20140825-NEWS--0001-NAT-CCI-CD_-- 8/22/20147:23PMPage1 ©Entire contentscopyright2014byCrainCommunicationsInc.Allrightsreserved down; what’s upforsite? Brewster-Douglass goes if ithappensagain? The $981Mquestion:What yards feelflooded,too Heaps oftrouble:Scrap according tocourtrecords. the city’sbankruptcycase, Detroit’s debt-cuttingplanin water andsewerportionsof drop theirobjectionstothe and bondinsurerswould ward asplanned,investors for systemimprovements. to replacetheolddebtandpay track toissuebondsthisweek Michigan FinanceAuthority with new,lower-costdebt. for thecitytofreeupcash curities ataknownpriceand investors topartwiththeirse- were presentedasawayfor Communications GroupLLC. cording to lion inoutstandingdebt,ac- cent, ofthesystem’s$5.2bil- $1.47 billion,orabout28per- partment Detroit WaterandSewerageDe- debt refinancing. investors toproceedwitha reaching dealswithenough and sewerbondsFridayafter approved abuybackofwater Commissioners buyback ofDWSDbonds Water boardapproves
NEWSPAPER www.crainsdetroit.com Vol.30,No.34 Page 3 Focus: EmploymentLaw This JustIn The GreatFlood Page 11 laws arechanging, Sexuality balancing act: HR’s new Should thedealmovefor- The buybackmeansthe The planandrefinancing Owners ofbondsfromthe The Detroit BoardofWater agreed tosellback unanimously — Bloomberg Bondholder is on ISTOCK PHOTO A123 wasforcedtorethink up inthenextseveralyears. contracts areexpectedtoamp ket evolves.Thesekindsof shipped toChinaasitsmar- — andmanyarebeing Spark andMcLarenMP4-12C BMW 3series,Chevrolet hicle modelssuchasthe lus arealreadypoweringve- tured inLivoniaandRomu- time initshistorythisyear. positive cashflowforthefirst plan andisexpectedtohavea ing changestoitsbusiness ang GroupCorp. supplier conglomerate der theownershipofChinese Bankruptcy Court tion, A123emergedfrom ter 11bankruptcyprotection. landed thecompanyinChap- ized andproductfailuresthat mand thatnevermaterial- politician hype,projectedde- ion batteriesrodeawaveof turer ofautomotivelithium- the Livonia-basedmanufac- other high-endgrocers. take onPapaJoe’s,WholeFoodsand Fresh ThymeFarmersMarketplansto Fresh Thymeplansatleast4storesforDetroit area Cash surge,lighterbatteriespowerA123comeback A COURTESY OFFRESHTHYMEFARMER’SMARKET To improveitsposition, A123 batteriesmanufac- Despite politicalopposi- Over thepastfiveyears, CRAIN’S DETROITBUSINESS B Y recharge. the midstofa 123 SystemsLLC D USTIN , madesweep- W last yearun- ALSH recharged Positively Wanxi- is in U.S. but onmarkets,whichIthinkisabigchangeinourthinking.” Jason Forcier,CEOofA123:“We’renolongerfocusedonchemistries ed tohelpthecompanygener- gies. other fuel-efficienttechnolo- teries forweightsavingsand low-voltage lithium-ionbat- is emergingasaplayerin to powerpassengercarsand gular lithium-iontechnology eased itsemphasisonasin- up. ment teamtoitsproductline- everything fromitsmanage- The newstrategyisexpect- Most significantly,A123 cers vyingforsimilarclientele:the planning storesnearothergro- taking thecompetitionhead-onby selection. swinging forthefencesinitssite and thenewsupermarketchainis to openinmetroDetroit2016, Market AUGUST 25–31,2014 ATTORNEYS ATLAW That’s becauseFreshThymeis At leastfour CRAIN’S DETROITBUSINESS grocery storesareexpected B Y K IRK Fresh ThymeFarmers P INHO Intellectual property? of CEODavidVieauandoth- changes, includingthefiring made sweepingmanagement From darknesstolight and $300millionin2013. loss of$100millionin2013 lion in2014,comparedwitha flow onrevenueof$200mil- ate justaboveanetzerocash Under Wanxiang,A123 Game on. Game roads inRochesterHills,said center, atHamlinandRochester square-foot roads inTroy,andthe123,000- center, atBigBeaverandRochester square-foot cer willopenstoresinthe137,000- Foods and Rochester HillsandtheWhole Whole FoodsMarketInc. Papa Joe’sGourmetMarket tional Marketplace See A123,Page25 The Phoenix-basednaturalgro- DUSTIN WALSH Hampton Plaza Troy Commons Nino SalvaggioInterna- in Troy. by isgivingbaseballanothershot. Fort Wayne,Ind.,thatwaspartofthe al yearsownedaSingle-Aminorleagueteamin Sports andEntertainmentLLC Appleby’s sportsfirm,Rochester-based mixed-use retail-condophase,istheproductof tember schedule. jointly usethe2,500-seatstadiumforaMay-Sep- pendent leagueofthreedevelopmentalteamsto Appleby league inUtica at-bat: Ballpark, Appleby’s next 2016. Developmentalteamswouldplaythere. would costupto$10millionandbeopenby2015or A renderingofa2,500-seatballparkinUticathat Rochester sportsentrepreneurAndyApple- The venture,whichalsoincludesasmall shopping shopping and in COURTESY OFGENERALSPORTSANDENTERTAINMENT CRAIN’S DETROITBUSINESS rector ofcommunitydevelopment. Jennifer Frey,thetownship’sdi- Planning Commission proval fromthe Thyme storereceivedsiteplanap- tate sourcesaid.AnotherFresh about 30,000squarefeet,areales- of marketingandstrategy. Colein Whicher,companydirector
B That 29,000-square-footdevelop- Those storesareexpectedtobe (see ouradonpage2) Y ly popular promotion toBritain’sglobal- which inMayfelljustshyof soccer club for hisownershipofEnglish 2015 or2016. in Uticathatwouldopen $10 millionbaseballstadium plans tobuildan$8million pleby lastweekunveiled B He’s alsocreatinganinde- Perhaps bestknowntoday ILL See FreshThyme,Page21 S HEA See Ballpark,Page24 . Thefirmforsever- Premier League $2 acopy;$59year Northville Township Derby County WN in June,said JJ. San Diego co General o m , Ap- ® , 20140825-NEWS--0002-NAT-CCI-CD_-- 8/22/2014 1:49 PM Page 1
Page 2 CRAIN’S DETROIT BUSINESS August 25, 2014
MICHIGAN BRIEFS W. Mich. commercial real estate The hospital property contains park land that cannot be transferred report looking up, as are rents Herman Miller decides to get out of the office more without a citywide vote, some attor- Judging by the second-quarter neys told MLive. With the acquisition last month of Connecticut- hospitality and even residential. Ⅲ Greensboro, N.C.-based Tanger real estate market reports from Col- based Design Within Reach Inc., Zeeland-based Herman CEO Brian Walker emphasized that the company liers International’s West Michigan Outlets Factory Outlet Centers Inc. will Miller Inc. aims to push far deeper into consumer fur- is not moving away from contract office furniture. break ground on its third Michigan office, the region can expect to see niture to top the $500 million mark in annual sales, Rather, Herman Miller seeks to tap the much larger mall, this one in Byron Township reasonable growth and increasing MiBiz reports. consumer segment at a time when mobile technolo- near Grand Rapids. Tanger’s other rents in the months ahead, MiBiz Design Within Reach, a distributor of modern fur- gy enables people to work from anywhere. As work outlet centers in the state are in reports. While the Colliers reports niture, lighting and accessories, gives Herman Miller and home become more blended, that creates more Howell Township along I-96 and didn’t signal any significant a new platform to accelerate growth in the consumer opportunity to market crossover products under the West Branch along I-75. changes from the first quarter — segment. It views the $95 billion segment as far less Herman Miller brand. Ⅲ If you’re a nonprofit seeking nor warn of any rapid changes com- volatile than the $10 billion office furniture industry Speaking of office furniture, the latest quarterly an extremely well-lit venue that af- ing in the third quarter — they did and as offering greater growth potential. survey by Michael A. Dunlap & Associates in Holland fords views of the water pretty reveal positive momentum across Moving into the consumer segment fits with an produced an industry index of 55.62 in July, up from much just about everywhere, then all commercial real estate sectors in “office to everywhere” strategy established a decade 54.6 in April and 54.36 a year earlier. That’s above register to bid on Round Island West Michigan. ago after a three-year downturn in the early 2000s. the average of 54.37 in the 10 years that the firm has Passage Lighthouse near Mack- Most notable, perhaps, is that The strategy pushed Herman Miller to serve a cross- polled executives at furniture makers and their sup- inac Island. Bidding to date has limited inventory has become section of markets — office, health care, education, pliers to gauge activity in 10 key categories. reached $20,000, the Detroit Free more of an issue, especially in the Press reported. Night light includ- retail segment. Additionally, the ed. Loud doorbell, too. report noted that much of the cur- ported. Execs stress that doesn’t up from 32 a year ago. The credit nell Earley said he won’t rule out Find business news from rent industrial activity involves necessarily mean the credit union union ended the second quarter putting Hurley Medical Center up for around the state at crainsdetroit new construction. will open other branches outside with total assets of $3.49 billion, an sale but said a sale doesn’t appear to of its home state. increase of nearly 20 percent from be a remedy for the city’s battered fi- .com/crainsmichiganbusiness. Office space in the Grand Rapids Typically, the 230,000-member a year earlier. nances, MLive.com reported. Earley Sign up for the Crain’s Michi- area also had a strong quarter “led credit union enters markets first hired consultant Ernst & Young LLP to gan Morning e-newsletter at by strong tenant activity down- with a mortgage office and then study the idea seven months ago. crainsdetroit.com/emailsignup. town,” the Colliers report said. Va- follows up a year or two later with MICH-CELLANEOUS cancy has declined in every quar- a full-service retail branch, as it Ⅲ Booking.com, part of the Con- ter since the start of 2011. did within the past year in Farm- necticut-based Priceline Group, has CORRECTIONS ington Hills and Troy. “We have signed a 10-year lease to remain in Ⅲ A story on Page 3 of the Aug. 18 issue should have said a 120,000- Credit union: We’re outside enough business in Michigan,” its customer contact center in the square-foot expo center planned for Chesterfield Township would be state, but may not expand there said Don Bratt, the credit union’s Grand Rapids suburb of Wyoming, the first independent exhibition center in Macomb County rather vice president of marketing. “We the Grand Rapids Business Journal than the first in the county. Macomb Community College operates the Grand Rapids-based Lake Michi- definitely don’t rule out any future reported. The Booking.com office 75,000-square-foot Macomb Sports & Expo Center on its south campus in gan Credit Union has opened a mort- possibility, (but) we don’t have has grown about 300 percent since Warren. gage lending office in Mishawaka, anything in the plan.” opening in 2008, and about $7.7 mil- Ⅲ A listing for Wixom-based Alta Equipment Co. in the Crain’s Fast 50 Ind., near South Bend, its first of- Lake Michigan Credit Union has lion has been spent to renovate it. report on Aug. 11 should have said Alta has 600 employees. fice outside Michigan, MiBiz re- 38 offices in the Lower Peninsula, Ⅲ Flint Emergency Manager Dar-
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August 25, 2014 CRAIN’S DETROIT BUSINESS Page 3
GLE Scrap Metal in Melvindale (below) Inside and elsewhere has been “flooded by flood victims” with items, said founder Nathan Zack. Rain drain
Ronald McDonald House will move to Hutzel site, Page 4
Company index These companies have significant mention in this week’s Crain’s Detroit Business: 4th Sector Consulting ...... 5 A123 Systems ...... 1 Allstate Insurance ...... 23 Altarum Institute ...... 14 Bodman ...... 13 THE MESS: Busy scrap yards THE FUTURE: Weather could Butzel Long ...... 13 Citizens Insurance Co. of America ...... 23 Davenport University ...... 15 Desai Family Accelerator ...... 15 fill with flood victims’ discards hasten prep for next big storm Detroit Bikes ...... 16 Detroit Lions ...... 7 BY AMY HAIMERL “It’s piling up in our facili- BY JAY GREENE more than $300 million in public Detroit Medical Center ...... 4 CRAIN’S DETROIT BUSINESS ties,” Zack, 33, said last week. CRAIN’S DETROIT BUSINESS and private property, mostly in Dykema Gossett ...... 11, 13 “It’s still coming in. People are southern Macomb, for about Fourmidable Group ...... 21 Before the Great Flood of 2014 lined up down the road.” Could the “hundred-year” rain- 30,000 properties. Fresh Thyme Farmers Market ...... 2 washed out large swaths of metro Once GLE takes possession of fall and resulting flooding that hit For government leaders, the General Motors ...... 19 Detroit, GLE Scrap Metal Inc. han- those old washers and cars, it has Southeast Michigan two weeks dled an average of 500,000 pounds staggering damage begs the General Sports and Entertainment ...... 1 to prepare their carcasses for ago repeat itself anytime soon? GLE Scrap Metal ...... 3 of recyclable metal each day. question: What kind of planning eventual sale on the global recy- If projected damages and insur- Globe Midwest Adjusters International ...... 23 The Monday after the storm, should begin right away to get cled-metal market. Any fluids ance claims are any indicators, Harbour Results ...... 14 1.6 million pounds were deliv- ahead of rising stormwater must be removed — oil and Fre- that is the $981 million-and-count- runoff levels? Hatch Detroit ...... 10 ered to its facilities in Warren, on drained and mercury switch- Insurance Institute of Michigan ...... 23 ing question. And the next ques- One idea raised last week is Pontiac and Melvindale. es pulled, for example — so the Integrity Building Group ...... 18 tion is how to stem the tide when whether the state or counties “We’re getting flooded by metal can be shredded LG Chem Power ...... 25 the next storm hits. need revamped management flood victims,” said Nathan and purified. Little Caesars ...... 7 Early estimates mechanisms specifically around Zack, founder of GLE. Purified? IN FLOOD’S WAKE ... Maddin, Hauser, Roth & Heller ...... 11 from Oakland, Wayne storm water management. Some Those That’s how GLE and Heroics: Workers, Michigan Economic Development ...... 14 and Macomb counties states have separate utilities or- flood victims other scrap yards sepa- strangers jump in to Mindfield ...... 18 show the Great Detroit ganized for this purpose. Several are bringing rate everything by ma- help, Page 22 Nemeth Law Firm ...... 11 Flood could top the cities in Michigan have approved in their old terial — aluminum, Oakland drain: System NewGAR ...... 18 $980 million mark in stormwater utilities, including Original Equipment Suppliers Association ...... 14 washers, dry- steel, copper, etcetera was simply deluged, Page 23 damage, county offi- Ann Arbor, Harper Woods, St. Parks and Rec Diner ...... 18 ers, cars, elec- — and by quality using Insurance: Fielding a cials and experts said Clair Shores, Marquette and Pitt McGehee Palmer & Rivers ...... 12 tronic equip- a radiation gun that claims flood, Page 23 last week. Berkley. Republic ...... 18 ment and works like an X-ray, For example, Rizzo Environmental Services ...... 23 more. Cities showing the composi- Wayne estimates more Roberts Boardwalk Hotel ...... 5 are delivering tion. (Although old-timers don’t than $344 million in flood dam- Tides of change Ronald McDonald House ...... 4 street signs, use the guns; they stick with ham- Zack age for 94,000 residents and pub- Roxbury Group ...... 3 posts and pil- mers, chisels and their eyes to Climatologists in Michigan lic buildings, Oakland has esti- Search Optics ...... 22 lars, lighting and wiring. Zack is know.) believe the state will experience mated more than $337 million for ServiceMaster Don’t Panic ...... 23 paying his employees overtime And what’s coming in after stronger and more frequent ex- an unspecified number of proper- Shinola ...... 16 to process the material, but they Sister Pie ...... 10 ties, and Macomb estimates See Future, Page 22 still can’t stay ahead. See Metal, Page 22 Sterling Insurance Group ...... 23 Trijicon ...... 12 University of Michigan ...... 14, 15 PHOTOS BY KENNY CORBIN Warner Norcross & Judd ...... 11 Whole Foods ...... 1 Developers see prime real estate in razed housing site Winston Bros. Iron & Metal ...... 22 Department index BY KIRK PINHO picking for determined developers other local projects. CRAIN’S DETROIT BUSINESS looking to buy and build on the No redevelopment plans have BANKRUPTCIES ...... 6 prime property at an ideal Mid- been finalized for the Detroit Hous- BUSINESS DIARY ...... 20 Once one of the most iconic town location. ing Commission-owned site, but CALENDAR ...... 20 symbols of crime and decay in De- “It’s very rare that you’re able to this year Mayor Mike Duggan CAPITOL BRIEFINGS...... 9 troit — the property best known as get that much land assembled un- said the space will be used for CLASSIFIED ADS ...... 21 the Brewster-Douglass housing der one ownership in that area,” “new housing and economic op- projects — is nearly reduced to said James Van Dyke, vice presi- portunities.” KEITH CRAIN...... 8 rubble. dent of business development for John Roach, Duggan’s spokes- OPINION ...... 8 Now it’s a question of what comes the Detroit-based Roxbury Group, man, said discussions are still ongo- PEOPLE ...... 20 next. developers of the David Whitney DAVID HALL ing on what the development process RUMBLINGS ...... 26 Crews dig up foundations and continue The 18-acre site near the Building, the former Globe Trading for the site will be. RFPs have not to demolish the last standing piece of Chrysler Freeway (I-75) and Mack Co. building for the Michigan De- WEEK ON THE WEB ...... 26 the Brewster-Douglass towers. Avenue will become ripe for the partment of Natural Resources and See Housing, Page 21
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KENNY CORBIN Jennifer Litomisky, executive director of Ronald McDonald House, said the Hutzel Hospital site is best suited to get up and running for the Detroit-based charity. Be ore Ronald McDonald House to expand at with a Madonna business degree! ex-Hutzel site; Children’s tower gets space
BY SHERRI WELCH ning,” she said. pital rooms into guest rooms are ▪ Learn from business professionals CRAIN’S DETROIT BUSINESS “We agreed with (Ronald already underway, Mallett said. McDonald House) leadership that The new house — 10,000 square ▪ Gain experience from an internship Ronald McDonald House Charities we should take the opportunity to feet larger than the current loca- of Southeastern Michigan’s next ad- give the guests a higher-class expe- tion — will have 28 large rooms ▪ Boost your career with a dress is changing yet again. rience ... and the Hutzel property along with the private bathrooms, certificate or master’s The charity, which is moving presented itself,” said DMC Chief a playroom for young children, a from its current site to pave the Administrative new teen room, ▪ Choose from popular graduate way for DMC Children’s Hospital of Officer Conrad communal living Michigan to build a new patient Mallett Jr. room areas, a and undergrad programs tower, is now heading early next “We have plen- We agreed with guest kitchen, a year to the former Hutzel Hospital ty of room, and “ peace garden and site, under the terms of a new long- we were able to (Ronald McDonald wireless connec- term lease deal for $1 per year. meet the tivity so teens Ronald McDonald House had needs House) can get online planned to move to a new house on within the leadership and guests can School of Business Mack Avenue and Brush Street, confines of Skype with other once it relocated from the site it an agreed family members. 36300 Schoolcraft Road Livonia 734-432-5361 madonna.edu/business that we ▪ ▪ ▪ has operated at for the past 35 upon bud- Ronald Mc- We know you by name at the M with the flame! years under a long-term lease with get,” he should ... Donald House ex- Children’s Hospital. said. tends the rooms The new, 26,000-square-foot Ronald give the for $10 per night “house” on the second floor of the McDonald to families visit- old Hutzel Hospital will give House pro- guests a ing Children’s Ronald McDonald House larger vides a lot of ser- Hospital for guest quarters and more rooms, vices to families higher-class treatment. while making way for Children’s in need, “and we “(It’s) going to Hospital’s new patient tower. did not want to experience ... and have the look More Choices. Lower Prices. The new tower is part of the $850 lose (their) affilia- and feel of a Resi- million investment promised tion,” Mallett the Hutzel property dence Inn ... ex- when Vanguard Health Systems — said. cept with a large now Tenet Healthcare Corp. — ac- “The Ronald presented itself. common space,” quired the Detroit Medical Center in McDonald House ” Mallett said. 2012. people did not Conrad Mallett Jr., DMC Five extended- DMC is contributing $3.45 mil- have to move — stay rooms with lion toward the projected $4.3 mil- they were doing television sets and refrigerators will be for those lion cost for the new “house,” and us a favor,” he said. whose children are undergoing Ronald McDonald House is con- “We had to approach it as they long-term treatment at Children’s tributing the remaining $850,000. did as partners, but also in a busi- Hospital, Litomisky said. That’s up from the estimated nesslike fashion.” “We have a family that got mar- $3.5 million that construction of an ried here and are now expecting 18,000-square-foot house would The Hutzel site their first baby, all within the time have cost. they’ve been here,” which is near- Located a half mile north from “DMC and Children’s Hospital ly a year, she said. the current Ronald McDonald have a tower to build, and they Detroit-based Hamilton Anderson House, the former Hutzel Hospital need to get (the move) done in the Associates and Kraemer Design at 4727 St. Antoine St. now houses first quarter of 2015,” said Jennifer Group are serving as designers and Litomisky, executive director of DMC offices, classroom space for architects for the new house, and The best prices on new, used and remanufactured office furniture. Ronald McDonald House. the Michigan State University Col- Sterling Heights-based Roncelli Inc. The Hutzel Hospital space is a lege of Osteopathic Medicine, and is general contractor. Grand Rapids l Lansing very good space for the 1,200-1,500 Wayne State University offices. The Jackson l Detroit With the move to the Hutzel site, families the charity hosts each second floor had been unoccu- Ronald McDonald House plans to 877.698.6250 year and “probably the most expe- pied. www.kentwoodoffice.com ditious (site) ... to get up and run- Renovations to turn former hos- See Next Page 20140825-NEWS--0004,0005-NAT-CCI-CD_-- 8/22/2014 6:20 PM Page 2
August 25, 2014 CRAIN’S DETROIT BUSINESS Page 5
From Previous Page launch round-the-clock transpor- Riverfront conference center part of construction plan tation services to Children’s Hos- pital, Litomisky said. BY SHERRI WELCH Besides a new conference CRAIN’S DETROIT BUSINESS center, the owner of the Roberts Raising capital Riverwalk Hotel also wants to The charity, operating on a bud- A riverfront conference center add a pool and pavilion along the get of about $1 million this year, is planned on the grounds of the Detroit River. plans to add two to three full-time Roberts Riverwalk Hotel, the former equivalent positions to assist with Omni Hotel in Detroit’s Rivertown transportation, volunteer manage- area, as part of a $2 million renova- ment and fundraising. tion and construction project. It’s launching a $3 million cam- Also on tap: a pool and pavilion paign to cover its capital costs, ex- area that the owners think will be panded services, operations and the first riverfront pool for a De- its endowment, which is about troit hotel. $950,000, Litomisky said. Olympic Land for the new 6,000-square- gold medalists Meryl Davis and foot, glass-fronted conference cen- Charlie White are serving as hon- ter building and pool area has been orary co-chairs of the campaign. cleared, but the hotel is waiting for The charity, a finalist in Crain’s final permits from the city so it can 2013 Best-Managed Nonprofit con- begin construction, said Donovan test, also plans to add prominent Martin, human resources manager signs on the Hutzel Hospital build- and assistant controller. COURTESY OF ROBERTS COS. ing, out in the community and on a The hotel expects to complete engage the entire community at a give guests “a million to add new paint and trim, new transport van, Litomisky said. the pool in late September and black-owned hotel.” unique experi- carpeting, flat-screen televisions “This is the one time in the the conference center — which ence they won’t and other amenities to the first house’s history that they’ll be able He thinks the red-carpet after- will include floor-to-ceiling doors be able to find half of the hotel’s rooms, its lobby, to be able to do this,” said Gary glow could attract 1,000 or more to enable vehicle displays — in Dembs, president and CEO of people, with overflow from the anywhere else and bar and lounge areas before late November. Southfield-based 4th Sector Consult- new conference center into the in Detroit,” he reopening it in April 2012, Roberts ing, which is consulting with the The hotel is already talking hotel or adjacent tents. said. said. charity on fundraising and mar- with organizers of the Urban Roberts Riverwalk plans to The new cen- Early this July, it completed keting. Wheel Awards about hosting a market the new conference center ter will add to renovations on the remaining In the past, the charity has done red-carpet afterglow at the new for both corporate and social 8,000 square rooms and hallways and added a direct mail campaigns each year, center after the charity preview of events such as weddings, said Roberts feet of existing new riverfront entrance that will “but moving into a new site allows the 2015 North American Internation- Michael Roberts Jr., executive meeting space give people coming along the De- the Ronald McDonald House the al Auto Show. vice president of St. Louis-based inside the hotel. troit Riverwalk access to the hotel opportunity to expand its brand “The charity preview is a major Roberts Cos., which owns the hotel Roberts Cos. acquired the 106- and Roberts Riverwalk Bar & Grill. awareness and ... its supporters,” event,” said Randi Payton, founder and operates a local affiliate, room former Omni Hotel late in Farmington-based Crutcher Stu- Dembs said. of Decisive Media Inc., which orga- Roberts Hotels Detroit LLC. 2010 from Irving, Texas-based Om- dio is architect on the project. Sherri Welch: (313) 446-1694, nizes the Urban Wheel Awards. The riverfront views from the ni Hotels & Resorts for an undis- Sherri Welch: (313) 446-1694, [email protected]. Twitter: “It’s the perfect opportunity for new Detroit conference center closed amount. [email protected]. Twitter: @sherriwelch us to start something that would and pool and pavilion area will The new owner invested $1.8 @sherriwelch
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CRAIN NEWS SERVICE
For the third consecutive year, U.S. auto dealership throughput — the average number of vehicles sold per store — is expected to break records in 2014, a new study found. But the experts behind the study warn that a downturn is in- evitable. The 2014 midyear Automotive Franchise Activity Report pro- jects nationwide dealership throughput is heading to 904 vehi- cles, based on forecast vehicle sales of 16.2 million. That’s up from a throughput rate of 874 vehicles at the begin- ning of the year, based on a report First Tier Ranking in released last week and produced Labor Law – Management by Urban Science, a dealership con- sulting and data firm in Detroit. The sales forecast is from consul- ■ Metro Detroit ■ Grand Rapids ■ Kalamazoo ■ Grand Haven ■ Lansing Contact Dick Hooker at [email protected] tants LMC Automotive. “We know that automobile sales patterns are cyclical. It’s vi- tal to remember current sales lev- els are near the peak of this cycle and will drop before growing again,” John Frith, vice president of Urban Science, said in a state- ment. 2.0 Frith said that as dealerships DETROIT near throughput of 1,000 units in the short term, automakers “may be tempted to add rooftops to alle- viate some of the pressure.” He advised against doing so. The report shows an increase in Show your the number of auto dealerships in Detroit’s champions are looking for the companies the U.S. compared with the year- and organizations making a difference in the city’s earlier period. Through July 1, future. Advertise in this in uential supplement to there were 17,903 dealerships, up support reach business leaders, locally and nationwide, to 123 from 17,780 in the year-earlier let them know you are making a difference too. period. Through July 1, auto brands Featuring: added nine dealerships in Florida, Expats on the city they left and what would eight dealerships in California for the city. bring them back and five each in Michigan, Georgia, Kentucky and Ten- Detroit report card: where city services nessee. stand today and plans to move ahead From Automotive News Map: places every Detroiter should know
The inside scoop on what’s popping in the neighborhoods
Lists, lists and more lists — what’s happened BANKRUPTCIES and what’s still be done The following businesses filed for protection in U.S. Bankruptcy Court in Detroit Aug. 15-22. Under Chap- ter 11, a company files for reorganiza- tion. Chapter 7 involves total liquida- tion. Ⅲ Pacific Enterprises Inc., 23611 W. Seven Mile Road, Detroit; voluntary Chapter 11. Assets and liabilities not
BONUS DISTRIBUTION available. through select Detroit Homecoming Partners. Ⅲ B & J Enameling Inc., 6827 E Davi- son St., Hamtramck; voluntary Chap- ter 11. Assets: $66,101; liabilities: ISSUE DATE: OCT. 20 CLOSE DATE : SEPT. 25 $549,370. To advertise, contact Marla Wise at [email protected] or (313) 446-6032. — Natalie Broda 20140825-NEWS--0007-NAT-CCI-CD_-- 8/22/2014 1:50 PM Page 1
August 25, 2014 CRAIN’S DETROIT BUSINESS Page 7 Pizza Bowl canceled as Lions back new Ford Field game
BY BILL SHEA while Ford Motor Co. had main- by Hoffman and former Michigan CRAIN’S DETROIT BUSINESS tained an undisclosed level of fi- State University football coach and nancial contribution. The fate of the Pizza Bowl has been in Athletic Director George Perles, The Little Caesars Pizza Bowl at The Pizza Bowl matched bowl-el- who was the CEO for many years. Detroit’s Ford Field is no more, the igible Big Ten and Mid-American doubt since the Detroit Lions announced The Detroit Lions have not yet college football game’s executive Conference teams, but only three disclosed the naming rights spon- director confirmed last week. times did Big Ten teams play in that they’ll host a new bowl matching Big sor of the new bowl. The game is “There is no Pizza Bowl for 2014. the game. The conference often scheduled for Dec. 26. We will have to see about the fu- didn’t have enough bowl-eligible Ten and Atlantic Coast Conference teams. Rather than specific bowl-eligi- ture,” said Ken Hoffman, the teams to fill out its slate of bowl ble teams based on records from The Pizza Bowl attendance The participating Pizza Bowl game’s longtime top official, via tie-ins. However, the Big Ten will each conference, participants in teams each got $750,000. Bowl pay- email. have 14 teams this year, in time for record is 60,624 in 2007, a crowd the Lions’ bowl will be decided af- The game, traditionally played the Lions’ college bowl game. that watched Purdue University edge out money typically comes from a ter consultation and other bowls the day after Christmas and aired Last year’s Pizza Bowl saw the Central Michigan University 51-48. mixture of corporate sponsor- determining their ACC and Big live on ESPN, began as the Motor University of Pittsburgh beat Bowling The worst attendance was 23,310 ships, broadcast rights fees, ticket Ten teams. City Bowl in 1997 and moved to Green State University 30-27 in front for 2012’s CMU 24-21 victory over sales, merchandise and other Bill Shea: (313) 446-1626, 64,500-seat Ford Field in 2002 from of 26,259 fans on Dec. 26. Tickets Western Kentucky University, a sources. [email protected]. Twitter: the 80,311-seat Pontiac Silverdome. were priced at $30, $45 and $60. game played during a blizzard. The Pizza Bowl was co-founded @bill_shea19 The fate of the Pizza Bowl has been in doubt since the Detroit Li- ons announced in 2013 that they’ll host a new bowl matching Big Ten and Atlantic Coast Conference teams at Ford Field in a six-year deal that begins this year. “If you look at any city right now, there are very, very few that can support two major bowl games,” Lions President Tom “ IS IT REALLY EASY Lewand said in July 2013, adding that the Lions would be putting all of their support behind the yet-to- be-named Big Ten/ACC bowl. The Lions-backed college game TO SAVE MONEY BY is scheduled for 4:30 p.m. Dec. 26, according to the NCAA’s official 2014 bowl lineup. That had been the Pizza Bowl’s spot in the bowl SAVING ENERGY?” schedule in the past. Hoffman told Crain’s last year that he’d been in talks with Little It’s never been easier to save your business money. Replace old incandescent exit signs Caesars co-founder Mike Ilitch to with LEDs, and you can save up to 95% on energy costs. An energy management system possibly relocate the Pizza Bowl across the street to Comerica Park. that turns lighting equipment off during downtime can save you a lot. And installing That idea has not gone anywhere. a programmable thermostat to automatically lower heating and raise air conditioning Little Caesars on Aug. 22 issued a statement about the Pizza Bowl temperatures during off hours will save you even more. Plus, you can tour our Interactive relationship, from the chain’s se- Business and Lighting Advisor tools for more ways to save. For additional cost-saving tips, nior vice president of global mar- keting, Edward Gleich: “We work go to dteenergy.com/biztips. Saving money has never been easier. hard to innovate with our market- ing and always pay attention to op- portunities that also support our hometown of Detroit. If a sponsor- ship opportunity that makes sense for our business materializes, we’ll evaluate it in this context and make the decision at that time.” The Detroit-based pizza chain, founded and owned by the Ilitch family, and the Auburn Hills- based Independent Organization of Little Caesars Franchisees took over the Motor City Bowl’s title sponsor role in 2009 under a three-year se- ries of annual options worth less than $1 million each. Both the corporate entity and the franchisees shared the cost of the deal, which included the name change for the bowl game. The pizza chain replaced General Motors Co. as the bowl’s primary fi- nancial backer. The automaker cut back on its sports marketing and sponsorships amid its bank- ruptcy struggles. Little Caesars and its fran- chisees re-upped the bowl sponsor- ship deal, still believed to be worth just under $1 million annually, for two years, in a deal announced in 2012. That covered the 2012 and 2013 games. Detroit’s three automakers and the UAW jointly pledged to com- Start saving today, visit: mit $100,000 annually in 2011 to be- come the Pizza Bowl’s presenting dteenergy.com/savenow sponsor, which is a step below the naming sponsorship. GM and Chrysler had halted involvement as they went through bankruptcies, 20140825-NEWS--0008-NAT-CCI-CD_-- 8/22/2014 6:21 PM Page 1
Page 8 CRAIN’S DETROIT BUSINESS August 25, 2014 OPINION Open land creates great opportunity here’s 18 newly open acres of prime real estate in De- troit. That doesn’t happen every day. T As the rubble is cleaned up from the demolition of Detroit’s former Brewster-Douglass housing projects, the city has a rare opportunity. It’s an open, contiguous site with easy access to I-75 and close to Detroit’s stadiums, Midtown and Eastern Market. As Kirk Pinho reports on Page 3, this much available land, under one owner, doesn’t come along often in a large city. Now, the process to gather ideas will start. This is a chance for someone with vision to create something remarkable. It’s a chance to make a statement as well. The city is taking a cluster of buildings that have re- mained vacant and lifeless since 2008 and imagining some- thing of regional significance. It’s a crucial move in the long- term strategy for the city and can add new dimensions of retail, housing and office development. Even high-tech manu- facturing could make sense. As an eyesore comes down, let’s take the time to be strategic and develop a plan with an eye toward the future Detroit. TALK ON THE WEB HR policies may need revisiting From www.crainsdetroit.com from PCP to hospital and back will Re: DWSD suburban users may be on Reader responses to stories and Everyone has personal opinions about hot-button issues hook for $675M for city pensions blogs that appeared on Crain’s be a critical step in the right direction. tied to sexuality and how employers should — or shouldn’t — website. Comments may be Eric Poje Since less than half of Detroit resi- deal with same-sex marriage, gender identity and birth con- edited for length and clarity. dents pay their water bills, where Re: U.S. Rep. Gary Peters announces trol. do you think DWSD will get the State Fairgrounds, we would be But there are also times to put opinions aside and look at money for operations if the sub- paying Ferguson and his company historic vehicle legislation the laws for the sake of keeping a company out of legal hot wa- urbs aren’t footing the bill? so that they could develop OUR land And the purpose of registering ter. Redrum01 into a shoddy, big box shopping our old car with the federal gov- As Chad Halcom reports on Page 11, businesses in Michi- center that none of us wants?! ernment is what? And how much America the wonderful. Yuck. gan could be looking at drastic changes in the law or their own Re: State OKs DPS deficit elimination will this cost the government, and Euni Rose what will this cost the registrants? company policies based on a series of recent executive orders, plan, pay cut for teachers And what will the benefits be and court rulings and local ordinances. These cuts will be fatal for the dis- Re: Gale Research founder Frederick to whom will the benefits accrue? For example, an executive order issued in July bars federal trict, and were completely unneces- Ruffner dies at 88 Seems like an election-year stunt to contractors from discriminating on the basis of sexual orienta- sary. me, but a very bad one. tion or gender identity. Thomas C. Pedroni Fred Ruffner was a great man MikeInMI and a true visionary. Most large companies are likely in line with this policy, but DeanDD Classic big-government solution. some small-company executives who might philosophically Re: Lions near bottom of NFL valuation Private-sector hobbies now need a object to insuring same-sex employee partners will now need list – but No. 1 for overpriced beer Re: Electronic data system points to federal program to create a reg- to look at the issues. For instance, what if they want to go after How is Tom Lewand still president future of managing health, costs istry. federal contracts? of this franchise? William J With changes at the federal, state and even local levels, it’s 268949 I sure hope that this initiative to coordinate care across all health a good time for human resources teams to take a meeting with care touch points works. Being Flooding will happen again their respective legal teams and revisit corporate policies and Re: Troy Transit Center may open in fall able to analyze population health Our tax cuts at work. handbooks. So as owners of the Michigan data and coordinate patient care Stan Hazan
KEITH CRAIN: The secret to business success is creativity There are a lot of things that a lot, sometimes they or is something that can academic endeavors. There is noth- to compete with other nations. companies and countries can lift fight in courts for years. be taught. But it is al- ing like watching the creativity of If any company is trying to com- or expatriate or simply steal from Sometimes they never most impossible to steal. the CCS students come alive as pete on a global stage, then it needs other companies. get caught. I look with great they learn to practice their en- to nurture and embrace all the cre- It would appear to be done more Some companies pride at the Detroit Cre- hanced creative skills. ativity it can muster. and more around the world. might think that taking ative Corridor. It is one It is the difference between com- Even the most basic services I notice that China seems to be innovation is cheaper of our many jewels — a panies. Few if any companies don’t such as accounting and lawyers can rearing its ugly head to first fine than figuring out how to terrific asset of our city have great advantages with cre- take advantage of some creativity and then, someday down the line, do it themselves. and one we don’t give ativity. It is the way that company among their skill sets as long as nationalize Western investment But I have always be- enough attention to. rises above the rest and has the they don’t try to obscure the results. within its borders. lieved that the one char- I have been involved competitive advantage. Detroit’s Creative Corridor is a Intellectual property theft is a big acteristic that separates with the College for Cre- China, as one example, can dupli- magnet in our city to attract com- deal; companies often are caught good companies from ative Studies for longer cate just about everything that it panies that understand and appre- using processes and technology great companies is that secret than I’d like to admit, and it’s al- needs from Western industrialized ciate the importance of creativity. that they take from competitors. sauce called creativity. I am not ways exciting to see how the school nations. But today, it simply can’t It will be the difference between Sometimes they get caught and pay sure if it’s always part of your DNA can spawn creativity in all sorts of find the creativity that will enable it success and failure. 20140825-NEWS--0009-NAT-CCI-CD_-- 8/22/2014 10:10 AM Page 1
August 25, 2014 CRAIN’S DETROIT BUSINESS Page 9 Lawmaker to-dos: Rights, roads, taxes, wolves
Lawmakers are near- began meeting again find a solution. that lame-duck stuff, there’s the this month, it approved the voter- ing the end of their near- this month on the con- Top lawmakers say it is a priori- wolves. initiated legislation. If the House ly three-month summer Capitol tentious topic of road ty to finally get done this fall, and The House is expected Wednes- concurs this week, it will mean break and are beginning Briefings funding. That’s after it’s an issue many lawmakers day to vote to keep voters from wolf hunting can continue, rather to assemble their to-do taking several months would like to see completed before having a say in whether the state than allowing the issue to go on lists for the fall. off following the Sen- their careers come to an end in should allow wolf hunting. the November ballot for voters to The House has a ses- ate’s failed attempt to Lansing. In the past two years, anti-wolf decide. sion on Wednesday, and find a way to raise About three dozen lawmakers hunt advocates have tried to place When it passed in the upper after that, the House and more than $1 billion an- will not be back in January either measures on the ballot to restrict chamber, Senate Democrats criti- Senate each have 12 days nually to fix the state’s because of term limits or their fail- the hunts, but Republicans have cized the priorities of the GOP and of work scheduled be- roads and bridges. ure to win election to another of- passed new laws and pro-hunting for catering to the hunting lobby. fore the November elec- The Senate spent fice. And many will be looking to groups have countered with their Expect more of the same from House Democrats this week. tion. Chris Gautz countless hours in un- finally pass legislation important own ballot measure to continue to There are a few things productive meetings in to them in their final days of the allow the wolf hunts. Chris Gautz: (517) 403-4403, on the political plate that ob- the final days of session before lame-duck session. Two weeks ago, when the Sen- [email protected]. Twitter: servers expect to be taken up — summer break in June trying to 4. Wolf hunting: But before any of ate met for its only day of work @chrisgautz especially by lame ducks moti- vated to push through significant legislation before the end of their tenure. Among the highlights: 1. The Elliott-Larsen Civil Rights Act: A growing movement in the business community has been pressing to have this law amend- ed to include sexual orientation so employees in Michigan can no longer be fired for being gay. This effort has been champi- oned in the Legislature by Rep. Invest Wisely Frank Foster, R-Petoskey, who had talked of introducing legisla- tion on the issue but had not done Choose an Advisor Who Sees the Bigger Picture so. But just his verbal support of WORLD CLASS MONEY MANAGERS | TRANSPARENT FEES | INDEPENDENT ACTIVE TAX LOSS HARVESTING ADVANCED TAX PLANNING it, along with his support of Med- icaid expansion and for the Com- mon Core education standards, led to him face a Tea Party chal- lenger in the GOP primary earli- er this month. That challenger, We implement tax loss harvesting for our clients every month, whereas other advisors may do this once a year at most. Lee Chatfield, defeated Foster, the only incumbent state law- Come discover how Schechter’s sophisticated approach and technology can guide your investment portfolio to better results. maker to lose a re-election bid in the primary election. Studies show this process can add 0.5% to 2.5% to your after tax return.* But Foster is expected to con- That’s Opportunity. tinue to push the issue and could introduce the bill Wednesday or early next month, with the goal of having Gov. Rick Snyder sign it into law before Foster leaves of- fice at the end of the year. (See related story on sexuality laws affecting employers, Page 11.) 2. IBM: A July ruling by the state Supreme Court in the case of IBM v. Department of Treasury could cost the state more than $1 billion if left unchanged. Snyder and other top state offi- cials and lawmakers are urging the Supreme Court to reconsider its decision. At issue was whether the origi- nal wording of the Michigan Business Tax allowed multistate companies to use a formula that is more beneficial to them to cal- | culate their tax liability, or if BERNIE KENT, JD, CPA, PFS JASON ZIMMERMAN, MBA, CLU, CAP they have to use the MBT. MARC SCHECHTER, CLU | JOHN STEIN, MBA, CFA In 2011, the Legislature elimi- BRAD FELDMAN, JD, CLU | AARON HODARI | CHRIS HALE nated that choice going forward JEFF VIEDER | KEVIN BEAUCHAMP when it replaced the MBT with the Corporate Income Tax. But it did not address the use of the for- mula for the tax years 2008 through 2010. If the Supreme Court does not reconsider its decision and the ruling stands, it is expected the 248.731.9500 | WWW.SCHECHTERWEALTH.COM Legislature will introduce legis- lation that will retroactively ad- BIRMINGHAM, MI | NEW YORK, NY dress the issue to keep the state from having to pay the more than $1 billion in refunds next year, as INVESTMENT ADVISORY & ADVANCED LIFE INSURANCE DESIGN it would blow a huge hole in the state budget. *Studies can be made available upon request. Securities may be offered through NFP Securities, Inc. (NFPSI), Member FINRA/SIPC. Investment Advisory Services may be offered through NFPSI or Schechter Investment Advisors, LLC. Schechter Investment Advisors, LLC. and NFPSI are not 3. Transportation funding: A bi- affiliated. SIA is an SEC registered investment adviser; please consult the Firm’s Form ADV disclosure documents, available on the SEC’s Investment Adviser Public Disclosure website. partisan study group of senators 20140825-NEWS--0010-NAT-CCI-CD_-- 8/22/2014 10:10 AM Page 1
Page 10 CRAIN’S DETROIT BUSINESS August 25, 2014 1HHGDQ,QYHVWPHQW 5HDO(VWDWH/RDQ" Hatch winner’s pie persistence: A recipe with key ingredients
Welcome to the Hatch ing not just the winners member organization that guides Detroit club, Sister Pie. but also an entire bench fledgling food businesses from Owner Lisa Ludwinski Detroit of retail business talent. startup through growth. won the 2014 Hatch De- 2.0 Some of the most popu- That effort showed when Lud- troit competition, which lar names in Detroit winski took the stage for the so- awards the victor $50,000 small business are alums called “Hatch Off,” in which a pan- courtesy of Comerica Bank. of the program. el of judges grills the finalists Ludwinski will use the Batch Brewing Co. won about their business plans. At this cash to open her bakery, last year. Bachelor- point, it’s no longer about popular- Sister Pie, in Detroit’s West lifestyle shop Hugh and ity or dream or idea. That’s all for Village neighborhood at tapas restaurant LaFeria the community voting phase. Kercheval and Parker are open just blocks from FoodLab co-directors Jess Daniel Amy Haimerl streets. each other on Cass Av- and Devita Davison prepped Lud- I live down the block enue. Detroit Vegan Soul is winski for her presentation. They &DOOXV and can’t wait for her planned serving up tasty Southern fried helped her refine her answers and /RDQDPRXQWV DQGDERYH opening of April so I can eat all the tofu bites in the West Village, while tell a story of what it would take to sour cherry bourbon pie I want. (Or the Detroit Institute of Bagels is sati- succeed not just as a bakery but as $GGLWLRQDODYDLODEOHORDQV that my Fitbit will allow.) ating cravings over in Corktown. a small-business owner. But, honestly, I wasn’t rooting The success of Ludwinski and The other competitors were 6%$86'$/RDQV just for her. I was rooting for all Sister Pie speaks not just to the strong and showed real promise, 2ZQHU2FFXSLHG5HDO(VWDWH four finalists. The others: power of a bakery but to the power but Ludwinski offered precise, /LQHVRI&UHGLW Ⅲ Third Wave Music, a full-service of a community. numbers-based responses overlaid $FFRXQWV5HFHLYDEOH music shop trying to open in Mid- Ludwinski applied to Hatch last with humor and community spirit. (TXLSPHQW town. year, but Sister Pie didn’t even The judges were unanimous. %DQN:RUNRXWV Ⅲ Cockadoodle, a breakfast and make it to the When judge Hugh Yaro, owner of lunch joint planned for the Avenue semifinals. Lud- the restaurant CraftWork, asked the of Fashion — that’s Livernois and winski learned finalists about their three- to five- Seven Mile Road. from that, re- year plans, Ludwinski responded Ⅲ Gabriel Hall, a New Orleans- grouped and fo- that she saw steady growth in her style restaurant/club/museum in cused on build- wholesale business. She would be in Woodbridge. ing a strong local supermarkets and restaurants Hatch Detroit founder Nick Gor- business — not and planned to start a pie workshop ga told the sold-out crowd Wednes- just an idea for a program similar to Zingerman’s ZZZHFOLSVHFDSLWDOJURXSFRP day night at Ford Field that “this business. She classes. She had a precise plan for was an exceptional year. These are graduated from when the bakery would be open and 2UFKDUG/DNH5G6\OYDQ/DNH0, Ludwinski four businesses that will be open TechTown De- a deposit on the space. ³6LQFH ´ within the year.” troit’s retail boot camp. She worked She was able to answer ques- Hatch has gotten good at grow- with FoodLab Detroit, a nonprofit tions from Avalon International Bread‘s Jackie Victor about local sourcing, telling her that she al- ready had a “plum guy and a maple syrup guy” at Eastern Mar- THE MILLER LAW FIRM ket and that she had plans in place for how to get better prices from lo- Changing the Odds in our Clients’ Favor cal wholesalers so she could stay focused on local sourcing. She was able to directly answer questions about overhead from Kirk Mayes, the new CEO of Forgot- ten Harvest, telling him that payroll would be her biggest budget suck. Finally, Lydia Gutierrez, CEO of Hacienda Mexican Foods, asked the contestants to fill in the blanks in this statement: My business is not about (blank) but it is about (blank). Ludwinski was the last competitor to answer, so she had a bit more time to think on her feet: “My business is not about me, but it is about my employees, neighbors and community.” Her presentation was so strong, in fact, that some crowd members questioned whether the level of competition in Hatch has grown be- yond the intent. Is the program in- tended to help those who can’t get funding to actually open their doors? Or is it to push forward the best retail idea and give them a The Miller Law Firm is Recognized shot in the arm, regardless of need? as a Leader in Complex Business Litigation It’s a question for Gorga and the Hatch Detroit team to ponder. In the meantime, Ludwinski is just ecstatic that this was her year. Q Automotive Supplier Counseling Q Commercial and business lawsuits “I’m so excited,” she said. “I’m in shock. But I’ve had a lot of help and support throughout.” Q Employment litigation Q Shareholder and partnership disputes And to the other finalists — and semifinalists — I can’t wait to see Referral fees honored on contingency fee cases you open, too. After all, Busted in De- troit didn’t make it to the finals last year, and the bra shop is already open and thriving in Midtown. 950 West University Drive, Suite 300 248-841-2200 millerlawpc.com This column originally appeared Rochester, Michigan 48307 as an Amy Haimerl blog at crainsdetroit.com. 20140825-NEWS--0011-NAT-CCI-CD_-- 8/22/2014 10:11 AM Page 1
August 25, 2014 CRAIN’S DETROIT BUSINESS Page 11
REPORTER’S NOTEBOOK Dustin Walsh writes HIRE BEWARE about auto suppliers, manufacturing, the Did you agree not to poach steel industry and the rivals workers? Better employ business of law. Call some caution, Page 13 (313) 446-6042 or write [email protected] Employment law Dustin Walsh Be wise during exit interview An exit interview can be far more than a nicety for a departing employee to air a few grievances or share ideas. It can also be a huge opportunity to reinforce contractual obligations of the employee as they perhaps prepare to work for a competitor. HR’s An exit interview can be key to protect valuable assets, such as intellectual property. So what does a company do when an employee decides to leave the reservation? new For starters, have a plan before hiring key people and an exit interview strategy in place, said Michael Brady, partner and co-chairman of the balancing act automotive industry group at Warner Norcross & Judd LLP. Laws on sexuality in the workplace are changing. “Identify who Brady your key people are and what information they know Here’s what a company should consider and whether you’ve got the appropriate level of agreements in place,” Brady said. “A noncompete agreement (negotiated at the time BY CHAD HALCOM of hiring) is the Cadillac of CRAIN’S DETROIT BUSINESS protections for an employer.” ISTOCK PHOTO Assuming you’ve done the bare minimum of establishing a noncompete agreement with the t’s one of the toughest topics that human resource man- surance benefits for employee spouses and children — all by employee, limiting their ability to agers and corporate legal teams have to face — so per- the end of this year. That’s based on a series of recent execu- share trade secrets or affect haps it’s best that the federal government is forcing tive orders, court rulings and local ordinances, legal experts business with competitors, them to face several issues at once involving sexuality in said. customers and suppliers, you need to reinforce those agreements in an Ithe workplace. With that in mind, here are at least five ways your HR de- exit interview, Brady said. Businesses in Michigan could be looking at drastic partment may need to update company policy in the next few Ask questions. Find out what changes in the law or their own company policies on birth months to adapt to changes in the law — if it hasn’t done so al- company has hired the employee, control, gender identity, sexual orientation, religion and in- ready. what are their job functions, what geographic area they will be working and whether they will be communicating within your same government contracts. But among small and closely held businesses or client base. 1. Federal contracting I’m not so sure you can do religious nonprofits if they object to insuring “A key time for the employer to find On July 21, President Barack Obama signed both under this order,” same-sex employee partners but also rely on out exactly what’s going on is during an amendment to an executive order barring said Terry Bonnette, an at- government contracts, he said. the exit interview,” Brady said. “It’s all federal contractors from discriminating torney at the Detroit-based James Reid, a shareholder in the corporate the right time to remind the employee on the basis of sexual orientation or gender Nemeth Law Firm PC. and employment practice at Southfield-based of the contractual obligations they identity. The original Lyndon Johnson order “It’s one thing to regulate Maddin, Hauser, Roth & Heller PC, said many signed when they were hired.” of 1965 barred contractor discrimination a company’s practices like Michigan employers also may need to update Brady also recommends the based on race, creed, color or national origin. contraception if they’re in their sexual orientation policy by the end of employer ask the departing employee About 24,000 businesses nationwide have the private sector, but it’s the year. to sign an affirmation stating he will federal contracts and employ about 28 million Bonnette another when the govern- “Some companies that were already pro- abide by those agreements. workers combined, or one-fifth of the nation’s ment is” the customer. gressive in their mission “These affirmations put the workforce, according to the U.S. Department of Bob Duty, an attorney in the employment statement probably won’t employer in a good position if, down Labor. That could include more than 300,000 of practice group of Dykema Gossett PLLC in need to make any the road, the employee breaks the 1.9 million people employed in a five-coun- Bloomfield Hills, said the Obama amendment changes,” Reid said. “But those obligations,” he said. ty region of Southeast Michigan as of June, ac- should make few ripples among large corpora- Michigan doesn’t yet have But, even if you’re fearful of what cording to data compiled by the Michigan De- tions with federal contracts because most an employee antidiscrimi- an employee may bring to another partment of Technology, Management and Budget. have inclusive policies on orientation already. nation law for sexual ori- employer, play nice in that sandbox. Notably, the Obama amendment lacked an General Motors Co. and other auto companies entation, and many “have already got this in their procedures lawyers would advise a Brady warns employers not to exemption for faith-based nonprofits, reli- manual, and one of the things they’ll ask you client not to give your em- overstate the scope of a gious organizations or closely held corpora- as a potential supplier is if you have this poli- ployees a contractual oblig- noncompete and never threaten the tions with religious owners, despite a request Reid cy as well,” Duty said. “Many managers don’t ation that exposes you to li- departing employee. from several faith-based groups to carve out an exemption. want to be the one company that’s reported as ability above what the law dictates. “Every situation is different, but “As an employer, if I wanted to have a reli- not doing it, and if they do business with the “I don’t believe those companies discrimi- maintain professionalism because gious exemption for some reason, I could now government, they either have this policy in nate or intend to discriminate against those your current employees will hear find myself deciding I can either exercise my their handbooks or it’s just a matter of time.” about it,” Brady said. religious exemption, or I can choose to have But the amendment could create “chaos” See Balance, Page 12 20140825-NEWS--0012,0013-NAT-CCI-CD_-- 8/22/2014 10:12 AM Page 1
Page 12 CRAIN’S DETROIT BUSINESS August 25, 2014 Focus: Employment Law Balance: Biz must consider changes in laws on sexuality in workplace ■ From Page 11 classes, but they may be advised Supreme Court in June. pipeline,” he said. ported for any state, according to es- been pro-same-sex marriage, she not to put (a policy) into their em- In that case, the high court timates from the U.S. Census Bureau. said, “but we’ll still have to wait ployee handbooks until they’re re- found that the coverage require- If the appeals court affirms Fried- and see.” quired to.” ment from the U.S. Department of 3. Same-sex marriage man’s ruling, it would mean health Reid and Rivers both expected a Health and Human Services violates and life insurance benefits to same- ruling from that appellate panel the federal Religious Freedom Reid said he thinks no recent sex spouses for most Michigan em- well before the end of the year, al- 2. Hobby Lobby fallout Restoration Act of 1993 when “ap- court case involving sexuality ployers that do not offer them now, though either side could challenge plied to closely held corporations.” could be as far-reaching for Michi- along with standing for the wid- it by asking the 6th Circuit’s whole Religious objections to federal Other Michigan companies that gan companies as DeBoer v. Snyder, owed to obtain Social Security sur- 15-judge bench to review the case regulations already have been a sued over the regulation included the challenge to Michigan’s 2004 vivor benefits and exemptions to — which could extend the appeal hot-button topic for closely held Utica-based Weingartz Supply Co. constitutional amendment banning both state and federal income tax into early 2015. companies such as Trijicon Inc., a and Ann Arbor Township-based same-sex marriage. Attorneys had withholding, said Reid and Beth Wixom-based manufacturer of Domino’s Pizza Inc. Many had ar- combined oral arguments this Rivers, a partner at Royal Oak- weapons sightings, or Barron Indus- gued that the birth control regula- month in DeBoer and three other based Pitt McGehee Palmer & Rivers 4. Family medical leave tries Inc., a defense industry suppli- tion essentially required them to cases from Ohio, Kentucky and PC. er in Oxford. insure certain forms of abortion. Tennessee at the 6th U.S. Circuit Rivers, who also represented The U.S. Department of Labor is Tom Munson, director of sales But studies by Columbia Universi- Court of Appeals in Cincinnati. Oakland County Clerk Lisa Brown also expected this year to formal- and marketing at Trijicon, said he ty and New York University indicate In what started primarily as a at the trial ize a proposed rule to revise the de- was unfamiliar with the new Oba- that 52 percent of all private em- challenge to Michigan’s state adop- phase of DeBoer, finition of spouse under the Fami- ma executive order on federal con- ployees could work for closely tion laws, this year Judge Bernard was able to file a ly and Medical Leave Act in light tractors. The company’s U.S. Army held corporations that produce 51 Friedman of U.S. District Court found joint tax return of a Supreme Court ruling in 2013 contract to supply its 4x-magnifi- percent of private sector output, that Michigan’s ban on same-sex for the first time that struck down a federal defini- cation Advanced Combat Optical so the local impact could extend marriage violated the U.S. Consti- this year with tion of marriage as being between Gunsight on rifles lapsed more far beyond the companies that tution clause on equal protection. her own partner one man and one woman. than a year ago. sued. Several hundred couples obtained after marrying The act currently requires em- Trijicon still supplies that sight- Reid said he thinks the Hobby marriage licenses before Michigan in California ployers to give unpaid, job-protect- ing and others for collectors, Lobby impact in Southeast Michi- Attorney General Bill Schuette ap- several years ed leave to care for a spouse as the pealed that decision and obtained a ago. hunters and some law enforce- gan could be modest because not all Rivers term spouse is defined by the law ment customers. closely held owners have strong re- stay on it. “There’s no in the state where the employee Trijicon, Barron and at least ligious convictions. Duty said he ex- Reid said he thinks the ruling time frame for when the court lives. But in June, the department nine other Michigan businesses pects that other closely held corpo- will be upheld but expects a whole rules, and the (current three-judge proposed to change the adminis- did, however, bring a religious ob- rations will want to extend their court review, “so it may take a few hearing) panel may be deciding trative rule to being a state where jection to federal birth control cov- religious protections beyond birth months to get some resolution on sooner rather than later” or before the marriage occurred. erage requirements for their em- control. that.” the end of the year, Rivers said. The Labor Department has said ployees in the run-up to the “There’s no doubt in my mind Michigan had more than 15,700 Every appeals court ruling since the proposed change would reduce contentious Burwell v. Hobby Lob- that there’s going to be further liti- same-sex couples statewide as of the U.S. Supreme Court ruling on by Stores Inc. ruling by the U.S. gation if it isn’t already in the 2012, the 13th-highest population re- the Defense of Marriage Act has See Next Page 20140825-NEWS--0012,0013-NAT-CCI-CD_-- 8/22/2014 10:12 AM Page 2
August 25, 2014 CRAIN’S DETROIT BUSINESS Page 13 Focus: Employment Law Experts: Employ caution before agreeing not to hire rival’s workers
BY DUSTIN WALSH trigger a scop- light of day because they are on a CRAIN’S DETROIT BUSINESS ing suit like in small scale,” Hickey said. “Where Silicon Valley.” the Silicon Valley case involved 80 On Feb. 13, 2006, Steve Jobs, the The crux of percent of that market’s employ- co-founder of Apple Inc. who died in the issue is ers, this region is more diverse. 2011, sent an email to Eric Schmidt, whether an em- And as long as it’s not on a broad then Google Inc. CEO, asking Google ployer is in- scale with multiple employers, I not to recruit his employees. hibiting an em- don’t see it becoming a widespread That email served as evidence in ployee’s ability problem.” a class-action lawsuit against both to move from Also, Michigan employers have tech giants as well as Intel Corp. Klein one employer to more protections under state law and Adobe Systems Inc. It resulted another without than in California, said Maureen in a $324.5 million fine for break- his or her knowledge. Any agree- Rouse-Ayoub, a ing U.S. antitrust laws. This ment between competitors over partner and month, the federal judge on the personnel decisions is potentially chairwoman of case ruled that the amount is too dangerous, Klein said. the workplace low and that the companies will For example, a 2006 lawsuit filed law group at pay a more substantial fine. in U.S. District Court in Detroit al- Bodman PLC in This isn’t just a Silicon Valley leged eight hospital systems in the Troy. issue. Recruiting and retaining top area had colluded to keep pay Michigan law talent while treading legally sound scales for registered nurses artifi- permits employ- ground remains a critical issue in cially lower than market forces ers to enter into Southeast Michigan, too, legal ex- dictated since 2002 by sharing per- noncompete Rouse-Ayoub perts say. sonal wage information. agreements Secret agreements between com- Since then, seven of the hospitals with their employees, prohibiting petitors not to hire each other’s — including St. John Providence them from working with a com- employees are illegal, as Califor- Health System in Warren, Oakwood petitor in a certain region or with nia’s tech sector found out. Healthcare System in Dearborn, the a certain competitor. The automotive industry, mean- former Bon Secours Health System “Michigan companies can pro- while, remains knee-deep in the and the four others — have settled. tect any reasonable business inter- largest antitrust case in history. Settlements by Detroit-based Henry est and unfair competition, unlike Since 2010, the U.S. Department of Ford Health System for $8.44 million in California,” Rouse-Ayoub said. Justice has issued more than $2.3 and Livonia-based Trinity Health for “It’s a negotiation between the em- billion in fines, and nearly 30 exec- $5.14 million earlier in 2013 brought ployer and employee, so they think utives have pleaded guilty and ac- the total payout to just over $48 mil- it’s fair for both parties.” cepted prison sentences. lion. Rouse-Ayoub said the agree- But even with the full force of The Detroit Medical Center is still ments are enforceable under the Justice Department bearing battling the class-action suit in Michigan law; the bench in the down on the industry, blind spots court. state is well-versed in handling the remain, especially in human re- “Personnel activities between issues, generally issuing an order SAN FRANCISCO GIANTS sources, legal experts say. competitors often create a mean- within 48 hours of a complaint. VS Sheldon Klein, a partner at ingful antitrust case,” Klein said. Butzel Long’s Klein said the best Butzel Long PC in Bloomfield Hills, “I tell my clients to recognize the way to avoid violating poaching said human resources is one of the risks; horizontal agreements are laws is to invite human resources DETROIT TIGERS “great unrecognized risks” in any the stuff that can send you to jail.” into the company’s antitrust com- organization because companies Patrick Hickey, a partner and pliance program. often don’t think of employees as leader of the labor and employment “As evident in the email from part of the procurement process. group at Detroit-based Dykema Gos- Larry Page and Steve Jobs, really “Competitors can’t agree on sett PLLC, said it’s unlikely that smart people do really stupid how they compete for personnel large Southeast Michigan employ- things sometimes,” Klein said. FRIDAY just as they can’t for steel,” Klein ers are engaging in these kinds of “It’s impossible to have this sort of said. “The auto industry is a bee- agreements. But smaller compa- agreement with no traps.” : hive of antitrust enforcement ac- nies may be involved in incidents Dustin Walsh: (313) 446-6042, SEPTEMBER 5 • 7 08 PM tivity, and if the government found that are never brought to light. [email protected]. Twitter: one of these agreements, it would “Most of these never see the @dustinpwalsh SATURDAY From Previous Page under the federal Fair Labor Stan- ers, and many, like the Sterling dards Act — the employee later Heights and Lathrup Village ordi- SEPTEMBER 6 • 1:08 PM administrative burdens on em- could claim a violation of the law. nances, impose a $500 fine on each ployers that operate in more than The new rule change could remove violation. But Reid said it’s not al- one state or that have employees this potentially thorny issue, he ways clear how municipal govern- who move between states. Essen- said. ments would investigate or en- tially, the change would extend force the code. SUNDAY the FMLA benefit even into states Dykema’s Duty said the prolifer- that don’t recognize same-sex 5. Local ordinances ation of ordinances, along with ex- marriage. ecutive orders and guidance, will SEPTEMBER 7 • 8:0000 PM “While the government has been Employers also should be mind- give employers much to think Sunday Kids Dayay deferring to the states to define ful of new local ordinances that about by the end of the year — al- marriage, the employee can obtain prohibit discrimination based on though most probably will get only “Back to School” Lunchnch Box the benefit if they were legally sexual orientation or gender iden- modest attention, other than the married in any state, regardless of tity, attorneys said, although it’s outcome of the DeBoer marriage to all kids 14 and underunder whether it’s where they reside unclear exactly how some would case. now,” said Bonnette of Nemeth be enforced. “It’s hard to name a clear win- Law. Sterling Heights, Canton Town- ner in the hierarchy of issues here Reid contends the change could ship and Fenton passed such ordi- for any one of these things versus sew up another troubling loophole nances in June, followed by Kala- all the others,” Duty said. “So the in the law for employers. Under mazoo Township in late July. only good advice is to stay tuned. current law, if an employer agrees Others to vote on similar regula- Because you need to worry about to grant FMLA leave in a state that tions in the past year include Roy- all of them.” doesn’t recognize such marriages al Oak, Lathrup Village, Adrian Chad Halcom: (313) 446-6796, and the employee is salaried — and Battle Creek. [email protected]. Twitter: and exempt from hourly wage laws Some are more limited than oth- @chadhalcom 20140825-NEWS--0014-NAT-CCI-CD_-- 8/22/2014 12:34 PM Page 1
Page 14 CRAIN’S DETROIT BUSINESS August 25, 2014
palace sports & entertainment’s Program aims to help ratchet newest premium seating option up auto tool-and-die capacity
BY DUSTIN WALSH estimate. Harbour said new model “What we’re interested in is cap- CRAIN’S DETROIT BUSINESS launches use about 7,000 tools to turing that expansion in the state, LIMITED INVENTORY AVAILABLE build, and that figure is expected and we’re going to continue to A new program is meant to help to rise 25 percent by 2020. reach out to the tooling, particular local tool-and-die makers fill a “The tooling industry used to be a tool-and-die industry, to make pending capacity gap as North necessary evil to build a part,” she sure we’re hearing what they are American automotive production said. “Now it needs to make opera- saying,” Francis told Crain’s. “If rises and toolmakers in Asia and tional improvements to take on the we don’t have programs in place Europe are at or near capacity additional demand in the market- that can be helpful for those expan- ALL-INCLUSIVE PREMIUM SUITE themselves. place.” sion plans, we’ll put them in place DINING EXPERIENCE Laurie Harbour, president of Harbour is collaborating with to make those plans helpful.” & BEVERAGE PACKAGE Royal Oak-based Harbour Results the Troy-based Original Equipment Besides working with the MEDC, DOMESTIC BEER, PREMIUM WINES, SODA & BOTTLED WATER Inc., said that more tools will be Suppliers Association and the Michi- Harbour Results will help facilitate needed to meet rising capacity de- gan Economic Development Corp. to discussions about growth with the mand and that it is important for help the tool-and-die industry OESA’s Tooling Forum, which is a Michigan to capitalize. As much as manage the increased demand. group of tool-and-die makers that 70 percent of all automotive tool- Harbour will provide bench- meet to discuss industry trends and-die makers are in Michigan, marking and best practices. through the OESA. sh e said. Nigel Francis, senior automo- “This is an important sector for Harbour last month released the tive adviser for the state of Michi- our state in bringing next-genera- results of her company’s October gan and senior vice president at tion technology and jobs,” Harbour 2013 Automotive Vendor Tooling the MEDC, said the expansion of said. Study, which said the tooling indus- the tooling industry is inevitable Crain’s reporter Chris Gautz, try is expected to grow from $9.25 — and the state must help that ex- and Plastics News and Automo- billion today to $15.2 billion by 2018. pansion locally. tive News contributed to this story With 867 tool-and-die shops in the state employing 24,000, capaci- ty should be sufficient to handle the increased work, state officials outsourced risk management
LOWER-LEVEL VIEW UM center director OF ALL PALACE SPORTS & ENTERTAINMENT EVENTS calls for national depression registry The death of comedian Robin Williams this month has given new meaning to a plan outlined by John Greden, M.D., executive director of the University of Michigan Comprehen- sive Depression Center in Ann Arbor, to expand a national clinical data registry that seeks to improve the care of patients with depression and bipolar illnesses. “The untimely death of Robin PRIVATE Williams reminds us that depres- RESTROOMS sion is a serious, life-threatening IN THE SUITE illness and needs to be recognized as a major public health crisis. It also highlights the overwhelming need for a registry such as this one,” said Greden, a psychiatrist WHAT PATH ARE YOU ON? who also is founding chair of the National Network of Depression Cen- Buy into this suite share opportunity and enjoy ters, which includes UM and 20 oth- er academic depression centers. an unrivaled business entertainment experience Last week, the NNDC and the Ann Arbor-based Altarum Institute for Pistons games and concerts at The Palace announced a plan to raise funds and jointly develop a comprehen- All-inclusive sive national clinical data registry Minimize Exposure. Reduce Expense. to improve the care of patients with Premium Experience depression and bipolar illnesses. The Sterling Insurance Risk-Path-Process® is a proven Greden said the goal is to create a registry of more than 10,000 pa- multi-channel, enterprise level risk management strategy. tients over five years that will en- To find out how you can minimize your exposures while able more than 500 researchers to driving down your cost, contact a Sterling Certified Risk study new treatments and research projects. The registry also will help Architect to get you on the right path. facilitate patient referrals. Altarum has experience develop- 888.525.7575 | 586.323.5700 | sterlingagency.com ing registries, information technolo- Pistons.com/premium gy and grant development. Altarum and the NNDC hope to generate up (248) 377-8477 to $2 million in additional financial support from corporations, founda- tions and federal agencies. Sterling Insurance Group is a Michigan based company. — Jay Greene 20140825-NEWS--0015-NAT-CCI-CD_-- 8/22/2014 10:13 AM Page 1
August 25, 2014 CRAIN’S DETROIT BUSINESS Page 15 New UM business accelerator draws
expertise from biz, engineering schools OF IHG’S DEVELOPMENT& Plans for the new Desai both at the business Will there be an upfront cash fee for DESIGNER AWARD Family Accelerator at the school and the engineer- companies accepted? Or will the ac- University of Michigan in ing school. celerator take equity in them? Ann Arbor were officially It will be a three- to That’s what we are still trying to Winner unveiled last week. four-month program that work out — the amount of invest- Bharat Desai, founder of will help founders acceler- ment, what type of investment. Troy-based Syntel Inc., is ate their company or ven- Those are details we are still try- one of the accelerator’s ture, getting them to a ing to finalize, hopefully by the funders. Crain’s reported point where they can get end of the year. And I would love to in June that the accelera- follow-up funding and get a website up here soon. tor, which at that time make significant was unnamed, would be progress. (The process) What will the application process funded with a $1 million Q&A will really depend on be like? gift from the Desai family; what type of company in We haven’t finalized it yet, but it UM wouldn’t talk funding Kelly LaPierre, order to have them invest- will be a form of written applica- last week, but a press re- Desai Family ment ready by the conclu- tions in addition to some video lease said the Davidson Accelerator sion of the program. submissions and in-person inter- Foundation is also a funder. views and pitches. I would want a The accelerator is a What types of companies lot of the teams to submit a short joint venture between the Stephen are you looking to support? video to explain the product and M. Ross School of Business and the We are not sure yet. We haven’t themselves. I think that gives you College of Engineering. It will be specified. The type of companies is a better sense of who someone is managed by the Samuel Zell & pretty broad, but it’s a type of com- instead of just written words. Robert H. Lurie Institute for Entrepre- pany that is able to make significant neurial Studies and the engineering progress in three to four months. What is the void that Desai is look- school’s Center for Entrepreneurship. ing to fill in the accelerator market? Kelly LaPierre, the accelerator’s What are the next steps? The two key pieces that differen- new managing director, spoke with There are still a lot of decisions tiates this is first the investment, RENEWED REFRESHED REFINED Crain’s Detroit Business reporter on the size of the investment, fig- seed-stage investments. That’s a Celebrate your special occasion, corporate meeting or holiday party Kirk Pinho last week about the accel- uring out all those details on the big benefit to the founders, to get a in style. Beautiful guest rooms, breathtaking views and inventive culinary creations at the new Top of the Pontch Restaurant opening erator’s mission and plans. mentors involved, getting engage- bit of cash in order to continue in September. Let us show you a new kind of luxury. LaPierre, 29, was formerly direc- ment from (venture capital), pro- their idea. The second key piece is www.crowneplaza.com | 313-965-0200 | 2 Washington Blvd., Detroit, MI 48226 tor of marketing and operations fessors and staff here because it the fact that you don’t have to be for Grand Circus in Detroit and an will be a mentorship-based model. affiliated with the university to ap- associate with Boston-based Tech- That is what will allow these com- ply. This will be open to the broad- Stars. The native of Farmington panies to make progress. er community. Hills is a UM graduate. What will be the roles of the Zell Where do you expect the accelera- Tell us a little bit about the Desai Lurie Institute and the College of Engi- tor to be in a year? Family Accelerator. neering moving forward in the Desai I hope by 12 months down the It will be jointly supported by accelerator? line we will have gone through both schools — the programs and They’ll provide mentorship, two different (funding) cycles, initiatives and faculty and staff. support and guidance. Anyone can have anywhere from 10 to 20 dif- That’s really great, especially to the apply. You don’t need a university ferent companies and a handful of students, because the ventures re- affiliation, but you’ll certainly be companies that have been able to quire people with a lot of skill sets. able to benefit from the vast uni- continue their enterprises or star- It’s the best and the brightest minds versity resources. tups. Davenport U: Can’t find a job in accounting? Go to school for free
As the ramp-up to the Pappas said in a state- naw, Grand Rapids and Traverse academic year begins, ment that the university City. several universities are Higher expects to add an addi- announcing new pro- Education tional bachelor’s degree grams and incentives for major to the program New biz admin curriculum students. each year. A new bachelor’s of business ad- Among the highlights “All of our degrees ministration curriculum will be last week: Davenport Uni- should lead to career launched this fall at the University versity will provide ac- fields with available of Michigan’s Stephen M. Ross School counting students who jobs,” he said. “If they of Business in Ann Arbor, the uni- can’t find jobs in their don’t, we should not be versity announced last week. field after graduation up offering that program The curriculum will focus on to three additional se- and taking students’ the role of business in society, an Kirk Pinho mesters of free tuition to money. A DU degree in emphasis on learning about real- earn a second major. the hands of a serious, world experiences in business, The Employment Guarantee disciplined student should lead to and capstone courses. program requires that eligible stu- a job, plain and simple. In addition, the curriculum will dents maintain a 3.0 grade point “This program isn’t a gimmick. stress international experiences. average in their major, complete This is Davenport putting its mon- Ross School Dean Alison Davis- an internship, be eligible to work ey where its mouth is.” Blake said the BBA program was in the U.S. and complete a thor- The incentive program could af- redesigned to deliver an integra- ough and documented job search, fect as many as 420 students. The tive and action-based education. the university said. spring 2015 semester is the earliest The revamped curriculum was The program, which would cov- for which qualified students could done in collaboration with the As- er up to 48 credit hours, is valued apply for additional courses. pen Institute and the National Under- at up to $30,000. It does not cover Davenport has 10,000 students graduate Business Symposium. the cost of university fees and and campuses in Livonia, Warren, Kirk Pinho: (313) 446-0412, books. Flint, Battle Creek, Holland, Kala- [email protected]. Twitter: Davenport President Richard mazoo, Lansing, Midland, Sagi- @kirkpinhoCDB 20140825-NEWS--0016-NAT-CCI-CD_-- 8/22/2014 11:36 AM Page 1
Page 16 CRAIN’S DETROIT BUSINESS August 25, 2014 Detroit Bikes rolls out second model, YOUR VIP sets sales goal of 1,000 by year’s end
BY GARY ANGLEBRANDT GAME DAY SPECIAL TO CRAIN’S DETROIT BUSINESS Detroit-based Detroit Bikes LLC EXPERIENCE launched a second product line this month, one year after starting its first. The “B-Type” model bicycle is an all-white, step-through bike that sells for $699. Company owner Zak Pashak has set a sales target of 1,000 by year’s end. The company spent two years preparing for the launch of the com- pany’s first bike model, the all-black A-Type, which also sells for $699. Pashak, a Canadian citizen, came to Detroit in October 2010, following a failed run for city office in his na- ARA HOWRANI tive Calgary. He used proceeds from Zak Pashak has invested $2.5 million to keep his company rolling. business investments in Canada to build Detroit Bikes. A-Types in the first 12 months. duced about 1,000 bikes in 2013. The His staff of 10 works out of a Sales have fallen well short of company would not disclose its 50,000-square-foot west side indus- that goal, at 1,000. sales targets last year, nor would it trial building Pashak bought in “It’s going to take some time for disclose actual sales figures for 2013 or sales targets for 2014 when asked 2012 for $190,000. He plans to hire people to trust our brand and hear last week. The company’s three another five to 10 people in the our story,” Pashak said last week. models are priced at either $1,950 or next two months. “Retailers are risk averse. We need $2,950, depending on the model. Detroit Bikes’ run at the bicycle to be around for a while longer.” Pashak also told Crain’s last Detroit Bikes’ B-Type’s more business has been harder than ex- realistic sales target of 1,000 — year he planned to sell the A-Type pected. Crain’s first reported on compared to the A-Type’s origi- for $550. Middleman fees prompted the company in April 2012, when nal target of 10,000 — reflects a Pashak expected it would cost the price increase after Detroit dose of learning curve for the $400,000 to get his company up and Bikes entered a national distribu- company. running by the end of that year. tion deal. “It’s hard to explode into mass Instead it cost $2 million to start “Also, looking at the market, I production,” Pashak said. rolling bikes out the door by Au- think we were undervaluing the The company is working to land gust 2013, and another $500,000 bike. I thought we priced ourselves international distribution deals to since. too low,” Pashak said. give sales a shot in the arm. The plant has the capacity to Shinola, which in addition to as- Detroit Bikes also plans to come produce 40,000 bikes a year. The sembling watches in Detroit does out with a “C-Type” bike within a company’s goal was to sell 10,000 the same with bicycles, said it pro- year. PREMIUM CLUB MEMBERSHIP Access Rewards Benefits One More of Michigan’s Most Valuable Resources
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August 25, 2014 CRAIN’S DETROIT BUSINESS Page 17 U.S. details plans for car-to-car safety communications
BY GABE NELSON ject in Ann Arbor that ran from CRAIN NEWS SERVICE mid-2012 until late 2013. About 3,000 drivers drove V2V-enabled After more than a decade of re- vehicles on ordinary city streets to search into car-to-car communica- test the capabilities and limits of tions, U.S. auto safety regulators the communications system. took a step forward last week by unveiling their plan for requiring The math of Cisco Systems Inc. is another of cars to have wireless gear that will vehicle-to-vehicle the big tech firms offering V2V enable them to warn drivers of communications: communications equipment and danger. A cost estimated software to the industry. at $341 to $350 The announcements came just per vehicle by NHTSA said that cars in the pilot three weeks before a major confer- 2020 – but project were able to transmit and ence on connected cars comes to potentially receive messages from one another Detroit. avoiding hundreds despite being made by different car These vehicle-to-vehicle trans- of thousands of companies. These cars were given mitters and software won’t be crashes and credentials through a security cheap, costing an estimated $341 to saving thousands management system so only legiti- of lives. $350 per vehicle in 2020, the Nation- mate messages could be received. ISTOCK PHOTO al Highway Traffic Safety Administra- NHTSA still needs to figure out tion said in a report. who will manage this security net- But the technology could save lying V2V equipment but would Motor Co., Hyundai Motor Co., Daimler “NHTSA’s kickoff of the rule- work and how it will be paid for. thousands of lives and prevent not mandate any specific safety AG, Nissan Motor Corp., Toyota Motor making process for V2V communi- The agency said it plans to put out hundreds of thousands of crashes features. The decision of which Corp. and Volkswagen AG — have cations demonstrates the country is a solicitation asking if any private each year by providing cars with features to activate would be up to been developing V2V technology well on its way to deploying this life- entities have an interest in run- information they never will be automakers, depending on their with the government through a saving technology,” said John able to gather simply from cam- engineering capabilities and their group called the Crash Avoidance Bozzella, CEO of the Washington, ning it. eras and sensors. level of comfort with the new tech- Metrics Partnership, or CAMP. D.C., lobbying group Global Automak- From Automotive News Industry leaders and others ea- nology. Despite the cost of the technology, ers. Crain’s Detroit Business reporter ger to learn about the latest in con- Eight major automakers — Ford automakers have embraced it as a Each of the CAMP group’s mem- Dustin Walsh contributed to this nected car technology will be at- Motor Co., General Motors Co., Honda way to make driving safer. bers provided cars for a pilot pro- story. tending the Intelligent Transport Systems 21st World Congress, run- ning concurrently at Cobo Center and Belle Isle on Sept. 7-11. The conference, which is in Detroit for the first time, will showcase the connected car technology that NHTSA will regulate in the future. LENDING Local suppliers expected to dem- onstrate technologies include a helping hand Southfield-based Denso Internation- from one entrepeneur al America Inc., Troy-based Valeo to another. North America Inc., Troy-based Del- phi Automotive plc, Van Buren Township-based Visteon Corp. and Northville-based IAV Automotive En- gineering Inc. The federal government plans to roll out requirements on some key safety features. Just two of the possible features that rely on vehicle-to-vehicle Mike Semanco technology — one that warns dri- President and COO vers if they don’t have enough time to make a left turn and anoth- Grow your company with er that urges them to stop if anoth- our cutomieǡ ƪeie er car is about to run a red light — Ƥnancia oution. could prevent 25,000 to 592,000 crashes and save 49 to 1,083 lives Ȉ Ȁ inancin HitachiBusinessFinance.com annually when the entire U.S. ve- Ȉ ine of reit (248) 658-1100 hicle fleet has the technology, ac- cording to the report. “Safety is our top priority, and V2V technology represents the next great advance in saving lives,” Transportation Secretary Anthony Foxx said in an an- nouncement. “This technology could move us from helping people With all the confusion surrounding survive crashes to helping them avoid crashes altogether.” healthcare, who knew providing it The report also included a draft version of standards that Foxx has vowed to propose by the time Pres- could be so simple? ident Barack Obama leaves office in 2017. They would be known as Federal Motor Vehicle Safety Stan- EXCHANGE SOLUTIONS™ dard No. 150 and would set mini- INTRODUCING CAMBRIDGE EXCHANGE SOLUTIONS. CAMBRIDGE CONSULTING GROUP mum requirements for the V2V transmitters and messages. There’s a new soluutioion to prooviddingg grorouup benenefiefit cooveraage, annd it’s very ssimple, really. The current V2V system is set YoYou gigvee your emplmp oyoyeess a seet amoununt of mom ney to spend on benefits – it’sts like a up in such a way that cars swap bennefits allolowanw ce – and thhey use that money to shohop for the ccombination of coveerage messages 10 times per second that meetee s thheir indidividual neeedsds. Employoyeess are empoweered by more plan choicices. about their position in space, AAnd you’re able to get crucuciaial contrn ool over costss. which direction they are headed and how quickly they are moving Cambridge bbringngs benenefits, tecchnologyog and deciision suppup orort tools inn a simple, in that direction. If two cars are on conveniene t andd easy to implememennt package. Add it upu , and the aadvantages are cleaear. 248.743.4300 a collision course, the driver can ccgexchangesolutions.com be presented a warning. NHTSA said its rules would re- ©2014 Cambridridgeriddgedggg Consulting GroGroup,oup,oup, LLC. All Rights ghtss Reserved.R quire new cars to have the under- 20140825-NEWS--0018-NAT-CCI-CD_-- 8/22/2014 12:30 PM Page 1
Page 18 CRAIN’S DETROIT BUSINESS August 25, 2014
PLATINUM STANDARD Restaurants, offices rejuvenate
FRACTIONAL AND MANAGED BUSINESS AVIATION PROGRAMS. SERVING ALL SOUTHEASTERN MICHIGAN. long-vacant G.A.R. building FALCON 2000 BY ANJANA SCHROEDER CRAIN’S DETROIT BUSINESS
To those driving southeast on Grand River Avenue toward down- town Detroit, the Grand Army of the Republic Building looks tiny against the backdrop of taller Detroit office buildings and structures erected or redeveloped in recent years. But up close, the 25,000-square- foot building shines — from the American flag affixed to the turret to the century-old brick that cov- ers the triangle-shaped facade. And inside, the sawdust cover- CORPORATEEAGLE.COM ing the floors, ceilings and walls are evidence of the work in full swing that is bringing the build- ing back to life. This fall, two new restaurants — Republic and Parks and Rec Diner — will open on the first floor of the building, which stands in the trian- gle space along West Grand River between Cass Avenue and Adams Street. On the second floor, a space for weddings and other events is planned. And up the stairs on the third floor, offices are being built out for Mindfield, the Detroit media DVISOR POTLIGHT firm whose partners are spending A S $4 million to renovate the building. The G.A.R. Building, built in 1899, was used as a gathering place MICHAEL LOVASCO for Civil War veterans for close to Vice President 40 years. But the veterans strug- gled to maintain the building as ecutive chef at the interior design for the two their ranks thinned with time. the former Rodin restaurants. Mike believes the first step in every client engagement is in Midtown. “You want to keep the historical establishing trust through an absolute focus on understanding a In 1939, it became a city office; the city vacated the building in 1982. Republic is feel of the building but have a client’s long-term financial goals and objectives. Representing the envisioned as an space for people to feel comfortable third generation in the family insurance and financial services Ideas for redeveloping the build- ing in the past have included old world Euro- while dining,” Gurski said. business, Mike combines his lifelong immersion in the industry pean tavern in Gurski, whose background also with his later experiences working on Wall Street to help launch everything from a bed and break- fast to condominiums. 1,750 square feet includes film and television set a consulting practice that puts clients’ interests first and provides of space along production, said he is most excited independent advice and customized consulting services. In 2006, after issuing a request for development proposals, the Grand River about mixing modern and vintage and will focus elements. An example? An ab- 535 Griswold Street, Suite 1600 • Detroit, MI 48226 • www.lovascogroup.com • 313.394.1700 city of Detroit agreed to sell the Williams property to Ilitch Holdings Inc. so on locally and stract art mural that Gurski de- A Member Firm of M Financial Group. long as development plans were seasonally sourced ingredients. scribed as “a modern-day interpre- Securities Offered Through M Holdings Securities, Inc., A Registered Broker/Dealer, Member FINRA/SIPC. Williams said the menu will in- tation of Detroit’s history through LoVasco Consulting Group is Independently Owned and Operated. made within two years. When the clude bone marrow fritters, sea- terms of the purchase agreement the eyes of an LA street artist sonal vegetable dishes and house- known for his brilliant visions of with Ilitch expired, the property made pies. Menu items will range urban landscapes.” went to public auction. from $7 to $30. Anjana Schroeder: But it took from 2008 to 2011 for Parks and Rec, a 550-square-foot [email protected]. the Mindfield investors, who had diner at Cass and Grand River, Twitter: @anjanaschroeder also submitted a plan in the earlier will have traditional American fa- RFP, and the city to agree on a de- Exceptional Leadership. vorites such as eggs cooked to or- velopment plan for the historic site. der, hot and cold sandwiches and The ownership entity NewGAR nachos. Williams described the Delivered. LLC, made up of Mindfield princi- diner as “whimsical and comfort- pals David Carleton and Tom Car- able,” with an average price of $3 leton and business partner Sean to $15 per item. Emery, finally purchased the John Biggar, principal with De- building at 1942 Grand River Ave. troit-based Integrity Building Group, from the city in 2011 for $220,500. is the architect of the renovation. Michigan’s David Carleton said the in- Biggar said the biggest chal- vestors are paying for the $3.5 mil- lenge he has faced in restoring it — Premier lion to $4 million build-out of the besides dealing with pigeons that G.A.R. building with personal in- have taken up residence — has Retained vestments, grants and historic tax been updating the mechanical, credits. electrical and plumbing systems to Executive Up first for development is the comply with modern coding and restaurant space on the first floor. safety standards. Search Firm There are two restaurants, each And then, of course, there’s the with a name that connects to the building’s shape. building’s history: Republic, being “There are no right angles in the Over 100 years part of the building’s name, and building, …and it’s a triangle, but of combined Parks and Rec, because the city’s it’s not even a right triangle,” Big- experience. former parks and recreation center gar said. This means the drawings ANJANA SCHROEDER LLC was housed there in the early 1940s. and measurements in the blue- The partners in the Detroit media firm The restaurants will have sepa- prints are always off, he said. Mindfield are spending $4 million to International Executive Search rate entrances but will share a Biggar is working with Peter renovate the G.A.R. Building. They Tel: +1.248.645.1551 • www.huntergroup.com kitchen and a chef, Kate Williams, Gurski, a principal of Los Angeles- are, from left: David Carleton, Sean a Northville native and former ex- based Peter Gurski Design Inc., on Emery and Tom Carleton. 20140825-NEWS--0019-NAT-CCI-CD_-- 8/22/2014 12:41 PM Page 1
August 25, 2014 CRAIN’S DETROIT BUSINESS Page 19 Data: Women execs poorly positioned for CEO jobs
BLOOMBERG NEWS man in a line job than a woman. 30 years at Detroit-based GM, HR to be directors, said Julie man gets into a new job, he’s al- Then boards, which are pre- which entrusted her with increas- Daum, who leads the North Amer- ready thinking about the next job Mary Barra made corporate dominantly male, fail to identify ing responsibilities, including ican board practice at New York and what he needs to get the next history seven months ago when promising female executives who plant manager and vice president executive-recruiting firm Spencer job,” said Stevenson, who is co-au- she became the first female CEO could be moved into operational of manufacturing engineering. Stuart. thor of the book Breaking Away: of a major global carmaker. But functions and prepared for the top Other recent appointments to How Great Leaders Create Innova- her rise to success is still an Facebook Inc. COO Sheryl job as part of succession plans. the top job included two former fe- tion That Drives Sustainable anomaly among the very largest Sandberg’s book Lean In is res- male COOs last year: Lockheed Growth — And Why Others Fail. companies. onating with women precisely be- Martin Corp.’s Marillyn Hewson, cause not enough women are tak- “Women, on the other hand, Statistics show that for all the ‘Very hard’ 60, and General Dynamics Corp.’s ing the risk and getting to when they are appointed to big gains made by Phebe Novakovic, 56. women in the Dawn Lepore, now a director at operational jobs, said Jane jobs, are out to prove they deserve highest levels of multiple companies, says she Stevenson, who leads the global to be in the job they’re already in. U.S. companies, probably wouldn’t have been Thinking ahead succession practice at recruiter That presents a different way of hired as CEO of Drugstore.com Inc. Korn/Ferry International. most are still in To some degree, companies fail looking for career progression,” the wrong jobs in 2004 if she hadn’t first run a “Generally speaking, when a Stevenson said. Charles Schwab Corp. unit. to think far enough in advance if they want to about future CEO candidates, “It’s very hard to move from a make it to the said John Wood, vice chairman functional role to a CEO job,” Lep- CEO’s corner of- at executive recruiter Heidrick & ore said. “You usually can’t just fice. Struggles in New York City. go from CFO or head of marketing Barra That’s be- Women often become head of to CEO. More women need to get cause unlike nonoperational businesses be- into these operating jobs. The fact Barra, who’d been in charge of cause they started in those areas. that I’d run a revenue unit with General Motors Co.’s product devel- The board needs to ensure that The opment for two years before her revenue of $1 billion made a huge executives who show promise are appointment, a majority of top- difference.” given a chance at a line job soon- ranked women in the Standard & The 24 female CEOs in the S&P er, regardless of their gender, he Poor’s 500 Index aren’t in the 500 today is a record, yet that’s said. GO TO kinds of operational jobs that lead still less than 5 percent of the to- “I don’t think there is a bias, a to a chief executive office. Rather, tal, while women make up about lot of companies are specifically 55 percent of them are finance half of the total U.S. workforce. looking for women to put into advisors for labor and employment challenges chiefs, top lawyers or heads of hu- In the layers just beneath the these jobs,” said Wood, who has We have an impressive team of attorneys who specialize in man resources, according to data top job, women account for about helped place more than 200 CEOs creating solutions for your workplace issues. compiled by Bloomberg. 8 percent of the more than 2,000 and directors. “If you haven’t We are your GO TO team. top five highest-paid executives at been thoughtful about evolving Women rare sight on boards each S&P 500 company, according and developing your talent, you to 2013 proxy filings. may find that you narrow your About 94 percent of S&P 500 About 42 percent of those top- choices beyond what you should if CEOs held top operations posi- ranked women who were not CEO you had more actively managed tions immediately before ascend- were in operating jobs, based on people getting new assignments.” McDonald Hopkins PLC ing to the top job, and the relative the data compiled by Bloomberg. The lack of operational experi- scarcity of women overseeing ence is also hurting women’s 8PPEXBSE"WFOVF 4VJUF #MPPNöFME)JMMT .*t Stephen M. Gross, product lines or entire businesses chances to sit on boards in the Detroit Managing Member James J. Boutrous, II, Chair, Labor and Employment Practice risks slowing their advance to the The next Barra S&P 500, where female directors $IJDBHPt$MFWFMBOEt$PMVNCVTt%FUSPJUt.JBNJt8FTU1BMN#FBDI very top. The data show that the The only way to get more fe- account for 18 percent of the total. next generation of female execu- male CEOs is to get a conscious ef- Companies rarely pick heads of mcdonaldhopkins.com Carl J. Grassi, President tives is poorly positioned to capi- fort within corporations to spot talize on recent progress at a time future leaders early in their ca- companies from Google Inc. to Apple reers and push them toward oper- Inc. are laying bare their lack of di- ational jobs, according to labor versity to help raise the number of experts. Boards also need to be women and minorities in the more aware and pro-active: They workforce. need to groom more female presi- Why women are left off the CEO dents, chief operating officers and track finds its roots in all echelons heads of units who will, in turn, of the corporate career, recruiters become role models for the next say. Women, lacking role models, generation. tend to start in functional posi- In other words, more Mary Bar- Be one of the tions, and companies are still ras. An engineer by training, the more likely in 2014 to promote a 52-year-old Barra spent more than fi rst 52 nonprofi ts to sign up and be featured as Let the Giant Buy Your “Nonprofi t of Note” in an issue of Crain’s DISTRIBUTION: Nonprofi t Report Distributed Oct. 27 with e-newsletter. IT A$$ET$ Crain’s Detroit Business On crainsdetroit.com for an entire year
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Page 20 CRAIN’S DETROIT BUSINESS August 25, 2014
PEOPLE BUSINESS DIARY CONTRACTS With the expanded production capac- NAME CHANGE CONSTRUCTION ity, the company expects to add 40 Near Perfect Media LLC, Farmington Moncur Associates Inc., Southfield, a new jobs. Website: borgwarner.com. IN THE SPOTLIGHT Hills, a public relations and market- branding and digital agency, Eastern Michigan University has ing firm, added clients, including Anytime Fitness LLC, Hastings, changed its name to Moncur. Web- named Michael Valdes as CFO. He Toronto, Ontario-based Taylor & Colt Minn., opened a franchise at 1390 site: thinkmoncur.com. succeeds John Lumm, who Men’s BarberSpa franchises in Ann Walton Blvd., Rochester Hills. Tele- announced his Arbor, Rochester Hills and Birming- phone: (248) 608-4475. Website: NEW SERVICES ham; Brophy Engraving Co., Detroit; anytimefitness.com. retirement Bianchi Public Relations Inc., earlier this Greektown Preservation Society, De- Dollar General Corp., Goodlettsville, troit; Laser Eye Institute, Troy; and Troy, launched a new website: year after Tenn., opened a store at 14611 W. Mc- bianchipr.com. Dine Drink Detroit, Detroit. Website: Nichols Road, Detroit. Telephone: serving as CFO nearper for six years. (313) 327-1282. Website: fectmedia.com. dollargeneral.com. Valdes, 49, iSelect Custom Benefits Store, Royal Atlas Oil Co., Taylor, is opening a DIARY GUIDELINES Merritt Chemello had been CFO Oak, a private insurance exchange, for Agility transloading site in Evans, Colo., Email news releases for Business announced a contract with Ulliance that initially will serve the crude oil Health Inc., , Troy, a provider of health and Diary to cdbdepartments@ Inc. market, with the ability to handle fu- Grand Rapids. wellness programs. Ulliance is pro- crain.com or mail to els, lubes and other oil field materi- Before that, he viding iSelect enrollees access to its Departments, Crain’s Detroit Valdes als. Website: atlasoil.com. was associate Life Advisor services, which offer em- Business, 1155 Gratiot Ave., hospital director of operations and ployee assistance, wellness coaching, Art Van Furniture Inc., Warren, Detroit, MI 48207-2997. Use any ancillary services, and chief health risk appraisals, online re- opened an Art Van PureSleep store at Business Diary item as a model administrative officer, for sources, management consultants 11501 S. Saginaw Road, Grand Blanc. for your release, and look for the University Hospital in the University and defined employer contribution Telephone: (844) 271-5616. Website: appropriate category. Without of Michigan Health System. He also reward options. Websites: artvanpuresleep.com. complete information, your item had been director of finance and iselectcbs.com, ulliance.com. Circuit Learning, Detroit, opened a will not run. Photos of at least Garchow Linenberg business operations, patient care math learning center for students in 260 dpi are welcome, but we services. EXPANSIONS grades 3-9 at 30300 Telegraph Road, cannot guarantee they will be Terry Merritt to se- Valdes earned a BBA from the BorgWarner Inc., Auburn Hills, plans Suite 230, Bingham Farms. Tele- used. nior vice presi- University of Toledo and an MBA to invest $9.4 million in its plant in phone: (248) 690-6284. Website: cir- dent, Walbridge from the Ross School of Business Dixon, Ill., over the next three years. cuitlearning.com. Aldinger Co., De- at the University of Michigan. troit, from group vice president. Also, Joe Chemel- SERVICES lo to group vice president, esti- mating, from vice CALENDAR president; Steve Morgan Garchow to vice president, indus- TUESDAY Chrysler Group LLC. San Marino trial operations, from assistant vice NETWORK WITH MAYOR Club, Troy. $25 junior and student president; John Linenberg to assistant AUG. 26 members, $35 members, $45 non- vice president, engineering group, DUGGAN, STAFF members. Contact: Melanie Davis, from engineering director; and Chris Leadership Oakland Breakfast — The (313) 872-7850; email: mdavis@ad Morgan to assistant vice president, Road to Reinvention. 7:30-9 a.m. With Join the Detroit Regional Chamber craft.org; website: adcraft.org. Southeast operations, from project di- Josh Linkner, CEO, Detroit Venture for a networking reception with rector. Partners, on his latest book, The Mayor Mike Cracking the Gender Code at Work. Carmona Mannaioni Road to Reinvention, MSU Manage- Duggan and 11:30 a.m.-1:30 p.m. Sept. 9. Inforum. EDUCATION ment Education Center, Troy. $36. key staff With Connie Glaser, corporate con- Heather Carmona to strategic develop- Contact: Susan Williams, (248) 952- members, sultant and author of GenderTalk Jason Barrett to chairman, depart- ment director, ardentCause L3C, 6880, ext. 3; email: swilliams@leader 5:30-7:30 Works, More Power to You! and Swim ment of humanities, social sciences Troy, from chief administrative offi- shipoakland.com; website: leader With the Dolphins, and Ann Thomas, and communication, Lawrence Tech- shipoakland.com. p.m. Aug. 26 cer, M-1 Rail, Detroit. at the Max executive producer of “The Paul W. nological University, Southfield, from Smith Show” on WJR AM 760. director of assessment. He remains an Jill Mannaioni to vice president of M. Fisher business development, Stefanini Inc., Toast + Tech Talk Session 2: Surefire Townsend Hotel, Birmingham. $25 associate professor. Also, Thomas Music students, $40 Inforum members, $55 Southfield, from partner, ArchSource, Ways to Attract, Retain and Motivate Goulding to chairman, department of Center, nonmembers, $700 preferred seating mathematics and computer science. Sterling Heights. Talent. 7:30-10 a.m. . Plante Moran Detroit. LLC, Automation Alley. Second in for 10, with recognition in event pre- He continues as CEO, Eldersafe Tech- Debra Blair to di- Duggan a four-part series on topics related The event is sentation and signs, access to VIP re- nologies, Harvard, Mass. ception. Contact: Deb Roy, (313) 225- rector of recruit- to the technology industry, focused the first in a new series of 8244; email: [email protected]; or ing, OpTech LLC, on helping growing companies devel- quarterly networking receptions Melissa Countryman, (313) 225-7223; HEALTH CARE Troy, from direc- op the framework and tools to that will showcase leaders and email: [email protected]; Lisa Norris to family nurse practition- tor of recruiting staff representing Detroit and continue to compete. Free. Detroit website: inforummichigan.org. er and clinical director, Detroit Cen- and national ac- Athletic Club, Detroit. Contact: Wayne, Oakland and Macomb tral City Health Center, Detroit, from count manager, Dan Artman, (248) 223-3469; email: counties. nurse practitioner, Internal Medicine VisionIT Inc., De- [email protected]; web- Tickets are $10 for Detroit 5th Summit on the Future of the Con- & Primary Care Specialists, West troit. site: plantemoran.com. Regional Chamber members, nected Vehicle. 7:30 a.m.-6 p.m. Sept. Bloomfield Township. Also, Ryan Roger Bushnell to $590 to join the chamber and 11. Connected Vehicle Trade Associ- Lepper to CFO, from senior vice presi- director of strate- attend. Tickets will be available at ation, Michigan Department of dent, asset management and consult- gic projects, Fer- WEDNESDAY Transportation. Participants will in- ing division, Longhorn Capital Man- the door for current members Blair rous Processing AUG. 27 only. clude automakers; suppliers; hard- agement LLC, Sterling Heights. ware, software, services and commu- and Trading Co., Call Marianne Alabastro at (313) Detroit, from executive vice president Detroit Economic Club 18th Annual nications companies; insurers; and LAW Detroit Lions Kickoff Luncheon. 11:30 596-0479, email her at state and federal government offi- of SLC Recycling Industries Inc., War- [email protected], Andrea Oleszczak to marketing and a.m.-1:30 p.m. . Detroit Economic cials. Cobo Center, Detroit. $300 ren, a facility of Ferrous Processing or visit the chamber’s website, practice development manager, and Trading Co. Also, Rob Bakotich to Club. Join the DEC as it welcomes government representatives, $400 detroitregionalchamber.com. Collins Einhorn Farrell PC, Southfield, executive vice president of SLC Recy- new Detroit Lions head coach Jim speakers and CVTA members, $500 from director of marketing, Logic So- Caldwell. Ford Field, Detroit. $45 nonmembers; all prices increase cling Industries Inc., from executive advanced manufacturing jobs that lutions Inc., Ann Arbor. vice president of sales and marketing; DEC members, $55 guests of DEC $100 after Aug. 28; $100 extra to at- members, $75 others. Contact: (313) require training beyond high school Dave Dobronos to vice president of tend Intelligent Transport System 963-8547; email: [email protected]; but no bachelor’s degree. Families MANUFACTURING sales and marketing, from senior sales World Congress Expo and Demos website: econclub.org. will generate points toward prizes as and marketing executive; and Tony Sept. 10. Contact: Scott McCormick, Michael Farley to they participate in invention/tech- (734) 730-8665; email: sjm@connected senior vice presi- Levin to vice president from general nology/robotic exhibits. Comau In- vehicle.org; website: connectedvehi dent, general manager. UPCOMING EVENTS novation. Campus Southfield. Free. cle.org. counsel and secre- Detroit Regional Chamber: Inside the Contact: (877) 429-2370; website: tary, Daifuku upliftinc.org/automationworkz.aspx. Webb Holding Co., CEO Mind. 3:30-5 p.m. Sept. 4. With Western Wayne Business Leadership Farmington Hills, PEOPLE GUIDELINES Caitlin James, managing partner and Banquet. 5-8 p.m. Sept. 25. Confer- from general co-founder, Drought, an organic raw Detroit Economic Club Presents: ence of Western Wayne. Join chief Announcements are limited to juice company, discussing the chal- Lowell McAdam. 11:30 a.m.-1:30 p.m. elected officials and business leaders counsel and secre- management positions. Email them tary. lenges and successes his company Sept. 8. Detroit Economic Club. Low- from 18 western Wayne County com- to [email protected] has faced throughout its startup. Chris Glinka to di- ell McAdam, chairman and CEO, Ver- munities for an evening of network- or mail notices to Departments, Drought Detroit, Detroit. $20 Detroit ing and insights into the region. With rector of sales and izon Communications Inc., will ad- Crain’s Detroit Business, 1155 Regional Chamber members; $50 Crain’s Detroit Business Publisher marketing, Cus- dress the lunch meeting. MotorCity Farley Gratiot Ave., Detroit, MI 48207- nonmembers. Contact: Marianne Al- Mary Kramer as emcee and keynote tomized Manufac- Casino Hotel, Detroit. $45 DEC mem- 2997. Releases must contain the abastro, (313) 596-0479; email: mal- speaker David Sowerby, portfolio turing and Assembly Inc., Rochester bers, $55 guests of members, person’s name, new title, company, [email protected]; website: $75 others. Contact: (313) 963-8547; manager, Loomis, Sayles & Co. LP, Hills, from director of marketing. Bloomfield Hills, addressing econom- city in which the person will work, detroitregionalchamber.com. email: [email protected]; website: ic and business trends for western econclub.org. NONPROFITS former title, former company (if not Wayne County and metro Detroit. promoted from within) and former Automation Works. 2-5 p.m. Sept. 6. Ford Motor Co. Conference & Event Robert Magee to interim executive city in which the person worked. Uplift Inc. Career exploration parent Chrysler Day. 11:30 a.m.-1:30 p.m. Center, Dearborn. $100 individual, vice president, The Engineering Soci- Photos of at least 260 dpi are workshop and employee recruiting Sept. 9. Adcraft Club of Detroit. Lun- $1,500 corporate sponsorship table ety of Detroit, Southfield, from vice welcome, but we cannot guarantee event designed to expose high school cheon presentation with Ralph of eight. Contact: Dan West, (734) president, sales, AT&T Advertising they will be used. students and their parents to a fully Gilles, senior vice president, product 427-2122; email: [email protected]; Solutions, Detroit. functioning automated factory and design, and CEO, motorsports, website: c-w-w.org. 20140825-NEWS--0021-NAT-CCI-CD_-- 8/22/2014 6:08 PM Page 1
August 25, 2014 CRAIN’S DETROIT BUSINESS Page 21 Housing: Developers see prime real estate in demolished complex ■ From Page 3 been issued. Most think the site — where the fourth and final high-rise tower could be completely demolished as soon as Monday — is primed for re- development as multifamily units, perhaps with retail spliced in the mix, given the high demand for apartments and loft housing in downtown and Midtown. Housing and retail options With little doubt, new multi- family units would help satisfy the demand for rental housing. Vacancy rates in downtown and Midtown are in the low single dig- its, and Roxbury and other devel- opers plan hundreds of new mar- ket-rate units to come online in the next couple years in those ar- eas and others. According to data from Wash- PHOTOS BY DAVID HALL ington, D.C.-based real estate in- MARCH: Crews make the first incision into the Brewster-Douglass towers, which LAST WEEK: Crews dig up foundations and continue to demolish the last formation service CoStar Group Inc., had been long vacant. standing piece of the towers. the vacancy rate for the central business district’s 10,551 apart- David Di Rita, Two years of demolition Commission) will work in partner- That was the beginning of the ment units stands at only about 1.9 principal of Rox- ship with the city to determine the end for the complex, which opened percent. bury Group, said Demolition began this year on best use for the site to promote eco- in 1938. It was the first federally- Only imagination can limit devel- the redevelop- the housing complex’s four remain- nomic development and affordable funded housing project in the na- opment of the site, said Scott Allen, ment also pro- ing 15-story towers; other demoli- housing opportunities for the resi- tion for African-Americans. president of The Fourmidable Group vides opportuni- tion work started as early as 2012. dents of Detroit,” he said. When it opened, it had 701 units Inc., a Bingham Farms property ty for a It’s been a steady stream of con- Brown said a large amount of de- and grew to 941 units by 1941; more management company that man- large-scale retail tractors this summer chipping bris still must be removed. than six decades later, in 2008, the ages several Detroit riverfront development in away at the demolition. That The demolition and site restora- city closed the windowless housing properties as well as the nearby the city. process is paid for with $6.5 million tion is being led by Carleton-based projects after they had become a Brewster Homes, another housing DiRita “If we were U.S. Department of Housing and Urban Homrich Inc. Once that process is symbol of Detroit’s crime and commission property that opened looking at it, we Development funds to the Housing completed by Sept. 30, all that will blight. in 1994. would definitely be including an Commission. remain is the Brewster Wheeler Two of the original six towers “When they have that all cleared element of retail in there” along The Detroit Housing Commis- Recreation Center at the southwest were demolished a decade ago. out, it opens up a realm of possibil- with multifamily, he said. sion owns the land but cannot sell it corner of Wilkins Street and the During its lifetime, the complex ities,” he said. “There are very few opportuni- without HUD approval, said Jereon Chrysler Service Drive. was home to boxer Joe Louis and But, Allen said, multifamily ties to locate retail of scale in Mid- Brown, deputy assistant secretary Crews completed the initial de- the Supremes before they became housing is probably the best idea town, let alone something that has in HUD’s Office of Public Affairs. molition of 96 low-rise row houses Motown icons. because of the location and demand. freeway access like that.” “The plan is (that the Housing nearly two years ago and razed Kirk Pinho: (313) 446-0412, two six-story midrise buildings [email protected]. Twitter: with 154 units late last year. @kirkpinhoCDB Fresh Thyme: Chain eyes 4 area stores ■ From Page 1 MARKET PLACE ment will be in the Benton’s Cross- more fresh grocery options. chased Merchant of Vino from the ing shopping center on Sheldon “Fresh Thyme is not a traditional Jonna family in 1997 — has locations COACHING WEDDING SERVICES Road north of Five Mile. grocer with a heavy dose of center- in Midtown Detroit, West Bloom- A fourth Detroit-area store is store packaged goods and frozen field Township and Ann Arbor. Laurel A. Sills, Psy.D., PLLC planned for Farmington Hills, but aisles,” said Wade Hanson, a princi- Hampton Plaza was once home to Strategies for Executives in Transition ElopeUpNorth.com the company is not releasing de- pal at the Chicago-based food mar- a 22,000-square-foot Fresh Market Inc. tails on the exact location, Whicher ket research firm Technomic Inc. store, but the North Carolina-based Our business brings you to the top of yours! DestinationsWeddingsUpNorth.com said. “A few more” metro Detroit “In Detroit, they are entering into chain closed the store six months af- 31313 NW Highway μ Ste. 120 μ Farmington Hills, MI 48334 stores are also in the works, she a market that already has a half- ter opening in November 2006. 906-643-8621 said. The stores are part of what dozen Whole Foods stores. While “It’s a corner that’s been under- (248) 788-4230 / www.DrLSills.com Crain’s Chicago Business, a sister Fresh Thyme is a different experi- utilized for several years, and gro- publication of Crain’s Detroit Busi- ence, they will be competing for cery stores create a lot in a commu- ness, reported in February as a five- many of the same types of shoppers. nity, a lot of extra commerce,” REAL JOB year push to open more than 60 Consumers will look to see if they Rochester Hills Mayor Bryan Bar- stores in the Midwest. can achieve any sort of cost savings nett said. “Over the next few years, Fresh over a typical Whole Foods.” The Troy location once housed ESTATE FRONT Thyme will bring 500 to 1,000 jobs Allison Phelps, a public rela- the New York-based Syms Corp. dis- to the greater Detroit area and of- tions specialist for Austin, Texas- count retail store, which has been COMMERCIAL PROPERTIES POSITIONS AVAILABLE fer the community an extensive se- based Whole Foods, declined to closed for more than a year. lection of fresh and healthy food at comment specifically on the new R. Brent Savidant, Troy’s plan- û û great prices,” President and CEO Fresh Thyme stores. ning director, said a market of MOTEL FOR SALE COMMERCIAL REAL ESTATE LEASING OPPORTUNITY Chris Sherrell said in a statement “We’re dedicated to providing the Fresh Thyme’s nature would be MACKINAW CITY, MICHIGAN On Straits of Mackinaw and overlooking Transwestern, an international to Crain’s. best natural and organic products beneficial for the city. He said the commercial real estate firm is expanding in Each of the new stores is expect- to the communities that we serve,” company has not filed any docu- the Mackinac Bridge. 24 units plus living quarters. Large repeat business. Michigan, and is seeking a motivated and assertive person for our Detroit office. You ed to employ 100-120 people. Phelps wrote in an email to Crain’s. mentation of its plans with the city. Owners Retiring. would be joining an established, leasing & According to the Fresh Thyme “We believe that we have the Ed Gardiner, planning director Call Steve at 231-631-6686 website, the company plans to sales team to assist with our 6.2 million strictest quality standards in the for Farmington Hills, said the city [email protected] square foot portfolio of office properties open its first Michigan store in grocery industry, and with more has a Busch’s Fresh Food Market and throughout metro Detroit. Sales and/or East Lansing in 2015. MLive.com than 40 years serving the commu- two Kroger Co. stores. He had not INDUSTRIAL PROPERTY other direct customer contact experience reported last week that a new nities of Michigan (dating back to yet been approached by Fresh is essential; commercial real estate Fresh Thyme is also planned for the opening of the first Merchant of Thyme about a store in the city. experience would be a plus. Dearborn Warehouse Compensation package is competitive and Grand Rapids, with construction Vino location in 1974), we look for- Troy Commons and Hampton flexible. All inquiries will be held in strict starting by the end of the year. ward to continuing our commit- Plaza are both owned by Troy- 87,000 SF confidence. Please email resume to : Market analysts, however, said ment to our customers and neigh- based Stuart Frankel Development Co. 6 Truck Docks & 1 Drive-In Door [email protected] competition will be tough for bors for many years to come.” Kirk Pinho: (313) 446-0412, 22Ft. Clear Height [email protected]. Twitter: Fresh Thyme, even though shop- In addition to Rochester Hills and Call 313-506-0534 pers have continued to demand Troy, Whole Foods — which pur- @kirkpinhoCDB 20140825-NEWS--0022,0023-NAT-CCI-CD_-- 8/22/2014 7:26 PM Page 1
Page 22 CRAIN’S DETROIT BUSINESS August 25, 2014 Future: The next flood ■ From Page 3 treme rainfall in the future as the get ahead of infrastructure plan- climate changes toward greater ning now, before the next disas- precipitation.Several municipal- ter, government leaders said. ities in Southeast Michigan, in- “Climate change is not some cluding Royal Oak and South- distant problem for future gener- field; the state Department of ations to worry about — commu- Environmental Quality; and the Oak- nities across the state are al- land County Water Commissioner’s ready seeing its impacts Office are beginning to assess firsthand,” said Jeff Andresen, damages and study ways to in- climatologist for the state of crease drainage capacity and Michigan, in a statement. mitigate future hundred-year ur- “Extreme heat, heavy down- ban floods. pours and flooding are projected “Business-as-usual just isn’t to become more frequent in the going to cut it anymore,” said future and will affect infrastruc- Jim Nash, water resource com- ture, health, agriculture, The real high-water mark missioner for Oakland County. forestry, transportation, air and “To protect our residents and water quality, among others,” ZACH BURGESS A conference room in the Ferndale offices of Search Optics was just one of the company’s water-damaged areas. communities, we must be proac- Andresen said. tive and make investments in Nash told Crain’s that the state climate-resilient infrastruc- needs to work with counties and ture.” municipalities to develop more Quick-thinking workers save company data In Southfield, residents have effective ways to manage As the floodwaters poured into They were trapped. And compa- “We just saved an awful lot not filed 788 flood-related claims stormwater runoff and extreme the first floor of the Ferndale office ny property was about to be in just in hardware, but data. They with an estimate of more than weather events. of Search Optics on Aug. 11, five em- trouble. So Bethanie Kelley, Zac went around and just made sure it 900 homes and businesses dam- “The costs would be extremely ployees took the initiative to save Cockerhan, Michelle Kurpinski, was a safe environment by pulling aged, said Michael Manion, the large to increase capacity” for company property, helping avert Jeremy Janson and Tracey the plugs on appliances.” city’s community relations man- stormwater drains and holding what could have been an even Simalek did what they considered Search Optics is a search engine ager. ponds, Nash said. “It is a state is- more disastrous situation. to be the next-best thing. optimization marketing firm. The Cities in Southeast Michigan sue that would have to be funded “The entire first floor flooded, “I’m very proud of them,” Tap- local office employs 112 and is in affected by the floods have been by the communities at large.” and we had about a foot of water,” pan said. “They were very mindful the process of getting insurance holding multiagency resource Nash said states like Florida said Scott Tappan, chief sales offi- of what was happening downstairs adjustments on the damage, rip- meetings to help people and busi- and Arizona — and in more than cer. “The five employees that were … because the water was coming in ping up floors and getting itself nesses cope with the aftermath, 800 communities nationally — trapped here couldn’t leave be- awfully fast and there were a lot of back on track. In the meantime, said George Miller, director of operate stormwater utilities that cause their cars were either under computers that were on the first everyone is happily working on health and human services and charge property owners fees to water or they were higher in the floor just sitting on the ground, and the second floor. homeland security with Oakland pay for runoff. parking lot and they couldn’t drive they just had the insight to grab “We’ve got a clean bill of County. Owners that build containing out into the streets or their cars these computers and move them up- health,” Tappan said. Leigh Schultz, acting city engi- ponds to limit runoff from park- would have been flooded.” stairs. — Zack Burgess neer in Southfield, said the city ing lots, buildings and other sur- has been making ongoing up- faces can potentially reduce their grades and maintenance on its tax burden, he said. The average sewer and drain systems the past residential fee for water runoff few years. programs is $44 per year, said the CMU exec grateful for strangers’ kindness “There are a couple of sections U.S. Environmental Protection of the city where we will look at Agency. The night had descended upon And then I knew who lived in an apartment building making improvements where we “We are going to work with Kimberly Houston-Philpot, direc- that I needed to nearby, walked her through to safe- have more frequent backups (the Department of Environmen- tor of corporate and foundation re- get out of the ty, to dry land. there,” said Schultz, noting the tal Quality) on a program that en- lations at Central Michigan Universi- car.” Tamuk even went back to her ve- areas between Evergreen and courages green infrastructure (to ty. She was on her way home Aug. It was then hicle to cut off the lights for safety Southfield roads in eastern reduce stormwater runoff) and 11 from a board meeting for new that Houston- reasons. Southfield. work with 12 towns (in Oakland members for Inforum, the profes- Philpot would “About 2 inches of my skirt was In Royal Oak, Judy Davids, County),” Nash said. sional woman’s alliance. experience the wet,” said Houston-Philpot. “I will community engagement special- Walter Kosinski, an engineer The Detroit floodwaters were good side of De- tell you, once I was in their pres- ist, said the city will conduct a and principal with GZA GeoEnvi- moving fast. People couldn’t see. troit. As the wa- ence, I felt safe. And gauging the danger of the wa- ter continued to “You know we hear so much of study on its drains and sewerage ronmental Inc. in Livonia, said Houston-Philpot systems after thousands of hous- stormwater utility fees can help. ter was nebulous at best. However, rise and she what is going on bad these days in like most people caught during the started to feel the dampness in- the city, especially for me, because es flooded. “(Drainage) infrastructure evening commute, she thought she vade the rental car she was dri- I am from Missouri and very sensi- “People want a third party to gets old like roads and bridges could make it through the water in ving, it was time to make a move. tive to what’s going on down there make sure nothing failed,” and needs revenue streams to front of her on McNichols Road be- Dressed in business attire, right now. I tell you, these people Davids said. “We want trans- maintain it because it is costly,” tween Log Cabin Street and Rosa Houston-Philpot removed her talked with my family and guided parency.” Kosinski said. Parks Boulevard. heels and started to make her way them to where I was and I really Davids said more than 3,028 GZA also provides environ- “I had no idea of the magnitude to safety. With water up to her felt like God sent me angels. They people have requested claim mental consulting services to pri- of what was going on,” Houston- knees, she said, fear crept in. But are what is good about the city. forms for flood damage to their vate companies to develop or im- Philpot said. “I went for it and I was not for long as people came to her They are what I believe the people homes and businesses. Estimat- prove water retention and fine … then I wasn’t. I told my girl- aid and helped her to safety. here are all about.” ed damages so far are more than holding ponds on their proper- friend I had stopped and stalled. Liz Howard and Tamuk Scruggs, — Zack Burgess $120 million, said Mayor Jim El- ties to comply with water pollu- lison, who has declared a state of tion regulations. emergency. On municipal-funded systems, “We had a lot of flooding, but one key to passing legal muster is our streets are designed to hold gaining voter approval. water, not back them up into Last year, the Michigan Court of Metal: Scrap yards feel aftereffects houses,” Davids said. “They per- Appeals ruled that the city of ■ formed as exactly as they were Jackson’s stormwater utility fee From Page 3 designed.” was illegal because it violated the the floods isn’t the type of metal is pretty minuscule,” said Billy possessions. Headlee Amendment, which re- that fetches top dollar. Johnson, director of political and The going rate right now for quires voters to approve taxes. public affairs for the Washington, aluminum is around 85 cents a Are flash floods the new normal? On Aug. 5, Jackson voters re- “It’s not real good material,” Zack said. “By the time you’re done D.C.-based Institute of Scrap Recy- pound, while stainless steel, found Starting in the afternoon of jected the stormwater tax plan, cling Industries Inc. in many old appliances, ranges Aug. 11, a little more than 5 inch- which had collected about $1 mil- paying overtime, it’s more of a good deed.” The flood of material into from 48 cents to nearly $3 a pound, es of rain fell in Southeast Michi- lion in fees since 2011. depending upon quality, according There’s also not enough materi- metro Detroit scrap yards is con- gan over a six-hour period. Thou- City officials then voted to lay to ScrapRegister.com, a trading al coming in — despite volume in- sistent with what happens across sands of homes and businesses off several employees and elimi- portal for scrap metal. creasing by three times at just this the country after any serious suffered water damage as sewer nate all services funded by the Plus, Johnson added, “It’s a one company — for it to affect the storm, as those suffering through systems and drainage pipes tax, including street sweeping, whole lot better than it all ending price of steel, aluminum or other the tedious, back-breaking backed up. Toadways flooded, leaf pickup, gutter cleaning and up in a landfill.” metals on the global market. cleanup — whether homeowner pumps failed and drainage sys- catch basin cleaning. Phil Garelik, the nonferrous tems were overwhelmed. Jay Greene: (313) 446-0325, “When there are 70 to 80 million or hired remediation company — manager at Detroit-based Winston The severity of the storm, and [email protected]. Twitter: metric tons a year recycled, hav- realize they can get a least a little the damage, speaks to the need to @jaybgreene ing a few extra tons here and there something for recycling their lost See Next Page 20140825-NEWS--0022,0023-NAT-CCI-CD_-- 8/22/2014 7:27 PM Page 2
August 25, 2014 CRAIN’S DETROIT BUSINESS Page 23 Oakland official: Flood of insurance claims still rising Drain worked, BY JAY GREENE businesses and is projecting 11,000 Martin said FEMA (Federal Emergency Manage- CRAIN’S DETROIT BUSINESS total claims, said Fausto Martin, AAA tries to get ment Agency),” Gross said. “The AAA’s vice president and chief answers quick- state declared an emergency, but but system Topping even the polar vortex claims officer. ly to policyhold- any payments will be mostly for winter storms that hit Michigan “Probably 60 percent to 70 per- ers who call in cities, not individuals. It will take earlier this year, the Detroit flood cent of claims coming in have to inquire about time for that to happen.” was one of the worst single natur- some coverage,” Martin said. “We claims. Local governmental bodies are was deluged al disasters to hit Southeast are looking into how many of the “We try to asking residents to file claims as Michigan in recent memory, ac- policies have process our calls quickly as they can for their loss- BY JAY GREENE cording to several insurance ex- coverage and as quickly as we es. Residents must file claims CRAIN’S DETROIT BUSINESS perts and restoration contractors. what limits Haney can. If the cus- within 45 days. Many companies are bringing they have.” tomer doesn’t Lori Conarton, spokesman for An Oakland County official says in extra help to deal with call vol- Martin said have coverage and accepts that, we the Insurance Institute of Michigan the severe flooding of Aug. 11 was umes and claims, and report no AAA refers will send out a denial letter,” he in Lansing, said it is important not exacerbated by one notable slowdown in work since the ini- some cus- said. “If they do have coverage, we that property owners carefully drain’s malperformance; the sys- tial claims began the day after the tomers to will start to process the claim.” document and photograph all tem was simply overwhelmed. Aug. 11 storm. restoration AAA has nearly doubled the staff damage from the storm. While speculation came in from “I have never seen anything contractors to of its customer service and insur- “Document everything. We Crain’s readers last week about this bad. Not since 1988 when I get estimates of technical prob- Martin ance adjustment workforce to take want you to mitigate, don’t wait first started in the cleanup care of claims, Martin said. Some for the adjuster. It may take more lems with the 12 the business,” work. support and office staff are also be- time than normally would for Towns Reten- said Tim Wise, “We don’t want to send mitiga- ing used to handle customer phone someone to come out,” she said. tion Treatment operations di- tion out if it costs (the homeowner) calls and computers, he said. Royal Oak Mayor Jim Ellison Basin, also rector with $9,000 but they only are getting “We have brought in more than said in a statement he doesn’t ex- known as the Troy-based Ser- $5,000 (of insurance) back,” Martin 100 people from other state offices pect the city’s insurer or the city George W. Kuhn viceMaster Don’t said. “We don’t want them to be or hired temporary staff to handle to pay claims for residents who Drainage Dis- Panic, a proper- surprised.” the phones for customer claims had sewer backups. State law only trict — a 60-foot- ty and building AAA sells residential sewer wa- and adjustments,” said Martin makes cities responsible if the wide and 2-mile- restoration long drain ter backup insurance with limits said. “We probably will be busy sewers are defective or the city Nash company. like this for the next two weeks.” system in Madi- Wise of $5,000 ($500 or $1,000 de- knew they were defective, he said. “This is ductible), and $10,000 and $25,000, Meghan Cass, senior communi- “There were no defects in the city son Heights — the combined city worse than the polar vortex. We are both of which are offered with a cations specialist at Allstate Insur- sewers,” Ellison said. “They were and county drains and sewers were inundated with work as well as our $1,000 deductible, Martin said. A ance in Farmington Hills, said simply overwhelmed with far more simply unable to keep up with the other competition out there,” said $10,000 policy also is offered with Allstate’s national catastrophe water than they were designed to deluge, said Jim Nash, water re- Wise, adding that he is working on no deductible. team has been mobilized to help handle. We fully expect (our insur- source commissioner for Oakland four to five hours sleep a night. “Depends on the level of dam- process claims for policyholders. er) to deny all claims. … The city County. “Mostly what I am doing now is age whether we send an adjuster “It is too soon to know the total cannot pay such claims, either.” “In some cases, water pressure working with commercial losses, out or not,” Martin said. “If it is number of claims we expect to re- Haney said it is too early to tell in the drains was so high that water pushed up and out of manholes, dis- trying to put people back into under $5,000, we just might send a ceive, but our adjusters will con- how many insurers will try to col- placing their covers,” Nash said. business,” said Wise, who has check. If it is on the higher end tinue to work closely with cus- lect damages against municipali- Despite an estimated $3 million to added more than a dozen workers and there is a question of (how the tomers in affected areas to help ties to reduce their own financial $5 million in damage to pumps and to deal with the situation. “I have water entered), we could send an guide them through the claims liabilities. concrete walls, Nash said, the Kuhn 180 homes on the waiting list.” adjuster out.” process,” Cass wrote in an email to “It is pretty typical, if they real- drain system operated as designed. On Aug. 13, Gov. Rick Snyder Ethan Gross, co-owner of Globe Crain’s. ize the city had a cause and they “Water pressure flooded 15 feet declared a disaster in Wayne, Midwest Adjusters International Inc., Emily Trevallion, media rela- were responsible” for the water above the screen and caused dam- Oakland and Macomb counties, a Southfield-based public insur- tions specialist with Howell-based backup damages, Haney said. age, but all the equipment worked. allowing the state to apply for ance adjustment firm, said most Citizens Insurance Company of Amer- Martin said AAA hasn’t yet de- Nothing broke down,” Nash said. funding assistance from the feder- homeowners do not have water ica, said Citizens also has brought termined if any municipalities or Nash said he heard that people al government. damage insurance coverage be- in additional personnel to assist county governments were partial- experienced a sudden drop of water As of late last week, the three cause either they didn’t add an en- with claims. ly to blame for the extent of the on the streets and their houses in Southeast Michigan counties an- dorsement rider for sewer back- “We’ve implemented our fast- flooding. the Clawson-Royal Oak area start- nounced preliminary estimates of ups or they don’t have federal track claims system where we han- “We have responsibility to look ing right before midnight Aug. 11. more than $981 million in poten- flood insurance. dle as many claims as we can over into that and any losses we can re- tial losses from the Aug. 11 storm. the phone and issue checks as soon “That is when the water started “Some (insurers) are just send- cover that could impact members to ease up in the system,” he said. Damages could be higher, but paid ing checks and other companies as possible,” Trevallion said in an and pricing,” Martin said. insurance claims will be much less e-mail response to Crain’s. “Some Because of the heavy rain, Nash are calling it a flood and not pay- Martin said AAA has subroga- said, the first section of Kuhn, after deductibles are met, limits ing under the endorsement,” said claims, however, still require an in- tion specialists who are investi- are reached and damages are not spection, and we are getting out to which holds 124 million gallons, Gross, whose company primarily gating certain areas of high flood- filled up and spilled into the sec- covered by policy exclusions. assists businesses and homeown- inspect those claims as quickly as waters. It’s unclear whethe major in- possible.” ond section, which goes into an- ers receive maximum payouts on “Before we subrogate, we want other large cavern. surers plan to pursue legal action their claims. Gross said most businesses to make sure we have a solid fact- against municipalities over local have commercial policies that “It continued to rain, and the wa- Joe Haney, president of Sterling based case,” he said. “We don’t ter went into the Red Run Drain (a infrastructure performance. Insurance Group, said the agency in have limited amounts of coverage want to file frivolous cases.” Dearborn-based AAA of Michigan for water damages and business tributary of the Clinton River), Sterling Heights is continuing to Jay Greene: (313) 446-0325, has received more than 8,000 interruption. where it is treated and purified be- process claims for water and sew- [email protected]. Twitter: claims from homeowners and “People are wondering about fore going out” into the Clinton er backups. @jaybgreene River and Lake St. Clair, Nash said. “The Red Run drain got so charged and was so high, it couldn’t enter back into the system to drain” into the lake, he said. “It charged so From Previous Page “It’s so unfortunate that it hap- “It’s sort of a dichotomy,” Gare- based Rizzo Environmental Services, hard, it backed up the system.” pens to be great for the scrap lik said, “because cities want to get which handles trash pickup for Nash said the water commission Bros. Iron & Metal Co. Inc., said the yards,” said Garelik, 65. rid of this stuff. Royal Oak and other metro com- Aug. 11 storm is the worst he has is “going to communities now and “You don’t want to get it that “But in the municipalities that munities. “Nothing is going to asking them to create maps of seen in his four decades working in way, to see people suffering. But, frown on anybody scrapping, stop them from their appointed recycling. where the worst flooding was and yes, you benefit from these disaster they’ll chase away these scrappers routes.” look at our system to see where we “In 1977 or 1978, when the tor- situations because you don’t want even though they aren’t stealing. When Rizzo does pick up a re- can make improvements,” he said. nado hit West Bloomfield, it was to just throw these things in the There is a use for what they are do- frigerator or some other bulk met- The original 12 Towns Drain, sort of like this,” he said. “But landfill.” ing.” al item, it sorts it into the metals which serves 14 communities in (these) floods hit everybody; it Unlike GLE, Winston accepts And, in fact, the trash haulers bin, which its commercial recy- Oakland County, opened in 1973. By wasn’t just one part of the city.” legal scrap from anyone selling. are finding that there aren’t a ton cling division then handles. 1992, 12 Towns failed to meet more Like GLE, Winston Bros. is in- Zack said GLE requires customers of freezers, stoves, washers and Still, Garelik sees a need for the stringent environmental regula- undated and receiving similar to arrive in a company truck, al- dryers for them to pick up be- scrap yards to help individuals re- tions. In 2006, the facility was ex- types of materials, from brass fit- though he has relaxed that rule to cause those scrappers already cycle. “There isn’t enough metal panded and renamed the George W. tings to cars. There have been a help out homeowners in the cur- have picked over the bulky metal to mine anymore. It has to be re- Kuhn Retention Treatment Basin few wacky items as well: One cus- rent crisis. items. cycled. There isn’t any city infra- in honor of the late former Oakland tomer brought in a flooded cell- Winston, meanwhile, buys “The scrappers are beating us structure without scrap metal.” County drain commissioner. phone tower, while another was from both commercial accounts to it,” said Joe Munem, director Amy Haimerl: (313) 446-0416, Jay Greene: (313) 446-0325, recycling commercial satellite and individuals scavenging trash of government affairs and public [email protected]. Twitter: [email protected]. Twitter: dishes. from people’s lawns. relations for Sterling Heights- @haimerlad @jaybgreene 20140825-NEWS--0024-NAT-CCI-CD_-- 8/22/2014 6:31 PM Page 1
Page 24 CRAIN’S DETROIT BUSINESS August 25, 2014 Ballpark: Utica proposal prepares to step up to the plate ■ From Page 1 Padres’ farm system, and it was un- breaks are involved. The longest-running significant successful in an effort to build an WHO IS ANDY APPLEBY? The 2,500-seat stadium — it like- MICHIGAN’S LINEUP independent league locally is the independent-league baseball stadi- Frontier League, in operation since Appleby, a 2000 Crain’s 40 under ly will have artificial turf — will be Here are the minor-league and um in Troy in the mid-2000s. 40 honoree, is a former longtime on 7.8 acres, a vacant former independent baseball teams in 1993. It has a team in Traverse City, After turning his attention to Detroit Pistons executive who left household-waste dumping ground Michigan: and it averages about 3,000 fans per English soccer, Appleby’s firm now to launch General Sports and east of Moscone Drive and north of Ⅲ Great Lakes Loons (Midland) game. believes baseball can be a money- Entertainment in 1998. He’s its Auburn Road that parallels M-59 League: Midwest League Other independent leagues are maker in Macomb County. chairman and CEO. in Utica. Level: Class A out there, some struggling and some The firm, which generated about An additional 6.5 acres will be Affiliation: Los Angeles Dodgers successful. The talent ranges from The business plan $30 million in revenue last year, used for a 500-space parking lot rookie developmental to Triple-A, specializes in consulting, team that General Sports will develop Stadium: Dow Diamond Park (5,500 seats) and hundreds of major leagues have Without the benefit of the enor- management, marketing, for a to-be-determined sum that sponsorships, financing and done time in such leagues. mous TV and radio broadcast will be split with the city. Ⅲ Lansing Lugnuts education. It also had a synthetic- The 16-team American Association rights revenue that Major League League: Midwest League turf division. “The design (of the lot) is still be- of Independent Professional Baseball, Baseball teams enjoy, minor-league Level: Class A Appleby is Derby County F.C. Ltd.’s ing finalized, and so we do not based in Durham, N.C., but with teams must rely on ticket sales and Affiliation: Toronto Blue Jays chairman, and he fronted the group have a complete estimate at this teams spread over several states corporate sponsorships for cash. point. I can tell you that it will be a that paid $100 million — and Stadium: Cooley Law School and Canada, has been in operation In General Sports’ case, it also 50-50 split between GSE and the Stadium (7,527 seats) assumed $25 million in debt — for since 2005. Another, the four-team intends to lease the stadium out the club six years ago. That deal DDA,” Masters said. The lot also Ⅲ West Michigan White Caps United League Baseball in Texas, for events. included 33,597-seat iPro Stadium. will serve as downtown Utica pub- (Comstock Park/Grand Rapids) born of other failed leagues over the The company said it is using its General Sports bought the Fort lic parking when baseball isn’t be- League: Midwest League years, has one team that has been prior baseball management experi- Wayne Wizards (now called the Fort ing played, he said. Level: Class A playing since 1994. ence as a business template for the Wayne TinCaps) for $4.75 million in As part of the project, a retail and Affiliation: Detroit Tigers new venture. May 1999 and sold it for an condo development will be built The eight-team Atlantic League of undisclosed sum in 2006 while Stadium: Fifth Third Ballpark Professional Baseball, which “The financial model for this pro- just across the Clinton River on 1.4 (9,684 seats) ject was based on the Fort Wayne Appleby was pursuing the purchase launched in 1998 and plays in the of the National Hockey League’s St. adjacent acres that are now home Ⅲ Traverse City Beach Bums Wizards — oper- mid-Atlantic region and Northeast Louis Blues. Ultimately, the hockey to empty brownstone homes. Those League: Frontier League ationally speak- are to be razed in coming days. (and has one team in Texas), is akin deal didn’t happen. Level: Developmental ing, it is similar “Nothing has been finalized on to a Double-A or Triple-A league, (concessions, Affiliation: None with ballparks seating 4,000 to 7,500. league teams have covered by the development to the east of Clin- merchandise, ton River, but we do have plans to Stadium: Wuerfel Park (3,518 There also are summer college their MLB parent clubs. seats) sponsorships, build a residential-retail space over- leagues, made up of unpaid amateur Another is the on-field talent. suites, expenses, looking the ballpark,” Masters said. Ⅲ Battle Creek Bombers players in small towns — a varia- “The people who are playing are etcetera), but it Utica’s Downtown Development League: Northwoods League tion of minor-league baseball. One not prospects. The prospects are cannot be specif- Authority, which owns the entire Level: Amateur collegiate summer such league, the Cape Cod Baseball playing in the aligned leagues. ically com- 15.7 project site, will lease the 6.8- league League, it traces its roots to 1885. There’s less inherent interest,” pared,” said acre stadium footprint to General Affiliation: None Masters Zimbalist said. “There is not even Zain Masters, Sports for $1 annually under a 30- Stadium: C.O. Brown Stadium inter-city or inter-town competi- General Sports’ director of re- year lease that includes two 10- (4,701 seats) Baseball experience tion. How do you form allegiances? search and strategy. year options. General Sports will General Sports hasn’t disclosed “I don’t think the minor-league Appleby is familiar with base- own the stadium. that incorporates many environ- ball’s economics, and this isn’t his financial details about its tenure component of it is the revenue gen- General Sports also considered mental-friendly aspects: as owner of the minor-league club erator. It would have to be support- Ⅲ first baseball venture in metro De- sites in Troy, Wixom and South Wi-Fi throughout the stadium. troit. in Fort Wayne, but Masters did say ed by the auxiliary activities.” Lyon, Masters said, before it settled Ⅲ LED field lighting. In 2004-05, General Sports sought that experience proves the finan- Appleby said his experience with on Utica. Talks with the city began Ⅲ Separate trash and recycling to build a 4,500-seat, $17.5 million cial viability of the current effort. the Fort Wayne team is fueling his about a year ago, Masters said. receptacles. Other potential revenue-generat- baseball stadium in Troy, but the desire to do the Utica project. Because the land is a capped Ⅲ Reusable cups for beverage ing uses for the ballpark are envi- plan was voted down by the Troy City “We fell in love with minor- brownfield site, Utica’s DDA has purchases. sioned for the stadium, including Council after the Detroit Tigers paid league baseball when we owned the $400,000 in federal brownfield rede- Ⅲ Use of fewer toxic cleaning fireworks, concerts, graduation cer- for a phone campaign against the Fort Wayne Wizards, and ever since velopment funds specifically ear- products. emonies, Little League games, new ballpark and team and sent op- then we thought that metro Detroit marked for the site’s cleanup. That Ⅲ Waterless urinals in rest- youth soccer games and high school position letters to council members. would be a perfect market for this could include removing contami- rooms. sports. Installing an ice skating rink sort of project,” Appleby wrote in nated soils, installing methane bar- Ⅲ Bike racks. Opposition from the Tigers came on the field during the winter is an- an email. riers and water treatment mea- The site has all the needed utili- at a time when the MLB team strug- other possibility, Masters said. “What we also loved was the con- sures. ties, such as sewer, water and elec- gled on the field and at the gate. It General Sports isn’t disclosing a cept of how minor-league baseball has subsequently blossomed into a timeline for the project to show a Utica is just 1.7 square miles and tric hookups, needed for both phas- can provide a wonderful platform to is home to about 4,700 residents. Ma- es. regular playoff team and has set at- profit. give back to the community. This tendance records, so interest in “As with any business, it will comb County has nearly 850,000 res- “We already have planning per- project gives us that opportunity to idents, and Sterling Heights’ 130,000 mission and City Council ap- scuttling low-level baseball projects take a few years to show profitabil- give back to the community where in the suburbs has evaporated. ity,” Masters said. people and Clinton Township’s proval, and so we just need a mi- I’ve had a lot of success over the last Sports business insiders are 96,000 live near Utica — giving some nor building permit or two at this The Tigers didn’t mount a cam- 28 years and utilize the ballpark for mixed on the Utica ballpark plan, density to the market for the team. point,” Masters said. paign to halt a 2009-10 effort to a number of charitable endeavors.” although they cautioned that not General Sports will sell the build a $9.5 million, 3,900-seat sta- many details are known. A modern ballpark name of the stadium, if a buyer can dium on 11 acres next to the Sum- “Obviously, Andy Appleby has The site plan be found, Masters said. mit Place Mall in Oakland County’s experience and I’m not inclined to The stadium will include 18 Waterford Township. second- guess him,” said Raymond General Sports is paying the en- suites, of which a dozen will be open- The teams That effort fell apart because of a “Skip” Sauer, a professor and eco- tire cost of the stadium and mixed- air cabana, Masters said. An addi- lack of financing. It would have re- nomics department chairman at use development. tional six will be dugout-level suites Details are still murky on the located the Frontier League’s Ypsi- Clemson University. He maintains the “The project will be financed behind home plate, and others may teams that will play at the stadium. lanti-based Midwest Sliders from blog TheSportsEconomist.com. through a mixture of equity and be on the stadium’s third level. What is known is that the three Oestrike Stadium at Eastern Michi- “Interesting concept, too. Three debt,” GSE’s Masters said, adding General Sports said it intends to teams, all General Sports-owned, gan University to the proposed Wa- teams playing there means reduced that no local public money or tax build a state-of-the-art ballpark will play a total of 72 games at the terford Township ballpark. fallow time, so he might just make stadium, and the season will run General Sports said it hasn’t $4,000 per seat work out” to cover from May 15 to Sept. 15. They’ll be talked with the Tigers about its the $10 million construction cost. General Sports said it independent of Minor League Base- Utica plans. Other observers are more skep- ball, the system of clubs that form “We have always had a great re- tical. intends to build a Major League Baseball’s affiliation lationship with the Tigers. We also “The component that is minor- of farm teams. hope to complement the Tigers by league baseball sounds to me to be state-of-the-art Composition of the teams hasn’t introducing lots of young kids to very difficult. Very few independent been determined. baseball and, in turn, creating lots teams are consistently profitable. ballpark that “Players will most likely be of new Tigers fans,” Masters said. The market has to be exactly right,” sourced from across America with said Andrew Zimbalist, a sports incorporates many an emphasis in finding hometown The Tigers have veto power over economist at Smith College and au- Michigan players,” Masters said. any MLB-affiliated team that seeks thor of several sports finance books, environmental-friendly Independent leagues have come to locate within 50 miles of Comeri- including Baseball and Billions. and gone throughout baseball’s his- ca Park but doesn’t have any veto There are other hurdles, he said. aspects. tory. They’re ranged from semipro, power over an independent team. One is that independent teams small-town local operations to suc- Bill Shea: (313) 446-1626, must pay the salaries and equip- cessful, large-scale efforts that have [email protected]. Twitter: ment costs that aligned minor- seen teams absorbed by MLB. @bill_shea19 20140825-NEWS--0025-NAT-CCI-CD_-- 8/22/2014 6:09 PM Page 1
August 25, 2014 CRAIN’S DETROIT BUSINESS Page 25 A123: Battery maker charges forward from Ch. 11 www.crainsdetroit.com ■ From Page 1 EDITOR-IN-CHIEF Keith E. Crain GROUP PUBLISHER Mary Kramer, (313) 446-0399 er top executives in January 2013. “There was simply too much or [email protected] ASSOCIATE PUBLISHER Marla Wise, (313) 446- A123 spent the past 19 months re- hype around the rate the volumes 6032 or [email protected] EXECUTIVE EDITOR Cindy Goodaker, (313) 446- ceiving cash infusions from its new would ramp up,” he said. “Vehicle 0460 or [email protected] parent, streamlining operations electrification is going to take 20 MANAGING EDITOR Jennette Smith, (313) 446- and concentrating on the growing years, just like it did for antilock 1622 or [email protected] DIRECTOR, DIGITAL STRATEGY Nancy Hanus, market of low-voltage batteries for brakes and other innovations.” (313) 446-1621 or [email protected] micro-hybrids — cars that use new Lew said A123 underpriced its MANAGING EDITOR/CUSTOM AND SPECIAL PROJECTS Daniel Duggan, (313) 446-0414 or technology to generate power, such competition when it launched, a [email protected] as regenerative braking. strategy that came back to haunt SENIOR EDITOR/DESIGN Bob Allen, (313) 446- 0344 or [email protected] “The story of A123 has been a neg- the battery maker when demand SENIOR EDITOR Gary Piatek, (313) 446-0357 or ative one,” CEO Jason Forcier said. didn’t spike. [email protected] WEB EDITOR Kristin Bull, (313) 446-1608 or “But we’ve turned a corner, and “The capital markets weren’t [email protected] we’re more competitive than we’ve lending, and a lot of companies RESEARCH AND DATA EDITOR Sonya Hill, (313) 446-0402 or [email protected] ever been in a growing market.” went belly-up,” Lew said. WEB PRODUCER Norman Witte III, (313) 446- Forcier, 42, who took over the 6059, [email protected] EDITORIAL SUPPORT (313) 446-0419; YahNica CEO job after leading the automo- Crawford, (313) 446-0329 tive unit of A123, also serves on the Turning to Asia NEWSROOM (313) 446-0329, FAX (313) 446- 1687 TIP LINE (313) 446-6766 company’s board of directors with Fueling A123’s ongoing destruc- Pin Ni, CEO of Wanxiang’s U.S. tion was a failure of its lithium-ion REPORTERS Jay Greene, senior reporter: Covers health care, subsidiary, Wanxiang America Corp. batteries: A Fisker Karma plug-in insurance, energy utilities and the environment. in Elgin, Ill., and Tom Corcoran, hybrid fitted with an A123 battery (313) 446-0325 or [email protected] Amy Haimerl, entrepreneurship editor: Covers an independent turnaround con- failed during an April 2012 test entrepreneurship and city of Detroit. (313) 446- sultant. conducted by Consumer Reports. 0416 or [email protected] Chad Halcom: Covers litigation and the defense A123 is chasing the new market BLOOMBERG Replacing the defective batteries industry. (313) 446-6796 or [email protected] of low-voltage lithium-ion batteries Machines fabricate batteries at the A123 Systems plant in Livonia, where the cost A123 $66.8 million. Tom Henderson: Covers banking, finance, to match demand in the micro-hy- company spent $300 million to build the largest lithium-ion battery plant in The announcement devastated technology and biotechnology. (313) 446-0337 or North America. [email protected] brid market, Forcier said. A123’s A123’s stock price, which fell more Kirk Pinho: Covers real estate, higher education, low-voltage batteries are half the than 85 percent during the year. Oakland and Macomb counties. (313) 446-0412 or Chem Power Inc. in Troy, said that Meanwhile, automotive electri- [email protected] 40-pound weight of a traditional Bill Shea, enterprise editor: Covers media, supplier is also working to develop fication was consuming the media In August 2012, a prior deal with battery, which fits most automak- advertising and marketing, the business of sports, 48-volt batteries for the North and politicians. Wanxiang fell through because and transportation. (313) 446-1626 or ers “lightweighting” strategy. Au- [email protected] American micro-hybrid market. Under Energy Secretary Steven A123 ran out of cash before the fed- tomakers are asking suppliers to Dustin Walsh: Covers the business of law, auto Chu, the U.S. Department of Energy eral government approved the suppliers, manufacturing and steel. (313) 446- create lighter parts to help meet the 6042 or [email protected] announced the Advanced Technol- deal. That agreement would have federal fleet fuel economy standard Sherri Welch, senior reporter: Covers nonprofits, ‘A better place to compete’ ogy Vehicles Manufacturing Loan provided A123 $465 million in fi- services, retail and hospitality. (313) 446-1694 or of 54.5 mpg by 2025. nancing for an 80 percent stake. [email protected] A123’s high-voltage lithium-ion Program, designed to provide $25 LANSING BUREAU business continues to supply Gener- billion in direct loans to fund ad- The company filed for Chapter Chris Gautz: Covers business issues at the Capitol and utilities. (517) 403-4403 or [email protected] Contract growth al Motors Co.’s Chevrolet Spark EV, vanced fuel-saving technologies, 11 bankruptcy protection Oct. 16, BMW AG’s hybrid 3-, 5- and 7-series in December 2008. 2012, with A123 owing millions of ADVERTISING Forcier said A123 expects to sup- dollars to hundreds of debtors, in- SALES INQUIRIES (313) 446-6052; FAX (313) vehicles and China automaker SAIC Ford Motor Co., Nissan North Ameri- 393-0997 ply 100,000 low-voltage batteries Motor Corp. Ltd. It also supplies lithi- ca Inc., Tesla Motors Inc., Fisker Auto- cluding the cities of Livonia, Novi within the next couple of years. It SALES MANAGER Tammy Rokowski um-ion batteries to truck and bus motive Inc., JCI, A123 and others re- and Romulus. At the time, A123 SENIOR ACCOUNT EXECUTIVE: Matthew J. has current contracts with McLaren makers Daimler AG and BAE Systems ceived the loans or grants. held $376 million in debts with Langan Automotive, Ferrari SpA and Daimler about $459.8 million in assets. ADVERTISING SALES Christine Galasso, Jeff plc. In 2009, the DOE awarded A123 a Lasser, Joe Miller, Sarah Stachowicz AG. Michael Lew, head of communi- $249 million grant through the JCI was the stalking-horse bid- CLASSIFIED SALES Angela Schutte, manager, The contracts mark a new bat- der to acquire A123 assets in the (313)-446-6051 cations for the Chicago-based Na- American Reinvestment and Re- DIGITAL MARKETING MANAGER tery life for A123, which once was tional Alliance for Advanced Technolo- covery Act. It also received $125 bankruptcy, but it lost out to Wanx- Jennifer Chinn the most talked-about maker of gy Batteries and president of the million from Michigan’s 21st Cen- iang in an auction. Wanxiang won AUDIENCE DEVELOPMENT DIRECTOR Eric Cedo pure electric-vehicle batteries in with a $256.6 million bid for the au- EVENTS MANAGER Kacey Anderson New York City-based consulting tury Jobs Fund. SENIOR PRODUCER FOR DIGITAL/ONLINE the world before market timing firm Clearer Horizons, said the new A123 spent $300 million to retro- tomotive and grid assets of the sup- PRODUCTS Pierrette Dagg and technical trouble interrupted A123 is in a better place to com- fit a plant in Livonia — the former plier. SENIOR ART DIRECTOR Sylvia Kolaski its progress. The deal was met with a critical SALES SUPPORT Suzanne Janik, YahNica Crawford pete. home of Technicolor Inc., which va- PRODUCTION MANAGER Wendy Kobylarz “What we’ve seen happen is a “A123 has fallen from being the cated the building more than a eye from U.S. Rep. Bill Huizenga, PRODUCTION SUPERVISOR Andrew Spanos dramatic shift from a one-size-fits- industry mouthpiece and are try- decade ago. R-Zeeland, and other Republican CUSTOMER SERVICE all approach,” Forcier said. “We’re ing to prove themselves against The plant, the largest lithium- legislators, who feared a Chinese no longer focused on chemistries the competition,” Lew said. “They ion plant in North America, pro- owner of U.S.-invested assets. But MAIN NUMBER: Call (877) 824-9374 but on markets, which I think is a are taking what the market is giv- duced a prismatic cell — a thin, the deal was ultimately approved, or [email protected] big change in our thinking.” ing them, and the market, for the lithium-ion battery around the and Wanxiang got to work. SUBSCRIPTIONS $59 one year, $98 two years. Low-voltage batteries, often in Years later, Forcier said company Out of state, $79 one year, $138 for two years. time being, is responding.” size of a license plate — for use in Outside U.S.A., add $48 per year to out-of-state 12- or 48-volt iterations, power por- Global revenue from lithium-ion battery packs for plug-in hybrid missteps and government funding, rate for surface mail. Call (313) 446-0450 or tions of vehicle operation, such as batteries for electric vehicles is and electric vehicles. An electric- no matter how egregious in appear- (877) 824-9374. starting or regenerative braking, ance, led the company to Michigan SINGLE COPIES: (877) 824-9374 projected to grow from $5.7 billion vehicle battery pack requires REPRINTS: (212) 210-0750; instead of the entire vehicle, as is in 2014 to $24.1 billion in 2023, with around 400 cells. and is aiding in its rebirth. or Alicia Samuel at [email protected] the case with the Tesla Model S. “Without the government fund- TO FIND A DATE A STORY WAS PUBLISHED: battery electric vehicles account- Executives, local and federal ex- (313) 446-0406 or e-mail [email protected] A123 competitors, Milwaukee- ing, we would have never come to ing for $15.1 billion, according to a ecutives celebrated the plant’s CRAIN’S DETROIT BUSINESS IS PUBLISHED BY based Johnson Controls Inc. and recent report from Boulder, Colo.- grand opening in 2010 to great fan- Livonia and Romulus,” he said. CRAIN COMMUNICATIONS INC. South Korea’s LG Chem, also have “The lessons learned were tough, CHAIRMAN Keith E. Crain based research firm Navigant Con- fare. PRESIDENT Rance Crain launched low-voltage options. sulting Inc. Then-Gov. Jennifer Granholm but I think they were necessary.” TREASURER Mary Kay Crain JCI, which builds lithium-ion However, the experts have been touted that advanced battery pro- A123 is now hiring again, with Executive Vice President/Operations William A. Morrow batteries in Holland, unveiled its wrong about projections on electric duction in the U.S., and predomi- 30 openings for engineers and oth- Executive Vice President/Director of Strategic micro-hybrid battery system at the vehicles in the past — a contributor nantly in Michigan, would make up er skilled positions, Forcier said. Operations Chris Crain Executive Vice President/Director of Corporate North American International Auto to the market implosion in 2012. 40 percent of the industry by 2012, A123 employs 600 in Michigan and Operations KC Crain Show in January 2013. thanks in part to investments by 2,500 globally, down from more Vice President/Production & Manufacturing Dave Kamis “Micro-hybrid systems will be the state and federal governments. than 3,000 in 2010. Chief Financial Officer able to support the automotive in- No rising phoenix, but a survivor President Barack Obama made a It added a fourth shift to its Livo- Thomas Stevens dustry’s needs at a much lower nia plant — which is now produc- Chief Information Officer Founded in 2001 out of materials surprise call during the event, Anthony DiPonio cost than hybrid or electric vehi- developed at the Massachusetts In- telling attendees, “This is about ing batteries seven days a week. G.D. Crain Jr. Founder (1885-1973) cles,” the supplier said at the time. stitute of Technology, A123 spun out the immersion of a new industry A123 is also a year ahead of Mrs. G.D. Crain Jr. Chairman (1911-1996) JCI declined to comment for this EDITORIAL & BUSINESS OFFICES: of the university in 2005 announc- in America.” schedule on its financing deal with 1155 Gratiot Ave., Detroit MI 48207-2732; article. ing a new, fast-charging lithium- It was the beginning of a new in- parent company Wanxiang in pay- (313) 446-6000 Last week, LG Chem secured a ing back on its capital infusion, Cable address: TWX 248-221-5122 AUTNEW DET ion battery based on revolutionary dustry — just one that would have CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 contract to supply low-voltage bat- chemistries of nano-phosphate ma- a rocky beginning. Forcier said. is published weekly, except for a special issue the third week of August, and no issue the third week teries to Audi AG’s micro-hybrid terials. Fewer than 250,000 electric pas- “We’re seeing a strong pipeline of December by Crain Communications Inc. at lineup. The contract is worth In 2006, the U.S. Advanced Battery senger cars have been sold in the of new business, which we weren’t 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and “hundreds of millions of dollars,” Consortium awarded A123, then U.S. since 2010, according to data seeing a year ago,” he said. “We’re additional mailing offices. POSTMASTER: Send Reuters reported. based in Waltham, Mass., with a collected by the electric-vehicle not where we want to be yet, but address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, LG Chem also operates a lithi- $15 million developmental con- news site insideevs.com, despite we’re the largest lithium-ion bat- MI 48207-9732. GST # 136760444. Printed in um-ion plant in Holland, which tract for hybrid-electric vehicles. the president’s stated goal of 1 mil- tery maker in Michigan, and we’re U.S.A. Entire contents copyright 2014 by Crain supports the Chevrolet Volt. That Within two more years, A123 se- lion EVs in the U.S. by 2015. coming back.” Communications Inc. All rights reserved. Reproduction or use of editorial content in any plant faced job furloughs in 2012 cured funding from General Electric Patil said the expectations for Dustin Walsh: (313) 446-6042, manner without permission is strictly prohibited. because of slow demand. Co. and contracts with BAE Sys- electric-vehicle adoption were al- [email protected]. Twitter: Prabhakar Patil, CEO of LG tems, GM and Chrysler Group LLC. ways overstated. @dustinpwalsh 20140825-NEWS--0026-NAT-CCI-CD_-- 8/22/2014 6:59 PM Page 1
Page 26 CRAIN’S DETROIT BUSINESS August 25, 2014 RUMBLINGS WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF AUG. 16-22
The Bills had $30 million meals, alcohol and travel are offering qualified appli- to $40 million in operating Cleaner, greener while on state business. cants grants of up to $15,000 Drive-in owner profit last season, the New for their down payment York Post reported Aug. 7. and closing costs. In addi- alley coming this COMPANY NEWS tion, a homebuyer’s educa- Newspaper: Dan Gilbert Lear Corp. is finalizing tion course and financial campaigns for fall to Midtown a deal to acquire Auburn literacy course will be of- to buy Robb Report Hills-based automotive seat fered in Cody Rouge start- ing Sept. 5. blighted alley be- leather supplier Eagle Ot- LeBron James’ boss may be Detroit bond insurer getting into lifestyle pub- tween Alexandrine tawa LLC, a source close to the deal confirmed. The Syncora Guarantee Inc. said Detroit donors lishing. A and Selden streets the city’s deal to refinance Southfield-based supplier The New York Post, citing will soon be cleaned up and $388 million in bonds is ille- f things go Bart Lower’s open in the state.) anonymous sources, last made more pedestrian and is expected to pay more than $800 million for Eagle gal because part of the tax way, Detroit could be “The banks shot us down week reported that Cleve- bicyclist friendly. Through dedicated to paying the I home to a new drive-in left and right,” he said. land Cavaliers owner Dan a crowdfunding campaign, Ottawa, the world’s largest supplier of leather to the debt will be given to retire- movie theater by next June. At the Ionia theater, Gilbert, better known local- Midtown Detroit Inc. raised ment systems, to which tax- automotive market. First, though, he needs nightly attendance aver- ly as the founder and chair- money to make improve- payers did not approve a Search Optics, a the money. ages between 700 and 1,000. man of Detroit’s Quicken ments to the alley as part of tax levy for payment. provider of dealer websites Lower, the founder of Io- In other drive-in movie Loans Inc. and Rock Ventures its Green Alley renovation Michigan officials and digital marketing ser- nia-based Danny Boy’s Enter- theater news, Grosse Pointe LLC, has put in a roughly program. reached an agreement to re- vices with an automotive- tainment Inc., was scheduled Woods freelance journalist $60 million offer to buy a The alley will be re- move farmers market sheds focused Ferndale office, to meet with the Detroit Eco- and blogger Karen Dybis’ 128- stake in the Malibu, Calif.- designed with permeable that block Kercheval Av- purchased KPA’s DigiGo di- nomic Growth Corp. on Mon- page softcover book, The based CurtCo Robb Media pavers and native plants to enue between the east side vision, formerly TK day to tour possible sites for Ford-Wyoming: Cars, Candy LLC, which owns The Robb divert water from the of Detroit and Grosse Pointe Carsites, Automotive News his second drive-in theater. and Canoodling in the Mo- Report, a lifestyle magazine storm sewer system, mak- Park, AP reported. The reported. Terms were not On Friday afternoon, he tor City, will publish on for the ultra-rich. ing it sustainable. Midtown cities’ mayors said the deal disclosed. started an IndieGoGo crowd- Tuesday. Jennifer Kulczycki, vice Detroit has plans for two includes removing blight Inc. magazine named funding campaign to raise The book, from South president of communica- more alley improvement and redeveloping the border about $300,000 of the rough- Carolina publisher History tions for Rock Ventures, projects in the works, said 130 Michigan firms — more area between the cities. ly $1 million it would take Press, is a look back at the had no comment on the re- Cari Easterday-Kar, Midtown than 80 in metro Detroit — The University of Michi- to develop the Detroit Dan- five-screen drive-in movie port. Detroit’s CFO. to its annual list of the na- gan Water Center is forming ny Boy’s drive-in theater on complex that opened in 1950 The magazine defines it- tion’s 5,000 fastest-growing a five-year, $20 million about 10 acres of land in the in Dearborn (and has since self as “the definitive au- private companies. Troy- partnership with the Nation- city. changed monikers to the thority on connoisseurship ON THE MOVE based Retail Capital topped al Oceanic and Atmospheric the Michigan list, ranking “That would be enough Ford Drive-In). for ultra-affluent con- Troy-based automotive Administration to oversee No. 35, and Richmond- for the banks to write a loan It retails for $19.99, but is sumers.” belt and pulley supplier Day- scientific research on eco- based Michigan Realty Solu- for us so that we could fund listed on Amazon.com for co Products LLC named John logically sensitive coastal tions (No. 47) and Farming- the rest of it,” Lower said. $15.90. Bohenick as CEO, effective areas, AP reported. ton Hills-based Yochana IT Bill Dillon, business devel- Affleck shows off Pure Sept. 2. He will replace Leaders of Detroit’s Solutions (No. 95) also made opment manager for the James Orchard, who will 555 Nonprofit Gallery and Are Donald Trump, Bon Jovi Detroit look for ice video the top 100. DEGC, said Lower seems serve as a special adviser to Studios and the owner of Like countless other The Southfield office of flexible on property loca- low-balling Buffalo Bills? the board through Dec. 31. the abandoned Packard celebrities, actor Ben Affleck Colliers International was Plant were to discuss the fu- tions. The three non-binding Bohenick most recently was has helped to raise money awarded the leasing con- ture of a mural created at “He would like to be close bids for the sale of the Na- president of SKF Sealing So- for the tract for 614,000 square feet the plant by British graffiti to downtown but not im- tional Football League’s Buf- lutions in Elgin, Ill. ALS Asso- of office space in Troy. The artist Banksy, AP reported. pacted so much by light pol- falo Bills, owned now by the Peter Provenzano, Ma- ciation by three buildings are owned The Dearborn-based lution that it would inter- estate of Grosse Pointe comb County’s finance di- taking and managed by West Center for Arab American fere with the screen,” Dillon Shores businessman Ralph rector, was part in Bloomfield Township-based Philanthropy announced it’s said. Wilson, were all less than named vice the Ice EA&S Investments and Birm- distributing 13 grants There are between six $900 million, Forbes.com re- chancellor Bucket ingham-based Surnow Co. worth a total of $50,000 to and 10 properties Lower ported on Friday. for admin- Challenge Troy-based Unified nonprofits serving Arab- will look at next week in a Citing two unnamed istrative and post- Business Technologies was Americans, among them variety of areas, including sources, the financial news services for ing awarded a $650,000 perfor- Flint’s Arab American Her- Corktown, according to Dil- site said Terry Pegula, own- Oakland videos on mance-based grant from itage Council lon. Affleck Community , AP reported. ers of the National Hockey various the Michigan Strategic Fund There are also properties College. Median home sale League’s Buffalo Sabres, bid social media channels. to help it create 171 jobs in near Seven Mile and South- the most, at $890 million. Stephen prices in Wayne, Oakland, And not long after people Provenzano the next three years. Uni- field roads, and East War- A Toronto consortium Smigiel, Ma- Macomb and Livingston saw the viral video of his fied expects to buy a second ren Avenue at Chene and that includes rock star Bon comb’s assistant finance di- counties rose 18.2 percent challenge, the question building in Troy to estab- McDougall streets. Jovi was next at $820 mil- rector, is the interim re- over July 2013 to $152,500 most asked of celebrities — lish a new engineering and Lower’s first single- lion, and celebrity tycoon placement. last month, said Farmington “Who are you wearing?” — manufacturing operation. screen drive-in, located in Donald Trump bid $809 mil- A123 Systems LLC, the Hills-based Realcomp II Ltd. not surprisingly had a De- United Way for Southeast- Ionia near Grand Rapids, lion, Forbes said. Livonia-based automotive troit answer. ern Michigan, Ford Motor Co. opened last summer on 5 Forbes itself this month battery suppler, named Fund & Community Services acres after he and his fami- estimated the team is worth Pure Detroit, to be exact. Patrick Hurley as chief tech- OBITUARIES Affleck, who has been in and the General Motors Foun- ly “threw every penny we $935 million, just ahead of nology officer. Hurley, who John Genitti, longtime dation contributed a total of had at it and leveraged the Detroit Lions ($960 mil- Detroit this summer film- replaces Mujeeb Ijaz, was ex- owner of Genitti’s Hole-in- $200,000 toward the Detroit every ounce of credit we lion) and second-lowest in ing the new “Batman v. Su- ecutive director for global the-Wall restaurant and din- Water Fund to help Detroi- had.” value in the 32-team NFL to perman” movie, was wear- core engineering for John- ner theater in Northville, Total cost? About the St. Louis Rams ($930 mil- ing a “Detroit City” T-shirt son Controls Inc.’s power so- ters pay overdue water bills. died Aug. 16. He was 67. $485,000. lion). made by the company Pure lutions business unit. Claudia House Morcom, Banks wouldn’t touch Morgan Stanley is han- Detroit, a retailer specializ- Jay Towers was named OTHER NEWS a retired Wayne County Cir- that project either, he said, dling the sale for the Wilson ing in Detroit-centric T- co-anchor of “Fox 2 Morning cuit Court judge, died Aug. because of the decline in estate. shirts and other products. News,” replacing Alan Lee, The Michigan Depart- 17. She was 82. drive-in theaters nation- Wilson paid $25,000 to Since the video, which who left WJBK-TV2 in July. ment of Education approved Bernard “Moon” Mullins, wide. (According to launch the Bills in 1960; he Affleck posted on his Towers, who has been week- a Detroit Public Schools plan a former Detroit Times re- Drive-ins.com, there are 10 died in March at age 95. Facebook page on Monday, end anchor and feature re- to cut teachers’ and admin- porter and longtime the company, with loca- porter for “Fox 2 Weekend,” istrators’ pay by 10 percent Chrysler Corp. and Toyota tions in the lobby of the will continue to host his starting Oct. 1, and the spokesman, died Aug. 1. He Guardian Building and the weekday morning radio pro- state Local Emergency Fi- was 85. lobby of the Fisher Build- gram on WNIC 100.3 FM. nancial Assistance Loan Frederick G. Ruffner Jr., ing, decided to donate 25 State Deputy Treasurer board approved a DPS pro- founder of Farmington percent of sales of the shirt Wayne Workman was named posal for the district to bor- Hills-based publisher Gale to the ALS Association for acting executive director of row $111 million in state Research Co. and Detroit- the rest of the week. the Michigan State Housing aid notes to pay bills. based Omnigraphics Inc., As of Friday afternoon, Development Authority. He In a program designed died Aug. 12. He was 88. COURTESY OF DANNY BOY’S Pure Detroit had sold more replaced Scott Woosley, who to help the Cody Rouge Cardinal Edmund Szoka, Danny Boy's Drive-In Movie Theater in Ionia draws between 700 than 400 of the shirts, which resigned this month amid neighborhood on Detroit’s former head of the Archdio- and 1,000 people a night, and owner Bart Lower hopes to bring a has helped raise more than news he received reim- west side, FirstMerit Bank cese of Detroit, died Aug. 20. big screen to Detroit by next June. $3,000 for the cause. bursement for expensive and the Skillman Foundation He was 86. DBpageAD_DBpageAD.qxd 8/4/2014 3:23 PM Page 1
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