Big Impasse in Talks with State

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www.crainsdetroit.com Vol. 28, No. 13 MARCH 26 – APRIL 1, 2012 $2 a copy; $59 a year

Page 3 Sports Hall of Fame is game to drop debt Lawmakers quick with fix CPAs wanted: M&A, better Courts put real estate investors on the hook; bill frees them economy drive job growth BY DANIEL DUGGAN the state’s most prominent real es- The bill, which is awaiting sig- “The implications were huge,” CRAIN’S DETROIT BUSINESS tate investors and developers — in- nature from Gov. Rick Snyder, said Janet Langlois, executive di- cluding the brother of Robert voids a provision in many signed rector of the Building Owners and Inside It took two court decisions to Schostak, chairman of the Michi- loan agreements that allows Managers Association, the trade highlight a way for lenders to pur- gan Republican Party — worked lenders to sue for the personal as- group representing developers and sue the personal bank accounts of with industry groups and legisla- sets of real estate investors in the investors, leading the efforts. Opera Theatre en route some real estate investors whose tors to counteract the rulings. event of foreclosure. “There was risk to investors for to paying down debt, Page 4 buildings went into foreclosure. Their goal was to retroactively However, investors contend that future development, but also risk And then it took just three indemnify real estate investors they paid higher interest rates on for everything they have.” weeks for a bill to pass both the against personal liability in non- bonds sold to support projects The case that started it all in- Michigan House and Senate to pro- recourse loan agreements, and to based on the understanding that volved the Cherryland Center at M&A Awards tect those investors’ assets. specifically stipulate that only their personal assets were not at In a quiet, coordinated effort, buildings can be used as collateral. risk. See Contracts, Page 29 V for vision: Lifetime Achievement winner led the way on Big impasse in talks investment strategy, Page 11 with state: Finances Crain’s List Question is who can solve it

Largest accounting firms, BY NANCY KAFFER Page 18 CRAIN’S DETROIT BUSINESS Arguably, people If the Michigan Court of Appeals “ lifts an injunction today barring should be able to sit This Just In the state and the city of Detroit from entering into a consent down and figure this Chrysler Group continues agreement, it’s possible that the out, but they haven’t JOHN SOBCZAK Auburn Hills expansion two sides could reach a deal by Bill Hellebuyck works with son and sales manager Dave at Hellebuycks day’s end. so far. Power Equipment Center in Warren, where seasonal sales have sprouted Chrysler Group LLC has con- If the city and the state reach a ” earlier than usual this year. tinued its expansion in consent agreement, it’s possible Patrick O’Keefe, Auburn Hills with the lease Detroit could avoid the appoint- O’Keefe & Associates of a 147,000-square-foot office ment of an emergency manager. building at 2301 Featherstone And if the state is sufficiently Road. satisfied with without the expanded powers a Temp work It follows a Chrysler lease BING’S MAN the consent consent agreement would grant in May of 210,000 square feet agreement that him or the restrictions of report- of office space at 1075 En- State signals no it allows De- ing to a state-controlled advisory Businesses warm up to early spring trance Drive and the lease of love for COO Chris troit to sell board. Terry Stanton, communica- Brown, Page 28 about $137 mil- tions director for the Michigan De- 400,000 square feet of indus- BY MEGHANA KESHAVAN He said that in typical years, lion in bonds, partment of Treasury, didn’t re- trial space in Redford SPECIAL TO CRAIN’S DETROIT BUSINESS the company gets about two or it’s possible that the city won’t run spond to an email asking whether Township in December. three service repair requests per out of money in May. the state accepts Bing’s assertion The Featherstone building Local businesses that thrive day in March — but in light of That’s a lot of ifs. that he can get the job done. is owned by a joint venture of on the great outdoors are report- the warmer weather, they’ve The city’s financial situation is But turnaround and municipal Farmington Hills-based Pre- ing a surge in business linked to been averaging about 50 per day so precarious that any snag in the experts are skeptical. mier Equities and Southfield- this month’s unseasonably warm this month. works would likely mean that Gov. “It hasn’t been done yet,” said based General Development Co. temperatures. “Honestly, in 37 years of busi- Rick Snyder would appoint an Patrick O’Keefe, founding princi- The two investors were Real estate, recreation and ness I’ve never been in this situa- emergency manager, one of two pal at O’Keefe & Associates, a able to purchase the building landscaping companies have ex- tion,” he said. options — along with the consent Bloomfield Hills-based turn- for $900,000 when Chrysler perienced increased sales or cus- As of Friday, there were nine agreement — identified by a state- around firm. “Arguably, people was forced to sell its assets as tomer demand thanks to the days in March with tempera- appointed review team examining should be able to sit down and fig- part of its bankruptcy re- warm weather. Farmers and tures above 70, although the fore- Detroit’s finances. ure this out, but they haven’t so structuring, Crain’s reported agriculture businesses, however, cast this week calls for temps in At the same time, Detroit Mayor far. So you have to wonder if in March 2010. are concerned about how the the 40s and 50s. Dave Bing continued to argue last they’re capable of doing this.” — Daniel Duggan temperature spikes will impact Increases in retail and com- week he can fix the city’s problems “The city has had a general fund their crops later in the growing mercial fuel purchases are up, deficit every year since 2002 and season. which will help to balance out an every year since 2002 there has “It’s gotten pretty crazy,” said underperforming winter, said been a deficit elimination plan, Bill Hellebuyck, president and Keith Albertie, executive vice and none of those plans has ever CEO of Hellebuycks Power Equip- president of RKA Petroleum Cos. been fully implemented,” said Bet- ment Center Inc., a lawn care re- Inc. in Romulus. tie Buss, a senior research analyst tailer with locations in Warren “The warm weather has actu- at the nonpartisan Citizens Re- and Shelby Township. “We did ally helped us,” he said. “We did- search Council. more business last Friday than n’t sell as much heating oil this “If you ask technically is it pos- NEWSPAPER we did in the entire month of See Finances, Page 28 February.” See Spring, Page 25 20120326-NEWS--0002-NAT-CCI-CD_-- 3/23/2012 5:39 PM Page 1

Page 2 CRAIN’S DETROIT BUSINESS March 26, 2012

MICHIGAN BRIEFS MEDC wants ‘economic Solo in a thoughtful, analytical manner to ensure lasting success.” gardening’ program to take root Kettering’s tuition plan: Do fixed rates fix the cost? Michigan needs to do less hunt- MICH-CELLANEOUS ing and more gardening when it Kettering University is switching to a fixed-rate tu- tors. “I’d describe it largely as a marketing ploy comes to economic development. ition model meant to take the guesswork out of bud- aimed at quelling people’s fears about increases in Ⅲ Organizers of Gilda’s LaughFest That was a key message delivered geting for a college education. The program locks in higher education costs,” said Christopher Mor- in Grand Rapids (Michigan Briefs, last week at an event in Grand a tuition rate for 10 semesters. The Flint-based col- phew, chairman of educational policy and leader- March 19) say attendance at the Rapids spotlighting a Michigan Eco- lege also will eliminate academic fees and aims to be ship at the University of Iowa and author of a paper ti- second annual event totaled 56,294 nomic Development Corp. pilot pro- a national leader in containing higher education tled Fixed Tuition Pricing: A Solution That May Be over 10 days, beginning March 8. gram aimed at helping second-stage costs, it says in a press release. Worse Than the Problem. In last year’s debut, the comedy companies. Those are businesses Kettering’s freshman 2012 tuition is about $17,000 “You charge people more than they would have festival attracted 55,376 attendees. with 10 to 99 employees and $1 mil- per semester — or $136,000 over eight semesters, ex- paid their first two years and less than the last two Ⅲ The Kent County Board of Public lion to $50 million in annual sales. cluding room and board. The university said that if, years — it equals out,” he said. “The only thing is that Works has extended by 90 days — to In November, the MEDC alternatively, it used a standard plan and tuition in- it’s nice for families and students to know what their June 15 — the public comment pe- launched a pilot of Pure Michigan creased 5 percent each year, an eight-semester edu- costs are going to be over the next four or five years.” riod for input on an amendment to Business Connect, which pairs sec- cation would cost about $140,000. Nationally, private In 2005, Central Michigan University in Mt. Pleasant the county’s solid waste plan that ond-stage CEOs with consultants university tuition rose about 4.5 percent last year, introduced a fixed tuition model. But in 2008, the some trash haulers think might in- from the Cassopolis-based Edward according to the New York-based CollegeBoard Advo- CMU board of trustees voted to cancel the policy af- crease prices by forcing them to Lowe Foundation. The Grand Rapids cacy and Policy Center. ter a reduction in state appropriations. use county-owned landfills and re- event, sponsored by the Small Busi- The fixed tuition plan is not without its detrac- — Meghana Keshavan cycling facilities (Crain’s Michi- ness Association of Michigan and gan Business, March 12). Crain’s Detroit Business, highlight- pabilities of larger third- and Cup coup: Dart Container in to New York-based Vestar Capital ed resources available, as told fourth-stage companies. Partners IV LP. Since then, Solo has Find business news from through the experiences of two en- Bonnie Alfonso, president and Mason to buy rival Solo for $1B closed several plants and trimmed around the state at crainsdetroit trepreneurs who have gone .com/crainsmichiganbusiness. chief embellishment officer at Alfie Mason-based Dart Container more than 1,000 jobs. Dart CEO through Business Connect. MiBiz, Robert Dart said in a release that Sign up for Crain's Michigan Logo Gear for Work and Play in Tra- Corp., the largest maker of those a business publication covering because his privately held compa- Business e-newsletter at crains verse City, agreed. “I have no IT ubiquitous foam cups, last week West Michigan, was the media ny can take the time “to integrate detroit.com/emailsignup. sponsor of the event. department. I have no market re- said it would plunk down $1 billion Business Connect provided each search. To be able to bring in pro- for rival Solo Cup Co. of Lake For- CEO 35 hours of consulting, then fessional (assistance) is critical to est, Ill. The deal, subject to regula- CORRECTIONS delivered a report with informa- my growth,” she said. tory approval, is expected to close Ⅲ A story on Page 6 of the March 19 edition about 19-year-old entrepre- tion to grow the business. Loch While the pilot program is in the third quarter. neur Bradley Foster incorrectly said he attends the Wharton School of McCabe, one of the Business Con- closed to new participants, an Going solo has been a struggle Business at the University of Pennsylvania on a full-ride scholarship. He nect service team members, said MEDC official said the organiza- for Solo since it bought competitor has a mix of scholarships and grants. the program works because it tion had issued a request for pro- Sweetheart in 2004. Combined with Ⅲ A People item on Page 24 of the March 19 edition incorrectly spelled gives second-stage companies ac- posals to expand the economic gar- an economic downturn, it began the name of Jay Wilber, the new president of Goodwill Industries of cess to resources that would be dening program beyond the pilot. two consecutive quarters of losses. Greater Detroit’s subsidiary, Green Works Inc. more in line with the in-house ca- — MiBiz In 2007, Solo sold a portion of itself 20120326-NEWS--0003-NAT-CCI-CD_-- 3/23/2012 7:07 PM Page 1

March 26, 2012 CRAIN’S DETROIT BUSINESS Page 3 Sports hall is game to drop debt Inside

$100,000 line of credit established Shrine works to raise revenue, end state probe in 2006 at now-defunct Paramount Bank. The hall had accessed about BY BILL SHEA hall’s board of directors said the since 2003, Jim Stark. He operates $80,000 of that money to pay Stark CRAIN’S DETROIT BUSINESS nonprofit’s liabilities have fallen the hall, which reorganized its and other expenses and has paid to less than business operations and the make- the balance down to under $50,000. More than two years after the $400,000. up of its board of directors during Farmington Hills-based Level Detroit’s population drop Michigan attorney general’s office At the end of the past two years, out of his Farm- One Bank took over Paramount’s began investigating the Michigan 2010, its debt ington home. assets and deposits after it was plugs up liquor license Sports Hall of Fame’s finances, the stood at “A big chunk of (the debt) is to shut down by federal regulators in nonprofit says it’s in full compli- $452,992, accord- Jim. We still have to work with December 2010. pipeline, Page 6 ance with state and federal licensing to its IRS him on that,” said Ryan Krause, a Some of the hall’s $41,555 in 2010 ing regulations and is on the path Form 990 finan- board member and the hall’s in- expenses listed in its federal finan- to righting its upside-down bal- cial disclosure house CPA. He’s a principal at the cial disclosures included $8,000 for ance sheet. form for that Troy office of CPA firm Rehmann. an online auction, $4,000 for travel Company index Now it needs cash to pay off its year. The debt Stark is paid $60,000 a year plus and $7,000 in interest. debts. was $412,140 at Stark expenses. The hall collected $197,687 in These companies have significant mention in this The hall is still assembling its the end of 2009. The rest of the nonprofit’s liabil- gifts, donations and revenue from week’s Crain’s Detroit Business: federally required financial state- The bulk of the debt is money ities are small amounts owed to Accuri Cytometers ...... 13 ments for 2011, but the CPA on the owed to its executive director vendors and the balance owed on a See Hall, Page 26 Angle Advisors ...... 15 Ann Arbor Spark ...... 24 Arch Global Precision ...... 14 Associated Builders and Contractors of Michigan . 20 Bernard Financial Group ...... 29 Boyne Country Sports ...... 25 Budco Holdings ...... 14 HMOs’ aggregate net income up 51% for 2011 Building Owners and Managers Association ...... 1 C.J. Mahoney’s ...... 7 Chrysler Group ...... 1 Coldwell Banker Weir Manuel Realtors ...... 25 One-year jump is best in 5 years HMO PERFORMANCE Compuware ...... 30 Here’s a look at HMO net income for plans based or operating in Southeast Dart Container ...... 2 BY JAY GREENE plans posted lower profits than Michigan, based on investment income and taxes paid: Deloitte ...... 3 CRAIN’S DETROIT BUSINESS 2010, but only one lost money in Net income Dykema Gossett ...... 29 2011— HealthPlus Partners, a Medic- Education Trust-Midwest ...... 9 HMO 2011 2010 Change Led by Blue Care Network and Pri- aid HMO owned by Flint-based Ernst & Young ...... 3 ority Health, 16 health maintenance HealthPlus of Michigan. Medicaid and/or Medicare First Place Lounge ...... 6 organizations tracked by Crain’s Overall, the commercial, Medic- BlueCaid of Michigan $271,560 $317,878 (15%) General Motors ...... 30 posted 51 percent higher aggre- aid and Medicare HMO plans ei- Glencoe Capital Michigan ...... 14 gate net income for 2011 com- ther based or operating in South- HealthPlus Partners ($3.3 million) $8.5 million (139%) Green Dot Stables ...... 6 pared with the previous year — east Michigan increased net Meridian Health Plan $12.9 million $11.6 million 11% HealthPlus of Michigan ...... 3 the highest one-year increase in income to $296.9 million in 2011 Midwest Health Plan* $5.9 million $8.5 million (31%) Hellebuycks Power Equipment Center ...... 1 the past five years. from $196.7 million in 2010, OFIR Molina Healthcare $15.1 million $3.7 million 308% Hired My Way ...... 27 That’s according to data pro- said. The figures do not include the OmniCare Health Plan $4.6 million $3.6 million 28% Howard & Howard ...... 6 vided by the state Office of Finan- HMOs’ preferred provider organi- Priority Health Government $5.6 million $8.4 million (33%) Jos. Kutchey & Sons ...... 25 Kettering University ...... 2 cial and Insurance Regulation. zation, or self-insured client busi- Pro Care Health Plan $244,441 $34,462 609% Crain’s Marlee’s ...... 21 HMO officials told that ness. Total Health Care $1.9 million ($2.4 million) 179% many managed-care plans posted “We have witnessed aggressive Masco ...... 11 United Healthcare** $2.5 million $3.3 million (24%) higher profits because of more ef- pricing in the commercial market Meridian Health Plan ...... 3 Michigan Association of Health Plans ...... 27 fective medical cost controls, low- for the past couple of years,” said Commercial and/or Medicare Michigan Economic Development ...... 2 er-than-expected services use and Jon Cotton, president and COO of Blue Care Network $163.5 million $103.9 million 57% Michigan Manufacturers Association ...... 20 selective price increases. Meridian Health Plan in Detroit. Health Alliance Plan $23.8 million $25.8 million (8%) Michigan Opera Theatre ...... 4 Posting the highest profits in its “Plans are moving into new areas HealthPlus of Michigan $8.7 million $3.1 million 180% Michigan Sports Hall of Fame ...... 3 32-year history, Blue Care, the and trying to expand their foot- Michigan State University ...... 25 McLaren Health Plan $22 million $18.5 million 19% state’s largest HMO with 569,000 print. Eventually you have to Molina Healthcare of Michigan ...... 27 members, in 2011 had net income raise your rates to stay profitable. Priority Health $33.2 million ($7.2 million) 558% Northeast Guidance Center ...... 24 of $163.5 million, a 57 percent in- This is what we are witnessing to- Total Health Care USA $52,558 $7.1 million (99%) O’Keefe & Associates ...... 1 crease from $103.9 million in 2010. day.” Total $296.9 million $196.7 million 51% Penske Automotive Group ...... 7 Revenue increased to $2.6 billion For the 13 HMOs and four other Plante Moran ...... 3 * Acquired by Health Ford Health System/HAP from $2.3 billion. plans that reported to OFIR, total ** Does business as Great Lakes Health Plan PricewaterhouseCoopers ...... 3 For 2011, nine HMO plans posted Source: Michigan Office of Financial and Insurance Regulation Priority Health ...... 27 higher net income numbers, six See HMOs, Page 27 Quicken Loans ...... 30 Renaissance Venture Capital Fund ...... 11 RKA Petroleum ...... 1 Schostek Bros...... 1 Strength Capital Partners ...... 14 Synergy Computer Solutions ...... 24 More M&A, better economy add up to job growth for CPAs Talmer Bank and Trust ...... 13 Tapper’s Fine Jewelry ...... 21 TriMas ...... 11 BY TOM HENDERSON regulatory needs generated by the health care UHY ...... 15 CRAIN’S DETROIT BUSINESS act and the Dodd-Frank banking act. Valenti Capital ...... 11 People had left “Clearly it’s a trend,” said Mark Davidoff, Westview Orchards ...... 25 As the economy continues to improve, the lo- “ Michigan managing partner for Deloitte. “The cal market has heated up for certified public ac- Michigan, and No. 1 reason is the growing complexity of the countants. regulatory environment. Dodd-Frank and Department index The Detroit office of Pricewa- it’s been tough to health care are huge drivers. RAIN S LIST C ’ terhouseCoopers LLP has had the “And, finally, we’re seeing a big uptick in BANKRUPTCIES ...... 25 Largest biggest increase, going from get them back. merger and acquisition activity. That all feeds BRIEFLY ...... 7 accounting 253 CPAs as of January 2001 to ” into a higher level of technical support.” BUSINESS DIARY ...... 22 firms, Page 18 368 this past January. The De- David Breen, The Dodd-Frank adds new federal oversights, troit office of Deloitte LLP has PricewaterhouseCoopers LLP increases transparency and ends bailouts of fi- CALENDAR ...... 23 gone from 244 to 299, with Southfield-based Plante fueled both by a return by clients to the kinds of nancial institutions. CLASSIFIED ADS ...... 25 Moran PLLC going from 323 to 351 and the Detroit activities that demand CPA-level help, such as “We’ve been scrambling for 18 months to hire JOB FRONT ...... 24 office of Ernst & Young LLP going from 146 to 162. mergers and acquisitions and a return to capi- KEITH CRAIN...... 8 Executives say the demand for CPAs is being tal markets for debt and equity, and by federal See CPAs, Page 27 LETTERS...... 8 OPINION ...... 8 Law firms and LinkedIn Salute an entrepreneur OTHER VOICES ...... 9 Register for an April 18 Crain's and Dickinson Wright Nominations are open for this year's THIS WEEK @ PEOPLE ...... 24 PLLC webinar on optimizing LinkedIn profiles for law Salute to Entrepreneurs awards, WWW.CRAINSDETROIT.COM firms and in-house counsel, crainsdetroit.com/events. crainsdetroit.com/nominate. RUMBLINGS ...... 30 WEEK ON THE WEB ...... 30 20120326-NEWS--0004-NAT-CCI-CD_-- 3/23/2012 6:35 PM Page 1

Page 4 CRAIN’S DETROIT BUSINESS March 26, 2012 With May goal to reduce its debt, MOT aims to stage happy ending to fund drive

BY SHERRI WELCH of employees and cut other posi- MOT’s spring dance season. CRAIN’S DETROIT BUSINESS tions to part time along with The short duration of the cam- salaries across the board. paign shows its urgency, one turn- The Michigan Opera Theatre is The opera company originally around consultant said. hoping to raise millions of dollars planned to use revenue from park- You don’t see campaigns with a by the end of May as part of a six- ing and lease fees at the Opera short time frame and a huge target month campaign to pay off its debt. House Garage to help pay down its popping up “unless something is Neither MOT nor its lenders debt. But the garage has not going on in the background,” said will comment on whether the ac- brought in the revenue that MOT celerated campaign is an effort to William Wildern IV, CEO of Farm- anticipated it would, Williams negotiate a write-down of the ington Hills-based Hydra Profession- 2012 GLK350 opera company’s $18 million in said. Kraemer Design Group PLC als LLC. 4MATIC debt or to renegotiate terms of signed a 10-year lease for 9,364 It’s unclear whether there’s debt. But MOT confirmed debt re- square feet on the second floor of debtor fatigue on the part of MOT 30 mo./10K Lease MOT’s Detroit Opera House Retail or lender fatigue with the debt sit- 36600 Woodward Ave duction is part of the organiza- $ tion’s overall plan. Center, which is attached to the uation, he said. Either way, the 4 mo. Bloomﬁeld Hills, MI 48304 “We are ag- MOT parking garage, in 2008. six-month time frame ensures 248-644-8400 gressively work- Available space on the ground something is going to happen at ing on (the) cam- floor of the garage, fronting Broad- that point. Plus tax, title, plates. Tier 1 credit. paign to pay way, has been vacant — until re- MOT is driving to one of three $4603 due at signing. down our debt,” cently. solutions, Wildern said. It could said Chairman In mid-March, Lambert Edwards raise some portion of the total Rick Williams. & Associates signed a seven-year amount owed, allowing it to rene- “Making MOT lease for 8,666 square feet of space gotiate and extend the debt. It permanently on the first floor of the retail cen- could raise the full amount and sustainable is ter. eliminate it. Or it could raise a por- Williams our No. 1 objec- In addition to increased parking tion of the debt and negotiate the tive.” garage revenue from the new ten- debt away at a discount. Launched in December with ant and success of the Detroit Tigers “Banks never like to take a MOT’s board, the campaign is “at and Detroit Lions, whose patrons write-off ... but in the case of non- about 50 percent of where we want park in the garage, other signs in- profits, they don’t want be per- to be,” Williams said. clude: a recovering local economy ceived as the reason a nonprofit Williams, managing partner of that could help increase donations closes,” he said. Williams, Williams, Rattner & Plunkett and sponsorships, more compa- Sherri Welch: (313) 446-1694, PC in Birmingham, said he could nies moving employees to Detroit, [email protected]. Twitter: @sher- not comment on the exact amount and strong interest by patrons in riwelch MOT hopes to raise but said “our target is to pay off our debt” by the end of May. MOT owes $18 million to a four- bank consortium led by JP Morgan Chase & Co. for renovations to the opera house, the Ford Center for Arts and Learning and the Opera House Garage — projects that date back to 2004. Williams declined to comment on whether the banks have indi- cated any willingness to renegotiate the terms of the loan to write down the amount owed to them. Speaking on behalf of the consortium, JP Morgan Chase also declined to comment. But by paying off its debt entire- ly or reducing the debt to a man- ageable level, MOT will become sustainable, Williams said. “On a pre-debt service basis, we have been able to consistently break even or come very close to break-even for a number of years.” MOT said it posted a total loss of $500,000 on revenue of $10 million for fiscal 2011 ended June 30. Its debt service last year totaled $1.1 million. In 2010, MOT reported an excess of about $10,000 on total revenue of about $9 million in 2010, after operations and debt service. Its revenue has steadily declined with the economy, falling from $11.6 million in fiscal 2009 and $14 million in 2008. Those revenue declines, coupled with lower-than-projected revenue from the Opera House Garage, have made it difficult for MOT to meet its debt service without com- promising its operations. MOT has been making payments on the debt, but those are primarily covering interest and other fees, Williams said. Over the past several years, MOT has also cut its productions from five to four, laid off a handful DBpageAD.qxp 3/7/2012 9:36 AM Page 1 20120326-NEWS--0006-NAT-CCI-CD_-- 3/23/2012 5:40 PM Page 1

Page 6 CRAIN’S DETROIT BUSINESS March 26, 2012 Population drop plugs liquor license pipeline; Senate bill may help

BY NATHAN SKID application had been sent back to Public Act 58 that would lower the CRAIN’S DETROIT BUSINESS Detroit for City Council approval, population threshold to 600,000, I got real nervous. What if we nev- meaning about six months would When Jacques Driscoll bought er get it?” be the norm for approval, as op- Green Dot Stables and its liquor li- Gerald Hudson, senior assistant posed to eight months to a year. cense last July, he was certain he corporation counsel for the city of The Senate has approved the bill, could have the equine-themed bar Detroit, declined to comment. and it is under consideration in at Lafayette and 14th Street in De- Driscoll’s application and others the House. troit up and running by October. have been caught up in a change in Driscoll said he thought he But October came and went, as liquor licensing triggered by De- would be grandfathered in under did November and December be- troit’s declining population. The the former rules because his trans- fore he found out his application state Liquor Control Commission fer application was filed before needed approval by the Detroit requires cities with a population 2010 census results were released, City Council. under 750,000 — Detroit’s is now at but “now it’s lost in City Council “I thought I was just two weeks about 714,000 — to have license and I call every day.” away from opening with my transfers and sales approved by Driscoll spent about $175,000 to NATHAN SKID/CRAIN’S DETROIT BUSINESS liquor license,” Driscoll said. their local legislative bodies. buy and rehab Green Dot Stables. Jacques Driscoll is waiting on Detroit City Council approval for a liquor license “When (the Michigan Liquor Control Relief may be on the way. Senate Starting today, he plans a partial for his Green Dot Stables bar. Commission) called to tell me my Bill 874 proposes an amendment to opening, sans liquor license, out of necessity. “We are opening for lunch because we are running out of cash,” Driscoll said. “It’s frustrating, “HealthPlus takes care of my employees very frustrating.” Green Dot Stables’ menu caters to a late-night crowd. Most items cost just $2 and $3 to encourage so I can take care of business. That’s a customers to buy a beer or two. Patrick Howe, hospitality attorney at Howard & Howard PLC in Roy- big Plus.” al Oak, said he has seven clients awaiting license approval and has- n’t seen movement in months. “These applicants were on track until this requirement was implemented over 90 days ago,” Howe said. “Now they are forced to delay their opening date and are waiting for either City Council to approve their license or for Senate Bill 874 to pass.” Howe said there could be as many as 50 liquor license applications waiting for approval that would have already been issued if the bill was passed. “The city is trying its best to get these applications through, but it’s simply understaffed and over- whelmed by the flood of applications,” Howe said. Delroy Thomas and Elaine Sables purchased the First Place Lounge in February near Detroit’s border with Grosse Pointe, thinking they could easily transfer the liquor license. “We thought since we bought an existing business with an existing license, it would make it even sim- pler,” Sables said. “There are some things that are out of our control, like the liquor license. It’s still in the hands of the city.” Instead of operating without liquor, they are delaying the sale of the restaurant in order to keep the liquor license active with its current owner. HealthPlus goes above and beyond for employers. “We didn’t want to close the doors; we didn’t want to start over,” Sables said. “We were ǆƚĞŶƐŝǀĞƐƚĂƚĞǁŝĚĞĂŶĚŶĂƟŽŶĂůƉƌŽǀŝĚĞƌŶĞƚǁŽƌŬƐ scared if we did we might lose our Worldwide emergency coverage customers.” Sables said a businessman of- WĞƌƐŽŶĂůĂƩĞŶƟŽŶďǇĂĚĞĚŝĐĂƚĞĚƵƐƚŽŵĞƌ^ĞƌǀŝĐĞƚĞĂŵ fered her the chance to open a contemporary restaurant in a ĂƐǇƚƌĂŶƐŝƟŽŶĨƌŽŵŽƚŚĞƌŚĞĂůƚŚƉůĂŶƐ building he had recently acquired, but she had to turn the of- Customizable HMO, PPO and self-funded health plans fer down because of the uncertain- ty surrounding license transfers. To enroll, contact your independent agent or call: “Part of that was they needed to know when we would have a 1-800-530-9071 liquor license, when we will have permits, when will construction be www.healthplus.org done,” Sables said. “We had to tell them ‘no’ because we can’t make any guarantees.” Nathan Skid: (313) 446-1654, HealthPlus HMO is a product of HealthPlus of Michigan, Inc. HealthPlus PPO is a product of HealthPlus Insurance Company. © 2012 HealthPlus of Michigan [email protected]. Twitter: @nateskid 20120326-NEWS--0007-NAT-CCI-CD_-- 3/23/2012 6:15 PM Page 1

March 26, 2012 CRAIN’S DETROIT BUSINESS Page 7

BRIEFLY CRAIN’S CALLS FOR 40 UNDER 40 NOMINATIONS and operate dealerships in north- has 169 stores outside its home Tom Everson, owner of the CJ Biz training program expands Crain’s Detroit Business is seeking ern Italy, the companies said in a market, primarily in the United Mahoney’s Troy, said the bar will Small businesses in Detroit, nominations for the 2012 class of release. Kingdom. The company reported be ready for the Detroit Tigers’ 40 under 40, which recognizes Pontiac, Hamtramck and High- The joint venture currently in- global sales of $11.6 billion last first game of the season, April 5 — young achievers based on factors land Park can participate in the cludes Bologna-based Vanti Group, year, according to the press re- albeit temporarily. such as financial impact and Emerging 200 Initiative, an MBA- which is owned by the Mantellini lease. Everson is still working to fi- community leadership. style program sponsored by the family, and the Mariani dealership — Crain News Service nalize the lease but said he is Winners will be profiled in the Oct. U.S. Small Business Administration. in Monza, a suburb of Milan. opening a CJ Mahoney’s some- 1 issue, and Crain’s will celebrate The program teaches owners Vanti Group sold about 1,000 where in downtown Detroit even their achievements at a late how to build their business, cover- BMWs and 450 Minis last year, Bar opens for Opening Day if this location doesn’t work out. October awards event. ing finance, marketing and growth while Mariani — just renamed The owner of CJ Mahoney’s, a The 7,000-square-foot space is To be eligible, nominees must be under age 40 as of Oct. 1, 2012. strategies in about 100 hours of Auto Vanti Monza — sold about 550 popular sports bar from the sub- spread across two floors and seats training. BMWs and 320 Minis in 2011, ac- urbs, is opening a Detroit loca- up to 400. For event sponsorship opportunities, please call (313) 446-6052. The six-month training, valued cording to the companies. tion just in time for Opening Day. The Opening Day menu will at about $10,000 of free education, Nominations must be received by Andrea Mantellini, 39, will CJ Mahoney’s Detroit will consist of hot dogs and hot wings April 23. Visit www.crainsdetroit.com encompasses about 40 hours of manage day-to-day operations of open at 1340 Broadway St., near brought in from Troy. But Ever- /nominate to fill out the online form. classroom time, 40 hours of assign- the two dealerships. the corner of Broadway Street at son said he will create a special Questions? Contact Jennette Smith, ments and 20 hours of CEO men- Penske Automotive owns and Grand River, in the former home menu for the permanent location. managing editor, at jhsmith toring. operates 166 U.S. franchises and of Lot 1210. — Nathan Skid @crain.com or (313) 446-1622. To qualify, businesses have to have operated for the past three years and have gross annual revenue of at least $400,000. The program is limited to 17 businesses. The initiative was established in 2009 and involves De- Global-Firm Resources. Local-Firm Relationships. troit and 26 other cities around the country. Applicants can register at in- terise.org/SBAe200. — Meghana Keshavan Penske to expand into Italy Bloomfield Hills-based Penske Automotive Group, the second- largest publicly traded automotive retailer in the United States based on revenue, will expand into Italy through a joint venture with Bologna-based BMW-Mini dealer Andrea Mantellini and his family. Penske will control 70 percent and the Mantellini family the rest of the newly created Penske Auto- motive Group Italy, which will buy

Crain’s coverage of light rail wins national award

A group of Crain’s reporters earned a national business writing award for coverage of the sudden collapse of a light-rail project in Detroit. Reporters Daniel Duggan, Chad Halcom, Nancy Kaffer, Bill Shea and Sherri Welch won a “Best in Business” award in the breaking news category from the Society of American Business Editors and Writ- At Doeren Mayhew, our clients enjoy the resources of ers. an internationally recognized, top 100 U.S. accounting The national awards were given out March 17 in Indianapolis to firm, without sacrificing localized personal service. For recognize business writing from 80 years we’ve offered more than traditional around the country, with honors going to publications such as The accounting services for Michigan’s privately held New York Times, The Wall Street companies – whether they’re expanding abroad or Journal and Financial Times. Judges in the awards noted the striving to grow here at home. And while we have extensive coverage online and in more than 200 professionals on staff locally, you can print by Crain’s over the course of 24 hours of reporting the breaking expect our solutions to be tailored and our rail story in mid-December. relationships to be one-on-one. The stories focused on the con- flict created after state and federal Call Doeren Mayhew today to get the resources you officials decided to give financial backing to a regional bus plan need, with the service you want. TROY, MI HOUSTON, TX 248.244.3000 WWW.DOEREN.COM rather than a rail system for De-

troit — a move in opposition to the ACCOUNTING, AUDIT, AND TAX INTERNATIONAL TAX AND CONSULTING CORPORATE FINANCE AND STRATEGIC SERVICES group of local corporate and non- PAYROLL SERVICES FINANCIAL ADVISORY SERVICES LITIGATION SUPPORT AND FORENSIC SERVICES profit groups partially funding a light rail system. 20120326-NEWS--0008-NAT-CCI-CD_-- 3/23/2012 6:15 PM Page 1

Page 8 CRAIN’S DETROIT BUSINESS March 26, 2012 OPINION TALK ON THE WEB From www.crainsdetroit.com

Reader responses to stories and blogs that appeared on Crain’s website. Comments may be edited for length and clarity. PHOTO ILLUSTRATION

Re: Snyder, Bing and the EM There are two real issues: Can the mayor and council get what they need done, within the existing constraints? If not, then do we have an emergency manager or an advisory board? Bing may not want it, but Snyder’s vote of confidence in Bing can be made by making Bing the emergency manager. JT Pedersen

We’re rearranging the deck chairs on the Titanic. Get Real Detroit

Time for emergency manager is now It is Bing’s inactivity and the history of dishonest people in the may- ho will be Detroit’s emergency manager? As events or’s office and on the City Council that played out last week, it was clear it’s no longer an “if” THE MATH drove Detroit into a brick wall. but a “when.” The political game is over. Enough is And those same people want to W Falling revenue, rising costs: have a consent agreement that enough. gives them the same power? Gov. Rick Snyder’s attempts to negotiate a consent agree- Between 2008 and 2011, the city cut $40 million from service delivery to offset the rising cost of benefits. Richard Cooper ment — which leaves roles for both the mayor and City Council City revenue dropped from $1.1 billion to $753 million from 2000 to Snyder is insulting a great mayor to play — have been greeted with the typical Detroit response: 2011. accusations of state “takeovers” and abrogation of civil rights and businessman who has been the In 2011, Detroit Mayor Dave Bing said that without action, benefit costs savior of this city. Bing is good for and voting rights of Detroit residents. would equal 50 percent of the city’s $1.2 billion general fund by 2015. Detroit, and Detroit is good for the We suspect the majority of residents care more about That same year, Bing reported that benefit costs were 108 percent of state. Let’s work together in Michi- whether services — particularly police and fire — are delivered payroll. gan. Theda Rudd effectively than about who is calling the shots. Potential revenue: An ideal manager would have significant turnaround expe- Nancy Kaffer is correct — the 50 rience as well as an appreciation for Detroit’s dynamics, from Ⅲ Increase property tax collections: 80% of the levy was collected in 2011, compared with 95% in 2007*. who showed up (for the public organized labor’s clout to racial politics. It would help, too, if he Ⅲ Increase income tax collections: Suburban employers could collect on meeting of the state-appointed re- or she can accomplish the tasks at hand as though a consent city residents. view team) are definitely a minori- agreement were in effect, engaging both the City Council and Ⅲ Lease assets: The most valuable are city water and sewage department ty of the 700,000-plus population. the mayor in the restructuring. Why? Because it’s critical to operations. But I would guess that if a vote is create a functioning political infrastructure to ensure that taken that the “unhappy” would be gains made under an emergency manager won’t evaporate Potential savings: the majority (60-40). Terry Wayne when the “emergency” is over. Ⅲ Phase out retiree health care coverage: The total budgeted tab for In an interview with Crain’s last week, Mayor Dave Bing retirees in 2012 is $124 million, according to an analysis by the Citizens Research Council of Michigan. Offer stipends for people to pay for their Re: Electrical choices repeatedly stated he had gotten no help from the business own policies. community. In fact, the business and foundation communities Detroit Edison and Consumers Ⅲ Contract for some services/operations still own and maintain the electric have volunteered thousands of hours of expertise (the initial Ⅲ Restructure debt systems. … At the end of the day, blue-ribbon turnaround team) and paid for professional ex- DTE and Consumers are still receiving pertise (an in-depth report from the consulting firm, McKin- a dollar. sey & Co.). Devin Ezop He hasn’t had a CFO for months. And he has never pushed Yet no significant restructuring has occurred on Bing’s the really tough decisions that could have made a major finan- watch over the past three years. In fact, in the Crain’s inter- I would like to see more choice for cial difference even a year ago. individual consumers in choosing view, Bing conceded he only recently concluded the city needed Last week, Bing issued a challenge to Snyder: If the governor electrical suppliers. restructuring expertise that he had no money to pay for. James Gerber To fix Detroit, you need leverage. Leverage to work with has no confidence in the mayor’s leadership, then “bring in unions (which have been slow to ratify contract changes Bing somebody else to do it. They need to have the guts to do that. If I find it incredible that our hoped would save the city from insolvency). Leverage to work that’s going to save the city, if that’s the best thing for the city, politicians on both sides of the aisle aren’t aggressively more sup- with other government funding sources, be they state or federal. then do it.” Bing doesn’t have leverage — or money. An emergency manager is Detroit’s best hope to rebuild. See Talk, Page 9

KEITH CRAIN: Everybody should have patience, maybe

Our governor was in Europe last them have a tougher job prised by the deathly si- those wanting to talk up Michigan. The time for kicking the ball week talking up Michigan as a because of the headline- lence on the part of We still have plenty of opportu- down the road is about to end. It’s great place for investment. But grabbing financial mess these business groups. nity for internal growth and ex- still going to take quite a while to fix you know the lead topic of conver- in Detroit. Their opinions are over- pansion with the companies based all the ills that abound in and sation during each meeting had My best advice for due. If they represent here. That’s what we need to con- around Detroit. But it looks to all of to be about Detroit. Not a very those organizations: Sit business, it’s time for centrate on until this financial us that the journey is about to begin. pretty way to try to sell Michigan. on the sidelines for a them to stand up with mess in Detroit gets resolved. Let’s hope that our leaders re- Detroit’s problems are 50 years while. strong opinions. Once that’s done, let’s hope our solve to support the solution; it’s in the making, and it looks like But that doesn’t mean We were seeing the city and our state will be strong in the best interest of the citizens we’ll need more patience to get business groups should- beginning of a rebound and competitive. and the businesses in our region. them fixed. n’t offer opinions on the in our state; by most ac- Whether we like it or not, it It’s the best way to get jobs into We’ve got all sorts of organiza- public differences be- counts, external interest looks like this financial mess that Southeast Michigan. tions whose primary job is to pro- tween Mayor Bing and Gov. Sny- has screeched to a halt as Detroit’s has been brewing for a half It’s going to be a rocky road for a mote the economy of our city, our der. insolvency has become known. It a century is finally going to be while, but the results are long region and our state. And all of I am disappointed but not sur- has to be extremely frustrating for addressed. overdue, about a half a century. 20120326-NEWS--0009-NAT-CCI-CD_-- 3/23/2012 11:57 AM Page 1

March 26, 2012 CRAIN’S DETROIT BUSINESS Page 9 OTHER VOICES: Adults, not students, failing our schools For a generation of now rank 43rd and 40th, bright and full of potential than this system actually helps educa- learning. Michiganians who felt respectively, in fourth- students in any of the other states tors improve. These changes will take time, they benefited from first- and eighth-grade math. that now rank above Michigan in We will also work to improve our political courage and, yes, they rate public schools, the Achievement among the national assessment. Students state’s public reporting and school will cost money — though, more latest numbers on our charter schools, consid- aren’t the problem. The problem is accountability systems, which often than not, they will require a state’s student achieve- ered by some to be a the adults who are making educa- have helped to drive dramatic im- reorganization of priorities and ment are surprising and panacea for our educational decisions. provement in student learning for uses of our current funding. But if dispiriting. tional woes, mirrors our Thankfully, Gov. Rick Snyder all children in Florida. we do this right, we can take mean- The nonpartisan Educa- traditional public school and other leaders have taken im- Michigan’s new accountability ingful steps toward ensuring all tion Trust-Midwest re- students’ lagging achieve- portant first steps to turn around system should include a grading Michigan students access to the ported last month that ment. this unacceptable trend. Over the system that makes it easy for par- world-class public education that Michigan’s lagging scores Amber Arellano Michigan’s educational past year, the Education Trust- ents and educators to know how they need and deserve. on national exams are not con- problem is not just a poverty prob- Midwest has worked with policy- their school stacks up. And it Amber Arellano is executive di- fined to impoverished, urban lem, an African-American prob- makers on both sides of the aisle to should not only provide conse- rector of The Education Trust-Mid- schools like those in Detroit or lem or a Latino problem. These re- pass sensible tenure reform and to quences for low-performing west, a nonpartisan research, poli- Flint. Student achievement is slip- sults are a concern for virtually develop the state’s first system of schools but also the supports, flexi- cy and advocacy organization. To ping across socioeconomic, racial every community across the state. teacher evaluation, standards and bility and infrastructure that they read the entire report, go to and ethnic categories. Michigan students are no less supports. We will work to ensure need to improve teaching and www.edtrustmidwest.org. In 2003, Michigan’s white students ranked 13th in the nation in fourth-grade reading and math compared with peers in other states on the National Assessment of Educational Progress. In 2011, our fourth-grade white students are 35th on the reading test, and 45th in math out of 50 states. Our higher-income students A LOAN WITH

TALK CONTINUED ■ From Page 8 portive of helping Michigan’s businesses. We are paying huge costs to keep this monopoly in place. James Angers

Re: Downgrade of Detroit’s debt Detroit’s art collection is worth many, many billions of dollars. If A CITIZENS BANK LOAN LETS YOU FOCUS ON THE FUTURE ... because the businesses it showed a willingness to pay, the ratings agencies would upgrade its that will succeed tomorrow are the ones that make the right choices today. They are debt, lowering the city’s interest led by individuals who see opportunity for growth and expansion, and take action with costs, which are a big part of its expenses. … The city doesn’t even have complete conﬁdence. A loan from Citizens Bank will keep you moving forward and to sell the art off the walls if it uses art to finance innovations. never wondering, “What could have been?” Mark White

Bing and the council argue Get the loan you deserve now. To make an appointment with a Citizens Banker, about losing their powers, but outside organizations do what is re- call 800-946-2264 or visit CITIZENSBANKING.COM/BUSINESS. quired. Detroit has had plenty of time to resolve these issues; it’s time for outside intervention into De- troit’s finances. jdd330

Re: Biz tax reform Personal property tax is difficult to administer for taxpayers and governments alike, but some mu- nicipalities receive a very substantial amount of their general fund funding from personal property tax — in some cases almost 60 percent. Eliminating the tax would eventually bankrupt some cities unless the state agreed to hold the cities harmless. Bill T. Cat

The state of Michigan has cut support for cities by $4.4 billion in the past decade. This is, of course, the primary reason most cities are in deep financial trouble, even after laying off cops and firefighters. The latest attack on cities comes as more talented young people are saying they want to live in cities that work. It’s apparent they won’t be finding cities that are safe, fun and interesting in Michigan if we eliminate revenue sharing without full replacement. In fact, we should be investing more in our cities if we wish to attract young talent. MWAC DBpageAD.qxp 3/21/2012 9:04 AM Page 1

Michael J. Tierney, Michigan Market President

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March 26, 2012 CRAIN’S DETROIT BUSINESS Page 11

A CONVERSATION WITH Extra

John Pencak, Grant Thornton LLP m&a awards

With the end of the first quarter in sight, it’s a popular time to assess the state of the region’s M&A landscape. It’s no surprise many experts predict an increase in M&A on the horizon. Southeast Michigan’s economy is stabilizing, thanks to increasing automotive volumes in North America. In addition, labor and shipping costs are expected to drive more contracts back stateside from overseas. These factors could contribute to an increase in M&A dealmaking — gradually through this year and more dramatically 12-18 months from now. Crain’s reporter Dustin Walsh spoke with John Pencak, director of transaction services at Grant Thornton LLP in Southfield, about the future of M&A activity in SE Michigan. What, in your opinion, is happening in the M&A market? Investors are slow- walking deals because EBITDA (earnings before interest, tax, depreciation and amortization) isn’t tracking up with production volumes. EBITDA levels are dragging a bit because of this increase in volume and the capacity companies have to take on. This causes an increase in capital expenditures (equipment, etc.). Investors aren’t looking at just EBITDA but the capital expenditures required

to increase capacity. Many companies’ NATHAN SKID/CRAIN’S DETROIT BUSINESS projections have underestimated the cost it takes to get back up to these volumes. A lot of the deals are moving at a slower pace because the Immigrant’s son Valenti became go-to for investment strategy in Michigan investors are being careful not to believe overzealous projections. BY TOM HENDERSON Michigan — owe our starts to gree in economics from Western Campbell, who received a CRAIN’S DETROIT BUSINESS Sam.” Michigan University, to $12.8 bil- lifetime achievement award at A lot of deals were stalled in 2011. For what he has done for VC lion at its pre-recession peak. the Crain’s M&A event in 2009, Will we see that change? A lot of odfather” is one word often and private equity, and a Jump-starting many of co-founded the Detroit-based suppliers are owned by nontraditional used to describe Sam Valen- range of other deal-related ac- the state’s venture capital and investment banking firm of owners, banks and hedge funds. G ti III’s role in Michigan’s in- tivity over 44 years, Valenti, private equity companies in W.Y. Campbell & Co. in 1988. In Those suppliers ultimately need a vestment community. 66, executive chairman of the 1980s and 1990s as presi- 1995, he was trying to launch liquidity event. There are a lot of “Catalyst” is another. Bloomfield Hills-based TriMas dent of Masco Capital Corp., Peninsula Capital Partners LLC, suppliers that were in the market, like “A lot of the venture capital Corp. (Nasdaq: TRS) and presi- which managed Masco’s pen- with the idea of using subordi- IAC, Cooper-Standard, and others, companies here dent and CEO of the Bloom- sion fund and the parent com- nated debt to do mezzanine that pulled out because of the wouldn’t have exist- European debt crisis. The problem field Hills-based wealth-man- pany’s investments. lending to companies. with 2011 was (that it was) a rosy ed without Sam,” agement firm of Valenti Capital Serving on the investment “If you were looking for picture from an industry standpoint, said Chris Rizik, LLC, will receive the annual committee of the state’s pen- money in Michigan, Sam but the sovereign debt issue toward president and CEO Lifetime Achievement Award sion fund from 1983-2000 and as Valenti and Masco Capital the end of the year dampened the of the Ann Arbor- at the fifth annual Crain’s its chairman from 1992-2000. were absolutely a must-call,” deal market. As we go into 2012, based Renaissance M&A Awards on April 19. Valenti helped grow the fund said Campbell. people are getting over that. Lifetime Venture Capital Fund. The award is given in con- from $5 billion in assets to Valenti had his doubts and Ultimately, we’re going to see some of “Sam was the junction with the Detroit chap- $52 billion and is credited with said “no.” Campbell persisted, these major liquidity events later in Achievement godfather of private ter of the Association for Corpo- making the state a pioneer in with calls almost daily. Finally, 2012 or 2013. These deals need to equity here,” said rate Growth. investing in what is now con- persuaded by a determination get done in the next 12 months to 18 Award longtime invest- Among Valenti’s accom- sidered a standard part of an that reminded him of his own, months to spur more M&A. Sam Valenti III ment banker plishments: institutional investor’s portfo- Valenti changed his mind, and William Campbell. Helping Taylor-based Mas- lio: the so-called alternative in- Masco invested — quite prof- Besides the economy, what other factors could spur M&A over the next “We’d have a private equity in- co Corp. vet more than 100 acqui- vestment class of venture capi- itably as it turned out — in 12 months? The Bush-era tax cuts dustry today without him, but sitions that helped grow its rev- tal and private equity. what became a $53 million fund. could end in 2012. We saw this issue it wouldn’t be nearly as well enue from $10 million from 1968, Co-founding the Ann Ar- Today, Peninsula is invest- in 2010 with the capital gains tax cuts developed as it is. We all — when Valenti joined the compa- bor-based Michigan Venture Cap- set to expire that led to a flood in the everybody in private equity in ny after getting his master’s de- ital Association in 2002. See Valenti, Page 12 deal activity. It’s an election year, so who knows what will happen, but investment bankers will get engaged M&A AWARD WINNERS, FINALISTS before the year ends. This is one thing Crain’s Detroit Business, in partnership with the Association for Corporate ACG members, $85 for non-subscribers and $84.50 for a special offer that could drive M&A in the back half Growth-Detroit Chapter, will honor winners and finalists of the fifth annual that includes a one-year subscription. Details: crainsdetroit.com/events of 2012 for sure. M&A Awards on April 19 from 5:30-9 p.m. at the Somerset Inn or (313) 446-0300. In addition to lifetime achievement winner Sam in Troy. Tickets are $60 for subscribers, $55 for groups of 10 or more or Valenti III, the other 2012 honorees, profiled inside, are: If you know someone interesting Deal over $100 million Deal under $100 million Dealmaker adviser Dealmaker buyer/seller in auto supply, the Winner: Becton, Dickinson Winner: Strength Capital Winner: Angle Advisors- Winner: Huron Capital Partners steel industry or & Co./Accuri Cytometers Inc.; Partners/TriMas Corp. units; Investment Banking LLC; LLC; Brian Demkowicz, higher education Jeff Williams, John Dahler Mark McCammon, Eli Crotzer Kevin Marsh, Cliff Roesler Mike Beauregard Dustin Walsh should Finalist: Talmer Bank and Finalist: Glencoe Capital Finalist: UHY LLP; interview, call (313) Trust; David Provost, Gary Torgow Michigan LLC/Budco Holdings Steven McCarty 446-6042 or write Inc.; Douglas Kearney, Jason Duzan [email protected] Page 13 Page 14 Page 15 Page 16 20120326-NEWS--0011,0012-NAT-CCI-CD_-- 3/23/2012 10:43 AM Page 2

Page 12 CRAIN’S DETROIT BUSINESS March 26, 2012 Finance Extra Valenti: Immigrant’s son became go-to investment leader ■ From Page 11 ing from its fifth fund, of just under Scott Reilly, one of Peninsula’s co- tal in giving us the bona fides, “My dad’s most prized posses- a large regional firm sold in 1998 to $400 million, and has raised a total founders and its president. “When where the world would at least lis- sion, which he carried with him, Rhode Island-based CVS Corp. for of $1.2 billion for its funds. Masco, you call up people who haven’t ten to us. Without Sam being will- wrapped in cheesecloth, was the $1.5 billion in stock. Valenti Capital or other institu- heard of you and you get past the ing to give local managers a shot, sprig of a fig tree. He grew it in our Today, Valenti is a consultant to tional money controlled by Valenti secretary to a decision-maker, and there wouldn’t be any local man- backyard on Cadillac Street, and it the Eugene Applebaum Family Foun- have invested in all its funds, as he says, ‘You’ve got three minutes, agers,” Reilly said. flourished like a son-of-a-gun. It dation. Applebaum founded Arbor well as funds for two other private who do you have on board?’ and you “Sam was really a catalyst in was a metaphor for life here,” Drugs. The foundation is based, equity companies later co-founded say Sam Valenti and Masco Capital, what was a very nascent indus- Valenti said. along with TriMas, in Valenti Cap- by Campbell: Detroit-based Huron it gives you instant credibility. try,” said Steve Swanson, describ- His dad died of a cerebral hemor- ital’s offices. Capital Partners LLC, this year’s “The majority of first-time funds ing Michigan’s venture capital rhage at 49 when Sam was 12. Sam’s dealmaker of the year; and Detroit- never get to a first close. The offer- community in the 1980s and early stepfather was Pat Dunn, a district A Renaissance fund based Superior Capital Partners LLC. ing memorandum goes out, and it 1990s. Swanson’s Ann Arbor-based manager at A&P who became Allen “Getting an investor of the cal- just becomes an idea that never Arbor Partners got an investment Park’s first mayor in 1957. In 2007, Valenti had what he iber of Masco was crucial,” said gets funded. Sam was instrumen- from Masco Capital when it was “He was a tough guy, a good says was an “a-ha!” moment. He founded in 1990. man. His gift to me was a job after was on the board of the organiza- “When we launched Arbor Part- school every day,” Valenti said. tion then known as Detroit Renais- ners, Sam was one of the first guys I Dunn, too, was an immigrant, ar- sance, now known as Business met with,” Swanson said. “I went to riving here at 19 from Canada, and Leaders for Michigan. Sam and said, ‘Here’s what we’re Valenti credits his dad and stepdad The idea? Get corporate mem- doing. Here’s our focus: Software with imbuing him with an immi- bers of Detroit Renaissance to in- geared toward making the Internet grant’s son’s desire to work hard. vest in a for-profit venture capital more efficient.’ “I know what it’s like to come fund of funds that would come to be “The beauty of it with Sam was, from people desperate to make a known as the Renaissance Venture he was a great listener and at the mark. To have a dream,” he said. Capital Fund. That fund would then end of the day, very analytical. After getting his master’s de- invest in venture capital firms that Sam could take a business plan and gree, Valenti had a choice of three were in turn investing in high-tech say, ‘You gotta do this and this and jobs: at Chrysler Corp., at the down- startups in Southeast Michigan. this in order to make it viable, and town headquarters of Detroit Bank Not only would the corporate in- in order to have me keep looking at and Trust and at Masco, then a vestors provide capital, they it.’ He gave you great feedback that small auto supplier and inventor would also be able to vet emerging took you to the ultimate conclu- of single-handle faucets that was technologies to make sure they sion, which was to have something branching out into supplying met real-world market needs, and to sell to a market someplace.” homebuilders. then become large end-users who “The Masco job came with free could generate revenue for the parking. Plus, I was sleeping at my portfolio companies. A free place to park mom’s house, and Masco was right There was only one problem: The Sam Valenti uses the III as a around the corner,” Valenti said. economy was about to fall off a cliff. tribute to his dad and grandfather, It also seemed like it might be Valenti thought he’d be able to both natives of Sicily. His dad had more fun than working in a large raise $200 million or $300 million a small grocery store in Detroit corporate environment. Richard from member organizations, but that couldn’t survive the reces- Manoogian, then 32, had just taken the worst recession since the Great sion, then got a job driving a truck the reins from his father, Alex, the Depression was about to hit, and for the Lincoln Mercury division of company’s founder, and they had companies that might have been an affinity from the start. Ford Motor Co. looking to invest capital in 2007 Alex Manoogian continued to were hoarding cash when the fund work at Masco, and early on he put went out to the marketplace in 2008. Valenti in charge of investing the $5 Doug Rothwell, president and million in the company’s pension CEO of Business Leaders for fund, as well as $20 million on behalf Michigan, calls Valenti “disarm- of the Armenian General Benevolent ingly persuasive.” Union, a nonprofit founded in 1906. “He connects with you at a per- “We had a great first couple of sonal level before he tries to con- Jaffe congratulates its clients years,” Valenti said. “One day, nect with you at a business level. Alex came in and said, ‘How’d we “He’s one of the strongest sales on their do?’ I told him. He looked at me people I’ve ever seen. Were it not 2012 Crain’s M&A Awards and said, ‘That’s good. But if you for Sam, we wouldn’t have had the had done better, I could have built size fund we ended up with,” said two more orphanages.’ Rothwell. The fund ended up rais- “That haunted me. I mean, it ing almost $50 million. haunted me. That’s what taught me “We were on the edge of an eco- Deal of the Year Winner Deal of the Year Winner Deal of the Year Finalist Over $100 Million Under $100 Million Over $100 Million that running money was serious.” nomic collapse. By all rights, we Valenti credits Richard shouldn’t have had a fund at all. Manoogian for Masco’s spectacu- But we were able to close on a fund. lar growth over their first 20 years It was smaller than we had in mind, together. but it was still a fund. And because “I’ve been around a lot of bril- we raised that fund, we’ll be able to liant people, but I’ve never met raise a larger second fund.” Sale to Acquisition of anyone like Dick,” he said. “He had Valenti recruited Rizik to run it. Becton Dickinson Precision Tooling Business Bank Acquisition an amazing mind. It was a joy to be He had first met Rizik in 2000 when around someone (who), if you came Masco Capital invested in Ann Ar- Jaffe represented Jaffe represented Jaffe represented up with an idea, he’d say, ‘Let’s run bor-based Ardesta LLC, a venture Accuri Cytometers Strength Capital Partners Talmer Bancorp, Inc. with it.’ It was a magical thing.” capital firm co-founded by Rizik Said Manoogian: “I’ve dealt with and Rick Snyder. When Snyder de- a lot of financial people in my life, cided not to raise a second fund for and Sam is very unique. He has an Ardesta in 2008 — no one knew then unusual combination of being cre- that he would soon run for governor ative and conservative at the same — Rizik became available. time. “Sam is a really smart guy. He “Sam came in as chief investment has a sense of the marketplace and officer and had a crucial role in Mas- trends in investing,” Rizik said co’s growth. He was an absolutely Valenti’s greatest strength is being terrific strategic analyst. He’s a a sounding board and being bold. great people person. At Masco, he “In the investment world, some loved bringing in young people and follow...Sam has spent his whole ca- growing them.” reer leading. He thinks ahead of the Another small company Valenti crowd, and consequently, he’s had helped grow? Troy-based Arbor great returns year in and year out.” Ê-"1/ ÊÊUÊÊ /,"/ÊÊUÊÊ Ê, ",ÊÊUÊÊ * -ÊÊUÊÊ* * Drugs Inc., on whose board Valenti Tom Henderson: (313) 446-0337, www.jaffelaw.com sat for a decade as it grew from a [email protected]. Twitter: small company with a few stores to @tomhenderson2 20120326-NEWS--0013-NAT-CCI-CD_-- 3/23/2012 10:40 AM Page 1

March 26, 2012 CRAIN’S DETROIT BUSINESS Page 13 Finance Extra Winner: Deal over $100 million Becton, Dickinson & Co./Accuri Cytometers Inc. Jeff Williams, John Dahler

When Jeff Williams joined Ann Arbor-based Accuri Cytometers Inc. in January 2010 as CEO, he figured it would take at least three years Dahler Williams and maybe four to carry out his “We were hoping to get two or ADVISER marching or- three companies who were interest- Jaffe Raitt Heuer ders, which ed. Instead, we had eight,” said & Weiss PC were to grow Williams. Also working on the deal revenue for the was company CFO John Dahler. medical device company to the He made a formal presentation point where it would either be able to all eight, which led to three to go public or, far more likely, be rounds of bidding and a winning sold. offer of $205 million cash by New Growing revenue from $10 mil- Jersey-based Becton, Dickinson and lion a year would be the easy part, Co., which in 2009 had bought Williams thought. He just needed to Williams’ previous company, Ann widen the targeted customer base Arbor-based HandyLab Inc. for the cytometers (desktop devices “We were very fortunate. Accuri that automate cell analysis) from made a great product that offered Accuri’s original focus on life sci- an awful lot at a reasonable price ence researchers to include those and which still allowed for good doing clinical diagnostics, too. profit margins,” he said. But growing the company to the On a deal-making scale of one to point at which a sale would pre- 10, with one being the easier, sent a good return on investment Williams said this one was a 1.5: for Accuri’s venture capital back- “It was perfectly smooth. There ers — Ann Arbor-based Arboretum were no hiccups.” Ventures LLC, Ann Arbor-based Ply- So, why not rate it at 1? There was mouth Venture Partners, Massachu- a chance, he said, that the U.S. De- setts-based Flagship Ventures and partment of Justice could have Chicago-based Baird Venture Part- blocked the sale for antitrust rea- ners — that’s where the hard work sons. “BD is the largest maker of would come in. cytometers, and Accuri was con- Or not, as it turned out. sidered the most innovative, so Less than a year after he took there was a chance that the regula- the job, to Williams’ surprise, a tors would block the sale. I didn’t medical-device company he de- think it would happen, but you clined to name asked if the compa- never know,” said Williams. ny was for sale. Accuri’s devices are much Williams said it wasn’t. Not yet. smaller than traditional cytome- “They came back anyway with ters and a fraction of the price, an offer we didn’t think was worth but its sales were so small, even it, and then they came back with having doubled to about $20 mil- another offer,” said Williams. At lion in Williams’ year at the helm that point, the company’s board — that regulators let the deal go thought perhaps it ought to test through. It closed on March 18, the market and engaged New 2011. York-based Jefferies and Co. — Tom Henderson

Finalist: Deal over $100 million Talmer Bank and Trust Congratulations to our clients who are among David Provost, Gary Torgow Crain’s Last year was one of continuing M&A Award winners and ﬁnalists growth for Troy-based Talmer Bank and Trust as it continued to expand its footprint throughout Provost Torgow Huron Capital Partners LLC ADVISER Southeast Nelson Mullins Michigan and Merzon. Winner Riley & the Midwest. Provost is president and CEO, Scarborough Last Febru- and Torgow is chairman of the hold- Dealmaker of the Year Buyer/Seller LLP ary, the bank, ing company, Talmer Bankcorp Inc. then known as Last December, Talmer ac- First Michigan Bank, bought the quired Sheyboygan, Wis.-based Client since 2001 $418.7 million in assets and nine Lake Shore Wisconsin Corp. and its branches of Madison Heights-based $26 million in capital in exchange Peoples State Bank when it was shut for stock. Lake Shore had been down by the Federal Deposit Insur- formed to buy the assets of dis- ance Corp. tressed banks, a strategy that fu- Glencoe Capital LLC In April, the bank bought the eled Talmer’s rapid growth. $476.3 million in assets and four In April 2010, First Michigan had Finalist branches of Mt. Clemens-based a single branch and only $100 mil- Best Deal of the Year under $100 million Community Central Bank, when it, lion in assets. too, was shut down by regulators. New York financier Wilbur Ross Shortly after the Community helped the bank raise $200 million Client since 2008 Central deal, First Michigan an- to launch its growth spree, which nounced it was changing its name began that month with the pur- to Talmer to make growth into chase of $1.1 billion in assets and 22 neighboring states easier. Talmer branches of Port Huron-based Citi- blends the first name of David zens First Bank when regulators Provost’s grandfather, Talmage, shut it down. and Gary Torgow’s grandfather, — Tom Henderson 20120326-NEWS--0014-NAT-CCI-CD_-- 3/23/2012 10:39 AM Page 1

Page 14 CRAIN’S DETROIT BUSINESS March 26, 2012 Finance Extra Winner: Deal under $100 million the company had told Wall Street quarter. Strength hopes to target ADVISERS it was going to exit them at some acquisitions that both grow rev- Jaffe Raitt Heuer & Weiss; Dawda, point,” McCammon said. “And enue and help diversify the cus- Strength Capital Partners/ Mann, Mulcahy & Sadler; LSG what we like to do is find (compa- tomer base of Arch Global. Its cur- TriMas Corp. units Insurance Partners; RSM nies with) assets that can be added rent three companies have about McGladrey; Atwell LLC onto strategically.” $50 million in combined revenue, Mark McCammon, Eli Crotzer Eli Crotzer, formerly president of which about 55 percent are auto- ty goals. Arch Global currently of both Precision Tool and Hi-Vol motive sales, including all of Hi- Strength Capital Partners LLC comprises former TriMas sub- under TriMas, has become the new Vol’s revenue. plans to review about 10 prospec- sidiaries Hi-Vol Products LLC in CEO of Arch Global, which shares The strategy is to reduce that to tive companies that could be bun- McCammon Crotzer Livonia and Precision Tool Co., its headquarters with Hi-Vol in less than 30 percent when the Arch dled into Livonia-based Arch Global which in turn is made up of War- Livonia. companies are ready to sell or take Precision LLC, the platform compa- said an adjustment in net working ren-based KEO Cutters Inc. and Ply- The company also recently public, McCammon said. ny it created to acquire three units capital will be finalized shortly but mouth, Mass.-based Richards Micro- hired Don Piper as CFO, and In that sense, it will mirror In- from TriMas Corp. should add less than $100,000 to the Tool. Strength Capital expects to review land Industrial, another platform Birmingham-based Strength purchase price. “These had become kind of or- about 10 other precision manufac- company that holds Strength Capi- Capital closed on a $38.6 million as- Strength Capital could offer up phan subsidiaries for TriMas. turer companies that fit with Arch tal’s industrial services compa- set purchase from TriMas on Dec. to an additional $2.5 million in ear- They were being used more as Global’s industry platform as a nies. 22. Mark McCammon, managing ly 2013 and early 2014, based on the sources of capital for the company precision manufacturer holding Inland Industrial’s customer partner of the private equity fund, acquired units meeting profitabili- than as targets for investment, and company, starting in the second base was more than 80 percent automotive when it was formed in 2005, but is only about 27 percent automotive today, while revenue has more than quadrupled. Turn to the “deal-makers” — Chad Halcom at Howard & Howard.

Southwest Brake & Parts

THROUGH ITS SUBSIDIARY, THE SALE OF CERTAIN SALE OF ASSETS TO RTI HOLDINGS, INC., ACQUIRED Kearney Duzan ASSETS COMPRISING THE DEFINOX FleetPride U.S. VALVE BUSINESS (an Investcorp Company) Finalist: Deal under $100 million July, 2010 Glencoe Capital Michigan LLC/ September, 2010 August, 2011 Budco Holdings Inc. Douglas Kearney, Jason Duzan

Glencoe Capital Michigan LLC’s ac- Laga, Inc. quisition of Budco Holdings Inc. not only preserved 450 jobs at the com- SALE OF ASSETS pany’s Highland Park headquar- SALE OF ASSETS TO HAS REDEEMED VISTEON’S AND SUBSIDIARIES TO ACQUISITION OF ters — it also SHAREHOLDING INTEREST ASSETS OF set up the lo- SCHAWK! Graham Corporation cal base for ADVISERS Visteon (NYSE) E.N. MURRAY CO. (NYSE) job growth. Blue River, Biriming- Honigman Miller August, 2010 October, 2011 July, 2009 December, 2010 ham-based Schwartz and Cohn LLP, Ernst Glencoe paid & Young, PM Beringer Capi- Environmental, tal between Gillum Strategy $50 million Partners, West Hilbrich Group, LLC. and $75 mil- Monroe Partners, lion to acquire Reiber Group Budco’s busi- ACQUISITION OF HAS BEEN ACQUIRED BY HAS SOLD ITS SOUTHERN ness process outsourcing opera- STOCK OF OPERATIONS TO tions, which had 2011 revenue of INDUSTRIAL OPPORTUNITY about $130 million and made up 95 PARTNERS INZI CONTROLS percent of its total business. Included in the deal was Budco’s November, 2011 November, 2009 December, 2009 second site in Robbinsville, N.J., which employs 50. The company’s extended warranty financing business was not part of the deal. Areas of M&A Expertise: Budco, which started out 30 years ago as an outsource print Automotive | Energy | Financial Institutions | Healthcare | Industrial | International | Private Equity | Venture Capital and mail shop for the Detroit 3, to- Our top ranked M&A group offers scalable resources and vast industry expertise to cover every aspect of your M&A transactions from qualifying day provides tech-enabled, out- buyers, IP due diligence and negotiation of deal documents, to post-closing integration. Applying innovative thinking and trusted insight, we sourced business processes in deliver deals from the millions to the billions to help make your merger, acquisition or divestiture successful and cost effective – every time. marketing, finance, accounting and logistics, in areas such as management of Web-based store- fronts or pilot pharmaceutical programs, customer support help lines or mortgage origination/refi- nancing programs. Attorneys and Counselors for Business Budco “has a lot of opportunities nationally to expand its customer base,” said Glencoe princi- www.howardandhoward.com | 248.645.1483 pal Douglas Kearney, who worked on the deal with managing director Jason Duzan. Ann Arbor, Michigan | Detroit, Michigan | Chicago, Illinois | Peoria, Illinois | Las Vegas, Nevada Glencoe is already looking at other acquisitions to bolster Budco. — Sherri Welch 20120326-NEWS--0015-NAT-CCI-CD_-- 3/23/2012 10:38 AM Page 1

March 26, 2012 CRAIN’S DETROIT BUSINESS Page 15 Finance Extra Winner: Dealmaker adviser and Marsh and Roesler opened in Finalist: Dealmaker adviser McCarty, about the pace of deal Birmingham. flow — a pace he said owners ac- Angle Advisors-Investment That first partial year, Angle UHY LLP celerated by deciding to convert Banking LLC Advisors closed three deals for a Steven McCarty their equity in businesses before total deal value of $75 million. any possible increase in federal Kevin Marsh, Cliff Roesler Today, Angle Advisors has grown income tax rates. to 32 investment professionals and Sterling Heights-based ac- UHY’s deals generally involved It was a productive first full year has offices in Manchester, England; counting and private companies with EBITDA of investment banking in 2011 for Frankfurt, Germany; and Shanghai. consulting (earnings before income taxes, de- Birmingham-based Angle Advisors- Its 2011 deals included the sale of a firm UHY LLP preciation and amortization) of Investment Banking LLC. The firm Marsh Roesler BorgWarner Inc. unit that makes tire- had a busy between $2 million and $10 million took on 12 engagements in the pressure monitoring systems to a year in 2011, and revenue under $40 million. year, which ended up in nine suc- run independently by its two co- German company for $30 million; advising on UHY’s sell-side deals included cessful transactions for a total deal founders, William Campbell and the sale of Doral Steel Corp. of Toledo four deals on the sale of Brandimage Desgrippes value of $240 million. William McKinley. to Ontario-based Samuel, Son & Co. the buy side Laga of Chicago to Des Plaines, Two potential deals are still in A dispute with Comerica in 2009 Ltd. for $60 million; and the sale of and seven on Ill.-based Schawk USA Inc.; (NYSE: the works. led to discussions for employees to Bingham Farms-based Personal Care the sell side. SGK); and the sale of Gentz Indus- “We had only one deal that blew “We were tries Inc. of Warren to MB Aero- buy the firm back from the bank, Products Inc. to Minneapolis-based McCarty up,” said managing director Cliff but when those talks hit a dead Stone Arch Capital LLC for $60 million. drinking out of space Holdings Ltd. of Scotland. Roesler. “It was a very difficult en- end, Campbell and McKinley quit, — Tom Henderson a fire hose,” said partner Steven — Tom Henderson vironment, one of the hardest years for M&A that I can remem- ber, despite the obvious recovery in the economy.” Although the economy was much improved over a year or two ago, bank financing was still hard to come by. Complicating that conser- “I know exactly who you should call.” vatism, said Roesler, was that by midyear, lenders were already ap- People who know private equity, know BDO. proaching the lending targets they’d set at the beginning of the year. “Banks got pickier in the third and fourth quarter,” he said. Another complication for Angle was that many of its engagements involved companies, several of them auto suppliers, who relied on a few key customers. “Now, private equity companies want an unconcentrated customer base,” Roesler said. Still, deals got done, more than he and co-founder Kevin Marsh would have imagined when they opened shop in April 2010. Marsh and Roesler were both veterans of W.Y. Campbell & Co., a Detroit-based investment banking firm founded in 1988. Comerica Inc. bought the firm in 1995 but let it be

HEALTH CARE HEROES SOUGHT Crain’s Detroit Business is seeking nominations for Health Care Heroes, a special report on health care professionals that will run in the Sept. 10 issue. The program will honor top-notch medical innovators and patient advocates — leaders who bring new meaning to the word “dedication” through their efforts to save lives or improve access to care. Winners will be chosen in five categories and honored at a Crain’s event. Ⅲ Corporate achievement in health care: Honors a company that has created an innovative health benefits plan or has solved a problem in administration. Ⅲ Advancements in health care: Honors a company or individual responsible for a discovery or for developing a new procedure, device or service that can save lives or improve quality of life. Ⅲ Physician: Honors a physician whose performance is considered The Private Equity Practice at BDO exemplary. Ⅲ Allied health: Honors an Strategically focused. Remarkably responsive. A century of experience. individual from nursing or allied BDO’s Private Equity Practice provides integrated, value-added assurance, health fields deemed exemplary by patients and peers. tax, and consulting services across the fund cycle, and across the world – Ⅲ Trustee: Honors leadership and all through a single point of contact. distinguished service by a health care trustee. A panel of health care judges will Accountants and Consultants choose the winners. Submit a www.bdo.com/privateequity nomination at www.crainsdetroit .com/nominate by May 4. Questions? Contact Bill Shea, © 2012 BDO USA, LLP. All rights reserved. enterprise editor, at (313) 446- 1626. 20120326-NEWS--0016-NAT-CCI-CD_-- 3/23/2012 10:37 AM Page 1

Page 16 CRAIN’S DETROIT BUSINESS March 26, 2012 Finance Extra Winner: Dealmaker buyer/seller Huron Capital Partners LLC Brian Demkowicz, Mike Beauregard

Year in and year out, pre-recession, recession and post-recession, Detroit-based Huron Capital Partners LLC is generally the most active private equity firm in town. Beauregard Demkowicz Last year was no exception. Huron Capital completed eight ac- three years ago, still came off as quisitions and three divestitures underperforming once Huron had for a total deal value of $430 mil- done due diligence. lion, including $108 million re- While bank lending remains turned to its limited partners — in- tight in the larger market, cluding Dow Chemical Co., DTE Demkowicz said it mostly wasn’t Energy Co., Soave Enterprises Inc., an issue for his firm because of re- Vlasic Investments LLC and the State lationships built with lenders. of Michigan Pension Fund — in exits And if lending wasn’t available that brought a five-times return. for a particular deal for one reason “We had a really good year, and or another, “we just write our own it’s continuing into 2012,” said check for the whole amount,” said managing partner Brian Demkow- Demkowicz. “We’ve never been icz. “We don’t do anything crazy. overleveraged in any of our compa- We stick to our knitting. It’s a nies, which is what saved us dur- tried-and-true strategy that’s been ing the recession.” successful for us.” Another key figure in the streak Demkowicz said that despite the of deals was Huron partner Mike number of deals done, it was not Beauregard. Three of Huron’s ac- an easy year. quisitions were new companies to “We had a number of deals fall serve as platforms for future add- by the wayside,” he said. There are ons, and five were add-ons for cur- two reasons. Sellers have unrealis- rent platforms. Two of the sales tic expectations, for one thing. were local companies Huron had “Sellers are coming back to the grown substantially — Quest Spe- market with the idea that their cialty Chemicals Inc. of Walled Lake, businesses are still worth what they for more than $150 million; and were before the recession,” he said. Michigan Orthopedic Services LLC of The other? A lot of companies, Livonia, for less than $10 million. while doing better than two or — Tom Henderson

Saturday, April 28, 2012

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March 26, 2012 CRAIN’S DETROIT BUSINESS Page 17 Calley: Governments would get replacement funds, not guarantees Fears persist over equipment tax repeal Congratulates

BY MIKE TURNER guaranteed. He said collections de- SPECIAL TO CRAIN’S DETROIT BUSINESS pend on such factors as depreciation schedules, the size of a com- Samuel Valenti III LANSING — Lt. Gov. Brian Cal- munity’s industrial base and the ley met with local governmental equipment purchasing plans of 2012 Lifetime Achievement leaders last week to discuss businesses. changes to the state’s personal “It is no more stable than what Award Recipient property tax and reiterated what we’re talking about putting on the many of them didn’t want to hear: table,” he said. “If you can think of Gov. Rick Snyder’s administra- a system outside of a constitution- tion is against constitutionally al guarantee that makes sense, As chairman of our Board of Directors, we guaranteeing that lost tax revenue then please come to the table with would be replaced. the understanding that it right thank you for your continued guidance, wisdom Speaking last week at the Michi- now is not a constitutional tax but gan Municipal a locally collected tax.” and support. League’s annual Calley said the administration Capital Confer- is taking time to craft legislation -TriMas Management Team ence at the because it wants to limit the finan- Lansing Center, cial impact on local governments. Calley said the “If there was an intention to dis- TriMas Corporation, headquartered in Bloomfield Hills, is a administration regard the impact on local govern- diversified designer, manufacturer and distributor of engineered and is committed to ment, then this would have hap- replacing the pened last year” — when the applied products, serving a variety of industrial, commercial and taxes that it administration pushed through consumer end markets worldwide. wants eventual- other significant tax policy Calley ly to eliminate changes, such as eliminating the on industrial equipment. Michigan Business Tax, he said. But a constitutional guarantee “For those who have a heavy re- is “a bit overboard,” he said. liance on industrial personal The Municipal League and oth- property tax, we want to make er representatives of local units of sure we have a system in place government are insisting that any that doesn’t result in things like revenue replacement plan include debt default, doesn’t result in a constitutional guarantee pro- things like insolvency and loss of tecting future funding. They have essential services,” Calley said. formed a coalition called Replace Critics of the personal property Don’t Erase, which contends that tax say it hurts job growth by dis- local governments have seen the couraging businesses from invest- state cut revenue sharing more ing in new equipment. than $4 billion in the past decade. Calley said eliminating the tax Local governmental units col- would help create a more busi- lect and use personal property tax- ness-friendly climate that would es on industrial, commercial and foster economic development and utility equipment — taxes that stabilize the tax base. raise about $1.2 billion annually. Calley said a poor economy was A great CPA Payers of personal property tax the reason that local governments fall into three categories: industri- saw state revenue sharing doesn’t just retire. al, commercial and utility. chopped. A plan being crafted by the Sny- “Revenue-sharing cuts hap- der administration and Senate Re- pened because the economy in publicans would phase out the tax Michigan was bad, not because on industrial property by 2021 and anybody wanted to cut revenue Consider Paul Carter, a senior manager at offer immediate relief to small sharing,” he said. Other entities ShindelRock. A few years ago, Paul was commercial and industrial compa- that also rely on state-collected looking for a place to close out a successful nies. The tax on utility personal taxes also suffered, Calley said. property would remain in place, “There isn’t anybody who’s been career. At ShindelRock, he stays active in as would the tax on commercial protected from a bad economy.” his clients’ affairs on a schedule that works personal property whose value ex- As previously described by ceeds a threshold of $35,000- state senators involved with craft- for him. $40,000. ing the legislation, the Snyder ad- At ShindelRock, we offer a well-managed Legislation is expected to come ministration’s plan would repeal before the Senate Finance Com- the personal property tax on in- practice with all the infrastructure you mittee soon. dustrial equipment purchased need to continue serving your clients. The changes would reduce prop- from Jan. 1 of this year through erty taxes by $425 million, which 2015 on Jan. 1, 2016, and any equip- Because slowing down doesn’t have to the state would replace with rev- ment purchased thereafter would mean retiring. enue that will become available also be free of tax. with the expiration of business tax Also beginning in 2016, industri- credits it is now paying. al equipment older than 10 years Local governments, however, would start coming off the tax say funding is too vulnerable to rolls until all of it was tax-free by the budgeting whims of legisla- 2021. tors. They have balked at working Also under the plan, the tax im- Contact for Inquiries with the administration on devis- mediately would be eliminated on Maria Montie, CPA, MST, CVA, CFFA ing a formula for distributing the commercial and industrial compa- Managing Partner replacement funds without a con- nies with less than $40,000 worth stitutional guarantee. of equipment, although Calley in- www.ShindelRock.com | 248.855.8833 But Calley said that, even with dicated last week that the pro- 28100 Cabot Drive Ste. 102 | Novi, MI 48377 local units collecting property tax- posed threshold could wind up at es, the revenue never has been perhaps $35,000 or $38,000. 20120326-NEWS--0018-NAT-CCI-CD_-- 3/23/2012 10:09 AM Page 1

Page 18 CRAIN’S DETROIT BUSINESS March 26, 2012

CRAIN'S LIST: LARGEST ACCOUNTING FIRMS Ranked by number of employees

Number of Number of Number of Company employees employees employees Number of Number of CPAs Address Detroit area in Michigan engaged in Number of Number of employees engaged Detroit area Phone; website January 2012/ January 2012/ audit/ employees employees engaged in other Jan. 2012/ Rank Managing partner(s) 2011 2011 accounting engaged in taxes in consulting Jan. 2012 2011 Deloitte LLP 913 1,041 394 228 225 194 299 200 Renaissance Center, Suite 3900, Detroit 48243-1895 885 1,003 244 1. (313) 396-3000; www.deloitte.com Mark Davidoff

Plante Moran PLLC 868 1,254 324 136 184 224 351 27400 Northwestern Highway, Southfield 48037 801 1,169 323 2. (248) 352-2500; www.plantemoran.com Gordon Krater PricewaterhouseCoopers LLP 715 738 386 162 94 96 368 1900 St. Antoine St., Detroit 48226-2263 631 649 253 3. (313) 394-6000; www.pwc.com David Breen Ernst & Young LLP 513 587 244 129 61 79 162 777 Woodward Ave., Suite 1000, Detroit 48226 507 579 146 4. (313) 628-7100; www.ey.com Jeffrey Bergeron KPMG LLP 335 335 135 81 NA 119 NA 150 W. Jefferson Ave., Suite 1900, Detroit 48226 327 327 78 5. (313) 230-3000; www.kpmg.com Heather Paquette The Rehmann Group LLC 288 683 140 129 36 433 168 1500 W. Big Beaver Road, Second Floor, Troy 48084 336 B 714 164 6. (248) 952-5000; www.rehmann.com Philip Bahr and Steven Maltzman UHY Advisors Michigan Inc. 255 255 99 92 30 34 117 27725 Stansbury Blvd., Suite 210, Farmington Hills 48334 257 257 116 7. (248) 355-0280; www.uhy-us.com Anthony Frabotta, CEO Doeren Mayhew & Co. PC 200 200 111 41 11 37 88 755 W. Big Beaver Road, Suite 2300, Troy 48084 200 200 101 8. (248) 244-3000; www.doeren.com Mark Crawford Experis Finance US LLC 126 157 36 6 113 NA 43 1000 Town Center, Suite 1000, Southfield 48075 157 160 48 9. (248) 226-1360; www.experis.com Pat Hevrdjes Baker Tilly Virchow Krause LLP 126 126 47 56 6 17 39 1 Towne Square, Suite 600, Southfield 48076 119 119 46 9. (248) 372-7300; www.bakertilly.com Alan Whitman Grant Thornton LLP 108 108 42 26 23 2 51 27777 Franklin Road, Suite 800, Southfield 48034 112 112 64 11. (248) 262-1950; www.grantthornton.com Vincent Tomkinson BDO USA LLP 70 329 35 29 0 6 34 755 W. Big Beaver Road, Suite 1900, Troy 48084 60 300 33 12. (248) 362-2100; www.bdo.com Fred Rozelle, assurance; John Marquardt, tax Godfrey Hammel, Danneels & Co. PC 68 68 15 32 9 12 32 21420 Greater Mack Ave., St. Clair Shores 48080 67 67 35 13. (586) 772-8100; www.ghdcpa.com Steven Guarini, president Gordon Advisors PC 58 58 25 12 11 10 25 1301 W. Long Lake Road, Suite 200, Troy 48098-6319 57 59 21 14. (248) 952-0200; www.gordoncpa.com Alan Steinberg Clayton & McKervey PC 58 58 31 18 2 9 35 2000 Town Center, Suite 1800, Southfield 48075 56 54 34 14. (248) 208-8860; www.claytonmckervey.com Donald Clayton, CEO Metzler Locricchio Serra & Co. PC 35 35 30 30 30 30 18 1800 W. Big Beaver Road, Suite 100, Troy 48084-3531 29 29 13 16. (248) 822-9010; www.mlscocpa.com Michael Locricchio Alan C. Young & Associates PC 30 30 23 3 1 3 8 7310 Woodward Ave., Suite 740, Detroit 48202 31 31 8 17. (313) 873-7500; www.alancyoung.com Alan Young Fenner Melstrom and Dooling PLC 30 30 10 15 5 NA NA 355 S. Old Woodward, Suite 200, Birmingham 48009 30 30 19 17. (248) 258-8900; www.fmdcpas.com Mike Gottshall Edwards, Ellis, Stanley, Armstrong, Bowren & Co. PC 27 27 517NA516 2155 Butterfield Drive, Suite 305A, Troy 48084 26 26 16 19. (248) 643-4545; www.eeacpas.com Richard Edwards, president Iannuzzi, Manetta & Co. PC 26 26 18 4 0 4 10 1175 W. Long Lake Road, Suite 201, Troy 48098 26 26 10 20. (248) 641-0005; www.imc-cpa.com Frank Iannuzzi

This list of accounting firms is an approximate compilation of the largest companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. NA = not available. B The Rehmann Group LLC acquired Wright, Griffin, Davis and Co. CPAs on Jan. 1, 2011. January 2011 figures are combined. LIST RESEARCHED BY BRIANNA REILLY DBpageAD.qxp 3/15/2012 2:42 PM Page 1

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Page 20 CRAIN’S DETROIT BUSINESS March 26, 2012 Union ballot drive stalls right-to-work effort; biz readies forces

BY MIKE TURNER union dues as a condition of em- year relating to union rights and SPECIAL TO CRAIN’S DETROIT BUSINESS ployment. Proponents contend it bargaining powers. I think you’re going to see every gives workers greater choice, Although the right-to-work as- LANSING — A union-backed bal- “ while opponents claims the mea- pect of the ballot drive has gar- lot drive that would enshrine collec- group in town rallying to stop sure is aimed to weaken unions. nered the most attention, “this is- tive bargaining rights in Michi- Debate in Michigan intensified af- n’t about any one specific piece of gan’s constitution has put on hold a this petition drive. ter neighboring Indiana on Feb. 1 legislation,” said Zack Pohl, a state representative’s plan to intro- ” became the 23rd state — and the spokesman for We Are the People, a duce right-to-work legislation. Charles Owens, first in the industrial Midwest — member of the coalition backing In the meantime, industry National Federation of Independent Business to adopt a right-to-work measure. the petition drive. groups in Lansing are closely The Board of State Canvassers last Protect Our Jobs backers must watching the ballot drive in antici- duce right-to-work legislation in the date for introducing right-to-work week approved language for the collect at least 322,609 valid signa- pation of possibly joining forces to House, said last week the ballot dri- legislation since taking the lead on Protect Our Jobs petition drive. tures by July 9 for the measure to oppose the so-called Protect Our ve “affects our priorities.” the issue early this year and did The initiative would pre-empt qualify for the Nov. 6 ballot. Pohl Jobs initiative if it makes it on the “The No. 1 objective now be- not say what his timetable is in the possible right-to-work legislation said the coalition, which is using a November ballot. comes making sure we defeat that wake of the ballot drive. by making any such law unconsti- combination of volunteer and paid State Rep. Mike Shirkey, R-Clark- union boss ballot drive,” he said. A right-to-work law would make tutional and possibly undo other petition circulators, is confident of lake, who has said he plans to intro- Shirkey has never given a firm it illegal to require workers to pay legislative initiatives of the past collecting more than enough sig- natures. He would not say how many have been gathered since the drive began March 6. Leaders of business groups agree that it’s likely the measure will qualify for the ballot and they are girding to defeat it. “I think you’re going to see every group in town rallying to stop this petition drive,” said Charles Owens, state director of the National Federation of Indepen- dent Business. He said opposition could take the form of a loosely aligned coalition, although a formal, state-registered ballot question committee would likely prove more effective. Owens said he would also en- WHY YES, courage legislators to continue the the grass push for a right-to-work law despite the petition drive. “The best defense is a good of- fense,” he said. “I think an appro- GREENER priate response to this would be to is over here. pass a right-to-work law.” Mike Johnston, vice president of government affairs for the Michi- gan Manufacturers Association, said the group has discouraged legislators from pursuing right to work. That’s similar to the stance of Gov. Rick Snyder, who has urged lawmakers and Protect Our Jobs organizers to avoid a showdown on the issue, saying it is too divisive. “Our preference is we not focus on those issues,” Johnston said. “This old debate over collective bargaining is just that — it’s an old debate. Let’s move forward.” However, he predicted the business community would be unified in opposing the Protect Our Jobs initiative if it appears on the ballot. Sometimes brilliant accounting Chris Fisher, president of Associ- and advising isn’t enough. Allow us to ated Builders and Contractors of give you an extra nudge over the fence. Michigan, said labor might have made a “tactical mistake” by un- Exceptional client service is what separates Baker Tilly from dertaking a ballot drive. Citing polls showing that Michi- the rest. Our customized Client Service Plan outlines your needs and gan voters favor right to work, he ensures you receive the individual attention you deserve. It’s our pledge to you, predicted Protect Our Jobs would because in the end, your deﬁnition of satisfaction is the only deﬁnition that matters. be defeated, which “will embolden and further the cause of right to Come see what’s happening on our side. work in Michigan, which is exactly what the unions didn’t want to do.” Right-to-work legislation could Connect with us: bakertilly.com become an easier sell after public sentiment is gauged at the ballot Alan Whitman, Managing Partner box, Fisher said, adding that ABC 248 368 8833 | [email protected] is gearing up for a “hard-fought effort” against Protect Our Jobs. “This is going to be one of the most important ballot proposals that ABC has seen in a generation,” he said. However, it’s possible the debate can be avoided if behind-the- scenes lobbying by the Snyder administration persuades unions to © 2012 Baker Tilly Virchow Krause, LLP. drop the petition drive, said Bill Baker Tilly refers to Baker Tilly Virchow Krause, LLP, an independently owned and managed member of Baker Tilly International. Ballenger, editor of Inside Michi- gan Politics. 20120326-NEWS--0021-NAT-CCI-CD_-- 3/23/2012 11:58 AM Page 1

March 26, 2012 CRAIN’S DETROIT BUSINESS Page 21 Tapper’s growth concept includes lower-priced Flagstar Bank jewelry, hands-on ‘pods’ Congratulates BY SHERRI WELCH CRAIN’S DETROIT BUSINESS

Tapper’s Fine Jewelry Inc. is hoping to broaden its customer base McKechnie Vehicle Components with the May 1 launch of a new fashion and jewelry store, Marlee’s, at 12 Oaks Mall in Novi. On Being Recognized by the The family-owned company, which turns 35 this spring, is try- White House and the USDA ing to attract younger customers and some of its current fine jewelry customers with the new store, For Its Successful Use of USDA Programs offering one-of-a-kind artisan jewelry and accessories at prices rang- Commercial Banking Services ing from $25 to $3,000. Marlee’s is named for Marla Provided by Flagstar Bank Tapper Young and Leora Tapper, COURTESY OF TAPPER’S the sister and wife, respectively, of An artist rendering shows the Tapper’s President Mark Tapper. freestanding hands-on jewelry pods. They’ll serve as buyers and styl- Personal r Mortgage r Business r Commercial ists for the store. Marlee’s joins Tapper’s Diamonds “We’re constantly looking at and Fine Jewelry and Tapper’s Gold ways to kind of innovate the retail Exchange in the company and at 12 jewelry concept,” Mark Tapper Oaks Mall. Business Banking said. Tapper’s Diamonds and Fine (248) 312-6077 The West Bloomfield Township- Jewelry also has locations in West flagstar.com/business based company is investing Bloomfield Township’s Orchard $500,000-$750,000 in the store, he Mall and Troy’s Somerset North. said. Member FDIC Tapper’s Gold Exchange has 13 “Hopefully, this is a concept that stores in metro Detroit. we can scale.” Tapper said he projects the com- Marlee’s is meant to be a fun pany will bring in “north of $30 place to shop, to be styled and ac- million” in revenue this year, up cessorized. It will be “a little less about 23 percent from 2011. serious than Tapper’s” with a different type of merchandise, he Tapper’s appears to target a said. younger customer who might not The 1,460-square-foot store will be able to afford fine jewelry with be smaller than other Tapper’s the Marlee’s concept, said Anthony stores. The company worked with Ahee, marketing director of Edmund Southfield-based retail consultant T. Ahee Jewelers in Grosse Pointe. JGA Inc. to come up with the brand “What I see in the industry is ei- strategy and prototype design for ther people purchase items that the new store. last a lifetime, or they’re purchas- Marlee’s will include freestanding something on a costume level ing jewelry display “pods” without where they wear it once or twice glass or barriers, so customers can with an outfit.” touch the merchandise, Tapper “There’s always a demand for said. Sales associates will be called accessorizing … (and) definitely a stylists. market there,” Ahee said. The store will also include a Sherri Welch: (313) 446-1694, made-in-Michigan collection of [email protected]. Twitter: @sher- jewelry and accessories. riwelch

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Page 22 CRAIN’S DETROIT BUSINESS March 26, 2012

BUSINESS DIARY CONTRACTS designed to strengthen AutoCom’s Township, changed its name to Book client services globally. Industry Charitable Foundation. It also Qualitech, Bingham Farms, a technol- moved from Ann Arbor to Pittsfield ogy integrator and software reseller, Township. was selected by OSB Management EXPANSIONS LLC, Southfield, a property manage- Henry Ford Health System, Detroit, NEW PRODUCTS ment company, to provide and install opened an outpatient medical center the Altigen computerized VoIP tele- at 2520 S. Telegraph Road, Bloomfield Domino’s Pizza Inc., Ann Arbor, phone system. Hills. Telephone: (248) 451-6060. Web- launched Parmesan Bread Bites. Web- Franco Public Relations Group, De- site: www.henryford.com. site: www.dominos.com. troit, announced the addition of the Daly Merritt Inc., Wyandotte, opened a Federal-Mogul Corp., Southfield, has following clients: Reliable Software new office at 2950 S. State St., Third introduced its Champion brand to the Resources Inc., dba DataFactZ, Floor, Ann Arbor. Telephone: (734) 282- automotive filtration category with Northville, a system and data integra- 2398. Website: www.dalymerritt.com. comprehensive lines of oil, air and tion company; Foley & Lardner LLP, cabin air filters. Website: www Detroit, a law firm; Hard Rock Cafe MOVES .alwaysachampion.com. Seattle; and Health Management Sys- Altair Engineering Inc., Troy, a global Creativibe Design & Marketing moved tems of America, Detroit. provider of simulation technology and from 508 Roe St. to 338 S. Main St., Paddle the Mitten LLC, Howell, a engineering services, announced the Suite 201, Plymouth. Telephone: (734) stand-up paddleboard studio, has se- release of NVH Director, a commer- lected Artichoke Creative, Encinitas, 414-9504. Website: www.creativibe cial software tool that makes ad- Calif., to assist in building the compa- .com. vanced and streamlined full-vehicle ny brand throughout the Midwest. Giffels-Webster, a civil engineering, noise-vibration-harshness simula- Brendy Barr Communications LLC, landscape architecture, planning and tion. Website: www.altair.com. Rochester, has been chosen to handle surveying company, moved its head- Detroit-area public relations for Feld quarters from Rochester Hills to 28 W. NEW SERVICES Motor Sports Inc., Vienna, Va. Adams St., Suite 1200, Detroit. Tele- The Michigan Business and Profes- Duffey Petrosky & Co. LLC, Farming- phone: (313) 962-4442. Website: www.giffelswebster.com. sional Association, Warren, updated ton Hills, has been named creative its website: www.michbusiness.org. agency of record for advertising and Pam’s Bead Garden Inc. moved from Harrington Communications LLC, marketing communications services Plymouth to 22836 Orchard Lake Grosse Pointe Woods, launched a web- for Oakwood Healthcare Inc., Dear- Road, Farmington. Telephone: (248) site for born. 471-2323. Website: www.pamsbead Stone River Capital Partners garden.com. LLC, Birmingham. Website: Creative Benefit Solutions LLC, Troy, www.stonerivercap.com. an employee benefit brokerage and Focal Point Studio of Photography Inc. consulting firm, was selected by La- moved from Canton Township to 995 Humantech Inc., Ann Arbor, released Fontaine Automotive Group, Highland W. Ann Arbor Trail, Plymouth. Tele- its HT NIOSH Lift Calculator applica- Township, to manage and service the phone: (734) 459-8800. Website: tion for the iPad and iPhone, which employee benefit programs for its six www.fpstudio.net. calculates the risk associated with automotive dealerships. Also, it has manual lifting tasks. Website: been selected by Lake Trust Credit NAME CHANGES www.humantech.com. Union, Lansing and Brighton, to man- American Premium Finance, Troy, an- age and service its 22 statewide Community Legal Resources, Detroit, nounced the availability of its online branches employee benefit plans. has changed its name to Michigan resource site dealing with life insur- Community Resources. AutoCom Associates Public Relations ance premium financing. Website: LLC, Bloomfield Hills, signed a part- MacLean Vehicle Systems, Rochester www.americanpremiumfinance.com. nership agreement with Automotive Hills, has changed its name to JP Sales Co., Ann Arbor, announced PR, London, England, an internation- MacLean-Fogg Component Solutions. an energy industry initiative, pro- al automotive public relations group, Borders Group Foundation, Pittsfield grams to provide manufacturing services, design and manufactured components for OEMs in the energy field. Website: www.jpsalesco.com. Federal-Mogul Corp., Southfield, introduced Federal-Mogul e360, a comprehensive electronic communication platform that allows virtually any Web-enabled aftermarket customer to receive the latest news regarding the company’s products and programs and to access an extensive virtual li- brary of technical resources and other business-critical tools. The new system is available at www.fme360.com. Plante Moran PLLC, Southfield, an accounting and business advisory firm, You Deserve More Thought Per Square Foot launched the firm’s food and beverage industry practice. Website: www.plantemoran.com. Walter P. Chrysler Museum, Auburn Hills, launched a new website at www.wpchryslermuseum.org. Formcode Design Group, Troy, a creative firm, has designed and launched new websites for Challenge Detroit, an initiative of The Collaborative Group, Birmingham, at www.challengede- troit.org; and Michigan Youth Arts, Royal Oak, a nonprofit alliance that promotes excellence in arts education, at www.michiganyoutharts.org. Web- site: www.formcode.com. Innovative Learning Group Inc., Royal Oak, has created Using Gilbert’s Mod- el, a free mobile application that helps users recognize problem performance areas, identify causes, and suggest possible solutions using psychologist Thomas Gilbert’s behavior engineering model. Website: www.innova Real Estate Strategy tivelg.com. Tenant Representation DIARY GUIDELINES Buyer Representation Send news releases for Business Diary to Departments, Crain’s Project Feasibility Detroit Business, 1155 Gratiot Ave., Detroit, MI 48207-2997 or Good real estate deals are at lower lease rates; great ones are Construction Oversight send e-mail to cdbdepartments@ aligned to the needs of your organization. Let our experienced crain.com. Use any Business Diary item as a model for your release, real estate department for hire show you what to ask for. Incentives and look for the appropriate category. Without complete Lease Administration information, your item will not run. pmcresa.com 248.223.3500 Photos are welcome, but we cannot guarantee they will be used. 20120326-NEWS--0023-NAT-CCI-CD_-- 3/23/2012 10:07 AM Page 1

March 26, 2012 CRAIN’S DETROIT BUSINESS Page 23

CALENDAR TUESDAY Communications. Spark Central, Ann GENERAL & IN-HOUSE COUNSEL Arbor. Free. Contact: (734) 761-9317; MARCH 27 website: www.annarborusa.org. Detroit Economic Club. 11:30 a.m.-1:30 AWARDS APRIL 25 Beginning Facebook for Business. 6-9 p.m. With Ken Holland, executive vice Crain’s Detroit Business, Ogletree president and general manager, De- p.m. April 10. Oakland County Business Deakins, Dickinson Wright and Center. With Salina Washington, presi- troit Red Wings; others. MotorCity others present Crain’s General & Casino Hotel, Detroit. $45 DEC mem- dent/CEO, Miyan Media. Intermediate In-House Counsel Awards April 25 class April 17. Oakland County Execu- bers, $55 guests of members, $75 non- at The Inn at St. John’s, Plymouth. members. Contact: (313) 963-8547; web- tive Office Building Conference Center, site: www.econclub.org. The program will salute the best Waterford Township. $40. Contact: legal minds working inside Karen Deaver-Lear, (248) 858-0783; Michigan public, private, nonprofit email: [email protected]; George Husband Distinguished Lecture and government organizations. The website: www.oakgov.com/peds/ Series. 2-3 p.m. Wayne State University keynote speaker is Nicole Lamb- calendar. School of Business Administration. Hale, assistant With Helen Munter, director of division . of regulation and inspection, Public secretary of Automation Alley Member Orientation 8-10 a.m. . Network and learn to Company Accounting Oversight commerce for April 11 use Automation Alley benefits and ser- Board. Wayne State University, De- manufacturing vices. Automation Alley, Troy. Free. troit. Free. Contact: (313) 577-4530. and services. Registration Contact: (800) 427-5100; email: info@ automationalley.com; website: begins at 4:30 www.automationalley.com. WEDNESDAY p.m., the MARCH 28 awards presentation Tee it Up for Business: A Woman’s Learn How to Work with the General starts at 5 Guide to Breaking the Grass Ceiling. Services Administration. 7:30 a.m.- 5:30-8 p.m. April 12. Inforum. With golf Lamb-Hale p.m., and a noon. Detroit Regional Chamber. strolling pro John Jawor. Plum Hollow Country Learn how to bid on GSA contracts. networking dinner runs 6:30-8 Club, Southfield. $30 Inforum or Exec- utive Women’s Golf Association mem- Detroit Regional Chamber headquar- p.m. ters. Free. Contact: Ryan Michael, bers, $35 guests. Contact: (877) 633- (313) 596-0382; email: rmichael@ Tickets are $60 for current Crain’s 3500; website: www.inforummichigan detroitchamber.com; website: subscribers and $55 for groups of .org. www.detroitchamber.com. 10 or more. Nonsubscriber tickets are $85; a special $84.50 ticket How to Become a Government Con- includes a one-year subscription to tractor. 9 a.m.-noon. April 12. Procure- THURSDAY Crain’s. ment Technical Assistance Center of MARCH 29 For more information, call (313) Schoolcraft. Learn to sell your goods 446-0300, email and services to the federal govern- March Membership Reception. 5:30- [email protected] or visit ment and the state. Schoolcraft Col- 7:30 p.m. Detroit Regional Chamber. www.crainsdetroit.com/events. lege, Livonia. $45, advance registra- Townsend Hotel, Birmingham. $15. tion required. Contact: (734) 462-4438; Contact: Beverly Maddox, (313) 596- media strategist, Identity PR. Velocity e-mail: [email protected]; web- 0343; email: bmaddox@detroitcham Center, Sterling Heights. Free. Contact: site: www.schoolcraft.edu. ber.com; website: www.detroitcham Joan Carleton, (586) 884-9324; email: ber.com. [email protected]; website: Small Business Unlocked’s Marketing www.oakland.edu/macombouinc. Mondays: The Power of Your Brand. QuickBooks Essentials. 9-a.m.-3 p.m. 11:30 a.m.-1:30 p.m. April 16. Detroit Re- Oakland County Business Center. An Small Business Loan Workshop. 9 gional Chamber. With Hajj Flemings, introduction to the popular business a.m.-noon. April 5. Oakland County CEO and founder, Brand Camp Univer- tool. Oakland County Executive Office Business Center, Waterford Town- sity. Emagine Royal Oak. $25 chamber Building Conference Center, Water- ship. $20. Contact: Karen Deaver-Lear, members, $40 nonmembers. Contact: ford Township. $75. Contact: Karen (248) 858-0783; email: Marianne Alabastro, (313) 596-0479; Deaver-Lear, (248) 858-0783; email: [email protected]; website: email: [email protected]; [email protected]; website: www.oakgov.com/peds/calendar website: www.detroitchamber.com. www.oakgov.com/peds/calendar. Chrysler Day. 11:30 a.m.-1:30 p.m. April Proactive Management. 9 a.m.-4:30 p.m. 9. Adcraft Club of Detroit. With Saad April 17. Engineering Society of Detroit. COMING EVENTS Chehab, president/CEO of Chrysler With Christopher Webb, co-director, En- ESD Today, ESD Tomorrow Tour. 8-9 brand, Chrysler Group LLC. San gineering Society of Detroit Institute. a.m. April 3. Engineering Society of Marino Club, Troy. $35 members, $45 ESD, Southfield. $125 ESD members, Detroit. ESD headquarters, South- nonmembers, $25 junior and student $150 nonmembers, $209 to attend and field. Free; RSVP required. Contact: members. Contact: Clarence Young, join ESD at a 50 percent discount on (248) 353-0735, ext. 120; email: (313) 872-7850; email: first-year membership. Contact: Leslie [email protected]; website: www.esd. [email protected]; website: Smith, (248) 353-0735, ext. 152; email: org. www.adcraft.org. [email protected]; website: www.esd.org.

How to Fully Take Advantage of Business to Business Marketing. 5-7 Fundamentals of Writing a Business LinkedIn. Noon-1 p.m. April 5. Macomb- p.m. April 10. Ann Arbor Spark. With Plan. 6-9 p.m. April 18. Michigan Small OU Incubator. With Nikki Little, social Sean Hickey, COO, PWB Marketing Business & Technology Development Center. Designed for individuals who want to increase their chances for successful self-employment. Oakland County Executive Office Building Conference Center, Waterford Town- ship. $40. Contact: Karen Deaver-Lear, (248) 858-0783; email: [email protected]; website: www.oakgov.com/peds/calendar. CALENDAR GUIDELINES Consultative If you want to ensure listing online Professional life insurance counseling and be considered for print in a non-salesy environment publication in Crain’s Detroit Business, please use the online calendar listings section of www.crainsdetroit.com. Here’s We work with our clients and their advisors to: how to submit your events: From the Crain’s home page, click Reduce estate and income tax Enhance fixed income “Detroit Events” in the red bar yields Solve family and business issues Improve near the top of the page. Then, click “Submit Your Entries” from existing life insurance policies. the drop-down menu that will appear and you’ll be taken to our online submission form. Fill out the form as instructed, and then click the “Submit event” button at the bottom of the page. That’s all there is to it. More Calendar items can be found BIRMINGHAM, MICHIGAN 248.731.9500 on the Web at www.crainsdetroit.com. WWW.SCHECHTERWEALTH.COM 20120326-NEWS--0024-NAT-CCI-CD_-- 3/23/2012 10:10 AM Page 1

Page 24 CRAIN’S DETROIT BUSINESS March 26, 2012

™ Job Front We welcome the unique talents of... PEOPLE FINANCE Radhika Magoo to IN THE SPOTLIGHT vice president The Detroit-based Northeast JILL GUSHOW and relationship Guidance Center has named Philip JIM BRANNIGAN Director of KURT KEMP manager, busi- Whitfield CFO. Senior Account Manager Human Resources IT Infrastructure Manager ness banking division, Fifth Third Whitfield, 41, Bank, Southfield, had been fiscal from vice presi- manager at dent in business Southeast banking, Comeri- Michigan Community BRYAN MADALENO ca Bank, South- JOHN LaBRECHE RICH MARTIN field. Also, Suheil Alliance in Architectural Engineer/ Magoo Senior Account Manager Estimator Senior Account Manager Shatara to vice Taylor. president, rela- He succeeds tionship manag- Susan er, business bank- Whitfield Nederlander, ing division, from who has commercial returned to school. banker and alter- HOPE CHAMPAGNE Whitfield earned a bachelor’s nate group man- Contact Center TED ROCKETT CAROL PLOCH degree in accounting from Site Manager Executive Producer Senior Account Manager ager, business Edinboro University of banking group, Pennsylvania. Comerica Bank, Southfield. Northeast Guidance Center is a community-based behavioral TALENTED? INTERESTED? www.morleynet.com/careers Shatara HEALTH CARE health organization. Brian Birney to di- Bill Kline to vice president of project rector, marketing management, airport baggage han- and communica- dling, Jervis B. Webb Co., Farmington tions, Crittenton Hills, from executive director of pro- Hospital Medical ject management. Also, Tom Pawlow- Center, Rochester icz to vice president of project man- Hills, from direc- agement, factory distribution tor of consumer automation, from executive director marketing and of project management. audience development, Detroit Me- REAL ESTATE Birney dia Partnership, Erin Gaiser to vice president of mar- and race director, keting, Coldwell Banker Weir Manuel, Detroit Free Press/Talmer Bank Troy, from account manager, ForeSee Marathon, Detroit. Results Inc., Ann Arbor. Geoff Linden to vice president of ac- LAW quisitions, Agree Realty Corp., Farm- Tim Sulolli to partner, Goodman Acker ington Hills, from director of acquisi- PC, Southfield, from associate. tions. Emily Palacios to principal, Miller Can- SERVICES Optimize Your field Paddock and Stone PLC, Ann Ar- bor, from senior attorney. Also, Steven Sanjay Shetty to Mann to principal, Detroit, from associ- managing direc- ate; Nelson Ropke to principal, Detroit, tor of enterprise improvement LinkedIn Proﬁ le from senior attorney; and Saura Sahu unit, AlixPartners HOSTS to principal, Detroit, from associate. LLP, Southfield, from director. MANUFACTURING For In-House Counsel and Law Firms Britton Davis to Scott Schilling to senior vice presi- collection manag- A sponsored webinar dent, Kolene Corp., Detroit, from exec- er, American Prof- utive vice president, Paragon Tech- Shetty it Recovery Inc., nologies, Warren. Farmington Hills, from collector. Vincent Gatti, co-founder, Ajax Social Media, co-author of Beyond Social: Transforming Your LinkedIn JOB FRONT CALENDAR Strategy to Convey Credibility, Connect with Resources, Bring a résumé, mingle gy Computer Solutions, Suite 2615, and Get Things Done. 30700 Telegraph Road, Bingham Ann Arbor Spark is hosting a free In 2010, Ajax Social Media became the only Farms. Information: www.syner- Career Connections from 5-7 p.m. certiﬁed LinkedIn live training company in gycom.com; Karen Schmitz, (630) Tuesday at the Arbor Brewing Co., 922-5269, kschmitz@synergycom North America. 114 E. Washington St., Ann Arbor. .com. Bring a résumé and mingle with Discover: companies in a fun and relaxed environment. This event is only for ‘Hiring Our Heroes’ job fair • 3 reasons to never have your people seeking opportunities for The U.S. Chamber of Commerce, resume up on LinkedIn – and what themselves, not recruiters and the Dearborn Chamber of Commerce staffing companies. Among the and other local organizations are you should post instead companies attending is Technical hosting a “Hiring Our Heroes” job Engineering Consultants Inc. Infor- fair from 11 a.m.-3 p.m. April 11 at mation: www.annarborusa.org. 2 connection strategies to the Ford Community & Perform- • Contact: (734) 761-9317. April 18|Noon – 1 p.m. EST build relations ing Arts Center, 15801 Michigan Ave., Dearborn. Employers and To learn more, please visit Tech career fair job seekers can preregister at www.crainsdetroit.com/crainsevents • 1 simple way to calculate an Synergy Computer Solutions Inc. is www.hoh.greatjob.net by April 3. ROI from your LinkedIn usage hosting a free technology career Information: Jennifer Giering, FREE to Crain’s readers fair for experienced IT profession- (313) 584-6100, jgiering@dearborn- als from 3-7 p.m. Thursday at Syner- chamber.org. 20120326-NEWS--0025-NAT-CCI-CD_-- 3/23/2012 6:33 PM Page 1

March 26, 2012 CRAIN’S DETROIT BUSINESS Page 25 Site plans for region’s first Menard stores near votes in Livonia, Warren

BY SHERRI WELCH zoning would move the project for- Van Dyke Avenue at its April 9 Plans call for demolishing both and other project details. CRAIN’S DETROIT BUSINESS ward if the site plan for the project meeting, Warren Mayor James buildings. In line with its model of acquir- is approved, said Judy Priebe, act- Fouts said. The new store would create an ing more land than it needs and Officials in Livonia and Warren ing director of legislative affairs Menard estimates it will spend estimated 160 jobs, more than half selling sublots near its stores, are awaiting site plans from Eau for the council. $10 million to $12 million to put a of which will be part time, Fouts Menard has purchased several Claire, Wis.-based Menard Inc. for The project isn’t yet on an agen- store on the sites of the Van Dyke said. properties next to the Warren site what would be the chain’s first da for the council, but it could be Sports Complex and Bostaan The home improvement and it is eyeing for the store, said stores in metro Detroit. taken up as early as the next regu- Restaurant at 32501 and 32401 Van convenience grocery chain went Nancy Burgess, economic devel- The site plans are expected to go lar meeting April 4, she said. Dyke, Fouts said. before the Warren Zoning Board of opment director for Warren, to a vote of the Livonia City Coun- Menard’s plans for the project to That excludes the cost of pur- Appeals on March 14, seeking vari- without providing further de- cil and to the Warren Planning call for demolishing a large por- chasing the land. ances on parking requirements tails. Commission in April. tion of a 773,355-square-foot former Last week, the Livonia council Kroger Co. distribution center on conducted a first reading of a pro- the site to make room for construc- posed zoning amendment that tion of the new store. would rezone 46 acres at 12701 Mid- Meanwhile, the Warren com- JOB FRONT dlebelt Road from light manufac- mission is expected to consider turing to general business. The re- Menard’s proposal for a store on MANAGEMENT POSITIONS AVAILABLE CHIEF DEVELOPMENT OFFICER

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But if there’s a Minimum of 5-10 years experience as a senior Real estate brokers have also in- frost, this spring, fruit and veg- development staff member for a human services creased their showings, and in etable crops have a higher likeli- organization, hospital, or foundation, with at least up to $4,000 when a hire is made some cases, their sales compared hood of being damaged. 3 years managing other professionals. to 2011. 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Alexandrine, Detroit, MI 48201 |JOB FRONT said. “Part of it is the improving based fruit and vegetable farm Jos. economy, but I think the emotion- Kutchey & Sons, said that he’s hold- crainsdetroit.com/jobfront al impact of a bright, sunny day ing off on planting tomatoes and MARKET brought people out.” other vegetables to avoid the pit- Golf courses have opened a falls that would stem from a month ahead of schedule, and re- spring frost. 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Page 26 CRAIN’S DETROIT BUSINESS March 26, 2012 M&A Experience Hall: Working to end state probe In Your Corner. ■ From Page 3 events, according to its federal filing for 2010. In 2009, when the hall HALL OF FAME NAMES suspended its annual induction We’re keeping dinner because of the recession, Executive director “ revenue was just $42,150. It was Ⅲ Jim Stark current on (bills) $251,463 the year before that. Stark estimated the hall took in Board of trustees that we’ve incurred. about $280,000 in total revenues in Ⅲ Dave Beachnau: Executive 2011, but that cannot be indepen- director, Detroit Sports We’ve made a lot of dently confirmed until the hall Ⅲ Mike Bishop: Attorney, Clark submits its IRS paperwork. He at- Hill PC progress, but we have tributed the increase to new Ⅲ Mickey Briggs: Attorney, events and fundraisers. Giarmarco, Mullins & Horton PC a ways to go.” Ⅲ ” “Following our restructuring Bruce Madej: Associate athletic Ryan Krause, director, University of Michigan during the recession, we’ve had Michigan Sports Hall of Fame nothing but a positive string of Ⅲ Tony Michaels: President, The successes,” he said. “I feel good Parade Co. At the end of 2010, the hall had about the progress we’ve made.” Ⅲ Eddie Murray: Member, $912,028 listed in assets in its IRS The hall, established in 1954, has Michigan Sports Hall of Fame Form 990 filing, but $884,441 of that 12 events scheduled in 2012. (Detroit Lions) total is the value of the inductee “The plan is to make sure each Ⅲ Ray Scott: Development plaques. is cash-positive to some degree,” director, Lutheran Child and Stark said. Family Service; Hall of Fame member (Detroit Pistons) One new revenue stream in- The probe cludes online auctions of packages Ⅲ Jim Thrower: Franchise The state began investigating owner/operator, McDonald’s Corp. (trips, games and meals with hall the hall in 2009 after it was tipped inductees) and sports collectibles. Board of directors off that the nonprofit failed to re- Michael G. Wooldridge That began in 2011, but revenue Executive committee new its state license or file its re- [email protected] quired federal financial disclosure numbers were not available for the Ⅲ Scott Lesher, chairman: auction. President, Corporate Optics paperwork. Because the hall has federal Other fundraisers include the Ⅲ Mike Taschner, vice-chairman: annual induction dinner, along Consultant, Talmer Bank and 501(c)(3) nonprofit status, it does- with golf and bowling events. The Trust n’t pay taxes but must file finan- hall announced its 56th class of in- Ⅲ Ryan Krause, treasurer: CPA, cial accounting forms. ductees earlier this month and will Rehmann Then-Attorney General Mike Cox have its ceremony in August. halted a planned sale of its inductee First Tier Ranking Ⅲ Allison Bentley, secretary: in Corporate Law One of the hall’s other revenue Attorney, Alan R. Miller, PC plaques. He sent a letter to the hall streams remains uncertain. Ⅲ Dave Wieme, committee in January 2010 that ordered finan- The organization previously re- chairman: Vice president, The cial reporting requirements and I Metro Detroit I Grand Rapids I Kalamazoo I Grand Haven I Lansing ceived about $50,000 annually in DeVillen Group suggestions for the organization on sustaining support from Michi- Ⅲ Mike Murray, committee how it could better operate. gan’s four major pro sports teams, chairman: Director of marketing, The hall has been operating un- plus the University of Michigan, Wright & Filippis Inc. der a conditional charitable li- Michigan State University and the Directors cense from the attorney general’s Mid-American Conference. Ⅲ Tom Anastos: Head coach, Charitable Trust Section since Talks are under way about how Michigan State University men’s then. The state could grant a free those organizations will continue hockey and clear license in the next Your Bank’s to support the hall in the future, Ⅲ Rob Carr: Vice president, month. Stark said. corporate counsel, Ilitch Holdings The hall hasn’t heard from the at- “The financial side, we’re still Inc. torney general’s office in several working that out, how it will look Ⅲ Jay Colvin: Attorney, Bodman months, said Allison Bentley, the Not Lending? going forward,” he said, adding PLC board’s secretary and legal counsel. that he recently met with the pres- Ⅲ Jordan Field: Director, Detroit “We’re in full compliance. They idents of the four pro teams. Tigers Foundation made a lot of suggestions and a lot Ⅲ Dan Follis: President, The Follis of things they insisted on. We did Co. everything they suggested and Keeping current Ⅲ Jim Graham: Community wanted,” said Bentley, an attor- In the meantime, the nonprofit relations director, Ford Motor Co. ney at Birmingham-based Alan R. is concentrating on paying its Fund Miller PC. bills, its CPA said. Ⅲ Greg Hammaren: General The state is limited in what it “We’re keeping current on manager, Fox Sports Detroit can say about the hall because its everything that we’ve incurred,” Ⅲ Brian Krasicky: Director, investigation is considered ongo- said Krause, who’s been on the O’Keefe & Associates ing. board since August 2010 and does Ⅲ Alan Miller: Attorney, owner, “We are reviewing their current the bookkeeping pro bono. “We’ve Alan R. Miller PC application to determine if there is made a lot of progress, but we have Ⅲ Sean Moran: Senior vice any need to continue any of the a ways to go.” president, Morgan Stanley Smith previous conditions going for- The hall paid back $20,000 it was Barney ward,” said Joy Yearout, deputy advanced in 2009 by Chicago-based Ⅲ Jeffrey Ossowski: Vice director of communications for At- Legendary Auctions, which it had president, business and finance torney General Bill Schuette. contracted to handle the sale of the operations, Comcast Corp. The hall has submitted its appli- ours are Ⅲ Tim Pendell: Community inductee plaques. cation for its next license to solicit . “Our advance was fully paid off relations consultant, Detroit Lions (now called a solicitation registra- Call for a free consultation. after they were prohibited from Ⅲ Mike Zehnder: Public services tion), and Yearout said a decision Loan amounts: $1,000,000.00 and above. auctioning the plaques,” said Doug director, Oakland County would be made before the current Allen, president and CEO of Leg- conditional license expires July s Investment Real Estate s Equipment endary Auctions, via email. “In a said. That’s because it doesn’t col- 31. Licenses expire seven months s Owner Occupied Real Estate s Turnaround Consulting bad situation, Mr. Stark was noth- lect enough money to trigger the after a nonprofit’s fiscal year s Lines of Credit s Loan Modiﬁcations ing but a gentleman and fulfilled state’s requirement for a charita- ends. s Accounts Receivable s Bank Workouts their commitment to my firm.” ble organization to have its fi- The attorney general’s Charita- Currently, the 270 2-by-2-foot, 47- nances independently audited. ble Trust Section licenses chari- pound inductee plaques are on dis- The other reason no one else re- ties to solicit funds, plus monitors play at Cobo Center or in storage, views the books is because the hall operations and oversees organiza- and temporary displays have been doesn’t have enough cash on hand tion changes. staged at events. to pay someone to do it. Krause es- If the state suspected any wrong- Cobo told the hall it plans to ren- timated it would cost $10,000 to doing, it would have transferred ovate the area where the plaques $15,000 for an independent audit. the case to the criminal investiga- 800.509.3552 now hang, Stark said, and the De- He declined to say how much tion arm of the attorney general’s www.eclipsecapitalgroup.com troit Lions have agreed to store cash the hall has on hand, other office. 2207 Orchard Lake Road, Sylvan Lake, MI 48320 them at Ford Field. than to say it was “tight.” The ear- Bill Shea: (313) 446-1626, “Since 1997” The hall’s finances are not audit- ly spring traditionally has the [email protected]. Twitter: ed by an outside agency, Krause least revenue coming in, he added. @bill_shea19 20120326-NEWS--0027-NAT-CCI-CD_-- 3/23/2012 7:05 PM Page 1

March 26, 2012 CRAIN’S DETROIT BUSINESS Page 27 HMOs: Aggregate net income rises ■ From Page 3 membership increased only 1.5 Priority improved performance even less, something close to 1 per- percent, or about 40,000 members, to $34 million in net income in cent margin,” Murdock said. to 2.6 million in 2011 from 2.56 mil- 2011 from a loss of $24 million in Meridian Health Plan, the lion in 2010. The other four plans 2010. Counting its PPO business, state’s largest Medicaid HMO are Medicaid HMOs that are Priority has 620,000 members, up with 290,000 members, earned net owned by four of the 13 parent about 10,000 from 2010. income in 2011 of $12.9 million, an Bring morale up. HMOs. While 2011 total margins were 11 percent increase from $11.6 Blue Care CEO Kevin Klobucar 1.2 percent, Flack said, Priority million the prior year. About thirty stories. said growth was driven last year expects to increase margins to 2 While Meridian has enjoyed by 37,000 new members, slowing percent to 3 percent over the next five straight years of $10 million- medical cost increases and lower- several years. plus profits, Cotton agreed that than-expected use of services that Allan Baumgarten, a Minneapo- most Medicaid HMOs are experi- began during the fall of 2010. lis-based researcher, said commer- encing declining profit margins. To sustain growth, Klobucar cial HMOs in Michigan and na- Meridian, like most Medicaid said Blue Care has reduced premi- tionally have been posting higher HMOs, has seen profit margins um rate hikes in 2012 to average 6.7 profit margins because they are drop below 2 percent the past two percent from about 8.7 percent in more accurately setting prices years from previous years of 3 last several years. along with lowering medical costs. percent-plus margins, OFIR said. “Trends have been very low, not “HMOs are doing better in med- “This shouldn’t be surprising, just in Michigan, but nationally,” ical management and are enjoying given we haven’t had a rate in- Klobucar said. “Lower utilization stronger results because of a re- crease for quite some time,” Cot- has a lot to do with economy, but duction in utilization,” Baum- ton said. also because employers are still garten said. “They also have set Molina Healthcare of Michigan, a struggling to cover their employ- prices based on the 5 percent cost Medicaid and Medicare HMO with ees and are making benefit trend (they had projected) instead 222,000 members, posted net in- changes” to lower-cost plans. of the 1 to 2 percent cost trend” come of $15.1 million, a 308 percent Klobucar said utilization — they are experiencing. increase from $3.7 million in 2010. which includes physician visits, Some HMOs have also decided However, Molina’s profit margins hospitalizations and emergency to price their services more accu- declined to 1.78 percent in 2011, department visits — is 2 percent rately than in the past when they compared with 0.45 percent in 2010 lower than expected, and per offered employers lower prices to and a five-year high of 2.69 percent member costs are down to about a gain market share, Baumgarten in 2008, OFIR said. 6 percent increase from 8 percent said. “We make a very marginal prof- in 2010. “Some HMOs were so eager to it on our revenues,” said Craig But medical costs are expected sell in service areas they took on Bass, CEO of Molina’s Troy-based to rise, which is expected to reduce groups that turned out not to be Michigan operation. “We had a Thrills bring every group together. Blue Care’s profitability some- profitable,” he said. “They are be- near break-even year in 2010, so in what in 2012, he said. ing selective in adding new groups 2011 we were back on track with a Your employees will all feel the “We are looking at the pharma- now.” modest profit.” exhilarating g-forces. The excitement ceutical space closely. There are a While all HMOs in Michigan av- While Molina’s membership is of the water rides. And the powdered lot of specialty drugs coming on eraged 2.66 percent total margins slightly down by 4,000 members in sugar of the funnel cakes. The very the market at $3,000 to $10,000 per in 2011, the highest level in at least 2011, revenue went up 5 percent to things that make a group outing to month,” Klobucar said. five years, Rick Murdock, execu- $422 million because Molina now Michigan’s second-largest HMO, tive director of the Michigan Associ- Cedar Point in Sandusky, Ohio unlike is covering nearly 6,000 more Priority Health, a Grand Rapids- ation of Health Plans, said Medicaid any other one. Visit cedarpoint.com/ Medicare patients; it also is cover- based health plan with 424,000 HMO total margins dropped to 1.59 group-sales or call 1-800-448-2428 ing nearly 2,000 Medicaid mem- members that has an office in percent, a four-year low. to get your discounted tickets for bers categorized as aged, blind or Farmington Hills, earned net in- “It might be the best year over- your corporate group outing today. disabled. Both Medicare and spe- come of $33.2 million, a 558 percent all, but there are differentials out cial-needs Medicaid patients re- increase from a net loss of $7.2 mil- there. Some plans had better years lion in 2010. than others,” said Murdock, who ceive higher payments. Priority’s 2010 losses were analyzed five-year trends for Bass said Molina expects to THRILLS CONNECT mainly due to higher-than-expect- Crain’s using OFIR figures. “Blue grow along with other Medicaid ed expenses, prices that were set Care is having a good year, so did HMOs if Michigan becomes re- too low and stiffer competition Priority and Health Alliance Plan. sponsible in 2013 to cover patients from other HMOs, said Steve HealthPlus did well, following two who are eligible for both Medicare Flack, Priority’s CFO. Priority’s or three marginal years.” and Medicaid. The state has asked HMO business lost 8,000 members But Murdock said Medicaid permission from the federal gov- in 2011. HMO profit margins have declined ernment to cover so-called dual eli- “We had a much more disci- the past several years as state ap- gible beneficiaries. plined focus on underwriting and propriations have not kept up with “We are well positioned to han- actuarial price setting (in 2011) by medical cost increases. dle the influx of not only new mem- offering competitive products “In past years, there were 3 per- bers, but also members with com- Crain that are priced appropriately,” cent to 4 percent increases,” but plex needs with either Medicaid Communications Flack said. “We worked hard to state appropriations in the 2011 benefits, Medicare benefits or address health care cost trends.” and 2012 budgets for Medicaid both,” Bass said. has a new home On a consolidated basis that in- HMOs have been flat, Murdock Jay Greene: (313) 446-0325, cludes all three of Priority’s in- said. [email protected]. Twitter: surance businesses, Flack said, “I expect next year we will see @jbgreene in Chicago.

54PJOPNHU(]LU\L CPAs: M&A, economy add up to jobs *OPJHNV03 ■ From Page 3 CPAs,” said David Breen, managing ty by clients. “Many of the compa- “We’ve seen a significant in- partner of PWC’s greater Michigan nies who were out of the capital crease in CPA activity on our site market. “We’ve been struggling markets and weren’t raising debt or the last few months,” said Matt (SS[LSLWOVULU\TILYZ tremendously with that. People had equity are back in the market Mosher, the CEO of Detroit-based left Michigan, and it’s been tough to again,” he said. Hired My Way LLC, which runs the job YLTHPU[OLZHTL get them back. I wish our growth “It’s the quiet recovery we’re see- site hiredmyway.com. “Some of it is hadn’t been so strong in the last ing in our footprint in the Mid- due to tax season, but a lot of it is be- year. I wish we could have hired west,” said Gordon Krater, manag- cause of the economy. And it’s not more of them the year before.” ing partner of Plante Moran. “You just the accounting firms who are Breen said that some of the hir- hear so much about the economy hiring CPAs, it’s companies like ing demand has been to make up for when it’s negative, not so much Quicken Loans and Nexteer (Automo- a shortage caused by not replacing when it’s positive. Clients are do- tive), too,” he said. CPAs during the recession as they ing better. They’re doing the things Tom Henderson: (313) 446-0337, JYHPUJVT retired or moved, and some has that they had held off on doing for [email protected]. Twitter: been fueled by an increase in activi- awhile.” @tomhenderson2 20120326-NEWS--0028-NAT-CCI-CD_-- 3/23/2012 6:36 PM Page 1

Page 28 CRAIN’S DETROIT BUSINESS March 26, 2012 Finances: Who can solve biggest impasse between city, state? ■ From Page 1 sible … with massive reductions in service levels, it is possible. Have we seen any indication over the last decade that there’s the politi- State signals no place for Bing’s powerful COO cal will to do that? I would have to say we have not seen that demon- nance, transportation, utilities healthy businesses and may not Wind. That position lasted six strated.” BY NANCY KAFFER CRAIN’S DETROIT BUSINESS and planning and facilities report have been adequate preparation months, ending in December 2008. Detroit’s deficit was about $196 directly to Brown, along with the for the dysfunctional operations of When he joined the city, Brown’s million at the end of the 2011 fiscal Two weeks ago, Gov. Rick Sny- heads of the Detroit Water and Sew- the city. résumé listed his current position year. The city is expected to have der and state Treasurer Andy Dil- erage Department, Health and Well- A native of Delaware, Brown as founder and CEO of Ann Arbor- just $2.5 million cash on hand by lon called Detroit Mayor Dave Bing ness Promotion, and the Department holds a bachelor’s degree in politi- based Brown Equity Group. April 12, and end the fiscal year to a 4 p.m. Fri- of Human Services, eight direct re- cal science from the University of He became Bing’s COO in Janu- with a roughly $45 million short- day meeting to ports in all. Brown is responsible Delaware, was a Fulbright Scholar ary 2011. He earns about $141,000 a fall. talk about De- for the Detroit Department of Trans- in finance and economics at Bonn year, after a 10 percent pay cut tak- The first draft of a consent troit’s financial portation, DWSD, the General Ser- University and earned a law degree en by all Bing appointees. agreement, developed by Snyder’s future. vices Department, and the city’s fi- from Pennsylvania-based Villanova Bing defends Brown’s record. team, left Bing in charge but creat- One thing the nance department. University. “When I saw that they wanted to ed a financial advisory board that state made And now, it seems, the state After graduating from law name my COO, my CFO and the would become the ultimate author- clear, Bing said: wants him out. school in 1987, Brown worked as le- head of human resources, I had a ity in Detroit. Snyder would con- Don’t bring De- Dillon told Crain’s that he has a gal counsel at two East Coast law problem with that,” Bing said. “I trol the appointment of six of the troit COO Chris professional relationship with firms, transitioning from legal don’t tell (the state) who they nine members of that board. Brown. Brown. counsel to business development should bring to the table. They A consent agreement would al- Brown “They didn’t But the draft consent agreement in 1992 at Baltimore-based Constel- shouldn’t tell me who I should low Bing to expedite some mea- want Chris in the meeting,” Bing delivered to Bing by Snyder and lation Energy. He moved overseas in bring to the table.” sures that are largely agreed to be told Crain’s. “They wanted just my- Dillon at that Friday meeting — 1994, establishing an Asian office But with the city on the brink of necessary for the city to regain fi- self and (Chief of Staff) Kirk and a second draft distributed to for U.S. utility Entergy Power Group. a state takeover, Bing says he may nancial stability, such as depart- (Lewis).” city officials the next week — in- He joined Singapore Power in 1996, not go to the mat for Brown. Bing mental consolidation, sale or lease Terry Stanton, director of com- cluded a provision that rankled where he served as a senior vice didn’t bring Brown to the March 9 of assets, outsourcing and privatiz- munications for the state treasury, Bing: The city’s COO, CFO and president and managing director. meeting. Brown says that’s fine. ing some city functions, and the declined to comment on Brown’s head of human services would be Brown left Singapore Power in “It’s not about me,” he said. “If ability to impose new contracts on exclusion from the meeting. appointed by a financial advisory February 2004. He took a job with I’ve got to go, I go. I came here like unions whose contracts have ex- Brown, 51, pulls a lot of weight board, largely controlled by Snyder Ann Arbor-based DTE Energy Re- (Bing) — I was retired. It’s about pired. in the Bing administration. As appointees. sources in 2005, a position he left in doing what’s right, trying to get the Bing’s plan — which he and COO, he oversees most depart- One source suggested that 2008, when he became CEO of New right results: the lights on and the COO Chris Brown are calling a “fi- ments. Group executives for fi- Brown’s experience was with Jersey-based wind farm Deepwater buses running.” nancial stability plan,” rather than a consent agreement — also creates an advisory board, whose The plan hinges on issuing $137 due in two installments on April 1 $50 million-plus-interest payment. court order by 10 a.m. today, call- members are largely appointed by million in new debt to, in part, and May 1. The city can’t sell Restructuring the city’s debt ing the injunction “crippling” to the mayor, but doesn’t grant the fund $33 million in limited tax gen- bonds without state approval. will be a chief concern moving for- efforts to repair Detroit’s finances. mayor any expanded powers. eral obligation bond payments, With the burden of those pay- ward, whether it’s the mayor, an If the city and the state can’t ments lifted from the city’s dwin- emergency manager or a financial forge a consent agreement, O’- dling general fund, Bing says De- advisory board running the show. Keefe said, an emergency manager troit will have the cash to make it Brown told Crain’s that the city is the only choice. through the June 30 end of the fis- has been talking to its swap coun- “They are basically forcing an cal year. But the city must also terparties and bondholders, work- emergency manager,” he said. “If find the funds to pay the bills ing to mitigate the impact of re- that happens, the next fight has to through July — summer property ports of the city’s current fiscal be as to whether EM has any pow- tax payments don’t roll in until woes — and the ratings down- ers, because as the law is written August. grades — on the city’s credit rating. out, the EM has a lot of powers, But those bonds must be sold by The authority of a state-appoint- and city government is fighting as Thursday, sources inside City Hall ed review team examining the to whether or not state can dictate say, in order to refinance April’s city’s finances expires today. Hav- those terms.” bond payment — and such a sale ing already determined that a fi- Complicating matters further, must have Detroit City Council ap- nancial crisis exists in the city, the Bing was hospitalized last Thurs- proval. team must recommend a consent day because of an inflammation of And in the next fiscal year, the agreement or the appointment of the intestine. At Crain’s Friday city has another financial prob- an emergency manager. An Ing- deadline, the mayor was still at lem. Detroit’s already-junk-level ham County Circuit Court Judge Henry Ford Hospital. Chief of Staff credit rating was downgraded yet has issued an injunction barring Kirk Lewis said that the mayor’s again by Moody’s and Fitch Ratings the city and the state from enter- condition is common and not life last week, triggering an increase ing into a consent agreement prior threatening. in payments to the counterparties to a Thursday hearing. Nancy Kaffer: (313) 446-0412, in a 2006 credit swap. Brown said The state is asking the Michigan [email protected]. Twitter: that the city has budgeted for the Court of Appeals to stay the circuit @nancykaffer

CRAIN’S EXPANDS COOL PLACES TO WORK Crain’s Cool Places to Work Cool Places recognition — with a receiving notification at the end of awards returns this year as Cool Best Companies Group Employee August. Places to Work in Michigan, Feedback Report based on employee Businesses and nonprofits can reflecting the expansion of the responses to the 72-question apply. Applicants must have a program from covering survey. The report can help minimum of 15 employees working businesses in Southeast company executives identify in Michigan and have been in Michigan to businesses in strengths and weaknesses in business at least one year, among the entire state. their company culture and other criteria. For the revamped program, practices. Companies pay a fee based on Crain’s is working with Best To be considered for Cool Companies Group of company size to Best Companies to Places to Work in Michigan, cover survey costs. The cost ranges Harrisburg, Pa., to manage companies must register at the program. In addition to an from $605 to $890 for online www.coolplacestoworkmi surveying, and $735 to $1,630 for employer questionnaire as .com by June 15. has been done in the past, Best paper surveying.Crain’s Detroit Companies will survey employees of Once registered, companies will Business will feature the recognized participating companies. The be invited to participate in the companies in the Nov. 5 issue and combined, weighted results of the surveys. recognize their success at a Nov. two will determine who qualifies for Up to 400 employees will be 15 event at Emagine Theatre in Cool Places designation. surveyed, depending on company Royal Oak. Best Companies supplies all size. Program details and samples of participating companies — The vetting process runs from the employee surveys are available regardless of whether they win the June through August, with honorees at www.coolplacestoworkmi.com. 20120326-NEWS--0029-NAT-CCI-CD_-- 3/23/2012 7:07 PM Page 1

March 26, 2012 CRAIN’S DETROIT BUSINESS Page 29 Contracts: Bill would rescue investors from rulings www.crainsdetroit.com ■ EDITOR-IN-CHIEF Keith E. Crain From Page 1 PUBLISHER Mary Kramer, (313) 446-0399 or [email protected] Garfield and South Airport roads between the value of the property EXECUTIVE EDITOR Cindy Goodaker, (313) 446- just outside of Traverse City, for- RAPID RESPONSE when it was repossessed and the 0460 or [email protected] MANAGING EDITOR Jennette Smith, (313) 446- merly owned by Livonia-based Two court cases exposed wording in some commercial real estate loans $17 million loan. 1622 or [email protected] Schostak Bros. & Co. Inc. allowing lenders to pursue the personal assets of real estate investors. The outcome was the same as DEPUTY MANAGING EDITOR Daniel Duggan, (313) In that case, lenders successful- the Cherryland case, with U.S. Dis- 446-0414 or [email protected] In reaction, a group of real estate investors and political groups got a bill SENIOR EDITOR Bob Allen, (313) 446-0344 or ly sued Schostak Bros. and its co- passed in just three weeks to negate that language in Michigan. It awaits trict Judge Robert Cleland ruling [email protected] CEO David Schostak for $2.1 mil- Dec. 12 against Damico. WEST MICHIGAN EDITOR Matt Gryczan, (616) 916- the governor’s signature. 8158 or [email protected] lion of an $8.1 million loan after Here’s a closer look: Damico’s attorneys and the loan COPY DESK CHIEF Gary Piatek, (313) 446-0357 or the lenders repossessed the shop- originator presented an affidavit [email protected] 0021 2012 2011 2010 ASSISTANT NEWS EDITOR Jeff Johnston, (313) ping center, valued at $6 million. Aug. 19, 2010: Lenders filed a lawsuit against the ownership of that the intent was for a non-re- 446-1608 or [email protected] The Grand Traverse Circuit Court de- Cherryland Center just outside of Traverse City, naming Livonia- course loan, but Cleland ruled the DATA EDITOR Brianna Reilly, (313) 446-0418, cision was upheld by the Michigan based Schostak Bros. & Co. Inc. and its co-CEO David Schostak. contract language said otherwise. [email protected] WEB EDITOR Gary Anglebrandt, (313) 446-1621, Court of Appeals. The Michigan The suit was filed after the lenders repossessed the mall, valued “The loan agreement unambigu- at $6 million. Schostak Bros. owed $8.1 million, though, so the [email protected] Supreme Court has been asked to ously provides that defendants are EDITORIAL SUPPORT Robertta Reiff (313) 446- lenders sued for the difference of $2.1 million. 0419, YahNica Crawford, (313) 446-0329 hear an appeal. liable for the deficiency balance,” NEWSROOM (313) 446-0329, FAX (313) 446- he wrote in his opinion. 1687 TIP LINE (313) 446-6766 May 10, 2011: A similar suit is filed by lenders against John ‘Springing recourse’ Damico, owner of a retail strip center at 51382 Gratiot Ave. in REPORTERS Chesterfield Township. A speedy success Daniel Duggan, deputy managing editor: Covers Underlying the controversy is real estate. (313) 446-0414 or [email protected] The real estate industry Jay Greene, senior reporter: Covers health care, one paragraph used in some real insurance and the environment. (313) 446-0325 or June 20, 2011: Judge Philip Rodgers of Grand Traverse Circuit watched the court decisions with estate loan contracts, along with [email protected] Court in Traverse City rules that David Schostak is personally alarm and began consulting with Chad Halcom: Covers law, non-automotive a legal concept called “springing manufacturing, defense contracting and Oakland liable for the $2.1 million. legislators. recourse.” It involves commer- and Macomb counties. (313) 446-6796 or Senate Bill 992 was introduced [email protected] cial mortgage-backed securities, Tom Henderson: Covers banking, finance, Dec. 12, 2011: Detroit U.S. District Court Judge Robert Feb. 29. Real estate investors, or CMBS, a popular type of loan technology and biotechnology. (313) 446-0337 or Cleland rules that Damico is liable for a $10 million BOMA, as well as trade groups [email protected] in which money is loaned to real shortfall. The case is sent to 6th Circuit Court of Appeals, Nancy Kaffer: Covers small business, the city of such as the Michigan Association of estate investors and then the where it awaits a hearing. Detroit and Wayne County government. (313) 446- Realtors and the International Coun- 0412 or [email protected] loans are packaged with many Bill Shea, enterprise editor: Covers media, cil of Shopping Centers, began a others to be sold to bond in- Dec. 27, 2011: The Michigan Court of Appeals upholds advertising and marketing, the business of sports, short, intense lobbying effort for and transportation. (313) 446-1626 or vestors. the ruling on Cherryland Center. David Schostak asks the [email protected] the bill. Many CMBS loans are non-re- Michigan Supreme Court to take the case; no decision Nathan Skid, multimedia editor. Also covers the Included in that effort was a letter food industry and entertainment. (313) 446-1654, course loans, in which the assets of has been made. [email protected] circulated among legislators signed Sherri Welch: Covers nonprofits, services, retail the real estate investor, such as by 14 real estate investors, including and hospitality. (313) 446-1694 or David Schostak, aren’t collateral Feb. 29, 2012: Senate Bill 992 to negate the language [email protected] is filed with heavy-hitting sponsors that include both some big names: Robert Taubman, Dustin Walsh: Covers auto suppliers, steel, higher — only the property is. Under such Senate Majority Leader Randy Richardville, R-Monroe, CEO of Taubman Centers Inc.; Andrew education and Livingston and Washtenaw a loan, if the building is foreclosed, counties. (313) 446-6042 or [email protected] and Senate Minority Leader Gretchen Whitmer of East Farbman of Farbman Group; Dennis Ger- the borrower can walk away and ADVERTISING Lansing. shenson, CEO of Ramco-Gershenson the only collateral that’s left is the ADVERTISING DIRECTOR Marla Wise, (313) 446- Property Trust; Dale Watchowski, CEO 6032 or [email protected] building. March 7: The bill passes in the Senate, 117-33. of Redico LLC; and Doug Etkin, princi- SALES INQUIRIES: (313) 446-6052; FAX (313) But non-recourse loans do have 393-0997 pal of Etkin Equities. clauses that allow the loan ser- SENIOR ACCOUNT EXECUTIVES: Matthew J. March 20: The bill passes in the House, 125-97. “If any development were to be- Langan, Tamara Rokowski vicer to go after the borrower per- ADVERTISING SALES Christine Galasso, Lori come insolvent and Wall Street sonally if the borrower mistreats Tournay Liggett, Dale Smolinski firms were allowed to cash in on CLASSIFIED SALES (313)-446-0351 the building or commits fraud. “It is not the job of this court to Personally liable the personal assets of the borrow- MARKETING DIRECTOR Jeff Kapuscinski And in many of the loans, there save litigants from their bad bar- EVENTS DIRECTOR Nicole LaPointe er, it very well may put them out of is language that opens the door to Starting the process against gains or their failure to read and un- EVENTS COORDINATOR Kacey Anderson business and in bankruptcy,” the SENIOR PRODUCER FOR DIGITAL/ONLINE suing investors for the shortfall Schostak was Jim Allen, an attor- derstand the terms of a contract,” PRODUCTS Pierrette Dagg letter states, “further crippling between the value of a foreclosed ney with Detroit-based Miller Can- the judges wrote in their opinion. MARKETING ARTIST Sylvia Kolaski Michigan’s economic recovery.” property and the loan balance. field Paddock and Stone PLC, who The Cherryland case prompted SALES SUPPORT Suzanne Janik, YahNica Crawford The bill quickly passed the Sen- AUDIENCE DEVELOPMENT MANAGER That was the language the ser- filed the suit after Cherryland Chicago real estate firm Titan Com- Candice Yopp ate and then the House. vicer for the Cherryland Center went into default. Allen, the attor- mercial to offer advice to clients: MARKETING COORDINATOR Jenny Griffith PRODUCTION MANAGER Wendy Kobylarz Wells Fargo N.A. ney representing Wells Fargo, de- bondholders, , used Use this as a lesson to pay atten- Next steps PRODUCTION SUPERVISOR Larry Williams to sue Schostak Bros. and David clined to comment. tion to the lending documents. CUSTOMER SERVICE Schostak. Grand Traverse Circuit Judge “Make sure the documents ex- If Snyder signs the bill, it will ef- MAIN NUMBER: Call (877) 824-9374 or write Because the language is com- Philip Rodgers found that letting pressly provide that the failure to fectively overturn the Cherryland [email protected] SUBSCRIPTIONS $59 one year, $98 two years. monly used, Schostak said the suc- the property become insolvent was remain solvent or maintain ade- and Chesterfield decisions and Out of state, $79 one year, $138 for two years. cess of the legislation to negate it grounds to change the loan from quate capital does not trigger re- make the judgments rendered un- Outside U.S.A., add $48 per year to out-of-state rate for surface mail. Call (313) 446-0450 or was because of its importance to non-recourse to recourse. course liability,” the firm wrote in enforceable, according to an analy- (877) 824-9374. real estate investors, and that his The upshot for Wells Fargo: a report on its website. sis of the bill by Detroit-based SINGLE COPIES: (877) 824-9374 David Schostak, who had provided REPRINTS: (800) 290-5460, ext. 125; brother’s role as state Republican The Deutsche Bank Securities Dykema Gossett PLLC. (717) 505-9701, ext. 125; or lindsay.wilson Party chairman wasn’t a factor. a personal guarantee, was person- report said “the crux of the issue is But retroactively changing con- @theygsgroup.com ally on the line for the $2.1 million. TO FIND A DATE A STORY WAS PUBLISHED: “This wasn’t a Schostak issue. how the loan agreements were tracts between private parties (313) 446-0367 or e-mail [email protected] This was an issue that concerns Attorneys say there is no way to written, and each originator uses a could prompt a constitutional CRAIN’S DETROIT BUSINESS IS PUBLISHED BY the entire industry,” David know precisely how many loans slightly different template.” challenge, said Adam Fishkind, a CRAIN COMMUNICATIONS INC. Schostak said. “Everybody got be- have similar provisions. Deutsche Bank said its loans are member of Dykema’s real estate CHAIRMAN Keith E. Crain hind this because everybody real- However, an analysis of Michi- clearly non-recourse and unlikely practice group. PRESIDENT Rance Crain SECRETARY Merrilee Crain ized it could be any of us. It could gan CMBS loans published in a re- to be challenged. “You have contracts in place, TREASURER Mary Kay Crain crater the entire industry.” port by Deutsche Bank Securities David Schostak said the main is- which the Legislature is impact- Executive Vice President/Operations William A. Morrow The clause addressed by the leg- Inc. found that roughly $1 billion in sue has been the intent of the loan ing,” he said. “One could make the Group Vice President/Technology, islation also could make it more Michigan loans are at risk. That argument that it’s a violation of Manufacturing, Circulation documents. Robert C. Adams difficult to find investors who figure represents less than 8 per- “In our case, we had someone the contracts clause of the U.S. Vice President/Production & Manufacturing qualify for lending. cent of the $13.1 billion in CMBS from Goldman Sachs (who originat- Constitution.” Dave Kamis Chief Information Officer That’s because the contracts re- loans tracked here by New York- ed the loan) to testify and say that The issue is also expected to Paul Dalpiaz quire someone to provide a person- based Trepp LLC. they intended it to be non-recourse head to other states. Chief Human Resources Officer Margee Kaczmarek al guarantee in the event non-re- just like we did,” he said. Deutsche Bank estimates that Director of Audience Development Operations course provisions are voided, and the potential exposure in $1 billion Michelle Roth lenders take into consideration A bad contract? in Michigan loans will extend to at G.D. Crain Jr. Founder (1885-1973) The second case Mrs. G.D. Crain Jr. Chairman (1911-1996) whether someone has enough liq- Some find the court rulings least another $4 billion across the EDITORIAL & BUSINESS OFFICES: uid assets to make good that guar- bizarre because they say the non- As the real estate market was di- U.S. if the Michigan cases are used 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 antee, said Dennis Bernard, presi- recourse element is fully implied. gesting the news of the Cherryland as precedent. Cable address: TWX 248-221-5122 AUTNEW DET dent of Southfield-based Bernard Bernard said that borrowers pay ruling, another came down, this Langlois said that other states CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, except for a special issue the Financial Group, and originator of 25 percent to 40 percent higher in- time in U.S. District Court in Detroit are watching Michigan. third week of August, and no issue the third week many CMBS loans. terest rates to get a non-recourse regarding a retail center on Gra- “This is industry-wide, and a na- of December by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. “If there’s someone out there loan. And the purpose of a non-re- tiot Avenue near 23 Mile in tional issue,” she said. “There are Periodicals postage paid at Detroit, MI and additional mailing offices. POSTMASTER: Send with a $25 million net worth, and course loan for the investor is to be Chesterfield Township, where a trillions of dollars of CMBS debt address changes to CRAIN’S DETROIT BUSINESS, then $50 million in contingent lia- shielded from personal liability if Farmer Jack store once was. nationwide. Everyone’s been Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in bilities based on CMBS loans, ... the property goes into default. Allen was also representing the watching Michigan, watching how U.S.A. lenders could never underwrite But when the three-judge panel servicer, this time Bank of America, this plays out, and a lot of people Entire contents copyright 2012 by Crain Communications Inc. All rights reserved. them because of contingent per- in the Michigan Court of Appeals and making the same argument as are panicking.” Reproduction or use of editorial content in any sonal liability,” Bernard said. “... upheld the lower court ruling on with Cherryland: That investor, Daniel Duggan: (313) 446-0414, manner without permission is strictly prohibited. Most of our borrowers wouldn’t Cherryland Center, the judges John Damico, was personally li- [email protected]. Twitter: qualify for loans.” turned to the language in the loan. able for the $10 million shortfall @d_duggan 20120326-NEWS--0030-NAT-CCI-CD_-- 3/23/2012 6:47 PM Page 1

Page 30 CRAIN’S DETROIT BUSINESS March 26, 2012 RUMBLINGS WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF MARCH 17-23

tle squeamish,” wrote Mark the Detroit Tigers increased duced by state Rep. Mike Byrnes, a fellow at The At- White House 24 percent, from $385 mil- Shirkey, R-Clarklake, to lift lantic Cities and a graduate lion to $478 million, after the limit on the number of No return trip the 2011 season, putting the Detroit Edison student in publications de- customers of sign at the University of Balti- brings back team 17th among baseball’s Co. and Consumers Energy more. The building’s explo- 30 teams, according to the Co. who can choose a dif- sion of color is the aesthetic funding for latest annual estimates ferent electricity supplier. for Chevy’s brainchild of Gilbert’s wife, published by Forbes.com. Under the state’s 2008 en- Jennifer. ergy reform law, no more Crain’s real estate re- lightweight steel COURTS than 10 percent of cus- porter Dan Duggan was the tomers can pick another old ad partner first journalist to write he White House an- Ⅲ The CFOs of Warren- supplier, and both utilities about the building’s look, in nounced $14.2 million based St. John Providence reached their caps in 2009. August. Interior space ar- T in Department of Ener- Health System and Kalama- Ⅲ The new semiprofes- n coming days, General planning to Aegis Group’s chitect was Rossetti Associ- gy grants to support ad- zoo-based Borgess Health Motors Co. is expected to Carat unit of London. The sional Detroit City FC soccer ates Inc. vancements in lightweight System — Patrick McGuire I name major agencies unit is opening an office in team will play its eight carbon fiber composites and Richard Felbinger, re- that will get nearly all Detroit with 200 people. home games at Cass Techni- and advanced steels and al- Chevrolet’s creative advertis- Compuware shares spectively — must appear cal High School in Detroit. loys used in auto manufac- ing duties, as the automaker this week for a deposition The regular season opens turing. Federal funding for sheds most of the 70 or so for $20,000? in a federal antitrust action at 7 p.m. May 12 against advanced high-strength companies that do Chevy As of Friday morning, you against Blue Cross Blue visiting AFC Cleveland. steels ended last year. Shield of Michigan over work around the globe. could buy a share of Com- Ⅲ A newly released The DOE will make “most favored nation” Warren-based ad agency puware Corp. (Nasdaq: book about Ford Motor Co.’s $8.2 million in grants avail- clauses. Campbell-Ewald, which lost CPWR) common stock for turnaround, penned by a able this year, and Con- Ⅲ The Michigan Supreme the account in 2010 to Good- $9.17. A share of Series A ju- local writer, is creating lo- gress must approve the Court heard oral arguments by, Silverstein & Partners after nior participating preferred cal buzz. American Icon: having it for 91 years, wasn’t next $6 million to fund the over who has the power to stock would set you back Alan Mulally and the Fight among the bidders. The just a little more. rest of the program. Uni- redraw lines for the Oakland versity researchers also to Save Ford Motor Compa- agency confirmed to Crain’s According to a form Com- County Board of Commission- can apply for the grants. ny (Crown Business, 2012), last week that it didn’t seek puware filed March 16 with ers’ districts, as it decides is written by Detroit News to get Chevy back. the U.S. Securities and Ex- whether to take up the reporter Bryce Hoffman Why? change Commission, one two- case. Previous courts said a COMPANY NEWS with cooperation from C-E kicked the question to thousandth of a share of the law passed by the Legisla- Ⅲ Chrysler Group LLC and Ford. Ford rewarded CEO GM. A spokesman for the company’s Series A stock ture to give redistricting clothing maker Pure Detroit Alan Mulally with $58.3 mil- automaker provided this re- goes for $40, which puts a power to the commission sponse: “The request for pro- COURTESY OF QUICKEN LOANS are meeting with a media- lion in stock, according to Chase Tower office space full share at $20,000. rather than a bipartisan ap- posal went to the larger mar- tor Tuesday in an attempt recent filings with the U.S. According to the filing, in portionment committee keting-communications to settle a trademark law- Securities and Exchange a rights agreement signed in didn’t pass with the neces- holding companies — Inter- Gilbert’s Atari-chic Chase suit over “Imported From 2000, Massachusetts-based sary two-thirds majorities Commission. public Group of Companies Inc., Detroit”-branded merchan- in the House and Senate. Executive Chairman Bill OmniCom Group and Publicis Tower draws criticism Computershare Trust Co. NA dise. They have an April 3 had until May 9 to decide Ⅲ A lawyer for Rosa Ford received 595,238 stock Groupe.” Dan Gilbert’s redevelop- deadline to tell U.S. Magis- whether to purchase a two- Parks’ 15 nieces and options with an exercise It wasn’t up to Campbell- ment of the Chase Tower is trate Judge Michael Hlucha- thousandth of a share at that nephews has asked a Wayne price of $12.46, the first of Ewald to get Chevy back. It making national news, as its niuk whether they were price. But an amendment County Probate Court judge which he can exercise next was up to its parent, New baroque ’80s Atari/Nintendo- able to work out a deal. signed March 9 extends the to require the two people year, and he was awarded York City-based IPG. chic interior décor comes Ⅲ Two Japanese compa- offer until May 9, 2015. the judge recently put back 175,473 restricted stock Tom Cunningham, IPG’s under scrutiny. nies, Panasonic Automotive Why Computershare in charge of the estate to units that can be convert- vice president of communi- Originally critiqued earli- Systems Co. of America and would want to buy a two- post an $8 million bond to ed into shares in 2014, ac- cations and strategy, de- er this month by real estate Teijin Advanced Composites thousandth of a share, or protect Parks’ relatives cording to a separate filing ferred comment to GM. Gen- blog CurbedDetroit.com, America Inc., have been ap- whether it might buy several against misconduct. with the SEC. eral Motors is consolidating Quicken’s video game-in- proved for incentives by two-thousandths or maybe Ⅲ Judge Prentis Edwards Both likely received oth- its roster of 70 creative agen- spired digs in the building the Michigan Strategic Fund cies in a bid to save $2 bil- even a full share, isn’t of Wayne County Circuit Court er compensation for 2011, now called The Qube have to support expansions in lion over the next five years. known. A message was left Southeast Michigan. lifted a civil contempt-of- been reviewed by The At- which will be revealed in That projected savings for the firm, and Com- Panasonic, which has a court finding against the lantic’s architecture and ur- coming proxy reports. from streamlining both puware execs were too busy plant in Southfield, was owners of the Ambassador ban issues blog, “The At- Ⅲ Allen Park plans to ask Chevy advertising and GM’s in the last few days of the granted a $500,000 Business Bridge, saying that the own- lantic Cities.” the state for a preliminary media-planning efforts rep- company’s fiscal year, which Development Program incen- ers have been complying “Dan Gilbert’s invest- review of its finances, a resents, on average, $400 ends March 31, to explain. tive for its plans to build a with his orders to turn over ments in downtown Detroit step that could lead to the million a year. That’s about Series A preferred stock is research and development part of a $230 million pro- are enthusiastically wel- appointment of an emer- 10 percent of GM’s global ad- both an equity and a debt in- facility in Farmington Hills ject on the U.S. side of the comed by locals. But his gency financial manager, vertising expenses of $4.48 strument. It is senior to com- and create 60 jobs. Teijin crossing to the Michigan De- marketing and design The Detroit News reported. billion last year. mon stock but subordinate received a $375,000 state in- partment of Transportation. In January, GM gave its choices are starting to to bonds in the rights to a centive to build an applica- Ⅲ Circuit Judge John Fos- $3 billion media-buying and make some onlookers a lit- share of a company’s assets. tion development center in ter heard arguments from OBITUARIES Auburn Hills and create up to 25 jobs. attorneys on County Execu- Ⅲ Ruben Acosta, co-man- Ⅲ Dearborn Bancorp Inc., tive Mark Hackel’s request aging partner of the De- the holding company for Fi- for a preliminary injunc- troit business law firm delity Bank, said in a filing tion on the Board of Commis- Williams Acosta PLLC and a with the U.S. Securities and sioners’ Jan. 26 contracting board member of the U.S. BEST FROM THE BLOGS Exchange Commission that it policy and procurement or- Hispanic Chamber of Com- is critically undercapital- dinance resolutions. The merce, died March 17 after READ THESE POSTS AND MORE AT WWW.CRAINSDETROIT.COM/BLOGS ized, that it has been un- judge scheduled a summa- a yearlong battle with able to raise equity capital ry disposition hearing for brain cancer. He was 52. Conservative baton passing? Bar owner looks for home run and that “substantial April 27, The Detroit News Ⅲ Bernard Coker, the doubts exist as to the reported. first African-American as- Will conservative- The owner of CJ bank’s ability to continue sistant superintendent for bent Detroit talk station Mahoney’s, a popular “ “ as a going concern.” the Detroit Board of Educa- WJR 760 AM replace the sports bar from the Ⅲ Chrysler Group LLC’s OTHER NEWS tion, died March 12. He was beleaguered “Rush suburbs, is bringing purchasing boss, Dan Knott, Limbaugh Show” … with his bar to Detroit, 91. said his company has put Ⅲ University of Michigan former Republican just in time for economists forecast that Ⅲ Thaddeus Hamera, for- presidential candidate- Opening Day. “teeth” into its effort to encourage its largest suppli- the U.S. economy will con- mer prosecuting attorney turned-media personality for Macomb County, died Mike Huckabee’s new ” ers to buy more parts from tinue to improve this year show next month? minority businesses. If the and next, bringing unem- Feb. 22. He was 83. big suppliers fail to do so, it ployment below 8 percent Ⅲ Bristol Hunter, former ” by adding almost 5 million judge in Oakland County Dis- Reporter Bill Shea’s “For Immediate Release” blog on Reporter Nathan Skid’s Detroit-area restaurant blog could mean lost contracts the media, transportation and marketing can be found can be found at www.crainsdetroit.com/skid with Chrysler. jobs. trict Court, died Feb. 29. He at www.crainsdetroit.com/shea Ⅲ The franchise value of Ⅲ Legislation was intro- was 86. DBpageAD.qxp 3/22/2012 4:33 PM Page 1

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