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www.crainsdetroit.com Vol. 26, No. 36 AUGUST 30 – SEPTEMBER 5, 2010 $2 a copy; $59 a year

©Entire contents copyright 2010 by Crain Communications Inc. All rights reserved Bing team’s Page 3 MGM Grand Detroit’s COO Duo brings ‘new leaves casino riding high framework Community colleges, K-12 has planks groups in budget crossfire energy’ to VC

Inside Resonant Venture that help biz MORE program links lands its first deal, budding entrepreneurs City to create with resources, Page 4 has Michigan focus one-stop shop BY TOM HENDERSON Design in Detroit: CRAIN’S DETROIT BUSINESS for biz services

Special coverage Michael Godwin and Jason BY NANCY KAFFER Townsend didn’t follow tradition- of area’s artistic CRAIN’S DETROIT BUSINESS al paths toward their MBAs from furniture designers, the University of Michigan. And The Detroit Strategic Frame- they certainly didn’t follow the work is a long-term plan designed Pages 3, 14-16 usual path toward closing the to chart a new course for a city dec- first deal of their fledgling ven- imated by population loss, deterio- ture capital firm, which was rating income base and crumbling founded in June. ALAN WARREN housing stock. New graduates from the MBA Fresh out of the University of Michigan MBA program, Jason Townsend (left) But for Detroit business owners, program, and brash enough to and Michael Godwin started their own venture capital firm, Resonant Venture some byproducts of Detroit Mayor Partners LLC in Ann Arbor. think they should start their own Dave Bing’s 18-month planning ef- firm instead of applying for jobs their firm, Ann Arbor-based Reso- management, to take the lead on fort could bear fruit within the at existing VC firms, they found nant Venture Partners LLC, so they the deal, which was announced next year, as the city prepares to their first deal before they’d could write a check for $250,000. last Wednesday. True Ventures, launch an on- raised a nickel. Simultaneously, they had to get Resonant Venture Partners and line business Then they persuaded an in- a large West Coast VC firm, Palo two angel investors joined to portal and con- We hear vestor in Texas to make a large Alto, Calif.-based True Ventures, a solidate busi- “ enough initial investment in firm with $375 million under See VC, Page 19 ness-related the horror This Just In city operations Kessler steps down into a true one- stories. stop shop. ” as chairman of Butzel Long A data- Karla Henderson, driven process, city of Detroit Philip Kessler, chairman of the strategic Detroit-based Butzel Long PC Bargain sale for once-costly Ritz framework will help city officials since 2006, stepped down from align resources with population that position and from his selling for $3 million in a sale and steer a new course for the city. seat on the law firm’s board of New owner forced by Ritz-Carlton. The administration is taking stock directors last week, the firm When the hotel last changed of city government and looking for said. Richard Rassel, a previ- works to restore hands, in 1998, its sale price was ways to streamline Detroit’s bu- ous chairman, will be acting $64.8 million, still far less than the reaucracy and make the most of chairman reporting to the estimated $100 million it would limited resources — while finding board on an interim basis. profits by 2011 cost to replace the property. ways to strengthen the city’s neigh- Kessler, a commercial liti- A group of investors from borhoods and business community. BY DANIEL DUGGAN gator and intellectual prop- Houston pooled $3 million and By June 2011, said Karla Hen- erty attorney, will continue CRAIN’S DETROIT BUSINESS COSTAR GROUP purchased the hotel in April with derson, Bing’s group executive for as a shareholder at Butzel. The Ritz-Carlton Dearborn, opened in Denver-based Greenwood Hospitali- When the Ritz-Carlton Dearborn planning and facilities, the city He’s departing from the 1989 aiming to prove Detroit’s ty Group to handle a transition of opened in 1989, it defied conven- will launch the new online busi- board to focus more exclu- western suburbs could support a the property to its new name: The tional wisdom ness system. sively on his practice, he said luxury hotel, sold this year for just Henry. on two fronts: “We hear the horror stories of in a statement. $3 million. The new name pays homage to CLOSER LOOK First was the why businesses won’t come into Justin Klimko, a board several well-known Dearborn ti- hotel’s strik- it financially in Detroit’s western the city of Detroit,” Henderson member appointed presi- Recession: Sale tans named Henry, one of whom prices plummet, ing, dusty pink suburbs. said. “So we know we need to dent in May to handle day- helped open the hotel. Henry Ford Page 21 color that It was a gamble, though, and it change that perception.” to-day operations at the firm II cut the ribbon for the hotel in Deals: Hotels for many thought took some persuading to get the With the new system up and run- and share leadership duties 1989. A second grand opening sale or sold, more appro- people from the Ritz-Carlton Hotel ning, business owners will be able with Kessler, will continue drew former President Gerald Page 21 priate to the Co. to agree, said Wayne Doran, to schedule inspections or pay for in that role. Ford, a symbol of the top-end then head of Ford Motor Land Devel- permits online, she said. The American clientele the hotel wanted to go See This Just In, Page 2 opment Corp., which developed the $2 million system is being designed Southwest. Second, it set out to for. Later, the hotel was used for a project. by Detroit-based Compuware Corp. prove a luxury hotel could make range of presidential events and “It was a bold move, but we had “The mayor feels very strongly fundraisers. numbers to back us up,” Doran that as we have this dialogue with Doran said everything about said. “We’d done a lot of economic the community, that residents and the hotel was intended to make a research. We were able to show customers feel the change that is bold statement about the strength them that we weren’t dreaming coming in terms of demolitions, of the western suburbs. Including dreams that wouldn’t work.” neighborhood stabilization, how the pink color of the building, he But Doran never dreamed that we attract new business, how we said, which was meant to be an ar- the so-called “Pink Palace” of streamline the permitting process chitectural statement and de- — these are very important things NEWSPAPER Dearborn would later set an eye- popping low sale price in 2010, See Ritz, Page 21 See Bing team, Page 20 20100830-NEWS--0002-NAT-CCI-CD_-- 8/27/2010 6:12 PM Page 1

Page 2 CRAIN’S DETROIT BUSINESS August 30, 2010

Local sites up for $25K keynote speaker, said association Port Authority head Curtis Hertel THIS JUST IN The way it was: 2002 president Khalid Rao, a local physi- historic preservation grant cian. to take job with DELEG ■ Rao said he expects the event, From Page 1 Throughout our 25th-anniversary The Ford Highland Park assem- Detroit/Wayne County Port Authori- which will take place at the Hyatt year, Crain’s will use this space bly plant — the birthplace of in- ty Executive Director Curtis Hertel Regency Dearborn, to attract 600 to Rassel will be a non-director to look at interesting items from dustrial mass production — is one Sr. has been tapped to be a deputy past issues. 700 people. chairman reporting to the board of several Michigan locations in director overseeing energy in the and Kessler’s board seat will be va- The group hopes to raise be- the running for a $25,000 grant in tween $250,000 and $500,000 Michigan Department of Energy, La- cant until a shareholder election There are the National Trust for Historic Preser- bor and Economic Growth. in early 2011, Klimko said. through donations and the “ vation’s “This Place Matters” con- fundraiser, he said. Hertel also is a former Democra- The 156-year-old Detroit firm still several test. tic House speaker and lobbyist. had around 170 attorneys. The money will go to the Human Among other local sites in the Development Foundation, which has Acting DELEG Director Andy Levin — Chad Halcom potential uses running: Alger Theatre in Detroit, Michigan and Detroit chapters, said Hertel starts today and will for that space, and we’re still the Michigan Central Station in De- and the Pakistan-based Edhi Foun- work on state efforts that include Three Burton-Katzman troit, the Fort Wayne Headquarters dation for distribution in Pakistan. expanding wind-turbine manufac- Building in Detroit, St. Joseph’s Sani- The association plans to post de- turing and supply chain, rules for companies file Chapter 7 exploring all of them. We are tarium and Bath House in Mt. tails at Paamich.org before Labor offshore wind-energy production Three Bingham Farms corpo- exploring a hotel. Clemens, Gray’s Opera House in Day. and other energy areas. rate entities controlled by Peter ” Romeo, the Markham-Wilcox House — Sherri Welch — Amy Lane Burton, Bob Katzman and other in- in Plymouth and the Ladies Literary vestors have filed for Chapter 7 Tom Lewand, Detroit Lions Club in Ypsilanti. bankruptcy. From a July 1, 2002, article about The site with the most online CORRECTIONS developers of Ford Field votes at PreservationNation.org West Village Commons LLC, the en- A listing of top-paid nonprofit CEOs that appeared on Pages 11 and tity developing a mixed-use pro- considering opening a 250-room between now and Sept. 15 wins the hotel inside the football complex. 14 of the Aug. 23 issue incorrectly listed Kevin Seitz at Blue Cross Blue ject in Dearborn, filed for bank- grant. Former warehouse space — Sherri Welch Shield of Michigan Foundation as its top-paid executive. Seitz is president ruptcy Thursday. The LLC lists incorporated into the complex is of the foundation but separately received $1.03 million in compensa- $3.5 million in assets, mostly land, used as offices now, but a hotel tion as former executive vice president, health care value at Blue Cross and $11.2 million in secured and never materialized. Local Pakistani group seeks Blue Shield of Michigan. The list should have included Ira Strumwasser, unsecured debts. donations in wake of flooding executive director and CEO of the BCBSM Foundation, and a vice The development remains in a president at BCBSM, with base pay of $150,601, incentive pay of $98,907 legal fight with the city of Dear- $1.4 million in debt. The Southfield-based Pakistan and total compensation of $389,775 in 2008. born, in which the city wants a Burton-Katzman Development Co. Association of America, which calls A chart on Page 14 of the Aug. 23 edition should have included a foot- court order to force the developers also filed bankruptcy, but has no itself the oldest registered Pak- note that figures for Michael Brennan, president and CEO of United Way to complete two buildings agreed assets. istani organization in the U.S., is for Southeastern Michigan, reflected compensation for a period longer to under a contract with the city. A Burton said he and the other in- organizing a late-September than 12 months. The reported figures included an 18-month retroac- 75,000-square-foot building is cur- vestors continue to control rough- fundraiser to help victims of the tive bonus and deferred compensation paid as a result of a change in rently on the site. ly 70 corporate entities through flood-ravaged South Asian nation. United Way’s fiscal year. Also filing is Westminster Homes which they own and manage 5 mil- The association, which has al- A headline on Page 21 of the Living and Investing in the D supple- LLC, a home development arm lion square feet of real estate in the ready collected more than $50,000 ment packaged with the Aug. 23 edition should have stated the Metro- used by the group of investors, region. “We are still here,” he said. from local physicians in the past politan Organizing Strategy Enabling Strength sought more full-service which lists $225,000 in assets and — Daniel Duggan two weeks, is lining up a political grocery stores within the city of Detroit.

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August 30, 2010 CRAIN’S DETROIT BUSINESS Page 3 Creighton leaves MGM riding high Focus: Franchising Casino increases market share, revenue, net income BY DANIEL DUGGAN from his post to run a Vancouver (NYSE: MGM). MOVING UP CRAIN’S DETROIT BUSINESS casino operating company. “I’m proud that this is one of the Creighton leaves the Detroit casi- few casinos in the country to show Comparison: Lorenzo Creighton knows no in the position of having 42.5 a year-over-year growth in net in- Detroit’s enough to leave the casino when ranking percent of the local gaming rev- come,” he said. among MGM he’s up. enue, as of July, and taking second The casino’s income position is a casinos, President and COO of MGM Grand place in net income among the 12 result of less travel to Las Vegas by Page 20 Detroit since early 2008, Creighton casinos owned by Las Vegas-based announced last week he will resign MGM Resorts International Inc. See Casino, Page 20 Creighton More looking to start biz get

Alex Stchekine made this console a taste of franchising, Page 9 from found cast iron pieces. Community Company index Designing These organizations appear in this week’s Crain’s colleges in Detroit Business: Arbor Partners ...... 19 Bieri ...... 12 College for Creative Studies ...... 14 Compuware ...... 1 their futures COURTESY OF LOST ART STUDIOS crossfire Context Furniture Marketing ...... 15 Detroit Brownfield Redevelopment Authority . . . . . 20 Detroit-schooled artists craft a niche in functional art Plan to shift K-12 Detroit Design Center ...... 14 Detroit Metro Convention and Visitors Bureau . . . . 21 BY NANCY KAFFER funds starts feud Digerati ...... 4 CRAIN’S DETROIT BUSINESS BUILDING A REPUTATION EDF Ventures ...... 19 BY AMY LANE First Step Venture Fund ...... 19 Detroit’s got good design. Next step: Get the word Alex Stchekine likes to make clean, modern de- CAPITOL CORRESPONDENT Ford Motor Land Development ...... 1 signs that at the same time remind the viewer of a out. Detroit is taking a page from other cities on leveraging design for economic development, said FranNet Detroit ...... 9 past era — a contradiction he seems to enjoy. LANSING — Michigan commu- Matt Clayson, director of the Detroit Creative Corridor. Giarmarco Mullins & Horton ...... 11 “A lot of times that’s done with age patinas or nity colleges have gotten caught “It’s a philosophy we need to start to have dialogues up in a $208 million tug-of-war be- Greektown Casino-Hotel ...... 20 hammer textures to achieve a timeless, ancient look about — how design and the creative economy can tween the Granholm administra- Hospitality Advisors Consulting Group ...... 21 that’s clean and modern at the same time,” he said. help push Detroit to a new era of prosperity.” tion and supporting lawmakers, Hyatt Regency Dearborn ...... 21 Stchekine has been making art This fall, the Creative Corridor initiative, College for for about 10 years, since his stu- Creative Studies, Crain’s and a bevy of local designers and the members of the K-12 com- Indus Capital ...... 12 dent days at Wayne State University, and artists are joining forces to create Design in munity. Innovative Learning Group ...... 4 but he left a career in the automo- Detroit Month with events in September and early At issue is Gov. Jennifer Invest Detroit ...... 20 tive industry about two years ago October: Granholm’s pro- IRN ...... 18 Sept. 13, 6 p.m.: A panel discussion about the posal to take to open Ferndale-based Lost Art Lost Art Studios ...... 3 Studios and pursue his creative Detroit creative community. Virgil H. Carr Cultural Arts $208.4 million Martin Waymire Advocacy Communications ...... 20 ambitions full time. Center, 311 E. Grand River Ave, Detroit. out of the state MGM Grand Detroit ...... 3 “I talked to a lot of business Sept. 17, 18, 19: Day and early evening events at School Aid DIY Street Fair, Ferndale. The street fair is a free event Michigan Association of School Administrators . . . . 3 owners who started in recessions Fund, which that brings together artists, businesses, groups, generally sup- Michigan Community College Association ...... 18 past,” he said. “At the beginning musicians, restaurants and others with a do-it-yourself Stchekine ports K-12 Michigan Education Association ...... 3 of the ’80s and ’90s, (many) had ethic. http://diystreetfair.com/ schools, and use MotorCity Casino-Hotel ...... 20 turbulence and said (they) started out light but were Sept. 21, 6:30 p.m.: Open City, Design in Detroit: able to tool up and be ready for more business (when What’s New. Cliff Bells, 2030 Park Ave., Detroit it for the state’s New Economy Initiative ...... 4 the economy improved). I wasn’t going to sit around 48226. www.opencitydetroit.com. 28 community Granholm NextWave ...... 12 and wait for things to get better.” Sept. 28, 5:30-10 p.m.: Design in Detroit Furniture colleges. Oakland Community College ...... 18 The shift is part of a budget pro- Stchekine’s business had mainly come through Show Preview and Roundtable. See Facebook page. Residence Inn ...... 21 word of mouth — “from people who knew what I was Sept. 29, 5:30-10 p.m.: Crain’s Detroit House Party posal Granholm announced Aug. Resonant Venture Partners ...... 1 doing and said, ‘You should get this guy to do a gate,’ ” and Design in Detroit Furniture Exhibition. A. Alfred 18. It would save general-fund Ritz-Carlton Dearborn ...... 1 he said. “Then I did a sign for a business … someone Taubman Center for Design Education, 460 W. money that goes to colleges and would either know me and recommend me or I Baltimore, Detroit. www.crainsdetroit.com/events help close a $302.7 million budget Rockbridge Partners ...... 21 would talk to someone directly.” Sept. 30, 9 a.m.-5 p.m.: Design in Detroit Furniture shortfall in the current fiscal year, Roxbury Group ...... 20 Exposition, Trade and Public Show, sponsored by the Stchekine moved into furniture design, he said, which ends Sept. 30. Scio Security ...... 19 Detroit Creative Corridor Center with support from the The plan, which would tap the Southwest Detroit Business Association ...... 20 out of a sense of functionality. Detroit Design Center and Taubman Center. 460 W. bulk of a surplus in the School Aid “I always approached it from a functional perspec- Baltimore, Detroit. Speedpro Imaging ...... 10 Fund, passed the state House last tive. I struggle a lot with sculpture, so if it has a use” Sept. 30: IIDA and ASID Finish 2 Fashion. Stefani & Co...... 15 week amid fire from the Michigan it’s easier to reconcile, he said. “I focus on making www.michiganiida.org. Click on Finish 2 Fashion. Taru Lahti Design ...... 16 Education Association, Michigan As- functional designs that have an artistic bent.” Sept. 26-Oct. 2: Detroit Gallery Week, Detroit and The Arbor Consulting Group ...... 4 Stchekine works mostly in steel and concrete, sociation of School Administrators metro area. Gallery crawls, studio tours, receptions and The Rehmann Group ...... 11 though he incorporates other metals. And in his other events. www.artdetroitnow.com/galleryweek.html and others. University of Michigan ...... 1 spare time, he’s working on a jewelry line. Oct. 9, 8 p.m.-1 a.m.: Detroit Harmonie. An event “We are … adamantly opposed Business has been good, he said, but as with any focused on showcasing the region’s diversity. to raiding the School Aid Fund to Wolverine Venture Fund ...... 19 other startup, there’s more work to be done. http://detharmonie.com. cover deficits in the general fund,” “I try to look at it with the intent of a five-year said Kerry Birmingham, media re- plan, so I’m right in the middle of developing it MEET MORE DESIGNERS lations specialist at the MEA. Department index still — but I’ve been really intent on trying to See profiles of Erik and Israel Nordin of the “What the House did by passing make this thing succeed,” he said. Detroit Design Center, Bryce and Kerry Moore of this was they took away that cush- BANKRUPTCIES ...... 19 “I want to make it a successful business, that’s Context Furniture Manufacturing, Taru Lahti of Taru ion that could have been left there CALENDAR ...... 17 Lahti Design and Jesse Stefani of Stefani to prevent cuts to the K-12 budget. first and foremost for me. It’s not just like I go in CAREERWORKS ...... 13 and make something and leave at the end of the & Co., Pages 14-16 We have devastated some of the CLASSIFIED ADS ...... 16 day.” Photo gallery, crainsdetroit.com/design schools in our state with continual Alex Stchekine can be reached at (248) 705-3208 or cuts. KEITH CRAIN...... 6 www.lxmetal.com. A chair of steel, bronze, maple and walnut, “Community colleges have tra- LETTERS...... 6 called “Pieces,” by Jesse Stefani. Nancy Kaffer: (313) 446-0412, [email protected] See School aid, Page 18 MARY KRAMER ...... 7 OPINION ...... 6 OTHER VOICES ...... 6 Interested in health care news? Subscribe to the news feeds PEOPLE ...... 13 Sign up for the free, twice- Don't miss breaking Washtenaw, THIS WEEK @ RUMBLINGS ...... 22 monthly newsletter at Livingston or technology news. Subscribe WWW.CRAINSDETROIT.COM crainsdetroit.com/getemail. to the RSS feeds at crainsdetroit.com/rss. STAGE TWO STRATEGIES ...... 4 WEEK ON THE WEB ...... 22 20100830-NEWS--0004-NAT-CCI-CD_-- 8/27/2010 5:23 PM Page 1

Page 4 CRAIN’S DETROIT BUSINESS August 30, 2010

StageTwo Strategies A weekly look at problem-solving by second-stage companies. StageTwoStrategies is a weekly feature that analyzes a To sign up for the twice-monthly recent business decision by a second-stage company. e-newsletter, go to crainsdetroit.com/getemail. The For more second-stage coverage, go to Second Stage print section will appear in Crain’s on the crainsdetroit.com/secondstage. third Monday of each month. INNOVATIVE LEARNING GROUP INC.

Location: Royal Oak the execution of an entire strate- ness...” she said. “The problem Description: Provides custom gy was beyond their reach. was balancing where the precious employee training programs to Solution: 10 of us spend our time.” clients including AAA Michigan, Toenniges de- Risks and considerations: Toen- Troy-based ArvinMeritor Inc., De- cided to hire in- niges had a small staff, inexperi- troit-based Blue Cross Blue Shield dependent mar- enced in marketing and unable to of Michigan, Comerica Bank and keting create or handle an elaborate plan. Consumers Energy Co. consultant Plus, everyone already had a full President: Lisa Toenniges Kathleen Nor- plate. Founded: 2004 ton-Schock of Expert opinion: Joan Moore, presi- Employees: 10 Bloomfield dent of Northville-based The Arbor Revenue: $2 million in 2009, with Hills to write a Consulting Group Inc., said she’s all $2.4 million projected for 2010. formal strategy too familiar with the outsourcing Problem to be solved: In the early Toenniges for $10,000. dilemma. days, Innovative Learning Group After evaluating Norton- It’s an investment, she said, but could handle much of its market- Schock’s suggestions on how to it’s better than playing cleanup lat- ing work in house. execute the strategy — do it inter- er. Plus there are ways to reduce “We all had some experience nally, hire a single freelancer, costs. doing that but weren’t experts,” hire a marketing firm, or hire a “One way is just to be up front said Toenniges. “So, finally we’re marketing professional — Toen- with them and say either, ‘We have thinking that before we take this niges chose the latter. this much to spend, what will that to the next level, we need to get “We opted to hire a full-time buy us’ or ‘How can we work with some help.” marketing professional, so the in- you to reduce the costs of this ef- Staff members, Toenniges said, dividual would be integrated into fort?’ ” she said. could handle certain duties, but our culture, know our busi- — Shawn Wright If your second-stage company has recently made a tough business decision, contact Michelle Welsh, entrepre- coffee!! neurship editor at Crain’s Detroit Business, at [email protected]. opportunity!! interested?? MORE gets funding to grow biz-support system franchise?? BY SHERRI WELCH To develop the system, Balasia profit MORE program’s primary CRAIN’S DETROIT BUSINESS and Klecha have ongoing work with work now is overseeing develop- library science departments at UM ment of the SESS system, Balasia While Brian Balasia was launch- and Michigan State University to cata- said. It has contracted Digerati to Contact us at ing Digerati Inc. 10 years ago with fel- log the assets of resource organiza- develop the system for entrepre- low University of Michigan sophomore tions down to the type of assistance, neurial use. (517) 913-1987 or Joe Klecha, the two spent lots of rather than just the organization. It also has contracted vendors time searching for resources, from The system has also attracted the such as Media Genesis in Troy to lay [email protected] access to seed money to help in ne- attention of the U.S. Department of out the user interface for the system gotiating a business lease. Commerce, thanks to an introduc- and build the portals; Saginaw- “We made far more mistakes tion on the part of Detroit Regional based Issue Media Group for help in than necessary … those types of Chamber President and CEO Sandy identifying resources that could www.biggby.com challenges consume a consider- Baruah, who formerly served as help entrepreneurs; and Mort Crim able amount of time for businesses acting administrator of the U.S. Communications Inc. in Southfield to that are just getting started or Small Business Administration and as help recruit municipalities and re- even struggling or growing,” Bala- U.S. assistant secretary of com- source providers’ assets for the sys- sia said. merce with the responsibility of tem. Five years later, after the pair leading the U.S. Economic Develop- Oakland County Executive L. had established their business de- ment Administration. Brooks Patterson and the Michigan veloping software to help clients U.S. Commerce Secretary Gary Municipal League were among the with strategy in the medical, legal Locke is expected in Detroit first to offer their support to the pro- and business industries, and Wednesday to announce the depart- ject. Other resource providers offer- they’d founded a nonprofit at UM ment’s participation in the SESS ing their assets for inclusion in the to help other entrepreneurs, some- and the opening of a permanent system so far include Wayne Coun- thing clicked. CommerceConnect office in Ponti- ty, major public universities, the 14 “We started to see similarities ac, Balasia said. private liberal arts schools that are between the work doctors were do- Digerati is readying the system, part of the Michigan Colleges Founda- ing in diagnosing patients and the which so far contains more than tion, Lawrence Technological University work we were doing through the 20,000 Michigan and federal re- in Southfield, Ann Arbor Spark, Troy- (Michigan Opportunities & Resources sources, for a spring beta launch. based Automation Alley, Macomb-Oak- for Entrepreneurs Program) at UM to “While there has been talk by nu- land University Incubator in Sterling help entrepreneurs,” said Balasia, merous groups of creating a one- Heights and TechTown in Detroit, the a member of Crain’s 20 in their 20s stop shop for entrepreneurs, there Detroit Economic Growth Corp., Class of 2008. has not been a successful effort to Inforum, the Michigan Manufacturing The two realized the software sys- inventory resources in a manner Technology Center and the Michigan tems Digerati had been developing that was useful to entrepreneurs Economic Development Corp. for the medical field could be adapt- regardless of their experience or The region and state definitely ed to help entrepreneurs and busi- the sector they are working in,” need a database to make it easier for nesses get to the funding, services said NEI Executive Director David entrepreneur support organiza- and contacts they needed in much Egner, who is also president of the tions to access resources outside of shorter time, through the use of spe- Hudson-Webber Foundation. their own operations, business in- cific questions and algorithms. SESS will hold the largest inven- cubator leaders say. Seeing its potential, the New Econ- tory of resources for entrepreneurs Said TechTown General Manag- omy Initiative has granted nearly $1.6 ever assembled in one database, in- er Leslie Smith: “I think a system million to the MORE program to ventoried by the issue it solves, and like this will really help … triage fund development of the Statewide make it easy for any level of entre- them to get (them) to their resource Entrepreneurship Support System and preneur to navigate, Egner said. faster. portals for business support organi- Operating on a $1.1 million bud- Sherri Welch: (313) 446-1694, zations. get with four employees, the non- [email protected] DBpageAD.qxd 2/17/2010 12:32 PM Page 1 20100830-NEWS--0006-NAT-CCI-CD_-- 8/27/2010 5:51 PM Page 1

Page 6 CRAIN’S DETROIT BUSINESS August 30, 2010 OPINION OTHER VOICES Hospital collaboration Right way to do development The recent announce- creasing opposition and That’s just one of many condi- ment that billionaire de- legal challenges, and they tions for which residents and stake- veloper Matty Moroun’s attract further invest- holders have been working to find bridge company would ments by creating more- solutions with officials overseeing would help the region make a donation to the sustainable communities. the proposed DRIC project in our Community Health and Community-benefits community. Among other things, ast week, advocates for health care cost containment re- Social Services Center in agreements are achieved we are seeking guarantees for job leased a new report predicting that $1.3 billion in capital Southwest Detroit is cer- through negotiations training and local hiring, and we L spending among Detroit-area hospital systems would re- tainly good news, but it with broad involvement have already attracted $1.9 million sult in short-term economic gains but long-term cost increases. should not be mistaken for of community members, toward building some replacement The silver lining: If hospitals pulled more patients from a community-benefits stakeholders and develop- housing in the community. agreement being pursued. Kathy Wendler ers. The agreements ad- Southwest Detroit hosts many outside the region, that equation could change for the better. From Los Angeles to Denver to dress all impacts of proposed de- transportation projects and heavy And that’s the opportunity. If hospitals collaborated to Wisconsin, community-benefits velopments by involving the industries that serve our state and market best-in-class programs, the region could draw patients agreements have met great success community from the outset to beyond, yet our community bears from around the U.S. and the globe. But a couple of economic and support, and that’s why groups identify issues — and together the their burdens. We must ensure development groups that explored such a collaboration in re- like the Southwest Detroit Commu- community and developers lay out that the community is involved in nity Benefits Coalition have been solutions and investments that determining remedies for the im- cent years found little appetite among the competing hospital working for more than two years to will offset and remedy negative pacts of large developments, and to systems for collaboration. engage authorities in the communi- impacts. guarantee these remedies in en- Maybe the current economic conditions could change that ty-benefits process with the Detroit In our experience, we found one forceable community-benefits outlook. We hope so. River International Crossing bridge of the biggest concerns of commu- agreements. The health care cost report by the National Institute for project. Legislation authorizing nity members is the increased We’re excited about the poten- community benefits with the DRIC truck traffic on residential streets. tial economic development that Health Care Reform and the Center for Studying Health Sys- project has passed the state House, Our border truck traffic is expect- can revitalize our communities, tem Change echoed the fears of institute founders — the De- showing this is the right way to do ed to more than double, according and we owe it to our residential troit 3 automakers and the United Auto Workers union. development. to studies referenced by the public neighbors and our partners in the The auto groups, which opposed much of the new capital Community-benefits agree- and private bridge projects. While business sector to make sure it’s spending on the books, have long held that health care costs can ments are a way for developers to the increase in trucks will be good responsible development that remedy pollution, traffic, reloca- for our economy, it will further af- brings more investment and solu- be controlled primarily through Michigan’s strict adherence to tions and other issues, and to pro- fect quality of life, will increase tions. its certificate-of-need approval process. In recent years, hospital vide local jobs related to develop- the costs to repair and maintain Kathy Wendler is the director of systems have gotten around the CON rules by getting laws ment projects that benefit the roads and will increase diesel the Southwest Detroit Business As- passed to approve specific, multimillion-dollar projects. region. These negotiated agree- emissions that are harmful to sociation and the Southwest Detroit Surprisingly, the report omitted Washtenaw County and ments save time and money by de- health. Community Benefits Coalition. the growing University of Michigan Health System. Authors apparently didn’t consider UM hospitals as part of the regional equation. That must be a surprise to UM, which saturates the broadcast airwaves with commercials aimed at attracting po- tential patients throughout the region. LETTERS EMU union’s demand unrealistic Recession? What recession? Not time to change energy law The union representing faculty at Eastern Michigan Uni- Editor: of having 10 percent of the state’s versity wants a 12.75 percent wage increase over three years. Crain’s Detroit Business In late 2008 — after two years of power from renewable sources by welcomes letters to the editor. EMU has proposed 1 percent a year over that same period, analysis, compromise and debate 2015. However, we have been dis- with veteran professors getting an extra $5,000 raise and addi- All letters will be considered for — Gov. Jennifer Granholm signed publication, provided they are appointed in the lack of progress tional 1 percent bonuses tied to enrollment and state funding. into law an energy reform package signed and do not defame toward building new power gener- Hefty salary increases and no-cost-to-employee health care that had overwhelming bipartisan individuals or organizations. ation and the slower-than-expect- are vestiges of times gone by. Most private sector workers long support. Letters may be edited for length ed pace in achieving cost-of-ser- It was crafted to encourage job- and clarity. vice rates. ago began sharing the cost of health care and have had wages creating investments in the state’s Now, some lawmakers are call- Write: Editor, Crain’s Detroit frozen — or reduced. energy infrastructure, increase re- ing for election-year changes to a Business, 1155 Gratiot Ave., EMU faculty went on strike in 2006. Another strike would newable energy and energy effi- Detroit, MI 48207-2997. good law. ciency programs, establish cost-of- Among them is Rep. Roy jeopardize the university’s efforts to overcome controversy E-mail: [email protected] from during the administrations of two predecessors to cur- service rates for all customers and Schmidt, D-Grand Rapids (“Michi- improve the state’s business cli- gan needs electric-rate competi- rent President Susan Martin. mate and ability to retain and cre- For example, programs are help- tion” Aug. 22). Schmidt is the au- EMU’s offer to extend annual bonuses based on increased ate jobs. ing customers save energy and thor of legislation that would enrollment and state funding would help give faculty a stake The current law is fulfilling the money, and new projects are un- in the university’s success financially as well as academically. vision behind most of these goals. der way to help meet the standard See Letters, Page 7 KEITH CRAIN: Where have all the moderates gone? I was listening to the radio last and bipartisan politics. he or she would be dis- such low voter turnout? People are tics. I don’t think he had a choice. week and had a hard time under- A friend and I were talk- avowed by everyone in simply turned off by all the politi- In the next few months, we are standing the venom coming from ing last week and the middle. cal mudslinging. going to hear a lot of angry the local left-wing radio station. agreed that both politi- Today, it seems like I’m not sure if we’re ever going rhetoric — even hatred — from There was a vicious anti-Republi- cal parties have become everyone wants to stick to be able to change the attitude both parties in political contests can angle to every item in the so extremely partisan it to the other party. and civility of our elected officials. playing out across the country. I news. you can’t find moder- People used to refer to It’s nice to know that there are still find it a sad state of affairs. Down the dial a bit, you can hear ates anymore. the Senate as cordial. a few elected positions that are Regardless of party, whoever the same kind of tirades from right- I’ve been around long Not anymore. Whether nonpartisan, like the mayor of De- runs a campaign without resorting wing radio. Everything that’s enough to remember it’s Lansing or Wash- troit, but I noticed that even he en- to throwing mud at the opponent wrong is the Democrats’ fault. moderates. They lived ington, everyone is try- dorsed the Democratic candidate will get my vote this fall, whether It was enlightening and very de- within both parties, and ing to make the other for governor of Michigan. It would it’s dogcatcher or governor. pressing. they worked together from the cen- person look bad. That’s the objec- seem more logical for the mayor to I want to hear about the candi- What ever happened to the mid- ter, with little or no discord. The tive, not doing our state’s and our simply withhold any endorsement date, not how bad the other guy or dle? I miss the moderate politi- occasional extremist from either country’s work. since he’s going to have to work gal may be. May the candidate cians who understood compromise party would pop up, but normally Is it any surprise that we have with whoever wins. But that’s poli- with the most character win. 20100830-NEWS--0007-NAT-CCI-CD_-- 8/27/2010 5:21 PM Page 1

August 30, 2010 CRAIN’S DETROIT BUSINESS Page 7 MARY KRAMER: Offer cash prize and things start happening Want to move the needle on your Egner is benchmark- wind-turbine blades in venues all over that city’s core foot portrait of ArtPrize founder favorite project or cause? ing the 10-year-old busi- and other products.” downtown from Sept. 22-Oct. 10. Rick DeVos, who was 29 when the Offer a big cash prize. ness plan contest creat- I think the more con- (You can check it out at www.art- contest was launched last year. That’s one of the many lessons ed by Rice University tests, the better. prize.org.) “We think that will bring a lot of of ArtPrize in Grand Rapids, in Houston. But the In Grand Rapids, 10 And if you go, make sure you attention,” says Kratchman, who where cash prizes totaling $499,000 contest also bests the artists walked away visit the Louis Campau prome- admires the vision of the third- kicked off a 17-day art competition $100,000 top prize with cash, but as nade and the Campau Square generation DeVos heir. “Many last September. awarded by the Great Crain’s Nancy Kaffer Plaza Building. Bloomfield Hills people brought up in privilege It was a “people’s prize” in the Lakes Entrepreneur’s reported in July, down- arts consultant Barbara “Bunny” have not been mentored in the sense that attendees could vote Quest. In June, that town businesses pros- Kratchman is curating exhibits of same way to give back to their digitally on their favorite works business plan competi- pered from the tens of mostly Detroit-area and Michigan community.” on display in 159 venues. The top tion awarded $100,000 thousands of attendees. artists’ works in adjacent out- 10 works in the first one-vote-per- to a Lansing-based A coffee shop, for exam- door/indoor spaces for three spon- Mary Kramer is publisher of person ballot went on to compete MSU spinoff, InPore ple, that typically sold sors: the law firm Miller Canfield, Crain's Detroit Business. Catch her for the cash, with a first prize of Technologies. Crain’s Tom Hen- 300-400 cups a day reporting hit- Comerica Bank and the owners of take on business news at 6:10 a.m. $250,000. More than 334,000 votes derson described its product as ting 1,800 cups a day for two weeks. the office building. Mondays on the Paul W. Smith show were cast. “nanoscale particles that save en- This year, the city’s retailers The big draw likely will be the on WJR AM 760 and in her blog at The lesson of “prize as catalyst” ergy in making chemicals and will be more prepared when more work of Robert Sestock, who has www.crainsdetroit.com/kramer. wasn’t lost on David Egner, CEO of strengthen materials in auto parts, than 1,700 artists show their work created an enormous, 12-foot by 18- E-mail her at [email protected]. the Hudson-Webber Foundation and New Economy Initiative in De- troit. With more than $1 million pledged in prize money, he pulled Wayne State University’s Tech- Town and its business accelerator counterparts in Washtenaw, Oak- land and Macomb counties togeth- er for the Accelerate Michigan In- novation Competition — billed as the world’s largest business plan competition for early and second- stage companies. Michigan’s research universi- ties — University of Michigan, Wayne State and Michigan State — will promote the competition to students and alumni. But the cash — $500,000 is the top prize — will go to a company only if it agrees to set up shop in Michigan. Final judging for the contest will be Dec. 11 in Ann Arbor, the same day as the UM-MSU “big chill” out- door hockey game.

LETTERS CONTINUED ■ From Page 6 increase the amount of electric load that could be served by alter- Retirees need to know their best Medicare option. native energy suppliers, many of them headquartered outside of They need to know about BCN Advantage. Michigan. The current law already re- SM serves a significant share of the At Blue Care Network, our BCN Advantage HMO plan has been chosen by state’s power market for alterna- many individuals and businesses across Michigan. Why? Because Blue Care tive suppliers. That limit was es- Network believes outstanding service and access to quality care are what tablished to allow competition, yet give utilities the certainty they matter most to Medicare beneficiaries and to you. And that’s exactly what need to make substantial long- BCN Advantage provides its members — all at exceptional value. term investments. The 10 percent limit also pro- tects the customers who get all of Whether you have a large group or a small one, BCN Advantage can tailor a their service from their utility. plan to meet your needs. Learn more by visiting us online, contacting your Blues They would see price increases if a representative or independent agent or calling Blue Care Network today. larger percentage of a utility’s high-volume customers got their power from alternative suppliers. At DTE Energy, for example, a BCN Advantage HMO loss of 25 percent of electric load to CONTACT INFO alternative suppliers would cost remaining customers about $400 MiBCN.com/medicare million. Call 1-866-966-BLUE (2583) Short-term market conditions shouldn’t be used as an excuse to TTY users call 1-800-431-7944 tinker with a comprehensive ener- (8 a.m. to 5 p.m., seven days a week) Medicare and more gy policy that took years to develop. Or contact your Blues representative If in 2011 Michigan’s next gover- Blue Care Network of Michigan is a nonprofit corporation and independent or independent agent licensee of the Blue Cross and Blue Shield Association nor and newly elected lawmakers

want to conduct a thoughtful and SM comprehensive review of the Leading Michigan to a healthier future. state’s energy policy, we would

welcome that oversight. SM Rich Studley BCN Advantage HMO is a health plan with a Medicare contract. President and CEO H5883_S_GrpDecMkrAD07/10 Michigan Chamber of Commerce And members of the Michigan Jobs & Energy Coalition DBpageAD.qxd 7/27/2010 9:48 AM Page 1 20100830-NEWS--0009-NAT-CCI-CD_-- 8/27/2010 11:58 AM Page 1

August 30, 2010 CRAIN’S DETROIT BUSINESS Page 9

REPORTER’S NOTEBOOK Nancy Kaffer LOCATION, LOCATION covers small business and Bieri Co. president and CEO second-stage addresses franchisee real companies and Detroit and Wayne estate needs, Page 12 County government. Call (313) 446-0412 or write nkaffer franchising @crain.com Nancy Kaffer Franchisees have some loan benefits When you’re asking a bank for a business loan, pitching a franchise concept has some advantages over a traditional startup business. “When we underwrite a franchise, we have the ability to look at the franchise nationally,” said Tom Zernick, a vice president and head of U.S. Small Business Administration-backed lending at Flint-based Citizens Republic Bancorp Inc. “There are statistics published on the default rate of franchises nationally, so when a Jimmy John’s (Gourmet Sandwiches) or a Quiznos comes to us, we have a track record of how they perform nationally.” Another plus, Zernick said, is that the franchisor has often prescreened the franchisee’s financial eligibility. “They can require a certain amount of liquidity post-closing,” he said. “They want the store to stay open. They can provide advertising, projections … a franchisor can be a valuable partner when they produce very good industry statistics on a franchise in a particular market.” GLENN TRIEST But a franchise isn’t a free pass to Michael Ansley, president and CEO of Diversified Restaurant Holdings Inc. in Southfield, has owned franchises for 14 years and a business loan. Prospective now plans to sell franchises of his Bagger Dave’s Legendary Burgers and Fries. He said franchising has evolved during his time in franchisees must still meet the same the restaurant business. stringent requirements as any business loan applicant. “When we underwrite, we really look for management experience,” he said. “What are the owners bringing to the table? We look at the résumé, look at their background, what skill sets do they have from past employment or a previous job that Working with a net they’ll bring into the new franchise?” The down payment is also important, Zernick said. risk, more support and easier “We’re going to want anywhere Franchising offers support to would-be access to financing. from 20 to 40 percent down in cash,” “There are more and more he said. “We want them to have some people who are at the end of skin in the game, because we’re not biz owners; more look to get into the act their rope and may have con- an investment bank.” sidered making a change and Prospective franchisees are eligible BY NANCY KAFFER “In the early days, it was thinks will serve him well as a getting into their own business for SBA-backed loans, he said, noting CRAIN’S DETROIT BUSINESS more of a handshake and franchisor. in the past,” he said. “Now — that a list of franchises preapproved here’s our document. I had no With no significant job because of the long job search, for SBA loans is available online at ourteen years ago, Michael idea what it said, and luckily it growth in sight, more Michiga- the frustration and limited www.franchiseregistry.com. Ansley opened his first Buf- worked out,” said Ansley, who nians are getting serious about amount of opportunities out Like any would-be business owner, a F falo Wild Wings franchise. advises business own- there, especially for people in prospective franchisee must be a viable Then 25 and a recent gradu- prospective ership, and for their 40s or 50s or early 60s — prospect for the lender, Zernick said. ate from the University of Dayton franchisees to an increasing many are getting serious about “We look at post-closing cash, how in Ohio, Ansley had become a be more If you’re not the number of looking for business owner- much working capital do they have, fan of the restaurant and aware. “It’s “ would-be busi- ship.” because we often find that the thought its for- really impor- kind of person who ness owners, But franchising isn’t for number one reason businesses fail is mula was one tant to under- can follow rules that means everyone, cautions Bingham they went in undercapitalized,” he QUICK TIPS that would pay stand what franchising, Farms-based attorney David said. “We would not put a borrower in Guide: Things off. you’re getting and regulations in said Mark Steinberg, who specializes in a position where they would be so to consider Back then, into.” Cory, a fran- franchise law. highly leveraged with no working before Ansley said, fran- Now Ans- chise place- “You have to be willing to be capital. We like to see a secondary a given format, becoming a chising was a ley’s presi- ment special- a follower of sorts,” he said. “If income coming into the household so franchisee, you’re not the kind of person the income from startup isn’t the only Page 10 more casual dent and CEO maybe it’s not for ist at Grosse who can follow rules and regu- way to pay the bills. We like to see Homework: arrangement. of a $19-mil- Pointe-based collateral, or a guarantor.” Study the Ansley lacked lion-a-year (you). FranNet Detroit. lations in a given format, maybe it’s not for (you).” For all loan applicants, Zernick disclosure restaurant and company, ” The fran- said, it’s important to be prepared. document, business experi- Southfield- David Steinberg, chise industry And it’s key for franchisees Page 11 to choose a franchise that fits “It comes down to having a well- ence; as a fran- based Diversi- franchise law attorney has evolved, prepared business plan when you chisee, he fied Restaurant and fran- their talents, Cory said. come to the bank that documents thought he’d get help with Holdings Inc., with 17 Buffalo chisees and consultants agree “They should consider their these kinds of items: What’s the cash both. Wild Wings restaurants, three that today there are resources transferrable skills, the things in going to be, what kind of collateral, So he and a then-partner in the works and a franchise to ensure better structure and they have learned and been what other income is coming in, what borrowed the $25,000 it cost in concept of his own: Bagger training. good at from prior employ- kind of management experience do 1996 to buy a Buffalo Wild Dave’s Legendary Burgers and Cory said interest is further ment,” he said. “Consider their you have, what are you bringing in in Wings franchise and opened Fries. He also has learned increased because potential terms of résumé?” shop in Ypsilanti. lessons on franchising that he business owners see lower See Support, Page 10 20100830-NEWS--0010-NAT-CCI-CD_-- 8/27/2010 11:15 AM Page 1

Page 10 CRAIN’S DETROIT BUSINESS August 30, 2010 Focus: Franchising RESPECT from Peers... Support: More consider franchising GRATITUDE from Families... ■ From Page 9 role in the business and what their SMILES from Neighbors... preferences are in terms of their A ROADMAP TO WEIGHING FRANCHISE BUSINESS IDEAS day-to-day activity. Expect to pay between 4 percent budget for those costs. Own a 7-Eleven and ACCESS it all. “Among the topics to consider: hours of work required, people and 10 percent of gross revenues in What kind of initial training and royalty fees to a franchisor. But make ongoing support does the and management skills, sales and sure you know what you’re getting for franchisor offer? Ask current Attend a Franchise Seminar marketing ability, and prefer- your money — a low royalty might franchisees what they’ve in Livonia, MI ences on whether to sell services mean higher business operating experienced. or products to end users or do B- September 22 from 2-4 p.m. costs. Don’t just speak to franchisees to-B sales. Ask how much of the fees you’d recommended by the franchisor. Do Please RSVP to Timothy Lankford, at And buying a franchise doesn’t pay will be used to directly benefit the homework and interview other 630-366-3328 or eliminate all risks. franchisees in your area. franchisees. [email protected] “People have to be careful, be- Inquire about the franchisor’s Evaluate the strength of the cause a franchise is not an insur- advertising program. If the franchisor financially, but also look ance policy,” Steinberg said. “If franchisor doesn’t offer advertising at the company’s management things don’t go well, it doesn’t for franchisees, make sure to team. mean you can sue.” Ansley said in his franchise de- Where to turn velopment, things could have gone There are online resources designed to assist would-be franchisees.

©2010 7-Eleven Inc. This is not an offer to sell a franchise. An offer can only horribly awry. Among them: be made in applicable states with authorized documentation. An equal “It was very difficult,” he said. opportunity organization. SBA Small Business Planner, www.franchiseregistry.com “Back then, the franchise struc- Buying a Franchise International Franchise ture and training were horrible. www.sba.gov/smallbusinessplanner Association, www.franchise.org The people involved didn’t have a /start/. Click on “Buy a Franchise.” The American Franchisee lot of experience with franchis- www.frandata.com Association, www.franchisee.org ing, and you were left on your www.frannet.com own. I think franchising has evolved tenfold since I got in- volved.” chise in full before you open. If you probably the majority of my Ansley said learning on the job don’t know exactly what the build- clients have used those. If done gave him the experience he needed out’s going to cost you, how much right, it can be done without incur- to buy a second franchise when his the lease is going to cost, how ring penalties or taxes by setting partner bought him out of the Yp- much for advertising, you’re going up a C-corp, establishing a new silanti location. to be in trouble.” 401(k) in the company name, The Bagger Dave’s concept that Different fran- rolling the exist- Ansley plans to franchise came chisors offer dif- ing 401(k) in, and with some rules, given his Buffalo fering levels of ad- With a franchise, using it to buy Wild Wings restaurants in Michi- vertising support, “ stock in the com- gan and Florida. Steinberg said. we felt pany. It’s not like “I had to stay away from the “Advertising a loan, it’s like a sports bar segment and chicken, is very impor- we’d have little IPO, but pri- more or less,” he said. “But Buffalo tant, and the vate, not public.” Wild Wings was very, very cooper- franchisee a much Tapping into ative. The laws are very protective needs to make 401(k) savings is in that essentially you can’t go out an inquiry into better how Kim and CPTUPO-!NB ¦ IBSUGPSE-!DU ¦ TQSJOHGJFME-!NB and be Buffalo Wild Wings, and what kind of Scott Frane re- ¦ ¦ why would you want to? I’m still a advertising the success cently purchased OFX!ZPSL-!OZ QIJMBEFMQIJB-!QB BMCBOZ-!OZ franchisee.” company is go- a Speedpro Imag- XBTIJOHUPO-!ED ¦ CBMUJNPSF-!NB ¦ BMBTLB There are three Bagger Dave’s ing to be doing” rate. ing franchise. The corporate stores, and one is under on the fran- ” company makes TDSBOUPO.XJMLFT!CBSSF-!QB construction in Brighton. It is ap- chisee’s behalf, he Kim Frane, Speedpro Imaging large display IBSSJTCVSH.ZPSL.MBODBTUFS-!QB proved as a concept for franchis- said. graphics. ing in Michigan, Illinois and When choosing to purchase a Kim Frane said Speedpro’s fran- Ohio. franchise, a prospective business chisee support appealed to the cou-

ª3121!MDF-!Jod/!34:96 Before getting serious about owner should plan to spend up- ple. buying into a franchise concept, wards of $50,000, Cory said, and ex- “They have a very good train- new or established, prospective pect to pay 4 percent to 10 percent ing and mentoring program to owners need to do their home- of gross revenue in royalties to the help you seek out business, and work, Steinberg said. franchisor. The amount of royal- have production and technical Each franchisor is required by ties will likely indicate the level of teams to make sure you can get the Federal Trade Commission to pro- support a franchisee may expect to support, make sure you have duce a Franchise Disclosure Docu- receive from the franchisor. everything covered from the tech- ment that should detail the ins and Steinberg said that the potential nical aspect,” she said. “That’s outs of the business. franchisee should be careful to very much a reason why we went “Look at the financial statements protect himself or herself finan- into a franchise. With a franchise, very carefully,” he said. “I know cially. we felt we’d have a much better what to look for, but I’m not an ac- “What we normally do for a fran- success rate.” countant. I tell people, please go chisee is encourage them to create a Kim Frane, formerly in mort- have an accountant or CPA look at subchapter S-corp or an LLC, and gage lending, is working to open this to make sure you’re not buying never to own anything in their own the shop, while Scott has kept his from a company that’s losing mon- personal name,” he said. “That’s day job in the automotive indus- ey. If the franchising company is just to limit potential exposure to try. not making money, I don’t know downside risk from liability. If they “We’re both hard workers. So why you would, either.” end up owing money to a vendor or we thought, we could have our Be conservative about costs, supplier, they want money to be 401(k) in the market and possibly Steinberg said. owed by the entity, not by them per- lose it. … Do we trust another com- “Federal law requires fran- sonally.” pany to make it profitable for us, chisors to determine how much However, he said, quite often a or do we trust us?” she said. working capital (a franchisee) will franchisor will ask a potential Frane said the couple decided to need for the first three months. … I franchisee to sign a personal guar- buy a business based on the same find that the range given is too antee. theory. low,” he said. “When I review the It can be easier to get a bank “We started thinking that if we Franchise Disclosure Document, I loan to purchase a franchise, Cory put forth the effort working for tell them to add another 30 percent said, but getting financing isn’t a ourselves the way we did for the on top of that figure so there’s no gimme. companies we’re employed with, surprises. “A lot of people are looking at al- we would be so much further “Another red flag is not know- ternative sources, primarily uti- ahead,” she said. ing what it’s going to cost you to lization of existing 401(k) or IRA Nancy Kaffer: (313) 446-0412, build the store, to build the fran- funds,” he said. “I’ve found that [email protected] 20100830-NEWS--0011-NAT-CCI-CD_-- 8/27/2010 11:13 AM Page 1

August 30, 2010 CRAIN’S DETROIT BUSINESS Page 11 Focus: Franchising Before choosing franchise, study disclosures carefully

BY DUSTIN WALSH of time before you have to renew,” CRAIN’S DETROIT BUSINESS Haffey said. “You need a reason- SAMPLE FRANCHISE DISCLOSURE DOCUMENT TABLE OF CONTENTS able amount of time to recoup Reading a Franchise Disclosure 1. Franchisor and any parents, predecessors, affiliates 13. Trademarks money on your investment.” 2. Identity and business experience of key people 14. Patents, copyrights and proprietary information Document is a tedious but impor- He said to be wary of any terms 3. Litigation history 15. Obligation of the franchisee to work in the business tant task when researching poten- less than five years. tial franchise investments. Buchanan and Haffey said to re- 4. Bankruptcy 16. Restrictions on what the franchisee may sell The 23-section document spells view several disclosure documents 5. Initial fees 17. Renewal, termination, repurchase, modification out the most important details of before picking a franchise and con- 6. Other fees and expenses and/or transfer of the agreement and dispute resolution purchasing and owning a fran- sult with attorneys and accountants 7. Franchisee’s estimated initial investment 18. Public figures chise, but it can be confusing if before purchasing an investment. 8. Restrictions on sources of products and services 19. Financial performance representations you don’t know what you’re look- “You’re investing a lot of money, 9. Obligations of the franchisee 20. List of franchise outlets and franchisees ing for, according to local experts. so you want to do as much due dili- 10. Financing arrangements 21. Financial statements “Read them carefully and entire- gence as you can,” Buchanan said. 22. Contracts ly,” said Bruce Haffey, a sharehold- 11. Franchisor’s help, advertising, systems and training Dustin Walsh: (313) 446-6042, 12. Territory 23. Acknowledgment of receipt er in Troy-based Giarmarco Mullins & [email protected] Horton PC. “You want to look for any surprises like additional costs.” Haffey said the franchisor should document all of its current and past lawsuits, and that should play a major role in the decision. “Inspect the sections on bank- ruptcy and litigation vigilantly,” he said. “The more bankruptcy and litigation there is, those are negatives to think about.” The document should also in- clude a list of franchise owners for potential franchisees to contact, said Kimberlie Buchanan, princi- pal and director of practice growth and client service at The Rehmann Group’s Farmington office. But don’t be limited to just the list in the disclosure, she said. “Make the calls, because they are going to be your best source of information about owning a fran- chise,” she said. “However, there’s nothing stopping you from picking up the Yellow Pages and calling those not listed as well.” Some franchisors, or at least those that have been franchising for some time, will disclose finan- cial projections or averages for each franchise, Buchanan said. “A lot don’t disclose this infor- mation, but those that do appear more reputable to potential fran- chisees,” she said. “But make sure you understand how those num- bers are realized and if they are reasonable for your franchise.” Review the costs section with great care, Haffey said. It will re- view whether your products and equipment will come directly from the franchisor or from a list of ap- proved suppliers. This is critical information for financial projections, he said. “It’s not necessarily a bad thing if all of your product and equip- ment come from the franchisor, but you want to make sure you’re getting a fair price,” he said. The section on franchise turnover is critical in understand- ing the risk of owning a particular franchise. The more turnover, the more cause for concern, Haffey said. Both Haffey and Buchanan stressed the importance of under- standing territory limitations for franchisees as outlined in the dis- closure. This section will define whether your franchise will have an exclusive territory in which to operate or whether another fran- chisee can set up shop across the street and bisect your client base. The franchisor also discloses re- newal terms. Most franchises re- quire franchisees to renew their agreements after a period of time so the franchise remains profitable. “You need to review the length 20100830-NEWS--0012-NAT-CCI-CD_-- 8/27/2010 12:09 PM Page 1

Page 12 CRAIN’S DETROIT BUSINESS August 30, 2010 Focus: Franchising RESPECT from Peers... Careful choice of location can pay off GRATITUDE from Families... Detroit-based Bieri Co. is I think there have been ling Heights) has probably every a national retail real es- more. Franchising af- franchise that ever exists out tate consulting firm spe- fords people who have there. SMILES from Neighbors... cializing in tenant and been displaced with buy- The problem is that franchisees landlord representation, outs or saved some money probably lack patience. Where Own a 7-Eleven and ACCESS it all. consulting, legal services an opportunity to get into franchisees get in trouble is that and market analysis. business. Franchising they don’t go to a professional, Attend a Franchise Seminar Crain’s talked with Presi- also affords people who maybe don’t listen to the fran- in Livonia, MI dent and CEO James Bieri have worked for a large chisor, or perhaps just don’t fol- about franchising trends, company a more struc- low some basic rules that have September 22 from 2-4 p.m. especially franchisee real tured way to make a liv- proven success and they take Please RSVP to Timothy Lankford, at estate needs. ing. chances on real estate they 630-366-3328 or What are the hot fran- If people just follow the shouldn’t. chises around this region? formula, they can be suc- [email protected] What are some of the most com- I think Zoup is a good James Bieri, cessful. ... A lot of times, Bieri Co. mon mistakes for franchisors looking franchise. Buffalo Wild the more successful fran- for real estate? Wings is wildly successful. chisees are immigrants. Doing it too quickly. Not survey- The service franchises — the maid They follow the rules. Franchises ing the market. And (not) being pa- services, the cleaning services — work because people have figured tient enough. The real successful continue to do well. Five Guys is ex- out a way to make money. traordinarily hot, and those folks franchisors are very patient in ©2010 7-Eleven Inc. This is not an offer to sell a franchise. An offer can only be made in applicable states with authorized documentation. An equal are opening up with big volumes. Have there been any common chal- their acquisition of real estate. opportunity organization. Freshii’s isn’t here yet, but that’s lenges to securing real estate for fran- They have a formula that tells them coming. ... Potbelly is just starting to chisees? that it may be traffic counts, demo- franchise around here. Sonic has There’s always the problem of graphics, adjacencies, amount of come to town; they had big plans the right real estate for the fran- gross dollars that can be paid, or the and they’ve sort of slowed down. chise. There’s only a certain type of real estate that they’re in. But they’ve got some (stores) open amount of places that are going to But franchisors that have suc- now, so maybe it takes a little while do well. If you’re a real estate guy cess have a lot of data on what to settle in. Certainly, they’re big in town, you know where the most works and what doesn’t work. Join us as we explore advertisers and they’ve had success high-traffic locations are, like When they violate their own rules how manufacturing around the country. where Ikea went up in Canton of success is when they’re going to Have there been more or fewer fran- (Township.) Hall Road (in Ma- get in trouble. companies are adopting chise deals since 2008? comb Township, Utica and Ster- — Shawn Wright to the impact of IN PARTNERSHIP WITH various dimensions of sustainability NextWave may franchise incubators globally Breakfast and Discussion BY CHAD HALCOM ing a plan for franchise NextWave equity stake in the technology CRAIN’S DETROIT BUSINESS locations to house startup and sec- companies that move into the Wednesday, Oct. 6, 2010 ond-stage technologies in cities building it acquired from DuPont Present Troy-based private business ac- around the world — so long as they Automotive last December. Its CEO 7:30 a.m. - 10 a.m. celerator NextWave Inc. is consider- do not compete directly with the is Robert Skinner, and former Fairlane Center North Quad E ing a plan to franchise its business company-owned locations in mar- CEO Dick Blouse of the Detroit Re- model of technology business incu- ket niche or business recruitment. gional Chamber is chairman. Sustainability in 19000 Hubbard Dr., Dearborn bation. “It’s still very early, but the Startup portfolio companies pro- Amjad Hussain, managing part- whole global expansion model in- vide between a one-third and one- Manufacturing ner and principal founder of cludes an element of franchising,” half equity stake to NextWave and $35 per person. NextWave and former CIO of Han- he said. “At a strictly vision level, provide a nominal rent payment. dleman Co. in Troy, said the incu- we are thinking we may develop a Stage-two companies with a rev- For more information or to bator, which opened in July along global franchise model after the enue stream will provide 5 percent register online, visit Stephenson Highway, expects to first three global incubator models to 20 percent equity to NextWave www.regonline.com/umsustain open sister facilities in London are set up directly by the company. and have a more traditional rent and Kuala Lumpur before the end It won’t be this year, or next.” payment schedule. of 2011. If the organization does de- NextWave, the for-profit tech- So far the organization has in- cide to franchise, it would not hap- nology business incubator owned vested in startups ranging from pen before 2012. by Troy venture-capital firm Indus engineering consultanting to on- The management is still weigh- Capital LLC, has been acquiring an line retailing.

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August 30, 2010 CRAIN’S DETROIT BUSINESS Page 13

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PEOPLE CONSULTING Thornton LLP, Detroit. Donna Cianciolo to director of business William Watch, co-founder of First FAS Inc., Fort Michael Asada to executive vice presi- John Shallcross to director of investor development, Mackinaw Administrators Commercial Realty & Development Myers, Fla. dent and managing director, Venture relations and capital strategies, Mead- LLC, Brighton, from risk management Co., Southfield, named chairman, De- Management Services, Troy, from owbrook Insurance Group Inc., South- program coordinator, Road Commis- troit District Council of the Urban SERVICES deputy and chief of staff, TACOM field, from treasury and finance spe- sion for Oakland County, Beverly Hills. Land Institute, Detroit. Chad Darnell to di- Ground Combat Systems, Warren. cialist. rector, Angott NONPROFITS RETAIL DISTRIBUTING Karl Carter to executive director of fi- Search Group, nancial planning, Michigan Financial Ted Canaday to director, marketing Michelle Delahunty-Cloutier to execu- Rochester, from Matt McIntosh to Cos. Inc., Southfield, from financial and communications, Charles H. Wright tive vice president, chief merchandis- owner, Darnell In- sales manager, consultant, Thrivent Financial for Museum of African American History, ing officer, Borders Group Inc., Ann surance Agency, Lighting Supply Lutherans, Walled Lake. Detroit, from director, public relations. Arbor, from brand president, Chico’s Darnell Lake Orion. Co., Ferndale, from branch sales manager, Consoli- dated Electrical Distributors Inc., Battle Creek. ENGINEERING Thursday, Oct. 14, 2010 McIntosh Rick Weaver to vice president of business development, PAT Engineer- Rock Financial Showplace ing Enterprises USA LLC, Madison Heights, from independent consul- I tant, Max Impact Corp., Rochester. 46100 Grand River, Novi 8 a.m. - 5 p.m. FINANCE REGISTER at www.regonline.com/2010healthcare John Burpee to vice president, FULL DAY CONFERENCE: $99 each until Oct. 1 high net-worth in- FULL DAY REGISTRATION INCLUDES a year subscription to surance special- Crain’s Detroit Business ist, Fifth Third Health Care Reform: with Health Care Extra Bank, Southfield, from managing SAVE! Groups of 10 or more: $90 each. Reserve groups by director, North- phone only, 313.446.0300. western Mutual Change = Opportunity Life Insurance HEALTH CARE HEROES AWARD LUNCHEON ONLY: $50 each Co., Ann Arbor. Jeanne Hansen to New federal health care reform laws offer incentives Burpee managing direc- and funding for initiatives that promise high-quality care PRESENTING SPONSOR tor, Marsh Inc., Detroit, from senior vice president; and John Hurley to at a lower cost. managing director, from senior vice president. Can Southeast Michigan get in line? This summit will give attendees ways to break through industry and geographic silos to agree to and act on specific plans to help the region benefit from these PLATINUM SPONSORS CLOSING REMARKS/RECEPTION SPONSOR new federal incentives. Who should attend? Hospitals, physicians, employers, life sciences/ pharma, industry insiders and suppliers, academics GOLD SPONSORS Rodriguez Dumond and economic developers. Kimberly Rod- riguez to princi- Featured speakers: pal, KPMG LLP, Detroit, from Paul Keckley, Deloitte Center for Health principal, Grant Solutions – Reports from Washington Thornton LLP, Crain’s Detroit; also, Tim and on the Big Ideas from the Dumond to prin- 2009 Summit. ROUNDTABLE SPONSOR LOCATION SPONSOR cipal, from prin- cipal, Grant Rachel Maguire, Health Horizons Program Thornton LLP, Detroit; and Institute for the Future, Palo Alto, CA Pavlak Vince Pavlak to Can technology improve care -- and reduce partner, from principal, Grant cost? This futurist, with expertise on new LUNCHEON SPEAKER SPONSOR media and mobile technologies, will offer BREAKFAST SPONSOR PEOPLE GUIDELINES her perspective. Announcements are limited to management positions. Nonprofit Featured panel: What employers need to know about and industry group board ACTION GROUP SPONSORS appointments can be found at health care reform. Panelists include: www.crainsdetroit.com. Send submissions to Departments, Crain’s Detroit Business, 1155 Gratiot Ave., Detroit, MI 48207- 2997, or send e-mail to [email protected]. Releases must contain the person’s AWARD LUNCHEON SPONSOR BAG SPONSOR name, new title, company, city in Jerry Konal, Chris McSwain Scott Lyon which the person will work, former Principal, Health Director, Global VP & Health title, former company (if not and Benefi ts, Benefi ts Insurance Expert promoted from within) and former Mercer – Whirlpool Corp. Small Business city in which the person worked. Association of Sponsorships available. Please contact Marla Downs at 313.446.6032 Photos are welcome, but we cannot Moderator Michigan or e-mail [email protected] for more information. guarantee they will be used. 20100830-NEWS--0014,0015-NAT-CCI-CD_-- 8/27/2010 11:07 AM Page 1

Page 14 CRAIN’S DETROIT BUSINESS August 30, 2010 Design in Detroit

etroit has long been underrat- Detroit Design Center editing eye — and ulti- ed as a center for design. But Erik and Israel Nordin, mately, Erik Nordin said, good design trumps Furniture ... is some design professionals co-owners D Detroit ego. “ and educators are seeking to change Business continued to definitely something that (313) 831-5511, that. www.detroit grow as the brothers is attainable by more “There’s huge money in the idea designcenter.net started to win local awards for their sculp- of crafts and making and selling,” he design is what tures. They’d made some people because it’s said Maxwell Davis, an art furniture matters. custom furniture, but functional. designer and head of the interdisci- T That’s the guid- Erik Nordin Israel Nordin hadn’t had the time to ing principle brothers ” plinary track in the crafts depart- create a line. Erik Nordin, Detroit Design Center Erik and Israel Nordin use in settling cre- “When the restaurant business slowed ment at Detroit’s College for Creative ative disputes at the Detroit Design Center. because of financing, we decided it was Studies. “People don’t realize.” Both of an artistic bent — Israel majored time to develop an inventory of furniture What might help bring exposure in ceramics and glassblowing at Detroit’s that clients could come and walk through,” College for Creative Studies, Erik Nordin said. is “Design in Detroit,” a show featur- Erik went to the University of Having furniture on hand ing furniture and fine art made by a Michigan to study music — takes the pressure off the mix of Detroit-based designers, part the brothers opened the De- customer. of Crain’s Detroit Business’s popular troit Design Center in the “Instead of having to old family steel business on make custom decisions, Detroit House Party that celebrates Michigan Avenue in Detroit kind of a spontaneous pur- Detroit investment. Davis is curating in 1999. chase instead of a planned the Sept. 29 show and has selected “We started in restaurant and custom purchase,” Erik sculpture, and we did (that) nine designers and eight CCS stu- Nordin said. “Furniture … for three or four years,” Erik is definitely something that dents to exhibit. Nordin said. “Then we start- is attainable by more The five design studios featured ed to find interest from resi- people because it’s “S in this report (which begins on Page dential folks who would see functional. na our work at restaurants and “We’re trying to of- 3) reflect the range of homegrown tal- Heavy st places. So then we started to fer people something bolts la ent at the show. The House Party will focus in on residential prod- singular, one of a form the be held at the College for Creative Stud- ucts, like railings and gates kind, hoping it posts for a ies’ A. Alfred Taubman Center for De- and furniture and lighting.” makes our business like coffee table The brothers, Erik Pewabic (Pottery) tile, where of oxidized sign Education. Nordin said, design coopera- the pieces will become steel. A See www.crainsdetroit.com/events tively. Erik’s style is more collectible in the future. blown glass Stainless steel-and-mahogany geometric; Israel is drawn to vase by Israel for details or to register. Other De- benches and a mirror from the An investment, instead of Nordin sits on curves and flowing lines. Nordins’ deco series accent the buying something from Ikea top. troit Design Month events are de- Each brother’s viewpoint lobby at 1300 Lafayette East or Design Within Reach.” PHOTOS COURTESY OF tailed on Page 3. differs enough to provide an Cooperative in Detroit. — Nancy Kaffer DETROIT DESIGN CENTER

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August 30, 2010 CRAIN’S DETROIT BUSINESS Page 15 Design in Detroit Stefani & Co. types of material, and combine “If it’s just sculpture, people them into one unique piece.” don’t really understand it. If I Jesse and Cary Stefani, co-owners Both the elder and the younger make it into decent furniture, it Stefani still make jewelry — at broadens their view of what it ac- Keego Harbor this point, it’s about 50 percent of tually is,” Jesse Stefani said. (248) 682-8818 the business, Jesse Stefani said — “Or in layman’s terms, put a www.stefaniandco.com but the goal is to continue to work price on something that has a very in larger pieces, with furniture be- cool shape and materials and 95 esse Stefani, a metalsmith by coming the main thrust of the percent of the public is like, ‘I training, grew up in a family company. would never buy that.’ But if you J of jewelers. “It’s a kind of art that is less in- make it functional, that opens it His father, Cary Stefani, had timidating to the average person,” up to 75 or 85 percent of people.” been a jeweler in Birmingham for he said. — Nancy Kaffer years by the time Jesse grad- uated with a degree in industrial design from De- GLENN TRIEST troit’s Col- lege for Cre- ative I like Studies, “ also Cary combining Stefani’s alma different raw materials GLENN TRIEST mater. Called “Sirlin” “Stump” is Jesse Stefani’s In 2005, together, mainly in for the name for this series of Jesse and customer who steel and cast-glass Cary Ste- compositions that are not commissioned lamps. it, this table is fani be- normally seen. made of steel came Stefani & Co., based in Keego ” and copper Harbor, “where we do sculptural, with a maple Jesse Stefani, Stefani & Co. metalwork and everything in be- top. tween,” Jesse Stefani said. Stefani’s furniture is primarily said. “Some is found, some is steel, but mixes nontraditional ele- made. Helping build your ments, he said. “The question I often get asked “For the most part, I like com- is, ‘Is that ceramic? Is that wood?’ bining different raw materials to- It takes a form that steel doesn’t business - one gether, mainly in compositions normally take. So I work with that are not normally seen,” he wood, rubber and glass, different block at a time. Context Furniture Manufacturing Bryce and Kerry Moore, co-owners Royal Oak (248) 200-0724 http://contextfurniture.com

ryce Moore started designing furniture be- cause he couldn’t find pieces he liked. Check out the new How can we assist? B As a student, first at the University of Montana P: 248.539.9900 and then at Detroit’s College for Creative Studies, good fosterswift.com E: [email protected] design was beyond his financial reach. “It was just necessity,” he said. These days, Moore and his wife, Kerry, own Royal Oak-based Context Furniture Manufacturing and are at the forefront of a Lansing | Farmington Hills | Grand Rapids | Detroit | Marquette | Holland movement called COURTESY OF CONTEXT FURNITURE MANUFACTURING There will remain “mass cus- Bryce and Kerry Moore’s Context Furniture Manufacturing “ tomization,” the in Royal Oak is part of a movement to produce custom idea that techni- designs at affordable prices. room in the market cal expertise, ex- cess manufactur- “Bigger companies with a lot more money are for small and ing capacity and starting to develop the same kind of backbone, are large. customer prefer- creating those concepts as we speak,” he said. ” ence can com- “Right now, I think it’s a mad dash to the finish bine to produce line, but there will remain room in the market for Bryce Moore, small-batch cus- small and large — but the thrust right now is the in- Context Furniture Manufacturing tom design at af- terface” that will allow customers to generate furni- fordable prices. ture concepts and expand the potential of mass cus- “Kerry and I both decided that we wanted to be tomization, he said. more of a design, build, manufacture-type of compa- — Nancy Kaffer ny, doing more limited-run, more limited-production types of pieces,” he said. “We decided that through the use of computers and technology, it should theo- retically be affordable to make small-batch produc- This wooden piece is titled tions at affordable prices.” “Narrative The first expression of that idea was the Moores’ Rocker Narrative Collection, Bryce Moore said, which Stool.” used materials like Baltic birch or European ply- wood to keep costs down. In 2008, the Moores launched Design Democracy as a way to gain exposure for some of their ideas about custom design. Users submitted and voted on furniture design through a web- site, and the Moores produced the top five workable designs, showing them at the New York International Contemporary Furniture Fair. 20100830-NEWS--0016-NAT-CCI-CD_-- 8/27/2010 11:58 AM Page 1

Page 16 CRAIN’S DETROIT BUSINESS August 30, 2010 Design in Detroit Taru Lahti Design Taru Lahti, owner (Furniture Detroit “ (313) 600-1599 design is) becoming teel, says designer Taru a little more Lahti, is immediate gratifi- S cation. interesting again, “I don’t have to wait 24 hours for things to glue together,” he probably through said. “I can basically new technologies and sketch out a piece within things people are a few hours, so it’s very utilizing. immediate, ” and you can Taru Lahti, Taru Lahti Design see the re- said, noting that he’s done furni- sults very ture in addition to sculpture for quickly. It’s Lahti both businesses and public spaces. like sketch- Furniture design, he said, has ing in metal. You can add things, changed over the years. cut things off, so it’s a very quick “Back in the late ’80s, I think it process of getting right to where was quite popular, then became a you want to go.” little passé in the middle ’90s, al- Lahti, who started designing most became a little too commer- furniture in the 1980s as part of a cialized,” he said. “Now I think it’s group at Detroit’s College for Cre- COURTESY OF TARU LAHTI DESIGN getting back a little more of its cre- ative Studies called the Propeller A glass top can turn this untitled wall ative edge over the past five years. Group, designs furniture he hanging of wood, steel and found objects into a table. Things are becoming a little more thinks of as functional art. interesting again, probably “There were three of us who by the automaker today. through new technologies and started the group,” he said. “We He left in 2001 to focus on art. things people are utilizing.” took the furniture aspect, but did “It’s been a full-time job,” he — Nancy Kaffer Eggs and Energy it with an art twist. Functional art was basically what we called it. It At The Engineering Society of Detroit was a means of making something functional, yet much more cre- ative and artistic.” MARKET PLACE Join The Engineering Society of Detroit (ESD) for a Lahti spent much of his profes- special breakfast series highlighting important issues sional career as a designer at Ford Motor Co. working on concept cars ANNOUNCEMENTS & BUSINESS & and topics in alternative energy. like the Ghia Focus — not the pop- SERVICES INVESTMENTS ular Focus model that’s marketed Stay informed about the latest innovations and HEALTH & FITNESS BUSINESS OPPORTUNITIES

opportunities related to alternative energy as you hear Successful physician/medical inventor seeks first hand from experts in the field. “Cloud 9,” business partner(s) for new national a sculpture of Get active and interactive at franchise-model of health services and/or stainless steel other medical innovations. Opportunity for The first breakfast will take place on and fabric, extraordinary growth. Concepts utilize latest medical technologies, providing improved Monday, September 20, 2010 8:00 a.m. to 10:30 a.m. was delivery and quality of care. Ideal candidate has completed this aHealthierMichigan.org access to capital and experience in start-up Speakers: Mujeeb Ijaz, Systems Energy Solutions Group year at Nine entrepreneurial ventures. RadVision Healthcare Mile and Email: [email protected] Manager, A123 Systems Harper roads LEGAL SERVICES US Representative Gary Peters (Invited) in St. Clair Shores. Problems with delinquent commercial Call Us For Personalized Cost (Includes continental breakfast): accounts receivable? Service: (313) 446-6068 Attorney who has collected business debts $35 for ESD members; $50 non-members and rents for more than 35 years can help. Hourly fee or contingent fee arrangements CLOSING TIMES: Monday 3 p.m., can be negotiated. one week prior to publication date. To register, visit www.esd.org or call 248-353-0735. FRED MANN, Attorney at Law Please call us for holiday closing times. [email protected] or (248) 645-0120 FAX: (313) 446-1757 SPONSORS E-MAIL: [email protected] SHREDDING SERVICES INTERNET: www.crainsdetroit.com/section/classifieds Secure On Site Document Shredding Confidential Reply Boxes Available Routine Service/One-Time Cleanouts FURNITURE PHOTO GALLERY Hard Drive Destruction, Recycling Programs PAYMENT: All classified ads must be 313-343-9600 www.GeneralShredding.com prepaid. Checks, money order or See more Crain’s credit approval accepted. works by the Credit cards accepted. designers Advertise your featured in this Products and Services in See section at Crain’s Detroit Business Crainsdetroit.com/Section/Classifieds crainsdetroit for more classified advertisements .com/design. CRAIN’S LIST ONLINE The top five area architectural Present firms by 2009 revenue are: 1. SmithGroup Inc., Detroit: $166.3 million Sustainability in Manufacturing 2. Ghafari Inc., Dearborn: How manufacturing companies are adopting to the $75 million impact of various dimensions of sustainability? 3. URS Corp., Southfield: $45.6 million IN PARTNERSHIP WITH Breakfast and Discussion 4. Harley Ellis Devereaux, Wednesday, Oct. 6, 2010 Southfield, $39.5 million 5. SSOE Group, Troy: $38 million 7:30 a.m. - 10 a.m. – Fairlane Center, Dearborn Find the rest of the list and more $35 per person. For more information or to details at register online, visit www.regonline.com/umsustain crainsdetroit.com/design. 20100830-NEWS--0017-NAT-CCI-CD_-- 8/27/2010 4:46 PM Page 1

August 30, 2010 CRAIN’S DETROIT BUSINESS Page 17

CALENDAR fense Industry. 1-10 p.m. Sept. 13; 7:30 chapters of the Turnaround Manage- site: www.detroitchamber.com. Bloomfield Township, has been invit- COMING EVENTS a.m.-10 p.m. Sept. 14; 7:30 a.m.-4:30 ment Association. With: Bill Kurtis, Extreme Change: Four Women, Four ed to attend. ESD, Southfield. $35 Meet, Greet and Eat. 3:30-6 p.m. Sept. p.m. Sept. 15. The Michigan Chapter documentary host, producer and TV Sectors, Total Transformation. 11:30 members, $50 nonmembers, includes continental breakfast. Join ESD for 9. Michigan Society of Association Ex- of the National Defense Industrial As- news anchor; and Andy Dillon, speak- a.m.-1:30 p.m. Sept. 17. Inforum. With: ecutives. Join MSAE members for an $114 and attend free. Contact: (248) 353- sociation. Network with government er, Michigan House of Representa- Susie Ellwood, CEO, Detroit Media opportunity to connect with the 2010 tives. Greektown Casino-Hotel, De- Partnership; Carol Goss, president 0735, ext. 149; e-mail; [email protected]; and defense industry decision-makers candidates for attorney general, secre- troit. $175 members, $200 and CEO, the Skillman Foundation; website: www.esd.org. from the Department of Defense, the tary of state and Michigan Supreme nonmembers before Aug. 31; $190 Barbara McQuade, U.S. attorney for armed forces, Automation Alley, the Court. Rock Financial Showplace, members, $220 nonmembers after. the eastern district of Michigan; and Crain’s Michigan Business-Bay Area. Defense Supply Center, the National Mary Zuckerman, COO, Detroit Med- Novi. $50 before Sept. 2, $60 after. Con- Contact: (248) 593-4810; e-mail: jbrew- Noon-2 p.m. Sept. 22. Crain’s Detroit tact: (517) 332-6723; e-mail: tilma@ Automotive Center and others. With: [email protected]; web- ical Center. MotorCity Casino Hotel, Detroit. $55 members, $65 nonmem- Business. Topic: Michigan’s New Sili- msae.org; website: www.msae.org. Tracey Pinson, director, office of small site: www.chicago.turnaround.org. con Valley. With: Mary Lou Benecke, business programs, Department of the bers; $600 table of 10. Contact: (877) 633-3500; website: www. vice president of public affairs and Secrets to Securing Government Army; others. Marriott Detroit, Troy. Industry Coffee: Creatives, Marketing, inforummichigan.org. corporate communications, Dow Funds for your Biotech Startup. $395. Contact: (586) 825-7141; e-mail: PR and Sales. 7:30-9 a.m. Sept. 16. Net- Corning Corp. Northwood University, [email protected]; website: 4-6 p.m. Sept. 10. TechTown, Aster- working for the creative, public rela- Eggs & Energy Breakfast Series. 8- Midland. $50, $45 each for groups of 10 and, MichBio. With: Jon Kozesky, G2G www.ndia-mich.org. tions, marketing and sales industries. 10:30 a.m. Sept. 20. Engineering Soci- or more, $60 at the door. Contact: (313) Consulting. NextEnergy, Detroit. $5 Lyndsey’s Linen, 1212 E. Nine Mile ety of Detroit. First in a series of dis- 446-0300; e-mail: cdbevents@crain. donation encouraged. Contact: (313) Mid-America Regional Conference. 10 Road, Hazel Park. Free to chamber cussions on alternative energy in com; website: www.crainsdetroit. 879-4478; e-mail: allison@techtown a.m.-10 p.m. Sept. 14; 8 a.m.-noon members Business Builder and above. Michigan. With: Mujeeb Ijaz, systems com. For sponsorship opportunities, wsu.org; website: techtownwsu.org. Sept. 15. The Chicago/Midwest, De- Contact: (313) 596-0479; e-mail: energy solutions group manager, A123 contact Marla Downs at (313) 446-6052 Expanding Opportunities in the De- troit, upper Midwest and Missouri [email protected]; web- systems. U.S. Rep. Gary Peters, D- or [email protected]. REAL ESTATE

AUCTIONS AUCTIONS AUCTIONS LENDER DIRECTED INDUSTRIAL Thursday, Sept. 23, 2010 REAL ESTATE AUCTION PUBLIC AUCTION @ 12:00PM (Noon) Luxury Real Estate Auction Former Lo-Temp Brazing Properties - Toledo, OH 20,310 SqFt Prime Office Building On 1.24 Acres 3060 Stone Meadow, Milford Twp., MI Wednesday, 09/01/10 at 12:00 PM Location of Auction: 3122 South Ave - Toledo, Ohio Four Buildings Totaling 46,192 Sq. Ft. & Approximately 3.992 Acres: ORDER OF SALE - OFFERED IN 3 TRACTS: Open Houses: Tract 1 - 3106 South Avenue Wednesday, September 8th 4-7pm Tract 2 - 3116 & 3122 South Avenue Sunday, September 12th 12-3pm Tract 3 - 330 & 334 Elmdale Due Diligence Materials Available at Location: 1540 S. Holland Sylvania Road, Maumee, OH 43537 www.signatureassociates.com/lo-temp.htm Just South of Airport Highway — 2 Sides of Road Frontage Held on-site Sunday, September 19th at 1pm For more information, contact Auctioneer: 20,310 SqFt 2-Story Prime Office Building on 1.24 Acres in a GREAT LOCATION Craig Herschel - [email protected] This extraordinary mansion situated on a 2.75 acre wooded lot is overflowing with w/162' frontage on Holland Sylvania - just South of Airport Hwy & East of US23/I-475

THE TEAM No Signature. No Results. Interchange. This quality office building offers high end contemporary finishes, brick

elegance and distinction. At 8622+/- sq. ft., this residence features 5 bedrooms, 5 REALTORS baths, 2 lavs, library, custom spiral staircase, 2000 bottle wine cellar, sauna, and 888.708.7070 exterior & 2 stories w/elevator. The second story has been completely renovated & con- home theatre, where no expense has been spared. A finished lower level walkout structed for 1st Class Office Space; the 1st story is partially complete. Renovations with 2nd kitchen takes you to your backyard sanctuary with a custom swimming include a new roof, rubber membrane in 2003 & 2007 & new HVAC system in 2003 & pool, sports court, fire pit, and terrace. 6 car heated garage with portico and so COMMERCIAL PROPERTIES 2007. This is a multi-tenant property that offers ample parking on the paved lot & is much more! Text “Waterford” to 90210 for more information! zoned C-47. Rose Auction Group, LLC Beth Rose MOBILE HOME PARK -- MONROE COUNTY Terms: 2% Buyers Premium added to final bid to determine final sales price.10% Down CAI Auctioneer ONE-OF-A-KIND 877.696.7653 2009 Michigan State Day of Sale; Balance at Closing. Broker Participation is Welcome. Auctioneer Champion (22) lots plus single fam rental home/laundry Set your Appointment TODAY to View!! RoseAuctionGroup.com ID#2801000078 bldg/paved roads. Good overhead lighting/all MATURE TENANTS. Gross $89,838. NET # Visit our Website for More Details # CASH FLOW after expenses $62,474 prior to Owner: debt service. Owner of 30 yrs retiring. $650,000 1540 HS Investments LLC less $150,000 Dn on L.C. by owner. WILSON AUCTION & REALTY CO., LTD. DEAL DIRECT 734-673-7780 Public Auction! 825 N. Main St., Bryan, OH 43506 / 419-636-5500 or 734-675-8911 241 S. Main St., Bowling Green, OH 43402 / 419-354-7653 On-site Sunday, September 12 at 1pm Auctioneers: Wayne M. Wilson, CAI —— Brent J. Wilson, CAI Preview & Registration at Noon INDUSTRIAL PROPERTY Toll Free: 866-870-5500 www.WilsonAuctionLtd.com 1799 S. Coats Road, Oxford, MI 48371 Troy -- Sale or Lease INDUSTRIAL PROPERTY OFFICE SPACE 67,700 Sq. Ft. Mfg. or Whse. Primary Power • 3 Truckwells WANTED TO LEASE $1.95/Sq. Ft. Lease Rate BY Possible Seller Financing Rail - Easily Accessible - Low Rates U.S. GOVERNMENT Broker/Owner (248) 705-0835 Available: On-site Mgmt - Exterior Storage 83,719 SF www.waretechindustrialpark.com The U.S. Government is seeking to lease Your Very Own Secluded Sanctuary! CATELLUS GROUP, LLC office space within 20 miles of the 43,000 SF (810) 695-7700 Detroit Arsenal, consisting of the following: As you inhale nature’s fresh air in your very own secluded sanctuary, you exhale as MISCELLANEOUS you realize you have it all to yourself! You’re nestled seven acres into the woods Exclusive use of an entire free-standing where your custom built brick and stone ranch awaits you. Double doors welcome VINEYARD AND WINERY FOR SALE AVAILABLE NOW facility consisting of approximately 41,000 you to cathedral ceilings, stone fireplace in the living room, and custom designed Picturesque vineyard and winery in Upper Mid- NSF of space suitable for administrative windows, with an updated granite kitchen and stainless steel appliances, along West passionately developed over past 20 years. 4,000 to 100,000 sq. ft. purposes with 350 parking spaces. with three spacious bedrooms. Make your way down to a private walk-out base- Beautiful operation producing acclaimed wines. For additional requirements, please contact ment and celebrate the night away with a beautiful deck and gazebo. The scenery The soils, exposure, altitude and location on the Also 10,000 & 25,000 sq. ft. Jennifer Rahn at 502-315-6975, or will take your breath away! This picturesque residence is located in Lake Orion 45th parallel (also home to Bordeaux, Rhone, Free Standing Bldgs w/truckwells. [email protected] . Schools! Don’t hold your breath any longer. Piedmont and Willamette wine regions) make this Responses can also be mailed to: Beth Rose, CAI Auctioneer Rose Auction Group, LLC setting prime for quality cool climate wine grapes. 1 Mile from Metro Airport U.S. Army Corps of Engineers, Louisville 2009 Michigan State Auctioneer Champion 877.696.7653 About 150 total acres, 50 acres of premium vines District, ATTN: CELRL-RE-M/Rahn, P.O. Box 59, Louisville, KY 40201-0059. ID#2801000078 www.RoseAuctionGroup.com now producing. REA CONSTRUCTION Includes winery, picturesque tasting room, three Applications required by September 2, 2010 OpenOpen Houses: Sun., Aug.,Aug., 29th Noon-3pm3pm & Wed., Sept.,Sept., 8th 4-7pm7pm residential homes, three barns and a storage (734) 946-8730 warehouse. The winery has a recognized Also Heavy Industrial winemaker and top quality wine making Call or email today for information equipment. Advanced development expected to Land Available on a custom advertising plan! lead to near term profitability. For more info contact: Dan Butler, www.reaconstruction.net [email protected] (616) 855-2604, [email protected] 313.446.6068 20100830-NEWS--0018-NAT-CCI-CD_-- 8/27/2010 5:22 PM Page 1

Page 18 CRAIN’S DETROIT BUSINESS August 30, 2010 Survey: Suppliers rewriting contracts Nationally Recognized Substance Abuse Residential Treatment Center to protect against surges in steel prices

I can help you to save a life today BY JAMES TREECE when we last conducted this sur- day, and the issue isn’t as urgent CRAIN NEWS SERVICE vey” in May-June 2008, Korth said. as it was when steel and other The new contracts typically in- prices were soaring. CHIEF EXECUTIVE OUTREACH Most automotive parts suppliers clude some way to pass along high- She urged suppliers to begin ne- have rewritten contracts to protect er costs to the customer. gotiating new contract terms if themselves against steep jumps in Still, suppliers’ exposure to po- they have not done so. “Even if you Just call me on my steel prices, but some remain ex- tential increases in commodities don’t win or only get 50 percent of personal cell phone (734)476-9931 posed to price swings, according to prices varies widely. what you sought in material price Denise Bertin-Epp a survey by consultants IRN Inc. “It astonishes us how huge a vari- increases, it needs to be part of President and Chief Nursing Officer, Brighton Hospital Among companies that use steel, ation there is between those who your negotiations,” Korth said. 63 percent of suppliers who re- I Highest physician recognition by the American Society of Addiction Medicine (ASAM) haven’t done anything on cost relief Commodity cost protections take I Masters prepared and experienced therapists sponded to the survey in May and and those who say, ‘Why would I various forms, but one-time price I Highest percentage of addiction certified nurses in the USA (CARN) June said their contracts include ship anything if I’m not protected increases and surcharges to com- I Integrative therapies, including auricular detox acupuncture and yoga terms that protect them against on cost relief?’ ” Korth said. pensate for soaring costs for raw I First choice for executives, health professionals and attorneys price surges, IRN President Kim Refusing to ship parts is becom- materials are going away, Korth www.brightonhospital.org Korth told a meeting of the Society ing less common as a bargaining said. Surcharges “assume you re- of Automotive Analysts last week. tactic, she said. In 2008, about a turn to stability,” and they aren’t 800-523-8198 IRN is based in Grand Rapids. quarter of suppliers surveyed said standing up in court, she said. In contrast, when the spot price they would consider halting all Instead, the survey found, the Confidential • Patient/family support • Intervention liaison • Evaluation of hot-rolled steel roughly doubled parts shipments to force a customer most common change in contracts Admission • Advocacy/counsel • Referrals • Concierge services SP1563 in April 2007, “virtually no one at to grant price increases reflecting is to add an index-based automatic that point had any kind of material higher raw material costs. In the price adjustment. relief contracting with the cus- latest survey, that fell to 10 percent Korth noted that most suppliers tomer,” she said. to 12 percent, depending on the com- and automakers are expecting “Suppliers have done a great modity. prices of commodities to increase deal to protect themselves from The reason, Korth said, was that less than 20 percent this year. materials price increases since suppliers are more profitable to- From Automotive News Jazz up this year’s holiday party! School aid: Shift angers K-12 groups ■ From Page 3 Our cultural places offer creative ditionally been funded in the state statement to Crain’s that “we’re House Bill 6086, sponsored by spaces for your next event. of Michigan out of the general supportive of resources for all of ed- George Cushingberry Jr., D-De- Call today to discover (and help support) fund, not out of the School Aid ucation, which is troit, contains language stating it’s our region’s treasured cultural gems Fund.” a continuum the Legislature’s intent that the through our one-stop service. Community colleges are used from the K-12 School Aid Fund shift to communi- heavily by both employers and by through the uni- ty colleges is a loan to be repaid by workers seeking retraining to find versity level.” the general fund over five years be- the jobs. Their budget was one of the He said “we ginning in fiscal 2012. only state budgets spared a cut in deal with the But there’s no guarantee. cultural the current year. And community products of the “It does concern us. Because the concierge colleges say they didn’t suggest the K-12 systems, Legislature cannot meet their a program of the cultural alliance current funding switch. and anything obligations now,” Birmingham of southeastern michigan, a 501(c)(3) organization While it’s essentially an ac- that harms said. “What makes us think, that counting shift and the colleges’ them harms us Meyer in two years … that they will be current-year funding has already down the line. This is not a K-12 able to have enough extra revenue Find out more! been dispersed, it still puts col- versus community college issue. to repay the School Aid Fund. We leges in the budget crossfire as The value of each should be recog- are not confident at all that that www.theculturalconcierge.org Michigan comes down to the last nized as essential by the state.” money will ever find its way back 248.766.5599 [email protected] month of the fiscal year and needs In passing the shift last week, the into the School Aid Fund.” to erase a deficit. House also passed legislation that The legislation now heads to the “There’s no new money coming restores $154 per pupil that was cut Senate, where it’s likely to pass. our way, and if anything you could this year from K-12 schools and pro- “There are very little options say there’s some downside to this” vides other assistance, paid for with available to us other than to shift in the unease caused by taking $312 million in recently approved that funding to the community col- money out of the community col- federal education money. leges. It’s not ideal, but it’s a neces- lege budget and replacing it with “This funding gives our schools sity,” said Matt Marsden, press other money, said Michael and teachers some breathing room secretary for Senate Majority Hansen, presi- as they continue to work extreme- Leader Mike Bishop, R-Rochester. OUTGROWN dent of the Michi- ly hard to teach our kids under But Brad Biladeau, associate ex- gan Community some very tough circumstances,” ecutive director for government YOUR LOOK? College Associa- said Rep. Terry Brown, D-Pigeon, relations at the Michigan Associa- tion. chair of the House Appropriations tion of School Administrators, said He said the Committee’s subcommittee for the the group is “outraged” at the group opposes Department of Education and House’s action and the shift will using School school aid, in a news release. likely force cuts beginning next Aid Fund rev- But Birmingham, at the MEA, year because state school revenue enue to support said restoration of the per-pupil won’t grow fast enough to offset community col- Hansen cut and other assistance doesn’t funding pressures. leges regularly, lessen the MEA’s opposition to the He said the Legislature knew af- but he is OK with the current pro- school fund shift. ter the state’s May revenue-esti- posed shift to fix a budget problem “That is just short-term money,” mating conference the outlook for as time and available solutions she said. “Yes, it does help that the general fund and School Aid run out. we’re getting federal money, but Fund, and “failed to make the “It’s not a great option, but it’s that money runs out at the end of tough choices” that could have an option,” Hansen said. “We cer- next year. So you’re not really averted the current situation. tainly are not going to be support- restoring the cuts at all. You’re Marsden replied that the K-12 ive of trying to do this next year. just pumping it up for an artificial- community is “always going to We have enough potentially finan- ly short period of time. have a complaint about how fast or cially failing districts, enough is- “We really feel like the Legisla- how slow” action occurs. “We’ve sues with the K-12 system, that to ture has to look at long-term plan- dealt with problems in a timely MARKETING • PR • DESIGN • NEW MEDIA take money out of that system ning so that schools have a stable fashion,” he said. “We’re doing the identitypr.com doesn’t make any sense.” source of long-term funding that best we can.” Timothy Meyer, chancellor of they can count on year after year Amy Lane: (517) 371-5355, Oakland Community College, said in a … not a Band-Aid fix like this.” [email protected] 20100830-NEWS--0019-NAT-CCI-CD_-- 8/27/2010 5:50 PM Page 1

August 30, 2010 CRAIN’S DETROIT BUSINESS Page 19

VC: Resonant Venture lands first deal 800-292-3831 ■ From Page 1 indiantrails.com raise $1 million for Ann Arbor- with a BS in computer engineer- based Scio Security Corp., a comput- ing. He joined Intel Corp. and was er security startup that offers au- We’ve been pretty accepted into its executive groom- thentication services to small “ ing program. After two years, he banks, credit unions and hungry for was transferred to Columbus, medical clinics. new blood Ohio, to head the Ohio-Michigan- Now that they’ve proven Indiana region. ONE HU G ND IN R T E they can get a deal done, say While in Ohio, he founded A D R Y and new B E E Godwin and Townsend, it’s Townsend Citation Club LLC, a real A L R

E S time to raise the bulk of the estate investment firm. He is still C 100 money for their fund, which energy in the CEO of the company. they hope to close at between VC space in Townsend enrolled part time in $10 million and $20 million UM’s MBA program in 2006, contin- within about 18 months. Michigan. uing to work full time at Intel. In “We’re going to go real hard on ” 2008, he quit Intel to go to school full fundraising right now, but there Mary Campbell, EDF Ventures time and joined the Wolverine fund, are some other projects we have where he worked with Godwin. our eyes on,” said Godwin. Wolverine fund, and they were al- Eventually, they decided VC Resonant will focus on seed- ways the ones who were above and was what they wanted to do for a stage investments in IT, life sci- beyond. What I’m enthused about living, and that they wanted to do ences, advanced manufacturing, is their energy level. Venture capi- it together. alternative energy and defense, tal is a marathon, not a sprint, and “We had to do this. It was in our with a Michigan focus. Godwin they’ve got to be prepared for DNA,” said Godwin. said the Scio deal was a perfect ex- that,” said Campbell. One of their fellow students on ample of what they want to do: “We’ve been pretty hungry for the Wolverine fund was James Help startups founded here to stay new blood and new energy in the Mertz, an angel investor himself. Comfort and here as they grow. VC space in Michigan. We haven’t When the Scio deal opened up, Scio was founded by Dug Song had any in a while,” she said. Godwin and Townsend contacted and Jon Oberheid. “Both of them “Both Tom and I have committed him in San Angelo, Texas. He and t
$IBSUFST were offered opportunities to to invest. If you’re going to support his family, veteran angel and VC Luxury move to the Bay area. They were something with your energy, you investors, quickly agreed to put up t
5PVST offered term sheets by venture- ought to support it with your mon- enough so the Resonant fund could capital firms that would have re- ey, too.” close on the deal. t
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quired them to move out West, so Godwin and Townsend’s back- “I believe in them,” said Mertz 00 we’re happy to keep them here,” grounds are evidence of new blood. on a post-dinner break during a t
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4FSWJDF promotional code at time of booking: CDB52sep Kinnear, executive director of the Red Wings, a team that played I trusted them.” Zell Lurie Institute at the Ross School against top junior teams in Canada Puneet Agarwal, a partner at of Business at UM. Both Godwin and was a feeder program for col- True Ventures, said his firm took a and Townsend served as managing leges and professional leagues. risk with Resonant based on the directors of the $5.5 million Wolver- But he said a coaching change recommendations of the Scio ine Venture Fund, a VC fund man- disillusioned him with the sport founders. aged by MBA students that Kinn- and he headed for Seattle, where “We’re very excited about Scio ear helps advise. he played bass, drums and guitar and the team there, and we firmly Kinnear has agreed to both for a world beat and reggae band believe that the team we’ve invest- serve as an adviser to Resonant named the Ganja Farmers. ing in should have a strong voice and as an investor. Then, pursuing a more serious on who they want at the table. We “They have a lot of experience music career, he enrolled from haven’t met the Resonant guys yet, beyond the normal MBA student,” 1994 to 1996 in the prestigious but we’re looking forward to it.” said Kinnear. “There’s a lot of per- Berklee College of Music in Boston, Of the decision by Godwin and spiration in being a good venture studying composition. Townsend to concentrate on seed capitalist, and they’re both very Godwin had learned computer investing for startups, a niche that hard workers and very orga- programming in high school, and many VCs have ignored in recent nized.” friends in the Bay Area found him years to do bigger deals on compa- Mary Campbell, another adviser day work where he learned com- nies already generating revenue, to the Wolverine Fund and manag- puter engineering on the job, in- Mahendra Ramsinghani, manag- ing director Ann Arbor-based EDF cluding stints at WebCrawler, an ing director of the $5 million First Ventures, the oldest VC firm in the early search engine, and IODA, an Step Venture Fund in Detroit, which state, also has agreed to serve as online distributor of music and also does seed investing, said: an adviser to and be an investor in video. “We could use 10 of these funds. the new firm. Moreover, she has Godwin returned to Ann Arbor There is a clear need. Look at the offered her headquarters on North in 2005 and worked from 2006 to First Step Fund. In our first three Main Street to serve as Resonant’s 2008 for Menlo Innovations, a soft- months, we received 76 business headquarters. ware development firm. One of his plans. If anyone thinks there is a Metro Cars will handle all your transportation needs She will invest her personal jobs was developing software that lack of entrepreneurship in Michi- From 1 to 56 passenger vehicles available money in Resonant and not any of was the backbone of devices made gan, they can come look at my EDF’s funds. by Ann Arbor-based Accuri Cytome- pipeline.” Another veteran venture capi- ters Inc., a fast-growing maker of Ramsinghani has invested talist, Don Walker, managing di- desktop instruments that auto- $500,000 in 10 companies and is fin- Metro Cars is the official and exclusive provider of sedan rector of Ann Arbor-based Arbor mate cell analysis for researchers. ishing the paperwork on four more service for the Detroit Metro Airport Partners, also will serve as an ad- Townsend, now 31, was a mem- investments of $50,000 each. viser. ber of the drum line in the march- Tom Henderson: (313) 446-0337, “I got to know them at the ing band at UM, graduating in 2001 [email protected]

BANKRUPTCIES The following businesses filed for Ave., Suite 101, Bloomfield Hills, vol- Westminster Homes LLC, 30100 Tele- Metro Cars Powered by Propane Chapter 7 or 11 protection in U.S. untary Chapter 7. Assets and liabili- graph Road, Bingham Farms, volun- Bankruptcy Court in Detroit Aug. 20- ties not available. tary Chapter 7. Assets and liabilities 26. Under Chapter 11, a company files Jen-Tech Corp., 175 Orval St., Unit A, not available. for reorganization. Chapter 7 involves Sandusky, Mich., voluntary Chapter West Village Commons LLC, 30100 liquidation. 11. Assets: $470,503; liabilities: Telegraph Road, Bingham Farms, vol- Borrowers Network LLC, 2244 W. Avon, $776,506. untary Chapter 7. Assets and liabili- Rochester Hills, voluntary Chapter 7. Moorish Republic Trust, P.O. Box ties not available. 800-456-1701 Assets: $16,000; liabilities: $4 million. 47686, Oak Park, voluntary Chapter 7. Bart Anthony PC, 43996 Woodward Assets and liabilities not available. — Shawn Wright 20100830-NEWS--0020-NAT-CCI-CD_-- 8/27/2010 5:48 PM Page 1

Page 20 CRAIN’S DETROIT BUSINESS August 30, 2010 Bing team: Framework has planks that help biz Midtown project ■ From Page 1 gets $1.7M credit we will be doing as we have this di- an impact in communities?” she alogue” about land use and long- said. Kresge awards grant for first year of framework BY DANIEL DUGGAN term planning, Henderson said. “You’re hear- CRAIN’S DETROIT BUSINESS The end goal, she said, is to cre- The Detroit Strategic Frame- tecture firm Skidmore Owings and ing a commit- ate a true one-stop shop for busi- work process is funded with Merrill LLP, and the community en- ment from the A critical piece of financing ness services, a phrase that’s been grants from the Troy-based Kres- gagement team, Detroit-based administration was approved for a mixed-use de- bandied about in the past with few ge Foundation. Community Legal Resources and to be more velopment in Detroit’s Midtown tangible results. The foundation is providing Washington, D.C.-based Justice and strategic about neighborhood last week. “We’re going to configure staff in contractual support for Toni Grif- Sustainability Associates. how it operates The Detroit Brownfield Redevel- one location, so not only do we have fin, co-leader of the project, in the Trudeau said others will con- and how it opment Authority approved a services available online, but when amount of $150,000 for the first tribute, but that plan is still in serves the citi- $1.7 million tax credit for a pro- the customer comes to the city we’ll year, said Laura Trudeau, a senior the works. zens. … We’re Griffin ject at the corner of Cass Avenue have the information in one place,” program director at Kresge. “We’re very hopeful this is go- calling this a and Canfield Street called the Henderson said. “So when the may- An $800,000 initial grant for con- ing to have strong results and im- framework plan because we think Auburn. or talked about a one-stop shop, it’s sultants who will work on starting plementable plans that will re- it’s a roadmap to help create better Detroit-based Roxbury Group is actually a one-stop shop.” the Detroit Strategic Framework sult in a much stronger Detroit alignment and efficiency around developing the retail and residen- And all these efforts will save was made last month and will cov- going forward,” she said. “Kresge how the government and other ac- tial site with Invest Detroit. the city money. er the costs of the technical team, doesn’t have a position on how tors go about making an investment Invest Detroit is an umbrella “When we looked at our return which includes Detroit-based ar- land should be used; we want to in the community.” organization created by the De- on investment, we saw that if we chitects Hamilton Anderson and in- ensure it’s a really good process.” Consultants like McKinsey & Co. troit Investment Fund and Business took one hour off of all those func- ternational Chicago-based archi- — Nancy Kaffer are working to find other ways to Leaders for Michigan to spur devel- tions we would save between 80,000- make city government more effi- opment in Detroit. The develop- 100,000 staff hours a year,” she said. Signage, said Vittoria Katanski, focus for the city’s code enforcers. cient, Henderson said. ment entity is Auburn REO LLC. “When you do the math, it ends up marketing director for the busi- “Past administrations have fo- “(McKinsey) is doing an analy- The $11 million development paying for itself and then some.” ness association, is one of the main cused on revenue collection,” she sis of current departments and will be funded through a federal The city also is working with the violations in the Southwest De- said. “Not that revenue is not im- their operation and taking a snap- New Markets Tax Credit struc- Southwest Detroit Business Associa- troit business district, more often portant to us, but for the long-term shot of how we operate,” she said. ture, which includes public and tion on a pilot program to bring through ignorance of city codes sustainability of the city of De- As community engagement for private funding. Still to be final- business owners in a 16-block area than deliberate malfeasance. troit, the message to the inspector the long-term land use project be- ized, said Roxbury Group vice into compliance with city codes. The business association is offer- is that if the city’s in receivership gins, Griffin encouraged Detroit’s president James Van Dyke, is the Until Nov. 1, business owners can ing matching grants for improve- it doesn’t matter how many tickets business community to get in- portion of private debt. Also in- make fixes to out-of-compliance ments through the city’s façade im- you wrote yesterday, we’re basi- volved. cluded in the financing is a buildings without paying any fines. provement program, said Matthew cally going to be out of business. So “We’re working to understand $325,000 loan from the New York- “We want to revamp that whole Bihun, program manager at the how do we encourage people to get what current trends have left us based Ford Foundation system so we are encouraging business association. their property values up by being with,” she said. “People have been The Auburn is to include 54 businesses to get into compliance, “Most of the correction orders business friendly?” leaving the city since the 1950s, market-rate apartments plus as opposed to going after and try- target violations that are often- All the efforts fit into the city’s and what we’re seeing is the op- 9,100 square feet of retail. ing to ticket people for not having times simple and come at no cost larger goal to more adeptly man- tion to think about (whether) there Detroit-based Kraemer Design certificates of occupancy (or simi- to the business or property owner age resources, said Toni Griffin, are other uses for parts of city, per- Group is architect. The city’s lar infractions),” Henderson said. but produce a strong visual im- co-leader of the strategic frame- haps uses similar to what was be- brownfield board approved a 20 “We have methods, used strategi- pact,” he said. “Examples include work project. fore, perhaps uses we’ve never percent tax credit for spending of cally, that will help raise property the removal of temporary signage “How do you help focus these thought of before.” up to $8.6 million during its meet- values not only in neighborhoods and tattered awnings.” agencies in being more strategic Nancy Kaffer: (313) 446-0412, ing Wednesday, totaling $1.7 mil- but also for businesses.” Henderson said it’s a different about how do they go out and have [email protected]. lion. Casino: Creighton leaves MGM Grand Detroit casino riding high ■ From Page 3 Detroit-area gamblers and cuts to “If nobody has an advantage on the local casino’s expenses. CLIMBING THE LADDER location or marketing, bricks-and- Creighton said he created a cul- mortar is going to win,” Fine said. For two-and-a-half years, MGM Grand Detroit has been climbing the ranks of the most-profitable casinos owned by ture in which the staff is constant- Las Vegas-based MGM Resorts International Inc. Shown are the company's 12 casinos, ranked by net income in “And MGM has a facility that is far ly thinking of ways to improve the millions of dollars, as reported by MGM in regulatory filings analyzed by Crain's: superior to Greektown and Mo- bottom line — preserving the 30 torCity.” percent profit margin. 2008 2009 2010 (first six months) On the topic of MGM’s income One example, he said, is a staff Bellagio $257.4 Bellagio $157 Bellagio $70.8 compared to its Las Vegas counter- member’s recommendation to re- MGM Grand Las Vegas $170 MGM Grand Las Vegas $123.4 MGM Grand Detroit $57.7 parts, Fine said the results are in cycle more materials — including Mandalay Bay $145 MGM Grand Detroit $90.2 MGM Grand Las Vegas $51.3 part from the local casino’s perfor- pop cans, which weren’t being re- The Mirage $99.1 The Mirage $74.8 Excalibur $20.8 mance and in part from Las Vegas’ turned. Luxor $84.9 Mandalay Bay $65.8 Mandalay Bay $18.7 slide. “Pop cans, in the past, were just Excalibur $84 Excalibur $48 New York-New York $17.4 “Las Vegas is getting pum- being thrown away,” he said. meled,” he said. “While local mar- MGM Grand Detroit $77.7 New York-New York $45.4 Gold Strike Tunica $13.8 “That turned out to be $400,000 to kets are fluctuating based on peo- New York-New York $74.3 Luxor $37.5 The Mirage $13.4 $500,000 a year.” ples’ confidence in the economy, In addition, the size of the staff Monte Carlo $46.8 Gold Strike Tunica $29 Beau Rivage $8.8 Las Vegas is faced with a problem has decreased mostly through at- Circus Circus Las Vegas $33.7 Monte Carlo $16.4 Luxor $8.6 that is more than just the econo- trition, though he would not detail Beau Rivage $22.8 Beau Rivage $16.2 Monte Carlo $3.9 my. There is a supply of casinos the change. Gold Strike Tunica $15 Circus Circus Las Vegas $4 Circus Circus Las Vegas ($3.6) growing far quicker than demand. Sale of the temporary MGM casi- “It’s like what would happen if no also helped performance by share and $28.4 million for Greek- cipal with Lansing-based public MotorCity and Greektown do the Detroit market grew from eliminating the tax liability of $2 town Casino-Hotel for 25.6 percent of relations firm Martin Waymire Ad- not report net income. three to six casinos.” million per year on the property. total revenue, according to rev- vocacy Communications, which rep- The advantage MGM has had in Creighton will take over as CEO “My philosophy has been that enue figures from the Michigan resents the casino. the Detroit market is the facility, and part owner of Vancouver-based you can’t cut your way to prosperi- Gaming Control Board. “Market share will continue to said Randall Fine, a Las Vegas- Gateway Casinos, a company that op- ty, you have to improve the top So far this year, MGM has boost- fluctuate in the Detroit gaming based casino consultant who ran erates nine casinos in Canada. line as well,” said Creighton. ed its share of the gaming market to market, as has been the case since Greektown Casino-Hotel on a one- He’s been in the casino business Through use of specific database 42.5 percent as of July with revenue the casinos opened,” he said. “We year contract that ended Dec. 31. for 20 years and with MGM for five marketing, a new advertising cam- increased to an average monthly are refocusing on improving our “In general, casinos compete on years, also operating the compa- paign and targeted discounts in figure of $49.1 million. Compared to marketing initiatives to improve three things: location, quality of ny’s New York-New York Casino in food and other services, the rev- 2007, MotorCity revenue has de- our guests’ gaming experience.” the bricks-and-mortar, and mar- Las Vegas. MGM will likely re- enue side of the casino has in- creased 5 percent to $37.7 million Net income for MGM increased keting,” said Fine, CEO of The Fine place Creighton internally, but no creased 15 percent since 2007. with 31.8 percent of market share, from $44.3 million during the first Point Group. decision has been made, he said. MGM Grand Detroit ended 2007 and Greektown revenue increased six months of 2008 to $52.8 million In the Detroit market, he said, “This casino is in a good posi- with an average monthly revenue 5.6 percent to $30 million with 25.8 for the same period in 2009, and re- there is little advantage to location tion going forward,” he said. of $42.8 million, taking 38.5 percent percent of market share. cently reported $57.7 million for as all three casinos are near free- “We’re the market leader, and I of the city’s gaming revenue, com- In terms of changes in market the same period of 2010, according ways and easy to get to. Marketing don’t see that changing.” pared to $40 million for MotorCity share, Greektown expects an in- to quarterly income filings by has been equivalent among the Daniel Duggan: (313) 446-0414, Casino-Hotel at 36 percent market crease, said Roger Martin, a prin- MGM Resorts International. three as well. [email protected] 20100830-NEWS--0021-NAT-CCI-CD_-- 8/27/2010 5:47 PM Page 1

August 30, 2010 CRAIN’S DETROIT BUSINESS Page 21 Ritz: New owner works to restore profits by 2011 www.crainsdetroit.com ■ From Page 1 EDITOR-IN-CHIEF Keith E. Crain PUBLISHER Mary Kramer, (313) 446-0399 or signed to complement the bur- [email protected] EXECUTIVE EDITOR Cindy Goodaker, (313) 446- HOTELS FOR SALE OR SOLD gundy hue of the Hyatt Regency 0460 or [email protected] Dearborn nearby and the glass of MANAGING EDITOR Andy Chapelle, (313) 446- Sale prices for hotels have taken a Hotel sale prices plummet 0402 or [email protected] the Ford headquarters. beating in the past couple of years. ASSISTANT MANAGING EDITOR/FOCUS Jennette The average local sale price per The hotel’s management set out Smith, (313) 446-1622 or [email protected] to charge the highest rates in the re- ENTREPRENEURSHIP EDITOR Michelle Darwish room is $14,400, according to Welsh, (313) 446-1621 or [email protected] data from Bethesda, M.D.-based gion and get the glitziest fundrais- as recession batters market COPY DESK CHIEF Gary Piatek, (313) 446-0357 CoStar Group, down from peaks of ers, said Michael O’Callaghan, who or [email protected] $165,000 in the second quarter of worked for a number of area hotels BY DANIEL DUGGAN lio. And while Marriott is work- ASSISTANT NEWS EDITOR Jeff Johnston, (313) 2007 and $216,600 in the third 446-1608 or [email protected] in the early 1990s and is currently CRAIN’S DETROIT BUSINESS ing out a deal on the other 43 Mar- DATA EDITOR Anne Marks, (313) 446-0418 or quarter of 2001. COO of the Detroit Metro Convention riott hotels to remain in the [email protected] The true damage the recession chain, it wants nothing to do with WEB EDITOR Christine Lasek, (313) 446-0473, Recent hotel sales and Visitors Bureau. [email protected] “There was never any question caused local hotels is becoming the Troy property and has re- WEB DEVELOPER Steve Williams, (313) 446- Ritz-Carlton, Dearborn. The 300- that the property was going to be apparent in a recent streak of quested a court order to remove 6059, [email protected] room hotel was purchased in June seemingly unbelievable hotel all Marriott signs by Aug. 30. EDITORIAL SUPPORT Robertta Reiff (313) 446- by a group of investors, to be bigger than, better than, every- 0419, YahNica Crawford, (313) 446-0329 one in the market at that time,” sale prices. But there is an upside to the NEWSROOM (313) 446-0329, FAX (313) 446- managed by Greenwood Hospitality 1687 TIP LINE (313) 446-6766 Group and rebranded as The Henry O’Callaghan said. “The hotel The former Ritz-Carlton in Dear- low costs. in the Marriott group of hotels. community in Dearborn was do- born sold for $3 million compared They offer a deal for long-term REPORTERS Sale price was $3 million. ing well at that time, and the Hy- with the estimated $100 million investors, said Jim Merkel, presi- Daniel Duggan: Covers retail, real estate and hospitality. (313) 446-0414 or Troy Ramada. Sold for $3 million att-Ritz combination was a great replacement cost. The Hyatt Re- dent of RockBridge Partners, an af- [email protected] in November 2009 to New York- one.” gency Dearborn is under contract filiate of Columbus-based Rock- Jay Greene: Covers health care, insurance and the to be sold at $12.5 million com- Bridge Capital LLC. environment. (313) 446-0325 or based Park Avenue Investment It competed with other hotels, in- [email protected]. Advisors LLC. Later re-branded as cluding the then-Westin hotel at the pared with a $150 million replace- RockBridge closed recently on Chad Halcom: Covers law, non-automotive The Met. ment cost. the purchase of the Four Points by manufacturing, defense contracting and Oakland Renaissance Center, creating a ri- and Macomb counties. (313) 446-6796 or By comparison, in 2007, the 251- valry for taking the region’s top And more bargain sales are on Sheraton in Ann Arbor for [email protected]. room Embassy Suites in Troy sold banquets and black-tie events. the way, analysts say. There are $12 million. Tom Henderson: Covers banking, finance, for $18.9 million, and a 160-room technology and biotechnology. (313) 446-0337 or But to be the quality leader, the 11 hotels in default with lenders The price is low enough that [email protected]. Courtyard by Marriott in Ann Arbor in addition to several cases RockBridge can afford to invest Nancy Kaffer: Covers small business, the city of sold for $20.4 million, according to rates had to be high. And the hotel where national operators want to $8.5 million to upgrade to the full- Detroit, Wayne County government. (313) 446- data from Real Capital Analytics. and its massive staff were expen- 0412 or [email protected]. sive to maintain, especially with cut ties with the region. service Sheraton brand. This Bill Shea: Covers media, advertising and “The value of these hotels has comes after Sheraton was ready marketing, entertainment, the business of sports, Pending deals frequent upgrades. and transportation. (313) 446-1626 or just disappeared because they to cut ties with the hotel altogeth- Hyatt Regency Dearborn. Under With the financial struggles of [email protected]. aren’t making a profit,” said er, Merkel said. Nathan Skid: Multimedia reporter. Also covers the contract to be sold for $12 million Ford — and the rest of the automo- food industry. (313) 446-1654, [email protected]. Chuck Skelton, president of Ann “If you are right, you can be re- after owner Ashford Hospitality tive industry — the hotel market Sherri Begin Welch: Covers nonprofits and Trust defaulted on the $32.5 struggled as well. And as the hotel Arbor-based warded handsomely,” said services. (313) 446-1694 or [email protected] million loan on the 772-room hotel. Hospitality Advi- Merkel, whose firm has invest- Dustin Walsh: General assignment. (313) 446- market started to decline locally, the 6042 or [email protected] The buyer is not known. Unlike Ritz began discounting rates for sors Consulting ments in 100 hotels nationally. some of the hotels being sold, the LANSING BUREAU rooms and services to stay competi- Group Inc. “You have to be disciplined, un- Amy Lane: Covers business issues at the Capitol, Hyatt has been profitable, though “They’re not derstand the market and take the telecommunications and utilities. (517) 371- the $5 million net income from tive. 5355, FAX (517) 371-2492, [email protected]. or getting the right risks.” 115 W. Allegan, Suite 220, Lansing 48933. 2008 has dwindled to the point of Compounding things, the Ritz rates they Merkel said there are many “barely making a profit,” according had an additional problem, which ADVERTISING to a broker familiar with the hotel. some have called the “AIG effect” need, they’re cases right now where it’s best to ADVERTISING DIRECTOR Marla Downs, (313) locked into be the second or third owner of a 446-6032 or [email protected] Omni Hotel Detroit Hotel. A for the fallout of insurance giant’s SALES INQUIRIES: (313) 446-6052; FAX (313) potential buyer is lined up, but if documented corporate largess. union con- hotel — not the first — as sale 393-0997 the sale does not close by Oct. 12 tracts that re- prices have dropped far below the ADVERTISING SALES Matthew J. Langan, Lori Many corporations had a knee-jerk Skelton Tournay Liggett, Tamara Rokowski, Kimberly the hotel will close, according to a reaction to shy from any seemingly quire employ- cost to build a comparable hotel. Ronan, Cheryl Rothe, Dale Smolinski corporate spokesperson. Sources luxury spending for fear of public ees to be paid a high wage, and A Courtyard by Marriott hotel or a CLASSIFIED SALES (313)-446-0351 familiar with the 108-room hotel relations problems. the occupancy is down.” Hilton Garden Inn can cost roughly MARKETING MANAGER Irma Clark say the asking price is $6 million. Hotel occupancy in metro De- $90,000 to $100,000 per room to MULTIMEDIA MANAGER Alan Baker, (313) 446- Even though it discounted its 0416 or [email protected] Hilton Suites, Auburn Hills. Under rates to being less than the nearby troit fell to 40 percent in January build, said Skelton, while some- EVENTS MANAGER Nicole LaPointe contract for $5.1 million to an Hyatt and Dearborn Inn, corporate 2009 from 65 percent in August thing on the higher end can ap- MARKETING ARTIST Sylvia Kolaski undisclosed buyer. Owner Ashford SALES SUPPORT Suzanne Janik, YahNica Crawford travelers knew better than to have 2008, according to data from Hen- proach $200,000. Hospitality Trust wrote down the dersonville, Tenn.-based hotel re- The average local sale price, CIRCULATION Candice Yopp, Manager. value of the 224-room hotel by $12 the high-end Ritz name on an ex- MARKETING COORDINATOR Kim Winkler search firm STR. per room, is currently $14,400, ac- million and confirmed the sale in a pense report. PRODUCTION MANAGER Wendy Kobylarz recent conference call. In the past two years, the hotel While the national average for cording to data from Bethesda, PRODUCTION SUPERVISOR Larry Williams hotel occupancy was 45 percent Md.-based CoStar Group, down Hampton Inn Detroit Metro started losing money and became a CUSTOMER SERVICE Airport, Romulus. The 126-room topic in conference calls by Bethes- at the beginning of 2009, a major from peaks of $165,000 in the sec- MAIN NUMBER: Call (877) 824-9374 or write difference between local and na- ond quarter of 2007 and $216,600 [email protected] hotel is under contract to be sold da, M.D.-based Host Hotels & Resorts SUBSCRIPTIONS $59 one year, $98 two years. for $2 million to an undisclosed Inc., which purchased the hotel from tional performance is revenue. in the third quarter of 2001. Out of state, $79 one year, $138 for two years. Metro Detroit revenue per Outside U.S.A., add $48 per year to out-of-state buyer. Ford Land in 1998 for $64.8 million. The bright spot is that hotel oc- rate for surface mail. Call (313) 446-0450 or (877) 824-9374. “This asset is in one of the most available room, a key metric used cupancy is steadily increasing in in the hotel industry, lagged the 2010, according to STR. Local oc- SINGLE COPIES: (877) 824-9374. HOTELS IN TROUBLE challenging markets in the country, REPRINTS: (800) 290-5460, ext. 125; (717) 505- national average in 2009, ending 9701, ext. 125; or ashley.zander@theygsgroup generates negative net operating in- cupancy was 44.5 percent in Jan- New York-based Trepp LLC, which the year with an average of uary and has increased every .com. tracks commercial mortgage- come, and has significant capital TO FIND A DATE A STORY WAS PUBLISHED: $37.43, compared with $53.48 na- month, with July showing (313) 446-0367 or e-mail [email protected]. backed security loans — a very needs,” said Host President and tionally. 61.5 percent occupancy. common type of loan for hotels — CEO W. Edward Walter during an That low level has forced hotels Skelton said occupancy is a CRAIN’S DETROIT BUSINESS IS PUBLISHED BY found that 50.8 percent of the April conference call. CRAIN COMMUNICATIONS INC. into default with lenders and good sign, but more good signs CHAIRMAN Keith E. Crain loans in metro Detroit are in One hotel investor who toured forced national operators to cut are needed. Small-group business PRESIDENT Rance Crain default. Here are hotels listed as the hotel and reviewed the finances SECRETARY Merrilee Crain ties with local hotels unable to has been nearly dried up in every TREASURER Mary Kay Crain being in default and more than 90 said the hotel lost $5 million in 2009. days delinquent: keep their property up to the na- market around the country. Executive Vice President/Operations As hotels are often valued at a William A. Morrow tional standards. “In Detroit, 40 to 50 percent of Group Vice President/Technology, Hyatt Regency Dearborn: multiple of earnings, a net loss de- $32.5 million loan Marriott International Inc. is cut- the hotel business comes from Manufacturing, Circulation stroyed its value. But a sale was a Robert C. Adams Hilton Garden Inn-Detroit: ting ties with ownership of the group meetings,” he said. “While Vice President/Production & Manufacturing must as Ritz told Host that if the ho- Dave Kamis $19.9 million loan Residence Inn in Troy — which occupancy is coming back, it is tel was not sold, Ritz would remove Chief Information Officer Crowne Plaza-Romulus: has been on the company’s list of going to be really hard to make Paul Dalpiaz its name from the hotel. $18.3 million loan underperforming hotels since up that gap of lost meeting busi- Corporate Circulation/Audience Development Tom Conran, a principal with Director Homewood Suites, Troy: 2007. ness with an increase in commer- Kathy Henry new owner Greenwood Hospitality $10.5 million loan The hotel’s owner, Palm Beach- cial travel.” G.D. Crain Jr. Founder (1885-1973) Group, said branding the hotel is Mrs. G.D. Crain Jr. Chairman (1911-1996) Hilton Garden Inn-Plymouth: based Innkeepers USA Trust, filed Daniel Duggan: (313) 446-0414, the key change being made, along EDITORIAL & BUSINESS OFFICES: $9.9 million loan bankruptcy for its 72-hotel portfo- [email protected] 1155 Gratiot Ave., Detroit MI 48207-2732; (313) with a “multimillion dollar” reno- 446-6000 Kingsley Hotel & Suites, Cable address: TWX 248-221-5122 AUTNEW DET vation. Bloomfield Hills: $8.4 million loan CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 He inked an alliance with Marriott ing the first 12 hours that we were the hotel profitable again by 2011, if is published weekly, except for a special issue the Holiday Inn Express-Waterford: third week of January, a special issue the fourth $4.8 million loan International Inc. to make the hotel online (with Marriott), we received not the fourth quarter of 2010. week of August, and no issue the third week of part of the new Autograph collec- 52 reservations,” he said. “We never O’Callaghan hopes he’s right. December by Crain Communications Inc. at 1155 Hampton Inn Detroit Metro Gratiot Ave., Detroit MI 48207-2732. Periodicals Airport, Romulus: $4.2 million tion, through which the hotel was would have received those as a “It’s my hope, and a lot of people postage paid at Detroit, MI and additional mailing renamed The Henry. Ritz.” in this area, that in 12 months we’re offices. POSTMASTER: Send address changes to Wingate Inn-Auburn Hills: CRAIN’S DETROIT BUSINESS, Circulation Not only did that move eliminate Some estimates put the cost to talking about how this hotel was re- Department, P.O. Box 07925, Detroit, MI 48207- $3.9 million loan 9732. GST # 136760444. Printed in U.S.A. the “AIG effect,” Conran said, but it build a similar hotel at $100 million branded and doing better,” he said. Entire contents copyright 2010 by Crain Comfort Inn-Metro Airport, also gives the hotel access to the Communications Inc. All rights reserved. Romulus: $2.5 million loan — 33 times the price paid. Daniel Duggan: (313) 446-0414, Reproduction or use of editorial content in any pool of Marriott customers. “Dur- Conran said he expects to have [email protected] manner without permission is strictly prohibited. 20100830-NEWS--0022-NAT-CCI-CD_-- 8/27/2010 6:52 PM Page 1

Page 22 CRAIN’S DETROIT BUSINESS August 30, 2010 RUMBLINGS WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF AUG. 21-27

The Culture of Debt: How a deposits bought by a new crease over that time. Once-Proud Society Mort- Vanguard: Loss entity, Urban Partnership Ⅲ The Detroit Regional Con- gaged Its Future. Bank. All 15 ShoreBank vention Facility Authority on Second Stage As Yogi Berra might say, branches reopened Monday Thursday chose Detroit- it’s déjà vu all over again. won’t stop DMC under the Urban name. based Albert Kahn Associates In 1992, McTevia wrote as the architect for renova- Bankrupt: acquisition plans RUN FOR GOVERNOR tions to Cobo Center. The au- alumni make A Society thority also entered into an Living in fiscal-year loss of Ⅲ Republican gubernator- agreement with Wells Fargo the Future, nearly $50 million ial candidate Rick Snyder Bank to borrow up to $80 mil- which A won’t affect named 33-year-old state Rep. lion to begin improvements. sounded Nashville-based Vanguard Brian Calley of Portland, a Ⅲ Blue Cross Blue Shield of Inc. 5,000 list the alarm Health Systems Inc.’s plans former banker, as his run- Michigan, Blue Care Network, about debt to acquire Detroit Medical ning mate. Meanwhile, The the University of Michigan can the list of Michi- rankings this month, with and Ameri- Center, the system said. Detroit Regional Chamber said Medical Center and 16 other gan-based compa- University of Michigan ca’s addic- McTevia The hospital chain plans Friday its political action hospitals will begin a quali- S nies on Inc. maga- ranked the top school in the tion to to close the $1.5 billion, committee unanimously en- ty improvement study in zine’s fast-growing 5,000 state. more and more of it. eight-hospital DMC deal dorsed Snyder. October to reduce risk of list and more than a few The list, in its 27th year, The new book, which later this year, Vanguard Ⅲ Detroit Mayor Dave blood clots in hospital pa- Second Stage alumni will ranked Michigan the 29th paints a picture of a loom- Chairman Keith Pitts said in Bing is backing Virg Bernero tients. Blue Cross estimates leap off the page. If you’re best school in the country, ing, as opposed to recently a statement. in the race for Michigan reducing blood clots could not familiar with the term, with Harvard University in the averted, crisis, should be Vanguard posted a governor, saying Bernero cut health costs $5 million second-stage companies are top spot. UM was 27th last available by Sept. 7 on Ama- $49.2 million net loss for the has the commitment and over five years. fast-growing businesses year. zon.com and other online re- 2010 fiscal year that ended experienced leadership to Ⅲ The Business Accelera- with revenue between $1 However, UM placed tailers. The crisis, which June 30 compared with net help move Detroit and the tor Network has announced million and $50 million, fourth among top public McTevia calls a debt bomb, income of $28.6 million the state forward, AP reported. the Accelerate Michigan In- and they’ve been a promi- universities nationally and isn’t inevitable, yet, but he prior year. Ⅲ Reports emerged Fri- novation Competition, nent feature of Crain’s cov- was fourth in the best un- says averting it is going to day that three-term South- which it calls the world’s erage this year. dergraduate business pro- require an end to big gov- field Mayor Brenda largest business plan com- Ann Arbor-based Beal Inc. grams national list. ernment and entitlements. ON THE MOVE Lawrence would be an- petition for early- and sec- charts at 191 with a stagger- UM does not comment on The 215-page book is pub- Ⅲ Rhonda Cohen, general nounced over the weekend ond-stage companies. The ing 1,508 percent growth the rankings. lished by MB Communications manager as Bernero’s lieutenant contest will fund 17 awards, over three years, resulting University of Detroit Mercy LLC of Ortonville. It is $14.95. and COO governor running mate. including a cash grant of in $4.6 million in 2009 rev- placed 30th on list of best re- of MotorCi- $500,000 to one company. enue, according to Inc.’s gional universities. Universi- Blog caters to ‘star’ gazers ty Casino- For information: www. list, the best ranking for a ty of Michigan-Dearborn, Hotel, has OTHER NEWS acceleratemichigan.org. Southeast Michigan or Lawrence Technological Uni- Ⅲ Detroit as Hollywood retired. Co- Ⅲ The number of merger Detroit City Council metro Detroit second-stage versity in Southfield, Eastern East has inspired a society hen’s re- member Kwame Kenyatta company. Beal is followed Michigan University in Ypsi- and acquisition deals in the page-style blog that tracks sponsibili- global automotive supplier has taken a leave from his by Detroit-based DMC Con- lanti and Madonna University celebrities spending time in ties are to position for undisclosed struction, which grew in Livonia also placed. sector rose above pre-reces- the city and suburbs. be shared sion levels during the first health reasons, The Detroit 1,364 percent over three Concordia University in Ann “With the rise of celebri- among oth- Cohen News reported. years to land $3.1 million in Arbor made the list of top half of 2010, but the deals’ Ⅲ ty culture in the media, er casino executives. disclosed value fell to the Southfield-based revenue for 2009, hitting Midwest regional colleges. celebrities rule the head- Ⅲ Glen Tomaszewski, vice Lawrence Technological Uni- slot 216 on the list. UM-Dearborn and lowest mark in years, ac- lines, (so) I decided to start president of Ann Arbor- cording to a PriceWater- versity is extending its 50 Detroit’s own FutureNet Lawrence Tech also placed a blog about local celebs, based Borders Group Inc., has percent tuition discount to Group is ranked lower — spot in the rankings of best un- houseCoopers LLP report re- people like Michigan-based been named interim CFO. leased last week. up to 200 additional stu- 574 — but had an impressive dergrad engineering pro- chefs or Kid Rock, and Holly- He replaces Mark Bierley, dents — either displaced 535 percent growth over grams without a doctoral of- The report said 150 M&A wood celebs who are in who resigned to pursue an- deals worth $1.6 billion were workers or their children three years and $16.3 million fering. Administrators town filming,” wrote Ashlie other employment opportu- — for the fall semester. For in revenue in 2009. believe the ranking helps done in the first six months Merritt in an e-mail to nity, according to Borders. of the year, compared with more information or to ap- There are far too many boost enrollment. Crain’s. Her blog is Ⅲ Dan Dalton, Zana Tomich ply for the reduction, visit second-stage companies in UM-Dearborn was 31st 86 deals worth $6.8 billion in celebsinthed.blogspot.com. and Pauline Pensler have left www.ltu.edu/recovery. the Inc. 5,000, about 120, to and Lawrence Tech 49th of the same period of 2009. “Our state and city have Royal Oak law firm Tomkiw Ⅲ Ⅲ Max Ernst, former exec- list in this space. The full the 172 schools ranked. Detroit Mayor Dave gotten great press since Dalton PLC to become found- utive vice president and list is at www.inc.com; click Bing and his wife, Yvette, Hollywood has come to the ing partners of Dalton Tomich COO of Arbor Drugs, and his on the Inc. 5,000. are moving into the Author returns with new D,” she wrote. & Pensler PLC in Bloomfield Manoogian Mansion after all, family have given $3 mil- Merritt, a Cranbrook Hills. Andrey Tomkiw said he the Detroit Free Press re- lion to William Beaumont Report: UM best in state, book on nation’s debt Kingswood and Dickinson Col- is rebranding to The Tomkiw ported. Hospital in Royal Oak for a Law Group PLC cardiac center. James McTevia, whose lege alum, spent time work- at the same lo- Bing had made a cam- Ⅲ slides nationally overall Bingham Farms firm McTe- ing in D.C. before moving cation and said the parting paign promise that he The Troy-based Kresge The U.S. News & World via & Associates was a pio- here. She has been market- was amiable. would not live in the Foundation has made a Report magazine released neer in turnaround consult- ing the blog via Facebook Manoogian, which costs $1.25 million grant to help its annual best U.S. college ing, has written a new book, and Twitter. tens of thousands of dollars Neighborhood Services Orga- COMPANY NEWS a year in upkeep and has nization convert the former Ⅲ Van Buren Township- been undergoing renova- Michigan Bell Telephone Co. based Visteon Corp. has tions. But on Thursday, the building in Detroit to hous- ing for the city’s homeless. asked the U.S. Bankruptcy mayor said he was persuad- Ⅲ Court in Delaware to ap- ed by city residents to move Ed Boike, chairman of prove a $700 million exit fi- from his rented condo. the Wayne County Board of nancing plan. If the court Ⅲ Gov. Jennifer Granholm Commissioners, will hold a approves at a hearing Tues- named state Appeals Court special meeting this week BEST FROM THE BLOGS to discuss the legality of the day, Visteon plans to exit Judge Alton Thomas Davis to READ THESE POSTS AND MORE AT WWW.CRAINSDETROIT.COM/BLOGS bankruptcy around the end the Michigan Supreme Court county’s 2008 transfer of of September or in early on Thursday following the land to the owners of Pinna- Give lunch a second chance Columnists off base on Detroit October. The parts maker resignation of Justice Eliza- cle Race Course in Huron filed for Chapter 11 protec- beth Weaver. Township, a source famil- We have all felt Outside of Boston tion in May last year. Ⅲ Eastern Michigan Univer- iar with the situation said. ignored“ by a host or and“ Detroit, no one Ⅲ ShoreBank Enterprise sity’s administration and its hostess, given a dirty fork, cares (about Johnny Detroit, a nonprofit that professors remained dead- BITUARIES deserted by a server or Damon). A twilight-years makes small loans primari- locked in contract talks last O underwhelmed by an player and two teams Ⅲ unappreciated cook. A on the fringe of ly to minorities in Detroit, week over salary and Matt Dobek, former vice visit to the same place contention is not great will continue to operate as health-care cost issues. The president of public relations two days running can copy or a vexing a separate entity, according contract expires at mid- for the Detroit Pistons, died produce two different question for great to its president, Ray Waters. night Tuesday. The faculty Aug. 21. He was 51. experiences. baseball minds. Its parent company, Chica- union is seeking a 12.75- Ⅲ Larry King, former pres- go-based ShoreBank Corp., percent salary increase ident of United Auto Workers Reporter Nathan Skid’s Detroit-area restaurant” blog Reporter Bill Shea’s blog on sports, the media,” was shut down Aug. 20, over the next three years, Local 235 in Hamtramck, can be found at www.crainsdetroit.com/skid transportation and marketing can be found with much of its $2.2 billion while the administration died of a heart attack Aug. at www.crainsdetroit.com/shea in assets and $1.5 billion in has proposed a 3 percent in- 19. He was 60. DBpageAD.qxd 8/16/2010 12:04 PM Page 1

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