Hospital execs Grand Rapids detail changes, convention challenges as center hotel care resumes put on hold PAGE 10 PAGE 9

JUNE 8, 2020 • VOL. 32/NO. 17 • $3.00 SERVING WESTERN MICHIGAN BUSINESS SINCE 1988 www.mibiz.com

Offi ce furniture makers fi nd ways to ‘TREMENDOUS WIN’ promote products Tetra Therapeutics’ sale offers without NeoCon healthy returns for investors, validation for local ecosystem By JAYSON BUSSA | MiBiz [email protected] By MARK SANCHEZ | MiBiz [email protected] week that was supposed to be bustling with news GRAND RAPIDS — Tetra Therapeutics Inc.’s A and information on new sale to a Japanese pharmaceutical company office furniture products and provides a final pathway toward bring- innovations in the world of ing to market potential new drugs to treat commercial design will be a Alzheimer’s disease and a form of autism, lot more reserved. as well as generates a handsome return for In line with virtually every financial backers. other event attended en masse About 100 businesses in downtown Grand Rapids suffered some sort of damage after peaceful protests Investors in a $7.2 million Series A capi- around the country, NeoCon erupted in violence on May 30 and 31. PHOTO: ANDY BALASKOVITZ tal round Tetra raised in 2016 got a return of became a casualty of the five times their original investment, founder COVID-19 pandemic. and CEO Mark Gurney said. Participants in Organizers of the marquee an earlier July 2013 debt trade show for the commercial offering got an ROI that’s design industry originally post- ‘INSULT TO INJURY’ close to 13 times their poned the event, slated for June investment, he said. 8-10, even as the COVID-19 GR business owners rebound from City Commissioner Senita “We returned a lot of pandemic began to grip states Lenear, who represents the south- capital to Michigan,” said across the country in early protest damage as local leaders east part of the city, said during Gurney, who started Tetra March. Later that month, they seek to mend old wounds a public meeting on June 2 there Therapeutics in 2011 and finally pulled the plug on the is a balance that must be struck methodically built and live show at The Merchandise By KATE CARLSON & ANDY BALASKOVITZ | MiBiz between rightly frustrated busi- led the company down Gurney Mart in Chicago, dooming [email protected] ness owners and ongoing police the R&D pathway toward plans for the more than 50,000 brutality toward minorities. an exit for investors. expected attendees and 500 GRAND RAPIDS — The May 30 violence following pro- “I think the balance with that is “This is a tremendous win for West exhibitors. tests against police brutality not only damaged dozens Lenear making sure we side with lives over Michigan, both for our investors and stake- The next NeoCon is now of downtown businesses on the verge of reopening, but property,” Lenear said. holders,” he said. slated for June 14-16 of 2021. also has caused local leaders to revisit efforts to mend the Grand Rapids — with its own recent history of police Tetra’s merger into Shionogi & Co. Ltd. Since its inception in 1969, city’s historically strained police-community relations. mistreatment of minorities, including the Michigan could ultimately reach a transaction value NeoCon has become a high- Following the protest that turned violent with burned Department of Civil Rights’ current investigation of of $500 million if certain regulatory and profile launching pad for both police cars, looting and broken storefronts, City Manager 35 complaints against the city’s Police Department — sales milestones are met over the years. leading and emerging com- Mark Washington said: “There is other damage that we is part of the national discussion sweeping U.S. cit- The deal represents one of the largest exits mercial design companies need to address that is unrelated to property. It is the ies since the killing of George Floyd in Minneapolis to date for a startup company formed and from across the globe to debut damage due to long-held tension between some mem- last month. Floyd was killed by a white police officer nurtured in Michigan and supported by new products, innovations bers of the community and the police department. We who kneeled on his neck for nearly 9 minutes. Local local investors. and services, always attract- continue to be committed to rebuilding that trust.” See GR UNREST on page 3 See TETRA on page 20 ing a who’s who of firms from West Michigan’s office furniture industry. While the occasion brought out the titans of the industry, Tribally owned fi rm secures $161M federal contract, expands GR headquarters NeoCon was arguably even more beneficial for smaller By JOE BOOMGAARD | MiBiz Potawatomi. The Waséyabek parent contract admin- environmental remediation subsid- companies, which utilized the [email protected] company recently started work on the istrators, legal iary. FED95 and the tribally owned high-profile nature of the event third floor of its Kendall Building head- support, techni- Baker Engineering LLC, a precision and steady foot traffic to gain GRAND RAPIDS — A federal con- quarters in downtown Grand Rapids cal writers, HR. performance engine manufacturer exposure in the space. tracting firm owned by Waséyabek to convert apartment units into addi- We were already and defense R&D supplier based in “I don’t know if we’ve really Development Co. LLC has begun tional office space and a large confer- bursting at the Nunica, both received 8(a) minority been able to gauge (the effect work on a five-year, $161 million con- ence room to support the expanding seams.” business certifications in March and of the cancellation) yet,” said tract with the Department of Energy federal services division. The firm is February, respectively, from the U.S. Nancy Stryker, director of to provide site operations and sup- “Right now, we’ve got about 15 working on the Small Business Administration. marketing for Holland-based port services at three National Energy positions that we’re advertising for, so Mitchell expansion project For FED95, the 8(a) certification office furniture manufacturer Technology Laboratory locations. we are growing and hiring,” Waséyabek with architecture came just as the COVID-19 pandemic Trendway Corp. The contract — Waséyabek President and CEO Deidra Mitchell and engineering firm TowerPinkster started to spread throughout the See OFFICE FURNITURE Federal Services LLC’s largest to date told MiBiz. “And then as we bring and general contractor McGraw country, which led the company to MANUFACTURERS on page 4 — helps illustrate the growth story for on more and more federal contracts, Construction Inc., both of Grand Rapids. form new teams to bid on coronavirus the non-gaming investment arm of those support positions are going to Waséyabek also launched FED95 cleaning and disinfection contracts the Nottawaseppi Huron Band of the have to grow, too — things like finance, LLC, a new Grand Rapids-based See WASÉYABEK on page 3

PERIODICALS Lakeshore communities INSIDE: hope for midyear Commercial rebound Lending PAGE 12 Report SEE PAGE 14 2 JUNE 8, 2020 / MiBiz Visit www.mibiz.com of further damage in future protests. Some busi- GR UNREST ness owners are reassessing when they will be able Community strength Continued from page 1 to reopen their brick and mortar locations because Several shop owners that sustained damage to of damage and the potential for additional unrest. property, including the bridal shop, have expressed business advocates say it will take proactive mea- Most of the damage to downtown storefronts support for the Black Lives Matter movement Published since 1988 sures to repair decades of systemic racism. happened late in the night on May 30 and early on social media. People in the community have MiBiz® is a registered trademark of “We do not condone violence and destruction morning of May 31 by a significantly smaller group also taped notes of support on many businesses’ MiBiz, Inc. of businesses and property, however we acknowl- of people than the estimated 3,000-4,500 who boarded-up windows. edge we’re at a critical point,” said Kenneth James, gathered at the beginning of the protest. The damage was a little more extensive to Old Publisher director of inclusion for the Grand Rapids Area Hundreds of volunteers descended on downtown World Olive Co., located at 108 Monroe Center St. Chamber of Commerce. “There is a lot of frus- the morning after the unrest and swiftly cleaned up NW. Three of its four windows along Ottawa Ave. Brian Edwards / [email protected] tration with the systemic rac- glass and graffiti and helped to board up windows. were smashed out, according to owner Shasta Fase. Associate Publisher ism that is playing out in this “I have a lot of glass to replace,” said Peter Mostly everything in the display right behind the Denise Montambo / [email protected] country. The Grand Rapids Krupp, co-owner of CDKI Holdings LLC, which window was destroyed, she said, resulting in a lot Chamber wants to be part of owns Sandy Point Beach House in West Olive and of broken product. Editor the solution.” Grand Rapids, and Mexo in Grand Rapids, which Old World Olive Co. has been doing curb- Joe Boomgaard / [email protected] James said he hopes the was damaged during the protest. side pickup throughout the pandemic, but was Managing Editor current “energy and atten- Mexo had been offering a limited amount of take- set to reopen its shop to in-person customers Andy Balaskovitz / [email protected] tion” will help move to a point out during the pandemic and plans to reopen on June by appointment on June 2, which was delayed (energy, policy) of “racial reconciliation.” The 8. But diners may have to sit amid plywood, Krupp because of the damage. Senior Editor Chamber has several pro- said. Along with the broken glass windows, Krupp “Seeing the damage was one of the more dif- Jayson Bussa / [email protected] James grams focused on race and said the inside of the restaurant was vandalized and ficult things we’ve gone through in the 11 years Senior Writer inclusion, he said, and “we a computer terminal and cash drawer was stolen. we’ve been in business,” Fase said. Mark Sanchez / [email protected] would like to see like-minded “It was insult to injury,” Krupp said of the dam- Despite this, Fase said the company was (fi nance, health care, life sciences) organizations and individuals age at the tail end of the pandemic-related closure. embraced by the community the next morning Staff Writers talk about what’s next.” “I’m very sympathetic to the (protesters’ cause). It as volunteers helped quickly clean up the store. Kate Carlson / [email protected] On June 2, Washington and was hard enough being shut down, then to have to “We know that Grand Rapids is awesome and (real estate & development, small biz) other city officials released a rebuild everything to reopen is tough.” that the community is by and large a caring and Jessica Young / [email protected] plan that indeed looks at what’s Robinson — a co-owner of Ambiance GR, a giving community, but I’ve never experienced acts (manufacturing, agribusiness, nonprofi ts) next. The city’s Office of Equity lounge that was set to open downtown before the of strangers and acts of such kindness,” Fase said. Contributing Reporters and Engagement and Office of pandemic hit — said one of the building’s windows The company is still estimating the lost product, Marla Miller, Jane Simons Robinson Oversight and Accountability was broken on May 30. but Fase hopes to reopen the store in two weeks, plans to increase summer job “Windows can be replaced, lives can’t be depending on how quickly the windows are replaced. Copy Editor opportunities for youth and “increase restorative jus- replaced,” Robinson said. “It would be insensitive Like most business owners, Fase said she worries Claire Boomgaard tice programming, elevating community voices, and on our part to gripe about windows even though about more damage in the future from protests. public safety engagement,” among other measures. we’re as invested as anyone downtown.” “This will be a lesson we’re all going to learn VP of Production & James saw three events take place on May 30 something from,” Fase said. “But you’ve got to Audience Development and in the following days: a “peaceful protest” fol- ‘Flood of emotions’ move forward with strength and courage and know Kristi Kortman / [email protected] lowed by a “few dissenters and agitators” and then the community is there for you.” the volunteer cleanup efforts. Seeing some of the damage play out on TV was Senior Advertising Consultant “No, we don’t condone (property destruction), overwhelming for Ashley Pipe, manager of Ali Reopening for business Shelly Keel / [email protected] but we need to look at what precipitated that: pain Nicole Bridal, but she said it was a relief there was and anger,” James said. not more damage caused to the store, located at Despite Osteria Rossa restaurant being located in Digital Specialist Jamiel Robinson, CEO of Grand Rapids Area 52 Monroe Center St. NW. the thick of where the protest and much of the dam- Danielle Affholter Black Businesses, said city leaders are seeing the Pipe went to the store with her sister the night of age took place, the business was left unscathed, said [email protected] “utter frustration” from community members, par- the protest to do her best to secure the business. One one of the restaurant’s owners, Karie Koster. ticularly the targeting of minorities by the police. window of the bridal store was broken, but not all “We made it through undamaged, but our land- Circulation For address corrections or “Whether people feel (the destruction) was the way through, and nobody had entered the store. lords demanded we put up boards,” Koster said. subscriptions, contact MiBiz at right, wrong or are indifferent to it, we have to “Because our store was affected in a less criti- “We actually made it through though, which is 1-877-443-1977 or [email protected] acknowledge the fact that there’s a large portion cal way than so many other businesses around us, incredible and lucky.” of our community that has been oppressed from we’re really grateful, but we’re doing a lot of reflect- Koster said she hopes to reopen Osteria Rossa MiBiz that standpoint,” he said. “We have to stop look- ing on why what happened did happen,” Pipe said. for dine-in customers the week of June 8, but the ISSN 1085-4916 • USPS 017-099 ing at protesters as the problem and have to look “We’re trying to figure out the best way to do our business needs to make sure it will be safe for staff Established 1988 at institutional racism and the policies of the Police part to ensure nothing like that happens again.” and guests because more protests are possible. Department and keep addressing those.” Pipe describes the damage during the protest “We’ve had a lot of people call and say they want and coming into town the next day to clean up as a reservation as soon as we open,” Koster said. MiBiz is published every other week by “a flood of emotions.” The restaurant has been open for takeout MiBiz, Inc., P.O. Box 1629, Grand Rapids, Bad timing “Coming into Grand Rapids the next day and see- throughout the pandemic, but had to temporarily MI 49501. Telephone (616) 608-6170. Fax City officials reported roughly 100 businesses were ing the community come together in a new way and close for a couple of days because of the damage to (616) 608-6182. E-mail: [email protected]. affected by the damage left in the wake of the May all the support and encouragement that was sent to the majority of downtown and blocked off streets. Subscription changes: subscribe@mibiz. 30 protests. Days after the protest, most downtown us as a business through messages and emails, it defi- “I just felt so bad for every single business that com. Periodicals Postage is paid at Grand storefronts remained boarded up with plywood to nitely comforted any feelings of unease in terms of the got hit,” Koster said. “None of those businesses did Rapids, MI. shield broken windows, and as a precaution in case damage of the store,” Pipe said. anything to deserve it.” POSTMASTER: Send address changes to MiBiz, P.O. Box 1629, Grand Rapids, MI “It may just be internal commu- W.Va., Pittsburgh, Pa., and Albany, end of 2020. We’ll see how that goes.” 49501. Subscriptions are available without WASÉYABEK nication to help keep everyone calm Ore. with a collective 200 employ- To cap it all off, Waséyabek in Continued from page 1 cost to qualifi ed readers. Paid subscriptions and let them know what’s going on, ees, Mitchell said. January partnered with Gun Lake are available to those not meeting qualifi ed but there might also be some external Waséyabek serves as the prime Investments, the non-gaming eco- circulation requirements. Paid subscriptions with the federal government, as well communication, too,” Truscott said. contractor, and formed a joint ven- nomic investment entity of Match- are $99/year. Single copy and back issues as offer industrial hygiene and other The partnership is an extension of ture with Emeryville, Calif.-based E2 E-Be-Nash-She-Wish Band of (when available) are $3 each, plus fi rst class services. a client relationship Truscott Rossman Consulting Engineers Inc. to offer a Pottawatomi Indians, or Gun Lake postage. Call 1-877-443-1977 to order. “We haven’t been awarded any- has developed with Waséyabek for range of R&D, engineering, facilities, Tribe, on the $17.5 million purchase thing yet, but we bid on several more than a year as the tribal firm has environmental, safety, health and of the iconic McKay Tower in down- things for the emergency response “really emerged as an investing organi- quality support services. town Grand Rapids. HEADQUARTERS piece of it so that when a COVID-19 zation doing some innovative things,” Mitchell said Waséyabek’s goal The building suffered damage confirmed case is onsite, you need to Truscott said. for the federal contracting group is and looting after protests against 1059 Wealthy St. SE, #202 come in and do the disinfection and Like many non-gaming tribal to generate $20 million in annual rev- police brutality turned violent at the Grand Rapids, MI 49506 testing to make sure that it’s clean,” economic development organiza- enue by the end of 2022. end of May, Mitchell said, noting 616-608-6170 phone • 616-608-6182 fax Mitchell said. tions, Waséyabek has leaned into fed- The growth for Waséyabek also the Kendall Building was spared in FED95 also tapped Truscott eral contracting as a way to diversify comes as the firm expands its buy- the incident. Prior to that, the own- NEWSROOM Rossman Group LLC, a public rela- revenue for the tribe. Tribally owned and-hold investment strategy ers had been working with McKay 1224 Plainfi eld Ave. NE tions agency with offices in Lansing, companies qualify for minority busi- beyond small businesses into the Tower’s retail tenants as they’ve been Grand Rapids, MI 49505 Grand Rapids and Detroit, to provide ness status, which opens them to middle market for the first time, seeking out various COVID-19 relief communications services for custom- opportunities to compete for fed- Mitchell said. Waséyabek is prospect- programs. COPYRIGHT ©2020. All Rights Reserved. ers in the case of a COVID-19 outbreak eral set-asides. ing for operating company acquisi- “The relationship with Gun Reproduction or use of any portion without or if their building gets commandeered The Department of Energy tions in the $10 million to $30 million Lake has been great,” Mitchell said. permission of the publisher is prohibited. to provide emergency services to awarded Waséyabek Federal Services revenue range “hopefully here in the “There’s a lot of pride in both tribes patients, for example. the site operations contract in Grand Rapids area, or the Michigan of owning a building of that caliber, CEO and Principal John Truscott December, with the firm fully tak- area,” she said. and in us being able to remain com- said the partnership will operate ing over the project on April 1 after “We’re hoping to do a mid-mar- mitted members of the Grand Rapids similarly to the work the firm does a transition period. The contract ket acquisition — or two, or three — community. We both really set down with I.T. companies when clients covers National Energy Technology before year end 2022,” Mitchell said. deep roots and we’re happy to be have a cybersecurity issue. Laboratory sites in Morgantown, “We’d love to have one done by the here.”

Visit www.mibiz.com MiBiz / JUNE 8, 2020 3 MANUFACTURING

Holland-based Haworth Inc. developed a variety of virtual features and experiences for potential clients that the company will unveil to coincide with NeoCon, whose organizers canceled this year’s live event in Chicago. This digital offering includes a virtual showroom that features several new products. COURTESY PHOTOS

OFFICE FURNITURE programming for NeoConnect, but was strate- into the virtual arena to fill the void left by “In the end, our industry, gic when it came to rebounding from an oppor- NeoCon, providing a wide range of opportu- MANUFACTURERS tunity lost to show off its latest innovations to nities for digital engagement with potential we’re a tactile industry. Continued from page 1 a broader audience. customers. People want to touch “For us, we wanted to be more adaptable This includes a series of webinars that is Trendway does not maintain a showroom to what our customers were asking for and set to launch this week, featuring the likes and see. If they’re buying within The Merchandise Mart itself, but has a what they were needing,” Stryker said. “We of speakers Anders Byriel, CEO of global tex- chairs, they want to sit in permanent space nearby. had accelerated some product launches that tile house Kvadrat, as well as University of them and feel the textile.” “NeoCon is a huge time to meet with our covered the needs that the pandemic created Michigan professor, author, and innovation dealers and continue to build those relation- for our customers.” expert Dr. Jeff DeGraff, among others. ships,” Stryker said. “It’s a focal point for our Single and U-shaped acrylic screens that These presentations will lead up to the — KURT VANDERSCHUUR industry. It’s a great time to gather all our dealers can be retrofitted to existing open-plan office launch of Haworth’s new digital showroom, Global Brand Director for Haworth Inc. together and engage with them. Missing out on environments were one such example. The featuring more than a dozen new products. that is probably one of the most painful things.” product met a surge in demand for increased Post-NeoCon, Haworth will begin sending However, the NeoCon concept isn’t dis- barriers for open settings to minimize and samples and stocking them in the company’s appearing completely. In lieu of the live eliminate the transfer of germs. physical showrooms. “For product development teams, it’s really Merchandise Mart event, NeoCon organizers Stryker also said that an advantage for “In April, we didn’t know if (the COVID-19 hard to do it all virtually — models and proto- have created NeoConnect, an online hub that Trendway is that it is able to maintain close pandemic) was just a bad dream, but in early types and the physical things,” VanderSchuur features access to exhibitor product launches relationships and consistent engagement with May, it was hard to see an end in sight,” said said. “You really test your rendering ability and in addition to panel discussions, webinars and its dealers, and can bring products to market Kurt VanderSchuur, global brand director for your 3-D modeling abilities.” other market education opportunities. without all the pomp and frills that come with Haworth. “We kind of decided we’d go virtual Virtualization is a concept that VanderSchuur The NeoConnect hub — found at NeoCon.com NeoCon. and do NeoCon that way.” and the team at Haworth are really embracing. — was established on June 1 and its information “We bring our dealers in periodically for Virtualization came relatively easy for He said that the company would be unveiling and programming will steadily trickle through- large training events and we get those inter- Haworth, which leans on technology to new virtual features this summer but wouldn’t out the month. actions with them,” she said. “We hold events work with its design teams across the globe provide much more information beyond that. in our showroom for our dealers. So, we have to launch products at the world’s premier Reaching customers a more personal relationship with our dealers shows. Haworth traditionally has a presence Trade shows obsolete? because of our size.” at other international shows such as Salone where they are Office furniture giant Haworth Inc., (Milan Furniture Fair), Orgatec in Germany A wide range of virtual tools now give com- Trendway did not develop any special based in Holland, chose to dive headfirst and NYCxDESIGN in New York City. mercial designers the opportunity to reach a broad audience, providing detailed looks at their latest innovations without having to rely on in-person shows like NeoCon. “Most of the visitors (to NeoCon) are designers and architects — and say you have a firm of 50 people and they send five people to the show,” VanderSchurr said. “(Through vir- tual features) you can reach everyone at that firm, where before you were just reaching the five people. You can speak to all 50. It makes it more accessible.” Haworth’s debut into the digital world was when its team designed a virtual house for NYCxDESIGN, stocking it with products from its brands. VanderSchurr said that it received over 100,000 views, which confirmed to his team that this was an effective way to promote and sell products. Still, VanderSchurr admitted that tradi- tional trade shows like NeoCon still have a place in the industry, especially because of its tactile nature. “In the end, our industry, we’re a tactile industry,” he said. “People want to touch and see. If they’re buying chairs, they want to sit in them and feel the textile. That’s the part that’s hard (to replicate virtually).” Trendway’s Stryker agreed, pointing again to the face-to-face opportunity to fos- ter relationships. WEST MICHIGAN’S LEADING COMMERCIAL ROOFING AND SHEET METAL CONTRACTOR “My personal opinion is that nothing beats A SUBSIDIARY OF EAST MUSKEGON ROOFING AND SHEET METAL • EASTMUSKEGON.COM • 231.744.2461 that live interaction and we embrace that and want that,” she said.

4 JUNE 8, 2020 / MiBiz Visit www.mibiz.com ADVERTISEMENT Unconsciously Competent: How core competencies can drive manufacturers through crises and position them for future growth

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9OTJQPJWFQXTUQFSXYTNSHTWUTWFYJ5WTܪQJ+NQRѣX core competencies as he continues to integrate new metrics, transparency, and other procedures. However, he is quick to note that integrating these new processes cannot be done at the expense TKYMJTWNLNSFQKTZSIFYNTSYMFYGZNQY5WTܪQJ+NQRX While the COVID-19 pandemic has sent the global YTKFQQGFHPTSNYXHTWJHTRUJYJSHNJXYTܪSIFUFYM into the business it is today. Similarly, letting core economy reeling, it also forced many manufacturers ahead in the new economic environment. competencies drive business decisions too rigidly can to reexamine the foundations and principles their also be risky, according to Hossink of the The Center- businesses were founded upon. Ѧ(4;.)WJFQQ^FHHJSYZFYJIYMFYHMFWFHYJW@TK5WTܪQJ West. +NQRXBѧXFNI9TII9OTJQPJW5WTܪQJ+NQRѣXSJ\(*4\MT Though they are often referred to in dry and academic OTNSJIYMJܪWRNS+JGWZFW^Ѧ.YLF[JRJFHMFSHJ “If you follow the path too closely you can actually terms, core competencies form the bedrock of an as a newcomer to see the team in action. You never XYNܫJNSST[FYNTSFSIYMFY\NQQWJIZHJ^TZWFGNQNY^YT organization. In line with the Japanese model of want a crisis to occur but when they do, it really is an react to rapid changes,” Hossink said. “If you ignore doing business, core competencies are like the root opportunity to see how the team interacts and works the human element of your culture, that can suffer as system of a tree. In more Americanized terms, they and solves problems and creates a new normal. That well. People could feel less a part of the organization are an organization’s “special sauce.” Many small- came out in spades over the last month and a half.” and their output could suffer.” and medium-size manufacturers focus on aspects of their business outside what they produce, such as As the full force of the pandemic took hold over the Outside of looking to improve its future operations customer service, quality, and reputation, but do not global economy, Tjoelker found himself positioned YMWTZLMNYXHTWJHTRUJYJSHNJX5WTܪQJ+NQRXFQXT YFPJYNRJYTIWNQQIT\SNSYTYMJXJFYYWNGZYJXYTܪLZWJ to observe and assist the rest of the executive team plans to leverage its core competencies when it out how or why they work. Likewise, many times NSQJ[JWFLNSL5WTܪQJ+NQRXѣHTWJHTRUJYJSHNJXYT HTRJXYTKZYZWJFHVZNXNYNTSX9WFINYNTSFQQ^YMJܪWR those core competencies are embedded so deeply navigate the crisis. has concentrated on organic growth, however, as within the culture that they can be overlooked when YMJJHTSTR^JRJWLJXKWTR(4;.)*MRFSSFSI it comes to seizing new opportunities or planning for The company “turned the place upside down,” Tjoelker noted they are keeping their options open for future growth. Likewise, in times of economic turmoil cordoning off separate entrances, closing lunch TUUTWYZSNYNJX+TWYMJRMF[NSLFܪWRLWFXUTKYMJNW -- such as during the current COVID-19 pandemic -- and locker rooms, and implementing other company’s core competencies will aid in choosing the leveraging your business’s core competencies allows procedures to ensure its employees’ safety, said HTWWJHYܪYKTWYMJNWTWLFSN_FYNTS an organization to pivot rapidly into new areas, said 8YJ[JS*MRFSSKTZSIJWFSIT\SJWTK5WTܪQJ Terry Hossink, a business development specialist at +NQRX9MJSYMJRFSZKFHYZWJWYZWSJINYXFYYJSYNTS “Knowing who you are is the starting point of being the Michigan Manufacturing Technology Center - West to serving its customers in the food processing able to perpetuate the culture somewhere else,” (The Center-West). sector and continued to run three shifts, seven days Tjoelker said. a week. Aided by Tjoelker’s experience with large “The key here is to truly understand what your organizations in the automotive and aerospace Despite the economic situation caused by the company, your talents and your abilities are, and how XJHYTWX5WTܪQJ+NQRѣXJ]JHZYN[JYJFRKTWRJI COVID-19 pandemic, small- and medium-size to use these assets moving forward so you don’t fall continuity and contingency plans, conducted risk manufacturers have the ability to refocus their behind the curve.” Hossink said of core competencies. assessments and continued to revamp its facility to GZXNSJXXJXFSIܪSISJ\TUUTWYZSNYNJXKTWLWT\YM both meet customer demand. 4KܪHJKZWSNYZWJRFPJWXXF\FSTUUTWYZSNY^YTQJ[JWFLJ Hossink along with other business executives spoke their design and manufacturing skills to produce about the importance of core competencies during “We often say we don’t really sell bags, we sell trust masks, Hossink said. Likewise, another organization the second webinar in the 2020 Back to Basics series FSIIJUJSIFGNQNY^ѧ*MRFSSXFNIѦ

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The Michigan Economic Devel- into shared and public transporta- Pandemic forces mobility fi rms to opment Corp. initiative pivoted tion settings. resources from planned technology “They’re putting tools into the grant programs to focus on programs vehicle to combat the virus and pivot, renew focus on rider safety that could be used to prevent further hopefully change the negative per- outbreaks of the virus, according to ceptions on transportation that we Tyson. think arose from COVID-19,” Tyson By JESSICA YOUNG | MiBiz in Detroit, Columbus, Ohio and soon as possible,” McCurry said. “The big thing here was that we said. “We’re also very excited about [email protected] Providence, R.I. The company is now building a knew that we had to get these solu- the fact that GHSP technology could By early this year, the system was prototype shuttle that will be parti- tions into the market as soon as we not only go into emerging mobility hared transit presents averaging more than 500 riders per tioned into three separate sections. could,” he said. options like May Mobility but also unprecedented risks as day who were mostly commuters and The vehicles, which were originally PlanetM expedited the grant traditional transportation vehicles communities and busi- college students, according to the designed with six seats, will now hold timelines to help companies quickly like police vehicles and ambulances.” nesses around the state company. two riders and an attendant each in deploy their technologies to address S reopen and people come “Ridership in Grand Rapids was a divided area. Continuously run- challenges facing the market in the Moving quickly out of isolation following a months- our highest,” McCurry told MiBiz. ning HVAC filters will circulate the air wake of the continued COVID-19 long shut down because of the COVID- “We’ve gotten a lot of people to try and the shuttles will be disinfected crisis. May Mobility plans to have a proto- 19 pandemic. public transportation for the first with hydrogen peroxide fogging units “In the mobility market, which type of the remodeled shuttle ready However, companies and part- time.” obtained through a partnership with is always changing, we noticed that to demo by mid June, however, that nerships in West Michigan are at the But the bottom dropped out of the Faurecia Automotive Seating in helping companies deploy their tech- timeline is vulnerable to supply forefront of inno- pilot program earlier this year when Grand Rapids and a UV-C lighting nology in real-world settings not chain disruptions or other unfore- vation when it the deadly coronavirus spread to unit manufactured by Grand Haven- only validates the technology fur- seen circumstances, according to comes to protect- Michigan and service was suspended based GHSP. ther but then they’re also going to McCurry. ing future rid- by the company in March. get feedback from the community “If we can move quickly and prove ers and drivers of New concerns surrounding the Speed to market that they’re deploying in. At the end that this technology is safe and get it public and shared safety of shared transportation came of the day, that helps them establish out into the world, we’d obviously like rides, according to the forefront. People who ride GHSP, a division of JSJ Corp., is one new partnerships, potentially raise to do that as soon as possible,” she to Erin McCurry, shared or public transportation are of three companies with a reach into more funding if they’re a startup, and said. “This is the fastest that we can product manager uniquely vulnerable to the highly West Michigan to recently receive it really helps accelerate the adoption go while making sure that it’s safe for accessibility at contagious coronavirus, which is grant funding from the state’s PlanetM of the technology,” Tyson said. and thoroughly testing everything.” Tyson May Mobility Inc. spread mainly between people who initiative. The resources are intended Ultraviolet light is one technol- Enthusiasm for the project is The company, which is based are in close contact with one another to jumpstart solutions to mobility ogy that can be used to disinfect spreading through May Mobility, in Ann Arbor, launched an autono- and through respiratory droplets challenges and public health con- and kill germs, including pathogens McCurry added. mous “micro-transit” shuttle fleet produced when an infected person cerns presented by the spread of the such as the coronavirus that causes “People who are immunocompro- in Grand Rapids last year. The proj- coughs, sneezes or talks, according to coronavirus. COVID-19. GHSP uses technology mised still need transit and I think ect is a partnership between May the Centers for Disease Control and “We are dedicating a lot of our licensed from Grand Haven-based that everyone really jumped at the Mobility, the city of Grand Rapids Prevention. work right now around how we can UV Partners Inc. that it developed for chance to work on this,” she said. “It and a number of private compa- “Mid April was when we really help combat the virus when it comes its UV Angel devices used in health goes back to our roots as a startup nies along the fixed route between decided that we need to make a prod- to transportation,” Charlie Tyson, care settings to disinfect equipment. and it’s great to be able to work really downtown and the city’s west side. uct that can address these concerns technology activation manager at The company received $80,000 from quickly on a product that will really The company also has similar fleets so that we can get back on the road as PlanetM, told MiBiz. PlanetM to expand the UV products impact people’s lives.”

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FCI_MiBiz_CorpAd_10.25x6.625_Half_2020v1.indd 2 4/1/2020 8:57:28 AM 6 JUNE 8, 2020 / MiBiz Visit www.mibiz.com SPORTS Whitecaps front offi ce awaits answers on future of 2020 season

By JAYSON BUSSA | MiBiz League teams are at the mercy of their parent to teams’ business models. [email protected] organizations. “(Major League teams) have other revenue “We are directly dependent on what they streams that might make it worth their while to riginally scheduled to kick off the decide,” Chamberlin said. “We get our team still play,” said Chamberlin, referring primarily to 2020 season on April 9, the West from the Tigers. We’re completely dependent on TV contracts. “In West Michigan, I don’t think it’s Michigan Whitecaps remain in what the Major League clubs decide for the sea- a hidden fact that we don’t have those revenue The West Michigan Whitecaps have yet to kick limbo along with 140 other Minor son and how they decide to handle the Minor streams. Baseball doesn’t make sense for us if we off their 2020 season because of health con- O League Baseball teams across the League operations.” can’t invite fans into the ballpark. … It’s a math cerns associated with the COVID-19 pandemic country. If rumors and emerging reports are any indi- equation: At what capacity does it make sense to as speculation mounts over whether or not Acknowledging that each day that goes by cation, the future is not very bright for local base- open up the gates?” Minor League Baseball will ever compete this without baseball activity is certainly not a good ball fans. Chamberlin also said that he was confident year. COURTESY PHOTO sign amid persistent rumors that the COVID-19 Not only have Minor League teams across the Major League Baseball would never force its pandemic might wipe out the season entirely, Joe country made drastic roster cuts en masse but Minor League organizations into an arrangement “They are very determined and are going to Chamberlin said the Whitecaps front office con- recent reports from Forbes and The Athletic cited that was not viable. be as creative as they need to be to play base- tinues to wait for the official word from the league. sources inside the Washington Nationals’ Minor ball in 2020,” Chamberlin said of the League. “As “I’m just trying to read the tea leaves in the League organization who indicated the season is a Northwoods League franchise, we feel good press and see how things are progressing,” said dead in the water. Growlers, Bombers and Pit about that. They’re going to leave the door open Chamberlin, CEO of the Class A Minor League Minor League Baseball President Pat to as many places as they can so that people can affiliate of the Detroit Tigers, which has been a O’Conner has yet to speak publicly about the Spitters still optimistic enjoy baseball in a safe and socially-distant way.” mainstay in the West Michigan community for fate of the 2020 season. As if stressing over one team wasn’t enough, The Northwoods League consists of collegiate 26 years. “Any speculation that you’re reading is the Chamberlin is also CEO of the Traverse City players that are unpaid in order to comply with “Until they make some solid decisions at the same speculation that I’m reading and seeing,” Pit Spitters, an organization that belongs to NCAA regulations. Still, ticket sales are the key Major League level, we will not have any firm Chamberlin said. “We get questions as an organi- the Northwoods League, a summer collegiate driver for operations, which is why Chamberlin answers on what something like the Midwest zation about it. At this point, our answer is unfor- wooden bat baseball league with Great Lakes wants to welcome as many people as possible to League will look like,” he said. tunately that we don’t have the answer yet. and Great Plains divisions. Turtle Creek Stadium. Chamberlin was referring to the fact Major “As Major League Baseball and the players While many similar leagues across the coun- “I can say that opening up a ballpark for a League Baseball has yet to establish any sem- association hopefully come to terms with what try have folded up shop for 2020, including the group of 100 people is probably not going to get blance of a concrete plan on how to salvage the a Major League season will look like, that is when iconic Cape Cod League, the Northwoods League it done,” he said. “But hey, as things continue to 2020 season, even while the NBA, NFL and NHL I think we’ll get some quick answers about how plans to play baseball in some form. progress over the next month or so, I think we’re have developed, at a minimum, tentative plans Minor League Baseball fits into that.” The league is ramping up competition in getting to the point where we might have some- to return from the shutdown. The Detroit Free Press reported that the Detroit Bismarck, N.D., home to the Bismarck Larks, thing we can take a look at.” The battle between the MLB and the players Tigers would indefinitely pay Minor League players which plans to host games in June. Additional The Kalamazoo Growlers and Battle Creek union continues. The latest development came a $400 weekly stipend as the matter is sorted out teams are able to come on line over the course Bombers also belong to the Northwoods League. on June 3 when the league rejected the players’ and has avoided cuts to its Minor League rosters. of the summer once health conditions in their Brian Colopy, managing partner for both orga- proposal for a 114-game season with no addi- Compensation for Minor League players relies respective states allow. nizations, did not respond to requests for com- tional salary cuts. This year’s season could boil heavily on ticket sales, which highlights a caveat: Chamberlin credited the Northwoods League ment on the upcoming season, but both teams down to as few as 50 games. If baseball returns, chances are high that it will be for what he called “sophisticated operations” and continue to update their fans on the status of the Meanwhile, the Whitecaps and other Minor in front of few or no fans, which is a major blow “operationally-sound franchises.” season through social media.

Visit www.mibiz.com MiBiz / JUNE 8, 2020 7 REAL ESTATE & DEVELOPMENT

Retail shops focus on customer service in gradual reopening

By KATE CARLSON | MiBiz everyone who has supported us during our [email protected] closure.” The business has been in operation since roviding different ways to shop and 1967 in Holland, so it has a loyal following in the making customers feel as safe as pos- community, she added. sible remains the focus for retailers as “We have a lot of people that support us, so they gradually work to reopen their we were really happy to have the orders we did P stores. have,” Hungerink said. “Once we could open our Many small retail shops in West Michigan doors, we still continued to do curbside for peo- have been in survival mode with limited opera- ple that wanted it.” tions for the past few months because of miti- gation steps put in place to curb the spread of COVID-19. As well, stores face an added cost to Missed opportunities Tenden in downtown Grand Haven sells hand- buy personal protection equipment, and a learn- Although most stores had to close during the made clothing and handcrafted goods, and has ing curve for staff and customers to follow new whole month of April because of COVID-19, 59 reopened its storefront, above, to in-person safety procedures. percent of retailers in the state expect increased shopping in the wake of closures stemming On June 1, Gov. Gretchen Whitmer rescinded sales through July, according to a survey from from the COVID-19 pandemic. Gina’s Boutique her stay-home order and announced retail the Michigan Retailers Association. Among sur- in Grand Rapids, left, has a sign directing cus- stores would be among the next wave of busi- vey respondents, 37 percent predicted decreased tomers to sanitize their hands upon entering nesses able to reopen starting June 4. Previously, sales, while 4 percent expected no change. the shop. COURTESY PHOTOS retail stores had only been able to operate on an “Retailers were worried shoppers may be hes- appointment-only basis with a 10-person limit itant to venture out, but Memorial Day weekend “We just want our customers to know that since May 26. Before that, non-essential physical in northern Michigan quickly revealed there is a we’re here for them,” Vos said. “If there’s anything stores were completely closed and retailers were pent-up demand,” MRA President and CEO Bill we can do to make them more comfortable, don’t operating through delivery and curbside service. Hallan said in a June 1 statement. “Many retail- be afraid to ask.” Several local shop owners said they did not ers all over the state said they’ve been busy with have a problem abiding by the 10-person limit, appointments and filling orders the past week, “The March and April timeframe is always a Rekindling the fire and could usually allow walk-in appoint- so we hope this broader opening allows busy time for us with proms, Easter and admin- ments. Since June 4, store owners were more stability as stores recover from the istrative professional day, and we’ve lost all of A similar standard of service and safety measures no longer required to use an appoint- shutdown.” those,” Vos said. “Mother’s Day we were allowed can be found at Gina’s Boutique in downtown ment system, but now have to fol- Don’s Flowers & Gifts Inc. has to be open for curbside and deliveries, but we Grand Rapids. low capacity restrictions based on not seen the usual foot traffic at still missed out on in-store traffic.” As soon as shoppers walk into the down- the square footage of their loca- this time of the year, but people Before the pandemic, most customers at town clothing boutique, they are asked to san- tion, the same as essential retail- REAL ESTATE started coming into the down- Don’s Flowers & Gifts would walk into the store itize their hands and are provided masks if ers like grocery stores. + DEVELOPMENT town Zeeland store as soon as it to shop. When the company was able to open they don’t already have one. Employees wash Sponsored by Lisa Hungerink, owner of ROCKFORD reopened on May 26. for curbside service, it moved its in-store cooler their hands every half hour, and the company Reader’s World Bookstore, said CONSTRUCTION CO. “There is some confusion in with flowers to the door so customers could see also set up a touchless payment system, said she has spent nearly $500 buy- the general public of what is and arrangements without coming inside. Gina VanTimmeren, owner of Gina’s Boutique. ing masks and hand sanitizer isn’t open, and do they need to “People want to be able to see it,” Vos said. Employees also set aside clothes that customers and installing a sneeze guard at her downtown call ahead,” co-owner Doug Vos said. “People “You can’t always describe it over the phone.” have tried on previously. Holland store. Sales are not what they usually are still trying to navigate the executive orders.” Vos said the company invested quite a bit “At this point, I’ve spent about $350,” would be, she said, but customers are still sup- The flower and gift shop has been posting into personal protection equipment and hand VanTimmeren said of the company’s PPE expen- porting the store and have been understanding photos of its products on Facebook to make it sanitizer to protect employees and customers. ditures. “I did not expect the masks to go as fast with the new safety precautions such as wear- easier to showcase items to customers. The com- Finding the products was a battle of its own, with as they have. They’re probably about $50 for 50 ing masks. pany is continuing to offer curbside service for a shipment of masks delivered to the store the of them and I went through 50 in one day at my “Everybody has kind of learned how to be people who are not comfortable coming inside same day it was allowed to open for appoint- Saugatuck location.” more patient,” Hungerink said. “I want to thank the newly reopened store. ment-only customers. People usually stop into her shop when they come to downtown Grand Rapids to eat, VanTimmeren said. Restaurants that are closed or operating with just takeout and delivery do not provide as much of a draw, she added. One thing the executive orders have done is force VanTimmeren as a business owner to work harder to find creative ways to reach her custom- ers. Customers can still shop on the boutique’s website, and there is free local delivery. She has also started “virtual styling” by trying on new out- fits and posting the videos to Facebook. “That part has been cool, being able to serve my customers in a new way,” VanTimmeren said. “It has brought back my hustle and reminds me of when I first opened and had that fire to do creative things that you can’t get from a chain retailer.” With most trade shows canceled this year, the boutique could struggle in getting enough clothes for spring and winter in 2021, VanTimmeren said, noting the store will likely have a lighter inven- tory next season. “I usually go to three or four trade shows and I think a lot of vendors will probably go out of business on that end,” she said. “That industry is so unknown, it will just be a challenge for me trying to pick out everything because usually you get to see it in person.”

Seeing the process Todd Hancock, owner of Tenden, a Grand Haven- based store with clothing and handcrafted goods,

8 JUNE 8, 2020 / MiBiz Visit www.mibiz.com “We just want our Downtown Grand Rapids convention hotel, amphitheater projects put on hold customers to know that we’re here for By KATE CARLSON | MiBiz Convention Center and DeVos “This is certainly not the CAA or task has set specific benchmarks on when [email protected] Performance Hall, was initially force saying that the projects are dead to resume consideration for the proj- them. If there’s expected to make a decision on the or that they’ll never happen, but the ect, Knape added. The governor’s stay- anything we can do GRAND RAPIDS — The Grand Rapids- convention hotel project by the end of responsible thing is we’re taking care of home order was in place from March Kent County Convention/Arena 2019. The task force had estimated the the aspects CAA has already invested in 24-June 1. to make them more Authority is hitting pause on a task convention hotel would cost between and evaluating what makes sense from “Until the country has fully opened comfortable, don’t force that is considering the feasibility $140 million and $180 million, with a financial standpoint and economic up, I just can’t see anything happen- of building a new convention center an annual economic contribution of stimulus standpoint.” ing until that happens,” said Small at be afraid to ask.” hotel and adding a large-scale amphi- $82.3 million, based on data from a Experience Grand Rapids. “Our pri- theater in the city’s downtown. 2018 study from Chicago-based HVS Questions remain ority is going to be on helping those — DOUG VOS Citing the effects of the COVID-19 Convention, Sports & Entertainment hotels that have reopened to regain Co-owner of Don’s Flowers & Gifts Inc. pandemic on the hospitality indus- Facilities Consulting. The coronavirus has negatively their footing.” try and on local government bud- The plan was for the 400- to 500- affected most industries, but par- gets, Doug Small, president and CEO room convention hotel to be con- ticularly the tourism and hospitality Looking outdoors of Experience Grand Rapids, now structed on top of DeVos Place, with industries have taken a blow as gover- feels fortunate that he makes most of expects discussions about a conven- a restaurant, lounge, coffee shop, nors across the country limited travel Once the task force reconvenes in the his products. Hancock also was able to tion hotel will be on hold until 2021. 40,000 square feet of meeting space to prevent the spread of the virus. future, Small said it is more likely the sew masks, which helped him main- Small chairs the task force the CAA and a 20,000-square-foot ballroom. The majority of hotels in Kent amphitheater project has “more solid tain cash flow to pay for utilities, for asked to study whether building a new Chris Knape, founder of K Corner County have remained open, Small footing” to move forward before the example, when he was closed to the hotel at the DeVos Place Convention Consulting LLC, attributed the pause said, but as many as 15 hotels had hotel because its outdoor setting bet- public. Center would make financial sense. in part to the task force’s consideration closed at one point this year because ter allows for social distancing. “Material is taking quite a bit lon- He said the task force was a month of using the city or county bonding of COVID-19. “It’s an outdoor setting, and you ger to ship, so I might have to adapt or two away from presenting its find- authority to help finance the project. Hotel occupancy for April plum- can space it out,” he said. a little bit, but for the most part I ings to the CAA board when the coro- “Frankly, (COVID-19) has had a meted 85 percent year over year, from One decision the task force made stock all my materials pretty far in navirus began to spread throughout huge impact on local government, 56 percent last year to just 18 percent about the amphitheater was that advance,” he said. Michigan, causing the statewide shut- and with all the uncertainty with local in 2020. it should be located somewhere in Hancock’s small downtown shop down in March. funding on the city and county level, it Similarly, venues of all sizes have downtown Grand Rapids, Small said. can only hold a few people anyway, so Noting that the task force has not made sense to see what the long-term been empty since the coronavirus The group previously considered he adapted well to the appointment- convened for several months now, effects of this might be,” Knape said. took hold in Michigan, said Rich Millenium Park as a potential loca- only restriction. Customers were sup- Small thinks a convention hotel could Much of the data the group had MacKeigan, regional general manager tion for the large outdoor venue. The porting him with online sales and still be built downtown, but just on a almost finished compiling quickly of DeVos Place and Van Andel Arena. focus now is on an urban downtown curbside pickup, but Hancock said delayed schedule. changed as Michigan became one “We’ve been busy rebooking busi- setting, Small said, but the group has he was happy to reopen his shop to “The last part of our industry that of the states with the highest num- ness, moving business around and not landed on a specific site. some foot traffic. will probably come back is the large ber of coronavirus cases in the coun- dealing with different industry groups The CAA received $5 million from “When people come into the shop, venues,” Small told MiBiz. “What peo- try, causing shutdowns of most busi- in terms of different plans for reopen- the state in 2018 for the estimated they see me, see how everything was ple will be most scared about is not nesses, Knape said. ing,” MacKeigan said. $40 million amphitheater project. made, and all my sewing machines going to be getting into a restaurant or “We can’t rely on that data in the MacKeigan said it is too early to It was estimated that the amphithe- are out in public view,” he said. “It bar, it’s going to be going to a concert same way we could in normal circum- tell when a decision will be made ater would create $5.9 million in new gives me energy and is rewarding for or convention.” stances,” Knape said. “It made sense about the convention hotel and spending annually, 410 full- and part- people to see part of the process. It’s The CAA, a public body that to take a pause and see what long- amphitheater. time jobs and $456,000 in new tax rev- part of the shop itself.” owns Van Andel Arena, DeVos Place term impacts this might have. Neither the CAA nor the task force enue.

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Visit www.mibiz.com MiBiz / JUNE 8, 2020 9 HEALTH BIZ

Deferring care for chronic conditions such as diabetes, COPD and heart disease “that require a regular tune up” may lead to patients becom- GETTING BACK TO CARE ing sicker, Pai said. Hospitals resume services as COVID concerns linger Ensuring safety How quickly hospitals are able to get back to pre- COVID-19 patient volumes depends on “how peo- By MARK SANCHEZ | MiBiz “are very nervous ple in the community view the urgency around [email protected] about going into getting their health care-related services, versus a health care the safety of it,” said Dr. Hyung Tai Kim, president rior to the COVID-19 pandemic, pri- environment.” of Mercy Health Saint Mary’s in Grand Rapids. mary care physicians and special- “There’s a As they resume regular operations, hospitals and ists at Metro Health-University of group that you’re health systems need to emphasize both the safety Michigan Health typically saw about not going to be protocols they’ve put in place to minimize risks and P 2,250 patients each day. able to convince for people to seek the care they need, especially for Patients and visits dropped dramatically dur- until you get a vac- an emergency or chronic medical condition, said ing the pandemic, as Metro Health and other cine or they know Pai Freese Decker Kim Berkovitz Dr. Ken Berkovitz, CEO of Ascension Michigan. health care providers were forced to postpone or for sure there’s “There is some concern and hesitancy to cancel non-essential surgeries, procedures, diag- a treatment that can cure them or make their fully back to pre-COVID volumes comes down coming back,” Berkovitz said. “Our messaging nostic tests and patient visits because of state COVID-19 less bad if they get it, so that’s a hard to “addressing patients’ concerns and fears,” needs to include that it’s safer to come in to see us orders, and as they deployed staff and resources group to reach,” he said. Freese Decker said. than to stay home with some of these life-threat- toward handling the pandemic. All hospitals face the same reality today as “We do expect that volumes will be less than ening conditions.” By late May, as hospitals were allowed to they get back to performing elective procedures planned, but I do think that people will gradu- Ascension Michigan consists of 16 hospitals resume non-essential care, patient visits had and surgeries and their physicians again see ally feel more comfortable getting their care,” across the state, including Ascension Borgess recovered somewhat and Metro Health doctors patients for routine office visits. They have to she said. “In health care, we have always been Hospital in Kalamazoo, plus Borgess Lee were seeing about 1,800 patients a day at their deal with people’s comfort level in going to see focused on infection prevention. It is something Hospital in Dowagiac, Borgess Pipp Hospital offices, which had been closed for weeks from their doctors, having a needed diagnostic test we do every single day to keep people healthy, in Plainwell, and Borgess Allegan. the pandemic. performed at the hospital, or venturing into an so we are taking the best practices that we’ve As of last week, Ascension Michigan was back ER for emergency care. done for years and we’re making sure that they to nearly 70 percent of the volume of procedures, At Spectrum Health, returning patient vol- are known and practiced in every way and bol- surgeries and diagnostic tests from pre-COVID “We do expect that umes vary among different types of care, from stered on top of that.” volumes, and 50 percent for ER visits. volumes will be less than surgeries to primary care office visits to tests Since March, hospitals have reported declines The medical group for Ascension Michigan such as medical imaging, President and CEO in ER visits even for emergencies such as heart reopened May 18, and in West Michigan, “We planned, but I do think Tina Freese Decker told MiBiz. On some days, attacks and strokes, as people stayed away despite hope to be back to our normal in-person rates that people will gradually volume “in a couple areas” has gotten back to the obvious risk. Metro Health’s ER traffic declined probably by early July,” Berkovitz said. 90 percent, “and there are days where it’s lower,” “fairly significantly” in the pandemic, from a nor- Hospitals have put numerous safety protocols feel more comfortable Freese Decker said. The health system has expe- mal of 170 daily visits, Pai said. As of late May, it in place to prevent infections, some of them man- getting their care.” rienced some patients expressing lingering con- had rebounded to about 126 visits a day, he said. dated by the state. Measures such as enhancing cerns when they are called to reschedule post- “We do think that’s a consequence of people cleaning and sanitizing, social distancing, screen- poned care. being afraid to come in,” said Pai, who called ing people for COVID-19 symptoms and check- — TINA FREESE DECKER “What we’re finding is between 75 percent the tendency for some people to avoid care ing their temperature when they come into the President of Spectrum Health and 85 percent of people are saying that they even for emergencies or chronic illnesses “super hospital, and requiring them to wear masks will will come in for a visit or a surgery, and 15 to 25 concerning.” likely remain in place for some time, and perhaps percent of people are saying, ‘No thank you, I’d “Strokes don’t stop because COVID’s around. permanently, administrators said. rather wait’ or ‘I don’t want the procedure any- Heart attacks don’t stop because COVID’s Similar safety protocols have also been put Dr. Rakesh Pai, medical group president and more’ or ‘I did something else,’” Freese Decker around,” he said. into place for physician offices and ambulatory chief population health officer at Metro Health, said. “When we call patients for rescheduling, A study the U.S. Centers for Disease Control care sites. Changes also have been made to how expects that getting back to pre-COVID-19 vol- it varies by what we’re calling to schedule for and Prevention released last week showed that they manage patient flow to minimize risks. umes will take months as the pandemic and and their response about what they want to do. ER visits to U.S. hospitals declined 42 percent At Metro Health, for example, patients visiting patient concerns linger. In many cases, they’re saying, ‘Yes, I’m ready to from March 25 to April 29. ER visits nationally their doctors wait in their cars and receive a mes- “It’s just a reality that we’re not going to be come back,’ and in some cases they’re saying, since the low point in mid-April have increased sage when it’s their turn, Pai said. They must wear able to recapture all of the volume that we were ‘give me another month.’” somewhat, but were still down 36 percent for the a mask and are escorted by a medical assistant doing in February overnight. It’s going to be a In scheduling alone, Spectrum Health is last week in May versus the prior year, according through the office to the exam room. Once their slog,” said Pai, acknowledging that some people back to 100 percent in some areas. Getting to the CDC. visit is done, they are checked out in the exam room. “They don’t have to linger or stop anywhere at the front desk or anything like that. It’s all done relatively seamlessly,” Pai said. Search West Michigan’s Benefits uncertainty Hospitals looking to get back to business also have another obstacle in addition to reassuring Commercial Property Listing Site people their facilities are safe: a surge in unem- ployment from the economic downturn the pan- demic triggered. Higher unemployment results in many people losing their employer-sponsored health insurance, potentially causing some to opt not to seek care for a medical condition because they can no longer afford it. “We’re trying to help people understand that it’s both safe and smart to get needed medical carwm.com care. That’s still definitely true and we still have a need for them to understand that more and more. On top of that has been the economic dif- View thousands of commercial listings and ficulties that are caused by coronavirus and the closings and everything. The personal economic Find the right Commercial REALTOR expert to advise and guide element comes in,” Kim said. “People are trying to decide, as they did in 2008, whether just from an economic standpoint, ‘Can this wait because throughout the real estate transaction. I have other bills that I need to pay?’” The Kaiser Family Foundation estimates that 26.8 million people nationwide could lose their commiƩed to collaboraƟon, cooperaƟon and sharing of informaƟon health coverage as of May because of a job loss from the pandemic. for the beƩerment of the real estate community As some job losses become permanent in the weeks and months ahead, Pai expects Metro Health to see an uptick in patient volumes from

10 JUNE 8, 2020 / MiBiz Visit www.mibiz.com people seeking to address a medical issue before and “as we’re doing more necessary procedures the support of the parent cor- $4.4 million at Bronson South their health benefits run out. and helping people with their health needs for poration, St. Louis, Mo.-based Haven. “When you lose your job, you lose your abil- the month of May and now into June, that our Ascension Health, although $ Federal aid totaling $9.6 mil- ity to pay, but we do think these 90 days here this finances will improve as we go forward and every “like every health care organi- lion went to Ascension Borgess summer will be really important to accommodate month, I’m hoping, is a better month.” zation, we are very challenged,” 22.8M Hospital in Kalamazoo and (as many) people as we can before there’s material Spectrum Health’s cash on hand during the Berkovitz said. Borgess Lee received $441,948. Operating loss in change to their health benefits,” Pai said. “We think first quarter declined by 5.7 days to 224.5 days The operating losses and The aid “certainly helped, but the first quarter for there’s a window this summer where people still as of March 30, according to the quarterly finan- higher spending during the pan- in no way did it make us whole,” Spectrum Health, have benefits, need to get stuff done and we need cial statement. demic was somewhat offset by compared to pro- Berkovitz said. “Our economic to be able to accommodate those patients because aid from the federal CARES Act jected income of losses are significant.” they may not have those benefits for much longer.” Federal help that Congress enacted early in $31.5 million Metro Health got $8.8 mil- the pandemic. lion from the federal gov- ‘Extraordinarily difficult’ In response to the losses, Spectrum Health, Spectrum Health Hospitals ernment. Holland Hospital Metro Health, Mercy Health in Grand Rapids and received $43.9 million, the larg- received $4.6 million, according The inability to perform non-essential proce- Muskegon, Bronson Healthcare in Kalamazoo, est single amount for any health system in to the HHS database. dures and surgeries and the reduced physician and other health systems implemented staff the region, according to a U.S. Department of Mercy Health in West Michigan got about $23 visits led to mounting losses for hospitals from furloughs and moved to cut costs that included Health and Human Services online database. million in HHS grants as part of the CARES Act. lost revenue, which was on top of the higher reducing executive pay and halting retirement Bronson Healthcare in Kalamazoo received The money still will not cover losses from the first spending to build inventories of personal pro- plan contributions for employees. $10.8 million for Bronson Methodist Hospital, two months of the pandemic, when patient rev- tection equipment for staff, testing for the coro- Ascension Michigan was able to avoid fur- plus $5 million for LakeView Hospital in Paw enues were down by about $75 million, according navirus and COVID-19, setting up temporary test loughs by “dipping” into reserve funds and with Paw, $3.9 million for Bronson Battle Creek and to a spokesperson. locations and preparing added bed capacity. A month ago, the American Hospital Association issued a paper that estimated hos- pitals and health systems across the U.S. would lose a collective $202.6 billion between March 1 and June 30. The estimate includes $161.4 bil- lion in revenue lost over four months from not performing elective surgeries and procedures because of stay-at-home orders in several states, and people deferring care during the pandemic or not seeking emergency care when needed. The estimate also takes into account the cost to treat COVID-19 patients, add temporary capacity and We are here to make your project easier. locations to test people, and a $2.4 billion price With engineering, architectural, infrastructure, tag for personal protection equipment for staff. West Michigan hospitals have seen the finan- and environmental services in-house and 14 cial hit from the pandemic as well. At one point early in the pandemic, patient RIŴFHVIRUORFDODWWHQWLRQ)LVKEHFNLV\RXU volumes at Mercy Health Saint Mary’s “were less than 50 percent of what they usually are,” all-in-one solutions provider. Kim said. Surgical volumes that are “especially important to the financial sustainability of the health system” were “well below 20 percent of the norm,” he said. “Financially, it’s been extraordinarily difficult. We’ve been affected in ways that everyone else has because (as) our volumes have gone down, our revenues have really plummeted and we’ve added additional expense to make sure we were prepared” for the coronavirus, Kim said. The support of parent corporation Trinity Health’s financial reserves has enabled Mercy Health Saint Mary’s to remain financially stable, “and we’re confident that we’re going to be able to serve the community’s needs going forward,” he said.

Finances suffer Prior to the COVID-19 pandemic, Metro Health- University of Michigan Health was on track to record $480 million to $485 million in revenue for the fiscal year that runs through the end of this month. Now, after the business lost during the last three months of the pandemic, the health system expects to record about $430 million in revenue for the fiscal year, and that’s based on “moderate assumptions,” Pai said. Metro Health CEO Peter Hahn earlier indi- cated to MiBiz it was projecting a $40 million net loss for the 2020 fiscal year. Grand Rapids-based Spectrum Health, which routinely posts quarterly financial reports online, recorded a $22.8 million operating loss for the first quarter on revenue of $802.5 million across its West Michigan hospitals. The health system had been budgeted for operating income of $31.5 million. Spectrum Health Lakeland in St. Joseph, which operates as a separate division, recorded a $4.7 million operating loss on $137.2 million in operating revenue. Lakeland was budgeted for $5.3 million in operating income for the first quarter. “It wasn’t the quarter we had planned for,” Freese 800.456.3824 Decker said. “We’re in consistent company across fishbeck.com the country. It’s going to be a much different year than expected, and that’s true for most businesses.” Freese Decker hopes April was “the lower point” for volume declines from the pandemic

Visit www.mibiz.com MiBiz / JUNE 8, 2020 11 ECONOMIC DEVELOPMENT PENT-UP DEMAND Battling COVID-19, cancellations and high water, lakeshore communities hope tourism rebounds

By MARLA MILLER | MiBiz [email protected]

lagued by high water, COVID-19 business closures and canceled festivals, officials in lakeshore commu- nities are developing plans to bring visitors back to res- High water levels are wreaking havoc on lakeshore communities and limiting some recreational opportunities. PHOTO: MARLA MILLER taurants and lodging in hopes of tourists’ return this P summer. Washington Avenue between Harbor Drive and First Street will still going to come. People want to get out. They want to go out West Michigan community officials also agree with the senti- be closed to traffic so restaurants can set up tables on the street. and eat and get a drink.” ment from state tourism executives that the widespread closures Stanz Café, Snug Harbor, Porto Bello, Odd Side Ales, JW’s Food & Since last summer, some Saugatuck businesses along the river since mid March have created pent-up demand for travel. They Spirits, Morning Star and other restaurants also want to add or have experienced flooding and added sandbags, but the beaches, remain optimistic the industry will rebound despite the challenges increase outdoor dining areas. parks and boat launches remain open, Mize said. brought so far in 2020. City officials have worked with Lorenz and others on a “Pure Because of the timing of the coronavirus closures and travel bans, Michigan” pledge for businesses to assure patrons they are follow- ‘Social districts’ could help in long run many people missed out on spring break trips, said Dave Lorenz, vice ing guidelines established by the state and U.S. Centers for Disease president of Travel Michigan, a division of the Michigan Economic Control and Prevention. In Muskegon, officials also plan to allow restaurants and other busi- Development Corp. He believes people will stay closer to home and “We want to make sure people feel comfortable,” McGinnis nesses to apply to the city to use public streets, sidewalks and parking plan vacations within the state this summer. said. “There is still some anxiety about being in large groups. We lots for dining, shopping and other activities. The city may allow out- “There is no reason to leave the area now, so when they can travel, want to ensure all these safeguards are in place. It’s not just some- door dining districts on Western Avenue, between Second and Third I think they will spend their time and money in this state,” he said. thing we’re saying, it’s something we’re doing.” streets, between Fourth and Fifth streets, and in the Lakeside district. On June 1, Gov. Gretchen Whitmer announced a “big step for- “I do feel there is a significant segment of our population that ward” by lifting the statewide stay-home order and opening retail is ready to travel, and they will prefer a location that is within just stores, restaurants and bars with occupancy limits. Previously, Flooding continues a couple of hours,” said Cindy Larsen, president of Muskegon restaurants and bars were only allowed to reopen in 17 northern Meanwhile, high water continues to cause problems and put a Lakeshore Chamber of Commerce. “Muskegon is in a great posi- Michigan counties and the Upper Peninsula. damper on boating. Grand Haven officials closed the city’s Harbor tion for that.” Retail businesses reopened June 4, and restaurants and bars Island boat launch last year because of flooding, and repairs are Although the cancellation of Muskegon’s major festivals — includ- can offer dine-in service beginning June 8 with safety precautions expected to cost $1 million. The city is losing $80,000 annually ing Lakeshore Art Festival, Rebel Road, Unity Christian Music Festival, and at 50-percent capacity. Hotels, short-term rentals and camp- from launch permits and faces more than $5 million in direct costs Burning Foot Beer Festival and Michigan Irish Music Festival — won’t grounds also are back in business, Lorenz said. because of the high water, including tearing down Chinook Pier bring large crowds to the area, it will give people a chance to explore City and tourism officials across the state — including in Grand retail stores because of mold and repairing damage at Linear Park, new attractions or visit museums and public art. The one bright spot Haven, Saugatuck and Muskegon — have been working behind McGinnis said. is Muskegon County still has beaches, lakes and rivers and plenty of the scenes so they are ready to welcome visitors. As local offi- The city council approved a temporary administrative order access for kayaking and other outdoor recreation, Larsen said. cials have explained, tourism is a key source of revenue for local prohibiting boat mooring along the city’s popular channel sea- “We are fortunate to have those expansive beaches at Pere governments. wall this summer, effective until Aug. 20, but the order is flexible Marquette as well as Muskegon State Park,” Larsen said. “That in “People greatly underestimate the financial impact of travel and and can be lifted if water levels recede. As an alternative, boaters combination with the plans for downtown to provide an outdoor tourism and what our industries do to support the state,” Lorenz can temporarily dock at the Grand Haven Municipal Marina for eating district should help significantly.” said, adding “it won’t be a year to make money, it will be a year free and go have dinner, if the slip is not rented, McGinnis said. As a growing cruise ship port, Muskegon tourism received to survive.” All of Ottawa County has been affected by the cancellation of another blow with the announcement that Great Lakes cruising Lorenz helped coordinate a statewide effort of more than 100 major events such as Tulip Time Festival and Grand Haven Coast is off this year due to COVID-19. Michigan’s Adventure, the state’s volunteers in the travel industry — divided into eight subgroups Guard Festival. Bergman thinks downtowns will be much quieter largest amusement park, also remains closed. Both of those losses — working on protocols for safe reopening procedures to keep this summer with other art fairs, car shows and weekly entertain- will have negative economic impact, Larsen said. employees, travelers and local citizens safe, he said. ment also canceled. “It’s not too early to tell, but it’s too early to measure,” she said. “As important as jobs, the economy, the freedom to travel are, “My hope is that as many as possible of those people that were Larsen said local officials have been advocating for outdoor I really hope people will follow those directives to safely open the planning on coming to the west side of the state for a week of vaca- “social districts” for a number of years and changes at the state state,” he said. “If we do this right, we won’t go backwards.” tion, or two or three days of vacation, will still come and order food level to cut the red tape could help bars and restaurants in the long and find a nice park to eat it in or down by the waterfront,” he said. run. State Rep. Terry Sabo, D-Muskegon, is co-sponsoring a bill Grand Haven tackles outdoor dining “That is the optimism I have. We still have Lake Michigan, and we that would allow local governments to create areas where people have parks and a beautiful waterfront and a beautiful boardwalk.” could buy to-go drinks from bars and restaurants and consume The varying forms of tax revenue from travel, tourism and retail them anywhere in designated spaces. businesses are vital to lakeshore communities. Saugatuck ready to welcome tourists Until now, bars and restaurants faced a “long laundry list” of Roger Bergman, chairman of the Ottawa County Board of requirements to have an outdoor event space with beer and wine, Commissioners, said most retail stores are “dream” businesses The Saugatuck-Douglas area, known as Michigan’s Art Coast, relies Larsen said. and operate on slim margins, and many of them were left in a on tourists to support downtown specialty shops, restaurants and “This is exciting,” she said. “This could be a big deal.” precarious position from COVID-19. bed and breakfasts. A handful of restaurants opened for takeout, At Pere Marquette Beach, visitors also will experience detours “If people don’t come back in the numbers they did before, the and retail stores recently opened their doors on a limited basis. But and rerouted traffic because of construction on a roundabout and lack of business is going to be detrimental,” said Bergman, who the evenings have been quiet due to the bars and lodging being new pay-to-park machines. High water has eroded portions of the lives in downtown Grand Haven and was a longtime shoe retailer closed since mid March, said Lisa Mize, interim executive direc- beach along Beach Street and closed the city’s Hartshorn Marina in Grand Haven and Holland. tor of Saugatuck Douglas Area Convention & Visitors Bureau. and portions of the Lakeshore Trail from downtown to Lakeside. Bergman worries that many businesses will have a hard time “I know that everybody is struggling,” she said. “There is a lot Heavy rain in May caused severe erosion at the county’s Pioneer reopening or staying open a year from now, especially bars and of frustration (among) business owners.” Park campground, and Muskegon State Park’s channel camp- restaurants that can only operate at 50-percent capacity. Community leaders, business owners and residents formed ground only will take walk-in reservations if high water goes down “The county is going to be impacted, but we have a fairly good Saugatuck Douglas Together to develop a safe reopening plan, later this summer. rainy-day fund to tide us over,” he said. “But the problem is we don’t including an Art Coast Safe seal of approval for businesses, and to The Michigan Department of Natural Resources plans to know how long this is going to go on. If restaurants can only serve brainstorm ways to come out of the extended closure. Whitmer’s reopen state park modern campgrounds and lodging by June 22. half of their customers, for a lot of restaurants, that is not sustain- lifting of the stay-home order was welcomed news. Prior to the Ron Olson, chief of the DNR’s Parks and Recreation Division, said able. They can’t operate on only half of their revenue.” announcement, Mize said people were calling the bureau to ask campground reservations after June 22 “are pretty strong.” In response, Grand Haven officials created a one-page appli- what was open and if they could visit. “A lot of people who had reservations over Memorial Day, some cation and streamlined the process for expanded outdoor dining, “My gut is people are going to come, and I think they’ll be con- of them rebooked for later in the summer,” he said. “We’ll have to including serving alcohol, until Oct. 31. cerned for safety protocols to be followed by restaurants and lodg- see how things play out. Obviously, the public will decide what Grand Haven City Manager Pat McGinnis said one side of ing,” Mize said. “I think the pent-up demand is such that they are level of comfort they feel to go out once things resume.”

12 JUNE 8, 2020 / MiBiz Visit www.mibiz.com ENERGY Report: Uneconomic coal plant management costs ratepayers millions

By ANDY BALASKOVITZ | MiBiz operator, ensuring that residents of Michigan and DTE spokesperson Renee McClelland said the She added that DTE has proven the econom- abalaskovitz@mibizcom other states have reliable, affordable energy,” said utility follows a “robust process” that includes ics of its coal plant scheduling “against similarly spokesperson Katelyn Carey. “As a regulated energy considering MISO rules for dispatching coal flawed claims made in the past,” citing a recent ichigan’s two largest utilities have provider, the costs to operate our plants and provide plants and performing a two-week look-ahead MISO report saying the “vast majority” of self- operated coal plants uneconomi- energy to our customers face regular review by the based on changing market conditions. scheduled coal is dispatched economically. cally in recent years, costing cus- Michigan Public Service Commission. Consumers “DTE disagrees with UCS’s claims related to “DTE is wrong,” Daniel responded, saying the tomers tens of millions of dol- Energy is committed to providing energy at the low- self-scheduling of DTE coal plants,” McClelland UCS analysis assumptions and inputs were vetted M lars when cheaper and cleaner est cost possible to the 1.8 million homes and busi- said. “UCS has made incorrect assumptions to the “highest degree” and that the group relied resources are available, according to a recent nesses we serve, and will continue to do so as our related to coal plant operations, using data on DTE’s own information about its coal plants. study by the Union of Concerned Scientists. coal-fired plants are replaced by renewable energy not specific to DTE plants, and ignored many Additionally, the MISO report DTE cites says The report released late last month analyzed sources through our Clean Energy Plan.” factors that affect the economic operation of over the past three years, 12 percent of the coal 2018 utility data across 15 Midwestern states. In Consumers’ Karn plant in Bay City is sched- coal plants, resulting in incorrect conclusions. dispatched in its territory was uneconomic. total, the report found $350 million in excess costs uled to close in 2023, while its Campbell plant UCS’s May 2020 report also lacks accurate input “The fact that other utilities are operating eco- related to a process known as self-scheduling, when may continue to run at least one coal-fired unit to support their claims regarding DTE gener- nomically doesn’t absolve DTE from operating utilities run coal plants regardless of the price grid beyond the next decade. ating units.” coal plants uneconomically,” Daniel said. operators are willing to pay for the electricity. In Michigan, the report found Detroit-based DTE Energy could have saved customers $94.7 mil- lion across five coal plants in 2018, ranking it sec- ond behind Louisiana utility Cleco. Jackson-based Consumers Energy could have saved customers $25 million, including $24.7 million by changing operations at the J.H. Campbell plant in West Olive. Coal is increasingly uneconomic as cheap natural gas and increasingly cheaper renewable energy come online. UCS Senior Energy Analyst Joseph Daniel, who co-authored the report, said modeling the 2018 data was finished at the end of last year and analysts “poured over” the findings for the fol- lowing six months. He said the 2018 data is still relevant today. TO US, IT’S BIGGER “If people want to take away from this report that utilities don’t necessarily respond to the wholesale market price, that is clearly still vis- ible today,” he said. A recent report from the regional grid oper- THAN A BUILDING ator — Midcontinent Independent System Operator (MISO) — confirms that 15 percent At Triangle, construction is more than our job, it’s the reward of watching of coal plants in its region are still operating uneconomically. a community grow. In these times of uncertainty we are inspired by “So it’s still a problem,” Daniel said. And while several of these plants are sched- the transformation and perseverance our neighbors have shown. We www.triangle-inc.com uled to come offline in the coming years: “There’s still tens of millions of dollars in potential sav- commend you and stand with you, ready to shape a new skyline. ings in operating those coal plants less between now and their closures,” Daniel said. “Secondly, this problem is illustrative of a larger problem: Utilities aren’t running their resources efficiently.”

Utilities dispute claims In response to questions from MiBiz, DTE and Consumers both issued statements that disputed the UCS report’s findings. “Consumers Energy runs its power plants based on market decisions made by MISO, the region’s grid

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Visit www.mibiz.com MiBiz / JUNE 8, 2020 13 FOCUS: COMMERCIAL LENDING Restrictions in Fed’s Main Street Lending Program could limit appeal

By MARK SANCHEZ | MiBiz business to borrow from $500,000 to $25 million. In loans through the Priority Loan Facility and borrowers are going to find it fairly challenging to [email protected] The maximum amount depends on a company’s Expanded Loan Facility, 15 percent of the princi- obtain credit under this program because of the existing debt. The New Loan Facility is limited to pal is due at the end of year two, another 15 per- underwriting,” he said. “It’s going to be interest- he Federal Reserve Bank’s $600 billion four times a borrower’s 2019 adjusted EBITDA, cent at the end of year three, and then a balloon ing to see what businesses actually take advan- Main Street Lending Program prom- Ashby said. The bank can sell up to 95 percent of payment of 70 percent at the end of the fourth tage of this. It’s going to be a narrow band of bor- ises to offer small and mid-sized busi- the loan to the Federal Reserve. year, according to the Federal Reserve. Borrowers rowers who are still in relatively good condition, nesses hurt financially by the COVID- In the Priority Loan Facility, eligible busi- through the New Loan Facility will have to pay but they have tapped out their lines of credit and T 19 pandemic with another option to nesses also can borrow $500,000 to $25 million one-third of the principal at the end of the sec- still have a good outlook.” access credit and operating capital. with a cap of six times 2019 EBITDA. The bank ond, third and fourth year. Some banks that dealt with “quite a bit” of However, borrower interest in the loans may retains more of the loan, 15 percent, and may sell While the first-year changes in PPP rules even be limited given the strings attached, according the remaining 85 percent to the Federal Reserve. payment deferral is a “It’ll be more selective as that program was in to sources contacted for this report. The Expanded Loan Facility allows a borrower “clear advantage of the progress also may prove Created under the federal CARES Act that to increase the amount of an existing loan with program,” the overall because it’s real debt reluctant to jump into Congress enacted in late March in response to a lender and borrow $10 million to $200 million, payback period is “fairly for people to take on. the Main Street Lending the pandemic, the Main Street Lending Program with a cap of six times 2019 EBITDA, or 35 percent quick” and “may be a hes- Program, Ashby said, add- offers three varying credit options, or facilities, of existing, undrawn debt. Lenders can sell 95 per- itation for people,” Mack They’re going to take it ing they may opt “to take a that are available through banks. cent of Expanded loans to the Fed, Ashby said. said. on because they have a wait-and-see approach.” The loans are intended for companies that The Main Street Lending Program follows “They have to be com- “The banks and bor- were in sound financial condition prior to the the Paycheck Protection Program that Congress fortable being able to gen- use for it to help bridge rowers alike have been pandemic, “and now face created under the CARES Act and the U.S. Small erate the cashflow to pay them through and get somewhat surprised and economic uncertainty and Business Administration quickly put into opera- it back over a four-year to the next side.” taken off guard by the liquidity constraints, but tion in April. timeframe,” he said. “One way that the SBA and are otherwise bankable in Through May 26, the SBA approved more year with no payments is Treasury have seemed to the eyes of their lenders,” than 4.4 million loans for small businesses good, but then you have — JIM MACK change the rules on them. said attorney Seth Ashby, a nationwide totaling $511.2 billion. In Michigan, three years to pay it back Head of Commercial Lending at I think there may be some partner in the business and the SBA approved 113,067 loans totaling $15.7 after that.” Independent Bank leeriness of jumping into corporate services practice billion through May 26. Fifth Third Bank, the another program,” he at Varnum LLP in Grand The PPP was designed to help borrowers market leader in West said. “Quite honestly, the Rapids. keep employees on the payroll for an eight-week Michigan, does “not see PPP will pale in compari- Ashby The Main Street loans are period. If they did, they can become eligible to near the demand for this that you saw with PPP” son to the complexity of the Main Street program. available to private and public for-profit compa- have all or part of their loan forgiven by the SBA. because of the lack of forgiveness and the four-year It’s going to be the most complex lending facility nies that have 15,000 or fewer employees, or 2019 repayment term, according to Mike Chaffin, the the Fed ever endeavored to establish. That means revenues of $5 billion or less, and have not yet Quick payback bank’s senior commercial executive in the region. also lenders are going to think carefully about received support under the CARES Act. Fifth Third Bank has a team of lenders ready to work what is in it for them. At Independent Bank in Grand Rapids, The key difference with the Main Street Lending with commercial clients interested in considering “The intent for this is to have broad appeal, commercial lending head Jim Mack considers Program is that unlike PPP, the loans are not for- the Main Street Lending Program, Chaffin said. but I think in practice it’s going to have limited the Main Street Lending Program “another tool givable. That may limit the program’s appeal, appeal and limited participation, and that’s that we can look at using to help companies get Mack said. He expects a demand for the program ‘Fairly challenging’ unfortunate.” through all of this.” that’s “nowhere close” to what Independent and “We’ll be assessing it, understanding it better, other banks experienced with the PPP. The Federal Reserve requires lenders to apply Interest varies educating our customer base and seeing where “It’ll be more selective because it’s real debt all of their customary underwriting standards to it might fit in for customers and for prospects for people to take on,” he said. “They’re going to Main Street applicants, plus their usual collat- Main Street Lending Program loans come with as well,” Mack said. “It does fit in well with our take it on because they have a use for it to help eral and guarantees, Varnum’s Ashby said. That’s restrictions on the ability of borrowers to pay larger small business customers and our middle bridge them through and get to the next side. I another difference from the PPP. dividends to owners and do stock repurchases market customers.” think it’ll really be used for ramp up, so when “The Fed has indicated very clearly that it’s and also place limits on executive compensation. they really see things coming back and they need not willing and it doesn’t expect to take any losses Those restrictions would remain in effect a year some more capital support, maybe some equip- on the program,” said Ashby, who wonders how after a loan is repaid and may lead some prospec- Three options ment they want to do, it’ll fit in in that regard.” many companies will actually use the Main Street tive borrowers to pass on the program. The three loan options share some similar fea- The Main Street Lending Program has a four- Lending Program to access credit. “That’s going to give a lot of owners and man- tures, although each differs somewhat. year repayment period with borrower payments “The reality is going to be that not too many agement teams pause before they jump into this The New Loan Facility allows an eligible deferred in the first year. banks are going to be willing to participate and program,” Mike Stapleton, a senior vice president and commercial lender at Mercantile Bank, said during a podcast last month with accounting and consulting firm Rehmann. As of late May, Chemical Bank was “still eval- uating this program to see how we can best do this with our customers. We do plan to partici- pate (and are) figuring out the how at this point,” a spokesman wrote in an email to MiBiz. At Kalamazoo-based First National Bank of Michigan, “we are very, very interested” in the Main Street Lending Program, said Jefra Groendyk, executive vice president, senior lender and Grand Rapids market president. “We have a select handful of customers that we think could benefit from it,” Groendyk said. As the Federal Reserve developed the Main Street Lending Program following adoption of the CARES Act, changes were made from the original plan. A few weeks ago, Chairman Jerome Powell told the U.S. Senate Committee on Banking, Housing, and Urban Affairs that based on public comment, the Federal Reserve lowered the mini- mum and raised the maximum loan amounts for each of the three lending options, and expanded the size of the companies that can borrow to up to 15,000 employees. “These changes should help the program meet the needs of a wider range of employers that may need bridge financing to support their oper- ations and the economic recovery,” Powell said in his committee testimony. “We will continue to adjust facilities as we learn more.”

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Contractors Minority biz brace for leaders face supply chain barriers to disruptions recovery PAGE 9 PAGE 16

APRIL 13, 2020 •VOL. 32/NO. 13•$3.00 SERVING WESTERN MICHIGAN BUSINESS SINCE 1988 www.mibiz.com PREPARING FOR THE State, local SURGE Hospitals look to add officials seek beds, meet staffing challenge in COVID pandemic federal help as

By MARK SANCHEZ | MiBiz [email protected] COVID-19 budget

line in Bronson Methodist Hospital’s deficits loom A emergency state filing to temporarily add 300 beds UPCOMING ISSUES epitomizes the main challenge By ANDY BALASKOVITZ | MiBiz Business owners discuss reacting, coping and for boosting capacity for an [email protected] expected surge in COVID-19 West Michigan Howpatients in the coming weeks. planning for the future in the era of coronavirus hrinking revenue from sales, income The Kalamazoo hospital’s and gasoline taxes could cost state will work employersability to put the added beds and local governments billions differently post caninto operation help with “will be depen- By JOE BOOMGAARD | MiBiz hospitals a fighting chance against the highly S of dollars in the coming months, dent on staffing,” according [email protected] contagious COVID-19. potentially cutting already stretched services COVID-19 mentalto a filing with health the Michigan Once they got past the chaos in which the rules and leading to a prolonged recession without PAGE 2 PAGEDepartment 13 of Health and all it the six stages of COVID-19 cop- seemingly changed by the hour, they all needed sufficient federal support. Human Services. ing: Experiencing shock. Assessing. to take a step back, assess what their next steps State officials reported earlier this month As with every hospital dur- that the fiscal year general fund and school APRIL 27, 2020 •VOL. 32/NO. 14•$3.00 SERVING WESTERN MICHIGAN BUSINESS SINCE 1988 www.mibiz.com Recalibrating. Cash Flowing. Helping. would be and recalibrate their business strategy. ing the COVID-19 pandemic, C Imagining. In many cases, that strategy focused on figuring aid budgets ending on Bronson has been planning That seems to sum up an emotional and intel- out how best to take care of employees in the Sept. 30 could see a $1 bil- for a patient surge by simulta- lectual path many West Michigan business own- short term while also addressing the company’s lion to $3 billion shortfall, neously looking at how to add ers have travelled recently as their companies viability in the long term as the crisis continues a result of the public health TRIAL capacityHealth and then staffsystems those faced extraordinary circumstances brought on to play out without a realistic end date in sight. measures taken to prevent beds, if needed. by the spread of coronavirus. To that end, business owners also thrust the spread of the corona- “In order to care for an Over the last two weeks, MiBiz spoke with themselves into applying for government relief virus. The higher range is BY FIRE: increased number of patients, owners and executives in a variety of industries. programs, finding novel ways to generate reve- a decline of more than 10 Bronson plans to redeploy staff percent. Next fiscal year, SBA races to provide relief face financial No matter what sector they work in, they all nue, and — this being West Michigan — figuring Bartik to small businesses, but members who are not cur- pretty much experienced the same rollercoaster out how they could use their platforms to help the deficit could be up to some hiccups remain rently in clinical roles, but who of emotions. others in need. $4 billion. Yet those are just estimates at this crisis broughtare clinically onFirst came the shock at how fast the virus was Here are six stories of local executives dealing point, and it’s difficult to predict the ultimate licensed. We spreading throughout the United States, then with the crisis, coping with the “new normal,” effect of the pandemic on the budget. By MARK SANCHEZ | MiBiz have many panic when it became clear that all non-essen- and looking ahead to how their companies and “My own guess is it might be worse than [email protected] RNs who tial businesses in Michigan would need to close society could change as a result of the pandemic. that,” said Tim Bartik, senior economist with by pandemicwork in edu- to help “flatten the curve” and give the state’s the Kalamazoo-based W.E. Upjohn Institute See BUSINESS OWNERS REACT on page 12 he sheer volume of small cation, qual- See STATE BUDGET on page 14 businesses that have ity and safety, sought federal relief By MARK SANCHEZmanagement | MiBiz loans illustrates the [email protected] other T Neely depth and scope of the economic departments pain brought on by the COVID-19 who willn normalreturn to times, a role Trinity of pro- HealthVC,’s seven PE firms steer companies through crisis pandemic. vidinghospitals patient acrosscare,” Michigan Denise generate com- The U.S. Small Business Neely, binedsenior operating vice president income for of $9 million to Administration quickly blew BronsonI $10 Healthcare million a month. and chief By MARK SANCHEZ | MiBiz revenues, assess the effects, and con- portfolio compa- visualize how we will steer out of this through $349 billion in just 14 operatingBut the officer current and operating chief [email protected] tinually revise projections based on nies. We immediately fog,” Parker said. “Sometimes, it is days and approved loans for 1.6 is far from normal, and the COVID-19 pan- Downtown Grand Haven. MIBIZ PHOTO: MARLA MILLER nursing officer for Bronson the data they see. shifted into crisis difficult for a small company in the million small businesses nation- Methodistdemic has Hospital, pushed saidthe Catholic in a health sys-he COVID-19 pandemic that Investment firms say they continue management mode trenches to see the entire battlefield. wide before halting new appli- statementtem’s financial to MiBiz performance. deep into thedismantled daily routines to scout for new deals, although some and began working We can provide that vision and bring cations April 16 for the Paycheck red.“We are currently identify- and hammered the economy are generally doing so at a slower pace. each step of the pro- best practices, along with resources 6.22.2020 Protection Program. That’s as ing thoseThe staff Michigan members operations and will forT Trinityhas forced investors to pivot Their immediate priority is to focus cess in parallel,” Tim to help them develop and implement many loans as the SBA processed LAKESHORE RETAILERS ADAPT, MOVE ONLINE refreshHealth, them the on Livonia-based current processes parent corporationalong with the companies they back on portfolio companies in which they Parker, the president safe and smart strategies.” in the previous 14 years combined. beforeof Mercy they return Health to inclinical West care.Michigan andfinancially. Saint have already invested to help them Parker of Grand Rapids- Grand Angels has angel investor Congress last week allocated AS SOME SCRAMBLE TO STAY AFLOAT We are also calling on retireesJoseph who Mercy HealthVenture capital and private equity navigate the crisis, and in some cases based Grand Angels, groups in West Michigan and affili- another $320 billion for the PPP, may be willing to returnSystem to the in Southeastinvestors contacted by MiBiz say provide an injection of capital. wrote in an email to MiBiz. ates in Kalamazoo, Detroit and Flint. $30 billion of which will go to feder- workforce,” Neely said. Michigan, recordedthey’ve a $50 advised portfolio companies “The crisis certainly caused a sud- “One aspect of our role is to help The investment firm closed in late ally designated community devel- By MARLA MILLER | MiBiz the region’s busiest tourist towns, as Main Streets See SURGE on page 17 million operatingto loss stay for safe, preserve cash, control den change in the way we all work companies deal with the current reali- December on $11.7 million raised Auto Industry Forecast opment financial institutions, plus [email protected] across the state are bearing the brunt of COVID- March, “and rememberexpenses and capital spending, secure and live. Its impact jolted us and our ties and at the same time help them See VC/PE on page 18 banks and credit unions with less 19 closures. in March half the month than $10 billion in assets. Banks s the owner of longtime downtown While some restaurants and breweries have piv- was a normal month,”

and credit unions with assets Grand Haven retailer Down To Earth, oted to takeout and delivery, retailers deemed non- PERIODICALSsaid President and CEO between $10 billion and $50 billion Sholeh Veiseh has turned to hosting vir- essential fall into more of a gray area. Some have shut Rob Casalou. will get another $30 billion. tual fashion shows and offering sales on down entirely, while others are transitioning online to The operating loss Remote working A Casalou Contract Deadline: 6.10.2020 The legislation also directed social media to bring in some revenue duringHow the should remain at least partially open for e-commerce. stems from the lost rev- Aerospace puts broadband $60 billion in funding to the SBA’s coronavirus closure. marketingUnder change a new executive order issued April 24, enue from canceling non-essential surger- suppliers brace 8.17.2020 Economic Injury Disaster Loan Gov. Gretchen Whitmer’s initial executive those stores now have more clarity: Retailers sell- ies and procedures, combined with ramped access in program Congress set up earlier order closing non-essential businessesi throughn the wakeing non-essential of items can open for curbside up spending to test and care for COVID-19 for contspotlinuedight in the pandemic. April 30 shuttered most storefronts on WashingtonCOVID-19? pick-up and for delivery. patients. turbulence Before running out of money Avenue, an established shopping district in one of See LAKESHORE RETAILERS on page 10 See FINANCIAL CRISIS on page 6 PAGE 3 for the first round of the PPP, the PAGE 9 PAGE 5 INSIDE: SBA approved relief loans total- ing $10.38 billion for nearly 43,500 MAY 11, 2020 •VOL. 32/NO. 15•$3.00 SERVING WESTERN MICHIGAN BUSINESS SINCE 1988 www.mibiz.com Industry 4.0 Automotive Supply Chain small businesses in Michigan. SEE PAGE 4 Executives at banks and credit After unbridled growth, Michigan craft unions say applications for the Experts warn of PPP came from across the econ- EXPLORING omy, including Main Street-type beverage companiespossible mental gird for devastating lows Contract Deadline: 8.5.2020 businesses, companies up to the 500-employee threshold, the hos- health ‘aftershock’ WHAT’S 7.6.2020 pitality sector, restaurants, manu- By JOE BOOMGAARD | MiBiz in-person dining and drinking in crews for to-go orders, curbside pickup In a survey compiled by Boulder, facturers and retailers that have [email protected] theirfrom establishments COVID-19 in an effort to or home delivery of beverages and Colo.-based Brewers Association in NEXT been hurt by the pandemic and curb the spread of COVID-19. For food. Meanwhile, distilleries have early April, 14.1 percent of respon- resulting stay-at-home orders. ichigan’s craft beverage the first time in many of their his- repurposed their stills to produce eth- dents indicated their business could Experts preview workplace “If you connect enough dots, industry is facing a chal- tories,By MARK the owners SANCHEZ of breweries, | MiBiz dis- anol in an effort to answer the call to sustain for four weeks or less if the changes as economy slowly and some you have to con- lenge with the economic tilleries,[email protected] wineries and cideries have boost critical supplies of hand sanitizer. current conditions persisted. An addi- nect more dots than others, M fallout from the corona- been forced to lay off staff members These scrappy and resilient com- tional 45.8 percent of respondents said re-emerges Small Biz M+A you can almost see where every virus pandemic that is unlike any — theirf thecompanies’ SARS outbreak direct connec-17 years panies are finding revenue wher- their businesses could only sustain for single human being and every other in its history. tions withago inconsumers Asia is an accuratein their indi-tap- ever they can, but few could have one to three months if the social dis- By MARK SANCHEZ | MiBiz Many companies have been com- rooms cator,and bars. behavioral health care prepared for such an abrupt sea tancing measures and restrictions on [email protected] See SBA LOANS on page 8 pletely closed for weeks as a result ITheproviders craft beverage could companies see a patient that change that’s been brought on by sit-down service remain in place. of state-mandated orders to end all remainsurge open in the are comingleveraging weeks skeleton and the pandemic. See CRAFT BEVERAGE on page 14 eople who have been working from months as the COVID-19 pandemic home for weeks because of the Contract Deadline: 6.24.2020 takes an emotional toll on people. COVID-19 pandemic will return to a PERIODICALS One-third of the people in Asia P decidedly different workplace than 8.31.2020 were unable to return to work full COPING they had previously once the economy gets Foodservicetime after the SARS pandemic, six going again. disruptionsin 10 experienced fatigue, and half Changes will span a range of workplace had difficulty sleeping. INSIDE: environments, including offices, shop floors, causeIn Hong crisis Kong, the suicide rate breakrooms and conference rooms. Wearing spiked nearly 32 percent for two WITH face masks and having more distance foryears farmers after SARS. Hong Kong also Drinking between workers will become the norm, Insurance PAGEexperienced 12 “increases in persistent along with routine temperature checks and depression, anxiety, panic attacks, economy continually cleaning and sanitizing the work- psychomotor agitation, psychotic SEE PAGE 14 place, tools, equipment and workstations. symptoms, delirium, and suicid- COVID-19 Those and other prac- ality,” accord- tices are all part of the pro- Contract Deadline: 8.19.2020 ing to a white verbial “new normal” for paper from Pine employers working to nav- 7.20.2020 Rest Christian igate the deadly pandemic Mental Health that has disrupted daily rou- Services on the tines, thrown the economy potential men- Small businesses around West Michigan have been affected in many ways into recession and may lin- tal health effects Kennedy ger for many months until a Eastburg of the COVID-19 by the ongoing pandemic. While some are seeing increased business, most vaccine is developed. pandemic. companies are being forced to deal with the fallout by getting creative, man- “As business leaders, you have to make The white report pulls data from sure you’re taking the responsibility for your West Michigan’s Tribal Economy a number of sources to issue a call to aging cash and finding new ways to stay engaged with customers and cli- employees,” Kentwood-based Autocam action for care providers to prepare ents. In this Coping with COVID-19 special report, MiBiz speaks with two Medical Devices LLC CEO John Kennedy for the “aftershocks” from the pan- said during a recent back-to-work webinar demic and “minimize the fallout of dozen West Michigan companies to hear how they’re navigating the current hosted by Advantage Benefits Group Inc. “It’s COVID-19 on mental health in our uncharted waters. SEE PAGES 12-19 incumbent on us as businesses to make sure Contract Deadline: 7.8.2020 communities.” See WHAT’S NEXT on page 8 “The warning signs are 9.14.2020 there right now that we could in Michigan experience a significant surge in behavioral health needs that emerge out of this COVID cri- COVID-19 highlights structural changes needed for unemployment system, researchers say sis,” Pine Rest CEO Mark Eastburg told MiBiz. “We ought to be pre- By ANDY BALASKOVITZ | MiBiz benefits for people active in their state’s Program loan — call hosted by the West Michigan Policy pared as a state and a community [email protected] system. In Michigan, this means work- which requires 75 Forum. As of early May, Sturgis Molded Family Business for that in case that happens.” ers unemployed as a result of the pan- percent of the loan Products was running at about 10 per- The stress, anxiety and s some employers express demic could receive up to $962 a week. to be used for pay- cent capacity involving transportation depression the pandemic trig- concern about retain- The federal benefits are available for roll in order to be and medical devices. The company has gers can come from the loss of a ing workers who are earn- up to 39 weeks, while state benefits forgiven — faced about 200 employees. job or income, grief, and uncer- A ing more income through were expanded to more workers and backlash from “I’ve called people and there has tainty about the future. At Pine unemployment benefits than their extended for 26 weeks. employees, since been communication that said, ‘I make Presta Contract Deadline: 9.2.2020 Rest, “we’re experiencing a rise normal paychecks, researchers say Media reports have shown con- the loan effectively more by not coming in,’” Presta told in many of the stressors that are long-term structural fixes are needed cern among employers who pay less means workers would be paid their MiBiz. “That’s out there.” 8.3.2020 known to increase risk for sui- to state and federal programs. than the amount of benefits work- typical wages. Sturgis Molded Products’ opera- cide,” Eastburg said. The $2.2 trillion CARES Act passed ers are receiving. In at least one case Kelly Presta, vice president at Sturgis tors and first-line positions make See MENTAL HEALTH on page 6 in late March included provisions to in Washington state, a company Molded Products Co., shared these less than the maximum amount add $600 in weekly unemployment that received a Paycheck Protection concerns during an April 22 conference See UNEMPLOYMENT on page 5

9 West Michigan Industries PERIODICALS Construction industry adapts to new safety Being Distrupted by AI 9.28.2020 protocols PAGE 11 Industry 4.0 Diversity/Equity/Inclusion Contract Deadline: 7.22.2020 Contract Deadline: 9.16.2020

Contact Us Today! [email protected] | [email protected] | 616-608-6170

Visit www.mibiz.com MiBiz / JUNE 8, 2020 15 FOCUS: COMMERCIAL LENDING Commercial lenders discuss effects of pandemic on West Michigan businesses, banking industry Chaffi n Dyer Groendyk McLean Quade Welsh

By MARK SANCHEZ | MiBiz [email protected] projects and a number of conversations we’ve just kind of (thinking), ‘Let’s make sure we’re in had that we’ll get back to. I don’t think it died. good shape, we have people back, let’s get orga- ankers across the region have been focused on working with small business clients to I think it has just been postponed. nized, let’s get ready to roll, and the day that we’re secure loans from the federal Paycheck Protection Program, as well providing payment GROENDYK: We continue to have a robust pipe- 100-percent confident we’ll be able to take off.’ deferrals and adjusting loans for business borrowers hit hard by the COVID-19 pandemic. line. There are a lot of financing opportunities GROENDYK: You can’t live through all of this and Banks also had to quickly adjust their operations as the pandemic hit Michigan, and that continue to move forward and continue to not expect some impact. There has to be some B now operate in a down economy. make a lot of sense right now. That’s been very fallout. I just think it’s too soon to know with cer- MiBiz interviewed several commercial lenders in the West Michigan market to discuss how busi- surprising for me, and refreshing. tainty. I don’t think we’re going to see the ramifi- ness is holding up and how the crisis has affected them. They were: MCLEAN: As expected, volume is down due cations of this until probably the fourth quarter of ■ Mike Chaffin, senior vice president and senior commercial banker in West Michigan for Fifth to COVID-19, shutdowns and the stay-at-home this year and then the real impact will show up in Third Bank order. Early indications are showing some good 2021. It takes time for all of this to kind of fall out. ■ Rick Dyer, president and CEO of Edgewater Bank in St. Joseph activity in certain sectors as we get closer to a MCLEAN: Assuming rates stay low like they are, I ■ Jefra Groendyk, executive vice president, Grand Rapids market president and senior lender full reopening of the economy. think the second half of the year should return for Kalamazoo-based First National Bank of Michigan QUADE: We had a solid first quarter and had to historical activity levels. ■ Dan McLean, vice president of commercial lending at Grand Rapids-based Lake Michigan built a pretty robust pipeline for the second WELSH: It goes without saying that we are in Credit Union quarter, but obviously the PPP took a lot of unique and uncertain times. We are doing our ■ David Quade, Grand Rapids market president for Horizon Bank energy out of the system. We’ve had good loan best to assist our clients by providing information ■ Sean Welsh, regional president for PNC Bank in Grand Rapids volume, but once the PPP hit, that became the and solutions designed to help them negotiate that Here are the highlights of what they had to say: priority. uncertainty. PNC Chief Economist Gus Faucher expects the economy to stabilize in the third quar- What do you see ahead for the rest of 2020? ter and then close with stronger growth at the end Other than the PPP, how has your on a pretty good roll. Our pipeline was good DYER: This kind of holding pattern is going to of the year. However, he stresses that the longer this lending volume been holding up during and we were pretty busy. All of a sudden, things continue at least through the third quarter. Some disruption lasts, the greater structural damage to the crisis? just slowed right down to a stop. I still think of my clients, as I talk to them, they are cau- the economy and the weaker the recovery will be. CHAFFIN: Up until COVID, it looked like we were it’s fairly temporary. I think we’ll get back to tiously optimistic things will bounce back late off to a pretty good start (in 2020) and things it. Everything that wasn’t in process or truly in the year and early in ’21, but I think everyone’s For companies that are borrowing right would continue to hold out at least through this required or needed, like a new piece of equip- expecting the third quarter to be still that recov- now, what are their main reasons or year, but obviously as COVID really moved into ment because one broke down or something, ery stage, just sit back and make sure because credit needs? the United States, we know the story from there. everybody put on hold. Everyone went into just there’s still all of the talk about the second CHAFFIN: What I see is a lot of the market is not DYER: From a volume point of view, we were kind of a holding pattern. We have a number of phase of the coronavirus. So, I think everyone’s overly focused on borrowing money right now, 300,000 SQ FT WAREHOUSE HIGHPOINT REAL ESTATE & DEVELOPMENT & DEVELOPMENT HIGHPOINT REAL ESTATE

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16 JUNE 8, 2020 / MiBiz Visit www.mibiz.com in general. They’re more focused on shoring logistical, and people who support retail that is banners and things like that. more proactive in working with clients, instead up their balance sheet and making sure they grocery based or pharmacy based. That’s still QUADE: Hotels, restaurants, venues for con- of just making some assumptions. And we’re understand what their business needs to con- strong. ferences or concerts, and things along those making sure we’re taking extra caution as we tinue operating in the environment they’re in WELSH: As the economy has begun to bounce lines, and that’s pretty much driven by the look at our loan portfolio. We’re probably stress right now. They’re more focused on what we back, a number of sectors are busy, including restrictions. testing a little bit more than we would. can help them on as far as their working capital manufacturing. WELSH: Any business that had to temporarily GROENDYK: Our bank is very well positioned. and liquidity planning. Obviously, there was a close during the pandemic is likely struggling. We have an incredibly strong balance sheet, lot of concern over the last 60 days about just Who’s hurting the most? we’re well capitalized and we have significant making sure everyone got their PPP funds, and DYER: We’re in a tourist town with our small How are you preparing for the down liquidity. We have increased funding for loan- then there’s a lot of companies out there that downtown businesses and our hospitality, res- economy over the next year or two, and loss provision in anticipation of difficulty in the are very focused on AR (accounts receivables) taurants, bars and hotels. for potential loan losses? coming months. We’re not sticking our head and AP (accounts payable) solutions so that GROENDYK: The obvious ones: Restaurants, DYER: We’re just watching things really closely. in the sand. We certainly expect some impact. they can further automate in this environment hospitality, retail, and the landlords for those We’re one of those banks that went through We’re prepared for that. where it’s a little harder for everybody to be in segments are hurting as well. The others that some really tough times (following the 2008 MCLEAN: Thankfully, our credit metrics con- the same place. are hurting are companies that support large financial crisis) and we remember that. We’re tinue to hold with minimal credit issues to Where conversations are today, they’re gatherings. Think about any large gathering — positioned pretty well to withstand even tough date. We are continuing to remain disci- thinking about, ‘How do I automate today so if whether it’s Tulip Time (in Holland) or Festival economic times. Part of it is just being close to plined in managing our credit metrics, which this happens again, in the fall or whatever, then of the Arts (in Grand Rapids), or anything like our customers, understanding what’s going on includes monitoring both individual loan and I’m not relying on being inside these four walls that — and all of the printed material that is and working with them. You just have to stay on aggregate portfolio loan-to-values, reviewing to be able to function appropriately.’ typically prepared for those gatherings, or top of things and work with people and try to be See ROUNDTABLE on page 18 DYER: I have a couple of hotels that were in process and they’re still borrowing because they’re finishing up things. I have a couple of manufacturers that had plants and equipment expansions and it still makes sense, interme- diate and long term, because the automation they’re introducing to their process is going to cut costs. Even though there’s a little uncer- tainty right now, in the long run it’s still a good move. Most of the borrowing right now is a continuation of programs and projects that were planned for the year, and after thinking it through and working through all of the num- bers, they decided it still makes sense to con- tinue on that road. GROENDYK: It’s across the board. Obviously, we have been very active in the PPP process. That is the obvious thing that’s going on right now. In addition, we’ve had a few companies that have asked for increases in their availability in their lines, just given the uncertainty in the world right now, that we’ve been able to accommo- UNLIMITED date. We also have companies that are growing. Although it sounds a little strange, they have a need to purchase equipment or have more availability on their lines to support receiv- ables. We are seeing some bright spots here. CASH MCLEAN: We are seeing two types of need for credit right now. First, companies that have growth opportunities are taking advantage % of low rates to invest in new or additional real BACK estate and equipment. Second, companies that have had a ‘delay’ in revenue have needed to 1 lean a bit more into their lines of credit for tem- porary funding through the slowdown. QUADE: What we’ve seen from people that are still actively borrowing, obviously PPP and working capital is high. But there are people that are looking for new banking relationships out there and we’ve seen a boost from some of that volume as well. MSUFCU’s Business Cash Back Visa Credit Card What sectors are still busy? gives you the most for your business needs. CHAFFIN: Anyone that obviously provides any type of supplies, whether medical supplies or cleaning supplies, or those types of services. We continue to see a lot of activity in those sec- tors. In general, I would tell you if you look at things from 50,000 feet, no one’s really busy 1% right now as far as generation of new business. ZERO There are a lot of people busy because the world Cash back on $0 annual fee has changed, but I wouldn’t say there’s just any every purchase $0 application fee one industry that’s flowing and going right now because if it’s not impacting them specifically, it’s impacting their clients and sometimes it’s impacting their supply chain. DYER: We have a couple grocery stores that Let’s work together. Apply today! are having great volume because even though they have a little challenge with getting enough msufcu.org/businesscashback • 517-333-2424 supplies and product, no one’s going out to eat. Everyone’s eating at home. GROENDYK: Anyone that is supporting the need for PPE. Those companies that could pivot and start manufacturing PPE are seeing a lot of activity right now. MCLEAN: Certain spots in the real estate sector Members will earn 1% cash back on all purchases. Cash back is not earned on tax payments, any unauthorized charges or transactions, are still very busy, while non-essential manu- cash advances, convenience checks, balance transfers, or fees of any kind. Account must be in good standing to redeem cash back. facturing has seen slowing at this time. Returns result in the loss of cash back equal to the amount returned. Negative cash back will be given if returns or credits exceed purchases. Visit msufcu.org/businesscashback for full terms and conditions. All loans are subject to credit approval. QUADE: Anything that’s medical supply related,

Visit www.mibiz.com MiBiz / JUNE 8, 2020 17 FOCUS: COMMERCIAL LENDING

a lot during this time. I will say that the low makes good lenders, and in the long run we’ll clients and really working with them much ROUNDTABLE interest rates have a negative impact on banks have better lenders as a result. They’ll under- more holistically, going back to working cap- Continued from page 17 for their earnings. It’s kind of a double-sided stand why we stress test loans and why we look ital and liquidity planning and understanding coin. It will help the borrowers for sure, but it at worst-case scenarios. their business needs and making sure we’re financial performance of borrowers more fre- certainly doesn’t help the banks at all. GROENDYK: We have always been a very con- there to help them as they need support on quently, and maintaining a fluid risk rating MCLEAN: Lower interest rates definitely are servative and diligent underwriter. We don’t predicting what the impact of anything that’s system of the portfolio. We have been able to one of the deciding factors for companies to grow just for growth’s sake. We’re very careful going be, whether it’s new business, reduced quickly identify potential risks, which in turn acquire additional real estate and equipment. in our approach to lending, so our approach business, and that their balance sheet is prop- allows us to better determine and calculate QUADE: It can be an advantage for companies really hasn’t changed. We continue to oper- erly positioned to manage through any cycle, the proper reserve amount taken per loan. that are a little more leveraged at higher rates ate in the same manner. The customers that whether it’s up or down. Now more than ever, the ability to maintain right now, but bigger picture, rates have been we work with, they know what to expect from DYER: I’ll go back to that proactiveness. What credit quality within a loan portfolio means low for the last 10 years, so I don’t think it’s us, and because we have a pandemic doesn’t we learned last time was to get more proactive we respond quickly, not only to identify poten- going to be that big of a benefit for people. mean we’re going to change our spots and earlier on with situations and not just assume tial loan losses, but to better assist our mem- do something differently. We may ask more that they were going to work their way out, that bers through economic challenges. Has the pandemic changed how you questions and want to know how they’re maybe in some cases we needed to help work QUADE: We have strategically looked at spe- approach the market or how you being impacted by all of this, but we’ve not them out. It may have just taken a little tweak cific industries that are challenged that we are underwrite credit? really changed our approach as of yet. I would in a payment, a little tweak in a rate, a little just keeping a much closer eye on and increas- CHAFFIN: Our underwriting has always been expect, as we get close to the end of the year tweak in some terms that could have gotten ing our communication with those specific what I consider to be strong, safe and sound and some of this pans out a little bit, maybe someone through some tough times quite a bit industries. practices from a banking perspective, and beginning in the third or fourth quarter, as we faster. Don’t just assume and let things hap- we really haven’t changed our underwriting see stress in the portfolio, we may choose to pen, let things work out. Do what you can to get How do you see low interest rates standards, but we have to look at where things review specific segments more frequently. We them worked out faster for your client. playing into things? are today and what companies are forecast- review all of our credits annually and maybe MCLEAN: Maintaining proper loan structure CHAFFIN: It could be zero percent interest ing for the rest of the year. Now there’s more we’ll go to a more frequent review just to keep as part of consistent underwriting and not right now and there’s not a lot of people who focus on how do they continue to function an eye on companies as they make their way ‘stretching’ our credit standards to make a want to take on leverage. Our clients are good through a down economy when revenue for out of the pandemic and into recovery. deal work. operating businesses and, as a general rule, that company may be somewhat or signifi- QUADE: We do have the conversation as far as QUADE: As long and you’re dealing with proven, they’re not looking at debt as a way to do cantly depressed. how they are prepared and what they’re doing successful clients that have navigated these things. They’re looking at, ‘How do I operate DYER: It’s another good reminder of why we for COVID. That’s a conversation that we have situations before, everything’s going to just be my business more efficiently? What can I do to stress test and why we always look at worst- now that no one had (pre-COVID), just kind fine. The lesson learned is make sure you’re make sure that I’m cutting out any costs that case scenarios when we underwrite all along. of how they’re set up and their contingencies. dealing with companies that have been are unnecessary?’ You would think in a low One of the interesting things is I have some through this before and have been successful. interest rate environment, everyone’s going young lenders. They weren’t lending in 2008 What best practices or lessons from WELSH: PNC’s strategies for maintain- to go borrow money, but the lack of certainty (and) ’09. They just got into the lending world the last recession might apply in this ing strong capital levels and liquidity have on what’s next for them is actually prohibitive in the last 10 years. This is the first time they’ve crisis? allowed us to serve our clients in both good for them in a lot of ways for them to want to go really been through this type of challenge, and CHAFFIN: We’re more proactive this time than and challenging times. In addition, our disci- out and borrow. so it’s a wonderful learning opportunity for perhaps the entire industry was. It was some- plined risk management principles served us GROENDYK: The interest rates being low right them. I’d rather just be able to sit and talk to what of an overnight crash to real estate that well in the last recession and are a major factor now, that will keep the financing burden for them about, ‘Hey, this is what happened back started the dominoes falling the last time. in our ability to be there for our clients during borrowers low and will certainly help them then.’ But having to go through times like this We’re much more closely in touch with our the pandemic.

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18 JUNE 8, 2020 / MiBiz Visit www.mibiz.com SMALL BIZ: COPING WITH COVID-19 San Chez bistro rethinks shared plates, new project delayed

By ANDY BALASKOVITZ | MiBiz individual that the Spanish-inspired [email protected] San Chez first offered on its original menu in the early 1990s. Schneider Restaurants across Michigan are also said customers will be asked if slowly reengaging under occupancy they plan to share plates or are eating limits and heightened measures to individually. protect workers and patrons’ safety. “We’d always be like, ‘Nope, you’ve Under those measures, a menu got to share.’ We’re going to be sensi- built around tapas, or small plates tive to people and their needs,” she The pandemic caused San Chez, a longtime eatery in downtown Grand Rapids, to put plans on hold to open seafood meant to be shared with the table, said. boil concept Beacon in the same building as its legacy restaurant. The building also suffered some damage from the would be naturally difficult to accom- Schneider spoke with MiBiz unrest over police brutality in late May. PHOTOS: ANDY BALASKOVITZ modate during COVID-19. on June 1, just minutes before That’s why Cindy Schneider, the Gov. Gretchen Whitmer formally needle in a haystack — pretty rough,” On top of the uncertainty, the side the project is about 65 percent com- owner of San Chez: A Tapas Bistro and announced restaurants and bars Schneider said. of the San Chez building along Fulton plete with the electric, plumbing and Roam by San Chez in Grand Rapids, across the state could reopen. Roam, Aside from ArtPrize, which is still Street was damaged by a fire during walls installed and painting done. is tweaking the concept to meet cus- which bills itself as “global street food,” scheduled in late September, events at the May 30 protests. The rest of the Financing has also been a chal- tomers’ needs in the coming months. and San Chez have been open for take- the Van Andel Arena, concert venues building was unharmed, which was lenge as federal loans were targeted “We’re tapas, and we share — that’s out with limited menus. and convention sites have been can- welcome news for Schneider, who at keeping existing businesses run- difficult for us,” Schneider said. In She was excitedly texting with celed this summer. is planning a third restaurant on the ning, she said. addition to offering additional dining managers about reopening plans, “We know we have to rely on Grand same block as San Chez. “We’re just waiting to get our res- ware for patrons, “we’re taking differ- but the outlook isn’t entirely opti- Rapidians to come into our restau- With Beacon, a seafood boil con- taurants up and running,” Schneider ent approaches to entrees.” mistic. To start, takeout in downtown rants and be there for us,” as opposed cept, “everything stopped” as the said. “From there, we’re going to That includes adding “entradas,” or Grand Rapids while much of the busi- to large numbers of visitors, Schneider pandemic shut down dine-in res- get focused back on Beacon going a variety of tapas on one plate for an ness activity is shutoff is like “finding a said. “We really rely on events.” taurants in March. Schneider said again.”

Little Space Central District Studio pivots Cyclery keeps to digital busy as more focus during people bicycle pandemic during pandemic

By KATE CARLSON | MiBiz By KATE CARLSON | MiBiz [email protected] [email protected]

GRAND RAPIDS — The COVID-19 GRAND RAPIDS — While most small busi- Central District Cyclery is located at pandemic interrupted the opening Alysha Lach White, founder of Little Space Studio LLC. nesses have been struggling and closing 1309 Plainfield Ave. NE in Grand Rapids’ of a coworking space this summer in MIBIZ FILE PHOTO: KATY BATDORFF during the COVID-19 pandemic, Central Creston Neighborhood. PHOTO: KATE CARLSON the historic Harris Building down- District Cyclery has been overwhelmed town, so the business is pivoting to online classes. Lach White also is a vaccine or other proven way to with business over the last few months. “I think customers are going to be look- offer digital memberships. starting a remote mentoring pro- safely operate. Her company could With an increase in people with more time ing for end-of-the-year sales, and that’s not Little Space Studio LLC was gram to connect fellow creatives capitalize on some opportunities on their hands because of the coronavirus, going to happen this year because it will be wrapping up extensive renovations who want to bolster their careers for private rentals or rent out some Central District Cyclery Owner Nate Phelps sold out,” Phelps said. when the coronavirus pandemic or pick up a new professional skill. individual offices, she added. said he’s seen a lot of new riders. Phelps Because of all the demand, the com- took hold in Michigan in March, “This was a pivotal moment,” The golden question, Lach estimated that he and his three part-time pany is not able to take walk-in appoint- around the time Gov. Gretchen Lach White said. “We have a lot of White said, is how soon people will employees are repairing about 50-60 bikes ments, which customers had been accus- Whitmer issued the stay-home excitement because we don’t know be comfortable coming to work a week. Sales were up last month by about tomed to over the shop’s history. executive order. how else to be right now. Our big again in a coworking setting. More $20,000-$25,000 compared to May 2019. “The community has been really sup- Owner and founder Alysha Lach mission over the summer and fall and more people are working from Located at 1309 Plainfield Ave. NE in portive,” Phelps said. “I’ve seen a lot of White had planned a soft launch in is to continue to engage our mem- home, and some are adjusting bet- Grand Rapids’ Creston Neighborhood, department store bikes that have been March and a full opening in June bership and continue to educate.” ter than others, Lach White said. Central District Cyclery specializes in dusted off because people have time to for the coworking space, located at Because Little Space’s services “It really doesn’t matter what mountain bikes. Currently, the shop is ride again.” 111 S. Division Ave. Despite not yet will be mainly on a digital platform restrictions are in place, it matters operating on an appointment-only basis Many of the company’s loyal custom- fully opening, Little Space Studio for a while, people from outside of how members feel and how clients for bike repairs and is limited to two cus- ers have visited over the past couple of started operating in a beta test- West Michigan will be able to take feel,” she said. “I’ve been getting tomers in the showroom at a time. months, but new riders are making up a ing phase in 2019, hosting work- advantage of online programs, Lach mixed signals on that. Some peo- “It’s been working well; I think we might large chunk of the business in the last few shops and classes and operating a White said, adding she has seen ple are not meant to work at home keep operating this way,” he said. months, he added. coworking space on a small scale. some non-local interest. All of the and need human interaction, oth- Bicycle repair shops were among the “I’m seeing a ton of new faces to me, “A lot of people we serve are cre- studio’s workshops will be online ers are adapting but still miss the first few businesses that were allowed to and they outweigh my regulars,” Phelps ative freelance professionals that until at least 2021. The coworking community so they are looking for reopen on April 24 under Gov. Gretchen said. “If you’re in the biking world and got hit pretty hard from the pan- space also offers an internship pro- more digital ways to connect.” Whitmer’s revised stay-home order. During start to be part of the biking community, it’s demic,” Lach White said. “All or a lot gram that it switched to a remote Despite the setbacks, Lach about a month of being shut down, busi- pretty receptive. People have had enough of their work has been cut. I know a model and has since received appli- White said Little Space Studio ness was kind of scary, Phelps said. The time off right now and it’s a bit of a habit handful of people still working, but cations from across the country. is there to stay in the Heartside company was able to maintain some cash that you fall into.” the work dried up really quickly.” “It’s really exciting to see that neighborhood of Grand Rapids. flow after receiving a contract from the It remains unlikely that everyone will Without being able to work in people are reading about our stu- “It’s heartbreaking not being City of Grand Rapids to fix city and Grand keep biking as more parts of the econ- the physical space, Little Space dio and get really excited about able to use (the studio) but I would Rapids Police Department bikes. omy start to reopen, but some people will Studio is expediting an afford- the momentum,” Lach White said. kick myself if I didn’t do it safely,” Business is now booming, but the increase develop a new affinity for the sport, Phelps able digital membership that’s As far as opening up the physi- she said. “We are in it for the long in people biking is causing a few supply said. expected to launch this summer. cal coworking space, Lach White haul and we’ll be in that location issues, he said. Central District is sold out of “I’ve seen more families riding The membership will include an is taking the virus seriously, and for at least five years. We’re build- bikes currently, and is unable to get more in together,” he said. “The trails are full, every- online message board, job search does not anticipate being able to ing something that will be steady stock. Certain parts also are taking longer to body is out there, so I do think some people portal, digital workshops and fully open the space until there is and last.” order and some are out of stock. will stick with it.”

Visit www.mibiz.com MiBiz / JUNE 8, 2020 19 FINANCE

TETRA ‘Another success story’ “It’s an excellent validation Continued from page 1 Although Tetra still has a “a fair bit of clini- of our business model and cal development to do” to get to market, the kinds of companies The company developed its drug compounds Shionogi “wouldn’t have made the deal during the last decade with the backing of $27 that they did if they didn’t see some prom- we want to promote. It’s million in federal grants, including National ise for outcome,” said Steve Rapundalo, also a validation of West Institutes of Health funding. Millions more came the president and CEO of Ann Arbor-based Michigan in general. This from several Michigan-based investors. They MichBio, a bio-industry association. included Grand Angels and its Ka-Zoo Angels D’Amato Haakenson Rapundalo The deal “was another success story is a success story not only affiliate, Kalamazoo-based Apjohn Group for us in Michigan in the bio-pharma from Grand Angels, but the LLC, Muskegon Angels, Traverse City-based the scientific background and business acu- world” that could bring further attention to the Northern Michigan Angels, Ann Arbor SPARK, men to create, lead and build the company. state’s industry from both pharmaceutical com- West Michigan ecosystem.” the Michigan Economic Development Corp.’s Gurney based Tetra’s headquarters in Grand panies and capital investors, as well as serve as Invest Michigan fund, and the Bioscience Rapids and his lab in Kalamazoo at the WMed an example to promote the state as a Midwest — PAUL D’AMATO Research & Commercialization Center at Innovation Center, and “was able to attract biotech hub, Rapundalo said. Managing Director of Grand Angels Western Michigan University, plus local high great talent at both locations,” Parfet wrote in “It’s a testament that our bio-pharma universe net worth individuals. an email to MiBiz. is doing quite well,” he said. “Success breeds suc- Apjohn Group formed a special purpose cess. If we can make this visible and promote investment company, Apjohn TDP LLC, that co- those successes, the more they hear about it, that the trial has been delayed by the pandemic. ‘A great outcome’ led the Series A financing round for Tetra. wherever they’re located, hopefully that will bring He wants to begin Phase 3 clinicals trials for both The deal was the best exit yet in a drug develop- “This company has achieved very signifi- more attention and interest and money to the drugs in 2021. ment company for Grand Rapids-based Grand cant milestones and holds significant promise in others that are following in the tracks of a Tetra.” The Phase 3 trials could lead to the fil- Angels, which provided Tetra early seed capital treating cognitive disorders within any number The deal further shows that in Michigan, ing of applications to the U.S. Food and Drug and later co-led the Series A round. Grand Angels of neurological conditions, including Alzheimer’s “we’ve got the experience and the manpower Administration for approval to bring the drugs invested in Tetra through its venture capital Disease, Traumatic Brain Injury and Fragile here to move science such as this along,” and to market. The Fragile X drug could come to mar- funds and member angel investors. X,” Parfet said. “We have been very pleased by that the “brain power is here and the abilities ket within three years, and the Alzheimer’s drug “It’s an excellent validation of our business Shionogi’s interest and commitment to Tetra and are here” to form and build a successful pharma in four to five years, Gurney said. model and the kinds of companies we want to the outstanding opportunity this next develop- startup, Haakenson said. promote. It’s also a validation of West Michigan ment phase represents for medicine.” “You don’t have to go to the coasts to find the Pivot from IPO in general. This is a success story not only from individuals to support businesses such as this,” Grand Angels, but the West Michigan ecosys- he said. As Tetra progressed in developing the drug com- tem,” said Paul D’Amato, managing director of Keeping intact pounds, work began toward an initial public Grand Angels’ venture capital funds. Tetra Therapeutics closed in late May on a merger offering. The company made presentations at “It’s a great outcome for everybody,” D’Amato with Shionogi & Co. Further financial details of Trials continue investor “roadshows” in October and November said. “We’re also proud of what we were able to the deal were undisclosed. The merger agreement follows Shionogi & Co.’s 2019 in New York City, he said. The company was create together. Our goal is to build these com- Under the deal, Shionogi & Co. acquired prior $35 million strategic investment in late 2018 getting “very strong interest in Alzheimer’s and panies in West Michigan and this is just an amaz- Tetra’s portfolio of drug compounds for treat- in Tetra Therapeutics, which is presently conduct- in Tetra,” Gurney said. ing success.” ing Alzheimer’s disease, Fragile X syndrome ing separate Phase 2 clinical trials in the U.S. The “In the end, the merger path provides a bet- At the nonprofit Bioscience Research & and other brain disorders associated with cog- trial for Alzheimer’s was completed in January, just ter outcome to our investors and stakeholders Commercialization Center at WMU, proceeds nitive or memory conditions. Tetra became a prior to the COVID-19 pandemic spreading into than pursuing the IPO,” he said, citing added dif- from the Tetra deal went back into an investment wholly owned subsidiary of Shionogi, which the U.S. By that time, Tetra was already analyzing ficulty because of the COVID-19 pandemic. “At fund that invests in early-stage life sciences start- obtained global rights to all of Tetra’s drug com- data from the trial and “in advanced businesses this point in time, no one’s doing an IPO. It’s very, ups across Michigan. pounds, including one known as BPN14770 for discussions” with Shionogi, which in March made very difficult to execute an IPO now.” The BRCC, an evergreen fund formed in 2004 Alzheimer’s. another equity investment beyond the 2018 deal. Tetra’s progress to this point “gives us some with backing from the state and WMU, invested Shionogi intends to maintain Tetra’s opera- Shionogi then decided to make a full acquisi- kind of successful guideline of what works for $450,000 in Tetra and received an ROI that was tions in West Michigan, although production of tion of Tetra, Gurney said. startup companies, especially with drug develop- in the “many multiples,” said Executive Director the new drugs — if and when they come to mar- “Tetra’s deep level of drug discovery know- ment,” a sector that is “unique from other indus- Stephen Haakenson. ket in the years ahead — likely would occur in how in the CNS area will help us to solve for tries,” Haakenson said. “That was one of those exits that an early- Japan, Gurney said. the cognitive disorders our aging population is “It takes time and it takes patience to invest in stage investment fund counts on, that one out “Shionogi wants to keep our team intact,” facing, and we believe we are well-positioned a company such as this. The product’s still not in of 10 returns that covers the others. So, it was said Gurney, who continues as CEO at Tetra to bring BPN14770 to patients in need,” Isao the commercial market and we hope to see it go very successful,” Haakenson said. “This allows under Shionogi’s ownership. “They understand Teshirogi, president and CEO of Shionogi & Co., there and make it with Shionogi taking the reins us to continue to put further funds out the door.” the depth of our experience and our ability to said in a statement. of the assets,” he said. Don Parfet, founder and general partner execute with minimal resources, and they are Tetra has a few patients remaining in the Asked for advice for other bio-pharma start- at Apjohn Group, credits Gurney for having interested in continuing that.” Phase 2 trial for Fragile X, Gurney said, adding ups, Gurney said: “Keep with it. Don’t give up.” “Create a network and rely on your network to build your company,” he said.

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farm that it owns. Clark Whitney said the group is not taking donations from individuals because it does not want to encourage trips out to the Crisis puts spotlight on food issues grocery store. “The food we’re providing looks different based on the best prices we can get. Healthy food By JANE SIMONS | MiBiz 9,000 meals were being delivered to more than also are giving to other organizations that sup- costs more. If we’re just serving processed food, it [email protected] 50 schools in Allegan, Kent, Muskegon, and ply food. Meanwhile, donors who support arts potentially could be adding to the problems we’re Ottawa counties, the four-county area served and culture may continue to support that while already seeing,” Clark Whitney said. ne week before schools through- by Kids’ Food Basket. The organization’s tar- also asking how they can support the needs of Meeting immediate needs is the first phase out Michigan were ordered to shut get clientele is children who were receiving the children. of a three-phased approach being taken by Kids’ down, leaders with Kids’ Food packaged meals through the various school sys- “Children can’t control their environment Food Basket. The second phase is replenishing Basket had already begun to put a tems, but when the needs for access to healthy and they need us to keep them healthy and pro- the depleted food supply followed by a long-term O plan in place to meet the needs of food scaled up, so did Kids’ Food Basket, Clark tected,” she said. strategy that will enable the group to meet future the children they serve on a daily basis. Whitney said. Unlike the situation chil- “We were watching what was happening As an example of the increased need, she said dren and families face in many around the world and watching Italy and see- there was one site in the Wyoming-Kentwood Michigan communities, Eddy said “Those who have the privilege ing that their schools were area that requested an additional 2,500 meals to schools in her community are con- shutting down,” said Bridget augment the 500 it had been providing. tinuing to provide meals during not to be hungry generally have Clark Whitney, founding The organization has been able to meet the the summer. The school district more compassion toward feeding CEO of Kids’ Food Basket. demands through ongoing fundraising efforts. she lives in has reallocated a por- people in hunger. There’s a lot “Very, very suddenly, schools “We are not funded by government dollars, tion of the dollars it would have here were shut down and a which allows us flexibility,” Clark Whitney said. spent on its summer school pro- of intersection we see globally stay-at-home order was put “Because of people in the West Michigan com- gram to the food program. around food and the importance in place.” munity, we are able to respond and use every sin- Those organizations that have Unlike many busi- gle dollar we receive as efficiently and effectively been able to meet basic human ser- of providing healthy and nesses and organizations as possible.” vice needs during the course of the Clark Whitney nutritious food to kids. Hunger that were caught off guard Fundraising efforts have largely relied on the COVID-19 response will likely see by the ensuing chaos cre- group’s message that, “Our collective health as an increase in financial support becomes a health as well as a ated by the coronavirus, a community depends on our ability to care for because there is more compassion societal issue.” Clark Whitney’s organiza- our most vulnerable citizens.” toward addressing basic human tion was ready because it “We are 18 years old and since day one we needs, Eddy said, noting her cur- knew how important it was have been in emergency work. Hunger is emer- rent clients include the YWCA — HEATHER EDDY going to be to continue to gency work and for us now it’s just become a in Kalamazoo and Covenant President and CEO of Kistner Eddy Executive Services provide healthy and nour- scaled-up emergency,” Clark Whitney said. “I Community Care in Detroit. ishing food to the children think people really trust us to use their dollars “We know that going into eco- living in a four-county area and resources to ensure that kids have healthy nomic turmoil, nonprofits in gen- Eddy that the nonprofit serves. food. The community knowing that about us is eral do OK if they’re providing direct human needs, which includes identifying new revenue At the same time, the orga- one way to fundraise. services,” she said. streams to bring in additional resources. nization recognized that the way it would get “Our children have had a disrupted school Eddy’s personal passions that she supports Among these is a Community Supported its work done would have to change to comply and life experience. Between the four counties we with her time and money are programs that Agriculture (CSA) program that gives members with social distancing guidelines and the stay- serve, 75,000 kids receive free or reduced lunch, focus on food, housing and domestic violence. the option to fund some of Kids’ Food Basket’s at-home orders. and so 75,000 children who were relying on “Those who have the privilege not to be hun- meals. The 250 volunteers who packed up thousands school meals no longer have that resource. That’s gry generally have more compassion toward “This is just the beginning,” Clark Whiney said of meals during the week at three a really important message.” feeding people in hunger,” Eddy said. “There’s of a response that will need to be long-term. different locations have been a lot of intersection we see globally around Eddy agreed, adding that, “We also know that replaced temporarily by Kids’ NONPROFIT food and the importance of providing healthy an economic crisis begins to hit people six to nine Food Basket team members who Competing and nutritious food to kids. Hunger becomes a months down the road.” are doing that work until it’s again SECTOR NEWS health as well as a societal issue.” She said this may mean that people who can’t Sponsored by: safe to gather. interests give financially may volunteer and that people GRAND RAPIDS “Our team members from COMMUNITY Heather Eddy, president and Planning ahead who can give will give less because donors at all week two of the stay-at-home FOUNDATION CEO of Kistner Eddy Executive levels have taken a financial hit. The situation is orders through now are packing Services, a Naperville, Ill.-based While working to address the immediate needs compounded by the recent protests and riots, meals,” Clark Whitney said. “I’ve group offering a broad range of created by the pandemic, Clark Whitney said her which can further distract people from giving. been doing my CEO job for 40 or 50 hours each services to the nonprofit sector throughout the organization put together a four-month emer- “As people feel moved to do something about week and then packing meals on weekends and United States, said during this time of economic gency plan and a 14-month strategic plan for social justice, racial equity and injustice, they at night for 20 hours.” uncertainty, she has been counseling her cli- the year. may give to that instead of a food bank,” Eddy Volunteers have been able to assist team ents to constantly engage with their volunteers Since March 12, prior to the state-mandated said. members with the distribution of these meals and communicate with their board members. closures, food costs for Kids’ Food Basket have Even so, Clark Whitney remains optimistic to more than 70 distribution sites located in Eddy notes philanthropy for children’s issues increased by 66 percent. The organization is about her organization’s capacity. the neighborhoods of schools served by the has been receiving greater attention lately. sourcing food from local vendors and farmers “Because we’re working so deeply in all three organization. Donors who may be supporting a food bank and Feeding America, among other avenues. The phases, we are positioned to continue to serve Prior to COVID-19, Clark Whitney said will continue to give at the same level, but now organization also is growing food on a 10-acre our community with strength,” she said.

:RYN[VR<_\gP\GNcNYN 0\[T_NabYNaV\[`a\aUR0YN``\S   B[V\[5VTU@PU\\Y0YN``\S   0UNYYR[TR@PU\YN_ grfoundation.org

Visit www.mibiz.com MiBiz / JUNE 8, 2020 21 Q&A Jelena McWilliams IN THE NEWS Chairman, Federal Deposit Insurance Corp. M&A MANUFACTURING The FDIC intends to keep providing regulatory flexibility ■ Family-owned investment firm Coastal Group ■ Specialty vehicle and chassis manufacturer to banks as they navigate the economic recession brought has acquired Bogalusa, La.-based Veecor Co. Inc., Spartan Motors Inc. has changed its name to The on by the COVID-19 pandemic. The federal regulatory a honeycomb packaging manufacturer, and has Shyft Group Inc. and agency wants banks to remain agile and do what they can moved all of the company’s operations to Holland. relocated its corporate to support consumers and small business owners during Two Veecor employees also moved permanently to headquarters from the crisis, according to FDIC Chairman Jelena McWilliams. the Holland area to remain with the company, while Charlotte to Novi. The McWilliams, who began a six-year term on the FDIC Board of Directors in June 2018, another is working remotely on a contractual basis, name change comes previously served as executive vice president, chief legal officer, and corporate secretary according to a spokesperson. The acquisition and after the company for Fifth Third Bank in Cincinnati, Ohio. She addressed a group of bankers last week launch of Coastal Honeycomb LLC is expected to divested its emer- in a virtual meeting hosted by the Michigan Bankers Association to discuss issues the lead to 12 new jobs in Holland to produce the com- gency response vehicles division to Milwaukee- industry faces and the economy. McWilliams later spoke with MiBiz. pany’s lightweight packaging materials, according to based REV Group Inc. back in February 2020 in a a statement. Coastal Group’s holdings also include $55 million cash deal. The REV Group also purchased

Coastal Automotive, Coastal Container and TKP the rights to the “Spartan” name and logo, prompt- What’s your key message for banks these days? To continue reaching out to their businesses, and small businesses in particular, to see whether they Investments. With the Veecor deal, the company’s ing the name change for the company. need to proactively react to the changes in the marketplace for those businesses and residential bor- packaging services now span design, testing, cor- rowers and consumers. On the other side, my message is they cannot be stressing out their portfolio rugated, honeycomb, packaging supplies and foam. HEALTH CARE internally enough because things are fluid and they’re changing on a daily basis. Terms of the Veecor deal were not disclosed. ■ Blue Cross Blue Shield of Michigan reports a The bankers need to know and understand their communities and to proactively reach out to surge in the number of physicians now offering tele- understand what’s going on. If they have high concentrations in the industries that have been par- EXPANSION health visits for patients. The COVID-19 pandemic ticularly impacted — and now it seems like it’s every industry, but early on it was the hospitality and ■ Kentwood-based Integrated Architecture and assistance for doctors to adopt or expand a plat- airline industries, tourism and some of the supply chains that support those industries — our mes- LLC will invest about $2 million into renovating a form pushed the telehealth participation rate to 82 sage is they have to take a look at those concentrations and figure out and understand how they’re 13,600-square-foot building at 840 Ottawa Ave. NW percent over four weeks among Blue Cross Blue going to address the risks if there’s a prolonged period to recovery. north of downtown Grand Rapids into its new head- Shield participating physicians, an increase of more

How do you assess the state of the industry going into the crisis and the economic period that quarters. Integrated Architecture plans to occupy the than 72 percentage points from a rate of less than 10 we now face? newly renovated space in the Monroe North district percent previously. The health insurer helped drive Based on the data we’re looking at going into this crisis, which wasn’t a financial crisis — and we’re in mid to late November this year. The new office will that rate far higher by offering up to $5 million in going to do everything we can to make sure it doesn’t turn into a financial crisis — luckily and fortu- be designed for 70 people, but 50 people will move incentives to physician groups to assist in launching nately banks were well capitalized (and) they had a lot of liquidity. Their loans that they underwrote into the building initially, with the opportunity for or expanding a telehealth service and provide virtual were based on sound underwriting principles, so this was not like 2008. The one difference that has growth, said Mike Corby, executive vice president of visits to patients. been worse, I would say, and more shocking to the system than 2008 is how quickly this descended Integrated Architecture. The architecture and engi- ■ Pine Rest Christian Mental Health Services upon us and the resulting government closures that resulted in business closures. neering firm first proposed the headquarters relocation added an urgent care telehealth service as a way to As we look at the next few months, our internal stress testing of the larger banks, and the inter- project in 2017. Integrated Architecture is working with provide greater convenience and access to men- nal stress testing of the banks themselves, have shown them to be pretty resilient, even to a shock like this. Now, the level of their resiliency is going to be tested by the duration of the times … and Caledonia-based FCC Construction Inc. for the exte- tal health care. People experiencing symptoms and understanding that if it’s a quick down and a quick up, we’re going to be OK. If it’s a quick down, a rior and site work, and Grand Rapids-based Rockford needing mental health care can get assessed the prolonged down, and then some up, we’ll probably be OK, depending on how long the down is. If Construction Co. Inc. for the interior improvements. same day by a Pine Rest clinician through the tele- there is a ‘W,’ that’s going to stress everyone’s portfolios. Van Haren Electric Inc. and River City Mechanical health service. Pine Rest added the service for urgent Inc. are also part of the renovation project. care after transitioning to telehealth weeks ago for all How have banks handled the crisis to date? outpatient sessions during the COVID-19 pandemic Lenders have had to adjust for this constantly evolving and changing marketplace where literally FUNDING and seeing how well that has worked. An urgent care in the first few days and weeks of the pandemic back in March, you didn’t know what to expect and ■ The U.S. Department of Agriculture has telehealth service “was the obvious next step,” said how to look at your portfolio, and what does this mean for the economy. I think they have been able awarded $22.5 million to expand rural broadband Megan Zambiasi, director of clinical practice at Pine to do enough stress-testing of their portfolios internally to take a look at the concentrations and risk access to thousands of residents and dozens of busi- Rest Hospital and Residential Services. exposure to be able to understand how best to navigate the landscape in the next few months. What we told them is start adjusting your loans, start modifying your loans, go ahead and reach out to your nesses in Southwest Michigan. The $11.8 million for borrowers proactively on the commercial and residential and consumer side, and figure out what Barry County Services Co. will be a combination of FINANCE do they need. Do they need you to modify a loan? And if they do need you to modify that loan, tell grants and loans for fiber-based broadband access ■ Grand Rapids-based Independent Bank Corp. us if you have any regulatory concerns. for 17 farms, 16 businesses and 12,000 residents raised $40 million in a debt offering that comes amid over 127 square miles. The remaining $10.7 million the economic downturn and uncertainty from the What can banks expect in the regulatory environment as they navigate the economic conditions? for Southwest Michigan Communications Inc. COVID-19 pandemic. Independent Bank (Nasdaq: We have been urging with the other agencies to have utmost regulatory flexibility. Unlike the 2008 is a combination of grants and loans for fiber-to- IBCP) completed the offering of subordinate debt crisis, this came upon us very quickly. The lessons learned from the 2008 crisis is that it is better to the-premises (FTTP) broadband in Van Buren and through a private placement. Proceeds raised from be proactive, even if the issue is not clearly big at the onset, but you don’t want it to develop into a Allegan counties, extending access to 22 farms, 19 the fixed-to-floating rate subordinated notes that are big issue. I call it putting out fires. You want to put it out while it’s still small. So, we have decided to businesses and 7,700 residents over 100 square due in 2030 “will be utilized for general corporate give utmost flexibility on our exams. Banks can be a vehicle to recovery. We need to make sure there are no roadblocks to that vehicle. miles. purposes,” according to the bank. Both the corporate ■ Grand Valley State University raised $130 mil- holding company and Independent Bank “are well What’s an example of the FDIC’s flexibility? lion via its Laker Effect capital campaign. Launched capitalized today and our forecasts have us con- All of our exams have moved offsite. We informally surveyed our banks early on in March to see, would in 2012, the campaign was the largest GVSU ever tinuing to be so prospectively,” President and CEO they prefer to continue with their exam on the current schedule. Surprisingly, most of the banks said conducted. The uni- Brad Kessel said. “With the significant uncertainty yes. The banks that asked for a delay — not many have, but some have — we granted 30 to 60 days. versity originally in the current operating environment, we thought it Then we had a handful of banks that were unable to proceed because they have personnel that is sought to raise $85 prudent to raise this capital today as it will provide affected directly by COVID-19. We don’t want to put on the added pressure of having to go through million. After exceed- additional flexibility for greater-than-expected chal- a bank exam while they’re dealing with key personnel that have been impacted. ing that goal, GVSU lenges and/or take advantage of opportunities over

a year ago raised the the next 12 to 36 months.” What’s your expectation of banks during this period? I’m urging management teams at different banks to think through the experiences they have had in goal to $100 million, as MiBiz previously reported. the past and to proceed wisely, knowing that we’re not going to be back to maximum employment for GVSU received contributions from a record 35,000 BANKRUPTCY some time, which could be years. So in the meantime, they will have to adjust their portfolios, they donors. Proceeds from the Laker Effect campaign will ■ Grand Rapids-based BarFly Ventures LLC, the will have to err on the side of being more prudent, rather than less. This is definitely — and more of go toward increased scholarships, expanded aca- parent company of the HopCat chain of beer bars, the banks that I’ve talked to have agreed — and absolutely no time to be exuberant. demic programs, and facilities such as the Health filed for Chapter 11 bankruptcy last week in the Campus near the Medical Mile in Grand Rapids, as U.S. Bankruptcy Court for the Western District of What’s your biggest concern right now? well as to support programs for students. Michigan. The company said in court documents The overall economy. Sooner or later we’ll have a vaccine, and the question in the meantime is what that it had $1 million to $10 million in assets and happens with folks who actually can’t make their bills. Government stimulus can only go so far, so DEVELOPMENT $10 million to $50 million in lia- it is going to be crucial that we reopen the economy and be smart about it because there are abso- ■ New York City-based developer Magnus Capital bilities. BarFly operates more lutely people dependent on daily income. A lot of our community banks are small. They function in local communities and they’re over- Partners has proposed a 240-unit affordable hous- than a dozen HopCat locations whelmingly represented in rural communities, and in those communities you don’t have many ing complex along Lake Michigan Drive on the in Grand Rapids, Holland, choices for jobs. west side of Grand Rapids. Subject to final site plan Kalamazoo and East Lansing, When local businesses close, some of them won’t be able to withstand the shock. What does that approval, the development will consist of five, four- as well as in Southeast mean for the local communities and what does that mean for the survival of small banks in America? story buildings located at 3059 Lake Michigan Drive Michigan and throughout the NW. The developer plans to apply for the compet- Midwest. The company also What permanent changes do you see coming out of this for the banking industry? itive Low Income Housing Tax Credits for all 240 runs Grand Rapids Brewing Co. and Stella’s What I think is going to be the biggest long-term change, and it’s not actually driven by the pandemic, units included in the development, said Vishal Arora, Lounge in Grand Rapi ds. Founder and Chairman is there has been a shift to digital channels. There has been a transformation in the sector of more managing principal with Magnus Capital Partners. Mark Sellers III said the restaurants and bars will banks going digital and delivering services and products digitally, and now because of the pandemic their systems have been tested and a lot of them have fared very well. So, if anything, there’s a silver The apartments will be pet-friendly with amenities reopen amid the bankruptcy proceeding. BarFly esti- lining: the ability of banks to transform their processes to go digital. I think you’re going to see the including a dog park on site, walking paths and a fit- mates that it has 50-99 creditors, according to the digital evolution exacerbated at every level of banking. ness center, according to the preliminary plan over- court filing. The company is represented in the case view. Units will consist of 40 one-bedroom units, 102 by Warner Norcross + Judd LLP and Pachulski Interview conducted and condensed by Mark Sanchez. COURTESY PHOTO two-bedroom units, and 98 three-bedroom units. Stang Ziehl & Jones LLP.

22 JUNE 8, 2020 / MiBiz Visit www.mibiz.com We’ll get through this together.

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