in his home in the John R Apart- inos-owned buildings, want some of ments in Detroit’s historic Brush their money back. Park neighborhood. at’s because Byrd, a 54-year-old Potential “catastrophe” who drives charter buses and some- times referees basketball games, It’s been more than two years lives in a building where there is no since a class-action lawsuit was led wheelchair ramp. e elevator often against various companies owned doesn’t work. by Kefallinos. “You would e plainti s, represented by think that in Troy-based law rm e Oliver Law 2017 that people Group PC, say in the 2014 complaint wouldn’t still that they leased apartments or lofts have to live in from Kefallinos when he knew he these condi- had no certi cates of occupancy for tions,” he said. any of the buildings and that there e building, were safety hazards. Dennis located at John R ey are in the damages phase of Kefallinos: and Adelaide a class-action lawsuit; so far, three Bought real estate Street, is one of groups of current and former tenants in Detroit for at least 11 owned have submitted claims, and a fourth decades. by Detroit real and nal one is expected to in the estate investor Dennis Kefallinos, coming weeks. who has been buying real estate in Kefallinos, who did not respond to the city for decades and whose Rus- a message seeking comment, said in LARRY PEPLIN sell Industrial Center at I-75 and Clay SEE INVESTOR, PAGE 30 Michael Byrd lives in the Kefallinos-owned John R Apartments in Detroit’s historic Brush Park neighborhood.
Culture Finance MUST Splitting audience READS State of the area’s arts OF THE could make UM’s WEEK $240M athletics A virtuous circle debt a heavier li around cars By Bill Shea Ron Fournier: How a nonprot is [email protected] putting people on wheels, and put- e University of Michigan athlet- ting people in jobs, Page 6 ic department sits atop $240 million in debt at a time when several major college athletics programs are grap- pling with enormous and potentially crippling debt loads. Fueling that peril are ESPN sub- scriber losses that sap revenue from High-rent district? Leonard Slatkin David DiChiera Ken Fischer a network whose gargantuan spend- Rumblings: How the Hudson’s site PHOTOS BY LARRY PEPLIN ing on college football TV broadcast building could bump up downtown rights is a vital revenue stream for rents, Page 31 As they prepare to leave posts, longtime leaders talk funding, audience and the future major universities. Other worries are the ongoing struggle to monetize By Leslie D. Green my Award winner renowned for his He is the rst university arts present- content — how do you make money Special to Crain's Detroit Business conducting, his composing and his er to receive a National Medal of on Snapchat? — to an audience con- In four months, metro Detroit’s love of American music. He came to Arts. He came to UMS from Wash- suming college sports in dizzying arts world will change signi cantly. Detroit from Washington, D.C., ington, D.C., where he was a man- arrays of formats, and the trend of at’s when David DiChiera re- where he led the National Sympho- agement consultant. Under his lead- dwindling football crowds for some signs after 46 years as artistic direc- ny. At the end of this season, the Los ership, UMS’s budget has schools. tor of the Michigan Opera eatre, Angeles native will also step down quadrupled and the organization Unlike its some of its cash- Leonard Slatkin prepares for his 10th from his post as conductor and mu- has commissioned, co-commis- strapped peers, Michigan has a and last season as conductor and sic director for the Orchestre Nation- sioned or co-produced more than 60 packed Big House on fall Saturdays, music director of the Detroit Sym- al de Lyon in France. works in dance, theater and music. deep-pocket donors, an elite credit phony Orchestra, and Ken Fischer Fischer, 72, is only the sixth presi- A National Endowment of the Arts rating, and it expects its share of TV ends his 30-year role as president of dent in the 137-year history of UMS. Opera Honors Award winner, DiChi- money to keep increasing — a mix the University Musical Society. era, 81, came to Michigan in the ear- the university expects to give it the “ ey are losses to the state,” said “They are losses ly 1960s to teach at Oakland Univer- nancial maneuverability to readily John Bracey, executive director for sity. He wound up launching the pay what it owes and to keep bor- Michigan’s Council for Arts and Cul- to the state.” Michigan Opera eatre, transform- rowing to build or refurbish its facili- tural A airs. John Bracey, executive director for ing a rundown adult movie theater ties. Slatkin, 72, is a National Medal of Michigan’s Council for Arts and into Detroit’s Music Hall, and raising But the potential threat on the Arts winner and seven-time Gram- Cultural Aairs SEE ARTS, PAGE 26 SEE DEBT, PAGE 28 6 CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017
KEITH CRAIN OPINION Editor-in-chief A virtuous circle around cars Can spring be just watched a 2001 cherry red IOldsmobile change the lives of far behind? two people. First was Ricardo Beecham, a 40-year-old felon training to be a Probably mechanic out of a shop run by Vehi- cles for Change, a nonpro t based After last week’s weather, there did in northeast Detroit’s struggling Os- not seem to be much reason to head born neighborhood. Beecham south for a vacation. To say the weath- wiped his long, oil-slicked ngers er in Detroit was unseasonable would across his pants before shaking my be an understatement. hand. “It’s hard nding a good job But last weekend also marked the out of jail,” he said. rst game of the Tigers’ spring training As part of his training, Beecham in Florida. at’s enough to convince helped repair a 2001 Oldsmobile us spring is right around the corner. Alero with 113,000 miles. Businesses all over Southeast Mich- Second was Myesha Harris, a sin- igan were poised to leap into action gle mother of two children who des- and put out all their spring and sum- perately needed transportation to mer merchandise. work, school and church. She had Clothing stores were about to dis- no car nor credit until Vehicles for play their summer fashions. Everyone Change sold her the same 2001 Old- was excited to welcome spring weath- smobile Alero for $965, including a er. six-month, 6,000-mile warranty and Whoo! a AAA Michigan membership. is is Michigan, folks, and it was “Oh my God!” she said when nothing more than a cruel hoax to Beecham’s instructor, Issac Small make us all think that this was it. Be- III, handed her the keys Tuesday fore you cancel your spring vacation morning. LARRY PEPLIN and drag your motorcycle up along Small smiled. His trainee is a step Myesha Harris, her ance Douglas Watts and Vehicles for Change instructor Issac Small III pose with Harris’ 2001 Oldsmo- with your lawnmower, remember we closer to being a licensed mechanic, bile Alero aer Harris received the keys. still haven’t seen the rst of March yet. and Harris now has a car — the As much as we all wish for spring, same cherry red Oldsmobile nursed “For a lot of people, having a car — except for the skiers and snowmobile onto the road by Beecham’s steady owners, it is just nature playing a trick. hand. “It’s a virtuous circle,” Small even a beat-up old car — is Whether you want it or not, we still said. transformational.” have a quite a few weeks until spring. e circle began in Baltimore, And heading into this past week- where Martin Schwartz launched Martin Schwartz, Vehicles for Change end, we had storm alerts that could Vehicles for Change to solicit car produce some snow. donations and sell the vehicles at RON FOURNIER are single mothers like Harris, living prison for armed robbery and at- Michigan does have four seasons. low rates to needy and worthy fami- Editor/Publisher in neighborhoods with poor public tempted murder, is one of ve ex-in- And yes, as we all know, merchandise lies. Since 1999, the nonpro t has transportation and few jobs. Harris mates in the current nine-person changes right along with those sea- provided cars to more than 5,000 works in a distant suburb. training class — all vetted for the sons. families who can prove they have a Ron Fournier is editor and publisher “ is vehicle is going to change program by the Detroit Economic We’re not like California or Florida, job or a job o er and need a car to of Crain’s Detroit Business. Catch his my life because I’ll be able to make Employment Solutions Corp. where they have the same merchan- stay employed. take on business news at 6:10 a.m. sure I can get my 8-year-old to ere is only one woman in the dise all year long. ose poor folks e average recipient experienc- every other Monday on the Paul W. school every day. I’ll make sure my class, 26-year-old Chynna Penson have never seen a clearance sale for es a $7,000 annual boost in pay Smith show on WJR AM 760 and in attendance is great at work. And I’ll of Detroit, who said she left her job seasonal changes. within the rst year of ownership, his blog at www.crainsdetroit.com. always have the opportunity to go to as a home health care aide to learn a My favorites are the retailers who go according to a study conducted by church events now,” she said. new trade. Until she enrolled in the from snowblowers or snowmobiles to the program. Nearly 90 percent of J People and institutions donate is year, Schwartz fully replicat- program this year, Penson said, “I motorcycles. It’s all about the seasons. recipients used their cars to take cars to Vehicles for Change. (You ed his Baltimore model by opening knew nothing about cars. I could My guess is that retailers in places with children to after-school activities can donate here: https://www.vehi- a training center that is giving nine put gas in them and I could tell seasonal changes may sell more than and tutoring. clesforchange.org/) people, including Beecham, a when the brakes were going bad — retailers in single-season states. “For a lot of people, having a car J e cars are xed and serviced. chance to earn six state certi ca- but that’s it. Now I’m certi ed to x In Michigan, we have all sorts of — even a beat-up old car — is trans- Until recently, that work was done tions in mechanics while xing and brakes.” clues for our seasonal changes. When formational,” Schwartz told me over by corporate sponsor Belle Tire. servicing the donated vehicles. Penson lives in one of the poorest anksgiving rolls around, we know breakfast recently in Eastern Mar- J Potential buyers are referred to During training, they earn $8.50 neighborhoods in a city starving for snow is coming. And when the Grape- ket. “What a car can mean for peo- the program by the Wayne County an hour 40 hours per week, with $1 opportunity. One-fourth of low-in- fruit League has its rst game, I can ple is the di erence between pover- Metropolitan Community Action per hour set aside to purchase a set come households in Detroit are always look forward to warmer weath- ty and success.” Agency, which seeks people with of tools. Mechanics can’t get work without cars, according to data pro- er. e pro basketball and hockey play- A cousin of Jim Schwartz, the for- the greatest need and ability to without tools. vided by the program. Only 60 per- o s are other clues, along with my fa- mer Detroit Lions head coach, Mar- bene t from reliable transporta- Once certi ed in the six catego- cent of working-age Detroit resi- vorite, March Madness. tin Schwartz expanded to Detroit in tion. ries, a new mechanic has an average dents live near a transit stop, and But chances are pretty good, even if 2015 after being encouraged by his J One Detroit Credit Union loans starting salary of $35,000 or so. A bit just 22 percent of all Detroit jobs are you are a rabid believer in global friend Luis Perez, who left the team’s recipients the price of each car at 8.9 more training, and they can earn reachable via public transit in fewer warming, that Mother Nature is good head o ce that same year. percent interest. Vehicles for close to six gures. than 90 minutes. for at least one or maybe two good Since coming to Detroit, Vehicles Change guarantees the loans. “I can make ends meet without “A lot of us are stuck here in this snowstorms before we see the winter for Change has put 42 low-income J Each car costs $850. e AAA this program,” Beecham told me. neighborhood unless we’re lucky clearance sales. residents in cars. By the end of the membership and warranty raise the “But with these certi cations, I can enough to get a car and a job,” Pen- It has been an exceptionally mild year, said Director of Operations Te- price to $965. With interest, that’s make the money a family needs to son said, ashing a deep-dimpled winter — so far. resa McFadden, the total will be 65. $85 per month for a year. thrive.” smile beneath her Superman ski Spring is not far ahead, but beware e program works like this: Ninety percent of the recipients Beecham, who served 14 years in cap. “I’m a lucky woman.” the Ides of March. CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017 7 New immigration rules, DeVos have consequences for business Crain's Detroit Business Publisher/ increases costs. Both the travel bans remain in this country. American business interests are Editor Ron Fournier addressed Presi- and insu cient support for public Faced with a hostile immigration best served by thorough vetting of dent Donald Trump's executive or- schools in providing a highly skilled environment and weakening public immigrants based on realistic risk der on immigration in his Feb. 2 col- workforce have the unintended ef- schools for their children, what is to criteria rather than only national ori- umn, asking “How can this be good fect of hurting our global competive- prevent people with newly minted gin or religion and a strong public for your business, your city, your ness by reducing the number of em- master’s degrees from establishing education system to produce an country?” ployees in science, technology, their careers in more-welcoming abundance of high-tech workers. Here are some concerns address- engineering and mathematics. places? Chamber of Commerce represen- ing the need to develop and sustain OTHER VOICES While vetting of immigrants is cer- National leaders in Germany, tatives and other business leaders the technologically skilled workforce David Corliss tainly needed, vetting of new govern- Canada and other countries have need to be a part of the conversation required today. ment rules is also necessary to pre- reached out to those worried by the at national, state and local levels to Corliss is a statistical astrophysicist who Detroit’s business environment vent sudden, harmful shifts in policy. travel ban with a voice clearly heard promote the technology needed for has been harmed by the unintended works in enterprise analytics and serves Inadequately considered changes in in engineering centers and graduate business growth. Working together consequences of two recent well-in- as vice president of the metro Detroit government rules can leave business schools across America. Our global with business leaders, federal policy tentioned but poorly considered fed- chapter of the American Statistical plans in disarray. Employers are left competitiveness has been injured by can do more to foster, rather than eral actions: the new immigration Association. uncertain if their known and trusted a lack of due consideration of the hinder, creation of the products and restrictions, along with an inexperi- employees can — or will want to — business impact of new policies. jobs of the future. enced education secretary interested more in a single, religion-driven is- sue than the broad range of educa- tional concerns needed to develop a highly skilled workforce. As a member of Detroit’s analytics community, I have written before how high-tech education makes a crucial di erence in today’s econo- my, including the commercial bene- ts immigrants with advanced de- grees bring to our shores. Our new education secretary, Bet- sy DeVos, seeks to reduce enrollment in public schools in favor of private, religious-based schools sometimes marked by selective support for modern science. Without proper in- put from business leaders, this can focus technological education to- ward fewer people. e increasing di culty in nding enough employees with the techno- logical skills required for today’s economy hurts business growth, lim- its new product development and
Deadline nears for Crain’s 2017 Twenty in their 20s Do you know a 20-something to watch? e deadline is fast ap- proaching to nominate a local rising star for Crain’s Twenty in their 20s. Likely candidates include up- and-comers who have made waves within a company, shown success or originality as an entrepreneur, or made a local impact in some other demonstrable way. Candidates are not limited to any particular eld or industry and may come from the corporate world, creative industries, nonpro ts or social entrepreneur- ship. Winners will be pro led in the May 1 edition and honored at an awards event. e deadline to nominate some- one is Tuesday. Once nominated, nominees will receive an email with a link to the form. e deadline for nominees to ll out their forms is March 7. e nominee MUST be 29 or younger on May 1, 2017. Visit crainsdetroit.com/nominate to make your nomination today. For questions about the awards or this nomination program, please contact Special Projects Coordinator Keenan Covington at (313) 446-0417 or [email protected]. 8 CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017 SPECIAL REPORT: FINANCE
GETTY IMAGES/ISTOCKPHOTO Technology drove Michigan’s mergers and acquisitions last year
By Dustin Walsh Group Inc. provides American Axle a new testing on Michigan roadways this year. [email protected] Inside powertrain components product portfolio as Liquidity has also made strategic buyers ac- Michigan merger and acquisition activity is well as a niche in the foundry industry and an quisition hungry. Reports indicate the S&P 500 is n American Axle & Manufacturing Holdings dominated by technology and market share expanded presence in Europe. sitting on $1.5 trillion in investment capital due Inc.’s move to acquire Metaldyne grabs. e Detroit-based supplier has also strug- to apprehension tied to the Great Recession. Performance Group Inc. in a $3.3 billion deal is In 2016, most of Crain’s Biggest Deals fell in gled for nearly 20 years to diversify away from “ ere’s so much existing liquidity in the an operational win, Page 9 those categories, thanks to a favorable lending its former parent company, General Motors market,” said Tim Melton, partner-in-charge at market and new technologies demands in the n Piston Group is set to become the largest Co. e Metaldyne deal will drop its reliance Jones Day LP in Detroit. “ ere’s not a lot of market space. And despite uncertain federal minority-owned supplier with its $175 million on GM from more than 65 percent of its reve- other areas to see good returns, so (compa- tax and trade policy, impending interest rate acquisition of Takata Corp. subsidiary Irvin nue now to 41 percent upon closing with ex- nies) are looking to invest that somewhere, hikes and a slowing global market, M&A ex- Automotive Inc., Page 9 pectations to reduce it to 32 percent by 2020. and acquisitions is a great place right now.” perts don’t predict that to change this year. n Bank consolidation is ongoing, and Arbor “Technology was de nitely the driving fac- Kalamazoo-based medical device maker “Really, last year should Bancorp Inc. secured expansion with its tor in 2016,” said Steven Stryker Corp. has held more than $3 billion in have been heavily in u- $33.3 million acquisition of Birmingham Hil nger, former COO for cash since coming out of the downturn in 2011, enced by uncertainty in Bloomeld Bancshares Inc., Page 9 the Michigan Economic up from under $2 billion prior to the recession. the economy and the elec- Development Corp. and Stryker closed on several deals in 2016, includ- n IBM Corp. is becoming a major player in the tion,” said Cli Roesler, partner at law rm Foley & ing the $2.8 billion acquisition of arti cial hips health care space, particularly aer its co-founder and partner at Lardner LLP in Detroit. and knees maker Sage Products Inc. and the acquisition of Ann Arbor-based Truven Health Birmingham-based invest- “Especially locally, as $1.28 billion acquisition of ambulatory de- Analytics for $2.6 billion, ment bank and M&A advi- Page 10 companies look at how to brillator maker Physio-Control International sory rm Angle Advisors n Stryker Corp. expanded its emergency accelerate development of Inc. LLC. “And if you look at the medical services business with the autonomous and connect- Health care and automotive are expected to Cli Roesler: calendar, it’s a long time acquisition of Physio-Control International Steven Hilnger: ed vehicles. ey can do remain active M&A sectors in 2017, but regula- Economy still not for a recession ... but the Inc. for $1.28 billion, Page 10 Technology a that internally, but the fast- tory uncertainty does have the potential to fully recovered. U.S. economy still hasn’t n Crain’s list of the biggest deals of 2016, driving factor. est way to close the tech- sideline many deals, Hil nger said. fully recovered from the Pages 11-12 nology gap is to make an “ ere’s de nitely a lot of regulatory policy recession, so there’s still been some running acquisition.” changes in the pipeline,” Hil nger said. “Some room and that’s what we saw last year and con- n For a searchable database of the deals, GM sought to jump ahead of its peers on au- of it could foster M&A, such as changes in anti- tinue to see today.” see crainsdetroit.com/bigdeals tonomous driving with the $581 million acqui- trust policy, but others could constrain the Canada’s largest utility owner, Fortis Inc., sition of San Francisco startup Cruise Automa- market.” paid $11.3 billion for Novi-based ITC Holdings tion. Big questions remain under a new adminis- Corp., a deal with a 33 percent premium over American Axle & Manufacturing Holdings e 4-year-old Cruise created an aftermar- tration in the White House. President Donald ITC’s trading price. Power companies have Inc. was stagnating as axles o er limited tech- ket kit that allows buyers to convert cars into Trump and Congress are working to repeal been grappling with at demand and rising nological advancement in the burgeoning autonomous vehicles. e kit was originally and replace the A ordable Care Act, which will costs. ITC, whose transmission lines earned connected, autonomous and alternative pro- designed for the Audi A4 and S4 models. GM, likely have major consequences for the health the highest return on capital in the U.S. utility pulsion automotive space. Its pending $3.3 bil- however, plans to integrate the technology into care industry. space, o ered promising growth to Fortis. lion acquisition of Metaldyne Performance its own autonomous vehicles, which it began SEE DEALS, PAGE 10 CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017 9
SPECIAL REPORT: CRAIN’S BIGGEST DEALS 2016 $175 million acquisition
$3.3 billion deal Metaldyne merger diversies American Axle By Dustin Walsh to reduce that Metaldyne LLC in 2012 for $820 mil- [email protected] further to 32 per- lion, three years after high debt and American Axle & Manufacturing cent by 2020. slumping sales forced Metaldyne Holdings Inc.’s move to acquire Met- MPG’s share- into Chapter 11 bankruptcy. aldyne Performance Group Inc. in a holders will see American Securities rolled two of $3.3 billion deal is an operational a bene t, receiv- its other suppliers, HHI Group Hold- win. ing a 0.5 share of ings and Grede Holdings LLC, into PISTON GROUP e merged companies will gen- the newly com- Metaldyne to form MPG in 2014, Vinnie Johnson, a former Detroit Pistons guard, has overseen the growth of Piston erate nearly $7 billion in revenue bined company. then launched a $150 million initial Group. and reduce Detroit-based American New York City public o ering later that year. David Dauch: Axle’s reliance on its largest custom- private equity American Securities, now a 76 American Axle er, General Motors Co. rm American percent shareholder in MPG, will see CEO/chairman. GM now accounts for about 66 Securities Inc. a payout of more than $693 million, Piston Group deals percent of the company’s revenue. hit a home run coupled with 25.6 million in shares, e integration of MPG will reduce with the deal, which is expected to or 23 percent, of the new company, GM to 41 percent of sales with plans close by June 30. e rm acquired under the deal with American Axle. for Takata subsidiary By Dustin Walsh ny’s airbag recall — the largest recall [email protected] in automotive history. $33.3 million bank transaction Redford Township-based parts Vinnie Johnson, a former Detroit assembler Piston Group is set to be- Pistons guard who is CEO of Piston, come the largest minority-owned has overseen the supplier’s growth Arbor Bancorp continues consolidation supplier with its $175 million acqui- from just $570 million in revenue in By Dustin Walsh $33.3 million. e deal was announced last July. sition of Takata Corp. subsidiary Ir- 2012 to a projected $1.8 billion in [email protected] e combined entity will have about 225 vin Automotive Inc. 2016, nearly doubling its revenue Bank consolidation is ongoing, and Arbor employees and eight branches in Washtenaw, e deal adds Irvin’s interiors from 2015. Bancorp Inc., parent company of the Bank of Wayne and Oakland counties. It will have manufacturing operations and pro- Piston has been growing with Ann Arbor, secured expansion with the acquisi- about $1.5 billion in total assets and about $1.2 pels Piston toward what the compa- contracts from Ford Motor Co. and tion of Birmingham Bloom eld Bancshares Inc. million in assets under management. ny expects will be $2.8 billion in rev- others. In 2012, Johnson’s other enti- in January. e Bank of Birmingham will continue to enue by 2018. ty, V. Johnson Enterprises LLC, an- Birmingham Bloom eld shareholders re- operate under that name until banking sys- Tim Marshall: Takata put Irvin on the market in nounced the formation of a new ceive $16.50 in cash for each share of common tems have been integrated. It is estimated that Bank of Ann Arbor February in search of a lifeline in the joint venture with Valeo SA called stock, with a total transaction value of about will happen by summer. CEO/president. wake of the Japanese parent compa- Detroit ermal Systems LLC.
Your deal gets done here.
Coshocton County Memorial Hospital Gulfstream Polo, LLC Association Flint Group $30 million sale of polo club Sale to Prime Healthcare North America Corporation to Pulte Homes Kirtland Capital Partners Acquisition of assets of LC Drug and Foundation, Inc. Acquisition of American Alcohol Testing Associates, Inc. Sale of Precision Dialogue in Chapter 11 Inks and Coatings to RR Donnelley
Pocono Mountain Quaker Steak & Lube Recovery Center MCM Capital Partners PT Liquidation Corp. Sale to TravelCenters of America Ohio Travel Bag Sale of stock to CRC Health, LLC f/k/a Premier Tool & Die Cast Corp. pursuant to Bankruptcy Acquisition of Action Industries, Manufacturing Co. (a public healthcare company) Code § 363 Ltd., Torsion Source LLC, Torsion Sale to MV Metal Products & Plastics, LLC and Flex Brush LLC Sale to Zorro Capital, LLC Solutions, LLC
Zacara Farm $27 million sale of equestrian polo facility $24 million recapitalization of Purchase of assets of multi-tenant industrial flex De Garmo Marketing warehouse portfolio
Chicago | Cleveland | Columbus | Detroit | Miami | West Palm Beach mcdonaldhopkins.com 10 CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017
SPECIAL REPORT: CRAIN’S BIGGEST DEALS 2016 spire, 36 percent indicated valua- DEALS tion issues and 22 percent cited $2.6 billion transaction FROM PAGE 8 issues uncovered during due dili- For automotive, uncertainty over gence. trade policy looms. Business-positive policy changes Truven deal a major health care move for IBM e U.S. House of Representatives are also afoot, including potential has oated a tax plan that calls for a tax depreciation expansions, re- By Dustin Walsh 20 percent border adjustment tax — duced corporate tax rate and relax- [email protected] which will negatively impact nearly ing of antitrust rules. ese could, IBM Corp. is becoming a major player in the health every automaker and supplier. e potentially, push deals across the care space, particularly after its April 2016 acquisition of renegotiation of the North American nish line even if other regulatory Ann Arbor-based Truven Health Analytics for $2.6 bil- Free Trade Agreement is also set to changes create issues, Hil nger said. lion. begin later this year. e U.S. is expected to remain an e acquisition, at the time it closed, represented “Since the election, the optimism M&A hot spot in 2017 — 79 percent IBM’s fourth health care-related deal in less than a year, about the economy has grown, but of respondents of the KPMG survey according to Bloomberg. IBM has invested heavily in an- the uncertainty has shifted,” Roesler said deal activity will take place in alytics services to the health care industry in recent years said. “We’re not worried about the the U.S. — but the dollar will be the X to integrate into its Watson Health business unit, economy, but about trade barriers factor. Bloomberg reported. e integration of Truven boosted and whether there’s going to be ad- Tax and border policy is expected Watson Health with information on more than 300 mil- ditional incentives for manufactur- to cause the dollar to rise, making lion patients. ing in the U.S. Strategic buyers are U.S. companies more expensive for Truven is a software company that provides cloud- IBM now paralyzed; decisions about foreign buyers, but opening up inter- based data management and analytics to more than IBM Watson Health’s global headquarters is in Cambridge, where to manufacture or look to ac- national deals, Melton said. 8,500 clients, including hospitals, insurers and govern- Mass. quire components are all jammed “ e exchange rate issue is going ment agencies. It’s best known for its annual Top 100 up until this plays out.” to impact deals, but we don’t know Hospitals, an analysis of health system performance. Asia, Latin America and the U.S., including Denver Regulation and policy didn’t im- to what extent,” Melton said. “If the e company has 20 o ces in Europe, Canada, and Chicago. pact deals in 2016, according to a dollar strengthens, we may see fewer November KPMG M&A survey. local deals, but the large enterprises Only 4 percent of respondents indi- that are interested in doing deals, $1.28 billion acquisition cated that regulatory changes killed they’ll get it done anyway.” or delayed an M&A deal in the past Dustin Walsh: (313) 446-6042 Stryker expands emergency medical services two years. Of deals that didn’t tran- Twitter: @dustinpwalsh By Dustin Walsh stair chairs and health care facility evacua- [email protected] tion equipment. Redmond, Wash.-based Medical technology company Stryker Physio-Control had been owned by Bain Corp. expanded its emergency medical ser- Capital Private Equity since 2011. vices business with the acquisition of Phys- Physio-Control’s products are the sec- io-Control International Inc. for $1.28 bil- ond-biggest source of emergency medical lion. services company spending after ambu- Physio-Control develops and manufac- lance cots, and most of its products share tures cardiac devices such as automated ex- the same customer base as Stryker, Stryker A Fee-Only Wealth Management Group ternal de brillators and is expected to com- CEO Kevin Lobo said during a conference plement Kalamazoo-based Stryker’s call announcing the deal. Kevin Lobo: emergency medical services oerings, which Physio-Control reported $503 million in Stryker chairman/ include ambulance cots and cot equipment, sales in fiscal 2015. CEO. Michigan’s #1 Financial Advisor*
Charles C. Zhang CFP®, MBA, MSFS, ChFC, CLU Managing Partner Charles has been ranked in the top Honoring those who 10 on Barron’s list of Top 100 Independent Financial Advisors for see past the present 2015 and 2016, and is currently the highest ranking fee-only lg\]Ôf]l`]^mlmj]& NAPFA-Registered Financial Advisor on the list.** Since 1986, EY has recognized the remarkable business leaders who shape today’s ideas into tomorrow’s exceptional companies. If you’ve been inspired by an enterprising trailblazer or are a successful entrepreneur yourself, submit a nomination We Uphold a Fiduciary Standard for the EY Entrepreneur Of The Year® 2017 Program. To request nomination materials, visit us online at 101 West Big Beaver Road ey.com/us/eoy/mnwo. The entry deadline is March 10, 2017. 14th Floor Troy, MI 48084 Founded and produced by Nationally sponsored by (248) 687-1258 or (888) 777-0126
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ed. ED None Assets under custody of LPL Financial and TD Ameritrade. erv s Re *As reported in Barron’s March 5, 2016. Rankings based on assets under management, ights
. All R revenue generated for the advisors’ rms, quality of practices and other factors. Regionally sponsored by **As reported in Barron’s August 22, 2015 and August 27, 2016. Based on assets oung LLP under management, quality of practices, revenue that advisors generate for their firms, and other factors. For fee-only status see NAPFA.org. © 2017 Ernst & Y Minimum Investment Requirement: $500,000 in Michigan/$1,000,000 outside of Michigan. CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017 11
CRAIN'S LIST: LARGEST MERGERS & ACQUISITIONS OF 2016 Value of Date transaction Rank Acquirer name Target Acquirer advisers Target advisers effective Description ($000,000) Fortis Inc., Canada; GIC Pte. Ltd., ITC Holdings Corp., Novi Davies Ward Phillips & Jones Day; Simpson Oct. 14, As a result of the closing, ITC was delisted from the New York $11,300.0 Singapore Vineberg LLP; Skadden, Thacher & Bartlett LLP; 2016 Stock Exchange. ITC shareholders received $22.57 per share and Arps, Slate, Meagher & Barclays; Lazard Ltd.; 0.7520 shares of Fortis for every ITC share. 1 Flom LLP; White & Case Morgan Stanley LLP; Goldman Sachs; Scotiabank American Axle & Manufacturing Metaldyne Performance Shearman & Sterlng LLP; Weil Gotshal; Bank of Pending American Axle acquired MPG for $1.6 billion in cash and stock $3,300.0 Holdings Inc., Detroit Group Inc., Southfield Greenhill & Co.; J.P. America Merrill Lynch and the assumption of $1.7 billion in debt. Metaldyne was 2 Morgan Chase acquired by American Securities in 2012 and merged with Grede Holdings LLC and HHI Group Holdings LLC — both majority- owned by American Securities — to form MPG in 2014. Stryker Corp., Kalamazoo Sage Products Inc., Cary, Ill. Sullivan & Cromwell LLP; Kirkland & Ellis LLP; April 1, Sold by prviate equity firm Madison Dearborn, Sage had sales of $2,800.0 3 J.P. Morgan Chase Madden, Jiganti, Moore 2016 $430 million in fiscal 2015, compared with $9.95 billion for & Sinars LLP; Barclays Stryker. International Business Machines Truven Health Analytics Inc., Cravath, Swaine & Moore Pillsbury Winthrop April 8, Truven offers IBM 8,500 clients, including U.S. federal and state $2,600.0 4 Corp., Armonk, New York Ann Arbor LLP; UBS Shaw Pittman LLP; 2016 government agencies, employers, health plans, hospitals and Goldman Sachs others. Kion Group AG, Germany Dematic Corp., Grand Rapids Cravath, Swaine & Moore Credit Suisse; Deutsche Nov. 11, Dematic, owned by private equity firm AEA Investors and $2,100.0 LLP; Fried, Frank, Harris, Bank; J.P. Morgan 2016 the Ontario Teachers’ Pension Plan, had sales of about $1.8 5 Shriver & Jacobson LLP; Chase billion in 2015. Goldman Sachs Sun Communities Inc., Southfield Carefree Communities Inc., Jaffe Raitt Heuer & Weiss June 9, At the closing, Sun issued Carefree 3.3 million shares of its $1,680.0 6 Scottsdale, Ariz. PC; Citigroup 2016 common stock valued at $225 million, and $1.46 billion in cash. DTE Energy Co., Detroit Appalachia Gathering Jones Day; Wells Fargo Nexus HealthCapital Oct. 20, In a multi-seller deal, DTE acquired outright Appalachia $1,300.0 System,Pennsylvania; Securities LLC LLC 2016 Gathering System and a 55 percent stake in Stonewall Gas 7 Stonewall Gas Gathering, Gathering from M3 Midstream and Vega Energy Partners. West Virginia Stryker Corp., Kalamazoo Physio-Control International Skadden, Arps, Slate, April 5, Physio-Control, sold by Bain Capital Private Equity, makes $1,280.0 8 Inc., Redmond, Wash. Meagher & Flom LLP 2016 devices such as defibrillators for emergency treatment of cardiac arrests. Chemical Financial Corp., Talmer Bancorp., Troy Warner, Norcross & Judd Nelson Mullins Riley & Sept. 1, The deal created a bank with about $16 billion in assets and $1,204.0 9 Midland LLP; Sandler O’Neill + Scarborough LLP; Keefe, 2016 about 250 branches. Partners LP Bruyette & Woods Inc. Coherent Inc. Santa Clara, Calif. Rofin-Sinar Technologies Capital Management Norton Rose LLP; Nov. 8, Laser developer Coherent paid $32.50 per share for solid-state $942.0 Inc., Plymouth Services Inc.; Wilson Greenhill & Co. 2016 lasermaker Rofin-Sinar, which was removed from trading on the 10 Sonsini Goodrich & NASDAQ. Rosati; Barclays Ningbo Joyson Electronic Corp., Key Safety Systems Inc., Gibson, Dunn & Citi Bank; UBS June 2, Key Safety, a maker of automotive safety parts such as a $920.0 11 China Sterling Heights Crutcher; Haitong 2016 seatbelts and airbags, will operate as an independent subsidiary Securities Co. Ltd. headquartered in Sterling Heights. Teijin Ltd., Japan Continental Structural Foley & Lardner LLP; Dec. 31, Through the acquisition, Teijin aims to secure North American $825.0 12 Plastics Inc., Auburn Hills Nomura Group 2016 sales channels for automotive composite products through CSP, which will become a wholly owned subsidiary of Teijin. General Motors Co., Detroit Cruise Automation Inc., San May 12, The deal for the autonomous vehicle technology company $581.0 13 Francisco, Calif. 2016 involved $291 million in cash and approximately $290 million in new common stock issuances. Mann + Hummel Holding GmbH, Affinia Group Holdings Inc., Davies Ward Phillips & May 6, Affinia produces aftermarket oil, fuel, air and coolant filters and $513.1 14 Germany Ann Arbor Vineberg LLP; Manatt, 2016 is best known as the owner of Wix and Filtron filter brands. Phelps & Phillips LLP Kellogg Co., Battle Creek Ritmo Investimentos SA, Souza, Cescon, Barrieu & Dec. 31, Ritmo is a controlling shareholder of Parati SA, Afical Ltda. and $431.7 Brazil Flesch Advogados; Credit 2016 Pádua Ltda. (Parati Group), a Brazilian food group with brands 15 Suisse including Parati, Pádua, Minueto, Zoo Cartoon and Hot Cracker biscuits. MBK Partners Ltd., Hong Kong; GST AutoLeather Inc., Pending One of the largest suppliers of auto interiors leather, GST was $400.0 16 Simone FC Co. Ltd.; South Korea Southfield sold by Japan-based equity firm Advantage Partners LLP. Icahn Enterprises LP, New York Federal-Mogul Holdings Richards, Layton & Pending Icahn sought the remaining 18 percent of shares of Federal- $304.0 17 Corp., Southfield Finger PA; Houlihan Mogul not owned in February 2016 and was able to secure a Lokey, Inc. deal in January 2017 for $10 per share. Ally Financial Inc., Detroit TradeKing Group Inc., Sullivan & Cromwell LLP; Cooley LLP; Bank of June 1, TradeKing became a wholly-owned subsidiary of Ally and about $275.0 Charlotte, N.C. Goldman Sachs America Merrill Lynch 2016 $4.5 billion in client assets. The business has about 260,000 18 brokerage-funded accounts and 20,000 daily average revenue trades. It has about $4.5 billion in client assets. SpartanNash Co., Grand Rapids Caito Foods Service Inc., Morgan, Lewis & Bockius Jan. 31, SpartanNash acquired Caito’s produce distribution business, $217.5 19 Indianapolis LLP; Deutsche Bank 2017 fresh-cut produce business, and its Fresh Kitchen facility, due to open early in 2017 in Indianapolis. Mecaplast Group, France Key Plastics LLC, Livonia Angle Advisors LLC; Dec. 31, Sold by Minnesota-based private equity firm Wayzata $200.0 B 20 Lazard 2016 Investment, Key Plastics would provide expansion in the U.S., Germany and China for Mecaplast. Horizon Global Corp., Troy Westfalia-Automotive GmbH, Eversheds LLP; Jones Oct. 4, The businesses, collectively known as Westfalia, were acquired $186.1 21 Germany; Terwa BV, Day; Wells Fargo 2016 from an investor consortium led by Germany-based DPE Netherlands Securities LLC Deutsche Private Equity. Piston Group, Redford Irvin Automotive Inc., KPMG Corporate Finance Moelis & Co.; SMBC Sept. 28, The acquisition adds Irvin's interiors manufacturing operations $175.0 22 Pontiac LLC Nikko Securities Inc. 2016 to Piston's assembly and sequencing business. Irvin, sold by Takata Corp., will operate independently under Piston Group. UACJ Corp., Japan SRS Industries LLC, Mori Hamada & May 31, Doing business as Whitehall Industries, SRS is an extruder and $155.0 23 Ludington Matsumoto; Nomura 2016 fabricator of aluminum components and assemblies for the Holdings Inc. automotive industry. Envision Healthcare Holdings Emergency Physicians Morrison & Foerster LLP April 8, The deal provided Envision with more than 500 clinical $120.0 24 Inc., Greenwood Village, Colo. Medical Group PC, Ann Arbor 2016 providers staff at 37 facilities in Michigan, Illinois, Indiana, Ohio, Iowa and Delaware. Blue Wolf Capital Partners, New U.S. operations of Tenon Ltd., Dec. 1, The company is now based in Grand Rapids and operates under $110.0 C 25 York Grand Rapids 2016 a new name, Novo Building Products LLC. Novo is a manufacturer and distributor of speciality building products.
Source: Company submissions, Crain's research and Bloomberg News. Many transactions had multiple sources of information. In some cases, more than one estimated value of a transaction exists. In those cases, Crain's has chosen the value it believes to be most accurate. The list does not include all 2016 transactions, only those valued at $10 million or more. It is not a complete listing but the most comprehensive available. B Crain's estimate. C Estimate based on original offer.
LIST RESEARCHED BY CRAIN'S STAFF SEE PAGE 12 12 CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017
CRAIN'S LIST: LARGEST MERGERS & ACQUISITIONS OF 2016 Value of Date transaction Rank Acquirer name Target Acquirer advisers Target advisers effective Description ($000,000) Penske Automotive Group Inc., CarSense, Philadelphia Pending CarSense has five locations; two in Philadelphia, two in $105.0 B 26 Bloomfield Hills Pittsburgh and one in southern New Jersey and is expected to add $350 million in revenue to Penske. OpenText Corp., Canada ANXeBusiness Corp., May 2, ANXeBusiness, a provider of cloud-based information exchange $104.6 27 Southfield 2016 services to the U.S. automotive and health care industries, was sold by Leidos Holdings Inc. NuVasive Inc., San Diego Biotronic NeuroNetwork LLC, DLA Piper LLP; Bank of McDermott Will & July 5, Biotronic, a provider of intraoperative neurophysiological $98.0 28 Ann Arbor America Merrill Lynch Emery 2016 monitoring services, was acquired in an all cash deal.
Wuxi Gissing Auto Parts Co. Ltd., ConForm Technologies LLC, Doeren Mayhew & Co. PC Angle Advisors LLC Nov. 1, Wuxi Gissing acquired a majority stake in the family of $96.0 China Detroit Technologies LLC and 2016 companies that supply textile wheel well liners, load floors, 29 DTI Enterprises LLC, underbody shields, interior trim parts, non-woven fabric and Bingham Farms fiber to the auto industry. Investor group led by Torque Remy light vehicle Oct. 31, Sold by BorgWarner Inc., the deal includes seven manufacturing $80.0 30 Capital Group LLC, New York aftermarket business, Auburn 2016 plants in Mexico, Ohio, Oklahoma, Belgium, Tunisia and Hills Hungary. Huron Capital Partners LLC, Systems Inc., Germantown, KPMG; Honigman Miller Godfrey & Kahn SC May 1, Huron, along with limited partner Duchossois Capital $75.0 Detroit Wisc. Schwartz and Cohn LLP 2016 Management, acquired a majority stake in Systems, a 31 manufacturer of hydraulic, pneumatic, and mechanical loading dock leveling equipment. Takara Bio USA Holdings Inc., Rubicon Genomics Inc., Ann Pending Rubicon Genomics was spun out from the University of $75.0 31 Mountain View, Calif. Arbor Michigan in 2000 to do contract research for other companies.
Exco Technologies Ltd., Canada AFX Industries LLC, Port April 5, AFX is a supplier of leather and leather-like interior trim $73.0 33 Huron 2016 components to the North American automotive industry.
CIE Automotive SA, Spain Century Plastics Inc., Shelby Pending CIE acquired the remaining 35 percent of Century. It acquired $68.8 34 Township the initial stake in 2012.
Ford Smart Mobility LLC, Chariot Transit Inc., San Sept. 9, Chariot provides van shuttle transportation using routes based $65.0 C 35 Dearborn Francisco, Calif. 2016 on customer demand.
Universal Forest Products Inc., idX Corp., Earth City, Mo. Sept. 19, The transaction value was paid through cash and borrowings $64.8 36 Grand Rapids 2016 under revolving credit facility. Universal also advanced $92.9 million to idX to retire its outstanding debts. Management buyout MFC Netform Inc., Shelby Angle Advisors LLC; March 30, Management acquired the manufacturer of cold formed $63.0 37 Township Honigman Miller 2016 components for drivelines and transmissions from inactive Schwartz and Cohn LLP shareholders. Allergan PLC, Parsippany, NJ RetroSense Therapeutics LLC, Wilson Sonsini Sept. 6, Allergan paid $60 million for RetroSense, but also agreed to $60.0 38 Ann Arbor 2016 potential regulatory and commercialization payments for its novel gene therapy for the treatment of vision impairment. U.S. Farathane Holdings Corp., Tepso Plastics Mex SA de CV, Weil, Gotshal & Manges Jan. 13, With the acquisition of Tepso Plastics Mex, US Farathane will $60.0 38 Auburn Hills Mexico LLP 2016 have 13 plants in the U.S. and Mexico.
Prophet Equity LP, Southlake, Total Plastics Inc., Kalamazoo March 15, Total, a distributor and fabricator of plastic shapes including $55.0 40 Texas 2016 rod, sheet and tubing, was sold by A.M. Castle & Co.
Piramal Pharma Solutions, India Ash Stevens Inc., Riverview Morrison & Foerster Aug. 31, The deal included $42.95 million in cash plus an earn-out $53.0 LLP; Honigman Miller 2016 consideration capped at $10 million. 41 Schwartz and Cohn LLP; Wells Fargo Securities LLC Stryker Corp., Kalamazoo Stanmore Implants Sullivan & Cromwell LLP April 29, Stanmore manufactures custom and off-the-shelf implants for $52.1 42 Worldwide Ltd., England 2016 limb salvage surgery for adults and children with cancer.
Huron Capital Partners LLC, Good Sportsman Marketing Crowe Horwath LLP; Porter Hedges LLP June 1, Huron, along with the company's management, invested in an $50.0 43 Detroit LLC, Grand Prairie, Texas Dykema Gossett PLLC 2016 undisclosed ownership stake in the designer and distributor of hunting equipment. Huron Capital Partners LLC, InterVision Systems LLC, Burr Pilger Mayer Inc.; Paradigm Counsel LLP May 1, Huron, with other investors, took a ownership stake in the IT $50.0 43 Detroit Santa Clara, Calif. Honigman Miller 2016 service company, which has three offices in California and one Schwartz and Cohn LLP in Washington. Spartan Motors USA Inc., Smeal Fire Apparatus Co.. Varnum, Riddering, Pending Smeal manufactures commercial pumpers, stainless steel $36.3 Charlotte Snyder, Neb. Schmidt & Howlett LLP; tankers and aerial ladder platforms for fire trucks. The 45 Donnelly Penman & acquisition also includes Smeal's subsidiaries, U.S. Tanker Co. Partners and Ladder Tower Co. Arbor Bancorp. Inc., Ann Arbor Birmingham Bloomfield Varnum, Riddering, Warner, Norcross & Jan. 6, Birmingham Bloomfield shareholders received $16.50 in cash $33.0 Bancshares Inc., Birmingham Schmidt & Howlett LLP; Judd LLP; Donnelly 2017 for each share of common stock. The combined entity has about 46 Keefe, Bruyette & Woods Penman & Partners 225 employees and eight branches in Washtenaw, Wayne and Inc. Oakland counties. U.S. Farathane Holdings Corp., Boston Plastics (Shanghai) Jan. 23, Sold by Baird Capital, Boston Plastics is a manufacturer of $32.0 47 Auburn Hills Pte. Ltd., China 2016 plastic-injected components for automotive. Deal was a combination of cash and stock. Whirlpool Corp., Benton Harbor Brasmotor SA, Brazil Souza, Cescon, Barrieu Pending Already controlled by Whirlpool, the manufacturer seeks to $30.3 48 & Flesch Advogados; acquire the outstanding shares, amounting to less than a Banco Itau BBA percent of Brasmotor's common stock. Neogen Corp., Lansing Preserve International plant April 30, Sold by Preserve International Inc., Preserve and Tetradyne $24.1 and Tetradyne LLC, 2016 manufacture livestock and food processing industries' cleaners 49 Memphis, Tenn. and disinfectants. Plants in Turlock, Calif. and Memphis, Tenn. are now owned by Neogen. Randal Bellestri, Oxford Models & Tools Holdings Inc., Angle Advisors LLC June 30, Bellestri, a private industrialist and former owner of Odyssey $22.0 B Shelby Township 2016 Industries in Lake Orion, reentered the market after being 50 sentenced to prison in 2014 for a scrap metal scam. Models & Tools was sold by Altus Capital.
Source: Company submissions, Crain's research and Bloomberg News. Many transactions had multiple sources of information. In some cases, more than one estimated value of a transaction exists. In those cases, Crain's has chosen the value it believes to be most accurate. The list does not include all 2016 transactions, only those valued at $10 million or more. It is not a complete listing but the most comprehensive available. B Crain's estimate. C Business Insider estimate.
LIST RESEARCHED BY CRAIN'S STAFF CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017
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100 Years of Impact! United Way for Southeastern Michigan will celebrate its centennial this year with a series of community events and stories around its impact work. From funding treatments for childhood illnesses in the 1950s to influencing policy changes around nutrition standards in the 2000s, United Way works to ensure that everyone has the education, economic prosperity and health they need to stand on their own and give back to their community. Read more about United Way’s results and how your company can make a difference.
WHAT’S INSIDE: 100YEARS • How to get your employees to volunteer, S3 • 2-1-1 answers 300,000 emergency calls for help annually, S4 • How businesses can support career training for students, S5 ® CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017
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Group Publisher, Crain Communications Inc. Business success is about community has access to re- hometown,” said Jim Vella, impact as much as it’s about sources they need to succeed in Ford Motor Company Fund and earnings: More than 90 percent life, like food, shelter, education Community Services President of consumers say that corporate and workforce opportunities. and past United Way for South- social responsibility matters to Employees can feel good eastern Michigan Board Chair. them when they choose where to knowing they’re helping the “And we’ve been with United spend their dollars. community and have fun in Way from the start. We know that In Southeastern Michigan, “Kids come to school to eat.” businesses have historically fo- Not just to learn, but in many cases, to get their meals. Even cused on giving back to the com- though child poverty rates within Detroit are above 50 percent, munities they serve. But it was two and a half times higher than the state average, according to through United Way that corpo- the American Community Survey, I was stunned upon hearing rate philanthropy grew to what it this statement from a Detroit educator. is today, uniting competitors for And in the summer? What’s to eat? That’s the question many the common cause of creating a kids face. So United Way for Southeastern Michigan, with a hand- better community for all. ful of for-profit and nonprofit partners, stepped up in recent years In 1949, Detroit-area busi- with a “Meet Up and Eat Up” breakfast and lunch program. More nesses “lit the torch” for the first than 1.3 million healthy meals were served last summer alone. fundraising drive for the non- That’s just one of the ways United Way, 100 years strong this Photo credit: Ric Batty profit. Participation has grown year, continues to serve basic needs in our region. But there’s over time. In 2016, more than As part of their annual United Way campaign, Ford Credit hosts a more. 650 companies ran employee tricycle race as a fun way for employees to help raise funds. Aided by funding from various corporate sponsors, including workplace campaigns to raise a $27.1 million grant from the GM Foundation, United Way led funds for United Way and volun- the process, creating engaging fundraising is important, but so the charge to increase Detroit’s graduation rates -- which were teered to support its community experiences — like ice cream is employee satisfaction. So we some of the lowest in the nation. Today, those schools reached programs. socials, auctions and volunteer try a variety of ways to engage an aggregate graduation rate just over 80 percent. This work has These corporate workplace experiences — to boost morale employees in the work of United transitioned into College and Career Pathways in 15 schools, with campaigns are the lifeblood that and raise funds. Way through fun activities.” plans to expand to more than 20. Earlier this month, I met a stu- fuel the organization’s work, “At Ford, we believe it’s To learn more, visit www. dent from Cody High School who is eligible to become a Detroit ensuring that everyone in the important to give back to our LiveUnitedSEM.org/get-help firefighter after he graduates thanks to these efforts. To celebrate these and other wins for the community, Crain’s Detroit Business’ Content Studio worked with United Way to create the section you’re reading now. The logos of the companies on Page 1 of this week’s Crain’s Detroit Business and the ads in this section made this possible. And, as a proud board member of United Way, I’m pleased that Crain’s donated two of the eight pages to the cause. The 100th anniversary is reason enough, but we also wanted to recognize the ways United Way has transformed itself over the years to be more than a grant-making pass-through collector of funds. Today’s United Way focuses on specific issues and prob- lems in our region, working with many partners to find ways to move the needle. More than 650 companies in metro Detroit participate in one way or another – either with a corporate gift, a workplace cam- paign (sometimes both) and days of employee volunteering. When FCA’s CEO, Sergio Marchionne, was considering the commitment of serving as chair during the 2012-2013 campaign, he visited the United Way office in Detroit and listened to 2-1-1 calls. And he brought his leadership team of 200 to listen, too. That proved to be a powerful reason to helm the campaign. United Way’s 2-1-1 helpline, which takes calls all day, every day, provides resources like shelter and food. Marchionne, who is now serving his second stint as campaign chair, said he likes United Way’s goal of tackling “systemic changes” by bringing public, private and nonprofit sectors togeth- er to focus on change. “Handouts are not the long-term solution,” he says. Marchionne compares some of the problems people face to the problems Chrysler faced. “No one can forget that we were doomed to fail, to disappear, causing a social disaster of unimag- inable dimension. But someone gave us faith and hope. “We all, at Chrysler, have experienced what it means to get a second chance. When we look at United Way, the service it pro- vides is fundamentally no different. It is devoted to giving people a chance to build or rebuild a future, a better one.” That’s a cause we can all get behind. This year. Every year. CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017
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Steve Sinclair and his but just as importantly, if you wife, Crystal, are committed want to do community service to making Southeastern or you want to participate in a Michigan a better community particular way, we absolutely and are instilling that sense of support you and we’ll make service within their son and sure we do everything we can daughter. That’s why in July to help you with those goals.” 2016, the South Lyon family So it’s fitting that more volunteered at a United Way for companies are turning to United Southeastern Michigan Meet Way to help create meaningful Up and Eat Up Block Party. volunteer experiences for their The outdoor summer events employees. serve free, healthy meals to “Corporations have become children and offer community increasingly interested in social resources to attendants. For responsibility, and giving Photo credit: Bruce Unwin the Sinclairs, Meet Up and their employees opportunities Eat Up provided a chance to to volunteer is a great way The Sinclair family attended a United Way for Southeastern Michigan summer Meet Up and Eat Up demonstrate to to do that,” Block Party, where community members can enjoy a free meal and games while learning about their kids the “Having that said Angela community resources and volunteer opportunities. The Sinclairs are longtime United Way donors. impact they could Beckman, make. sense of United Way for “I wanted to corporate Southeastern show our kids that involvement in Michigan’s they can make a director of huge difference,” the community volunteer Crystal Sinclair is important to engagement. said. “It’s me and other “Volunteering important for my makes staff kids to be able to employees at feel more understand that.” Lear.” connected to Eaton + United Way The Sinclairs their community, were connected and like their 100 years of shaping better tomorrows to the volunteer company makes opportunity through Steve a difference.” Sinclair’s job at Lear Corp., Volunteerism has been a a United Way partner that part of United Way since the encourages employee organization’s inception in volunteerism. It’s a facet of his 1917. workplace that Steve Sinclair Now, the organization said he loves. leverages its corporate And it’s good for business, relationships to connect too. A Gallup poll on the State volunteers with the of the American Workplace community’s greatest needs, found that businesses that focus from collecting donations and on employee engagement saw serving meals to mentoring increases in productivity and students and providing free tax Eaton has a proud tradition of employee giving that began over a profitability. preparation. century ago and has grown with our business. We are delighted “The idea of giving back In April, the organization to partner with the United Way to help build stronger communities. to the communities where we expects to substantially To learn more, visit the Community area on eaton.com/sustainability live and work started with our increase volunteer opportunities founders, and it’s always been through a new online platform a part of who we are,” says that will serve as a one-stop Ray Scott, vice president and shop connecting nonprofits, president of seating at Lear. volunteers and corporations. “Our employees have the To learn more, visit www. ability to give back financially, LiveUnitedSEM.org/volunteer. CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017
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Donni Johnson was utilities and other basic needs. form of income, said Hassan blindsided when she found out “After my money ran out, I Hammoud, director of 2-1-1 at she and her kids were being didn’t know what else to do, so United Way for Southeastern evicted from the home she had I called 2-1-1,” Johnson said. Michigan. “These people are lived in for 30 years. DTE has been instrumental not looking for a handout Unbeknownst to Johnson, her in both 2-1-1 and LSP, helping — they’re underinsured and landlord fell behind on taxes. launch the local 2-1-1 service underemployed,” he said. Johnson had a low-paying job, in 2005. “They have income, but it’s not and because of her limited “Not only did DTE Energy a livable wage.” income, her rental applications help bring 2-1-1 to Southeastern With the help of 2-1-1, were denied. Michigan, but our company has Johnson found a shelter and Johnson’s story is a common been a champion of the services was connected to housing one, where one accident, illness 2-1-1 provides to our customers services that allowed her to or mishap can uproot an entire and communities,” said Mark eventually find a new home. family. Stiers, president and COO of While Johnson’s story had a Johnson was familiar with DTE Gas. “It aligns completely happy ending, not everyone’s United Way’s services, because with our aspiration to be a does. In 2015 there were 16,040 she was a customer of the force for prosperity with our homeless people in Detroit, DTE Energy Low Income community.” according to the Homeless Self-sufficiency Plan (LSP), Annually, nearly 300,000 Action Network of Detroit. a program supported by people contact 2-1-1, which is That’s why in addition to United Way that offers utility available 24/7/365. Utilities, 2-1-1, United Way also advocates bill assistance. Through that financial assistance, food and for public policies that invest in experience, Johnson learned shelter are some of the most programs offering food, shelter about United Way’s 2-1-1 Photo credit: Bruce Unwin requested 2-1-1 services. and medical assistance. helpline, the region’s leading Donni Johnson was able to find shelter and get back on her feet Like Johnson, two-thirds To learn more, visit www. referral service for food, shelter, with help from United Way’s 2-1-1 referral service. of 2-1-1 callers earn some LiveUnitedSEM.org/get-help. www.yazaki-na.com | CONGRATULATIONS TO UNITED WAY
100 Years. 50,000,000 Lives. 734.983.1000 Immeasurable Impact. |
Yazaki believes in building a better world and shaping the human experience. We applaud United Way’s commitment to creating opportunities, empowering youth and inspiring wellness in communities across the world. 6801 N Haggerty Rd, Canton, MI 48187 6801 N Haggerty Canton, Rd, | Yazaki North America, Inc. North America, Yazaki CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017
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Donning safety gear and collaboration and creativity program will have by the time wielding a fire hose isn’t the as well as college preparatory they receive their diplomas. norm for most high school courses. United Way brings Lieutenants from the Detroit classrooms, but for students at in corporate partners to offer Fire Department serve as Cody High School’s Medicine regional industry opportunities instructors for the firefighting and Community Health so that students can learn about program, putting students Academy, it’s just one example advanced manufacturing, health through the same training of a new shift taking place in care and engineering. any Detroit fire cadet would education. “We want these diplomas receive. They’re also mentors Thanks to funding from to have power,” said Tanya for the students, sharing advice JPMorgan Chase, the Heidelberg-Yopp, COO at about life, job interviews and Skillman Foundation, the Ford United Way. “When Linked the future over meals and Foundation and the Ford Motor Learning students graduate, during downtime in class. Company Fund, United Way they have skills employers want “For this group specifically, for Southeastern Michigan is to pay for and they have the the amount of growth I’ve seen partnering with local schools background needed to hit the in them is just exponential,” to ensure that students not only ground running at a college or said Detroit Fire Department graduate, but that they graduate university or apprenticeship Lt. Jamal Mickles, one of the prepared for a career or college. program.” instructors. The schools focus on At Cody, that power comes “I’m blown away by it.” teaching students skills they’ll in the form of Firefighter I and To learn how your business Photo credit: Bruce Unwin need to excel in a workplace II certifications, which are state can support students, email environment, like critical requirements for firefighters, LiveUnited@LiveUnitedSEM. Cody Medicine and Community Health Academy students train to thinking, communication, and which graduates of the org. become certified firefighters.
Driving a Brighter Future
For more than 65 years, Ford Motor Company Fund has worked to improve people’s lives, investing $1.5 billion to support innovative programs in Community Life, Education, Safe Driving and the Ford Volunteer Corps.
Congratulations to United Way on 100 years of service. Ford is proud of our decades of collaboration in support of the community.
www.community.ford.com #fordgivesback @fordfund_ CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017
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By Dave Phillips Life is controlled chaos for motor skills, problem-solving As part of the Social Innovation the Potts family of Rochester, and personal/social skills. A Fund’s stipulations, United Way according to parents Ayana specialist sends results to parents must match the grant, as do its and Paul. The duo never has a and provides tips if a child needs partner sub-grantees, turning a dull moment when it comes to help getting on track. $6 million investment into parenting their three biological It helped the Potts family $18 million. and three adopted children: identify and correct delays The results of United Way and Ajani, 13; Khamani, 11; Amari, in Jabari and Samaya’s its partners on positively impacting 9; Anaya, 8; Jabari, 6; and development, and thanks to the lives of children has been so Samaya, 5. an investment by United Way, successful that the organization Thanks to United Way for is available to parents and was awarded a second $6 million Southeastern Michigan, the caregivers for free in Wayne, SIF grant in 2016. family is getting some help Oakland and Macomb counties. United Way’s investment in through a tool called the Ages It’s just one example of how Child Development has made all and Stages Questionnaire, United Way is helping prepare the difference for the Potts family. which gauges their children’s children for lifelong success. “Knowing that we have developmental progress. United Way was awarded a resources available, it gives Available online, the $6 million Social Innovation so much empowerment to the questionnaire takes about 10 Fund grant in 2011, which parent,” Paul said. “We just hope minutes to complete. It guides allowed the organization to Photo credit: Bruce Unwin that more parents learn about it, parents through an easy-to- increase its impact by partnering because it changed our family understand developmental and funding local nonprofits that Paul Potts reads a story to his daughters. He and his wife, Ayana, structure.” use resources provided by United Way for Southeastern Michigan, checklist and covers age- specialize in child development like the Ages and Stages Questionnaire, to make sure their To learn more, visit appropriate communication, programs and methodologies. children are hitting their developmental milestones. www.bibtobackpack.org
Clark Hill Celebrates 100 Years of United Way for Southeastern Michigan
Clark Hill has been a proud partner of the United Way for Southeastern Michigan for many years. We applaud their mission to mobilize the caring power of Detroit and Southeastern Michigan to improve communities and individual lives in measurable and lasting ways. Making a positive difference in the communities we serve is one of Clark Hill’s leading values.
clarkhill.com CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017
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Photo credit: Bruce Unwin
Volunteers create care packages for new mothers as part of a Women United-led volunteer event at the Feb. 2 Women Thrive Conference, an event celebrating women in leadership. The care packages include blankets and clothing for newborns, as well as United Way for Southeastern Michigan resources for new parents. We are committed to making the community a better place Women United is a dynamic, their children be successful. to live, work and learn philanthropic group comprising Members of Women United the region’s leading business can also participate in exclusive women that supports United networking events. Visit us online Way for Southeastern “I joined Women United csr.bosch.us and bosch.us Michigan’s Child Development because I know how powerful work. women can be when they come The Bosch Builds team packs and sorts food at Gleaners Members give, advocate and together to make a difference,” Community Food Bank, an agency supported by United volunteer in order to ensure said member Aimee Argel. Way for Southeastern Michigan. that parents and caregivers To learn more, email have the tools they need to help [email protected]
Bosch Legacy - Crain 6x6 FINAL.indd 1 2/14/17 12:44 PM CRAIN’S DETROIT BUSINESS // FEBRUARY 17, 2017
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United Way for Southeastern Michigan Board of Directors Lizabeth Ardisana - Chair Rick Blocker Charles E. Hall Leslie A. Murphy Ed Siaje AAA Michigan ASG Renaissance Metro Detroit AFL-CIO UAW, Region 1 Murphy Consulting Inc. U.S. Trust - Bank of America Private Wealth Management AAA Life Insurance Company Mark Petroff - Vice Chair Beth Chappell Brian Harlow Heather Paquette Marketing Associates LLC Detroit Economic Club Fiat Chrysler Automobiles KPMG LLP Reginald M. Turner Adient Clark Hill PLC American Axle & Manufacturing Inc. Mark W. Stiers - Treasurer Mark Davidoff Srikant Inampudi Sandra E. Pierce DTE Energy Deloitte LLP McKinsey & Company Huntington National Bank James G. Vella Applebaum Family Foundation Ford Motor Company Fund and ASG Rennaissance Deborah Macon - Secretary Andrew Echt Hassan Jaber Michael Ritchie Community Services Community Leader Arbor Investments Group LLC Comerica Bank Bank of America ACCESS Ken Whipple Blue Cross Blue Shield of Tonya Allen Frank W. Ervin, lll James Jacobs Lynda Rossi Consumers Energy, Retired The Skillman Foundation Michigan Minority Supplier Macomb Community College Blue Cross Blue Shield of Michigan & Blue Care Network Elizabeth A. Alvarez Development Council Steven Kiefer Michigan & Blue Care Network BorgWarner Inc. EY David Foltyn General Motors Company Ray Scott Clark Hill PLC Bryan Barnhill Honigman Miller Schwartz & Cohn Mary Kramer Lear Corporation CMS Energy City of Detroit, Mayor’s Office Lisa V. Ford Crain’s Detroit Business Cooper Standard Community Leader Deloitte LLP DTE Energy United Way for Southeastern Michigan Campaign Cabinet Eaton Fiat Chrysler Automobiles Sergio Marchionne - Chair Cathy Cornell Norwood Jewell John Rakolta, Jr. Mark W. Stiers Fifth Third Bank Fiat Chrysler Automobiles Comerica UAW Walbridge DTE Energy Ford Motor Company Scott Adams Charles Crews Jeff Kalinowski David Sanders James Verrier Lisa & Bill Ford Eaton CMS Energy Fiat Chrysler Automobiles EY BorgWarner Inc. Gallagher-Kaiser Olga Alavanou Kenneth Dallafior Gordon Krater Raymond Scott Rick Westenberg General Motors Company Yazaki Blue Cross Blue Shield of Plante Moran PPLC Lear Corporation General Motors Company Kelly Services Inc Lizabeth Ardisana Michigan & Blue Care Network Sheela Manyam Aaron Sikora Dennis Williams KPMG LLP ASG Renaissance Joe Fadool Blue Cross Blue Shield of PwC UAW President’s Office Lear Corporation BorgWarner Inc. Michigan & Blue Care Network Jeffrey Aughton Brad Simmons D. Scott Winchip Marketing Associates LLC David Girodat Neil Marchuk Deloitte LLP Ford Motor Company Robert Bosch LLC Miller Canfield Fifth Third Bank Adient Walt Bartels Matthew Simoncini MSX International Fiat Chrysler Automobiles Regan Grant Mark Petroff Lear Corporation EY Marketing Associates LLC PwC Rick Blocker Bill Smith Robert Bosch LLC Metro Detroit AFL-CIO Brian Harlow Barbara Pilarski American Axle & Manufacturing Inc. Fiat Chrysler Automobiles Fiat Chrysler Automobiles United Auto Workers John Bridge Lisa Smith Yazaki North America Inc General Motors Company Lorron James Christopher Preuss Ford Motor Company James Group International Delphi Automotive LLP
BACK COVER -- -- THANK YOU “Coming together is a beginning; keeping together is progress; working together is success!” - Henry Ford
Nearly 5 years ago, we assembled a dynamic group of volunteers to accomplish an unprecedented goal for United Way for Southeastern Michigan. Our task: to drastically increase individual supporters in the Alexis de Tocqueville Society. Starting at 37th in the national membership ranks, we are now at 11th and on our way to a top 5 ranking by June 30th. We salute your extraordinary spirit and dedication in pursuit of this lofty goal.
You are truly the best and we thank you!
Lisa and Bill Ford Co-Chairs, Alexis de Tocqueville Initiative
Elizabeth A. Alvarez & Joe Klecha Marcia Holland-Turner & Reginald Turner Bobbi & Stephen Polk Jill Bryant & Robert Coury Anke & Hans-Werner Kaas Barika & Jonathan Quarles Margie Dunn & Mark Davidoff Rebecca Kress & David Sanders Michael Shields Kerry Doman Carey Oven & Deven Ross Mel Stephens Regan Grant Eileen & Mark Petroff Gwen & Evan Weiner 100YEARS
® CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017 21 Rothwell: State should focus on scal health, development, mobility LANSING — Doug Rothwell says Michigan still has a long way to go to “There is clearly a move to become a top-10 state economically, repatriate more jobs back to despite recent improvements. the U.S., and that’s going to “Every time the nation gets a cold, WEL COMES we get pneumonia,” said Rothwell, present an opportunity for president and CEO of Business Lead- states.” ers for Michigan. “We came out of this deep trough in the recession of Doug Rothwell, Business Leaders for Michigan Patrick Ervin the last decade, and so the numbers look relatively good because you’re year (and will be) reintroduced again whatever they do is going to require coming o such a low base. But if you this year in March. ere’s also the some state match. ey’re not just go- to our new look at where we stand in absolute brown eld redevelopment package ing to give money out. And we really terms, we’re still average to slightly (that passed last week in the Senate). don’t have that match available right below average on most of the metrics It’s going to be tough. In this Legis- now. I mean, again, what they passed Troy Residential that you would nd most important lature, there’s a lot of folks that have in the road bill (in 2015) was barely for economic growth.” concerns about the role of economic su cient just to meet our repair Lending Office! e group he leads, which in- development. We get that, certainly needs, let alone new construction. cludes the CEOs of many of the state’s with the tax credits that just are still largest companies, has set out ve out there. ... is program is needed You said PricewaterhouseCoopers priorities to help the state improve: for us to be able to get new revenue will lead Business Leaders for J Long-term state scal health, in- coming into the state that wouldn’t Michigan’s upcoming best- Patrick Ervin SVP – Mortgage Banking cluding dealing with unfunded re- be here but for this incentive. practices study of K-12 education tirement liabilities, preventing local in other states. What do you hope 201 W. Big Beaver Rd. nancial emergencies and allowing It’s interesting that legislation to to learn? Suite 201 Troy, MI 48084 Snyder-era nancial practices to create new incentives is being led We’re not trying to change the continue into the future. by Republican lawmakers. The GOP whole education system as we know it. P: 248.689.9841 J Creating more economic develop- oen has come out against We’re trying to say: What are some [email protected] ment tools, including business in- incentives for ideological or things that can be done that really centives. philosophical reasons. would have impact (on student out- www.independentbank.com/in-the-news/patrick-ervin J Investing in infrastructure. We’ve done an analysis of who the comes)? at may mean that you have J Building Michigan’s talent pool. states are that are competing the most to change governance, that may mean Business Leaders for Michigan, the against us, and they’re led by Republi- that you have to change nances, but state’s business roundtable, will com- can governors with Republican legis- that’s not how we’re going at it. CUSTOMER SERVICE | 800.285.3111285 3111 mission studies this year looking at latures. ... Our point to them is, look, Visit Independentbank.com for best practices from other states re- this is not — outside of Michigan, this On the topic of mobility, what does a listing of locations near you. garding K-12 education and how job is not seen as a partisan issue. Michigan need to do next? Equal housing lender. Member FDIC. training is delivered for employers. e question is: What more can we Findings could be ready in early 2018. Are caps and sunset clauses do? And so we’ve asked McKinsey (& J Developing the next to-do list to reasonable when considering Co.), who actually came up with our support Michigan’s burgeoning mo- incentives? Mobility 1.0 plan about four years ago, bility industry. We’re ne with that. ... We think to say what’s 2.0 look like? Because a Advanced technologies and global competition that the program will prove its worth, lot of that original plan has already require new skills. Lawrence Technological Crain’s Detroit Business reporter and that if it doesn’t, then it ought to been implemented: Planet M was University's innovative certificate programs Lindsay VanHulle recently sat down be sunsetted. But if it proves its called for, (American Center for Mo- with Rothwell to discuss the organiza- worth, I think there’s going to be a lot bility) was called for, the World Mobil- and bachelor's and graduate degrees in tion’s top policy priorities. Below is a of support for extending it for as long ity Leadership Forum we did this fall. Colleges of Architecture and Design, Arts condensed version of their interview. as it needs to be. So we’ve ticked o a lot of those to-dos. ere’s no cost here. If you don’t and Sciences, Engineering, and Management Gov. Rick Snyder has created a task get the jobs, the state’s not out any How can the state build on the can help you succeed. force to look at possible legislative money at all. If you do get the jobs, autonomous vehicle legislation solutions to municipal underfunding you’re actually still ahead because adopted last year? . of pensions and retiree health care. we’re only capturing one revenue As of right now, Michigan’s legisla- Obligations are estimated to top $10 source: personal income taxes. tive standing is state of the art. What billion statewide. How do we tackle we don’t know is what comes next. My this issue? You said you’re happy to see Snyder guess is, is that there will need to be
Let’s preserve bene ts. Let’s not set aside money in his 2018 budget things done in the legal area, for liabil- THING talk about this as dealing with un- proposal as a “down payment” to ity insurance and the like that we don’t Y funded liabilities, because we sound invest in Michigan’s infrastructure. even know right now what that looks like bean counters. And you need to Aside from that, what other like. be sensitive to people in all of this. investments are needed? He knows — we know — it needs What do you think should be VER You’ve said that the state’s to be more. How do you do it? Well, included in any next-generation
economic development incentives we’d ideally like to see user fees in- mobility strategy? S E don’t go far enough to help large creased. at means gas taxes, for ex- e other big one is talent. at was I corporate or community ample. e likelihood of that is prob- part of Mobility 1.0, but I’m not sure — development projects. Why the ably very slim given they just did this of all the things that we called for, that’s eort now to create new (in 2015), but maybe if the federal the one that feels to me that we still incentives? government comes up with a big in- don’t have maybe a really good handle We feel there’s a real opportunity frastructure proposal, maybe we can on in terms of what speci c skills and right now, kind of regardless of what revisit that. ... We’re still feeling like talents and how much (we’ll need). LTU ranks fifth among U.S. colleges and universities you think about what’s going on in there’s some possibility of progress And remember, part of it is: How do for boosting graduates’ Washington. ere is clearly a move on infrastructure. I think the big we redeploy people that may be a ect- earning power. to repatriate more jobs back to the question is: How far does Washing- ed by this change in mobility? You – Brookings Institution U.S., and that’s going to present an ton go in terms of how much progress know, truck drivers, for example. If opportunity for states. ... We know we can make? commercial trucks are a ected by au- 2017 2017 2017 that our tools for larger projects are tonomous driving and you need fewer BEST COLLEGES AMERICA’SBEST MILITARY in the Midwest UNIVERSITIES FRIENDLY not as e ective, and so there’s legisla- That is the big unknown. truck drivers, well, then, what do we Princeton U.S. News & SCHOOL Review® World Report® G.I. Jobs® tion that would create a new busi- But we should be ready. We should do there? ... Now’s the time to start ness incentive called Good Jobs for be having those conversations and thinking about it. Lawrence Technological University 21000 West Ten Mile Road, Southfield, MI 48075-1058 Michigan (that would capture some (be) ready so that when Washington Lindsay VanHulle: (517) 657-2204 800.225.5588 | [email protected] | www.ltu.edu income taxes). It was introduced last moves, we can move fast. I’m sure that Twitter: @LindsayVanHulle 22 CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017 Report: Wayne State nancials for 2016 look the best in years By Jay Greene [email protected] “We have taken cuts and e good news is that Wayne State they have taken some pain, University posted a net $33.4 million gain on designated fund operations in but they have to be done. 2016 after at least four consecutive The reality is expenditures years of running de cits, according to and revenue have to be university o cials. But after paying o an accumulat- better aligned.” ed $39 million de cit run up over the M. Roy Wilson past several years at Wayne State’s School of Medicine and two related Decatur said 2016 represents the For example, total revenue, which Your trust. Your triumphs. entities, the university ended up with “end of major cleanup work” for includes state appropriations, tuition, a $6.2 million net loss, said Bill Deca- FRME. “ e prior administration had gifts, grants and investment income, We care about both. tur, WSU’s CFO, in an interview with moved the school of medicine costs to rose 1.4 percent to $875 million in Crain’s. FRME, and the university had been 2016 from $863 million the year be- WSU President M. Roy Wilson, paying those salaries, getting some re- fore. In 2015, total revenue rose faster, We’re here to help. If you are in M.D., was clearly happy when he imbursement from FRME,” he said. up 6.7 percent from $809 million in VHDUFKRIñH[LEOHðQDQFLQJVROXWLRQV shared the university’s unaudited re- It all worked relatively well for a 2014, primarily because of higher lev- sults with medical school faculty time. But about two years ago, FRME els of donations and investment in- IRU\RXUEXVLQHVVWDONWRXVDERXW members at last December’s holiday became unable to make payments of come gains. DVVHWEDVHGOHQGLQJ party. He also praised the medical payables to the university, Decatur On the other hand, total expenses, school for much higher performance said. at was about the time that De- which increased 2.1 percent in 2015, in 2016 compared with previous catur and David Hefner, vice presi- declined by 1.1 percent in 2016, drop- years. dent of medical a airs, were hired by ping to $846 million from $856 million “ e university, after years of de - Wayne State. in 2015. Total expenses were $838 mil- cits, has a surplus,” Wilson told the “We began an investigation of lion in 2014. &RQWDFW0LNH6HPDQFRWRGD\ doctors. “It is that positive from the FRME and found $29 million of ex- Decatur said expenses in 2016 were (248) 658-1100 university that will help blunt” the penditures of FRME by the universi- $17 million less than budgeted, pri- de cit at the medical school and its ty,” Decatur said. “FRME had been marily because of a decrease in total KLWDFKLEXVLQHVVÀQDQFHFRP a liates. sending over money, but applied it to compensation to faculty members, But in the fall of 2015, a Wayne past years’ receivables. We still had lower utility costs because of milder State internal audit found major prob- $10 million on the books from past weather and about $8 million in bud- lems in how the medical school ac- years.” e total owed was $39 million. getary savings by schools, colleges counted for its faculty salaries and Decatur said the medical school and departments, Decatur said. other expenses. had no viable way to repay the univer- “Operating expenses went down in “We found a shell game was going sity. instructional areas because some fac- on (at the medical school) and it was “We all agreed to write it down ulty positions were vacated (through at least $30 million in de cit” for 2015, from an accounting standpoint. Not retirements and resignations),” Deca- said Wilson. “We have taken cuts and write it o ,” he said. After the universi- tur said. “We had savings in the they have taken some pain, but they ty did that, Decatur said the operating schools and colleges, and expenses have to be done. e reality is expen- surplus became a “negative $6.2 mil- came in below budget from being fru- ditures and revenue have to be better lion.” gal.” aligned.” For scal 2017 that ends Sept. 30, After further cost cuts this year, Improved nances Decatur said, the university is on bud- Wayne State o cials expect the medi- get for another good nancial year. cal school de cit to shrink to $12 mil- Meanwhile, total revenue has been “ e approved budget is balanced,” lion this year and $5.5 million in 2018 steadily increasing the past two years he said. “ is means that if current with break-even projected for scal at Wayne State, far exceeding a rise in trends continue, the university 2019 ending Sept. 30. operating expenses, according to au- should end the scal year with posi- But another nancial problem the dited nancial statements. Projec- tive net income.” university found was that one of the tions for 2017 also look positive, Deca- Jay Greene: (313) 446-0325 medical school’s a liate entities, the tur said. Twitter: @jaybgreene Funds for Research and Medical Edu- cation, was being misused and grossly underfunded. FRME was inappropriately being used as a pass-through account for salaries, bene ts, research and devel- opment costs for the medical school’s 19 departments, Wayne State o cials said. Decatur said one of the strategies employed by the university to straight- en out medical school nances was to pay o the FRME’s $10 million accu- mulated de cit from past years and return FRME to its traditional role. e FRME was originally designed as HELPING COMPANIES NAVIGATE THROUGH the dean’s discretionary fund for of- ce costs, recruiting, new projects and DIFFICULT BUSINESS SITUATIONS other initiatives to promote the medi- • Turnaround, Workouts & Restructuring cal school. It is now funded by a 5 per- • Performance Improvement cent “dean’s tax” on medical school • Litigation Support departments. • Fraud Investigations & Forensic Accounting “ ere will be no (medical school) • Executive Coaching salaries paid out of FRME” anymore, Decatur said. “ e salaries will be paid by (departments and University Physician Group, the medical school’s practice group).” calderonelight.com CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017 23 CALENDAR TUESDAY J Economic Prospects for the U.S. and FEB. 28 Regional Economy in 2017-2018. 11:30 Is your last-gen network J Vistage Executive Breakfast. a.m.-1:30 p.m. March 16. Detroit 7-10:30 a.m. Vistage Michigan. In- Economic Club. Stuart Ho man, se- struggling to keep up? cludes keynote “What in the World Is nior vice president and chief econo- Going On? 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FRIDAY J 9th Annual Trade Secrets with Con- MARCH 3 nie Holzer. 6-9:30 p.m. March 29. JVS. J U.S.-Mexico Trade Relationship: A Keynote speaker Connie Holzer, Discussion With Mexico’s Secretary of owner of Tom Holzer Ford, who has Economy. 11:30 a.m.-1:30 p.m. De- built it into one of the top Ford deal- BECAUSE EVERYONE troit Economic Club. Ildefonso Gua- erships in the country. Holzer took jardo Villarreal, secretary of econo- over the dealership when her hus- WILL REMEMBER my, Mexico, will provide his band died in 2006, at the same time country’s perspective on the trade the country was going into an eco- relationship between Michigan and nomic tailspin. Troy Marriott. $150. HOW YOU ASSISTED Mexico and the road ahead for the Contact: Judy Strongman, phone: North American Free Trade Agree- (248) 233-4213; email: jstrongman@ YOUR PEOPLE. ment. MotorCity Casino Hotel, De- jvsdet.org; website: jvsdet.org/ troit. $45 members; $55 guests of tradesecrets. members; $75 nonmembers. Web- Ulliance Provides Support for Displaced and Remaining site: econclub.org. J Great Lakes Business Intelligence and Big Data Summit. 8 a.m.-5 p.m. Employees When Workforce Changes Happen UPCOMING EVENTS March 30. WIT Inc. Attendees will J Trump Economics and Its Impact on learn best practices and success sto- Key Program Dierentiators: the Middle Class. 11:30 a.m.-1:30 p.m. ries to help them capitalize on big Because Ulliance focuses on the “people side” of career transition, March 7. Detroit Economic Club. data, business intelligence, analytics • Speaker Neera Tanden, president, and data visualization opportuni- we can o er a higher level of service at rates 20-25% less than our Center for American Progress. ties. Troy Marriott. $169. Contact: competitors. Townsend Hotel, Birmingham. $45 Erin Adair-Guy, phone: (248) 641- We are experts at addressing the emotional side of job loss and members; $55 guests of members; 5900, ext. 244; email: bisummit@wit- • $75 nonmembers. Website: econ- inc.com; website: greatlakesbisum- career change for an individual or a group of employees. club.org. mit.com. • Ulliance provides counseling to the employee’s family, who is often impacted more profoundly by the job loss than the employee. J Asian Pacic American Chamber of Commerce 14th Annual East-West Calendar guidelines. Visit Business Connection. 9:30 a.m.-3:30 crainsdetroit.com and click “Events” p.m. March 8. Global business net- near the top of the home page. working event, comprised of Asian Then, click “Submit Your Events” and U.S. businesses and minority from the drop-down menu that will business enterprises throughout the appear. Fill out the submission form, Midwest. Edward Village, Dearborn. then click “Submit event” at the $70 APACC members; $95 nonmem- bottom of the page. bers; $100 walk-ins. Contact: Leonie More Calendar items can be found Contact Ulliance at 866-648-8326 or www.ulliance.com Teichman, phone: (248) 430-5855; at crainsdetroit.com/events. email: [email protected]. 24 CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017
for Realcomp Realtors/MLS sub- quencing on Paci c Biosciences PEOPLE: scribers to have access to Remine’s platforms. Website: swiftbiosci.com. DEALS & DETAILS data product. Websites: realcomp. SPOTLIGHT ACQUISITIONS & Lending, from Stearns Lending LLC, moveinmichigan.com, remine.com. NEW SERVICES Grines to leave as VP MERGERS Santa Ana, Calif. Websites: agstar. Local Search Association, Troy, a of DMC heart institute EXX Inc., Las Vegas, has entered com, stearns.com. Duo Security Inc., Ann Arbor, a not-for-pro t industry association of an agreement for Newcor Inc., Roch- cloud-based access provider, will media companies, agencies and tech- Cindy Grines, M.D., resigned as ester Hills, an automotive manufac- Motor City Industrial LLC, Hazel collaborate with Intel Corp. , Santa nology providers that helps business- vice president of academic and turer of machined products, to be Park, an industrial distributor of spe- Clara, Calif., a technology company, es market to local consumers, has clinical af- acquired by CIE Automotive S.A., cialty fasteners, has acquired EMCO to provide native Universal Second launched the LSA Digital Marketer fairs at De- Bilboa, Spain, a manufacturer and Inc., Charlotte, N.C., a supplier of Factor support. Websites: duo.com, Certi cation Program to help small troit Medical supplier of automotive components electrical, mechanical, uid power intel.com. businesses nd reputable digital mar- Center’s Car- and subassemblies. Websites: and automation products. Website: keting partners. Website: thelsa.org. diovascular newcor.com, cieautomotive.com. motorcityindustrial.com. zipLogix LLC, Fraser, a real estate Institute to technology company, teamed with Esys Automation, Auburn Hills, an become chief Soaring Pine Capital, Birming- MRPR CPAs & Advisors, South- HomeActions LLC, Green Cove automation solutions provider, has of cardiology ham, a Simon Group Holdings com- eld, a certi ed public accounting Springs, Fla., an e-prospecting and launched a mobile-friendly website. at Northwell pany, has acquired ETI Tech Inc., rm, has merged with Rhoades, client relationship platform for real Website: esysautomation.com. Cindy Grines Health Sys- Dayton, Ohio, a provider of ight Doehrer & Associates PLLC, Saline, estate agents, for users of zipForm tem, the larg- hardware parts for military aircraft an a liate of Hantz Rhoades Doeh- to access HomeActions’ marketing est health system in New York. Deals & Details guidelines. Email and ground support equipment for rer. e combined rm will maintain services. Websites: ziplogix.com, [email protected]. Use At Northwell, e ective May 1, the aerospace defense industry. o ces in South eld and Saline. homeactions.net. any Deals & Details item as a model Grines will become chief of cardi- Website: soaringpine.com. Website: mrpr.com. for your release, and look for the ology for Hofstra medical school NEW PRODUCTS appropriate category. Without and academic chief of cardiology Flagstar Bancorp Inc., Troy, has CONTRACTS Swift Biosciences Inc., Ann Arbor, complete information, your item will for the 21-hospital health system. acquired a delegated correspondent Realcomp II Ltd., Farmington a biotechnology company, an- not run. Photos are welcome, but we Grines was vice chief of cardio- lending business, Residential Mort- Hills, has an agreement with data nounced the Accel-NGS XL library cannot guarantee they will be used. vascular medicine at Beaumont gage Delegated Correspondent company Remine, Falls Church, Va., prep kit, for whole genome se- Hospital in Royal Oak for two de- cades before leaving for DMC in 2011. She is known nationally for ADVERTISEMENT SECTION her research in acute myocardial infarction and has initiated the Primary Angioplasty in Myocardi- CONSTRUCTION al Infarction studies. e research has revolutionized the manage- ment of heart attack patients. Detroit tabs Khaldun as health department head e city’s medical director, Joneigh Khaldun, M.D., was pro- moted to run FINANCIAL the Detroit SERVICES Health De- partment af- Joseph S. Vig John J. Fulgenzi Stephen W. Talbot ter former public health Board Member Monroe Board of Directors chief Bank & Trust Abdul El- SE MI Chapter of the National Electrical Contractors Association (NECA) Sayed re- Monroe Bank & Trust signed. The Southeastern Michigan chapter of the National Electrical Contractors Association Joseph Vig joins the Monroe Khaldun, (NECA), leaders in commercial, public, industrial and residential electrical construction Joneigh Khaldun Bank & Trust Board of the new exec- announce the appointment of John J. Fulgenzi to its board of directors. The Directors. Mr. Vig is Principal and CEO of J.S. utive director and health o cer of announcement was made by NECA executive vice president, Tom Mittlebrun. Fulgenzi Vig Construction Company, a commercial the city health department, had began as a NECA member and estimator at Doublejack Electric in Royal Oak, Michigan in construction company based in Taylor, and been El-Sayed’s medical director 1997. He later became vice president and then president of the company in 2016. with o ces in Ann Arbor. He runs the daily since July 2016. El-Sayed left to activities, including all construction make a bid for the Democratic The Southeastern Michigan chapter of the National Electrical Contractors Association operations and nancial planning. Under his Party’s nomination for governor (NECA), leaders in commercial, public, industrial and residential electrical construction, leadership, the company has rmly in 2018. announce the appointment of Stephen W. Talbot to its board of directors. Talbot is established itself as one of Michigan’s most Khaldun returned to Detroit president of the Talbot Corporation and Talbot Associates, P.C., Consulting Electrical active and experienced providers of last summer. She had been chief Engineers in Livonia, Michigan. Founded in 1971, the company specializes in the design and construction services with the successful medical o cer and assistant com- construction of critical electrical infrastructure. completion of over 1,500 projects. missioner for clinical services for Baltimore’s health department. Kristine L. Barann Monroe Bank & Trust Catastrophic claims FINANCIAL RETAIL Board Member SERVICES group names Clinton Monroe Bank & Trust Former state treasurer Kevin Kristine Barann joins the Kurt M. Hocker Wendy Silverman Clinton has been named execu- Monroe Bank & Trust Board Senior Vice President, Head of Residential and tive director of the Michigan Cat- of Directors. Ms. Barann has served as Director, Commercial Divisions astrophic Claims Association. He President at Baker College of Allen Park since Capital Markets will replace Gloria Freeland, who is 2014. Her prior roles at the collage have Scott Shuptrine set to retire in March after a 40- included adjunct professor of accounting, Flagstar Bank Interiors year career and serving as execu- member of its board of regents and VP of Kurt Hocker joined Flagstar Wendy leads the day-to- tive director for 25 years. nance. With 25 years of nance, consulting Bank as senior vice president and director of day growth and development of the e association also named and managerial experience, Ms. Barann Capital Markets. He previously held numerous commercial division, using her expertise to Ann Flood, former director of the served as the business manager for Trenton leadership roles during his 25-year career at oversee design projects from inception to Michigan Department of Insur- Public Schools, nance director for the city of Union Bank of California, including executive nalization. She and her team of expert ance and Financial Services, to Allen Park and manager with a regional public vice president of Commercial Capital designers provide counsel and direction for the new position of assistant ex- accounting rm Markets. Hocker is leading Flagstar’s transforming properties, such as the revival of ecutive director. expanded capital markets activities and the Caucus Club and Utica Sports Park, to Clinton was Michigan treasur- directing a new team to execute capital create functional solutions to ful ll er in 2013-15 and insurance com- markets solutions for clients, including loan customers’ visions. Silverman formerly owned missioner and director of the syndications, secondary market trading, and and operated Silverman Design, an award- DIFS under Gov. Rick Snyder. access to other capital providers. winning, full-service design company. February 27, 2017 CRAIN’S DETROITC BUSINESSRAIN’S DETROIT B USINESS// FEBRUARY 27, 2017 Page25 25
follow the statute,” DeLong added. DELRAY Ackerman is not working for Mo- FROM PAGE 3 roun, who has hired former Attorney nal hurdle with the remaining viable General Mike Cox to wage his legal businesses in Delray, a blight-ridden battles. and isolated neighborhood that has Because of Moroun’s litigation been waiting for the bridge to come for ghting condemnation of his trucking more than a decade. terminal and 21 other parcels within Ackerman declined to specify the bridge footprint, MDOT ocials MDOT’s o er for Delray Mechanical are guarded about speci c acquisi- but said it was less than $20 per square tions, declining to discuss why certain foot and Ebsch needs at least $75 per business properties have received square foot to build new or rehab ex- purchase o ers and others have not. isting industrial space in Detroit. Ackerman’s practice has focused “ eir o er is a fraction of what solely on condemnation since 1973. they’re going to need to move any- He has been involved in some of the where,” Ackerman said. “And a frac- state’s largest eminent domain cases, tion with a high denominator.” including General Motors’ leveling of Andrew Doctoro , who is Gov. Rick the Poletown neighborhood for con- Snyder’s top adviser for the bridge struction of the Detroit-Hamtramck project, said the state is “very sensi- plant in the early 1980s. tive” to the impact the project is having In Delray, Ackerman said MDOT’s on existing businesses in Delray. purchasing strategy is “more cold, “ e governor for a whole host of calculating” than he’s ever seen be- reasons is very committed to making fore. sure that the community is treated eq- “If they want to protect people and uitably and any adverse impacts are make them whole, it can be done,” limited and fully mitigated,” he said. LISA SAWYER/CRAIN’S DETROIT BUSINESS Ackerman said. “I don’t get a sense As of last week, MDOT had pur- after the church rejected the depart- clearly in the path of publicly dis- costs you $700,000 to buy a property right now that they give a hoot. I’m chased or taken control of 394 of the ment's $411,000 purchase o er, dis- closed plans for the bridge, which the somewhere else, we’re still only go- hoping I’m wrong.” 634 parcels, 62 percent of the land agreeing with the appraisal. Canadian government has pledged ing to pay you $500,000.” Chad Livengood: (313) 446-1654 needed for the project, said Matt De- e congregation is in the process to nance through a public-private “ at’s what the statute says and we Twitter: @ChadLivengood Long, administrator of MDOT’s devel- of moving into a smaller church partnership. opment services division. building at 2004 Scotten Ave. that has State ocials also would not ad- MDOT has commenced condem- less classroom space and doesn’t dress questions about whether land nation proceedings against the own- have a gym like the Fort Street from the LaFarge North America ce- JOB MARKET ers of 30 commercial or industrial par- church, Pastor Kevin Casillas said. ment plant and McCoig Concrete cels and plans to le 30 more lawsuits “We’re not going to have what we mixing plant on the Detroit River within the next two weeks if property currently have, facility-wise and ca- would be sought for the bridge. De- FRONT PLACE owners don’t accept the department’s pacity-wise,” Casillas said. “We don’t sign plans show the bridge passing FRANCHISE OPPORTUNITIES purchase o ers, DeLong said. feel we’re being made whole.” over the air space of both properties SURVEY Condemnation is MDOT’s last re- Ackerman, who also is represent- en route to Moroun’s trucking termi- sort to acquire land needed for a $4.5 ing the church, said that case will go nal property along Je erson Avenue. ANALYZE billion bridge project that President to trial later this year. Ackerman is representing most of Donald Trump and Canadian Prime Down the street from the 110-year- the businesses located inside a Minister Justin Trudeau recently old church, the Detroit Friends Meet- 2-square-mile area where the MATCH hailed as a “vital economic link be- ing are now going through a condem- bridge’s customs plaza and toll lanes tween our two countries.” nation proceeding with MDOT over will be located. “We think it’s very important for their building at 6227 W. Fort St. after His clients include Peerless Metal folks to appreciate that condemnation the state o ered the group of Quakers Powders Inc. on South Military Street; FRANCHISES AVAILABLE is a healthy part of the process, even $105,000 for their property. Edward W. Du y Co., a mechanical CHECK US OUT AT though people think it’s adversarial,” “For us to move someplace compa- tubing and piping supplier on West CrainsDetroit.com/JobConnect | WWW.PASSPORTPIZZA.COM Doctoro said. rable is going to cost more money than Je erson Avenue; Rye Gentry Truck- CALL (586) 992-8800 Inside the footprint of the bridge what they’re o ering,” said Peter Dale ing Inc. on Je erson; and John John- POSITIONS AVAILABLE OR EMAIL [email protected] and customs and toll plaza, there are of Livonia, the 22-member Quaker son Co., an automotive and industrial INDUSTRIAL SERVICES eight businesses of varying size still congregation’s recording clerk. textiles manufacturer on Waterman û ACCOUNTING û operating as most residents have relo- e Detroit Friends Meeting build- Street. Manager, Core Assurance (Mult. C.W. JENNINGS Pos.), PricewaterhouseCoopers LLP, INDUSTRIAL EXCHANGE cated and MDOT’s contractors speed ing and Baptist church on Fort Street e other owners declined to com- Detroit, MI. Examine fin & accntng up housing demolitions this spring. lie in the path of yover bridges that ment, said Ackerman, who is manag- records, docs, & tangible equip. of Global Industrial Consulting e most prominent business is a will connect I-75 to the Gordie Howe ing partner of Ackerman Ackerman & clients. Req. BS deg in Acctng, Fin, Bus Construction • Acquisitions 42-acre Central Transport trucking plaza and Detroit River bridge. Dynkowski PC in Bloom eld Hills. Admin or rel. + 5 yrs post-bach’s prog. Exporting • Financing rel. work exp.; OR MS deg in Acctng, terminal on Je erson owned by Am- Dale said the small group of Quak- Ackerman also is representing Fort Fin, Bus Admin or rel. + 3 yrs rel. work (855) 707-1944 bassador Bridge owner Manuel “Mat- ers was ready to move a decade ago Iron & Metal, which operates a sprawl- exp. Must hv US CPA license or foreign ty” Moroun, who has fought construc- when state ocials rst approached it ing indoor scrap metal and salt storage equiv. Travel up to 40% req. Apply by tion of a new publicly owned Detroit about needing its land for the infra- facility between South Livernois and mail, referencing Job Code MI1149, Attn: HR SSC/Talent Management, 4040 REAL River crossing for more than a decade. structure project. South Crawford streets. W. Boy Scout Blvd, Tampa, FL 33607. Up to one-third of Moroun’s 300- e Quakers had visions of moving at facility has 60-foot ceilings to bay distribution center and a fueling into a space on John R Street, Cass Av- accommodate raw materials storage, ESTATE station will likely have to be torn down enue or even Woodward Avenue — Ackerman said, making it dicult for PROJECT MANAGERS COMMERCIAL PROPERTIES to make way for the bridge landing years before Midtown’s development the owner to nd a comparable Molex, LLC seeks Project Managers for and space for construction operations. boom sent real estate prices soaring. move-in-ready facility in Detroit. Auburn Hills, MI loc. to lead the planning FOR SALE Moroun owns 21 mostly vacant “With all of this delay, our location “ e o ers that are coming are in- & implementation of printed circuit prod- TELEGRAPH ~ I-75/275 ucts (PCP) & ASIC dev proj. Master’s in parcels of land within the project’s has now become totally una ordable,” hibiting the ability to move,” Acker- Industrial/Systems Eng +2yrs exp OR Frenchtown Twp. 38+ Acres boundaries, and the billionaire truck- Dale said. “We’re not trying to hold up man said. “ ese people want to be Bachelor’s in Industrial/Systems Eng 30,000 sq. ft. School Built 2007/12 + 6,600 sq. ft. Church Built 1998 ing mogul is using those properties to the state — we just want to get some- in business.” +5yrs exp req’d. Must have exp facilitating/managing Printed Circuit Prod- Mr. Messier 586-254-6800 mount a multifaceted legal challenge thing that’s functional now. But things Under state law, MDOT’s pur- uct (PCP) & ASIC dev programs for a glob- Real Estate Profssional Services, Inc. to construction of the bridge. are just expensive now.” chase o ers to commercial and in- al manufacturer of interconnect products dustrial property owners are based for automotive & infotainment electronics, St. Clair River, Algonac MI incl tech SME of end-to-end electronics Beyond biz Changing costs on comparable sales. e depart- assembly/manufacturing process, Project Residential Point Lot ment also reimburses business own- & global & domestic supplier mgmt, cus- 130’ X 210’ Steel Seawall Businesses in Delray aren’t the e $370 million in land acquisi- ers for reasonable and necessary tomer relationship liaison, lean manufactur- All Underground utilities on site ing, resource optimization, inventory "Private" Island & Street only property owners butting heads tion costs in Delray is a moving tar- moving expenses and pays up to mgmt, product dev, automotive OEM $750,000 - Terms available with MDOT in court over the cost of get, MDOT ocials say, and could $25,000 for a company to re-establish APQP protocol/specifications for produc- Email Robert ~ [email protected] tion scheduling. Travel to domestic/ inter- relocating in Detroit. change depending on the outcome its operations elsewhere. national customer & company sites as Last October, MDOT used con- of buying up the remaining property. “If your property is worth $500,000 needed. Call or email today for information on a custom advertising plan! demnation to take First Latin Ameri- MDOT ocials declined to com- ... in Delray, that’s how much you’re Send resumes to: [email protected] - Ref: VV. [email protected] can Baptist Church at 6205 W. Fort St. ment on speci c parcels that are going to get paid,” DeLong said. “If it 313.446.6068 26 CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017
but then the artistic part has been es you. If you really want something my predecessor and me where the are bene ts you’ll garner from this.” had all of our stu to show them. ARTS putting the seasons together, casting and believe that it’s possible, it just orchestra just began to disintegrate We had not had corporate sup- “How are you supporting our re- FROM PAGE 5 the operas, auditioning singers. keeps you going. because there was no artistic leader- port when I arrived. Fortunately, I search mission?” I said, “Well, we’ve $62 million to reopen the old Capitol Slatkin: Wasn’t there an opera I started the company in ’71, four ship. But now my job really was to had some experiences in Washing- commissioned 40 new works in eatre as the Detroit Opera House. company before you at all? Ever? years after the riots, and people were rebuild the institution, and not just ton serving as a consultant with Pa- dance theater and music in the last Crain’s sat down with them and DiChiera: No. ere was a woman not coming into the city. When I the musical end, but the administra- ci c Telesis Group and Eli Lilly on 10 years, and every time those works discussed funding, technology, edu- who did some things but it was very, opened the Music Hall in ’71 — it tive side. how you have to be thinking about are performed in Suntory Hall in Ja- cation, challenge, tough decisions, very small. She was a singer. had been closed for years — people We were just kind of hanging on the corporate objectives when you’re pan, in the Barbican (Centre) of Lon- next steps and much more. Fischer: My late mentor Patrick thought this was wild. ey said, here. Our attendance was horrible. talking to an arts group. If you can don, at the Chantilly of Paris, they is interview has been edited for Hayes desegregated the theaters of “Why aren’t you doing this in Troy or e highest we got in the rst three point out how providing support can bear the name of the University of length and clarity. Washington D.C. So, I came infused something?” And I said, “Absolutely years was 62 percent of the house. It also be an opportunity to reward Michigan and you haven’t paid a with this notion of “everybody in and not. is is the center of cultural life was a good night if we had that. Im- employees, to stimulate new busi- dime for it.” at prompted them On their responsibilities nobody out.” We needed to get out of in a major city like this.” en we mediately I took a page out of the or- ness, to bring in customers — that is asking, “How can we help you?” the tower and build relationships opened the opera house. And since, chestra playbook during the strike. often the argument we make beyond Fischer: Now the Trump adminis- Slatkin: If you’re a music director, with communities of very rich cul- the whole area has been redevel- ey went out and they played at “it’s good for you.” tration [is] suggesting we need to just you have not only your rehearsals tures with which we had no relation- oped. I always thought it was about community venues out in the sub- Slatkin, to DiChiera: You must eliminate the National Endowment and performances to do, but you ship — the Arab-American commu- two things: It was the arts to enrich urbs. I said right away, “We have to have, in the old days, gone door to for the Arts and the Humanities. have a load of administrative work. nity, African and African-American people, but at the same time it was to keep that. We have to establish that.” door. Slatkin: But we’ve heard that be- You have to interact with your board, communities, the Latin community, revitalize the city. And now we have seven partner ven- DiChiera: Oh, absolutely. fore. e amount of money, the total you have to interact with your pa- especially in Mexicantown, and the Slatkin: A lot of people said I ues for concerts each year. People Slatkin: I suspect that David and I amount of his budget, it’s more sym- trons, you are involved in fundrais- diversity of Asian populations. We shouldn’t come here because they are starting to trust enough to come can probably say the same thing: bolic than anything else. ing. In addition to those responsibil- spent the ’90s building those kinds of anticipated a lot of problems, not down as well. We went up from 62 to We’ve done better than anybody DiChiera: It doesn’t equal that ities, you still need a lot of time for relationships and also with other just for the orchestra but for the city. 92 percent. thought we would do, but we still much. study. As opposed to the violinist or arts organizations. It was just incum- But I like a challenge. It’s not fun oth- have a lot to do because of private Fischer: It doesn’t equal the ex- the pianist or the singer who has un- bent upon us to do this. erwise. On donors and funding fundraising. pense of a military jet. limited time by themselves to prac- But the rst year, I was only avail- Fischer: A presenter is in a di erent Slatkin: No! tice, we don’t. Because who wants a On revival able for ve weeks because of prior Slatkin: We used to be able to go to situation. We have corporate, foun- DiChiera: We’re a piece of a jet. You full symphony orchestra in their liv- commitments. at doesn’t count as a donor and say, “We need X dol- dation, government, individual always have to keep looking for dif- ing room? So it is purely a matter of DiChiera: e opera company has a rst-year music director. e sec- lars,” without anything attached. [support]. And then I have the Uni- ferent sources. communication between you and been focused from the very begin- ond year, I had a heart attack. I was Now you have to be really speci c versity of Michigan. But they provid- Fischer: You never give up. You the person who has written the ning on the revitalization of the city. out for three months. at doesn’t about what you want that money for. ed us no general fund or student fee keep the ght on. piece; you’re sitting and studying the Fischer: Amen. count as a music director. e third Fischer: Another thing you see support until scal year 2002. I said, piece, you’re learning it, you’re try- DiChiera: I actually had a lot of year, there was no season because more often is return on investment. “What’s your mission?” ey said, On the key to survival ing to get the sound of it up in your pushback when I started this. People they went on strike for half a year. What am I getting for what I’m do- “Teaching, research and service.” head. would say to me, “An opera company So my work really didn’t begin un- ing? How can you prove to me that’s And I said, “When you think of us Fischer: e real key is to shore up DiChiera: A lot of it was getting the in Detroit? You don’t do that in this til six years ago, and because of all it’s providing a bene t? It used to be what do you think?” ey said, “Oh, the holes in early education. community excited about having kind of town.” I was doing what peo- that, my job changed. I thought I was that we didn’t have to do so much of you’re part of the service mission.” Slatkin: We have to take it on our- another cultural institution in the ple thought was not doable, and that going to help build the orchestra — that. Now it’s not a bad thing to sit I said, “Excuse me, can I show you selves. My musicians volunteer to do city and nding the support for it, was ne, because that really energiz- there was a ve-year gap between down with a donor and say, “ ese what we’re doing in education?” We community outreach, to do teach- ing. One of [our] largest youth pro- grams is the Wu Family Academy. You come on a Saturday, there are 550 kids. ey break down into about ve orchestras, they get instruments, they get classes. DiChiera: e schools are so with- out anything in terms of the arts. We go into the schools, we take singers, CALLING LOCAL we do small scenes and so forth. And then you need to pay for the busing, because now they don’t even have any money for busing. TRAILBLAZERS! Slatkin: When you move it to edu- cation, you do a little better with people who nd that of interest. DiChiera: People care about educa- tion. ey know that there’s nothing Crain’s Detroit Business is now seeking in the public schools. nominations for its 2017 class of 40 under 40. Slatkin: When I was in high school We’re looking for today’s brightest under 40 in Los Angeles in the early ’60s, we who continue to make their mark within their had three choruses, two bands and an orchestra. We had a composer in company, their industry and their community. residence. When I arrived here, I met Winners will be proled in the Oct. 2 issue of with the then-acting superintendent Crain’s and honored at an awards event in of the public schools, Robert Bobb. And he boasted that 30 percent of November. Detroit Public Schools had arts edu- cation. I looked him in the eye and If you consider yourself a trailblazer or have said, “ at means 70 percent don’t.” And that’s not just a phenomenon of been inspired by one, we invite you to submit Detroit. at’s a nationwide one, and a nomination to Crain’s 40 under 40. it’s starting to creep into the world situation. So we decided we would stream our concerts and nd a way to get them into the schools. Our educa- tion concerts are seen by a mini- mum of 40,000 people on the day we SUBMIT A NOMINATION TODAY do them. We have to do that stu at crainsdetroit.com/nominate now, where the government — ei- ther the federal, state or local level — isn’t.
On diversity
DiChiera: I really wanted to make sure that what we were doing re ects CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017 27 are bene ts you’ll garner from this.” had all of our stu to show them. the diversity of the city by working to have diversity on that stage. In all need to look to our boards of di- composing, which I have not had We had not had corporate sup- “How are you supporting our re- with and bringing African-Ameri- past times with opera companies, it rectors, to our sta s, to have them time to do. If I can nd the right port when I arrived. Fortunately, I search mission?” I said, “Well, we’ve can singers into the programming. I was not done. ere are still parts of be the best possible re ection of subject, I want to write a second had some experiences in Washing- commissioned 40 new works in gave people like Kathleen Battle this country, if you’re casting an the wonderful diversity we nd opera. ton serving as a consultant with Pa- dance theater and music in the last their professional career debuts. opera like Romeo and Juliet, the here in Southeast Michigan. ci c Telesis Group and Eli Lilly on 10 years, and every time those works at was really important to me, idea of having Romeo as an Afri- On advice for their how you have to be thinking about are performed in Suntory Hall in Ja- because we were taking things into can-American and Juliet as Cauca- On the future successors the corporate objectives when you’re pan, in the Barbican (Centre) of Lon- the schools and into the communi- sian is a dicult thing for some talking to an arts group. If you can don, at the Chantilly of Paris, they ty. ese young people had to see companies. Slatkin: At the end of this season, I Slatkin: My hope is they will build point out how providing support can bear the name of the University of themselves on that stage. ey had Slatkin: Less now than it was. relinquish my post in France. At the on the ideas they consider success- also be an opportunity to reward Michigan and you haven’t paid a to realize that this wasn’t just some DiChiera: Yes, less now. end of next season, I step down ful but really bring something new employees, to stimulate new busi- dime for it.” at prompted them foreign thing for people who were Slatkin: I can look back and say here. I just can’t deal with the ad- and fresh. Don’t be stale. Do some- ness, to bring in customers — that is asking, “How can we help you?” not like they were. there are things that I could have ministration part any more. It’s too thing bold. Do something that con- often the argument we make beyond Fischer: Now the Trump adminis- Fischer: e Michigan Opera e- done better. But there are a couple hard for me. I only want to do about tinues to put the orchestra on the “it’s good for you.” tration [is] suggesting we need to just atre, UMS and the Arts League of of things I am proud of. We com- 20 to 30 weeks of conducting a year. map. And don’t harm the orchestra Slatkin, to DiChiera: You must eliminate the National Endowment Michigan joined together in a missioned a cello concerto from an My second book comes out in Oc- at all — don’t destroy what’s been have, in the old days, gone door to for the Arts and the Humanities. three-year program to celebrate Af- Arab-American — Mohammed tober; I’ve already started on a third built. I want to make sure that door. Slatkin: But we’ve heard that be- rican-American arts and to help Fairuz. When that commission one. I’m doing some teaching. I’m whatever part we’ve played in the DiChiera: Oh, absolutely. fore. e amount of money, the total build audiences. We did the Nut- came through, I said, “I want that doing some arranging. So, there are rebuilding of this city continues. Slatkin: I suspect that David and I amount of his budget, it’s more sym- cracker together, the Alvin Ailey commission played in a syna- other projects I’m moving into Fischer: My successor [Matthew can probably say the same thing: bolic than anything else. American Dance eater and in the g o g u e .” now. VanBesien, current president of the We’ve done better than anybody DiChiera: It doesn’t equal that nal year we produced our own DiChiera: I was there. Fischer: I’m going to stay active in New York Philharmonic] is a little thought we would do, but we still much. program on the history of black Slatkin: It was the symbolism of the professional organizations that older than my son, so if he wants to have a lot to do because of private Fischer: It doesn’t equal the ex- church music in Detroit, working saying: It’s music. You’re going to I am in. I have an opportunity to he can have 30-plus years in this fundraising. pense of a military jet. with e Winans in the late ’90s. learn something about the culture. teach a course in arts leadership. I gig. I would just advise to listen and Fischer: A presenter is in a di erent Slatkin: No! Next year, we’ll come back to De- DiChiera: Exactly. have grandchildren on the West learn. I was not prepared for this gig situation. We have corporate, foun- DiChiera: We’re a piece of a jet. You troit with another ballet. ese Fischer: Aaron Dworkin [founder Coast that I want to spend time at all. I’ve got a fabulous sta that I dation, government, individual always have to keep looking for dif- have been wonderful collabora- of Sphinx Organization] has been a with. I am open to other prospects hope he can nd a way to continue [support]. And then I have the Uni- ferent sources. tions for us, getting out of Ann Ar- real champion of diversity in classi- as long as I can still have time with to grow. versity of Michigan. But they provid- Fischer: You never give up. You bor, being able to work with col- cal music. He’s been told by so family. And I’m working on a book. DiChiera: We have maestro Ste- ed us no general fund or student fee keep the ght on. leagues here in Detroit including many orchestras, “Aaron, you don’t DiChiera: I’ll be retired at the end phen Lord, who for several years is support until scal year 2002. I said, Mosaic Youth eater, Sphinx Or- see many people in the orchestra of this season in terms of my ocial going to act as artistic voice. Wayne “What’s your mission?” ey said, On the key to survival ganization, Arab American Nation- like you because they’re just not capacity. I decided that 46 years of Brown is here as CEO. My advice is “Teaching, research and service.” al Museum and a number of others. out there.” He’s challenged that for running a company should be to make this company evolve even And I said, “When you think of us Fischer: e real key is to shore up DiChiera: Because I’m so focused the last 20 years, believing they’re about it. I have started writing a more. ere’s so many directions what do you think?” ey said, “Oh, the holes in early education. on diversity, if I’m casting a role out there. ey just need to be iden- book. And the book is not just about that it can go. I would like to see us you’re part of the service mission.” Slatkin: We have to take it on our- and there are two sopranos who are ti ed, encouraged and rewarded. the evolution of the company but do something like summer pro- I said, “Excuse me, can I show you selves. My musicians volunteer to do of equal talent and one of them is is is a critical issue for all of us. about the city of Detroit. Because I grams on the riverfront — where we what we’re doing in education?” We community outreach, to do teach- either Latino or African-American, I’d say we’re pleased with changes was creating, running and develop- expand our footprint outside of the ing. One of [our] largest youth pro- that’s my decision. I make that de- that we’ve made on our stages in ing a cultural institution at that opera house in a more signi cant grams is the Wu Family Academy. cision because it is important for us dance, theater and music, but we time. I also want to do a little more way. You come on a Saturday, there are 550 kids. ey break down into about ve orchestras, they get instruments, they get classes. DiChiera: e schools are so with- out anything in terms of the arts. We go into the schools, we take singers, CALLING LOCAL we do small scenes and so forth. And then you need to pay for the busing, because now they don’t even have M&A Experience any money for busing. TRAILBLAZERS! Slatkin: When you move it to edu- ® cation, you do a little better with people who nd that of interest. In Your Corner. DiChiera: People care about educa- tion. ey know that there’s nothing Ŷ Mergers and acquisitions, private equity, angel Crain’s Detroit Business is now seeking in the public schools. and venture capital, nance, and joint venture nominations for its 2017 class of 40 under 40. Slatkin: When I was in high school transactions. We’re looking for today’s brightest under 40 in Los Angeles in the early ’60s, we Ŷ Commercial transactions, corporate structuring who continue to make their mark within their had three choruses, two bands and an orchestra. We had a composer in and succession planning, real estate transactions, company, their industry and their community. residence. When I arrived here, I met tax planning matters, and 1031 exchange Winners will be proled in the Oct. 2 issue of with the then-acting superintendent transactions. Crain’s and honored at an awards event in of the public schools, Robert Bobb. And he boasted that 30 percent of November. Detroit Public Schools had arts edu- cation. I looked him in the eye and If you consider yourself a trailblazer or have said, “ at means 70 percent don’t.” And that’s not just a phenomenon of been inspired by one, we invite you to submit Detroit. at’s a nationwide one, and a nomination to Crain’s 40 under 40. it’s starting to creep into the world situation. So we decided we would stream our concerts and nd a way to get them into the schools. Our educa- tion concerts are seen by a mini- mum of 40,000 people on the day we SUBMIT A NOMINATION TODAY do them. We have to do that stu at crainsdetroit.com/nominate now, where the government — ei- ther the federal, state or local level — isn’t. First Tier Ranking in Corporate Law and On diversity Commercial Litigation
DiChiera: I really wanted to make Contact Pete Roth at [email protected] Ŷ Detroit Ŷ Novi Ŷ Grand Rapids Ŷ Kalamazoo Ŷ Grand Haven Ŷ Lansing Ŷ Ann Arbor Ŷ Hastings sure that what we were doing re ects 28 CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017
takes on no new debt, an unlikely sce- something it traditionally has not back with interest, he said. Michigan projects DEBT nario as the department seeks to up- done, Hegarty said. It brought in mon- He noted that UM’s preference is FROM PAGE 5 grade older facilities and build new ey from leasing the Big House for to use its savings and donations in- Major athletic projects that horizon is real and increasingly less ones to remain competitive. elite-level exhibition soccer matches stead of debt nancing. account for the $240 million in distant, something acknowledged by Hegarty said the athletic depart- in recent years. “We have a lot of cash on the bal- athletic department debt. Interest Michigan administrators. ment can absorb the increased annual If nancial problems ever emerged, ance sheet, and we use it to nance a payments on that debt are not “We watch very closely with debt payments because revenue is ex- Michigan can always turn to its alumni lot of capital projects,” he said. “Very included: what’s happening to ESPN,” said pected to rise equally quickly. for help, too. few projects are 100 percent lever- Donald R. Shepherd Soball Kevin Hegarty, UM’s executive vice UM could end up paying less than “We as a campus have enjoyed very aged with debt.” Center president and chief nancial o cer. $371 million if it pays o principal strong donor sponsorships in terms of When the university does issue A look at UM’s nancials shows sooner, which reduces or eliminates gifts,” Hegarty said. debt, the markets consider UM bonds Budget: $5.3 million that its athletics debt stems from interest — the same as with a home Most notably, the athletic depart- a safe investment, and when the foot- Current debt: $3.4 million spending on new venues and reno- mortgage or auto loan. ment — it has about 900 student-ath- ball team is successful, investor con - Project: Construction of a vations such as expansion of Michi- e interest part of the equation is letes and 350 coaches and sta for 31 dence can grow, Hegarty said. 10,200-square-foot soball facility gan Stadium and construction of the purely theoretical. Hegarty’s o ce is teams — is using a $100 million dona- “People like University of Michigan that includes player and coach football team’s Al Glick Field House. constantly seeking lower rates to drive tions from alumnus Stephen Ross to bonds,” he said. “People want to invest locker rooms, sta oces, a team Millions more are owed for interest. down payments. e athletic depart- pay for its new south athletic campus. in winners. It can drive revenue.” meeting room, athletic medicine e $240 million in Maize-and- ment currently has $131 million in in- and tness spaces, hydrotherapy Blue borrowing accounts for one of terest payments on the books through Keeping tabs The great uncertainty pools and support space. the nation’s largest college athletic de- 2048, but Hegarty stresses that the partment debt loads, but unlike some amount will change as the university Hegarty said he instituted monthly At rst, it seems silly that major Status: Completed in 2014 other struggling schools, UM’s admin- seeks to re nance debt, and it could nancial review meetings as part of his schools would worry about broadcast Michigan Stadium istration is con dent that its reputa- pay down its borrowing early thanks to overall plan to more closely track how rights money. After all, the Big Ten re- tion, budget controls and credit rating donations and other revenue sources. self-funding parts of the university cently signed six-year deals with ESPN Budget: $226 million are enough to keep it out of trouble. It also will take on new debt, such as handle their nances. and Fox Sports worth a combined Current debt: $129 million UM is keenly aware of a catastrophe for the plan approved recently to “It’s a good time to bond with $2.64 billion. ose deals begin in the Project: A 400,000-square-foot taking place out West. spend $21 million to refurbish the Warde’s team, to work on problems fall, and UM is expected to nearly dou- addition of two multi-story In the rst week of the new year, Oosterbaan Field House for the foot- together. It’s been a huge positive,” he ble its share of broadcast revenue to masonry structures on both the Bloomberg Businessweek published an ball team. said. about $40 million. east and west sides of the stadium analysis of college athletics debt high- “We are constantly in the market, e ground rule for the athletic de- But there are cracks in the paint. includes 83 suites and 3,000 club lighted by the University of California looking for opportunity to take advan- partment taking on debt is simple: In 2013, ESPN had 99 million sub- seats, other improvements. at Berkeley, which may have to slash tage of reduced interest rates,” Hegarty “When the time comes, they’re going scribers. It now has 90 million, its low- its number of intercollegiate teams be- said. “We’ll manage that down as to have to have the money. e institu- est subscriber base since 2005. Daniel Status: Completed in 2011 cause of a $22 million athletic depart- much as we can.” tion isn’t going to provide that money,” Salmon, analyst at BMO Capital Mar- Al Glick Field House ment budget de cit last year on $445 at said, UM certainly will pay a Hegarty said. kets, recently estimated that ESPN Budget: $26.1 million million in debt. e rest of the story large chunk of that interest, just as In other words, the university as a could lose about 4 percent of subscrib- explains the origins of the college homeowners who stay in their home whole ultimately backs the bonds, but ers in scal 2017. Other insiders say Current debt: $10.1 million sports debt crisis — mainly the arms pay far more than the list price over a the athletic department has to con- the losses could be even worse. And Project: A new 104,000-square- race for bigger and better facilities, es- 30-year mortgage. But unlike a home- vince the administration that it can those ex-subscribers take with them foot eld house for the football pecially for football — and how owner, UM isn’t going to sell the foot- pay o the spending without trouble. cash ESPN uses to fuel its billions of team, along with 3,000 square feet schools are coping. ball stadium to move elsewhere. And that’s been working. dollars in professional and college of renovated space in the e analysis showed Michigan, “ e regents are very comfortable sports broadcast rights deals. Schembechler Hall locker room. based on 2014 data, as being among where we are debt-wise and opera- On the other hand, a Pricewater- Budget controls, options Status: Completed in 2009 the top 10 in athletic department debt tionally,” Hegarty said. houseCoopers sports industry report nationwide. e athletic department itself opted Mark Bernstein, chairman of UM’s from October predicts that media William Davidson Player But while there is worry in Berkeley, not to say much about its budget and board of regents, said he’s keenly rights spending will increase, from Development Center there’s guarded optimism in Ann Ar- debt, instead deferring to Hegarty and aware of the athletic department’s $18.2 billion this year to $21.2 billion Budget: $23.2 million bor. the board of regents. debt and is OK with it because of the by 2020. at’s nearly double the total As CFO, Hegarty is UM’s top nan- A departmental spokesman did is- university’s scal position. broadcast rights spending in 2011, Current debt: $17.4 million cial mind and its budget steward. In a sue a short statement. “I am mindful of the issues related which was $10.8 billion. Project: A 57,000-square-foot conversation with Crain’s, he outlined “Operating expenses go directly to our debt obligations, and feel com- e uncertainty breeds varying lev- facility for the men’s and women’s why the debt load isn’t worrisome. against revenues and Michigan has fortable given our debt capacity relat- els of concern. Speci cally, the prolif- basketball teams built adjacent to Namely, the reputation and credit rat- been able to balance its budget while ed to the university as a whole and eration of platforms and ways in which Crisler Arena. ing allow the school to borrow money operating independently as a self-suf- athletics in particular,” he said. college sports are delivered to con- Status: Completed in 2011 at favorable rates, administrators cient entity. We accept no university e athletic department debt is sumers raises nancial questions, ac- budget smartly, and deep-pocket or state monies. is long-term debt is backed by the university as whole, cording to Karen Weaver, a Crisler Center donors writing big checks reduce the less than 10 percent of our operating which has a AAA bond rating from sports-management professor at Budget: $52 million need to borrow, he said. budget,” Kurt Svoboda, UM’s associate Moody’s Investors Service. at allows Drexel University and specialist in col- Current debt: $37.9 million But rst, a look at the numbers. athletic director for external commu- Michigan to borrow money at advan- lege media rights. nications and public relations, said via tageous rates for lower-cost long-term ere are no simple TV deals any Project: Renovation of arena The budget email. e athletic department de- investments, said Bernstein, who was more. Fans increasingly consume infrastructure and replacement of clined to make Manuel or any senior elected regent in 2012 and is president games on their mobile devices, and seating, and new construction of Michigan’s scal 2016-17 athletic department business sta available to of Farmington-based e Sam Bern- some indulge only in stats, high- about 63,000 square feet for new department budget of $161 million in- discuss nances and debt. stein Law Firm PLLC. lights and specialized content that spectator entrances, retail space, cludes a $15 million debt payment for Internally, the athletic department e debt level and questions about isn’t pure game action. So, advertis- ticketing areas and private club eight projects, including $9.2 million plays it cautious with assumptions in future revenue streams are on the re- ers are not going to pay the networks space. for the 2011 Michigan Stadium reno- its budgeting and debt estimates, He- gent’s radar, he added. a premium for content split among Status: Completed in 2013 vation, according to UM Athletic Di- garty said. e principal and interest “No doubt it is something that channels, the theory goes. Stephen M. Ross Athletic rector Warde Manuel’s June 2016 op- payments last year were a couple of needs to be constantly evaluated. Ath- “ at makes it di cult to mone- South Competition and erating budget report to the university’s million dollars less than budgeted, letics, both college and professional, tize as e ciently and e ectively,” Performance Complex board of regents. e budget predicts thanks to that conservative planning are in a fragile place,” Bernstein said. Weaver said. “It’s enormously frus- an $800,000 surplus while factoring in and e orts to re nance rates. trating to a media industry that de- Budget: $168 million a 4 percent annual increase in costs. “We plan conservatively,” said He- Paybacks tests uncertainty and change.” Current debt: $33.5 million A more detailed breakdown of the garty, who noted that Michigan has UM’s administration is con dent athletic department’s current debt $2.1 billion in total debt for the entire If a nancial crisis did erupt and that fans will continue to consume Project: Construction of 280,000 shows $371 million in principal and university. debt default loomed, the athletic de- Michigan sports on whatever plat- square feet of space for the future interest payments for 10 projects Additionally, the athletic depart- partment would have to repay any form they prefer, and advertising home for men’s and women’s track through 2046, according to informa- ment has been modest in its pricing bailout by the university as a whole. and subscriptions will follow. and eld, cross country, lacrosse, tion supplied by the university under a for tickets and premium seating, He- “If things did go bad for athletics “I do believe this is sustainable in soccer, and women’s rowing Freedom of Information Act request garty said. If trouble emerged, there’s — I’d give that a low probability — the long term, therefore the demand teams. Much of the funding will by Crain’s. room to charge more. the University of Michigan at large for our content will continue,” Bern- come from the $100 million at breakdown shows the athletic “Michigan had followed a real, real would be obligated to backstop that stein, the top regent, said. “ ere al- donation from alumnus Stephen department’s annual debt payments a ordability path,” he said. “ ey do obligation,” Hegarty said. Instead, ways will be a passionate following, Ross. will leap to more than $20 million be- have headroom to price up if they the university could write the athlet- and that’s what puts us in the driver’s Status: Estimated completion in ginning in 2019 before leveling o to need to.” ic department an internal loan from seat with regard to the revenue model.” winter 2018 about $15.7 million annually from e athletic department also could cash on the overall balance sheet, Bill Shea: (313) 446-1626 Source: University of Michigan 2022-36 — provided the department lease its facilities for more events, and the department would pay it Twitter: @Bill_Shea19 CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017 29
PROPOSAL A ““For the rst time in a long FROM PAGE 3 time in Lansing, we’re Researchers estimated that just 14 talking about this stu,” percent of local retiree health care plans in Michigan were funded in Minghine said. “It’s really 2014, compared with about 78 per- encouraging.” cent of local pension systems, with more than $10 billion in estimated Tony Minghine, COO, municipal league unfunded health care obligations alone. at’s a big bill that will come tion on revenue, including anything ation. e state’s Headlee Amend- due eventually or municipalities risk related to Proposal A, would coincide ment, approved in 1978, requires not being able to provide the prom- with retirement reform. e co-chair- communities to roll back their mill- ised bene ts; unlike pensions, health men of Snyder’s retirement bene ts age rates if their total property tax rev- care for retirees is not constitutional- committee, who have backgrounds in enue growth exceeds in ation. Under ly protected. at could prompt auditing and health care nance, told Proposal A, when a property is sold, tough decisions on how to spend Crain’s it’s too early to say whether its taxable value reverts to the limited local resources to avoid scal- revenue will be among the nal rec- state-equalized value — equivalent to ing back public services. ommendations. half of the property’s cash value and In a recent paper, two former However it’s done, the state and its generally higher than its taxable val- Michigan scal experts who now run communities need to start thinking ue. If a community has a strong real a consulting rm argued that deep dierently about how to strike a bal- estate market in a given year, that property tax declines during the ance between a favorable tax struc- bump in revenue could have the ad- housing crisis combined with a slow- ture and adequately funded local ser- verse eect of triggering a Headlee ly recovering tax base — in part be- vices, said Tony Minghine, chief rollback that lowers its millage rate. cause of the Proposal A growth caps operating o cer of the municipal at could lead to a less-than-in a- — have created a no-win situation for league. People generally don’t move tionary growth in a community’s rev- cities that have lower tax bases: Ei- to a state because it has low taxes, he enue. e rst idea would exclude Rather than repealing or replacing Proposal A, which would require a statewide vote, ther pass high millage rates to fund added. ey move because they like a so-called “pop-up” values from being associations representing cities and townships believe changes could be made by services, or keep tax rates low and cut particular community’s quality of life. used in Headlee rollback calcula- the Legislature. services. “For the rst time in a long time in tions. Both high tax rates and service Lansing, we’re talking about this e second would be to allow a Still others say cities can’t aord elimination of Michigan’s personal cutbacks “would encourage resi- stu,” Minghine said. “It’s really en- community that is growing at less the bene ts that have been oered, property tax on some business equip- dents and businesses to move else- couraging.” than the rate of in ation to “roll up” and nding ways to adjust pension ment. where,” wrote Mitch Bean, a former Rather than repealing or replacing its millage rate under Headlee — in and health care bene ts is the rst “I have no problem looking at how director of the nonpartisan House Proposal A, which would require a essence, allowing a community to priority. we deal with long-term liability issues Fiscal Agency, and former state Trea- statewide vote, associations repre- oset stagnant growth or declines in “I believe there is a need to revisit facing local communities. But it has surer Robert Kleine, who formed senting cities and townships believe property values with slightly higher Proposal A and how we fund local to be done in context of a broken mu- Great Lakes Economic Consulting changes could be made by the Legis- millage rates. A community only municipalities, but that doesn’t take nicipal nancing system,” House LLC. “ us, cities are caught in a vi- lature, rather than by going back to would be allowed to “roll up” millage away from the fact that we have a Democratic Leader Sam Singh said. cious cycle that results in ongoing voters. Rewriting the law in its entire- rates if it hadn’t already hit its taxing spending problem in local govern- Revenue sharing cuts and the re- serious nancial problems.” ty also would be a di cult task, given cap under state law, and it wouldn’t ment,” said James Freed, Port Huron’s cession led mayors and city manag- e most serious problems, as in the voter educational campaign that be able to net more in tax collections city manager, who estimated that 22 ers to downsize sta to balance bud- Flint and Detroit, can lead to state - would be required and the current than in ation. percent of the city’s general fund — or gets and minimize cuts to services. nancial oversight or bankruptcy. tax-cut sentiment pervading Michi- While local government leaders an $8.2 million annual contribution at decision today means fewer ac- Republicans in the state House gan and Washington. understood in the mid-1990s that an — will be going to address a $103 mil- tive employees are paying into mu- have made reforming public-em- More than two decades after the economic downturn could have dev- lion pension liability in the next three nicipalities’ retirement systems, ployee bene ts a legislative priority law’s landmark passage by voters un- astating consequences for revenue, years. Singh said. this term. Gov. Rick Snyder appoint- der former Republican Gov. John En- Minghine said, a healthy economy Freed said his city will face a $3 ed a task force expected to deliver gler, the limits it forced on local reve- might have led them to underesti- million de cit on a $22 million gener- Other solutions recommendations this spring on nue have been tested in ways that no mate the eect: “You never experi- al fund budget within the next three how to address the pressure from one could have predicted in 1994, enced those declines like that, so you years, which he said is solely the re- Other policy ideas that have circu- pensions and retiree health care on when the economy was growing. never saw the math play out the way it sult of rising annual contributions to lated include updating the formula local budgets. Proposal A had two main goals — did.” unfunded pension liabilities. He to distribute statutory revenue shar- Municipal advocates, Democratic to lower property tax bills and to set “One of the things that became re- wants to see the Legislature rst re- ing payments to account for such cri- lawmakers and the state Treasury up a state funding structure for public ally, painfully apparent during the form what kinds of bene ts munici- teria as population, per-capita in- have begun to raise the idea that lo- schools, which until then had been recession was how severely limiting palities can oer, and then authorize come and the cost of services. cal revenue streams should be evalu- funded primarily by local property that was,” he said. “When you have cities to restructure payments In addition, lawmakers could con- ated as part of a multi-part approach taxes. Before Proposal A, a wealthier markets that are always trending up- through bonding or revolving loan sider authorizing more local taxes, to reform that includes containing community could have a richer ward, those limits are masked.” funds that could reduce annual con- including local sales taxes; smooth- costs and bene ts obligations, im- school district, a gap that has shrunk No speci c legislation has been in- tribution amounts. ing out annual declines in property proving e ciency in delivering ser- over the past two decades but has not troduced; rather, municipal groups “Until we address the bene ts and values by using a multiyear average; vices and making sure municipali- been erased. have said the idea so far is a policy our spending, I don’t see how you go and increasing municipalities’ tax ties’ revenue is sustainable. “It was the solution to the problem goal. to the taxpayers and talk about reve- caps, according to the Citizens Re- e magnitude of underfunded at that particular time,” said Judy Al- Gideon D’Assandro, spokesman nue,” Freed said. “If we had every dol- search Council of Michigan. employee legacy costs statewide has len, government relations director for for House Speaker Tom Leonard, said lar of revenue sharing back, we would “ ere’s no reason to cling to any- brought greater urgency to nding a the Michigan Townships Association, House Republicans would need to still be in the crisis situation.” thing we’ve done in the past, and solution. Plus, economists have sig- which represents the state’s 1,240 see a speci c proposal before they e state hasn’t fully funded reve- anything and everything should be naled a coming slowdown in the re- townships. “I’m not saying it should could comment. ey’re focused for nue sharing to local governments on the table,” covery. Michigan could take an early be eliminated or thrown out. But I now on restructuring bene ts, D’As- since the 2001 scal year, according said Eric Lupher, hit if that happens, if record auto think it is always good to review to see sandro said. to an analysis by the House Fiscal the research sales start to stagnate. if the mechanisms we have in place Agency. council’s presi- “All three categories need to be ad- are working.” A matter of bene ts? e April 2016 report by Great dent. dressed over the next year” while the Under Proposal A, annual growth Lakes Economic Consulting included e longer a economy is still growing, state Trea- of an individual property’s taxable An unsuccessful run last year by estimates that cuts to statutory reve- solution is put surer Nick Khouri said. “ e thing value is limited to the lesser of the in- the Republican-led Legislature at the nue sharing, the type not provided for o because it’s I’m emphasizing, more than any spe- ation rate or 5 percent. While it has retiree bene ts issue is expected to in the state constitution, for cities, politically di - ci c policy proposal or principle, is: slashed tax bills for Michigan resi- resurface this year. Snyder’s task force townships, villages and counties cult, Gilmartin Now is the time to have these de- dents, last decade’s recession ex- is made up of city and township lead- topped $7.5 billion since 1998. Dan Gilmartin: said, “we will do bates, when we have the economy at posed a aw that municipal leaders ers, labor groups, lawmakers and Snyder proposed no increase to Issue “strangling so at our own our back and we’ve got a little exi- say has hindered their ability to re- people with expertise in accounting, statutory revenue sharing next year. our state.” peril.” bility — not waiting until the next cri- cover: Property tax collections can auditing and health care. Instead, he proposed allowing local “ ere are s i s .” tumble along with the housing mar- e revenue idea is one response governments to share in $122 million other issues that play more in politi- ket, but growth is capped — meaning to solving the problem, as municipal in surplus funding, which is the result cal campaigns,” he said. “But this is Thinking dierently tax revenue doesn’t grow as fast as a groups contend that simply restruc- of the state overestimating how much slowly strangling our state.” rebounding economy. turing bene ts won’t help them pay money was needed to prevent fund- Lindsay VanHulle: (517) 657-2204 at doesn’t necessarily mean ac- Two strategies are under consider- for bene ts promised years ago. ing losses for municipalities after the Twitter: @LindsayVanHulle 30 CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017
INVESTOR FROM PAGE 5 www.crainsdetroit.com a deposition that none of the build-
Editor-in-Chief Keith E. Crain ings had certi cates of occupancy. Executive Vice President KC Crain And it turns out the Russell Indus- Publisher/Editor Ron Fournier, (313) 446-1674 or trial Center evictions last week [email protected] Group Publisher Mary Kramer, (313) 446-0399 weren't the rst time the city has or- or [email protected] dered Kefallinos-owned buildings to Managing Editor Michael Lee, (313) 446-1630 be vacated. or [email protected] Managing Editor/Custom and Special Projects According to the lawsuit, on July Kristin Bull, (313) 446-1608 or [email protected] 25, 2012, residents of Kefallinos' Uni- Product Manager/Marketing Kim Winkler, (313) versal Lofts building at 5805 Lincoln 446-6764 or [email protected] Deputy Product Manager/Digital Carlos Portocarrero St. were ordered to “desist in the use (313) 446-6056 or [email protected] of this building for residential pur- Membership Director Nancy Hanus, (313) 446-1621 or p o s e .” COSTAR GROUP [email protected] News Editor Beth Reeber Valone, (313) 446-5875 For his part, Kefallinos says in a The 2.2 million-square-foot Russell Industrial Center in Detroit was ordered vacated by the city last week. or [email protected] deposition that the units at Universal Special Projects Editor Amy Elliott Bragg, (313) Lofts were “always habitable” and Crain’s that the company put Har- selves or allowed tenants to put up 446-1646 or [email protected] Design and Copy Editor Beth Jachman, (313) 446-0356 denied that there was lead paint in Dennis Kefallinos’ vard Square Centre’s plans for 80 “walls using combustible materials, or [email protected] one of the plainti ’s apartments, one residential buildings residential units on the back burner illegally installed plumbing, and Research and Data Editor Sonya Hill, (313) 446-0402 of the key contentions in the lawsuit. to work on other projects. heating systems in numerous units or [email protected] Newsroom (313) 446-0329, FAX (313) 446-1687, He said he requested an exten- n Greektown Los, 743 Beaubien Mihailovich did not respond to a without proper permits, inspec- TIP LINE (313) 446-6766 sion to comply with city construc- St., 41 units message seeking comment urs- tions, and approvals.” tion rules but a clerical error resulted day. Two attorneys who have repre- e city began receiving tips REPORTERS n in a certi cate of occupancy not be- Brooklyn Los, 2233 Brooklyn sented Kefallinos in the case also about the condition of the Russell Tyler Cliord, breaking news. (313) 446-1612 or St., 56 units tcli[email protected] ing issued. declined comment. Industrial Center shortly after a De- Annalise Frank, breaking news. (313) 446-0416 or Kefallinos also said in the deposi- n John R Apartments, 2627 John cember warehouse re killed 36 [email protected] Jay Greene, senior reporter Covers health care. tion that he wasn't aware if from R Road, 73 units A trailblazer people, but the evictions were not (313) 446-0325 or [email protected] 2008-14 all of the buildings had valid n Coat Factory Los, 1652 Fort driven by the blaze in Oakland, Ca- Chad Livengood Covers Detroit rising. (313) 446-1654 or certi cates of occupancy because “it For all the missteps and issues lif., city building ocials said. [email protected] St., 62 units Kurt Nagl Breaking news. (313) 446-0337 or knagl@ is not (his) Boydell Development with his buildings, Kefallinos was Eric Novack, project manager for n crain.com Co.’s duty to obtain” them. 14th Street Los, 2101 W. one of the early pioneers in Detroit Boydell Development, said last Kirk Pinho Covers real estate. (313) 446-0412 or A handful of the buildings appear Lafayette Blvd., 40 units real estate investment at a time week that he felt blindsided by the [email protected] Bill Shea, enterprise editor Covers the business of to have since received certi cates of n Milwaukee Park, 2566 E. Grand when few saw the value in it. city for the eviction notices. sports. (313) 446-1626 or [email protected] occupancy, but not all of them. Blvd., 123 units “It is easy in this environment to “Obviously there are some de - Lindsay VanHulle, Lansing reporter. (517) 657-2204 Byrd, a U.S. Army veteran who criticize, and if people have legiti- ciencies,” Novack said. “You’re or [email protected] n Universal Los, 5805 Lincoln Dustin Walsh, senior reporter Covers economic issues. served from 1980 to 1990, still lives in St., 40 units mate issues, so be it,” said David talking (about) a place that has (313) 446-6042 or [email protected] the John R Apartments, paying $500 Di Rita, principal of Detroit-based been in operation this way for three Sherri Welch, senior reporter Covers nonprots and n Lafayette Los, 1301 W. philanthropy. (313) 446-1694 or [email protected] a month in a building which hasn’t developer e Roxbury Group, or four decades, and suddenly the been able to accept new tenants be- Lafayette Blvd., 59 units which is behind projects like the Da- city is interested in how the Russell ADVERTISING cause it doesn't have a certi cate of n River Park Los, 227 Iron St., vid Whitney Building restoration Industrial Center is operating? Sales Inquiries (313) 446-6032; FAX (313) 393-0997 occupancy. 107 units and e Griswold apartments atop a “ e city has always been at our Director of Sales Lisa Rudy “What freaks me out about this 10-story parking deck downtown. place and suddenly after this much Senior Account Manager Katie Sullivan n Grand Los, 727 W. Grand Blvd., Christine Galasso, Gerry Golinske, case is that these people could die as “But Dennis and his team were time and this much exposure, we are Advertising Sales 138 units Diane Owen a result of these violations,” Alyson down here keeping the lights on and suddenly on the map with the city? Classied Sales Manager Angela Schutte, n , 1915 Fort St., 98 (313) 446-6051 Oliver, managing partner of Oliver Hudson Los guring out how to create value in We are more than willing to put ev- Classied Sales Lynn Calcaterra, (313) 446-6086 Law Group, said in an interview in units Detroit real estate in a time when to- erything into compliance but it Events Manager Kacey Anderson early February. day’s crop of so-called saviors — doesn’t seem like they want to work Marketing and Sales Promotions Manager Total: 837 units Christina Fabugais-Dimovska “ at sounds melodramatic, but myself included — were happily with us; they want to vacate the Senior Art Director Sylvia Kolaski when one of these things goes up in making our money in the suburbs.” property.” Special Projects Coordinator Keenan Covington ames because of the electrical wir- Historic downtown During a tour of the Russell In- Sales Support Suzanne Janik Media Services Director Geof Innis ing, it’s a catastrophe.” buildings “Blind-sided” dustrial Center last week immedi- Media Services Manager Hussein Abdallah ately following the eviction notice, Bills, raccoons pester In addition to the Russell Indus- Kefallinos again came into the brochures advertising the residen- CUSTOMER SERVICE trial Center and the residential spotlight last week when the city’s tial buildings Kefallinos owns were Main Number: Call (877) 824-9374 tenants or [email protected] buildings, Kefallinos owns several Buildings, Safety, Environmental available for anyone to pick up. Subscriptions $59 one year, $98 two years. Out of state, Laura Rayson, an engineer for other historic properties in and and Engineering Department de- Kirk Pinho: (313) 446-0412 $79 one year, $138 for two years. Outside U.S.A., add $48 Verizon Wireless, moved into Kefall- around the downtown area. manded that his Russell Industrial Twitter: @kirkpinhoCDB per year to out-of-state rate for surface mail. Call (313) 446-0450 or (877) 824-9374. inos’ Hudson Lofts at 1915 Fort St. in Among them: e 58,000-square- Center be vacated of its more than Single Copies (877) 824-9374 August 2011 after she relocated from foot Harvard Square Centre build- 150 commercial tenants, citing what Reprints (212) 210-0750; or Krista Bora at New Jersey for work. ing at 1346 Broadway St., which was department director David Bell [email protected] BANKRUPTCIES To nd a date a story was published (313) 446-0406 She moved out in July 2015. But it built in 1925 and which he bought in called “blatant disregard for city or- or e-mail [email protected] took her until last month to nish 2011 for $700,000; and the parking dinances, laws and regulations.” e following business led for
Crain’s Detroit Business is published by paying o a utility bill rst accrued garage that once was the opulent e complex, which is known as a bankruptcy protection in U.S. Bank- Crain Communications Inc. while living in her $900-per-month Michigan eatre and the attached haven for artists who use the inex- ruptcy Court in Detroit Feb. 17-24. Chairman Keith E. Crain loft. Michigan Building at 220 Bagley pensive space for studios, also hous- Under Chapter 11, a company les President Rance Crain Treasurer Mary Kay Crain She said she got a $900 DTE Ener- Ave. es photography and music studios, for reorganization. Senior Executive Vice President William A. Morrow gy bill one month because the elec- He also owns Niki’s Pizza and residential units, a counseling center J Alfa Medical Equipment & Sup- Executive Vice President/Director of Strategic tric heaters in her large apartment Bouzouki, a strip club in Greektown; that serves children and a tness plies Inc., 13181 W. 10 Mile Road, Operations Chris Crain Executive Vice President/Director of Corporate were too small to heat the space. the Roosevelt Hotel at 2250 14th St., center, according to the city. Oak Park, voluntary Chapter 11. As- Operations KC Crain “ ey nally took a little o my which he bought in 2010 for just Bell said the owners have them- sets and liabilities are not available. Vice President/Production & Manufacturing rent, but I had to get on a payment $37,500 at a tax-foreclosure auction Dave Kamis Chief Financial Ocer Bob Recchia plan,” she said. “It was happening (it is now listed for sale for $3.67 mil- INDEX TO COMPANIES Anthony DiPonio Chief Information Ocer every month.” lion), and Shapero Hall, a former These companies have signicant mention in this week’s Crain’s Detroit Business: G.D. Crain Jr. Founder (1885-1973) During an interview at her law Wayne State University pharmacy Mrs. G.D. Crain Jr. Chairman (1911-1996) American Axle & Manufacturing Holdings 8, 9 Michigan Department of Transportation 3 Editorial & Business Oces rm’s Troy oce ursday, she re- school building that he purchased 1155 Gratiot Ave., Detroit MI 48207-2732; counted being afraid of raccoons in in 2010. e city had targeted that Arbor Bancorp 9 Michigan Opera Theatre 5 (313) 446-6000 the stairwell and an elevator that building for demolition, but Kefalli- Birmingham Bloomeld Bancshares 9 Piston Group 9 only worked for two months after nos staved o the wrecking ball. Cable address: TWX 248-221-5122 AUTNEW DET Boydell Development 30 Russell Industrial Center 5 CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly she moved into the building, which Kefallinos lieutenants have long by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI was under construction at the time. talked about plans for Harvard Business Leaders for Michigan 21 Stryker 8, 10 48207-2732. Periodicals postage paid at Detroit, MI and additional mailing o¦ces. POSTMASTER: Send address changes to CRAIN’S Eventually, after nearly four years in Square Centre and Shapero Hall. Delray Mechanical 3 Truven Health Analytics 10 DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, the building, she decided to leave. None of them have come to frui- Detroit Symphony Orchestra 5 University Musical Society 5 MI 48207-9732. GST # 136760444. Printed in U.S.A. “‘Forget it,’” she recalled thinking. tion as of yet. Contents copyright 2017 by Crain Communications Inc. All rights John R Apartments 5 University of Michigan 5 reserved. Reproduction or use of editorial content in any manner “‘I’ll move to Grosse Pointe.’” In November 2015, Boydell Gen- without permission is prohibited. So she did. eral Manager Chris Mihailovich told Metaldyne Performance Group 9 Wayne State University 22 CRAIN’S DETROIT BUSINESS // FEBRUARY 27, 2017 31 THE WEEK ON THE WEB RUMBLINGS FEBRUARY 18-24
Detroit Digits IPO solution. Pistons, Henry J Ann Arbor-based Clinc Inc., an ar- ti cial-intelligence startup that built Ford unveil new A numbers-focused look at last Finie, a Siri-like voice-controlled week’s headlines: app for banking, announced it has facility, team HQ raised a funding round of $6.3 mil- deal to make Henry Ford 41 lion. e current round was led by Health System the o cial The number of Michigan locations Drive Capital of Columbus, Ohio. health care provider of the of J.C. Penney Co., the Texas-based J Live Cycle Delight, a tness center ADetroit Pistons beginning with the retail giant, which said it will close to oer classes in cycling, yoga and 2017-18 season includes construc- 130 to 140 stores nationally in a bid weight training, is slated to open tion of a 100,000-square-foot train- to improve protability. Locations next month in Detroit’s West Village. ing facility and corporate headquar- will be announced in March. J All three Papa Vino’s Italian Kitch- ters for the basketball team in en locations in metro Detroit closed Detroit’s New Center Area. e proj- $50,000 after their 20-year leases expired SHOP ARCHITECTS ect, announced Friday, also will in- The amount of a new Patronicity around the same time. Indi- The average oce oor size in the proposed redevelopment of the J.L. Hudson’s clude a sports medicine, treatment crowdfunding campaign by the ana-based owner Quality Dining department store site is nearly 70,000 square feet, making it one of the largest and rehabilitation facility managed Michigan Urban Farming Initiative, Inc. shuttered the locations in North- in and around downtown. by the health system, the Pistons and with help from the Michigan ville, Troy and Pontiac. Henry Ford said in a joint statement. Economic Development Corp., in an J Grosse Pointe nonpro t Wolver- eort to transform a long-vacant ine Human Services is turning un- Hudson’s site project COMPANY NEWS building in Detroit’s North End into used space at its John S. Vitale Com- J e South eld-based Area Agency a community resource center. munity Center on Detroit’s east side on Aging 1-B named Jim McGuire, di- into co-working space dubbed “ e could mean steeper rents rector of research, policy develop- $1.6 million Den” to support nonpro t startups. If Detroit’s tallest building rises ers to bump their rents slightly ment and advocacy, as its acting in- The yearly savings projected by An April 1 opening is slated. 734 feet into the air, downtown of- with the argument that they re- terim CEO, following the Jan. 4 Flint-based McLaren Health Care ce rental rates are likely to rise as main cheaper than the Hudson’s resignation of longtime CEO Tina as a result of the overhauling of its OTHER NEWS well for certain high-end buildings. project. Abbate Marzolf. Marzolf resigned for lighting systems statewide in a J In his State of the City address, De- Last week, mortgage and down- “It might inspire (someone) to undisclosed reasons after the non- collaboration with Sterling Heights- troit Mayor Mike Duggan vowed that town real estate titan Dan Gilbert say $28 just went to $31,” said AJ pro t held a private meeting regard- based Future Energy Group. new practices put in place in the released plans for a new building Weiner, managing director in the ing an undisclosed legal matter. city’s troubled demolition program on the site of the former J.L. Hud- Royal Oak o ce of JLL. J e Grosse Pointe Farms-based will allow contractors to tear down son's department store. Whitney Eichinger, director of Ralph C. Wilson Jr. Foundation is tap- called the Chevrolet Detroit Grand 10,000 blighted homes over the next About 25 percent of the project’s communications for Gilbert’s Bed- ping Macomb Community College Prix Presented by Lear, dropping two years. total 1.2 million square feet is o ce rock LLC, said rates have not yet President James Jacobs as a part-time Belle Isle from its name. J State Sen. Coleman Young II an- space incorporated in the top four been determined. senior adviser to help it develop a J Detroit high-speed internet pro- nounced plans to wage a campaign oors of a nine-story base. According to a report from the strategy for funding workforce devel- vider Rocket Fiber and the Detroit for mayor of Detroit portraying him- To be economically viable, Gil- local o ces of Newmark Grubb opment initiatives. Jacobs is to retire Lions announced a 10-gig service self as the populist candidate taking bert would likely have to charge Knight Frank, the average asking from MCC in June after 50 years with upgrade to Ford Field’s Wi-Fi system. on an establishment gurehead. He is o ce tenants at least $35 per rent for Class A space downtown is the college, nine as president. J e Oakland County Community the son of Detroit’s longest-serving square foot, with some experts say- $23.71 per square foot. J New York-based shake and burger Mental Health Authority announced mayor, Coleman A. Young. ing even more than $40, depending Gilbert told Crain's in November chain Shake Shack opened its rst it will be renamed Oakland Commu- J Former President George W. Bush on what sort of incentives the $775 that Bedrock is quoting $27 per Detroit location, inside the Dan Gil- nity Health Network in May. e lauded friend and former baseball million project receives. square foot. Still, he says, his o ce bert-owned First National Building. agency is preparing to move in Au- rival Mike Ilitch during an invita- at would give wiggle room for buildings are virtually 100 percent J A new seafood and piano bar with gust from its 22,000-square-foot tion-only celebration of Ilitch’s life at some Class A o ce building own- leased. a familiar name is set to open this building in Auburn Hills to a the Fox eatre. Ilitch, owner of the spring at the Mall at Partridge Creek 141,000-square-foot facility in Troy. Detroit Tigers and Red Wings and in Clinton Township. Muer’s Table + J Detroit-based Huron Capital Part- Little Caesars founder, died Feb. 10 Bar will be led by veteran restaura- ners LLC said its re detection and at age 87. Pewabic looks to expand teur David Muer. security services company, Sciens J Bill Ford, executive chairman of J Little more than a year after open- Building Solutions, acquired Jack- Ford Motor Co., will retire as volun- studio to increase capacity ing a records and novelty shop in De- sonville, Fla.-based W.W. Gay Fire & teer chairman of the Detroit Eco- troit’s Cass Corridor, ird Man Re- Integrated Systems Inc. nomic Club in July, the DEC an- Pewabic is planning an expan- northeast corner and run adjacent cords — the record company founded J Singapore- and San Jose, Ca- nounced. DTE Energy Co. Chairman sion of its historic building in De- to Hurlbut Street. by Detroit native Jack White — was lif.-based software and electronics and CEO Gerry Anderson will re- troit to increase its capacity to Last year, Pewabic invested set to o cially open its 10,000-square- system manufacturer Flex Ltd. is place Ford. make tile and other items amid ris- $500,000 in capital improvements foot vinyl pressing plant. buying Troy-based automotive sup- ing demand from public projects, to add a production kiln for retail J Bonobos, the New York City- plier AGM Automotive LLC. OBITUARIES home renovations and retail cus- and architectural tile and three based luxury menswear retailer, J Troy-based Continental Services J Richard “Dick” Huvaere, longtime tomers. new kilns for its education pro- brought its unusual “guideshop” announced it has received funding owner of Richmond auto dealership e historic pottery nonpro t grams and update its education model of shopping to Detroit when it from Boston-based private equity Dick Huvaere’s Richmond, died Feb. estimates the 2,500-square-foot courtyard and outdoor kiln area for opened its rst Michigan store at investor New Heritage Capital LLC, 17. He was 72. addition to its tile studio at 10125 adult education programs. 1417 Woodward Ave. which targets founder-owned busi- J Harry Lomason II, former presi- East Jeerson Ave. will cost about It ended the year with a $400,000 J City Bark pet boutique o cially nesses and backed the food manage- dent of Douglas & Lomason Co., $1 million. surplus, on a budget of just over opened its doors in downtown De- ment company through its Private died Feb. 12. He was 82. A $70,000 grant through the $3.6 million for scal 2016 ended troit. e store moved from its origi- Michigan Council for Arts and Cul- Sept. 30, McBride said. nal Grosse Pointe location to a The nonprot tural Aairs last fall provided the It’s operating this year on a $3.7 1,250-square-foot space in e Al- Guest House has seeds for a campaign to fund the million budget, with about two- bert building at 1222 Griswold St. launched a project. thirds of its revenue coming from J Pontiac-based general contractor three-year, $2 Once Pewabic has raised about the sale of tile and vessels. Another rm George W. Auch Co. completed million renovation $350,000, ideally, this summer, it 25 percent comes through fund- the purchase of a property in down- of the William E. plans to break ground on the ex- raising, and about 10 percent is town Pontiac from RACER Trust to Scripps Mansion pansion, Executive Director Steve from fees paid for its education build a new 20,000-square-foot on its Lake Orion McBride said. e hope is to com- programs. headquarters to be built by 2018. campus, with plete the project sometime in “We’ve seen a big increase (in J South eld-based supplier Lear initial work largely 2018. demand) both for our giftware and Corp. was named presenting spon- in plaster repair. Pewabic is working with Inform our architectural tile. (But) we’ve sor for this year’s Detroit Grand Prix, The project is Studio in Northville on the nal de- been limited in our ability to meet which runs June 2-4 on Belle Isle. slated to be signs for the new expansion, which the growing demand,” McBride e IndyCar racing event will now be GUEST HOUSE complete by 2020. will extend the historic building’s said. B:11.125” T:10.875” S:10.25”
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Prepared by: 101026_CHR_C7-CDB-FP-0228.indd Southfield, MI • 248.354.9700 Saved at: 2-21-2017 5:38 PM From: gparsons-imac-12271 by Greg Parsons / Heidi Kempisty Printed At None Job info Approvals Fonts Client: FCA TIER 1 Producers: Hodge, Brent / Lyons-Urbanek, Fonts: Job #: 171049100007 : 000 Kathy Gotham (Bold, Book) Prefix: 101026 Account: Coyne, Nicholas / Segasser, Madison Trim: 10.875” x 14.5” Creative: Wilson, Dominique / Livengood, Link Name: Bleed: 11.125” x 14.75” Matthew CHR_17_541_UU_4CSWOP.tif (CMYK; 300 Live: 10.25” x 14” Scale: None ppi; 100%), uw_b_one_hi.jpg (CMYK; 921 ppi; Line Screen: 300 dpi Asset Type: Print, Magazine 32.56%), FCA_CMYK.eps (17.52%), SignOff_ Project Name: None Page #(s): 1 , Proof #: 3 out_K_stack.eps (99.94%) Ad Code: C7-CDB-FP-0228 Used Swatches: Cyan, Magenta, Yellow, Black Finished Asset: Yes