Local Center Wants More Auto Jobs for South; MEDC Not Happy Casino

20130304-NEWS--0001-NAT-CCI-CD_-- 3/1/2013 6:53 PM Page 1

www.crainsdetroit.com Vol. 29, No. 9 MARCH 4 – 10, 2013 $2 a copy; $59 a year

Page 3 Right-to-work workaround running into flak Fewer regs on tap for alcohol “There is no question that right now, I think that the rules and regulations we have in place Wholesalers opposed; retailers split are a hindrance to market access,” Walker said. BY CHRIS GAUTZ AND NATHAN SKID Some of the changes included in Senate Bill “The thrust of this is to allow more access for CRAIN’S DETROIT BUSINESS 216, sponsored by Sen. Howard Walker, R-Tra- more entrepreneurs to produce more Michigan verse City, would speed up the time it takes to beer, wine and spirits. And provide that prod- A major fight is brewing in Lansing over the transfer a liquor license, allow liquor license uct to Michigan consumers.” way the state handles liquor licenses, as well as transfers between adjacent counties, give small Wholesalers, some of the most powerful lob- a variety of alcohol regulations that supporters breweries the same ability as wineries to sell byists in Lansing, oppose the bill. Retail groups Sequestration equation say will make it easier on small businesses and their product to retailers and customers direct- are split, depending on their area of business. allow the growing craft beer industry to expand ly without using a wholesaler, and allow more for Michigan cuts in Michigan. gas stations to sell alcoholic beverages. See Alcohol, Page 22 Inside Capitol Briefings: Snyder entertains sales tax plan, Page 6 Crain’s Lists Largest hotels, meeting facilities, Page 17 Managers get to core of redevelopment

BY KIRK PINHO This Just In CRAIN’S DETROIT BUSINESS Hotel on the registry Post-World War II, the city of Pontiac was a booming metropolis as General Motors Corp. and the auto industry flourished, bringing with them for historic firehouse site jobs to the Oakland County seat. And then it all wilted. A $23 million boutique ho- Fast-forward six decades, through years of financial turmoil for tel is in the works for the his- GM and the city, and Pontiac may be on the They will come toric firehouse site in down- “ town Detroit. DETROIT VENDORS verge of a renaissance, thanks to the sense of to Pontiac if we fix A development group led Wait for pay may be stability afforded by the rule of emergency fi- by Walter Cohen and his South- longer with an EM, nancial managers in place since 2009. the core. field-based 21 Century Holdings Page 25 Some members of the Pontiac Downtown ” LLC has agreed to pay $1.25 Louis Schimmel million for the 1929 building Business Association and others are crediting renewed interest in that serves as the Detroit Fire the city to improved governance under its three emergency Department headquarters, said Beth Duncomb, director of the managers: Fred Leeb, Michael Stampfler and, most specifically, Detroit Building Authority. Louis Schimmel, the current EM. The five-story building is More than $28 million in commercial investment came to at the corner of Washington Boulevard and Larned Street downtown Pontiac last year, according to Robert Donohue, Cohen, who also owns Arco principal planner for Main Street Oakland County, which helps Construction in Southfield, See Pontiac, Page 24 said $23 million or more is likely to be spent to renovate the property in time for the GLENN TRIEST 2015 auto show. The city’s fire department is set to move to the former MGM Grand Detroit temporary Local center wants more auto jobs for South; MEDC not happy casino. 21 Century Holdings is BY DAVID SEDGWICK suppliers. “The competition is with Mexico, not working with Chicago-based CRAIN NEWS SERVICE “We want the engineers to be here,” the North,” Baron said. “We do not pro- Aparium Hotel Group on the Baron said. “These technicians and engi- mote the idea that anybody should move concept for the 75-80-room Ann Arbor-based Center for Automotive neers are higher-end jobs.” from the North to the South. We are try- boutique hotel. Research is leading an effort to attract Southeast Michigan, with its pool of ing to make the pie bigger.” The sale is scheduled to go more overseas automakers and suppliers engineering talent, has been a magnet for However, the plan is drawing criticism before the Detroit City Coun- to eight Southern states. R&D centers built by foreign automakers locally. cil for approval Tuesday. Center President Jay Baron said the such as Toyota, Nissan and Hyundai. “It’s a wake-up call,” said Tom Man- — Sherri Welch coalition is intended as a counterweight But Baron says the coalition does not ganello, partner at Warner Norcross & Judd to Mexico, which has attracted consider- intend to lure existing centers away from Baron able investment from automakers and Michigan and other Midwest states. See Jobs, Page 26

Honorees will be recognized for excellence in ﬁ nancial or other corporate operational management and their contributions to the community. Deadline: March 15 | www.crainsdetroit.com/nominate NEWSPAPER 20130304-NEWS--0002-NAT-CCI-CD_-- 3/1/2013 3:03 PM Page 1

Page 2 CRAIN’S DETROIT BUSINESS March 4, 2013

MICHIGAN BRIEFS The Spring Arbor promise: We’ll reported. Ⅲ Two Men and a Truck, a nation- pay loans if you can’t afford to Studies: Promising results for Kalamazoo Promise ally franchised moving company Starting with its incoming fresh- based in Delhi Township near man class this fall, Spring Arbor Uni- Studies by the W.E. Upjohn Institute for Employment students who qualify for the The Promise compared Lansing, was awarded a grant of versity will offer to pay back loans Research suggest that the Kalamazoo Promise is help- to those who don’t. up to $350,000 for job creation from the Michigan Strategic Fund, accord- for students after graduation if ing the community as well as the students in the Ⅲ The Promise has steered more Kalamazoo stu- ing to the fund’s website. The com- they cannot earn enough money to Kalamazoo Public Schools, MLive.com reported last dents to in-state public universities, meaning they pany said an office expansion will reach certain financial bench- week. are more likely to stay in Michigan after gradua- marks, the Grand Rapids Business “There’s a steady drumbeat of good news about allow it to hire an additional 125 tion. employees. Journal reported. All students at the Promise” and the studies reinforce that, said Ⅲ It has created more positive media coverage of the 4,000-student Christian college, Michelle Miller-Adams, who works for the Upjohn Ⅲ @properties, the largest Chica- the school district. in Spring Arbor near Jackson, will Institute and is an associate professor at Grand Valley go real estate broker by transac- Ⅲ It appears to have raised the role of education be automatically enrolled in the State University. tions and sales volume, has opened program. The Promise, a scholarship program for gradu- in the community’s identity. an office in New Buffalo near the The program resulted from dis- ates of the district, was introduced in November One study found that the Promise appeared to re- Michigan-Indiana border, the cussions with alumni and from the 2005. The program pays for four years of tuition at duce suspensions among students and increase the Grand Rapids Business Journal re- university’s desire to keep college Michigan’s public colleges and universities and is likelihood that students would pass their classes. ported. The area is popular for sec- affordable, said Malachi Crane, as- funded by anonymous donors. The researchers also found “large improvements” ond-home purchases because it’s sistant vice president for commu- The studies and the findings show: in grades among African-American students, near Lake Michigan and Chicago nications. According to the Spring Ⅲ Academic achievement has improved among Miller-Adams said. and offers outdoor recreation, a Arbor website, tuition is about slower-paced lifestyle and spectac- $22,000 a year and room and board ular views. $7,900. fires and water main breaks, the ported in November about the sized swimming pools, the paper Ⅲ A man who handled finances If graduates make below $20,000 Flint Journal reported. rapidly emerging industry sur- said. at Village Market Food Centers plead- a year, Spring Arbor will make full Kurtz hasn’t decided whether rounding what’s formally known The Michigan Department of Envi- ed guilty last week to stealing reimbursements for their loans water rates will change for the fis- as hydraulic fracturing but com- ronmental Quality said the amount more than $6 million from the quarterly, Crane said. cal year that starts July 1. The city monly known as “fracking.” One of water being used fits within the South Haven-based grocery chain. Christopher Pratt said he con- has raised its average water and thing that bugs opponents of frack- range of safe withdrawals predict- cealed his crime by manipulating sewer rates more than 110 percent ing is the amount of water needed ed by a state of Michigan water re- Flint’s losing up to 30% of water? the books. Apparently, someone since January 2011. Officials said to extract oil and natural gas from source assessment tool. got wise when they noticed he had Could be emergency to manager the increases are due to rising shale. How much, you ask? legacy costs, population loss, rate bought or leased more than 50 One problem with emergency fi- According to public documents cars. Yes, that would make one increases from the Detroit Water and interviews compiled by the MICH-CELLANEOUS nancial managers that perhaps and Sewerage Department and main- suspicious. Traverse City Record-Eagle, three Ⅲ Kent Beverage in Wyoming hasn’t gotten the attention it de- tenance of an aging system. serves is that they tend to deliver a deep fracking wells in Kalkaska and B&B Beer Distributing in Grand Find business news from lot of seriously bad news. Last County used 42 million gallons of Rapids plan to form a joint venture around the state at crainsdetroit week Flint’s emergency manager, Another tale of H2O: 3 fracking water to search for natural gas in called Alliance Beverage Distributing, .com/crainsmichiganbusiness. Ed Kurtz, said that up to 30 percent wells up north used 42M gallons the past two years. The amount which will become the Grand Sign up for Crain's Michigan of the water in the city’s pipes is used to feed the Encana Oil & Gas Rapids area’s largest complete Business e-newsletter at crains being consumed through theft, Crain’s Michigan Business re- wells could fill at least 63 Olympic- beverage wholesaler, MLive.com detroit.com/emailsignup. 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March 4, 2013 CRAIN’S DETROIT BUSINESS Page 3 RTW workaround finding flak Meetings and conventions

Oversight Committee about its Some colleges are resisting extended contracts reasons. And the Taylor School District, BY CHAD HALCOM facing potential fallout from it be- tend their contracts’ security pro- which now has a 10-year union se- CRAIN’S DETROIT BUSINESS fore the Legislature and the courts. visions by nine to 10 years. curity agreement with its teach- In mid-February, the Central Also in late February, trustees at ers, faces a lawsuit in Wayne County Wayne State University’s 1,950 fac- Michigan University board of trustees Ferris State University rejected a re- Circuit Court filed by the Mackinac Makeover for Crowne Plaza ulty and academic staff members declined to authorize its president quest by the Ferris Faculty Associa- Center Legal Foundation challenging are not alone in seeking long-term to negotiate, amend or modify any tion to extend its current labor con- the deal. Pontchartrain is one of many union contracts before Michigan’s current collective bargaining tract, which ends June 30, by five The Freedom to Work Act — right-to-work law takes effect — agreements with several unions years. Michigan’s right-to-work law, as biz rebounds, Page 11 but the tactic has met increased re- before the Michigan Freedom to But Wayne State, which said signed by Gov. Rick Snyder on sistance. Work Act takes effect this month. “yes” last week to its longest-ever Dec. 11 — bars employers from Some employers are shooting The CMU Faculty Association, the labor pact at eight years with the having union security provisions down talk of extended union secu- Graduate Student Union and the uni- American Association of University for closed shops where union Company index rity deals, and others that have versity’s Service Maintenance Union Professors, has been invited to tes- These companies have significant mention in this come to the bargaining table are all had made recent requests to ex- tify Tuesday before the House See Pacts, Page 26 week’s Crain’s Detroit Business: A&M Hospitality ...... 13 Adoba Dearborn Detroit ...... 12 Aloft Detroit ...... 13 Amerilodge Group ...... 13 Amplifinity ...... 4 New seed-stage Associated Food and Petroleum Dealers ...... 22 Associated Petroleum Industries of Michigan . . . . 22 The sequestration equation BAE Systems ...... 23 fund launches, Bookies Bar & Grille ...... 22 Center for Automotive Research ...... 1 The Children’s Center ...... 15 State tally: $500M hit, 10,000 jobs lost by fall Citizens Research Council of Michigan ...... 25 Courtyard by Marriott Detroit Downtown ...... 12 targets young BY CHAD HALCOM MICHIGAN’S LOSSES The Crofoot ...... 15 CRAIN’S DETROIT BUSINESS Crowne Plaza Pontchartrain ...... 11 Here are some of the approximate costs of the sequester this year in Dearborn Inn ...... 12 Michigan could see a total eco- Michigan, according to the White House: tech companies Detroit Historical Museum ...... 15 nomic loss of more than $500 mil- Detroit Innovate ...... 3 lion and at least 10,000 jobs in re- BY TOM HENDERSON Detroit Marriott Renaissance Center ...... 11 search, health care and defense Detroit Metro Convention & Visitors Bureau ...... 15 CRAIN’S DETROIT BUSINESS by October, according to various Detroit Venture Partners ...... 4 A new seed-stage fund called De- industry and government projec- DTE Energy ...... 7 troit Innovate, which intends to help tions of fallout from the federal The Fillmore ...... 15 launch technology companies in budget sequester. Ford Field ...... 15 The sequester — automatic Fountain Bistro ...... 15 Southeast Michigan and invest in Fox Theatre ...... 15 budget cuts of more than $1 tril- $67.7 million existing young companies, is General Dynamics ...... 23 scheduled to be announced today. lion over 10 years, including $85 Pay for approximately 10,000 civilian $42.3 million Goodwill Industries of Greater Detroit ...... 5 The fund has received $5 million billion in fiscal 2013 under the Hampton Inn & Suites ...... 13 federal Budget Control Act of 2011 Department of Primary education, from the New Economy Initiative for Defense employees secondary education, Hockeytown Café/City Theatre ...... 15 — means the Michigan Health & Holiday Inn ...... 12, 13 Southeast Michigan and hopes to who would be teachers and staff for raise at least $10 million from oth- Hospital Association projects a $143 furloughed children with disabilities Howard & Howard Attorneys ...... 22 er state foundations. million loss of funding to the Hyatt Place Detroit Novi ...... 13 Detroit Innovate will be based in state’s 134 hospitals in 2013. Invest Detroit ...... 3 The law, passed in 2011 as a set ITC Holdings ...... 7 Detroit and operate as a sister fund Journal Register ...... 21 of conditions to raise the federal to the $5 million First Step Fund. Michigan Brewers Guild ...... 22 Both operate under the umbrella debt ceiling, mandated a 2 percent Michigan Health & Hospital Association ...... 3 of Invest Detroit, a nonprofit creat- sequester or cut from Medicare re- Michigan Wine and Beer Wholesalers Association . . 1 ed by Business Leaders for Michigan imbursements to health care Mitchell Research & Communications ...... 25 that manages $110 million in funds providers from 2013 to 2021. That Olympia Entertainment ...... 15 and tax credits would be part of a larger round of Planterra ...... 15 to support busi- automatic budget cuts that take ef- $1.7 million $482,000 Pontiac Downtown Business Association ...... 1 fect because Congress didn’t reach $7.4 million The Roxbury Group ...... 13 ness expansion Job search assistance, Law enforcement, a separate expense-cutting deal. Sachs Waldman ...... 26 and real estate Water and air quality referral, placement courts, crime St. Andrew’s Hall ...... 15 “The 2 percent Medicare cut is development in programs, fish and prevention and The Shelter ...... 15 Southeast Mich- significant when you consider wildlife protection education, Sheraton Ann Arbor Hotel ...... 12 igan. that some Michigan hospitals corrections Society of St. Vincent de Paul Detroit ...... 5 Detroit Inno- have a margin of 2 percent,” MHA Stik.com ...... 4 vate will be Vice President Kevin Downey $301,000 TACOM ...... 23 wrote in an email to Crain’s. Thrun Law Firm ...... 26 managed by Ad- Vaccinations “This cut could mean the differ- Todd Enterprises ...... 24 rian Fortino, for children Fortino who has co- ence between a hospital operating Townsend Hotel ...... 12 in the black (versus) in the red. … Trans Inns Management ...... 13 founded several companies includ- University of Michigan ...... 3 Hospitals have been gearing up Source: Whitehouse.gov PHOTOS: ISTOCKPHOTO.COM ing SideCar LLC, a ride-share plat- UM Health System...... 23 form that raised $10 million from for this for some time — but that Warner Norcross & Judd ...... 25 Google Ventures and is headquar- doesn’t mean this won’t translate tional figures is the same for could be lost this budget year by Wayne State University ...... 3 tered in San Francisco; and Ann into real consequences.” Michigan, then the state’s shrink- the University of Michigan, Michigan West Construction Services ...... 24 Arbor-based FlockTag, which has An analysis prepared last Sep- age of actual health care jobs is State University and Wayne State raised $800,000 in angel investing tember by the research firm Tripp closer to 5,000, including more University, according to recent es- to launch its loyalty-card program Umbach for the American Hospital than 2,000 employees at hospitals. timates compiled by those institu- Department index for merchants. Association ranks Michigan An MHA annual report for 2012 tions. The three schools and the BANKRUPTCIES ...... 5 Fortino said he considered mov- eighth among all states with a says hospitals support 222,000 University of Michigan Health Sys- BUSINESS DIARY ...... 19 ing to California to help SideCar possible loss from the Medicare jobs or about 40 percent of all tem collectively employ the equiv- grow. He has an equity stake in the sequester at 17,639 jobs in 2013. health jobs statewide. alent of 52,215 full-time faculty CALENDAR ...... 18 company but decided in June he’d But that figure is computed as a members, and 16 percent of their CAPITOL BRIEFINGS...... 6 rather stay in Michigan after be- total of both health care jobs and Colleges take research hit combined budgets is spent on re- CLASSIFIED ADS ...... 21 ing recruited by Mahendra Rams- some additional indirect and “in- search. JOB FRONT ...... 20 duced” job losses. As much as $78 million more in KEITH CRAIN...... 8 See Fund, Page 26 If the multiplier used in the na- federal research appropriations See Sequester, Page 23 LETTERS...... 8 MARY KRAMER ...... 9 ’ Healthy Delivery Start your day OPINION ...... 8 Want business news from around the state sent THIS WEEK @ Crain’s rounds up news twice a month PEOPLE ...... 20 for the Health Care e-newsletter. Sign to your email by 7 a.m. daily? Sign up for the WWW.CRAINSDETROIT.COM up at crainsdetroit.com/getemail. Crain’s Michigan Morning newsletter at crainsdetroit.com/morning. RUMBLINGS ...... 27 WEEK ON THE WEB ...... 27 20130304-NEWS--0004-NAT-CCI-CD_-- 3/1/2013 5:47 PM Page 1

Page 4 CRAIN’S DETROIT BUSINESS March 4, 2013 Detroit Venture Partners among group funding social media startup Stik.com

BY TOM HENDERSON CRAIN’S DETROIT BUSINESS

Detroit Venture Partners LLC, the venture capital firm run by Josh Need growth When businesses face the organic demands Linkner and co-founded by Dan of growth, purchasing goods, or even to Gilbert, is expected to announce capital? make payroll, Crestmark’s service and today that it has joined in an in- innovative working capital solutions can be vestment round of $2.3 million in the answer. Stik.com, a social media startup that lets friends on Facebook make Providing accounts receivable fi nancing and recommendations to each other on asset-based lending to small- and mid-sized such professional service businesses nationwide for over 16 years. providers as attorneys, doctors, dentists and real estate agents. Contact us today! Detroit Venture Partners, Ann Arbor-based North Coast Technology www.crestmark.com Matt Dekutoski Investors LP and the Michigan Eco- 888.999.8050 Anntreal Hemmingway-Smith nomic Development Corp. each invested $500,000 in the current round of Stik, with Troy-based Au- tomation Alley investing $250,000, and Detroit-based First Step Fund investing $50,000. Silicon Valley’s Draper Associates, which launched Stik with $500,000 in seed money, also invested. The company was founded by Jay Gierak and Nathan Labenz, ARA HOWRANI two Harvard University grads who Detroit natives Nathan Labenz (left) and Jay Gierak founded Stik.com in 2010. It were in the Class of 2006 with Face- now has 10 employees and expects to be cash-flow positive by the end of the book founder Mark Zuckerberg — year. and who represent a homecoming story Linkner hopes will become “I didn’t put much work into it. views and recommendations. more commonplace as the young It was just something to have fun Competitors include zillow.com, tech community in downtown De- with. It was pretty trivial,” Labenz a real estate site; houzz.com, which troit continues to grow. said. focuses on the home renovations Despite funding from Silicon They expected to maybe have a and repair industry; and Valley, Gierak and Labenz, both few dozen of their friends and fam- zocdoc.com, which reviews doctors native Detroiters, wanted to move ily download the app. Within and health care. back home and weeks, it had more than 50,000 Richard Beedon, founder and moved the com- users. The reaction left Labenz and CEO of another online referral pany to Detroit Gierak saying, “Hmm, maybe company, Ann Arbor-based Am- in October. Stik there’s something to this,” but by plifinity Inc., said that there is plen- is housed in the then both had graduated. ty of room in the referral space for Madison Building Gierak was working on initial companies like tech hub owned public offerings for tech compa- Stik to grow. nies as an investment banker for by Gilbert. “I don’t think Morgan Stanley, and Labenz was “They’ve it’s an over- living in Buenos Aires operating found an inter- crowded space his own small business editing re- esting niche,” at all,” he said. Linkner sumes for others, called The Writing Linkner said. “There are plen- “Angie’s List can help you find a Center LLC. ty of opportuni- plumber, but it’s a closed commu- That business provided the final ties for compa- nity and costs you to join. Stik al- incentive to co-found Stik in No- nies who build lows you to give and receive rec- vember 2010. As part of his market- the right tools to ommendations from your friends ing, Labenz asked customers if Beedon without having to pay.” they liked what he had done, to leverage social Both Labenz and Gierak are 29. recommend him to their friends, relationships. Social relationships Gierak grew up in Pleasant Ridge and he’d send each friend a coupon have a big voice, and it’s powerful and Troy and went to University of for $5. to leverage them.” 60$//2)),&(Ř+20(2)),&( Detroit Jesuit High School. Labenz at- The business flourished. Beedon said he had looked into Michigan’s Best Selection tended Chippewa Valley High School “The lesson was, your cus- Stik and likes its model. For Small Professional Ofﬁce or Home Ofﬁce in Clinton Township. The two did- tomers will do your advertising for Amplifinity, which closed on a  Free Design Assistance n’t meet until attending Harvard you for free if you just ask,” he Series A funding round of $3.5 mil-  in the summer of 2002. said. “And if referrals worked for lion last September, signs up com- Customization - Sizes & Finishes finding customers for me, it would  If a Silicon Valley-funded tech panies as clients, then uses a vari- Professional Installation company deciding to move to De- work for finding customers for ety of social media sites to manage  Contemporary or Traditional troit is rare, even rarer is one that others.” their customer-referral programs. in part owes its existence to the De- Stik expects revenue of less than Labenz and Gierak say the move troit Tigers team that made the $500,000 this year, and employs 10 of Stik here wasn’t just out of a de- World Series in 2006. people. It is not yet cash-flow posi- sire to get back to family and roots, In May 2007, Facebook launched tive, but expects to be by year’s but was a tactical decision. end. Facebook Platform, which opened “We can get better talent here The main source of revenue will up the site to independent develop- than we could get in San Francis- be from advertising, with a small- ers for their own for-profit applica- co,” said Gierak. “There are cost tions. Developers were able to sell er source coming from an upgrad- advantages here, but the real ad- their own ads and conduct transac- ed version of the site that is avail- vantage is better talent. There’s tions with visitors, which gave a able for $29 a month. The basic site more talent in San Francisco, but jumpstart to Facebook traffic and is free. there are hundreds of companies FEATURING commerce. “Revenue is our least important It also caught the eye of Labenz, number right now,” said Gierak. trying to grab them. There are few- an avid Tiger fan. He created an “We need to get out in front of as er companies fighting for talent many people as fast as we can.” here.” 6287+),(/'ō752< app called “Who’s Your Tiger?” 129,ō/$.(6,'( that allowed fans to post a photo of The website currently lists al- Tom Henderson: (313) 446-0337, *5$1'5$3,'6 their favorite Tiger on their Face- most 200,000 professionals, who [email protected]. Twitter: www.gormans.com jesper_A book pages. have garnered about 2.5 million re- @tomhenderson2 20130304-NEWS--0005-NAT-CCI-CD_-- 3/1/2013 3:03 PM Page 1

March 4, 2013 CRAIN’S DETROIT BUSINESS Page 5 St. Vincent de Paul seeks a lift from new thrift stores

BY SHERRI WELCH tax holiday this year as contribut- CRAIN’S DETROIT BUSINESS ing factors. But the organization is still con- Responding to demand for thrift fident in thrift. items, the Society of St. Vincent de “It will rebound,” Brazier said. Paul Detroit has opened two new “Typically, when the economy stores and has three more planned goes down, thrift goes up because for this year. people are looking for value, and The Detroit-based nonprofit thrift is value.” leased locations in Monroe and Goodwill Industries of Greater De- southwest Detroit for stores that troit also sees potential growth in opened in December. thrift stores, with much of it com- St. Vincent de Paul is negotiating ing from a growing breed of “trea- the purchase of an undisclosed sure hunters.” property on Detroit’s east side A decade after exiting the thrift about a mile from its location on store business, Goodwill re-entered Kercheval Street. It also is looking it in late 2010 with its first store in for locations in northern Macomb Canton Township. Revenue from County to serve the large popula- the store increased 11 percent last tion of migrant farmworkers there year, said Jeff Ukrainec, director of and in southern Oakland County in donated goods. the Farmington and Southfield ar- In September, Goodwill opened eas, where demand is strong from a second store on Michigan potential customers and clients Avenue in Dearborn, and in Feb- needing free ruary it broke ground on a 15,000- merchandise. square-foot store in Commerce “Part of our Township at Haggerty and Crumb mission is to roads. It’s slated to open in June. serve people who Those stores support Goodwill’s live in poverty,” employment and job training Executive Direc- programs. tor Bill Brazier The aim is to open two stores said. “You’ve got every year, Ukrainec said. to have stores “We’re in conversations with a close to people couple of municipalities in Wash- Brazier who live in tenaw and Oakland counties,” he poverty and also close to where the said. “Our goal is to have another donations are.” store open by the end of the year.” The new store on Detroit’s east Like St. Vincent de Paul, Good- side will replace another location will is looking for a location in in Detroit near the Grosse Pointe southern Oakland County because Park border it recently sold to the the area is not saturated with sec- Cotton family as part of redevelop- ondhand stores and has the population density and income level the ment plans for the area. The non- organization seeks in terms of profit is renting the old site month- donors, Ukrainec said. to-month until it closes on the new For now, Goodwill is locating site, which is within a mile of the stores near donors to establish a Grosse Pointe border and donors supply of donations. It also plans in that community, Brazier said. to obtain additional vans so it can St. Vincent de Paul Detroit, pick up more donations from indi- which has been in the thrift store vidual donors rather than rely business for 115 years, operates 12 almost entirely on Berkley-based stores in Wayne, Oakland and College Hunks Hauling Junk. Macomb counties and one each in But the long-term goal, 10 years St. Clair and Monroe counties. out, would be to have enough dona- Last year, its revenue was close tions coming in to supply stores in to $10 million, Brazier said. That areas where there is demand, even was up slightly from fiscal 2011 if not a strong donor base, revenue of $9.8 million and $9.2 Ukrainec said. million in fiscal 2010. Sherri Welch: (313) 446-1694, The majority of the agency’s rev- [email protected]. Twitter: @sher- enue, or $6 million, came from riwelch thrift store sales last year, Brazier said. The remainder came from donations and grants from the government and other sources to ad- minister a statewide utility BANKRUPTCIES assistance program. The following businesses filed for St. Vincent de Paul has a well- Chapter 11 or Chapter 7 protection in established network for donations U.S. Bankruptcy Court in Detroit Feb. of clothing and other items. It has 22-28. Under Chapter 11, a company drop boxes throughout the region files for reorganization. Chapter 7 in- and receives donations at its volves total liquidation. stores, through drives at work- Ⅲ Greek House Inc., 920 Auburndale places and other locations. Road, Ypsilanti, voluntary Chapter 7. “Our 2012 revenue was up, but Assets and liabilities not available. we’ve seen a recent dropoff since Ⅲ MRJP LLC, 7942 Hallie Drive, Ypsi- October that follows retail trends,” lanti, voluntary Chapter 11. Assets he said, pointing to high gas prices and liabilities not available. and the elimination of the payroll — Ryan Felton 20130304-NEWS--0006-NAT-CCI-CD_-- 3/1/2013 3:04 PM Page 1

Page 6 CRAIN’S DETROIT BUSINESS March 4, 2013 Snyder: Sales tax plan at least shows initiative

Before I could even sit taxed, a concept of which system is the way to go. down completely in my Republicans and many Of the services tax, Snyder said barber’s chair last Capitol Democrats surely aren’t there are some challenges to it and week, I heard an earful Briefings fond, there are bad memo- recalled the controversy it caused about the state talking ries of the last time such a in 2007. about the idea of extend- tax was put into law. Before the small list of services ing the sales tax to ser- In the early morning the state ended up voting to tax, vices — again. hours of a government then-Gov. Jennifer Granholm had Bad news, at least for shutdown in October service businesses, proposed putting a 2-cent tax on 2007, lawmakers cobbled nearly all service businesses. The seems to travel fast. together enough service In one of several ideas phrase “two-penny Jenny” helped businesses to tax that floating around Lansing sink the idea. would balance the state’s to help find the $1.2 bil- Chris Gautz Snyder said that now is not the budget and get them out lion Gov. Rick Snyder is time to attack ideas but to be open of crisis mode. requesting for infrastructure im- to hearing a variety of proposals, The problem was that the ones provements, the money from a tax saying this is part of the normal taxed were mainly all the business on services would be used to offset legislative process of people bring- entities that didn’t have a lobbyist the revenue lost by the state re- ing in different ideas and hearing in the room when lawmakers and moving the 6 percent sales tax on them out. the Granholm administration gasoline purchases. “We should be open to a lot of came up with the list. Aside from the idea of taxing different thoughts,” he said. businesses that aren’t currently Everyone remembers the tax on But whatever path is taken, Sny- baby shoe bronzing, balloon-o- der said, they should all lead to the gram services, palm readers and same result — finding funding for psychics. And the resulting out- the improvement of the state’s in- rage when it was learned things frastructure. like golfing, country club member- “That’s the most important ships and marina docking were somehow left off the list. thing,” he said. The tax was ultimately repealed, Snyder said it’s always impor- and the revenue it was supposed to tant to carefully weigh the results generate ended up coming from of a tax that takes money out of the something even more reviled — private sector. But in this case, he the Michigan Business Tax sur- said, improving the state’s roads, charge. bridges and other infrastructure Snyder said last week that while assets will lead to job creation. he is not on board with the sales “There’s no perfect answer, but tax idea, he is not rejecting it out of there are good answers that should hand, either. be possible out of this,” he said. The plan he prefers, and the one In the end, Snyder said, having he put forward in his budget pre- many ideas to compare is a good sentation last month, is a user fee- thing. based model that will increase the “People are trying to bring solu- 19-cent gasoline tax and the 15-cent tions to the problem, rather than diesel tax to a flat 33 cents per gal- ignore the problem, which is what lon. He would also increase regis- we’ve done for about a decade in tration fees for light vehicles by 60 this state,” he said. “Now we are percent, and for heavy trucks by 25 talking about solutions, and I percent. think that’s progress.” That plan is also largely en- Chris Gautz: (517) 403-4403, dorsed by the business communi- [email protected]. Twitter: ty, which thinks a user fee-based @chrisgautz

Shareholder problems? Changing the Odds in Our Clients’ Favor

Brian E. Etzel Jayson E. Blake Marc L. Newman Kevin O’Shea

E. Powell Milller Richard “Tony” Braun Shareholder and partnership disputes Corporate governance litigation Minority oppression litigation Corporate control contests Breach of fiduciary duty Securities fraud and derivative claims

248-841-2200 millerlawpc.com 20130304-NEWS--0007-NAT-CCI-CD_-- 3/1/2013 5:04 PM Page 1

March 4, 2013 CRAIN’S DETROIT BUSINESS Page 7 ITC expects growth jolt by buying New Orleans energy firm

BY JAY GREENE $4.82 billion in 2011. Through ac- complete in 2015, will provide by internal cash and new debt, Baa2 with Moody’s Investors and CRAIN’S DETROIT BUSINESS quisition and internal growth, transmission lines from DTE’s said ITC CFO Cameron Bready. BBB with Standard and Poor’s. ITC now operates in seven states wind power farms to its distribu- Bready led ITC in an operational ITC stock was trading at $84.01 Novi-based ITC Holdings Corp., with 500 employees and 500 con- tion system. improvement program that re- Friday afternoon, near the 52-week the nation’s largest independent tractors. The 140-mile Thumb Loop will duced costs by 8 percent, or $50 high. The 52-week range was $66.30 electricity transmission compa- Traditionally, utility companies feature 345 kilovolt transmission million, and overhauled its ap- to $84.31. ny, is working to prepare to dou- like DTE used to own the power lines, much higher than older proach to investor relations. ITC Jay Greene: (313) 446-0325, ble its size this year when it ac- plants, the large high-voltage trans- transmission lines of the 125-138 Holdings also has maintained [email protected]. Twitter: quires the transmission business mission lines and towers along with kV variety. The project, expected strong investment grade ratings of @jaybgreene of Entergy Corp., a New Orleans- the neighborhood distribution lines to cost $510 million, will accommo- based energy company, in a $1.8 that feed power into homes and date future wind projects in Tusco- billion deal. businesses. ITC’s business model is la, Huron, Sanilac and St. Clair Pending expected regulatory to own the transmission lines, free- counties. approval by the Federal Energy ing utility companies to operating In several line reconstruction Regulatory Commission and state power plants and the smaller distri- projects that run 209 miles north to regulators this summer or early bution line systems. south in the eastern and western fall, ITC will grow to more than Dave Meador, CFO of DTE, said parts of Michigan, COO Jon Jipping 30,000 transmission miles in 12 the sale of ITC helped DTE spend said, ITC is replacing 50-year-old states, 1,300 employees and pro- capital improvement money in transmission lines from lower volt- jected net plant, property and other areas than its aging trans- age (138 kV) to modern high voltage equipment assets of more than mission lines. lines that can operate at 230 kV that $6.3 billion. “The sale allowed us to make could reduce energy losses from 8-9 “We reached out to Entergy sev- significant environmental invest- percent, based on national aver- eral years ago to set the seed in ments in our coal plants, aging in- ages, to about 1-2 percent. place. As they frastructure and other internal Starting in 2014, Jipping said, reviewed their capital needs for the rest of DTE,” Southeast Michigan is scheduled business plans, Meador said. “We plowed that for transmission upgrades. ITC of- they came to the money back into our business.” ficials said those projects are in conclusion that Meador said ITC also invested the planning phases and no fur- they wanted to $3.2 billion in transmission line up- ther information is available be- divest their grades and maintenance with $1.8 cause they haven’t been approved transmission billion spent in Michigan since 2003 by regulators. systems,” said to improve reliability and safety Joe Welch, CEO and decrease operating costs. of ITC, who Improvement from within Welch added that ITC ITC’s five-year, $4.2 billion capi- is in various stages of talks with Thumb Loop project tal investment plan, which it pro- other utility companies. Greg Ioanidis, president of ITC jects to drive 15 percent to 17 per- In fiscal 2012 ended Dec. 31, Michigan, said ITC’s Michigan cent compound annual growth in ITC’s revenue grew 9.6 percent to Thumb Loop project, which will be earnings per share, will be funded $830.5 million from $757.4 million in 2011. Net income rose 9.4 percent to $187.9 million, or $3.60 per share, in 2012 from $171.7 million, or $3.31 per share, the year before. ITC Holdings has several regu- lated operating subsidiaries that include ITC Michigan, ITCTransmis- sion, Michigan Electric Transmission Co., ITC Midwest and ITC Great Plains. Neil Kalton, senior equity analyst at Wells Fargo in St. Louis, said the Entergy acquisition and other potential deals will help ITC continue its steady growth. “There could be a little strain on management in absorbing En- tergy, and we believe if they ac- quire the assets, most employees in the South will keep their jobs and there will be more hiring because of the growth projections,” Kalton said. Under the proposed transac- tion, Entergy will sell its transmission business into a newly formed entity, Mid South Transco LLC, which will merge into an ITC subsidiary. Entergy shareholders will receive 50.1 percent of the shares of the new company, and ITC shareholders will get the remaining 49.9 percent. 10 years and counting ITC was born in February 2003, when a group of New York-based private equity investors acquired DTE Energy Co.’s transmission subsidiary in Michigan for $621 million. The Michigan company, which celebrated its 10th anniversary Feb. 28, has grown under Welch, 64, into a publicly traded company (NYSE: ITC) with more than $4 billion in market capitalization and $5.56 billion in total assets in 2012, a 15 percent increase from 20130304-NEWS--0008-NAT-CCI-CD_-- 3/1/2013 5:46 PM Page 1

Page 8 CRAIN’S DETROIT BUSINESS March 4, 2013 OPINION MARY KRAMER Pontiac re-emerged Gilbert plan worth repeating We’re becoming ac- Chamber’s Detroit Poli- son site. He also outlined other in- customed to big an- cy Conference last vestments and the vision for con- nouncements from week, could come up necting Campus Martius to the Dan Gilbert: He’s buy- with only one other Greektown Casino-Hotel, which ing an office building phenomenon that be- Gilbert is trying to buy. from its emergency one day, making a bid gins to rival Gilbert: This is not a five or 10-year plan, for the Greektown Tony Hsieh (pro- Cullen said. We’re talking two to n emergency manager? Or no emergency manager. Casino-Hotel the next. nounced SHAY), CEO of three years. That is the question — and we are tired of it. At last check, he owns Zappos, the online shoe Maybe Hsieh and Gilbert are The drawn-out drama over Detroit’s finances con- 3 million square feet of seller. onto something that could save A office and commercial The Silicon Valley tinues, with Gov. Rick Snyder confirming the city’s fi- other cities. If young talent wants space — not to mention veteran bought the old an urban experience, why not buy nancial crisis last Friday while allowing the 10-day appeal a number of parking Las Vegas City Hall in a under-valued office towers with process to unfold before naming a financial manager. decks and lots — with rundown part of town iconic architectural features to Meanwhile, the anti-manager rhetoric was escalating, with more of both to come. north of The Strip, and moved his create a new kind of corporate two mayoral candidates accusing the state of fudging numbers Gilbert isn’t kidding when he company and 2,000 employees park? says there was a “skyscraper sale” there. Coffee shops, bars and resi- and a third, Mike Duggan, announcing that EMs have not The key long term for Detroit in downtown Detroit. In just over dential rehab followed. worked in Pontiac. will be whether the city can also two years, he has created a corpo- Hsieh told an interviewer for rebuild stronger neighborhoods Au contraire. As Kirk Pinho reports on Page 1, Pontiac’s rate campus at a bargain-base- public radio’s “Marketplace” show beyond downtown and Midtown. ment price, perhaps a little north that he wanted to create an “NYU- no-nonsense, straight-talking emergency manager, Louis But most people I know believe of $70 million. approach, where the campus kind Schimmel, has reduced costs and improved basic services — that despite the city’s financial dis- Even if fix-up costs are twice as of blends in with the city and you all while creating a foundation for new business investment in tress, they are the most optimistic much, it’s still a bargain compared can’t really tell where one begins about Detroit as they’ve been in a the city. Democratic Oakland County Treasurer Andy Meis- to new construction. In 2004, when and the other ends.” ner even applauds Schimmel’s work. Visteon Corp. created its “Visteon Sound familiar? long, long time. Pontiac suffered from the same kinds of economic forces Village” corporate campus on In his presentation that served as Detroit, albeit on a smaller stage. An EM can work for De- greenfields in Van Buren Town- as a warm-up to Florida’s address Mary Kramer is publisher of ship, near I-275 and Ecorse Road, it last week, Matt Cullen, a team Crain's Detroit Business. Catch her troit, too. spent at least $250 million. leader in Gilbert’s development take on business news at 6:10 a.m. Urbanist Richard Florida be- strategy, announced the company Mondays on the Paul W. Smith show lieves it may be unprecedented in would have a global competition to on WJR AM 760 and in her blog at In praise of ‘The buck stops here’ the United States. Florida, who create an exciting design for a www.crainsdetroit.com/kramer. spoke at the Detroit Regional mixed-use building on the old Hud- E-mail her at [email protected]. Accountability is pretty scarce in corporate and public life. That may be why two examples of people stepping up to accept blame — and consequences — are so striking. First, just a day after a blast leveled a Royal Oak home and killed its occupant, Consumers Energy announced that its work on a gas line likely caused the Wednesday explosion. LETTERS Consumers could have dragged out an investigation. After all, Consumers was sued in 2011 over an explosion that de- stroyed a furniture store in Wayne, killing two people. The Don’t ignore no-fault reform Michigan Public Service Commission investigation has not yet completed its review, the Detroit Free Press reported last week. Editor: faced multiple lifetime, unlimited Crain’s Detroit Business I am greatly disappointed to catastrophic claims, as mandated But last week’s quick admission by Consumers no doubt welcomes letters to the editor. read the Feb. 25 opinion on poten- by Michigan’s no-fault law. The eased the minds of residents and businesses near that busy All letters will be considered for Woodward Avenue corridor. tial no-fault reforms (“No-fault re- publication, provided they are MCCA was enacted to provide that form: No data, no deal”). protection, because five years into The second mea culpa was the ousting last week of signed and do not defame Rather than analyzing the facts individuals or organizations. the law the private market for re- Groupon founder Andrew Mason, who was replaced, tem- surrounding the structure, pur- Letters may be edited for length insurance was unable or unwilling porarily, by Detroit-born Chairman Eric Lefkofsky and board pose and operations of the Michi- and clarity. to assume the “unlimited” liability member Ted Leonsis. The daily-deal digital coupon company, gan Catastrophic Claims Associa- Write: Editor, Crain’s Detroit created by Michigan’s system. which went public in November 2011 with $26 shares, opened tion as well as the need for Business, 1155 Gratiot Ave., To protect the financial solven- at $4.62 last Friday, the day after Mason was fired. substantive reforms to Michigan’s Detroit, MI 48207-2997. cy of the system, the act insulated unique automobile no-fault insur- the MCCA from politically moti- According to our sister pub Crain’s Chicago Business, Ma- Email: [email protected] ance system, Crain’s chose to join vated efforts to undermine these son tweeted his followers a lengthy reaction to his firing, not- special-interest opponents to over- protections. As a result, the MCCA ing that the company had been tanking and he was “getting in simplify and demagogue an impor- tion and has all its dealing directly is exempted in statute from both the way” of a second chance. “As CEO, I am accountable.” tant public policy issue. with insurance companies, not the the Open Meetings Act and the Of course, he also likened his tenure to making it through a The MCCA was organized under general public. The purpose of the Freedom of Information Act. level of a video game without dying. Which may explain a lot Public Act No. 136 of 1978 as an un- MCCA was to ensure the solvency of insurance companies when they See Letters, Page 9 about the company’s troubles. incorporated nonprofit associa-

KEITH CRAIN: Thank goodness for a few in our city Just in case you thought that You might say to vestment going on to- bicycles, there could not be a bet- Grosse Pointes. They believe in there was no redeeming value to yourself that Detroit is a day. ter place than Detroit. our community. Detroit, I can’t help but remind bad investment. My Make no mistake And can anyone ignore Dan There are plenty more where you that there are quite a few folks guess is that you’d be that, if you have a line Gilbert? He is making a huge in- these folks came from. who are investing millions of dol- wrong. OK, it might not of credit or lots of cash, vestment in downtown Detroit. I For them, the glass is half full, lars in our city yesterday, today have the highest prices you can find some bar- don’t think anyone thinks that not half empty. in the nation and it may gains in Southeastern he’s not a successful and smart and, yes, tomorrow. Are these business executives a well be that there are Michigan. My favorite businessman. Does he know some- You might ask yourself: What do lot smarter than the rest of us? some great values in startup in the nation thing that the rest of us don’t? Probably not, except that they they see that no one else sees? our community. That has to be Shinola, a Nope, he just has a big belief that Well, the answer is that we are happens to be just fine. brand-new watch com- his investments are going to pay have the faith in the community talking about folks who have the If you don’t have faith pany that took a look at big dividends. that has encouraged them to invest entrepreneur spirit and a very in our community, you the entire U.S. and de- And a few weeks ago, Crain’s heavily in our city. strong belief that there are some aren’t going to be investing at any cided that if you were going to be had a big story on the Cotton fami- Who knows, it could become a real values in our city. price, and there is a whole lot of in- marketing watches and high-end ly and their investments in the trend. 20130304-NEWS--0009-NAT-CCI-CD_-- 3/1/2013 11:04 AM Page 1

March 4, 2013 CRAIN’S DETROIT BUSINESS Page 9

has shrunk city services, closed nibalize Detroit businesses. But I victim of moves by the state, such get with probably a surplus, but LETTERS CONTINUED rec centers and parks, cut city guess the state policy was the as unequal tax revenue sharing the services will have to be so ■ From Page 8 workers and pay and benefits, etc., city’s fault as well. from the casinos, veto of the re- obliterated that mass exodus from and yet it is always portrayed as In 1997, the city was more or less gional transit bill and the cutting the city will continue, leading to All of the resources of the MCCA woefully underperforming and blackmailed into an agreement of brownfield, historical site and another imbalanced budget. are dedicated by law to reimburs- mostly to blame for the current with the state that forced a reduc- film tax incentives. You see, while expenses are a ing insurance companies for pay- condition of its finances. tion in city income taxes in ex- This set up the inequality in the huge problem in the city, the main ments made on behalf of injured The process started long ago. change for keeping revenue shar- budget we see today. Much of it is issue is and will continue to be customers. Whether the MCCA ex- White flight in the ’50s-’70s robbed ing at the current level for 10 years way beyond the city’s control but growth and the ability to generate ists or not is immaterial to the the city of tax base. But I guess the as opposed to losing more in rev- is within the state government’s revenue to run the city. But I obligation an insurance company city was to blame for all that. enue sharing than the loss in low- control. Is there little wonder it guess that’s the city’s fault, too. has to provide these benefits. White flight was further exacer- ering the income tax would have would create the financial crisis The one thing the column got Michigan’s no-fault system has bated by unscrupulous Realtors caused. The state decided it could we see in the city today? right is saying that to bring up the facts about share in revenue shar- served our citizens well since its in- and developers from the suburbs. not afford to honor its agreement Now this same state government ing will just bring up the excuse ception. However, any objective ob- But I guess the city was to blame with the city. This led to hundreds will take advantage of this crisis to server will recognize that this sys- for another round of assaults on for that. of millions in lost revenue. But I suspend democracy in the city and tem needs serious reforms to keep it the city’s revenue. But I guess the The state participated as well in guess somehow the city is still to take over and force more whole- around for the next 40 years. That is city is to blame for that as well. applying generous tax abatements blame for this. sale changes. why reform is supported by our gov- Michael Turner for suburban communities to can- The city has continued to be the This will lead to a balanced bud- Grosse Pointe Woods ernor, the state insurance commissioner, the Michigan Chamber of Commerce and others. It is important not to fall victim to the tactics of well-financed special interests. Forestalling the de- bate on no-fault reform until the dis- closure of yet-to-be-specified actuarial data is like refusing to put out a house fire until you determine whether it was started by accident or on purpose. Pete Kuhnmuench Executive director Insurance Institute of Michigan

EM foes forget about the rights of others in state

Editor: With regard to the letter “Rea- sons why PA 4 is so bad” (Feb. 25), I wonder if “defenders of democracy” who are so opposed to emergency managers are also con- cerned about the democratic rights of Michiganians from com- petently managed communities. I suspect that conscripting the taxes of these Michiganians to fund imprudent entitlements and incompetent governance in failing cities and expecting citizen- investors who loaned these cities money to forgive the debt are per- fectly acceptable remedies. For many who oppose the emergency manager law, democracy seems to mean that some are more equal than others. Thomas Doran Plymouth Fiscal sanity no dream

Editor: Why is it that no one in public office, the media and academia ever discusses the ramifications of the bankruptcy alternative? Shame on the writer of “Reasons YOUR BUSINESS ISN’T JUST A JOB — IT’S A PASSION. why PA 4 is so bad” (Feb. 25) for You get to know your not even mentioning the dire alter- customers, treat them fairly, and build relationships. Don’t you deserve that same kind native to PA 4. Or is that he, like too many others, thinks that a bal- of treatment from your bank? With Citizens Bank, you’ll get the right solutions and anced budget is a fairy tale, or that products from people with the experience to know what’s right. After all, we’ve been all we need to do is keep raising taxes and hope someone stays around over 140 years, helping businesses just like yours grow. So if you want a bank around to pay them? that shares your passion, call us. BECAUSE WITH US, IT’S PERSONAL. Walt Johnson Rochester Hills Unfair to solely blame $)&$,*/(4"7*/(4r-0"/4-*/&40'$3&%*5r.&3$)"/54&37*$&4 53&"463:."/"(&.&/5r41&$*"-5:'*/"/$*/(r8&"-5)."/"(&.&/5 city for its troubles

Editor: 1-800-946-2264 In response to Mary Kramer’s Feb. 11 Crain’s Michigan Business CITIZENSBANKING.COM/BUSINESS column, “Blame game easy to lose”: In the past 10 years, the city DBpageAD_DBpageAD.qxd 2/27/2013 9:29 AM Page 1 20130304-NEWS--0011-NAT-CCI-CD_-- 3/1/2013 10:43 AM Page 1

March 4, 2013 CRAIN’S DETROIT BUSINESS Page 11

REPORTER’S NOTEBOOK Sherri Welch GOING UNCONVENTIONAL writes about nonprofits, Spaces that may lift meetings services, retail out of the bored room, Page 15 and hospitality. Call (313) 446-1694 or write [email protected] meetings and conventions

Sherri Welch Future bright for events While Detroit’s schedule for major Renovations registry meetings and conventions is about even with last year’s, the best is yet to come, according to the Detroit Metro Convention & Visitors Bureau. Hotels upgrade to ride a rebound in occupancy At least seven or eight new major conventions are headed to Cobo Center this year, and that number is BY SHERRI WELCH expected to grow to 15-20 in future CRAIN’S DETROIT BUSINESS years, said Bill Bohde, senior vice president, sales and marketing for the number of metro Detroit ho- bureau. tels are booked for renova- A tions this year. Among them: Industry experts say financ- Ⅲ The Church of Our Lord Jesus Christ ing for new hotel construction of Apostolic Faith Inc. international is still tough to come by, but convention in July, bringing 6,500 funding a hotel makeover is an people. easier sell. Ⅲ The Society of Tribologists and Among several local hotel Lubrication Engineers annual meeting projects in the works is a and exhibition in May, bringing 1,200. planned renovation of the Detroit Tribologists work with interacting surfaces in relative motion, such as in Marriott Renaissance Center’s bearings or gears. 1,298 rooms and 100,000 square feet of meeting space, set to be- Ⅲ The Progressive National Baptist gin in the fourth quarter and Convention in August, bringing 8,000. wrap up by the end of the first Ⅲ The National Alliance of Black quarter next year. School Educators annual convention in The actual timetable will de- November, bringing 3,500. pend on when the voluminous Looking ahead to 2015, among the amounts of draperies, wall cov- conferences coming to Detroit is the erings, artwork, bedding, furni- American Society of Association ture and carpeting — which is Executives convention, also known as on order from the “Super Bowl” of conferences since it brings executives and meeting BUILDING UP England — planners, alike. And expect about come in, said 60,000 people coming to Detroit in New hotel the Marriott’s 2020 for the Alcoholics Anonymous projects on the director of grow, Page 13 convention, which is held every five sales and mar- years. keting, Judy Several things are helping entice new Booth. groups to Detroit, Bohde said. The improvements will be A few years ago, there were just under the first at the corporate-man- 2,500 rooms in the downtown area, aged property since 2002. GLENN TRIEST making it difficult to accommodate the Marriott “truly wants to be a Mike Kralevic, general manager of the Crowne Plaza Pontchartrain, oversees a $5 million renovation of the hotel, slated to open this spring. needs of large groups. But at the end part of what’s happening in the of 2008, Greektown Casino-Hotel, city of Detroit,” Booth said. MGM Grand Detroit, MotorCity Casino Marriott declined to give a ued growth in business traveler Detroit also increased its av- Hotel, the Westin Book Cadillac and cost estimate for the renovation and international visitors com- erage daily rates last year by Doubletree Guest Suites Fort Shelby so early on, but Ann Arbor- ing to the city, said Bill Bohde, 3.7 percent to $79.51, but it brought online an additional 1,850 based hospitality consultant the bureau’s senior vice presi- slightly lagged the national in- rooms, Bohde said. Charles Skelton estimates it will dent of sales. crease of 4.2 percent, according Improvements at Cobo Center and run $40 million to $50 million to The total number of rooms to Smith Travel Research. downtown are leading to renewed update the state’s largest hotel. sold in the Detroit market last Detroit has the lowest average interest in Detroit and commitments The national brand is en- year was 9.3 million, the high- daily room rate among the top 25 into the future years. couraged by the trends it’s see- est ever in this market, said lodging markets in the country, “Our story just keeps getting better,” ing in increased business Jan Freitag, senior vice presi- not including Las Vegas. That Bohde said. booked for the Detroit hotel, dent at Smith Travel. could give the market here a The CVB is now spreading the news of Booth said, beginning in 2014 Occupancy rates at Ann Ar- sales advantage, Freitag said. the new hockey arena and and stretching out to 2020. bor hotels rose 2.7 percent to 68.3 “Your (convention and visi- entertainment and retail district “Looking forward, we see percent last year, following a 9.5 tors bureau) can now can go planned by the Ilitch family, owner of this positive growth in group percent jump in 2011. The Ann out and say if you want to be in the Red Wings and Tigers. bookings that helps to substan- cent in 2011 to 61.9 percent last Arbor market last year outpaced a major metro with good value It’s also talking about the M-1 Rail tiate that (renovation) commit- year, according to Henderson- Chicago, with its 66.8 percent oc- ... and good hotel stock, we project planned for Woodward Avenue, ment,” she said. “And having a ville, Tenn.-based Smith Travel Re- cupancy rate, according to have the lowest (average daily the Riverwalk, new hotels such as the strong convention center, you search Inc. That compares with Smith Travel. rate),” he said. Crowne Plaza Pontchartrain opening become a much more competi- 58.2 percent in 2007 and 54.6 per- Overall, the U.S. hotel indus- this spring and Aloft Detroit opening tive city going after convention cent in 2008. The Detroit Metro try had a good year in 2012, and Renovation push next year and the competitive pricing and group business.” Convention & Visitors Bureau fore- Detroit was slightly better on of the market. casts that occupancy this year revenue per available room Over the past few years, “We market Detroit right now as a very will be flat, but average daily which rose 7.1 percent to $49.20, tighter financing has led major affordable destination,” Bohde said. Occupancy rates rebound rates will begin to climb by 3.5 Freitag said. brands such as Marriott, Hamp- The city boasts the second lowest While bookings crashed with percent to 4 percent. Revenue per available room ton Inn and Hilton to push their travel tax rate in the country in terms the economy, they’ve rebound- Occupancy and demand for Detroit hotels rose 7.1 per- franchisees to upgrade their of hotel room and rental car taxes, ed the past two to three years. should go up again after 2015 cent in 2012 to $49.20. Ann Ar- properties to ensure they are second only to Portland, Oregon, he Occupancy rates for hotels in with the completion of Cobo bor hotels saw a 7.4 percent in- positioned to capitalize on re- said. metro Detroit rose from 59.9 per- Center renovations and contin- crease to $63.42. See Hotels, Page 12 20130304-NEWS--0012-NAT-CCI-CD_-- 3/1/2013 10:43 AM Page 1

Page 12 CRAIN’S DETROIT BUSINESS March 4, 2013 Focus: Meetings and Conventions Hotels: Registering renovations ■ From Page 11

bounding occupancy rates and to charge higher average daily rates, said Skelton, president of Hospitali- Check in on other renovation projects ty Advisors Consulting Group Inc. Among the other hotels with also slated for renovations, which Financing for new construction planned or recently completed are set to be completed in March, is tough to obtain, but financing is renovation projects: and new floors and counters will available for renovations, he said. The Holiday Inn near the Uni- be installed in the Townsend Bak- And with increasing occupancy versity of Michigan in Ann Arbor is ery. The Townsend declined to over the past few years, hotel own- in the midst disclose what it is spending on ers are launching projects because of a $4 mil- the renovations. they are more comfortable they’ll lion renova- The Sheraton Ann Arbor Hotel see a payback. tion of the in- completed a $750,000 renovation Once the major brands launch terior and of 15,000 square feet of ballroom renovations, everyone else follows exterior. meeting space in June 2012. That to remain competitive, Skelton Plans in- followed an earlier $8.25 million said. clude up- renovation of the hotel’s interior Across the street from the De- dates to the ballroom, 225 guest and exterior completed in 2011. troit Marriott, the Crowne Plaza De- rooms and suites, lobby and the That work included updates to troit Downtown Convention Center Guy Hollerin’s bar and restaurant. the 197 guest rooms, corridors, has a new owner/operator — the Expected to be completed by July. lobby, heating and cooling sys- Mexican and European investors Dearborn Inn, a Marriott Hotel tem, exterior and landscaping. group Pontchartrain Detroit Hotel in November completed interior Courtyard by Marriott Detroit LLC — and is finishing a $5 million- renovations and installed new Downtown plans around Labor plus renovation for a planned windows in its five historic Day to be- opening this spring. homes and 20 guest rooms. Plans gin a $1 The hotel plans to continue to call for restoring and painting the million use the Pontchartrain name on its homes’ exteriors this spring, renova- fliers, brochures and other materi- bringing the total project cost to tion of its als, operating as the Crowne Plaza more than $500,000. lobby and Pontchartrain, said General Manag- The Townsend Hotel in Birm- cosmetic er Mike Kralevic, who returned to ingham completed renovations of improve- Detroit after serving as general its tea lobby in January and has ments of its adjacent restaurant. manager of Crowne Plaza hotels in launched renovations of its 10 ho- The renovation should be com- Chicago and Minneapolis. tel suites, set to be completed this plete within 60 days. Before those positions, he man- year. The hotel’s Rugby Grille is — Sherri Welch aged the Hotel St. Regis in Detroit for 10 years and, before that, the former Michigan Inn in Southfield. — which boasts 772 rooms, 62,000 per year, Skelton said. To prepare for its opening, the square feet of meeting space and a Pontchartrain is getting new heat- rooftop ballroom — as the Adoba ing and cooling systems; rebuilt el- Dearborn Detroit. Jones Lang LaSalle Going after higher rates evators; new, blue-tinted windows; is leading development of the plan With renovations completed, new signs; upgraded bathrooms in for capital improvements, under way or planned, hotel own- its 367 rooms; new carpeting and Pumphrey said. ers and operators need to increase The firm worth wall coverings; a new boardroom Atmosphere Hospitality plans to average daily rates to help recoup off the main lobby; refurbished renovate in several phases to get their investments and sustain op- restaurant and bar areas; and oth- the property to LEED (Leadership erations, industry experts said. listening to er updates. in Energy and Environmental De- “Hoteliers are trying to get the Future enhancements include sign) Silver certification within 18- most amount of money possible. ... the reopening of the upscale Top of 24 months, Pumphrey said. In order to give good services and is the firm that the Pontch restaurant and a sky In the first phase, Atmosphere is have renovated services, they need tunnel from the hotel to Cobo Cen- replacing the carpeting in the ho- money to make that all happen,” SM ter, Kralevic said. tel’s public areas and meeting Freitag said. listens to you. The hotel plans this month to spaces and upgrading the televi- Despite its high 2012 occupancy hire 50-75 workers. sions in the rooms with flat rate, Ann Arbor was unable to cap- “We need to work on the service screens, she said. ture an increased average daily — Crowne Plaza is known to be “We know that immediately rate, Skelton said. good service, and the Pontchar- SM needs to be done,” she said. “I’ve “In some of the bigger markets train was known to be providing Talk to Foley. We’re listening. heard more about those TVs than around the country, you get much good service at one time,” Kralevic Elvis Presley sightings.” more rapid rate said. “We’ll expand on that.” Atmosphere is still identifying growth because The hotel already is getting calls all of the renovations, but you have more from local companies such as Pumphrey said it’s important to When our Detroit clients needed a national law firm commercial de- Chrysler Group LLC inquiring about show staff, clients and the commu- mand,” he said. that provides trusted local advisors with top-tier legal booking rooms for next year’s nity some immediate changes tak- Business trav- skills, Foley delivered. That’s why our attorneys and North American International Auto ing place. elers are not as practices are consistently recognized for excellence Show, Kralevic said. Atmosphere hopes to position The hotel also expects to provide Adoba Dearborn Detroit as the sensitive to by our clients and industry experts.* about 100 rooms for 10-12 days for most sustainable “green” meeting rates as groups attendees of the Amateur Athletic and event space in the Midwest. and tourists are, Learn more about how Foley can add value to your business. Contact Union Junior Olympic Games at Cobo “When we get through the sales Skelton Skelton said. “A tourist will change brands Detroit Office Managing Partner Daljit S. Doogal at [email protected]. Center in July, he said. agreement, phase two will begin,” “The word is out, and they’re Pumphrey said. before they’ll pay significantly calling,” Kralevic said. “And I’m Atmosphere doesn’t yet have es- more rate,” he said. Foley.com glad to take calls.” timates for what it will spend on Hotel operators have made some Colorado-based Atmosphere Hospi- renovations, she said. expenditures and seen some occu- tality LLC, which took over operation To get the property up to Hyatt’s pancy growth, Skelton said. “Now of the former Dearborn Hyatt on Nov. standards, consultant Skelton esti- they are going to focus on (increas- 1, is still negotiating to purchase the mates it would cost $50 million or ing) rates.” hotel from overseas investment more. Adoba would need to invest Over the past three to four group Royal Realties LLC. at least $25 million to make notice- ® years, there has been great resis- *Chambers USA: America’s Leading Business LawyersBOE64/FXTo#FTU-BXZFST able improvements, he said, but it But it’s already launching initial tance to rate increases, he said. renovations at the hotel andconfer- will need to balance the amount of “But as demand increases,” Skel- ence center, which hasn’t seen im- time it will take to recoup its in- #0450/t#3644&-4t$)*$"(0t%&530*5t+"$,40/7*--&t-04"/(&-&4 ton said, “there’s a little less resis- ."%*40/t.*".*t.*-8"6,&&t/&8:03,t03-"/%0t4"$3".&/50 provements in seven to eight years, vestment. tance from the corporate sector.” 4"/%*&(0t4"/%*&(0%&-."3t4"/'3"/$*4$0t4)"/()"*t4*-*$0/7"--&: said Adrienne Pumphrey, global If the hotel were charging $150 a 5"--")"44&&t5".1"t50,:0t8"4)*/(50/ %$ head of Atmosphere and Adoba Eco night per room, with 67 percent av- Sherri Welch: (313) 446-1694, ª'PMFZ-BSEOFS--1t"UUPSOFZ"EWFSUJTFNFOUt1SJPSSFTVMUTEPOPUHVBSBOUFFBTJNJMBSPVUDPNF erage daily occupancy, it could ex- [email protected]. Twitter: /$MBSL4USFFU 4VJUF $IJDBHP *-tt Hotel & Suites. Atmosphere rebranded the hotel pect to bring in about $3.9 million @sherriwelch 20130304-NEWS--0013-NAT-CCI-CD_-- 3/1/2013 10:44 AM Page 1

March 4, 2013 CRAIN’S DETROIT BUSINESS Page 13 Focus: Meetings and Conventions Moving on up: New hotel construction projects on the grow

BY SHERRI WELCH majority share of the new hotel. Fairfield Inn & Suites. The 80-room CRAIN’S DETROIT BUSINESS Plans call for opening the Hamp- hotel in Chesterfield Township is ton Inn during the first quarter set to open in May 2014. A handful of new hotel projects next year. Besides the three new hotels in the region have obtained financ- The new hotel will follow the planned for Southeast Michigan, ing and are moving ahead, while a opening late last year of the Towne- Amerilodge has four additional ho- number of hotels have begun con- Place Suites by Marriott and the tels in the works for Monroe, Port struction and look to open before Hilton Garden Inn three miles Huron, Bay City and Battle Creek, year’s end. south of downtown Ann Arbor. all set to open by late spring 2014, The Hyatt Place Detroit Novi at the The two hotels added 227 rooms to Malik said. It’s spending a total of Suburban Collection Showplace the market, which already offered $52 million across the state. and the Aloft Detroit, planned for 3,484 rooms across 30 properties. “We have used our current rela- the historic David Whitney Build- Rochester Hills-based Amerilodge tionships with our existing banks, ing, are filling niches by bringing An artist’s rendering of the Hyatt Place Detroit Novi, expected to open this Group LLC, a 5-year-old company and ... we’ve developed new rela- hotel rooms to the expo center for spring. that owns and operates seven oth- tionships with new banks like the first time and a boutique hotel Italian marble floors, terra-cotta A $7 million, 100-room Hampton er Michigan hotels and four total to downtown Detroit. Wells Fargo, which is financing our cladding on the atrium walls and Inn & Suites that was tabled when in Ohio and Indiana, has plans to Troy project, and Lake Trust Credit Hyatt Place is expected to open open three hotels in metro Detroit gold leaf molding, while moderniz- the economy crashed is back on Union, which is financing the late this spring. When completed, ing the heating and cooling and track in Ann Arbor and poised to between 2013 and 2014. Rochester Hills hotel.” the $10 million to $12 million, six- plumbing systems and bringing in capitalize on rising demand in In October, Amerilodge Amerilodge’s revenue rose 11 story hotel — attached to the east modern furnishings and opening a Washtenaw County. Construction launched construction of a $9 mil- percent to $19.3 million last year, side of the expo center — will have restaurant on the first floor. on the hotel, which will be on Jack- lion Holiday Inn Express Hotel & Malik said. 126 rooms. Trans Inns and Roxbury have son Road near the Clarion Hotel and Suites in Troy on Stephenson High- Average daily occupancy at its The new construction also will been pulling together financing for Conference Center, is expected to re- way. The 117-room hotel should add 25,000 square feet of meeting two years, Damitio said. The sume this spring. open the second week of April, Michigan hotels was 70.1 percent space, bringing process been complicated, he said, Akram Namou, majority share- said Amerilodge President and last year, and the revenue per that total to but historic tax credits are helping. holder of the Clarion and presi- CEO Asad Malik, who left his posi- available room across those hotels 80,000 square “Development is tough in any dent of A&M Hospitality, said he and tion as CFO of Henry Ford West rose 7.3 percent from 2011 to 2012, feet. Also on site market today, but we do feel like son Shawn Namou recently se- Bloomfield Hospital last August to he said. will be a new we’re satisfying a niche for down- cured about 60 percent of the fi- manage his company full time. “We’ve definitely seen the (fi- ride-and-drive town,” he said. nancing from the U.S. Small Busi- This month, Amerilodge plans nancing) loosen up,” Malik said, lot geared to- Demand for residential down- ness Administration. The remaining to break ground on another Holi- adding that the state’s improving ward auto re- town has been strong, Damitio financing is coming from share- day Inn Express in Rochester economy and double-digit occu- search, dealer said. holder investments, Akram Hills. The $6.4 million hotel will pancy growth across Amerilodge’s training and ve- “And this is a hotel that hasn’t Namou said. have 83 rooms and should open in Michigan hotels last year helped. hicle launches. Bowman existed in Detroit or in the state,” The Clarion and Hampton Inn November, Malik said. Sherri Welch: (313) 446-1694, “We had site he said. “It’s a historic project will refer business to each other, Also on tap this year: construc- [email protected]. Twitter: plan approval in 2007-08 ... but with a very modern look and feel.” he said, with his son holding the tion of the $7 million Chesterfield @sherriwelch tabled that after the economy fell,” said Blair Bowman, owner of the Hyatt Place and Suburban Collec- tion Showplace. Bowman said he moved forward with the new hotel after securing a tax abatement from the city of Novi for about 50 percent of the real estate taxes on the hotel for six years and after getting other needed approvals and favorable construction pricing — signs the economy was improving. Numerous events, associations and convention producers had expressed interest in booking the showplace if a hotel were available, he said. And they’re doing so, scheduling events into October and November. Developers of the upscale Aloft Detroit hotel are wrapping up financing, said Mike Damitio, senior vice president of acquisitions for Farmington Hills-based hotel investment firm Trans Inns Manage- ment Inc. They expect to begin the $82 million historic restoration during the first quarter. Aloft is a division of White Plains, N.Y.-based Starwood Hotels & Resorts Worldwide Inc. Trans Inns is developing the De- troit building in a joint venture — Whitney Partners LLC — with The Roxbury Group, a Detroit-based development firm. The Aloft will have 136 rooms on the lower floors of the 19-story building, while the upper floors will house 108 apartments. The Roxbury Group will oversee development of a 108-unit residential component as well as retail development on the ground floor. Trans Inns will operate the hotel and serve as property manager. The hotel is expected to open during the second quarter of 2014, Damitio said. The project will retain the building’s 100-year-old fixtures, DBpageAD_DBpageAD.qxd 2/26/2013 11:52 AM Page 1

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March 4, 2013 CRAIN’S DETROIT BUSINESS Page 15 Focus: Meetings and Conventions Unconventional spaces lift meetings, events out of the bored room

BY RYAN FELTON SPECIAL TO CRAIN’S DETROIT BUSINESS More venues beyond the same Shane Pliska, president of Planterra Corp., had no idea that A sampling of nontraditional St. Andrew’s Hall, The Shelter venues in metro Detroit: when the company opened a state- Occupancy: St. Andrew’s Hall, 100- of-the-art greenhouse in 2010, it 1,000; The Shelter, 50-400 was also creating an entirely sepa- Detroit Historical Museum Rates: St. Andrew’s, $2,500; The rate business venture. Occupancy: From a small group Shelter, $1,000 Pliska, 31, who started with the at one exhibit to more than 1,000 Highlights: Ballroom, balcony. plant arrangement and design strolling on all three levels. The Stage, private rooms firm in 2004, said that before the “Streets of Old Detroit” exhibit 23,000-square-foot greenhouse in can host 150 seated or 400 West Bloomfield Township was Olympia Entertainment Inc. strolling. even completed, he was receiving Rates: $350 for a small room to Occupancy: Fox Theatre, from 450 inquiries from people who wanted $4,000 for the museum standing in the grand lobby to to host special events there. Highlights: Guests can wan- 4,800 seated “It was not intended to be built der through all exhibits. The in the the- for special events,” he said of the Historical Society also rents ater. Hockey space. “We more or less stumbled the Dossin Great Lakes Museum Town Café/ upon a demand that’s there.” on Belle Isle, to reopen May 18. City Theatre, That demand is not unique to from 60 GLENN TRIEST Planterra. Demand is strong President Shane Pliska had a wedding canopy constructed at Planterra to meet standing in enough in metro Detroit to support demand. Ford Field the second a number of nontraditional meet- mezzanine to Class of 2011. “It’s now a division (30,000 square feet). Occupancy: From 10 in ing venues — such as Bert’s Market- 2,400 standing in the entire build- for what we do.” McGowan said Crofoot can host event spaces up to 20,000 at func- place in Eastern Market and the De- ing. Joe Louis Arena, from 100 The conservatory works be- events with standing room for 300 tions on the field. troit Historical Museum downtown standing in the Manhattan Room cause it’s “a botanical garden ex- to 1,100 guests. Rates for weddings Rates: $1,000 for 50 people in the — that offer people and companies to 1,500 on the arena floor. Other perience just being in the room,” begin at $4,000; rates for other func- Hall of Legends, up to $15,000 for a a place to host an event in a more spaces are available. Pliska said. tions depend on the complexities of luxury suite on the field. unusual, intimate or less expen- Rates: Fox Theatre, from $3,000 The greenhouse can hold up to the event, he said. Highlights: Large video boards sive venue than more traditional for the grand lobby to $27,500 for 200 guests, he said. But space can “We’ve transformed the room for presentations. More than a meeting spaces. the theater. Hockeytown be arranged for smaller gather- into all sorts of things,” he said. dozen rooms ranging from 2,500 Michael O’Callaghan, vice presi- Café/City Theatre, from $500 to ings. Rates range from $2,000 to “One event was a hockey-themed to 100,000 square feet. Dance floor dent and COO of the Detroit Metro $10,000. Joe Louis Arena, from $5,000 per night — the more in-de- bar mitzvah. We built a scale replica in South Cove. Attached parking. Convention & Visitors Bureau, said $150 for the Manhattan Room to mand nights, like Saturdays, being of a scoreboard you’d find in a hock- nontraditional venues offer an un- $3,000 for the arena floor. most expensive. ey arena and hung it.” expected side of the region. The Fillmore Highlights Planterra held 60 special events They’ve also managed to suc- : Fox Theatre’s grand “We always find that when we in 2012, its first year of operating as cessfully put together a “space- Occupancy: 100-2,900 lobby has gold leaf on the walls bring people into Detroit from out an nontraditional venue, and it has themed wedding” in which a bride Rates: Start at $5,500 and columns rising from marble of town and we can connect them hosted 12 special events in 2013, he and groom interacted with a movie Highlights: Architecture from floors. Comerica Bank Legends back to the history or the culture said. Pliska wouldn’t disclose what projected on a screen on the ball- the early 1920s. Features a grand Club overlooks the ice rink. Hock- of the community, that they have a revenue the company generated room’s stage. lobby with marble columns, mar- eytown Café’s rooms include The better understanding of what we through special events. “It was highly theatrical,” he ble staircases leading to bal- Roof, which overlooks downtown. are all about, and it makes their At Fountain Bistro in Campus said. conies, velvet theater seats. — Ryan Felton opinion of Detroit improve,” Martius, special events have had a O’Callaghan said. “It also seems to large impact on the company’s make them feel better about their business, said co-owner Kevin experience.” Morin, 33. Suzanne Chandler, events direc- Since the café obtained a liquor tor for Detroit-based The Children’s license in 2011 and began hosting Center, said that while she tends to corporate functions and weddings use more traditional venues for soon after, special events now ac- the types of events the nonprofit count for 30 percent to 40 percent charity hosts, she used nontradi- of its revenue, he said. It has host- tional venues often when she ed everything from birthday par- worked at Farmington Hills-based ties to corporate functions. Ameriprise Financial Service Inc. and The café, in the heart of down- the Children’s Hospital of Michigan. town Detroit with a backdrop of “(A nontraditional venue) gives skyscrapers, can host 70 people for you a lot more creativity and flexi- an event inside, Morin said, and 70 bility,” she said. more guests seated outside. Chandler said she’s booked “We also have the ability to use events at the Toledo Zoo, numerous the park,” he said. restaurants, a couple of office The Crofoot complex in Pontiac, building atriums and at the Royal Oak Women’s Club. while known more as a music Having worked both sides of the venue, hosts about 75 special fence, Chandler said that when she events each year, including wed- decides on a setting, it comes down dings, corporate events, bar and to the nature of the event and the bat mitzvahs and birthday parties, variables at play. said owner Dan McGowan. “Obviously, budget is a concern “The built-in environment is at all times,” she said. “It might be considerably different from most more expensive to do it at a hotel facilities,” said McGowan. “We or a banquet center. But, then have essentially an 1830s building again, it might not; depending on that was renovated in 2007, and it’s how you price out your things. an interesting blend of industrial “Are you trying to do an event elements and 1830s brick work.” for 25 people and be effective? Or McGowan said the venue boasts are you trying to do an event for 25 an elaborate lighting and sound sys- people and be fabulous?” tem to accommodate the more than At Planterra, once Pliska realized 400 concerts a year that take place people wanted to host events in the throughout the complex, which in- conservatory, he started to focus on cludes the Eagle Theater, The Pike the new source of revenue. It ob- Room, The Vernors Room, Crofoot Café tained a liquor license in 2011. and the Phoenix Plaza Amphitheatre. “We never thought it would be a The range of space that can be rent- real business line,” said Pliska, a ed starts at the Crofoot Café (3,000 member of Crain’s 40 under 40 square feet) to the entire complex DBpageAD_DBpageAD.qxd 2/26/2013 10:07 AM Page 1

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March 4, 2013 CRAIN’S DETROIT BUSINESS Page 17 CRAIN'S LIST: LARGEST MEETING FACILITIES CRAIN'S LIST: LARGEST HOTELS Ranked by total square feet of meeting space Ranked by number of guest rooms Total square Number of feet of meeting Company guest rooms/ Address Number of Facility space/Square feet Rank Address of largest Phone; website Top executive(s) meeting rooms Rank Phone; Web site Top executive meeting space Detroit Marriott Renaissance Center Shonda Johnson 1,298 Cobo Center Thom Connors 897,500 1. 400 Renaissance Drive, Detroit 48243 general manager 34 1. 1 Washington Blvd., Detroit 48226 general manager 27,000 (313) 568-8000; www.detroitmarriott.com (313) 877-8777; www.cobocenter.com Adoba Hotel Dearborn/Detroit Conference Center Adrienne Pumphrey 773 The Henry Ford Patricia Mooradian 544,020 2. 600 Town Center Drive, Dearborn 48126 global head of 17 2. 20900 Oakwood Blvd., Dearborn 48124 president 22,000 (313) 592-3622; www.adobadearborn.com Adoba brand (313) 982-6001; www.thehenryford.org The Westin Book Cadillac Detroit Tim Freisen 453 Joe Louis Arena Tom Wilson 439,380 1114 Washington Blvd., Detroit 48226 general manager 13 19 Steve Yzerman Drive, Detroit 48226 president and CEO, 30,197 3. (313) 442-1600; westin.com/bookcadillac 3. (313) 394-7593; www.olympiaentertainment.com Olympia Entertainment/ Detroit Red Wings Westin Detroit Metropolitan Airport John Reed 404 Ford Field Tom Lewand 375,000 4. 2501 Worldgateway Place, Detroit 48242 general manager 26 4. 2000 Brush St., Detroit 48226 president 100,000 (734) 942-6500; www.westin.com/detroit (313) 262-2000; www.detroitlions.com MGM Grand Detroit LLC Steve Zanella 400 Suburban Collection Showplace Blair Bowman 350,000 5. 1777 Third St., Detroit 48226 general manager 20 5. 46100 Grand River Ave., Novi 48374 owner and president 215,000 (877) 888-2121; www.mgmgranddetroit.com (248) 348-5600; www.suburbancollectionshowplace.com MotorCity Casino Hotel Marian Ilitch 400 The Masonic of Detroit Roger Sobran 200,000 5. 2901 Grand River Ave., Detroit 48201 owner 11 6. 500 Temple St., Detroit 48201 president 19,500 (866) 752-9622; www.motorcitycasino.com (313) 832-7100; www.themasonic.com Greektown Casino-Hotel Michael Puggi 400 Fox Theatre Tom Wilson 125,000 555 E. Lafayette Blvd., Detroit 48226 president and CEO 9 2211 Woodward Ave., Detroit 48201 president and CEO, 20,305 5. (313) 223-2999; www.greektowncasino.com Clifford Vallier 7. (313) 471-3333; www.OlympiaEntertainment.com Olympia Entertainment/ general manager Detroit Red Wings The Westin Southfield Jerry Tononi 389 Detroit Marriott Renaissance Center Shonda Johnson 100,000 8. 1500 Town Center, Southfield 48075 general manager 25 8. 400 Renaissance Drive, Detroit 48243 general manager 25,801 (248) 827-4000; www.westinsouthfielddetroit.com (313) 568-8000; www.detroitmarriott.com Sheraton Detroit Metropolitan Airport Patrick Short 359 Emagine Canton Paul Glantz 80,000 9. 8000 Merriman Road, Romulus 48174 general manager 13 9. 39535 Ford Road, Canton Township 48187 founder and chairman NA (734) 729-2600; www.sheratondetroitmetroairport.com (734) 721-3456; www.emagine-entertainment.com Detroit Marriott Troy Michelle Street 350 Emagine Novi Paul Glantz 80,000 200 W. Big Beaver Road, Troy 48084 general manager 20 9. 44425 W. 12 Mile Road, Novi 48377 founder and chairman NA 10. (248) 680-9797; www.troymarriotthotel.com (248) 468-2990; www.emagine-entertainment.com Doubletree Hotel Detroit/Dearborn Charles Mahabir 347 Macomb Community College, south campus James Jacobs 76,000 5801 Southfield Expressway, Detroit 48228 general manager 16 11. 14500 E. 12 Mile Road, Warren 48088 president 61,000 11. (313) 336-3340; www.dearborn.doubletree.com (586) 498-4198; www.macomb.edu

James Jacobs 74,000 The Henry, Autograph Collection Joseph Shurmur 308 Macomb Community College, center campus 300 Town Center Drive, Dearborn 48126 general manager 16 12. 44575 Garfield Road, Clinton Township 48038-1139 president 41,400 12. (313) 441-2000; www.behenry.com (586) 498-4198; www.macomb.edu Star Lanes at Emagine Royal Oak Paul Glantz 71,000 Auburn Hills Marriott Pontiac at Centerpoint Mike Manzari 290 founder and chairman NA 3600 Centerpoint Parkway, Pontiac 48341 general manager 12 13. 200 N. Main St, Royal Oak 48307 13. (248) 253-9800; www.auburnhillsmihotel.com (248) 414-1000; www.emagine-entertainment.com Palace of Auburn Hills Dennis Mannion 70,000 Courtyard Detroit Downtown Jon Coutts 260 president 30,000 333 E. Jefferson Ave., Detroit 48226 general manager 6 14. 6 Championship Drive, Auburn Hills 48326 14. (313) 222-7700; www.detroitdowntowncourtyard.com (248) 377-0100; www.palacenet.com MotorCity Casino Hotel Marian Ilitch 67,000 Embassy Suites-Troy Eric Welch 251 owner 19,604 850 Tower Drive, Troy 48098 general manager 8 15. 2901 Grand River Ave., Detroit 48201 15. (248) 879-7500; www.embassysuites.com (866) 752-9622; www.motorcitycasino.com Crystal Park Roger Roels 65,000 Somerset Inn Duane Swanson 250 16. 17099 Champaign, Allen Park 48101 president 5,500 16. 2601 W. Big Beaver Road, Troy 48084 general manager 17 (313) 388-9001; www.crystalgardensonline.com (800) 228-8769; www.somersetinn.com General Motors Heritage Center Greg Wallace 64,500 Best Western Plus Sterling Inn Banquet and Conference Center Daniel Duffy 246 17. 6400 Center, Sterling Heights 48312 manager 64,000 17. 34911 Van Dyke Ave., Sterling Heights 48312 general manager 16 (586) 276-1498; www.gmheritagecenter.com (586) 979-1400; www.sterlinginn.com

Adoba Hotel Dearborn/Detroit Conference Adrienne Pumphrey 62,000 Detroit Metropolitan Airport Marriott Tammy Paczkowski 245 global head of Adoba 17,000 30559 Flynn Drive, Romulus 48174 general manager 11 Center brand 18. 18. 600 Town Center Drive, Dearborn 48126 (734) 729-7555; www.marriottdetroitairport.com (313) 592-3622; www.adobadearborn.com Ann Arbor Marriott Ypsilanti at Eagle Crest Resort Tom Lamb 243 Heinz C. Prechter Educational and Performing Deborah Duyck 60,000 1275 S. Huron St., Ypsilanti 48197 general manager 44 Arts Center district executive dean 6,000 19. (734) 821-6167; www.marriott.com/dtwys 19. 21000 Northline Road, Taylor 48180 (734) 374-3512; www.wcccd.edu/about/ Holiday Inn Express Hotel & Suites-Detroit Downtown Marwan Hachem 240 PerformingArtsCenter.htm 20. 1020 Washington Blvd., Detroit 48226 general manager 1 Walsh College-Troy campus Jenny Carson 55,000 (313) 887-7000; hiexpress.com/hotels/us/en/detroit/dttwb/hoteldetail 20. 3838 Livernois Road, Troy 48083 conference coordinator 3,900 (800) 925-7401; www.walshcollege.edu Embassy Suites Detroit/Livonia/Novi Jamison Janda 239 21. 19525 Victor Parkway, Livonia 48152 general manager 6 Washtenaw Farm Council Grounds Lynn Rich 55,000 (734) 462-6000; www.detroitlivonia.embassysuites.com 20. 5055 Ann Arbor Saline Road, Ann Arbor 48103 manager 9,000 (734) 429-3145; www.washtenawfarmcouncil.org Embassy Suites-Detroit Southfield Gail Major 239 28100 Franklin Road, Southfield 48034 director of sales and 12 The Inn at St. John's Paul Wegert 48,000 21. (248) 350-2000; www.detroitsouthfield.embassysuites.com marketing general manager 6,800 Leo Phillippi 22. 44045 Five Mile Road, Plymouth 48170 general manager (734) 414-0600; www.theinnatstjohns.com Sheraton Detroit Novi Hotel Kenric Hall 238 Detroit Institute of Arts Graham Beal 45,861 23. 21111 Haggerty Road, Novi 48375 general manager 17 23. 5200 Woodward Ave., Detroit 48202 director, president and 4,750 (248) 349-4000; www.sheratondetroitnovi.com (313) 833-7900; www.dia.org CEO Best Western Gateway International Hotel Dia Francis 232 Ann Arbor Marriott Ypsilanti at Eagle Crest Tom Lamb 42,000 24. 9191 Wickham, Romulus 48174 general manager 4 Resort general manager 9,000 (734) 728-2800; bestwesternmichigan.com/hotels/best-western- 24. 1275 S. Huron St., Ypsilanti 48197 gateway-international-hotel (734) 821-6167; www.marriott.com/dtwys Holiday Inn Hotel Detroit-Livonia Randall Richmond 226 17123 N. Laurel Park Drive, Livonia 48152 general manager 7 Best Western Plus Sterling Inn Banquet and Daniel Duffy 31,313 25. (734) 464-1300; www.holidayinn.com/livonia-mi Conference Center general manager 15,905 25. 34911 Van Dyke Ave., Sterling Heights 48312 (586) 979-1400; www.sterlinginn.com This list is an approximate compilation of the largest hotels operating in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided This list of meeting facilities is an approximate compilation of the largest such facilities in Wayne, Oakland, Macomb, by the hotels. Washtenaw and Livingston counties. It is not a complete listing, but the most comprehensive available. NA = not available. LIST RESEARCHED BY BRIANNA REILLY LIST RESEARCHED BY BRIANNA REILLY 20130304-NEWS--0018-NAT-CCI-CD_-- 3/1/2013 10:46 AM Page 1

Page 18 CRAIN’S DETROIT BUSINESS March 4, 2013

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Business Center, Oakland County (248) 615-3885; email: sknowles@irem ciation of Women Business Owners, TUESDAY Market Research Department. Target- mi5.org; website: www.iremmi5.org. Greater Detroit Chapter. With Carol MARCH 5 ing startup or existing small business- Cain, Detroit Free Press columnist and MARCH 11 SUMMIT TO FOCUS es looking to research a business idea host of WWJ-TV 62’s “Michigan Mat- Walsh College Business Summit. Protect Your Money: Tips on Avoiding or find research for a business plan. ters.” The Roostertail, Detroit. Lun- ON NEW MICHIGAN ECONOMY 8 a.m.-2 p.m. Walsh Institute Leader- Scams. 8-9:30 a.m. National Associa- Oakland County Business Center, Wa- cheon: $40 members, $60 nonmem- ship Center. With Tina Marie Business Leaders for Michigan tion of Women Business Owners terford Township. Free. Contact: bers. Business-to-business showcase Greater Detroit Chapter. With Wohlfield, Walsh alumna and adjunct hosts The New Michigan Summit Karen Lear, (248) 858-0783; email: faculty member; and Walsh alumnae (includes lunch): $100 members, $150 8 a.m.-1 p.m. March 11 at the Melanie Duquesnel, CEO, Better [email protected]; website: nonmembers. Register by March 6 at Business Bureau of Eastern Kathryn Baker and Dana Davis. Walsh Radisson Hotel, Lansing. www.advantageoakland.com/expand. www.nawbogdc.org. Contact: Dave Michigan. BBB at Devry University Troy campus. $90. Contact: Jan Jones, [email protected]. Panel discussions will focus on Building, Southfield. Free to mem- Hubbard, (248) 823-1392; email: jhub Michigan as a natural resources bers, $10 nonmembers. Contact: [email protected]; www.thewal THURSDAY shinstitute.com. economy, global center of mobility, www.nawbogdc.org. To Sell or Not to Sell? That’s the $363 global engineering village, gateway MARCH 7 Million (Section 363) Bankruptcy to the Midwest, higher education Question. 7-9:15 a.m. March 12. Asso- marketplace and life sciences hub. WEDNESDAY Property Management Trade Show. 10 ciation for Corporate Growth Detroit, Speakers include Doug Rothwell, MARCH 6 a.m.-4 p.m. Institute of Real Estate UPCOMING EVENTS Turnaround Management Associa- Management, Michigan Chapter No. Top 10 Michigan Business Women tion Detroit Chapter. Panel discussion chairman, Michigan Economic Business Research: Feasibility to Ex- 5. Suburban Collection Showplace, Awards Ceremony and Luncheon. 11 of why the 363 sale process is increas- Development Corp. executive pansion. 9 a.m.-noon. Oakland County Novi. Free. Contact: Susan Knowles, a.m.-2 p.m. March 11. National Asso- ingly used in asset dispositions over committee, and president and CEO, Business Leaders for Michigan; Sandy Baruah, president and CEO, Detroit Regional Chamber; Jay Baron, president and CEO, Center for Automotive Research; Erin McDonough, FREE WEBINAR SERIES: APRIL – AUGUST 2013 executive director, Michigan United Conservation Clubs; and Michael Hansen, president, Michigan Community College Association. The event is free to attend. For About the Series more information, call Jennifer Look forward to 2014 and nobody knows what health care Hayes at (313) 259-5400, email jenniferh@businessleadersfor will look like, but everyone knows things will be different. michigan.com, or visit That’s the starting point for Health Facts 2014, a project to www.businessleadersformichigan. provide facts for employers and employees as they make com/events. near-term health care decisions. Chapter 11 bankruptcy plans. With With the combined resources of the Greater Detroit Area Phillip Shefferly, bankruptcy judge, state of Michigan; David Sherbin, se- Presented by: Health Council and Crain’s Detroit Business, this series will nior vice president, general counsel, present useful and informative webinars throughout the secretary and chief compliance offi-

In Partnership with: ™ year aimed at employers, employees and providers. cer, Delphi Automotive PLC; John Bonadonna, director, business development, Chrysler Group LLC; and others. Glen Oaks Country Club, Farm- ington Hills. $25 ACG/TMA members, $45 nonmembers. Contact: www.acgdetroit.org.

To Small Business: Unlocked – Connec- About the Webinar tions & Cocktails. 5-7 p.m. March 12. Exchange Detroit Regional Chamber. Informal Receive strategic advice on whether to offer a health plan or to networking. Joe Muer Seafood, De- or ask employees to use the insurance exchange. This webinar is troit. Free for DRC members. Contact: Notto Marianne Alabastro, (313) 596-0479; designed for employers considering both options. email: malabast@detroitchamber .com; website: www.detroitchamber Exchange .com. Discover: People, Profit, Progress 2013. 7:15- 4 p.m. March 14. American Society of Tuesday, April 2 Insight from consultants specializing in health plan design Employers. Workshops and networking for human resources profession- 12 – 1P.M. The legal issues: What the Affordable Care Act requires als. With Ryan Estis, Ryan Estis & As- sociates management consultants, The HR angle: Advice from a human resources perspective and Jeff DeGraff, business consultant Reserve your seat: and clinical professor of business administration, Ross School of Busi- crainsdetroit.com/events ness, University of Michigan. Subur- ban Collection Showplace, Novi. ASE members $225, nonmembers $255. Reg- istration deadline is March 8. Contact: (248) 353-4500; website: www.aseon line.org.

Detroit Economic Club Luncheon. 11:30 a.m.-1:30 p.m. March 14. Detroit Economic Club. With Stuart Hoffman, senior vice president and chief econo- mist, PNC Financial Services Group. Westin Book Cadillac, Detroit. $45 members, $55 guests of members, $75 nonmembers. Contact: (313) 963-8547; email: [email protected]; website: www.econclub.org.

40th Annual Women’s Recognition Luncheon. 11 a.m.-2 p.m. March 22. Henry Ford Community College. With Debbie Dingell, president, D2 Strate- gies, and chairwoman, Manufactur- ing Initiative of the American Auto- motive Policy Council; Brenda Lawrence, mayor of Southfield; and others. HFCC, Dearborn. $40. Sponsorships range from $100 to $2,500 and are due by March 12. Contact: (313) 317-1700; website: www.hfcc.edu/news/items/1361478333. 20130304-NEWS--0019-NAT-CCI-CD_-- 3/1/2013 11:29 AM Page 1

March 4, 2013 CRAIN’S DETROIT BUSINESS Page 19

BUSINESS DIARY

ACQUISITIONS NEW PRODUCTS launched a corporate video, “Cooking new modules to its History Vault, a and Android mobile devices. Users of Communications,” as a guide to pro- five-year program providing central the Michigan First Mobile application Jawood, Bingham Farms, a health care ProQuest LLC, Ann Arbor, published access to archival collections that doc- now can take a photo of a check with information technology company, was the 2013 edition of the Statistical Ab- ducing an effective marketing com- ument 18th to 20th century America. their device and deposit it directly acquired for an undisclosed price by stract of the United States. Website: munications strategy. View video: Website: www.proquest.com. into a checking or savings account. Genpact Ltd., New York City, a global www.proquest.com. www.meritmarketinginc.com. Web- site: www.meritmarketinginc.com. Merit Marketing & Communications, Michigan Health Information Network technology and business management Altair Engineering Inc., Troy, released Troy, an integrated marketing firm, Shared Services announced statewide company. two new products: PBS Professional announced the launch of several new shared security services for Michigan 12.0, the latest version of its workload NEW SERVICES websites: for the Cole Carbide Family health information organizations. CONTRACTS management and job scheduling soft- ProQuest LLC, Ann Arbor, as part of of Cos., Orion Township, manufactur- Bingham-Farms-based Ingenium LLC ware, and the Altair Hyper Works Icom North America, New Hudson, its Early European Books program, er of carbide cutting tools, website: Partner Alliance, a subscription- and the Michigan State Medical Soci- will install its JTG II liquid injection partnered with Paris-based Biblio- www.colecarbide.com; for Michigan based licensing model for customers ety, East Lansing, have undergone a propane system on Menards’ fleet of theque national de France to digitize Deburring Tool, Brighton, a manufac- to access Altair-developed and third- MiHIN security assessment. Website: Ford F150 pick-ups, beginning with nearly 70,000 volumes from BnF’s col- turer of precision deburring tools, party software applications, added www.mihinss.net. vehicles in Wisconsin and Illinois lection of books printed before 1700. website: www.mideburring.com; and NovaCast Systems AB and Nova Flow stores. Website: www.icomnorth The move opened access to a Chinese expanded its own website, www.mer Food Lion, Salisbury, N.C., began offer- & Solid CV software to the partner america.com. collection that captures all editions of itmarketinginc.com. ing in-store coupons through its Face- program. Website: www.altair.com. University of Michigan C.S. Mott Chil- several prominent newspapers pub- Michigan First Credit Union, Lathrup book page, via an app powered by Livo- dren’s Hospital, Ann Arbor, is now affil- Merit Marketing & Communications, lished between 1832 and 1953 from cov- Village, launched a new feature allow- nia-based Valassis Communications iated with Sparrow Children’s Center, Troy, an integrated marketing firm, er to cover. Proquest also will add six ing mobile deposit for iPhone, iPad Inc. Website: www.valassis.com. Lansing, to provide specialized pedi- atric care. As part of the agreement, the University of Michigan Survival Flight took over Sparrow’s air medical trans- port service. Websites: www.mott children.org, www.sparrow.org. Lawrence Technological University, Southfield, signed an agreement to allow students from Terra State Commu- nity College, Fremont, Ohio, to transfer up to 64 credits toward completion of a Bachelor of Science degree in robotics engineering. Website: www.ltu.edu. JOINT VENTURES RouteOne LLC, Farmington Hills, a Web-based credit application management system for dealers and finance sources, owned by Ally Financial, Ford Motor Credit, TD Auto Finance and Toy- ota Financial Services, partnered with SourceHOV LLC, Dallas, to create a pa- perless document-imaging process for RouteOne customers through the con- version of paper documents into electronic images. Websites: www. routeone.com, www.sourcehov.com. RouteOne also entered into an agreement with LendingTree LLC that allows consumers to make vehicle selections from inventory, estimate monthly payments with the ability to adjust the down payment and term, and apply for financing with participating dealers. Website: www.lendingtree.com. Computing Source, Southfield, and Di- versified Legal Staffing LLC, Bingham Farms, entered a joint venture to provide an all-inclusive computer-based Local matters. electronic evidence processing and legal staffing solution to law firms, corporate general counsel and law de- But, you already knew that. partments nationwide. Website: www.computingsource.com. Hennessey Capital, a division of Hi- tachi Capital America Corp., Rochester, a provider of revolving lines of credit secured by accounts receivable and inventory, joins Business Improvement Team LLC, Bloomfield Hills, a consortium of independent consulting firms. Websites: www.hennesseycap.com, www.bizimpteam.com. MOVES Cole Carbide Family of Cos., a producer of standard and custom carbide cutting tools, moved from Warren to 4930 S. Lapeer Road, Orion Township. Tele- We like this state. No, we love this state. It’s who we are. It’s what drives us. phone: (586) 757-8700. Website: www.colecarbide.com. We also like proving that a bank from right here is better for your business. Michigan Deburring Tool, a manufac- turer of precision deburring tools, Not always an easy task. There isn’t a mold, only a model — work harder. moved from Howell to 2155 Pless Dri- ve, Suite B, Brighton. Telephone: (810) 227-1000. Website: www.mide Because local matters today and tomorrow. Thanks for letting us prove it. burring.com. Personal • Mortgage • Business • Commercial DIARY GUIDELINES Send news releases for Business Diary to Departments, Crain’s Detroit Business, 1155 Gratiot Partner with us today. Ave., Detroit, MI 48207-2997 or (888) 324-4100 send email to cdbdepartments@ crain.com. Use any Business Diary flagstar.com/business item as a model for your release, Like us on and look for the appropriate category. Without complete information, your item will not run. Member FDIC Photos are welcome, but we cannot guarantee they will be used. 20130304-NEWS--0020-NAT-CCI-CD_-- 3/1/2013 10:48 AM Page 1

Page 20 CRAIN’S DETROIT BUSINESS March 4, 2013 Job Front PEOPLE

CONSULTING GAMING Matthew Grimes to director, financial Deborah Moffatt IN THE SPOTLIGHT advisory services unit, AlixPartners to vice president, Transtar Autobody Technologies, LLP, Southfield, from vice president. human resources, Brighton, has appointed Mark MotorCity Casino Sockness its first CFO. CONSTRUCTION Hotel, Detroit, Sockness, 59, Peter Green to chairman, John E. from vice president, human re- had been CFO Green Co., Highland Park, from presi- of Alpha dent. Also, Michael Green to presi- sources, Greek- town Casino, Technology dent, from executive vice president; Corp., Howell. Robert Martin to COO, from Detroit Detroit. He earned his branch manager; John Stelter to CFO, Moffatt from CFO, Commercial Contracting bachelor’s in Corp., Auburn Hills; and Dave Hub- business bard to vice president of finance, from management director of finance. from the University of FINANCE Sockness Wisconsin and an MBA from Robert Seestadt to director, account- Marquette University, Milwaukee. ing and financial management, Appa- He is a certified management ratus Solutions Inc., Detroit, from vice accountant. president of finance, Edsel & Eleanor Ford House, Grosse Pointe Shores. Also, Sarah Balmer to director of Hickonbottom Watson human resources, Detroit Police De- partment. clients, community and culture, from HEALTH CARE gallery manager, Detroit Artists Mar- ket, Detroit. Lela Hickonbottom to chief nursing of- INFORMATION TECHNOLOGY ficer, Special Tree Rehabilitation Sys- Janet Hazekamp to senior project Jim Richardson to vice president, cen- tem, Romulus, from clinical nurse manager, Stout Systems Development tral region, TIP Capital, Bloomfield specialist. Hills, from vice president, technology, Inc., Ann Arbor, from project manage- Dalph Watson to corporate director of ment consultant. leasing specialist, Huntington Nation- employee relations, Botsford Health al Bank/LeaseNet, Troy. Care, Farmington Hills, from director, Mark Duane to director of business development, OpTech LLC, Troy, from senior account manager, G-Tech Ser- vices Inc., Dearborn. PUBLIC RELATIONS David Gad-Harf to director of corporate relations, philanthropy, Henry Ford Health System, Detroit, from chief development officer, Jewish Fed- Dennis M. Devaney, now eration of Northern New Jersey. MANUFACTURING ® Greg Steinl to executive director, elec- In Your Corner. tronics, Gentherm Inc., Northville, from director, technology strategy, Dana Holding Corp., Maumee, Ohio. Varnum is pleased to welcome Dennis M. Devaney to the fi rm. REAL ESTATE Dennis represents clients in labor and employment matters. Sarah Girand to director of apartment ■ Former member of the National Labor Relations Board and management, Broder & Sachse Real Estate Services Inc., Birmingham, Commissioner of the U.S. International Trade Commission. from senior area director, Village Dennis has served as a presidential appointee under four Green Cos., Farmington Hills. Also, U.S. presidents Mary Cheney to director of apartment management, from senior area direc- ■ Involved in signifi cant international trade initiatives, including tor/special projects, Village Green creation of the World Trade Organization, the North American Cos.; Michelle Beckwith, regional apartment manager, from general Free Trade Act, and the Free Trade Area of the Americas. manager, Gateway Apartments, Grand Blanc; Scott Wallace to region- ■ In Your Corner. al manager from assistant regional manager, Broder & Sachse; and Scott Ryan, director of multifamily marketing, from vice president of marketing, Silverman Cos., Bingham Farms.

PEOPLE GUIDELINES Announcements are limited to management positions. Send submissions to Departments, Crain’s Detroit Business, 1155 Gratiot Ave., Detroit, MI 48207- 2997, or send email to [email protected]. Releases must contain the person’s name, new title, company, city in which the person will work, former title, former company (if not Dennis M. Devaney promoted from within) and former city in which the person worked. ■ Metro Detroit ■ Grand Rapids ■ Kalamazoo ■ Grand Haven ■ Lansing [email protected] Photos are welcome, but we cannot guarantee they will be used. 20130304-NEWS--0021-NAT-CCI-CD_-- 3/1/2013 5:51 PM Page 1

March 4, 2013 CRAIN’S DETROIT BUSINESS Page 21 Newspaper chain’s life after Ch. 11: A mystery story

BY BILL SHEA The Macomb Daily, the value of their holdings increase CRAIN’S DETROIT BUSINESS ADDITION AND SUBTRACTION owned by the Yardley, in the near term,” Langeveld said. Pa.-based Journal “There is much more shakeout yet A Chapter 11 2009 bankruptcy left The fate of 844 Journal Register Register Co., is moving to come in the form of frequency Co. employees across more than 80 Journal Register Co. with about from this building in Mt. $225 million in debt (leases, reductions and real changes in the Michigan newspapers is in the Clemens to an office in business model.” defined benefit pensions and other Clinton Township. The hands of so-called vulture investor liabilities), which had been reduced He was especially critical of Randall Smith, founder of the New company is in to about $160 million when new bankruptcy for the Alden in a piece written last sum- York City hedge fund Alden Global owner Alden Global Capital second time since mer for Nieman in which he blast- Capital LLC. voluntarily put the company into 2009. ed the hedge fund’s stewardship of How many will keep their jobs Chapter 11 again last September. COSTAR GROUP Digital First, the management entity The company didn’t disclose dollar — and their current pay and bene- employee population is critical for for Journal Register and Alden- fits at newspapers that already are figures but did say in September Why newspapers? owned MediaNews Group of Denver, that: the company’s ongoing success.” considered lean on head count — What makes newspapers attrac- which owns The Detroit News and remains a mystery because none Ⅲ Digital revenue grew 235 tive to some investors while re- is unaffected by the bankruptcy. of the companies involved will say percent from 2009 to 2011. Newspaper investor pelling others are the profit mar- “It’s now clear that the ‘stacking anything beyond prepared corpo- Ⅲ Digital investment has increased Little is known about 21st CMH gins. of digital dimes’ to replace digital rate statements. by 151 percent since 2009. Acquisition, other than Journal As advertising revenue eroded dollars hasn’t happened fast Alden, which specializes in dis- Ⅲ Debt has been cut 28 percent Register CEO John Paton’s public and the 20 percent-plus profit mar- enough,” he wrote. “And if there tressed properties, bought Yard- since 2009. statements that it’s an affiliate of gins of 10 years ago declined, actually was an Alden-led strategy ley, Pa.-based Journal Register Ⅲ Overall costs have been cut 10 funds managed by Alden. banks shied away from financing at Digital First to truly capitalize outright for an undisclosed percent since 2009. Randy Smith, who founded newspaper sales. Instead, buyers on the combination’s clout amount in July 2011, took it pri- Ⅲ Print advertising revenue, which is Alden in 2007, apparently never have been investors such as Alden through new mergers and acquisi- vate, and last September put the more than half of all company has given a media interview. And and Berkshire Hathaway, newspaper tions, it failed.” revenue, has fallen 19 percent since chain into Chapter 11 bankruptcy executives whom Crain’s attempt- consultant John Morton wrote in In the past decade, newspaper 2009. That’s two percentage points ed to reach did not return calls or for the second time since 2009. worse than the industry average. an analysis of the economics of publishers including Journal Regis- The papers that constitute the Ⅲ declined to comment. newspaper sales for the American ter have invested vast sums in digi- Pension liabilities have grown The Alden name may sound fa- backbone of the Journal Register 52 percent since 2009. Journalism Review. tal and mobile news and advertis- chain in Michigan are the daily miliar locally because of a threat- “At the right acquisition price, a ing offerings. Although there have Oakland Press in Pontiac, Macomb ened proxy fight in 2011 between it 10 percent operating profit margin, been revenue gains, they largely Daily in Mt. Clemens, Royal Oak nal announced last week that it’s and Van Buren Township-based or even a couple of points lower, is have failed to offset print revenue Tribune and Mt. Pleasant Morning selling its building. Visteon Corp. The former parts affil- not unattractive,” he wrote. “Some losses, industry metrics show. Sun, along with more than 80 Consolidation and clustering as- iate of Ford Motor Co. eventually industries don’t hope to achieve 8 For every $1 gained in digital rev- nondaily publications. sets, such as printing, circulation ceded two seats on its board to the to 10 percent margins in the best of enue in 2011, $7 in print revenue On March 19, a judge in the U.S. and other business functions, has fund. times, and here are newspapers was lost — a ratio that grew last Bankruptcy Court for the Southern been a newspaper industry trend “Nobody knows much about reaping them in what for them has year to $16 lost for every $1 in online District of New York is expected to since the 1990s. Alden and where they are going been the worst of times.” revenue, according to a study by the approve a $122.1 million bankrupt- Reducing print and home deliv- with their newspaper holdings,” That means newspapers are not Pew Research Center’s Project for Ex- cy sale of all of Journal Register, ery frequency began with Detroit’s said Martin Langeveld, a former typically a short-term investment. cellence in Journalism. which encompasses newspapers in two daily newspapers in 2009, and publisher turned consultant who “I don’t think anyone owning Bill Shea: (313) 446-1626, bshea 10 states, to 21st CMH Acquisition Advance subsequently followed writes about the newspaper indus- newspapers today is going to see @crain.com. Twitter: @bill_shea19 Co., which is managed by Alden — with its Michigan newspapers. try for the Nieman Journalism Lab at a move that clears the newspaper Rem Rieder, editor and senior Harvard University. company of debt and legacy costs. vice president of the American One thing that is known is that The sale price is a $117.5 million Journalism Review trade magazine, Alden has been a major newspaper credit bid — plus $1.75 million in said reduced home delivery isn’t investor since 2008, holding stakes REAL ESTATE cash to be used for post-sale wind- yet an industry trend, but the effort in most of the country’s largest down expenses and for distribu- by the Newhouse family-owned Ad- chains, both public and private OFFICE BUILDING AUCTIONS tion to general unsecured credi- vance chain is being scrutinized. and healthy and distressed. tors, along with cash sufficient to “Newhouse has been out front, At one point, Alden may have LIVONIA OFFICE BUILDING pay off the remainder of the com- adopting its digital-first, less-than- had as much as $750 million of $3 $120,000 GBA 400 Car parking, 14% occupied. Great upside potential. Give away price $850,000. pany’s debtor-in-possession facili- daily in print approach, he wrote billion in total assets invested in Call Bill Mcmachen 586-915-4441 ty, according to LeveragedLoan.com in an email. “No doubt many in the newspaper and broadcast media properties, according to last week. industry are watching closely to PROPERTY MANAGEMENT Attention Investors! 11 Houses The court had been scheduled to see how it works out.” Langeveld’s Nieman Lab report- Several currently rented. All have rental rule on the sale Feb. 21, but that The thinking behind reducing ing. The company has divested it- potential. Up to 4BR, 1,400±sf houses. was rescheduled for this month af- print publication days is simple, if self to varying degrees in the past Lansing, MI ter objections from organized la- controversial, Rieder said. couple of years. bor. The original close date was “The logic is that print advertis- The New York Post in July re- PROPERTY MANAGER 11 ONLINE-ONLY ported that Smith’s primary vehi- Prestigious national real estate company with April 17, but it’s unclear whether ing in most markets is concentrat- over 16,500,000 square feet of property in the delay has moved that date. ed on a few days, and on the other cle for buying troubled newspa- southeast and western Michigan is seeking a AUCTIONS days the print product is a money- pers, the Alden Global Distressed Property Management Professional to join th th loser,” he said. “But there’s also Opportunities Fund LP, saw a 7.5 per- our rapidly growing organization. The March 12 & 13 What next? successful candidate will have at least five years’ the fear that less-than-daily might cent decline through June 30. experience in commercial real estate See Website for Auction & Inspection Times, One possible model post-bank- further erode the newspaper read- For 2011, the fund declined 22 management & operations and possess excellent Photos, and More Information! ruptcy that Journal Register could percent, the Post said. written and verbal communication skills. The ing habit.” responsibilities of the position include: leasing, adopt is the template employed by Journal Register began dipping Current and former newspaper tenant relations, property operations, monthly Advance Publications Inc. The chain, its toe into the reduced-circulation chain investments included Medi- reporting and forecasting, annual budgeting and aNews Group (The Detroit News), Tri- contract administration. A Bachelor’s degree is based in the New York borough of model Jan. 16 when it announced required & CPM, RPA and/or CCIM (517) 676-9800676-9800 Staten Island, shut down the Ann that its Oneida (N.Y.) Daily Dispatch bune Co. (Chicago Tribune, Los Ange- designations preferred. Some travel within www.sheridanauctionservice.com Arbor News in 2009 and terminated would shift to a three-day print les Times), Freedom Communications Michigan is required. Excellent salary, benefits, 401K, and professional development all of its staff, only to rehire a hand- schedule while expanding “online, Inc. (Orange County Register), Gan- opportunities are available. If you are seeking a ful of them to run a digital news op- mobile and electronic offerings.” nett Co. Inc. (USA Today, Detroit Free position where creative thinking is encouraged eration anchored by AnnArbor.com The paper added a Sunday print Press) McClatchy Co. (Miami Herald, and ambition is rewarded, send your resume to: MARKET and a twice-weekly newspaper. edition for the first time and will Kansas City Star), A.H. Belo Corp. Ashley Capital Advance, which also owns the publish Tuesday and Thursday. It (Dallas Morning News) and Journal 2575 S. Haggerty Road Suite 500 statewide MLive.com news opera- said in January that the print re- Communications Inc. (Milwaukee PLACE Canton, MI 48188 duction didn’t involve job losses. Journal Sentinel). tion, is replicating that model at its Fax (734) 394-1925 As part of the sale process, Jour- In Michigan, Alden also owns newspapers in New Orleans and No phone calls, please. BUSINESS OPPORTUNITIES Syracuse, N.Y., with Cleveland ex- nal Register informed all its em- the Voice and Heritage chains of ****ENTREPRENEUR’S**** pected to be next. It also reduced ployees that they could be termi- small local newspapers. Interested in Dunkin Donuts, 7-Eleven or Tim Hortons print frequency at papers including nated by the new owner. One prominent industry watch- Call Us For Personalized Etc, in North Macomb County Van Dyke Ave. Let’s Talk... Pete PJ’S Property (586) 413-7383 Grand Rapids, Flint and Saginaw. Mandatory layoff notices were er doesn’t see Alden exiting news- Service: (313) 446-6068 Some of the moves include selling filed in each of the 10 states with papers despite the fund’s selling FAX: (313) 446-1757 BUSINESSES FOR SALE company-owned buildings and relo- Journal Register properties. some of its investments. E-MAIL: [email protected] In its notice, the company did say “The indication they have given Building for Sale or Lease cating into smaller, leased spaces. INTERNET: Journal Register’s Macomb Daily is this about the future of its employ- is that they’re continuing the digi- www.crainsdetroit.com/section/classifieds High or Low Injection Molding moving from its current space in ees: “We have asked the buyer to tal-first strategy” with Journal 35 Ton Cranes See Mt. Clemens to an office in Clinton operate the business using substan- Register, said Rick Edmonds, a 96,000 sq. ft. Crainsdetroit.com/Section/Classifieds Township, Advance’s Flint Journal tially all of our current employees. media business analyst with The Morenci, MI We have expressed to the buyer Poynter Institute in St. Petersburg, for more classified advertisements sold its longtime headquarters, and Call 317/523-6484 Gannett Co. Inc.’s Lansing State Jour- that a competent and competitive Fla. 20130304-NEWS--0022-NAT-CCI-CD_-- 3/1/2013 6:31 PM Page 1

Page 22 CRAIN’S DETROIT BUSINESS March 4, 2013 Alcohol: Fewer regulations on tap ■ From Page 1 Mike Lashbrook, president of the Michigan Beer and Wine Wholesalers REMIXING ALCOHOL LAW Association, was unavailable for Senate Bill 216 would reinvent the state’s rules on many aspects of alcohol comment, but in a statement said sales and licenses. Among the highlights: “these proposals may hurt the very businesses they claim to want to Conditional liquor licenses would liter limit per month. help, especially small independent be issued within 20 business days Liquor licenses could be for the new owners of recently sold businesses that will struggle to transferred between counties, so bars or restaurants with a liquor long as the counties are compete against larger businesses. license, contingent on a ENJOY THE GAME. “Because of these diverse con- contiguous. Inter-county transfers background check. (A competing bill are currently not allowed. THEN ENJOY THE GAMES. cerns, a large and growing number would expand that to 30 days and a of people are rightfully speaking background check.) More gas stations in Michigan out against these attacks on com- Michigan breweries would be could sell alcohol. To qualify for a liquor license now, a gas station mon-sense regulations that protect able to sell and direct-ship beer to consumers. The volume limit for has to have inventory of non-alcohol people and promote business and non-gasoline products of more growth,” Lashbrook wrote. small brewers is less than 30,000 barrels per year. than $250,000. The bill drops that Small brewers, meanwhile, view Bars and restaurants that run out to $50,000. the legislation as a helping hand to of spirits purchased from two Up to 40 additional resort liquor growth. authorized distribution agents could licenses could be issued in the Scott Graham, executive direc- buy and sell to consumers state per year. The businesses are tor of the Michigan Brewers Guild, additional alcohol purchased from a required to be in tourist-heavy areas said there have been a lot of small local retailer as demand dictates, and spend at least $500,000 on startup brewers “who couldn’t get instead of being capped at a nine- the property or improvements. a distributor to take a serious look at them. the idea of a conditional liquor li- hol. Under current law, gas sta- “It could be huge for the develop- cense, says Patrick Howe, a liquor tions are not supposed to be able to ment for small brewers,” he said. license and hospitality attorney do so, but of the roughly 5,000 in While some of the larger brewers with Royal Oak-based Howard & the state, about 1,500 do because aren’t interested in the distribution Howard Attorneys PLC. they are located in rural communi- business, making the change for the Under the current law, when ties or after gaining the ability APRIL SUITE SWEET DEAL smaller ones would help them grow someone purchases a bar, the trans- through loopholes in the law, were * their brands to the point where they Receive a voucher for a free hotel stay at MotorCity Casino Hotel fer of the liquor license typically then grandfathered in. would then want or need to become with every party suite purchased in the month of April.** takes months longer than all the To qualify for a liquor license customers of the wholesalers. other paperwork. So in order for the under the Walker bill, a gas station Walker’s 147-page omnibus bill new owner to be able to sell alcohol has to have inventory of non-alco- amends 33 sections of the liquor before the license is transferred, a hol and non-gasoline products of code. While there is more wide- participating management agree- more than $50,000. spread support for pieces of it, ment has to be set up and the previ- Arabo, whose organization rep- *RESTRICTIONS APPLY. APPROXIMATE VALUE $179. such as conditional license ap- **DOES NOT INCLUDE OPENING DAY, 4/26, 4/27 OR 4/28. ous owner has to stay on as owner, resents gas stations, is opposed to proval for new owners of bars or and the business has to stay open the change, to protect current mem- restaurants, other changes are under the original owner’s name. bers from additional competition. more controversial, such as the di- Sometimes that process can take He said allowing as many as 3,500 rect beer sales. anywhere from a few months to a more gas stations around the state Auday Arabo, president and CEO year. With the Walker bill, a condi- to start selling alcohol would be a of the Associated Food and Petroleum tional liquor license would be is- mistake, because the market would Dealers, said he has reservations sued within 20 business days. be oversaturated. about such wide-ranging alcohol Jay Lambrecht, owner of Detroit- In contrast, John Griffin, execu- changes being grouped into one law. based Bookies Bar & Grille and anoth- tive director of the Associated Pe- “An all-or-nothing bill is not the er member of the advisory commit- troleum Industries of Michigan, said right way to go on something in- tee on the proposed legislation, had that group supports the change. volving alcohol,” he said. to create a management agreement He said gas stations that spend when opening the new Bookies. several million dollars to build a Size matters “We need to make it more new facility should be treated the streamlined so people are not trying same as dollar stores which have Walker’s bill would tweak the to find loopholes to open,” he said. the ability to sell beer in the state. system so that small brewers, de- When Lambrecht opened Foun- fined as those who produce fewer tain Bistro in Campus Martius Park than 30,000 barrels per year, or without a license, he had to wait to County to county 930,000 gallons, would be able to get one, and when he received it, The new legislation would allow sell their beer without being forced sales increased 150 percent. inter-county liquor license trans- to contract with a wholesaler. Rep. Ray Franz, R-Onekama, is fers between contiguous counties. “I think allowing microbrew- moving forward with his own legis- Howe said that in Wayne Coun- eries to do a limited amount of di- lation on conditional licenses sepa- ty, a liquor license usually goes for rect shipping is important,” Walk- rately. He introduced similar legis- about $20,000, because there is an er said. “It’s not trying to replace lation last session. overabundance in escrow. In the the three-tier system. We are try- Franz’s bill, House Bill 4277, three counties that touch Wayne, ing to allow startup companies and would allow the issuance of a con- demand is higher than supply, and entrepreneurs more access to that ditional license in 30 days follow- licenses go from $40,000 to $60,000. industry and the producing side of ing the completion of the applica- Right now, there are 191 Class C the industry.” tion, which includes a background liquor licenses in escrow in Wayne The exception for craft beer mak- check. Franz has had personal ex- County compared to 68 in Oakland ers would be a departure from perience and frustration with the County and 12 in Washtenaw Coun- Michigan’s three-tier system. Aside length of time it takes to receive a li- ty. Macomb has 45 Class C licenses from a few exceptions, such as for cense. Several years ago, he sold his in escrow and Livingston has five. wineries, a business can only be in grocery store, and it took a year for The inter-county transfers and one tier. A wholesaler can only be a the transfer of the license to go other changes are seen by the Sny- wholesaler, and the same is true for through. der administration as removing manufacturers and for retailers. Later, when the new owner unnecessary bureaucracy from the “That would be a significant couldn’t make the payments, process. The bill is based largely on change in the law,” said Michael Franz took it back under forfeiture an Office of Regulatory Reinvention Brown, partner with Lansing- of a land contract. Even with a report recommending changes. based Carlin Edwards Brown PLLC, court order, it took seven months Snyder spokesman Kurt Weiss who was also a member of an advi- for him to receive his former said in a statement that the admin- sory committee that made recom- liquor license back. istration applauds the bill, adding mendations to the state for “The cooler was empty,” he said. that it “will make it easier for busi- changes to the state’s liquor laws. “We couldn’t sell anything.” ness owners to succeed and grow, removing outdated and unnecessary regulations.” Easier permission Filling up Chris Gautz: (517) 403-4403, If only one thing is approved in The bill would also permit more [email protected]. Twitter: this entire package, it should be gas stations in the state to sell alco- @chrisgautz 20130304-NEWS--0023-NAT-CCI-CD_-- 3/1/2013 6:31 PM Page 1

March 4, 2013 CRAIN’S DETROIT BUSINESS Page 23 Sequester: State could see $500M hit ■ From Page 3 None of the schools as yet had a projection on research job losses, COST OF CRISIS although UM Vice President of Re- Here are some examples of the impacts on Michigan this year under search Stephen Forrest said the sequestration, according to the White House: possible $40 million loss of federal funding for 2013 at UM — or about Ⅲ Teachers and education: The treatment and enforcement, and a 5 percent cut — easily could state will lose about $22 million in crime victim and witness initiatives. funding for primary and secondary Ⅲ translate to 300 or more local jobs Job search assistance: Michigan education. In addition, Michigan will will lose about $1.7 million in lost. lose about $20.3 million in funds funding for job search assistance, “The question is how and when for teachers, aides and staff who referral and placement. we get guidance on what the gov- help children with disabilities. Ⅲ Vaccines for children: Michigan ernment will do,” Forrest said. Ⅲ Environmental protection: will lose about $301,000 in funding “It’s not going to happen this after- Michigan will lose about $5.9 million for vaccinations for diseases such noon, and the longer it takes to in funding to ensure clean water and as measles, mumps, rubella, find the (cuts before the end of the air quality, as well as prevent tetanus, whooping cough, influenza budget year), the worse the news is pollution from pesticides and and hepatitis B. going to be.” hazardous waste. Michigan could Ⅲ Public health: Michigan will lose UM spends nearly $1.3 billion a lose another $1.5 million in grants approximately $944,000 in funds for fish and wildlife protection. year on research programs, with to respond to public health threats Ⅲ and about $2.9 million in grants to more than 62 percent of funding Military: Approximately 10,000 civilian Department of Defense help prevent and treat substance coming from federal sources. Well employees would be furloughed, abuse, and the Michigan over 7,000 jobs universitywide are reducing gross pay by around Department of Community Health supported by research funds, For- $67.7 million. U.S. Army base will lose about $315,000, resulting rest said. operation funding would be cut by in fewer HIV tests. The MSU Office of Research about $14 million. Ⅲ STOP Violence Against Women and Graduate Studies and the Ⅲ Law enforcement: Michigan will program: Michigan could lose up to WSU Division of Research also lose about $482,000 in Justice $209,000 to provide services to what’s were expecting a possible 5 per- Assistance Grants that support law victims of domestic violence. cent to 10 percent federal funding enforcement, prosecution and Ⅲ Nutrition help for seniors:

courts, crime prevention and Michigan would lose approximately Citi Flats Hotel - Holland, MI Holland, - Hotel Flats Citi cut because of sequestration. That your fancy? MI Holland, - Hotel Flats Citi $1.8 million in funds that provide means MSU could lose up to education, corrections and community corrections, drug meals for seniors. $27 million of federal funds this fiscal year and Wayne State Source: Whitehouse.gov YOU DREAM IT. WE MAKE IT HAPPEN IN CONCRETE. $10 million. Michigan’s 15 public universi- based on total economic fallout. 30 of its current 335 employees to Precast is the perfect solution for your hotel. Hollowcore floor ties receive about $1.9 billion in But the budget uncertainty cit- 100 or more depending on exactly annual research and development ed in that report also includes a $6 how the Pentagon decides to struc- plank blocks noise transmission and leaves overnight guests funding from the federal govern- billion spending shortfall due to ture cuts. feeling refreshed. ment, but more than 90 percent of operating under a continuing res- Much of that cutting is due to that is distributed to the three in- olution in lieu of a new defense program delays and cuts from op- www.kerkstra.com stitutions of the University Research budget appropria- erating under Corridor, said Mike Boulus, execu- tion this fiscal the continuing tive director of year, plus at least The longer it takes resolution, Sig- the Presidents $5 billion needed “ norelli said. Council, State to fund some to find the But the worst- Universities of overseas op- case scenario of Michigan. erations, over (cuts before a sequester cut “The biggest and above the and excessive impact of any sequester. the end of delay in new fis- kind on the uni- Among the cal 2013 appro- versities is go- cuts are a the budget priations was ing to be $16.6 million looking in- through re- reduction at evitable. Boulus year), the search. It will the Detroit “Within that hit student financial aid pro- Arsenal, worse the total budget au- grams to a degree as well, though which houses the thority (of de- not the Pell program,” Boulus U.S. Army Tacom news is going to fense appropria- said. Life Cycle Manage- tions), there are “The biggest hits are to the re- ment Command in be. some things you search-intensive universities, par- Warren. ” can’t touch — ticularly since those funds tend to The report Stephen Forrest, military pay, land at the institutions with major doesn’t break out University of Michigan veterans bene- medical schools.” cuts by region, fits and nondis- But at UM, Forrest said, the im- but furloughs probably would fall cretionary government programs. pact could be more severe because heaviest on the Arsenal — which So that means a much deeper pro- the school gets substantial re- houses about 8,000 employees, of portional cut is likely to search funding from the U.S. De- whom more than 7,000 are civil- come from the discretionary ex- fense Advanced Research Projects ians. penses like procurement and ve- Agency. The 2011 law triggering The Army projections also in- hicle modernization accounts,” he the federal sequester requires at clude a loss of 950 Michigan pri- said. least half of the projected $85 bil- vate sector jobs from “reduced “I don’t think it will be pink lion in federal funding cuts this military investments” in contrac- slips on everyone’s desk, but year to come from security agen- tors, plus 204 jobs among battle- they do have to make major deci- cies such as the U.S. Department of field operating service contrac- sions.” Defense and Department of Home- tors. It doesn’t break these out by The company expects to know land Security. company but does name General more on government spending Dynamics Land Systems and BAE Sys- projections that affect BAE’s tems Inc. opera- budget by late April, Signorelli No defense from defense cuts tions in Sterling said. In a February report, the U.S. Heights as like- Pete Keating, president of com- Army Program Analysis and Evaluation ly targets. munications at General Dynam- Directorate projected that the de- Mark Sig- ics, said the company has no pro- fense budget woes could cost norelli, vice jection for possible job cuts Michigan $333 million and affect president and related to sequestration or a time 7,807 jobs this year, including general manag- frame on when its effects will be more than 1,000 in the private sec- er of vehicle sys- known but is continuing to exe- tor. tems for BAE cute current contracts until it That includes furloughs for up and its ranking Signorelli knows more. to 6,651 civilian Army employees site executive in Chad Halcom: (313) 446-6796, statewide and means Michigan Michigan, said the company esti- [email protected]. Twitter: ranks about 15th among states mates it could lose anywhere from @chadhalcom 20130304-NEWS--0024,0025-NAT-CCI-CD_-- 3/1/2013 5:49 PM Page 1

Page 24 CRAIN’S DETROIT BUSINESS March 4, 2013

Pontiac makes strides Pontiac: Emergency managers get to the core of development ■ From Page 1 local governments develop down- towns. COMMERCIAL PROJECTS SPUR PONTIAC REHAB “Nobody wants to come to a More than $450 million in commercial investment has poured into Pontiac since 2009. Here’s a look at some of the town that’s a financial disaster,” big projects: Schimmel said. “We are providing Oakland police and fire (services) now at an 1. A mixed-use development by Jim and Ed Terebus will come into the extremely lower cost and better Woodward services. That’s what starts eco- former First Baptist Church building, 1 which was most recently a Salvation 2 nomic development. They will 3 Perry Army thrift store. It is expected to Saginaw COURTESY OF THE CROFOOT come to Pontiac if we fix the core.” open at the northwest corner of Wayne Walton The Crofoot concert venue opened in Schimmel doesn’t actively re- Joslyn Lafayette and Saginaw streets this Pine Pontiac in 2007. cruit new business to come to Pon- Baldwin year or next year. University Opdyke tiac but lets his work in righting 2. DASI Solutions, which helps 4 the city’s fiscal ship do the wooing. companies with computer-aided Huron brought about 65 new businesses Case in point: The city had a technologies such as like drafting and 12 Perry downtown. engineering, purchased a 1960s office 6 downtown development authority, 5 Lawrence He said the initiative addressed building at 21-31 Oakland Ave. and will I-75 B.R. an economic development corpo- 7 other issues downtown, particu- ration and a building authority — move into the office space this year. 8 Pike larly a bus stop on Huron Street 75 all publicly funded, all with auton- 3. Lafayette Place, a $20-million 9 University “that allowed a lot of people to omy, and all with differing and redevelopment by West Construction 1011 13 hang out on the street,” and pan- Services of the former Sears Roebuck Water 59 “grandiose” visions for the city, handling, which was addressed & Co. Schimmel said. department with two police officers patrolling “I abolished them all,” he said. the street every day. store at 154 Huron “It was such a scatterbrained, N. Saginaw St. Woodward “Indirectly, it was always the in- crisscross, mishmash of stuff. into lofts, tention that the Phoenix plan Let’s have one group and all get be- Anytime would spur development,” Todd hind them.” Fitness and South 14 15 said. So Schimmel turned to the Pon- Lafayette tiac Downtown Business Associa- Market. Telegraph Opened in GLENN TRIEST Orchard Lake 16 tion, a 501(c)(3) nonprofit, to advo- Lafayette Place Economic engines churning 2012. cate for the downtown businesses. Most recently, General Motors 4. Ten West Lofts, a $4.5-million, GJ & JA “By him cleaning up the politics announced a $200 million invest- Investments redevelopment that converted a former CDB and the administration, it elimi- bank building and drug ment that is expected to shift about nated a lot of the roadblocks that 11. The former Tonic nightclub 400 jobs from Warren, Wixom, In- store at 67-69 N. Saginaw into at 25 S. Saginaw St., owned (businesses) had to be able to do a mixed-use development with by Marty Coats, will open as a diana and California to Pontiac what we wanted to do,” said Lee lofts, and office and retail new music and entertainment through a 138,000-square-foot ex- Todd, a former business associa- space. venue this year, but the name pansion of its Powertrain Engineer- tion member and the owner and 5. The former Consumers hasn’t been finalized. ing Headquarters at 777 Joslyn Ave., broker of Pontiac-based property Power building at the 12. General Motors Co. will north of Montcalm Street, bring- management and real estate firm 67 N. Saginaw northeast corner of Lawrence 25 S. Saginaw expand its Powertrain ing it to 588,000 square feet. Todd Enterprises LLC. and Wayne streets will be Engineering Headquarters by Couple that with a $20 million re- Phil Wojtowicz, a senior associ- rehabbed and restored into office space and lofts by Bob 138,000 square feet at 777 development of the 80,000-square- Waun, managing director at Americorp Mortgage Inc., ate with Thomas A. Duke Co. and the Joslyn Ave. in a $200 million foot former Sears Roebuck & Co. de- and is expected to open late this year. co-vice chairman of the Downtown investment expected to be partment store at into Lafayette 6. Whiskey’s, a former restaurant and bar at Saginaw Business Association, agreed, call- complete by the second half of Place — featuring 46 high-end loft and Lawrence streets, is reopening this year with retail 2014. ing Schimmel “a very positive apartments, the Lafayette Market, and office space and a wine bar. Waun purchased the 13. The Pontiac Silverdome force” for Pontiac’s economic General Motors Powertrain and Anytime Fitness at 154 N. Sagi- property in 2012. will be renovated this spring resurgence. Engineering Headquarters 7. The Strand Theatre at 12 N. Saginaw is expected to and summer. The city of naw — and a planned $7 million “I can’t have that same comment undergo a complete interior and exterior restoration by Pontiac sold to Triple Sports renovation of the Strand Theatre, at for the two predecessors,” he said. West Construction Services and open in early 2014. and Entertainment the former home of the Detroit Lions for 12 N. Saginaw, near the intersec- Schimmel said his role is to 8. An office building at Perry and Pike streets was $583,000 in 2009. tion of Saginaw and Pike streets, ensure that businesses and resi- purchased by Grace Centers of Hope last year and reused 14. Ultimate Soccer expected to be completed next year, dents alike are in a city “that’s not as a private nursery school and day care center, which Arena, a $16.66-million and there are signs of life in Ponti- in a God-awful disaster or finan- also opened last year. development at 867 ac. cial mess. 9. The former Pike Street South Blvd., opened in The Strand Theatre has been the “That’s the piece I am in the puz- Restaurant at 18 W. Pike St. will 2010. It is owned by subject of proposed renovations zle.” be renovated and redeveloped George Derderian Jr. dating back to at least 1999 after under an unknown name as a 15. Hewlett-Packard Co. Ultimate Soccer Arena the city took ownership of it after a bar and entertainment venue opened a new center at court battle with its previous own- Cutting the fat opening this year. 1872 Enterprise Drive for $4.8 million in 2011. er. None came to fruition. Schimmel, the former emer- 10. The former Pontiac State 16. The $129-million patient tower at St. Joseph Mercy There is also the $129-million pa- 18 W. Pike Bank building at 28 S. Saginaw gency financial manager in Ham- Oakland, part of the St. Joseph Mercy Health System, is tient tower at St. Joseph Mercy Oak- was sold to Todd Enterprises in August and is now planned as a 301,000-square-foot, eight-story building tramck and former court-appoint- land, a 301,000-square-foot, eight- ed receiver in Ecorse, keeps a occupied with offices, a bank, retail space and lofts. It’s featuring 136 private rooms and 72 additional patient beds expected to be completed by 2014. at 44405 Woodward Ave. It is expected to open next year. story building that will feature 136 laundry list of completed major private rooms and 72 additional projects. Sources: Bob Donohue, Main Street Oakland County program coordinator; Phil Wojtowicz and Robert Karazim, Pontiac Downtown Business patient beds at 44405 Woodward Association/Main Street Economic Restructuring Committee; CoStar Group Inc. Among them are the contracting Ave. of the city’s policing duties to the PHOTOS: COSTAR GROUP In addition, Pontiac attracted Oakland County Sheriff’s Department, The Crofoot entertainment venue, and the merging of the fire depart- environment where we could suc- premiums have increased to 20 “Providing better services for near the Strand Theatre at Sagi- ment with neighboring Waterford ceed.” percent. less money by contracting things naw and Pike streets; and the Township’s, both efforts to cut In addition, Dozens of services have been out and cutting the costs by $20 $16.7-million 2010 Ultimate Soccer costs. Pontiac sold ex- privatized or contracted out, in- million and operating efficiently Arena project at 867 South Blvd. Stampfler spearheaded the con- cess capacity at cluding property tax collections, — that’s what starts economic de- “When you quit bickering with tract with the Sheriff’s Depart- its wastewater engineering, assessing, informa- velopment,” Schimmel said. yourselves and let someone come ment. treatment plant tion technology, city golf course in and run your finances, you can “As painful as it was,” said Oak- for $55 million management, animal control, vital Beyond the cuts get something done,” said Oakland land County Treasurer Andy Meis- to pay off its records and street maintenance. County Deputy Executive ner, those efforts have made Ponti- debt and elimi- “You argue that what he did was Meisner also believes two other Matthew Gibb, who oversees eco- ac safer. Response times have nate its budget right or what he did was wrong,” strategies helped lure investment nomic development. dropped and more arrests have deficit, which said Glen Konopaskie, president of to Pontiac: making Pontiac a Meisner Kyle Westberg, president and been made, leading to an improved Schimmel high- the Downtown Business Associa- Promise Zone, which offers Pontiac CEO of West Construction Services, business climate, he said. lighted as his “crowning achieve- tion, “but it makes us much more School District students up to $4,000 one of three developers on the “(Businesses) wanted them to ment” as Pontiac’s EM. approachable to investors.” in college scholarships; and 2010’s Lafayette Place development and solve the police and fire and (De- Instead of 15 law firms working All told, the budget has been Rise of the Phoenix initiative, one of those involved in the Strand partment of Public Works) issues,” for the city, there is now one. whittled from $55 million down to which offered businesses one year Theatre renovation, said 32 of the Todd said. “We felt under the con- City employees now have one $35 million, and Schimmel wants of free rent if they signed a lease of 46 loft units at Lafayette Place are trol of the EM … that he would health insurance plan instead of to bring it to $29 million before two years or more. Todd spear- clean it up and allow us to have an 87, according to Schimmel, and he’s done. headed Rise of the Phoenix, which See Pontiac, Page 25 20130304-NEWS--0024,0025-NAT-CCI-CD_-- 3/1/2013 5:49 PM Page 2

March 4, 2013 CRAIN’S DETROIT BUSINESS Page 25 Snyder’s measured moves on www.crainsdetroit.com EDITOR-IN-CHIEF Keith E. Crain GROUP PUBLISHER Mary Kramer, (313) 446-0399 or [email protected] ASSOCIATE PUBLISHER Marla Wise, (313) 446- EM political or businesslike? 6032 or [email protected] EXECUTIVE EDITOR Cindy Goodaker, (313) 446- 0460 or [email protected] MANAGING EDITOR Jennette Smith, (313) 446- For planners, BY KIRK PINHO 1622 or [email protected] officials and MANAGER, DIGITAL CONTENT STRATEGY Nancy CRAIN’S DETROIT BUSINESS Analysts: City Hanus, (313) 446-1621 or [email protected] business people DEPUTY MANAGING EDITOR Daniel Duggan, (313) working to There may be a political art 446-0414 or [email protected] redevelop Pontiac, form to the way Gov. Rick Snyder vendors may SENIOR EDITOR Bob Allen, (313) 446-0344 or a window at [email protected] has gradually divulged informa- WEST MICHIGAN EDITOR Matt Gryczan, (616) 916- Lafayette Market, tion about Detroit’s need for an 8158 or [email protected] 154 N. Saginaw wait longer for SENIOR EDITOR Gary Piatek, (313) 446-0357 or St., shows a emergency manager and his [email protected] SENIOR DESIGNER Jeff Johnston, (313) 446-1608 welcome sign. choice for the person who will be or [email protected] GLENN TRIEST appointed to that post. pay with EM DATA EDITOR Brianna Reilly, (313) 446-0418, [email protected] Or, political experts say, he With the placement of an WEB PRODUCER Norman Witte III, (313) 446- ■ From Page 24 But it won’t be free rein for the 6059, [email protected] might be acting just as a methodi- emergency manager, vendors elected officials once the city is EDITORIAL SUPPORT (313) 446-0419; YahNica under lease and that Anytime cal businessman would be expect- and contractors will likely see Crawford, (313) 446-0329 out from under the thumb of Fitness has more than 300 mem- ed to. longer wait times for payment NEWSROOM (313) 446-0329, FAX (313) 446- state control. They will have to 1687 TIP LINE (313) 446-6766 berships on the books. Snyder, who announced Friday as the manager prepares to re- follow a two-year budget that It’s the Lafayette Place devel- his agreement with the financial structure the city’s obligations, REPORTERS Schimmel prepares, under the Jay Greene, senior reporter: Covers health care, opment that Schimmel thinks is review team’s findings that the experts say. watch of an oversight board. insurance, energy utilities and the environment. the most significant. city is in a financial emergency, Tim Horner, partner at Warn- (313) 446-0325 or [email protected] “We can talk about GM, and we And for good measure, he said Chad Halcom: Covers litigation, higher education, is under no legal obligation to in- er Norcross & Judd LLP in Grand non-automotive manufacturing, defense can talk about some of these oth- he will prepare a five-year bud- crementally roll out information Rapids, said contracting and Oakland and Macomb counties. get. (313) 446-6796 or [email protected] er huge things, but I think Kyle vendors are “The board won’t let them go about the process, said Douglas Tom Henderson: Covers banking, finance, Westberg and his expertise in already fac- technology and biotechnology. (313) 446-0337 or crazy,” Schimmel said. “They are Bernstein, a partner at Plunkett [email protected] putting together the Lafayette ing long going to have to follow my two- Cooney PC in Bloomfield Hills. Kirk Pinho: Covers real estate and the city of project is somewhat amazing,” wait times Detroit. (313) 446-0412 or [email protected] year budget, like it or not.” First, on Feb. 21, Snyder ex- he said. due to De- Bill Shea, enterprise editor: Covers media, plained in a media roundtable advertising and marketing, the business of sports, All those projects and others troit’s finan- and transportation. (313) 446-1626 or how he would evaluate the re- have Todd and other business cial trou- [email protected] Work in progress view team’s report. Nathan Skid, multimedia editor. Also covers the leaders optimistic. bles, but an food industry and entertainment. (313) 446-1654, It’s not a complete success sto- On Feb. 22, he said he agreed “I think it is somewhat of a re- EM won’t [email protected] ry in Pontiac just yet. Dustin Walsh: Covers the business of law, auto naissance,” Todd said. “I think with its findings and had a “top expedite the Unemployment in the city in suppliers and steel. (313) 446-6042 or the general consensus was that candidate” for emergency manag- Horner process. [email protected] November 2012 was 21 percent, Sherri Welch: Covers nonprofits, services, retail Pontiac was going very quickly er in mind, but declined to identi- “In the short term, there according to the U.S. Bureau of La- and hospitality. (313) 446-1694 or the wrong way before, and the fy the person. could be further delays in pay- [email protected] bor Statistics, although that’s LANSING BUREAU ship has been righted. That’s one “This is the first time that I ments as the city struggles to down from the peak of 34 percent Chris Gautz: Covers business issues at the Capitol of the reasons they are coming know that they’ve dragged it out meet day-to-day demand for and utilities. (517) 403-4403 or [email protected]. in July 2009. down here to do business.” in a two-step process,” Bernstein cash flow,” Horner said. “In the Some small businesses contin- ADVERTISING said. “One, announcing that medium to long term, however, ue to close, including the Three SALES INQUIRIES: (313) 446-6052; FAX (313) you’re putting (an EM) in, and the hope is that the city can re- What about Detroit? Sisters Market, which had been in 393-0997 then naming the person you’re structure its liabilities, thereby SALES MANAGER: Tammy Rokowski business for decades. Last month, the state’s Finan- putting in (later).” freeing up cash to allow pay- SENIOR ACCOUNT EXECUTIVE: Matthew J. cial Review Team concluded that “We can’t rest on our laurels at Langan Steve Mitchell, chairman of ment of vendors in a timelier all,” Meisner said. “You have to ADVERTISING SALES Christine Galasso, Dale Detroit is in a financial emer- manner.” keep adding successes and help- West Bloomfield-based Mitchell Smolinski, Sarah Stachowicz gency, which gave Gov. Rick Sny- The EM will have 45 days af- CLASSIFIED SALES (313)-446-0351 ing restore Pontiac to what it was Research & Communications Inc., der a 30-day window to decide ter appointment, under PA 436, EVENTS DIRECTOR Nicole LaPointe in the 1950s, which was a boom- said Snyder’s withholding his top whether he agreed with the to review all contracts and DIRECTOR, INTEGRATED MARKETING Eric Cedo ing metropolis.” candidate’s name will keep the fo- team’s report — a decision ex- draft a financial plan. The act SALES PROMOTION MANAGER Karin Pitrone Among that work to be done is cus on the city’s issues rather ASSISTANT EVENTS MANAGER Kacey Anderson pected to result in the city falling requires the EM to draft a bud- an effort at the city and county than his EM choice. SENIOR PRODUCER FOR DIGITAL/ONLINE under the control of an emer- get that will provide full pay- levels to “reconstitute” down- Bettie Buss, senior research as- PRODUCTS Pierrette Dagg gency manager like Schimmel. ment of its current obligations, MARKETING ARTIST Sylvia Kolaski town through the Downtown Ponti- sociate at the Citizens Research Beyond righting the city’s said John Gregg, partner at SALES SUPPORT Suzanne Janik, YahNica Crawford ac Transportation Assessment pro- ledgers, an emergency manager Council of Michigan, said Friday Barnes & Thornburg LLP in PRODUCTION MANAGER Wendy Kobylarz ject. PRODUCTION SUPERVISOR Larry Williams could help instill greater confi- that she didn’t Grand Rapids. “The construction of the dence among business leaders in know if there “The plan must provide for CUSTOMER SERVICE Phoenix Center stopped traffic in Detroit’s ability to provide core was a political payment in full of all debt re- MAIN NUMBER: Call (877) 824-9374 or write the area,” Meisner said. “The [email protected] services such as police and fire, component or quirements,” Gregg said. “It’s city and county right now are SUBSCRIPTIONS $59 one year, $98 two years. as in Pontiac — but it would be other factors a massive undertaking, and Out of state, $79 one year, $138 for two years. trying to reconstitute the down- Outside U.S.A., add $48 per year to out-of-state difficult based on Detroit’s size behind Sny- the EM will likely hire profes- rate for surface mail. Call (313) 446-0450 or town so it can be more accommo- (877) 824-9374. and the scope of its problems. der’s strategy sionals to meet the require- dating to more traffic and stimu- SINGLE COPIES: (877) 824-9374 “I don’t know if Detroit is so to the city’s fi- ments, but we really don’t late more business.” REPRINTS: (800) 290-5460, ext. 125; big that the correlation (would nancial emer- know the city’s ability to pay (717) 505-9701, ext. 125; or lindsay.wilson That includes making the @theygsgroup.com be) obvious,” Konopaskie said. gency. until a plan is proposed.” Woodward loop and Cass Avenue TO FIND A DATE A STORY WAS PUBLISHED: A Detroit EM would have Once a plan is in place, the (313) 446-0406 or e-mail [email protected] into two-way streets and adding “I think he tough choices ahead to get the Buss EM will have the ability to on-street bike paths. wants to make CRAIN’S DETROIT BUSINESS IS PUBLISHED BY city on firm financial footing and amend, modify or reject all CRAIN COMMUNICATIONS INC. A key part of the effort to re- it clear that he is not reacting produce results similar to Ponti- contracts with the city, accord- CHAIRMAN Keith E. Crain configure the downtown would without full consideration and de- PRESIDENT Rance Crain ac. ing to the new law. include the demolition of the liberation of all of the factors,” TREASURER Mary Kay Crain “Pontiac is a microcosm of De- This means that any exist- Executive Vice President/Operations Phoenix Center, which has fallen she said. William A. Morrow troit,” Gibb said. “The reason ing vendor contract can be into disuse and disrepair since it The city of Detroit has until Vice President/Production & Manufacturing Pontiac now has these great sto- scrapped for a more financial- Dave Kamis was built in the late 1970s, al- March 11 to request a hearing ries of lofts and health clubs and ly beneficial one for the city of Chief Information Officer though legal challenges have with Snyder or his designee. If Paul Dalpiaz alternative-energy plants is that Detroit, Horner said. the city requests a hearing, it Chief Human Resources Officer somebody at some point had to been filed against its demolition. Margee Kaczmarek make some very difficult deci- An eventual razing is expected would be held on March 12 in G.D. Crain Jr. Founder (1885-1973) sions.” to save the city more than $8 mil- Lansing. term debt, and a cumulative cash Mrs. G.D. Crain Jr. Chairman (1911-1996) deficit that’s expected to eclipse EDITORIAL & BUSINESS OFFICES: lion in repair and maintenance After the hearing, Snyder 1155 Gratiot Ave., Detroit MI 48207-2732; costs; it would cost $2 million to would be required to affirm or re- $100 million by June 30. (313) 446-6000 The handoff voke his conclusion that the city “The case is all about the num- Cable address: TWX 248-221-5122 AUTNEW DET demolish the center. CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 It will be up to the Michigan De- Still, there is more work to be is in a financial emergency. bers,” Detroit Mayor Dave Bing is published weekly, except for a special issue the said Thursday at the Detroit Policy third week of August, and no issue the third week partment of Treasury to determine done to get the city back to its If he reaffirms it, the Local of December by Crain Communications Inc. at when to hand control of the city postwar glory days. Emergency Financial Assistance Conference. “Anybody who’s been 1155 Gratiot Ave., Detroit MI 48207-2732. following the numbers in Detroit Periodicals postage paid at Detroit, MI and back to its elected mayor, Leon “I think we’ve turned the cor- Loan Board would appoint an additional mailing offices. POSTMASTER: Send Jukowski, and City Council. ner,” Schimmel said. “We are not emergency manager. knows that the numbers aren’t address changes to CRAIN’S DETROIT BUSINESS, good and they’re not going to Circulation Department, P.O. Box 07925, Detroit, Snyder and state Treasurer going to be Royal Oak tomorrow, The review team’s report said MI 48207-9732. GST # 136760444. Printed in Andy Dillon said last month at but it kind of has that feel to it the city has no satisfactory plan change dramatically any time U.S.A. to address its financial woes, soon.” Entire contents copyright 2013 by Crain separate press conferences that right now.” Communications Inc. All rights reserved. they hope Pontiac can transition Kirk Pinho: (313) 446-0412, which include a $327 million bud- Kirk Pinho: (313) 446-0412, Reproduction or use of editorial content in any out of emergency management [email protected]. Twitter: get deficit for fiscal year 2012, [email protected]. Twitter: manner without permission is strictly prohibited. by the summer. @kirkpinhoCDB more than $14 billion in long- @kirkpinhoCDB 20130304-NEWS--0026-NAT-CCI-CD_-- 3/1/2013 7:05 PM Page 1

Page 26 CRAIN’S DETROIT BUSINESS March 4, 2013 Fund: Young Jobs: Local center wants auto jobs for South ■ From Page 1 tech is target LLP and board member for MichAuto, a for high-paying auto jobs and fend off Mexico, located in nearby Greenville, S.C. statewide industry association looking to at- which has attracted a number of assembly That facility has attracted a dozen automo- ■ From Page 3 tract development in Michigan. “We need to plants. tive suppliers, and it gets financial support get more focused on what we have and how Manganello said the plan is to steal away from the state. In fact, South Carolina Com- inghani, managing director at the we’re going to keep it and how we’re going to Michigan’s more than 330 automotive R&D merce Secretary Robert Hitt is a former First Step Fund. grow it or we’re going to lose it.” centers. BMW executive. Fortino has since helped vet invest- Doug Smith, senior vice president for busi- “The automotive epicenter for R&D is The Center for Automotive Research be- ments for the fund. Since its founding ness and community development for the Michigan, and these are the highest-paying gan discussing a research alliance with nearly three years ago, the First Step Michigan Economic Development Corp., said the and most permanent jobs,” he said. “Don’t Southern states some years ago. Those talks Fund has invested more than $2.5 mil- organization is not happy with the coalition think the Southern states aren’t licking their were put on hold during the recession, then lion in 47 companies. idea but understands that CAR is not solely a chops to get what we have.” resumed when the economy began to re- Detroit Innovate will target compa- Michigan-based group and has an interna- In an interview with Crain’s sister publica- bound. nies in life sciences; digital clean tional focus. tion Automotive News, Baron said the coali- The talks gained momentum last year after tech, which uses software to reduce “We do see it as a threat,” Smith said. tion would have three priorities: Audi AG announced plans to build a plant in energy use or waste generation; ad- He said 75 percent of automotive R&D is Ⅲ Coordinate activities of engineering Mexico — not Chattanooga, Tenn., as many vanced manufacturing and trans- done in Michigan. schools so Southern universities avoid over- Southern officials had hoped. portation; and business-to-business “We don’t take it lightly in terms of hold- lapping research. Audi’s decision “was a tipping point” for software. ing onto it,” Smith said. “It means we need to Ⅲ Provide expertise to economic develop- Southern officials, said Glenn Stevens, vice Where Detroit Innovate differenti- redouble our efforts to keep them here.” ers to make their regions more competitive. president of sales and membership at the Troy- ates itself from the First Step Fund The effort, called the Southern Automotive Ⅲ Identify the needs of automakers and based Original Equipment Suppliers Association. and other funds supporting early- Research Agenda, hopes to attract engineering tier-one suppliers, then help the Southern Although the research initiative appears stage companies is that it will also talent to support automakers and suppliers states provide those resources. to be gaining momentum, it’s not clear how seek out patent-protected technolo- doing business in Alabama, Kentucky, Member institutions could help provide re- the Center for Automotive Research will co- gies at state universities and figure Louisiana, Mississippi, Tennessee, South sources for product development, manufac- ordinate its activities. out which best lend themselves to Carolina, Georgia and North Carolina. Texas turing engineers, or whatever a company Baron says he could appoint a liaison in commercialization. and Florida may join the group. might need. each state to act as a go-between, or he might Detroit Innovate will pay the An organizational meeting is planned for For example, if BMW needs more techni- open a branch office in the South. salaries of what it calls “entrepre- March 12 in Washington, D.C. cians to fix robots in Spartanburg, S.C., the In any event, Baron said, the center’s main neurs in residence” to lead the com- The South has attracted a large share of German automaker might get some help office would remain in Ann Arbor. panies it spins off from universities. transplant assembly plants in recent decades. from other nearby companies. From Automotive News. Crain’s reporter Fortino said the fund will be willing An organized effort to win more R&D work Or it might consult Clemson University’s In- Dustin Walsh and Chris Gautz contributed to to invest in technologies at universi- would increase the South’s competitiveness ternational Center for Automotive Research, this story. ties such as Michigan State University and Michigan Technological University that are outside Southeast Michigan, but only if they are willing to have the companies be based in metro Detroit. “We’ll be getting the word out to Pacts: Flak meets right-to-work workaround tech transfer offices and to the engineering schools that we’re looking to ■ From Page 3 form companies based on their intel- membership or an alternative payment of proposed 10-year agreement. the 10-year security clause. lectual property,” said Fortino. “We’ll agency fees to a union becomes a condition of The university also obtained increased co- State Rep. Tom McMillin, R-Rochester work with faculty and guide them to employment. pays for physician visits, urgent care and pre- Hills, chairman of the House Oversight Com- commercialization. We’re going to But the law applies to contracts adopted af- scription drugs, plus a remediation provision mittee, also has invited Wayne State adminis- take a proactive approach that could ter March 27 — terms of any pre-existing for post-tenure review of professors found to trators to testify at its next meeting on Tues- lead to some exciting companies.” pacts are grandfathered in by the new law un- perform “substantially below the unit’s fac- day, but he has yet to receive a response from To lead spinoff companies, Fortino til they expire. So unions have been on a push tors and norms” by their salary committees, the university. has lined up two experienced entre- in recent weeks for long-term new contracts capping a contentious negotiation over post- “I believe students and parents struggling preneurs — Nicholas Cucinelli, for- or separate deals that preserve union securi- tenure faculty review. to pay tuition, and the taxpayers that help mer president and CEO of CSquaredIn- ty. Taylor schools, meanwhile, recently adopt- fund the university, would appreciate hear- novations Inc., a University of Michigan Detroit Public Schools has two labor con- ed a five-year contract with a 10-year union se- ing how this is beneficial,” McMillin said in a spinoff that is commercializing laser- tracts under review and recently settled a curity clause running through July 2023. The statement. “The committee is interested in based manufacturing of advanced en- third, but it too is resisting longer contracts. district in return gets a three-year, 10 percent the background of this particular agreement ergy materials; and Brandon Mc- Negotiations begin this week with the De- salary reduction, other benefit concessions since it appears to be the first of its kind for a Naughton, chief technology officer troit Association of Educational Office Employees and an agreement that the Taylor Federation of university in the state.” and founder of Life Magnetics Inc., a and Organization of School Administrators and Teachers will drop a pending unfair labor prac- Taylor school administrators declined a UM spinoff that makes biosensors to Supervisors bargaining units on contracts that tice lawsuit with the potential for up to $3 mil- similar offer to appear before the committee. rapidly speed up the time it takes to lapse June 30, and a new contract with the lion in damages. Instead it submitted a statement saying the detect pathogens in tissue or fluid American Federation of State, County and Munici- The concessions are expected to help return district and union “were called upon to re- samples. pal Employees Local 345 was ratified Feb. 23. Taylor, which faced a budget deficit of more solve perhaps the most difficult financial is- Life Magnetics made headlines in But the emergency financial manager, Roy than $10 million this year, to financial solven- sues the district has ever faced,” after a pre- April 2011 when the fledgling compa- Roberts, has already said he will not approve cy. vious deficit elimination plan was rejected by ny announced it had landed two of the any new labor contract provisions this year Kevin Harty, partner at the Lansing-based the Michigan Department of Education, jeopar- biggest stars in local high-tech entre- that extend beyond Dec. 31, 2016 (the new AF- Thrun Law Firm PC, which represents more dizing future state aid funds. The district es- preneurship, Jeffrey Williams and SCME contract expires on that date), so long- Sundaresh Brahmasandra,to run it. than 500 school districts, including Taylor, timates that up to 150 of its 480 teachers In 1999, Brahmasandra co-founded term security clauses are largely off the table. said a few other districts are in similar nego- would have faced layoffs without the conces- HandyLab Inc., a medical device compa- “Our position is, why should we consider an tiations. But the firm generally advises sions. ny that was sold for $275 million in eight-year or 10-year length agreement of any clients not to make union security deals with- But the lawsuit claims the district and 2009. Williams was its CEO. He later kind when we have no idea what economic out gaining something in return. union cannot make such a lengthy agreement was CEO of Ann Arbor-based Accuri conditions in the city will be like over that “That district’s (Taylor’s) case is kind of in part because it constrains a future elected Cytometers Inc., which was sold for long a period?” said Michelle Zdrodowski, exceptional. There’s a significant operating school board that will eventually inherit the $205 million in 2011. chief communications officer for the district. deficit, and it needed a financial concession. contract , and because state law allows bar- Detroit Innovate will also differen- “We’re in no position to make agreements It can make the difference between that dis- gaining units to change union representation tiate itself from the First Step Fund without knowing the underlying economic trict continuing to operate or not,” he said. after three years. by making larger investments. First conditions.” “But as a whole, there are two types of con- But Mary Ellen Gurewitz, an attorney for the Step generally invests $50,000 per versations going on. One is, ‘Does this give us Michigan Democratic Party and for various la- deal, while Detroit Innovate plans to Leverage to deal any incentive where we can get all things bor unions at Sachs Waldman PC in Detroit, said invest at least $250,000, in increments wrapped up by March 27, for some stability?’ she thinks the Mackinac case lacks merit. of $50,000 as companies hit develop- The employers who are willing to deal on and the other is, ‘If the union wants to obligate “Certainly there’s nothing that precludes ment milestones. security have gained favorable provisions in me on something for two years, or five years or parties from entering into long-term agree- The $5 million the fund has thus far other areas of their contracts in return. whatever — then what do I get?’ ” ments. Three-year contracts were the norm comes from the first NEI fund of $100 Wayne State’s tentative agreement with for a long time in bargaining, but over time million, which was formed in 2008. the AAUP-American Federation of Teachers Local that practice has really changed,” she said. The NEI is exploring the raising of a 6075, which goes for a union ratification vote The pushback “And any contract can eventually be inherit- second fund. The first fund came from this week, calls for no across-the-board pay One thing employers so far stand to get is a ed by a successor board. A labor agreement is a coalition of 10 state and national raises this academic year and about a 1.4 per- political reckoning. no different in that way than any other con- foundations to bolster economic activ- cent across-the-board increase starting in Last week, the Mackinac Center founda- tract it might adopt.” ity in the region. August, with equal merit pay raises. tion’s attorneys brought a lawsuit on behalf No date has been set for Curtis to hear the Tom Henderson: (313) 446-0337, then- The union had been seeking a 2 percent of three Taylor teachers against the union case. [email protected]. Twitter: across-the-board pay raise and merit pay of and the school district, asking Wayne County Chad Halcom: (313) 446-6796, @tomhenderson2 up to 1.5 percent for the first four years of a Circuit Judge Daphne Means Curtis to void [email protected]. Twitter: @chadhalcom 20130304-NEWS--0027-NAT-CCI-CD_-- 3/1/2013 6:45 PM Page 1

March 4, 2013 CRAIN’S DETROIT BUSINESS Page 27 RUMBLINGS WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF FEB. 23-MARCH 1

The Worm turns for Kim open June 5, the company Ⅲ General Motors Co. Compuware announced. The company wants a tax abatement for a during North Korea visit said it will hire about 75 Carhartt proposed $258 million infor- Mayor Dave Bing, trying workers, with openings mation technology data to navigate a possible state plans layoffs, posted on its website start- center at its Milford Prov- takeover, isn’t the only ex- ing April 2. ing Ground site, The De- Detroit Pistons star making Ⅲ By year’s end, three troit News reported. hopes new line headlines lately. office closings 7-Eleven Inc. stores are ex- Ⅲ Hourly car rental firm Iconoclastic weirdo Den- pected to open in down- Zipcar named Warren- etroit-based Com- nis Rodman, perhaps the town Detroit. based Campbell-Ewald as its puware Corp. filed a greatest rebounder and de- Ⅲ Driven by member- new global creative and D report with the U.S. ship gains and positive fender to suit up for the Pis- brand strategy agency. works to a T Securities Commission Fri- stock market performance, Ⅲ Dow Chemical Co. tons, was back in the news ’s day that it plans to lay off for his trip to North Korea Blue Cross Blue Shield of claim to $1 billion in tax de- fter 124 years in busi- caught the prickly New 160 employees and close or last week. Michigan said it increased ductions was based on ness, Dearborn-based York City media unawares. reduce the size of 16 offices “Guess what, I love him. 2012 total revenue 2.4 per- transactions with sham A Carhartt Inc. has Capital New York broke worldwide as part of its an- The guy’s really awesome,” cent to $20.9 billion from partnerships, a federal launched its first spring ad- the story, and outlets such nounced goal of cutting Rodman was quoted as say- $20.4 billion in 2011. But be- judge ruled, throwing out vertising campaign, touting as New York magazine, costs by $60 million over ing about North Korea’s cause of $221 million in un- the Midland-based compa- a new line of T-shirts. Deadspin.com and the New the next three years. third-generation hereditary derwriting losses, Blue ny’s bid to recover the mon- The workwear clothier’s York Times followed — The downsizing will go dictator, Kim Jong Un. Cross reported a $2.5 mil- ey. multimedia campaign is for most with observations crit- across all operating and ad- The New York Times lion net income loss last Ⅲ The $23.4 million ex- the “Carhartt Force” perfor- ical of the Mets. ministrative divisions of called a photo of Rodman year on revenue of $6.3 bil- pansion and renovation of mance tees aimed at Why Citi Field? Lots of the computer services com- and Stalinist autocrat Kim lion for its non-self-insured the Grandville Clean Water builders, ranchers, farmers Amway sales people live in pany, with layoffs to affect business, according to state laughing together one of the Plant received top honors at and other workers in hot Queens, is what the compa- less than 5 percent of the regulatory filings. “strangest sights in the his- the 48th annual American climates. ny told Capital New York. workforce. The company Ⅲ Waterproofing and tory of accidental American Council of Engineering Com- The campaign will in- All the pieces delve, to said it expects the layoffs restoration contractor Ram diplomacy.” panies of Michigan’s Excel- clude print advertising, re- varying degrees, into the and office closings to save Construction Services Inc. Bloomberg.com sports lence Awards in Detroit. tail store displays and criticism and allegations about $23 million in the plans to move this month columnist Jonathan Mahler sports-oriented digital con- that Amway is a pyramid next 12 to 18 months. from Livonia to Chrysler was even more direct: “It tent in addition to televi- scheme, something that ir- House in downtown De- OTHER NEWS sion spots. was a freak show, a meeting ritates the company and troit. Ⅲ A worst-case scenario Carhartt didn’t disclose between two crazy narcis- ON THE MOVE bristles its supporters. Ⅲ An international de- in a report commissioned its ad spend in a statement sists.” Amway has a history of Ⅲ The Detroit Medical sign competition is planned by the city says 83 cents of announcing the campaign’s The Worm, as Rodman is sports marketing. In Sep- Center named Rodney Hueb- to solicit ideas for a new every Detroit police and launch last week. known, was in the Hermit tember 2011, the Detroit Red bers president and COO. He building where the flagship fire payroll dollar could be It was scheduled to debut Kingdom with three Harlem Wings inked a deal with had been COO of Baptist J.L. Hudson Co. department spent on pensions by 2017, Saturday and will continue Globetrotters for exhibition Amway to become the Health System in San Anto- store once stood downtown. the Detroit Free Press re- during NCAA basketball TV basketball games as part of team’s first-ever presenting nio, a division of DMC par- Rock Ventures LLC an- ported. programming in March, as a documentary being filmed team sponsor. Financial ent Vanguard Health Systems nounced plans related to Ⅲ Mark Bertolini, chair- well as NBA games and the by New York’s Vice Media. terms were not disclosed, Inc. Huebbers succeeds Joe the potential $75 million de- man, president and CEO of 2013 Bassmaster Classic on but that contract is thought Mullany, who succeeded velopment at the 2013 De- Connecticut-based Aetna ESPN2. Carhartt is an offi- to be a two-year, seven-fig- Mike Duggan as CEO. troit Policy Conference. Inc., said he believes that cial apparel outfitter for the Kelly, Detroit 3 tabbed for Duggan officially an- Ⅲ The Southfield-based the health care industry Bassmaster fishing tourna- ure deal. women in biz honor nounced last week that he Sam Bernstein Law Firm will transition into a con- ment series. Amway has a number of Troy-based Kelly Services will run for Detroit mayor. signed a multiyear deal sumer-driven marketplace The new campaign’s cre- other pro sports invest- Ⅲ The Troy-based Kresge with the Detroit unit of CBS over the next decade. He ative was handled by New ments: It holds the naming Inc. will again be among rights of the Amway Center, four Michigan companies Foundation named Ariel Si- Radio Inc. for a radio ver- spoke at the Detroit Econom- York City ad agency Anom- mon home to the National Basket- honored March 13-14 in Bal- , an executive from sion during Detroit Tigers ic Club luncheon at the aly and by Carhartt’s in- McKinsey & Co. in Washing- ball Association’s Orlando timore for being named games of the familiar “1- Westin Hotel in Southfield. house team. ton, D.C., to the new posi- Magic. The company also is among America’s top corpo- 800-Call Sam Studio.” Ⅲ About $556,000 in tax- tion of chief strategy officer the presenting sponsor of rations for women’s busi- Ⅲ Unions at the Detroit payer money — the highest and deputy to President Amway-Mets deal mystifies Major League Soccer’s San ness enterprises. Free Press and Detroit News figure reported since 2001 and CEO Rip Rapson. Jose Earthquakes and the Los The 2012 list, released ratified new three-year con- — was used by state gov- New York City media Ⅲ Macomb County Circuit Angeles Sol of Women’s Pro- Friday by the Women’s Busi- tracts that will include a ernment agencies to lobby Court Judge David Viviano new health insurance plan Ada-based Amway Corp., fessional Soccer. ness Enterprise National Coun- the Michigan Legislature in was named by Gov. Rick and the first across-the- the network-based direct- Amway, known for sales cil, also includes Ford Motor 2012, according to an analy- Snyder to the Michigan board raises since 2008. marketing giant, opened its of health, beauty, and home Co. — which has won twice sis by the Lansing State Supreme Court., filling a Ⅲ Southfield-based Feder- first U.S. retail storefront care products through net- before — and newcomers Journal. spot created by the resigna- al-Mogul Corp. said it will business last month at Citi work marketing, is owned Chrysler Group LLC and Gener- Ⅲ The Michigan House tion of Diane Hathaway. shut more factories, mostly Field, home of the perpetual- by Ada-based Alticor Inc., al Motors Co. Thirty-two cor- voted to accept $31 million in western Europe, and shift ly beleaguered New York which had revenue last porations are being hon- in federal grant money to work by 2015 to lower-cost Mets — an occurrence that year of $11.3 billion. ored. move forward with the COMPANY NEWS locations such as Mexico, state-federal partnership Ⅲ Whole Foods Inc.’s Mid- China and Poland after a version of Michigan’s town Detroit store will third straight quarterly loss. health insurance exchange. Sowerby joins crainsdetroit.com guest bloggers Several guest bloggers have debuted pressed bottom,” he said. “It’s encourag- BEST FROM THE BLOGS on Crain’s website, crainsdetroit.com, ing. It has more structural longevity.” READ THESE POSTS AND MORE AT WWW.CRAINSDETROIT.COM/BLOGS including last week’s addition of David Also guest-blogging are Charlie “Curve” Sowerby. Wollborg on marketing and advertising, Good year for bonds, except ... Another round for Sangria? Sowerby, portfolio Saulius Mikalonis on environmental law, manager for Loomis Mark S. Lee on small business and Nikki Michigan was one of Aaron F. Belen is Sayles & Co. LP in Bloom- Little on social media. the“ healthiest markets in looking“ to become a field Hills, will write Do you have something to contribute? the nation for municipal player in metro Detroit’s twice monthly. In his The guest blog stints are designed to last bond attorneys and food and entertainment first blog, Sowerby, 52, for six weeks, and bloggers typically con- underwriters in 2012 ... scene, and his plans for says Michigan has built a tribute at least one blog post a week. If But voters were uniquely the now-closed Sangria foundation for economic you have something to say on a current tightfisted here about in downtown Royal Oak growth that bodes well issue or news story, you can also submit expanding that market or could do just that. Sowerby for the next five years. a single “Guest Voice” blog post without taking on new public debt. ” In a recent interview with Crain’s, committing to an entire six weeks. Sowerby said Michigan has shown sig- Interested in being considered for a ” Reporter Nathan Skid’s Detroit-area restaurant blog nificant improvement in the past few guest blog? Email Crain’s Digital Con- Reporter Chad Halcom’s blog on the legal business can be found at www.crainsdetroit.com/halcom can be found at www.crainsdetroit.com/skid years in business competitiveness. “It’s tent Strategy Manager Nancy Hanus at not simply a cyclical bounce off a de- [email protected]. DBpageAD_DBpageAD.qxd 3/1/2013 2:42 PM Page 1

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