20150518-NEWS--0001-NAT-CCI-CD_-- 5/15/2015 6:38 PM Page 1 CRAIN’SReaders first for 30 Years DETROIT BUSINESS May 18-24,2015 Former churches BEAUMONT, CREAM AND find new HENRY FORD SUGAR? ... uses in the afterlife POST PROFITS VITAMINS? Page 3 PAGE3 PAGE3

Van Buren Township is suing Visteon Corp. after a failed bond deal that could bankrupt the Poll: Biz willing community. Should the company share blame? to pay more Visteon: Lesson in caution

By Dustin Walsh The case isn’t the first time economic development [email protected] desires have burned municipalities, but experts say this for better roads A lawsuit between Van Buren Township and its case should serve as a cautionary tale. The biggest issue: largest corporate resident, Visteon Corp., underscores vague language about shared risk and the dollars in- the risks of government-led investment in economic volved. Legal experts in this area of law say indemnity Fuel or sales tax hikes are favored options development — and whether corporations should be clauses in any contract like this must be ironclad. held accountable when these kinds of projects go awry. The Visteon development opened in 2004. When The suit, filed May 12 in U.S. Bankruptcy Court in the Visteon Village campus was envisioned, it wasn’t By Lindsay VanHulle Delaware, alleges the multinational auto supplier known that Visteon would ultimately end up in bank- Crain’s Detroit Business/Bridge Magazine breached its contract over bonds tied to the construc- ruptcy court or that the commercial real estate market Metro Detroit businesspeople say tion of Visteon’s opulent 263-acre campus near they would be willing to pay more Ecorse Road and I-275. See VISTEON, Page 22 out of their own pockets to repair Michigan’s failing roads and bridges, The road both in the form of higher taxes and fees — and nearly half of them to funding would even consider corporate in- come tax changes. Survey: Biz owners, The roads, they agree, are broken. managers would pay for What they don’t agree on is just roads, if plan is right what Plan B for roads should look like. 4% Of the 300 business owners and managers surveyed in a poll com- 10% missioned by Crain’s Detroit Busi- ness and law firm Honigman Miller Schwartz and Cohn LLP, a majority, 56 percent, believe some combina- 31% 56% tion of fuel tax and fees could fill the funding gap. The polling was con- ducted by Lansing-based Epic-MRA. Respondents said lawmakers and Gov. Rick Snyder must make reaching a deal on an alternative It will be necessary to raise state funding plan a priority in the wake taxes,fees or both [LARRY PEPLIN] of Proposal 1’s defeat this month. Denita Donahoo (left) gets a grip lesson from instructor Terri Anthony-Ryan last week at the Belle Isle Golf Range. These respondents to the Crain’s Funding can be raised by cutting existing programs and services poll said coming up with Plan B quickly is essential. But they nearly It will take a combination of both uniformly opposed cuts to some cuts and new taxes New owner aims high for Belle Isle golf, existing state programs to match Undecided/refused the $1.2 billion that Proposal 1 Source: Crain’s/Honigman poll

See ROADS, Page 25 [ISTOCK PHOTO] but expenses put her in the rough

© Entire contents copyright 2015 By Bill Shea ticipated,” she said. “The state underestimated what by Crain Communications Inc. All rights reserved. [email protected] it would cost to open the doors here.” crainsdetroit.com Vol. 31 No 20 $2 a copy. $59 a year. Since she took over the Belle Isle Golf Range on Michigan, which made the island a state park last April 1, Francine Pegues said she has had only year, gave Pegues a three-year contract in February enough time to hit a single bucket of range balls. to operate the golf facility, and her intent has been to That’s distressing for the president of the Michigan use the center as a tool to bring golf to underserved Women’s Golf Association who first took up the game populations, especially children, she said. 39 years ago, but her time has been occupied by Unexpected expenses and troubles have made keeping the driving range and golf training center that a difficult goal. open and maintained. NEWSPAPER “At this point, I have spent more money than I an- See GOLF, Page 21 20150518-NEWS--0002-NAT-CCI-CD_-- 5/15/2015 3:49 PM Page 1

2 CRAIN’S DETROIT BUSINESS // May 18, 2015

scores. But consumers who hadn’t requirement that automakers sell MICHIGAN signed up for the services were being through franchised dealers only, INSIDE billed anyway, according to the Fed- The Detroit News reported. The law THIS ISSUE eral Communications Commission has been criticized by electric car BANKRUPTCIES ...... 7 and several state attorneys general. maker Tesla Motors. Ⅲ BUSINESS DIARY ...... 19 Both companies said in statements The coal-fired SS Badger pas- CALENDAR ...... 20 that they had stopped allowing pre- senger ferry is set to return to serv- CLASSIFIED ADS ...... 21 mium text messaging before the gov- ice after undergoing a makeover to CRAIN’S LIST ...... 17 BRIEFS ernment investigation began. meet terms of a deal with the U.S. MARY KRAMER ...... 9 Environmental Protection Agency, OPINION ...... 8 The lesson here: Beware … well, call it bacchanalia, in keep- That’s all,for Holland mall; the Ludington Daily News reported. PEOPLE ...... 19 of Greeks bearing ski poles ing with the overall Greek theme. enter,the shopping center The Badger, which sails between RUMBLINGS ...... 26 The Detroit Free Press reported that Ludington and Manitowoc, Wis., WEEK ON THE WEB ...... 26 Perhaps this explains why Greeks Sigma Alpha Mu paid Treetops From the Mall of America to de- will have a new ash retention sys- tend not to excel at the Winter $11,500 for damages and for having mall of Holland. Starting next tem as part of a requirement to stop Olympics. Upon further review, offi- too many guests in 2014. month, Westshore Mall will undergo discharging ash into Lake Michigan. COMPANY INDEX: cials at Treetops Resorts in Gaylord Treetops attorney Paul Dillon said about $20 million of work to turn an Ⅲ A $75 million settlement was SEE PAGE 25 last week said they would file a civil the fraternity was invited back be- enclosed mall along U.S. 31 into an reached with Enbridge Energy over lawsuit against individual members cause 2014 problems weren’t seen as exterior-designed shopping center the 2010 oil spill that sent 800,000 gal- of the Sigma Alpha Mu and Sigma “intentional acts.” To the credit of known as The Shops at Westshore. lons of oil into Talmadge Creek and ny based in Durham, N.C., for $34 Delta Tau fraternities at the University both fraternities, no such ambiguity Greg Erne, a principal at South- the Kalamazoo River, the Kalamazoo million in cash, The Holland Sen- of Michigan for their alleged roles in was present this year. field-based Versa Development, the Gazette reported. The spill affected tinel reported. the destruction of nearly 50 rooms at parent company of Westshore Mall more than 38 miles of the Kalamazoo Ⅲ A Michigan Senate committee the ski resort during the Jan. 17-18 Verizon,Sprint to pay back Investors, told WZZM-Channel 13 in River and 4,435 acres of shoreline voted to let the filing deadline for weekend. customers over ‘cramming’ Grand Rapids that the switch is a re- habitat. Flint’s mayoral primary be extended The Otsego County prosecutor al- sponse to, naturally, shoppers in the Ⅲ Atlanta-based Georgia-Pacific after city Clerk Inez Brown told can- ready had criminally charged three Michigan is to receive $538,934 area. will close its packaging plant in didates their nominating petitions members of Sigma Alpha Mu when from Verizon Wireless and Sprint The entire project is expected to Parchment just north of Kalamazoo with at least 900 valid signatures Treetops lawyers issued a statement Corp. as part of a $158 million na- last about 18 months. Upon com- by the end of the year, eliminating were due April 28. The actual dead- that said, “Several facts … now sug- tionwide deal to settle charges that pletion, the shopping center will 57 jobs, MiBiz reported. line was April 21. gest that legal action beyond the the mobile giants allowed phony have about 20-25 stores ranging Ⅲ Elkhart, Ind.-based Forest Ⅲ Frankenmuth Brewery’s Batch criminal matter should be pursued.” charges on their customers’ month- from large department retailers to River Manufacturing Inc., whose 69 American IPA was awarded the Treetops officials said they decided to ly bills so they could keep a cut of small businesses, Erne said. West- products include travel trailers and 2015 Gold Medal for Best IPA (neo- pursue a civil suit partially because the profit, The Associated Press re- shore Mall Investors purchased the pop-up tent campers, broke ground phytes can Google it) at the World only three people have been charged. ported. In total, Michigan has re- mall from Coastline Michigan LLC in on a $7 million plant in White Pi- Expo of Beer, considered the largest Treetops estimates $430,000 in costs ceived nearly $1.3 million as a part 2012 for about $5.5 million. geon west of Kalamazoo, the Kala- beer sampling event in Michigan. from the vandalism. of four national cramming settle- mazoo Gazette reported. Forest Ⅲ Faced with a $21.9 million So assuming your hackles have ments with major carriers. MICH-CELLANEOUS River plans to hire 396 people with- deficit, the Flint Board of Education been raised, consider this: A police The two mobile providers had Ⅲ Three Federal Trade Commis- in three years. voted unanimously to close three report says Sigma Alpha Mu had cre- partnered with vendors that sell pre- sion staff members sent a letter to Ⅲ Allegan-based Perrigo Co. plc elementary schools at the end of the ated problems in 2014 — yet the frat mium text messaging services, such state Sen. Darwin Booher, R-Evart, acquired the Mexican operations of school year, The Flint Journal re- was allowed to return for this year’s as daily horoscopes, trivia and sports urging legislators to drop Michigan’s Patheon, a pharmaceutical compa- ported.

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The first 52 nonprofits to sign up will be featured as a “Nonprofit of Note” in an First Tier Ranking in issue of our Nonprofit Labor Law – Management Report e-newsletter. Health Care Law Contact Marla Wise: Ŷ Metro Detroit Ŷ Grand Rapids Ŷ Kalamazoo Ŷ Grand Haven Ŷ Lansing Contact Barbara Buchanan at [email protected] [email protected] or (313) 446-6032. 20150518-NEWS--0003-NAT-CCI-CD_-- 5/15/2015 6:12 PM Page 1

CRAIN’S DETROIT BUSINESS // May 18, 2015 3 2 health systems find profits,optimism

Lower per-patient costs help weather cuts to reimbursements Southeast Michigan, including St. John Providence Health System, St. Joseph By Jay Greene Recovering from a $12 million net in- ducing) costs,” said Schlichting. “To come Mercy Health System, McLaren Health Care [email protected] come loss in 2013, Henry Ford bounced out of it (financial losses in 2013) was and University of Michigan Health System, Despite ongoing reimbursement re- back last year by posting $27.8 million in pretty significant.” have fiscal years that end in July or Sep- ductions from Medicare and possible net income, said CEO Nancy Schlichting. Henry Ford, which last year saved $65 tember and financial data was unavailable. changes in lucrative auto no-fault med- Henry Ford’s turnaround in 2014 was million through productivity improve- Marianne Udow-Phillips, director ical payments, two of the six major aided by a 3 percent increase in revenue ments from its new Epic Systems elec- with the Ann Arbor-based Center for health systems in Southeast Michigan, to $4.71 billion, a 4 percent reduction in tronic health record, is on track to cut Healthcare Research and Trans- NancySchlichting: Henry Ford Health System and Beaumont uncompensated care costs and a 15 per- $300 million in costs by 2016, said Ed- formation, said lower per-patient costs Medicaid payments Health, had financial success in 2014 and cent increase in Medicaid payments. ward Chadwick, Henry Ford’s CFO. aid Henry Ford books are cautiously optimistic for the future. “We showed tremendous work on (re- Other health systems operating in See SYSTEMS, Page 23 Sharing sacred spaces Group links low-use religious sites with space-needy organizations

By Sherri Welch Physical Theatre. [email protected] With its lofty ceilings, wood floors The sounds of children playing and balcony, the former gym is per- once filled the gymnasium at the fect for dance performances, and historic St. John-St. Luke Evangelical the classroom-like space on the United Church of Christ in the city’s building’s second floor is perfect for Eastern Market area. rehearsals and classes, said ArtLab J But they faded as the size of the founder and artistic director Joori congregation there — over 1,300 Jung. strong in 1874 when the church was Next year, she and ArtLab J plan built — dwindled to just 50 today to host performances inside the for the church now occupying the sanctuary — complete with its tow- building. ering stained glass windows and Things are looking up for the candelabras as a backdrop. church to find new use, and even Space at the church is affordable new membership interest, however, — ArtLab isn’t charged rent but thanks to a new space-sharing does make donations to the church agreement between the church and — and parking is free, Jung said, un- two local performing arts groups. like its previous locations in the ArtLab J and its fledgling contem- downtown area. A space-sharing pact with St.John-St.Luke Evan- porary modern dance company For the church, the agreement is gelical United Church of Christ provides ArtLab J moved into St. John-St. Luke’s auxil- bringing new people and new do- founder Joori Jung space for performances. iary building last summer, joining nations through its doors, some- United Church of Christ performing [JOHN SOBCZAK] arts outreach program Young Fenix See CHURCHES, Page 24 Drink to health: Vita Perk brews ‘smart coffee’biz

By Laura Cassar and a passion for health, Kifferstein, Belchinsky, 44. Together, they began Kifferstein, with a background in Special to Crain’s Detroit Business 36, wanted to infuse well-being into researching what was out there. business development for a textiles It all started with a cup of coffee. his favorite beverage and find op- They found coffee that was already company, and Belchinsky, with a Brad Kifferstein, a daily coffee portunity in the convergence of two infused with vitamins, but they background in sales, began to refine drinker, was driving down the road industries — coffee and nutrition wanted to be able to add vitamins the product concept. considering the drink on hand. “If supplements. to any coffee. Together, the two came up with there are smartphones, smart cars This was January 2010. As he “Coffee is like a religion to people,” Bloomfield Hills-based Vita Perk, a and even smart water, why not began to develop the idea, he Belchinsky said. “We wanted to bring powdered coffee supplement with [VITA PERK] smart coffee?” he wondered. turned to friend, fellow coffee en- something to market that could be Vita Perk powder adds 15 vitamins and With an entrepreneurial spirit thusiast and former co-worker Jeb added to any coffee you like.” See VITAPERK, Page 23 minerals to any cup of coffee.

MUST READS of the week... Practicing medicine with a Net ‘Collaboration equals profits’

30 years ago, health care made its marketing The bottom line of an annual survey of house calls through TV and radio ads. Now the supplier-automaker relationships? As one Internet and social media have become analyst puts it: “Basically, (automakers) are alternative therapies. Read this week’s installment paying for their pattern of behavior.” of Crain’s 30th anniversary feature, Looking Back, Meaning, being nice pays off, Page 4 Page 6 20150518-NEWS--0004-NAT-CCI-CD_-- 5/15/2015 3:48 PM Page 1

4 CRAIN’S DETROIT BUSINESS // May 18, 2015 In Crain’s May 27, 1985, issue, metro Detroit TV station managers called the 39 percent increase LOOKING BACK in spending for health care advertising “astonishing” and “incredible.” While health care TV advertising is still strong, there’s also a big shift to the Internet and social media. More at crainsdetroit.com/30 Health care ads make shift to Internet,social media

By Jay Greene number of quality health insurers, While blanketed ners) were breaking ground on the For years, Killian said, Beau- [email protected] physicians and hospitals. brand advertising TV side with commercials. It was a mont’s primary strategy had been to Television and radio advertising “That stimulates competitive- big thing for us,” said Glenn, who court journalists to help them write in the health care industry is taking ness in that whole segment,” Drutz is still used — note has been with the system 30 years. stories about Beaumont, what he a slight backseat these days to social said. “There is a lot of creativeness “Do you have a “We needed to bring in patients called “earned” coverage as op- media and individualized direct ad- in the health care community. We to our doctors,” Glenn said. “Our posed to paid advertisements. vertising. see that in their image campaigns.” Beaumont doctor” employed group is an important “We changed dramatically in 1985 While total spending on health Tom Canedo, general manager of or “We’re Henry way to get the message out to and spent about $1.5 million in ad- care appears to be holding steady CBS’ WWJ-TV and WKBD-TV in De- prospective patients.” vertising over 18 months,” he said. the past few years, the percentage troit, said television advertising con- Ford. When others McCarthy, former vice president of Killian said Henry Ford and DMC devoted to TV, radio and print adver- tinues to be a top category, especially can’t, we can” — market communications and com- advertisements were very effective, tising has declined somewhat as In- the past few years with the number munity affairs but they were not hurting Beau- ternet media advertising has grown, of hospital mergers and acquisitions the idea now is to with Henry Ford mont’s bottom line, so it down- advertising executives told Crain’s. in Southeast Michigan. tailor messages to from 1975 to played paid advertising again for But back in mid-1980s, televi- “We are anticipating a continued 1992, said Henry another decade. sion, radio and print advertising strong presence on television from specific Ford began TV But on April 13, 1999, Killian said, were exploding as health care giants the new consolidated companies,” populations using advertising to get Beaumont unveiled its now-famous like Henry Ford Health System, De- Canedo said. the Internet or the message to tagline “Do you have a Beaumont troit Medical Center, and later But today health care organiza- the public about doctor?” exclusively on radio. William Beaumont Hospital spent tions are also more often using tar- direct mail. its clinical centers “It was not a big campaign,” he millions to get their brand message geted or individualized marketing Patty McCarthy: of excellence in said, noting Beaumont was still only out and highlight superstar doctors. and advertising to tout their clinical Capitalized on what heart, bone and spending 20 percent of what Henry For example, DMC spent hun- service expertise. “The consumer has changed so “made us different.” joint and neuro- Ford and DMC were at the time. dreds of thousands of dollars as it While blanketed brand advertis- much. They want a personalized in- surgery, and how “We spent all our money on hired actor E.G. Marshall to tout ing is still used — note the tag lines teractive experience and don’t want its employed medical group con- radio, but people began talking Harper University Hospital in televi- of “Do you have a Beaumont doc- mass media pushed at them,” tributed to hospital operations. about it and thought it was every- sion ads. tor” or “We’re Henry Ford. When Schnell said. “They are fast forward- “We did a lot of research at Henry where.” In a May 27, 1985, article, Crain’s others can’t, we can” — the idea ing past the commercials.” Ford and understood the differen- Killian said Beaumont’s pitch quoted metro Detroit TV station now is to tailor more messages to Nationally, digital advertising tiator was the Henry Ford Medical rang true for people, similarly as the managers who called the 39 percent specific populations using the In- revenue rose 16 percent to $49.5 bil- Group. We had an opportunity to University of Michigan’s earlier growth in health care spending for ternet or direct mail. lion in 2014, setting an all-time capitalize on what made us differ- “Knowledge heals,” which was de- advertising from 1983 to 1985 “as- For example, Henry Ford Health record, according to the IAB Internet ent,” McCarthy said. “We are more veloped by now-retired marketing tonishing” and “incredible.” One System spent 9 percent of its ad Advertising Revenue Report, an an- than a hospital. It was a very bold executive Ken Trester. manager said there is a “lot of com- budget on digital nual survey by PricewaterhouseC- and somewhat controversial.” “I thought Michigan had a fabu- petition for the message.” spending in oopers. McCarthy said some of Henry lous campaign, the best in the Christopher Rohrs, who at the 2011. By 2015, Retail ads accounted for 21 per- Ford’s 1,200 employed doctors were country at the time,” he said. “They time was general sales manager with however, those cent, followed by financial services at placed front and center in advertis- stopped it after a leadership NBC’s WDIV-TV Channel 4, said numbers are 13 percent and automotive at 12 per- ing spots with the branding tagline: change.” health care advertising catapulted to pushing up to 40 cent. Health care, which includes “More specialists make us more UM’s current campaign is the fifth largest category in 1985 after percent, said Liz pharmaceutical, insurance and hos- than a hospital.” around its “leaders and best” failing to crack the top 10 the previ- Schnell, Henry pitals, accounted for 5 percent, the But McCarthy said some physi- tagline that highlights clinical areas ous year. Ahead of health care ad rev- Ford’s vice presi- same amount as the previous year. cians were uncomfortable with pre- that include trauma medicine, enue were restaurants, beverages, Liz Schnell: Con- dent of brand Social media advertising — that senting themselves personally in prosthetic limb replacements, stem automotive and phone companies. sumers want per- strategy. includes Facebook, Twitter, LinkedIn advertisements to the public. cell research and cancer treat- Marla Drutz, current general sonalized message. Schnell, who and Digg — also increased 57 per- “They were physicians. Marketing ments. manager at WDIV Local 4, said has been with cent to $7 billion in 2014 for all in- had never been a part of medical While most health care advertis- health care still is a top 10 category in Henry Ford for 28 years, said cus- dustry categories, the report said. school. They felt, build it and they ing in Southeast Michigan hadn’t metro Detroit. Factors why include tomers want their health care ads to In metro Detroit, DMC outspent will come, but times were changing been antagonistic toward competi- the high percentage of people with be authentic and resonate with second-place Henry Ford in 2014 dramatically,” said McCarthy, noting tors, Killian said former CEO of health insurance and the larger them. $5.4 million to $4.1 million. Both that consumerism was just begin- DMC Mike Duggan, now Detroit systems accounted for nearly 60 ning to take hold in the mid-1980s. mayor, broke ground when in 2004 percent of total hospital ad spend- “People were making educated he started DMC’s 29-minute emer- ing, with Beaumont coming in third choices about where to go,” she gency room guarantee. at $2.9 million. On TV, Henry Ford said. Earlier, Oakwood Healthcare spent 70 percent, DMC 33 percent At the time, Michael Killian, who began to guarantee to patients they and Beaumont 35 percent, accord- recently retired after more than 35 would see a doctor within 30 min- ing to Voicetrak Inc. years with Beau- utes in their emergency depart- mont Health, ments. Birth of hospital TV said Beaumont “Duggan’s stuff was political ad- advertising was nearly 100 vertising rather than normal mar- During the early 1980s, Henry percent full with keting,” Killian said. Ford and DMC were beginning to patients in the Other notable taglines have been extend into the suburbs as they fol- 1980s and felt it Barbara Ann Karmanos Cancer Insti- lowed patients with outpatient cen- didn’t need to tute’s “When you think cancer, ters. advertise. think Karmanos, St. John Provi- And Rose Glenn, Henry Ford’s Michael Killian: “One argu- dence Health System’s “Passion for chief marketing Ad philosophy ment was why healing,” DMC’s “The specialty hos- officer, said changed in 1985. spend money on pitals of DMC. When it’s serious Henry Ford was advertising if you come to Detroit” and Oakwood’s at the leading are already full,” said Killian. “The “Points of pride.” edge of health counter-veiling argument was we But regardless of the type of hos- care advertising were just beginning to replace med- pital ads, McCarthy said the best in the 1980s. ical leadership and were bringing in messaging is word of mouth. “Patty Mc- more specialists — oncologist Alvaro “If a patient and a family have a Carthy and Mar- Martinez from Mayo Clinic, pediatri- good experience, that will win the Rose Glenn: Henry cie Brogan cian Jeffrey Maisels from Penn State day,” she said. Ⅲ Ford was on leading (chairman of University and urologist Ananias Jay Greene: (313) 446-0325 edge in advertising. Brogan and Part- Diokno from University of Michigan.” Twitter: @jaybgreene DBpageAD_DBpageAD.qxd 5/8/2015 1:18 PM Page 1

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6 CRAIN’S DETROIT BUSINESS // May 18, 2015 Report: Poor supplier relations cost automakers millions

By Dustin Walsh tomakers as “good to very good” University. “If the relationship is nies to peers Toyota Motor Corp. and Detroit 3’s working relations index [email protected] were nearly twice as likely to meet good, automakers are getting Honda Motor Co. Ltd. scores, generated from responses U.S. suppliers that have quality automaker demands, according to money from the suppliers and the Henke said buyers at the Detroit from 541 supplier sales personnel. relationships with automakers are the annual study, released by Birm- suppliers are happy to give them 3 are reverting to “adversarial” ways The index measures communica- more willing to give price conces- ingham-based Planning Perspec- that money because it’s also good of doing business, causing con- tions; profit opportunities; supplier sions, share technology and offer tives Inc. business on their part.” tention in its supply base. relations; “help” (willingness to help support beyond what contracts The study examines the au- On the flip side, poor relation- “(Automotive) buyers and man- suppliers cut costs and improve tomaker-supplier relationship and ships are individually costing the agement have to remember that quality); and “hindrance” (late engi- stipulate, according to a new report how it affects automaker bottom Detroit 3 millions every year. cost reductions, contract changes neering changes, conflicts between on automaker-supplier relations. lines. The worsening relations between and other similar programs do not engineers and purchasers, etc.). Just how much do relationships “Basically, (automakers) are pay- General Motors Co., Ford Motor Co. and of themselves result in poor suppli- GM had a relationship score of matter to the bottom line? ing for their pattern of behavior,” FCA US LLC and its U.S. suppliers er relations,” he said in a statement. 224, down from 244 last year. FCA Automakers spend 60 percent to said John Henke, president and caused the OEMs to lose a collective “It’s the manner in which these pro- also scored a 224, down from 245 70 percent of revenue on contracts CEO of Planning Perspectives, mar- $1.8 billion in operating profit in grams are administered that causes last year, while Ford scored a 261, with suppliers. Suppliers who rated keting professor at Oakland Universi- 2014 alone, according to the study. poor relations with suppliers.” down from 267 in 2014. their working relationship with au- ty and research fellow at Rutgers The study also compares the compa- This directly led to the drop in the Competitors Toyota and Honda increased their scores to 336 and 330, respectively, or a total average of 8.7 percent from last year, ac- cording to the study. Mike Wall, director of automotive analysis for Southfield-based IHS Automotive Inc., which does its own automaker-supplier relations study, said pricing pressures have re- turned to the U.S. market, but sup- pliers are pushing back, which could create a more tenuous rela- tionship. “Suppliers are feeling the pres- sure more and more,” Wall said. “But the suppliers I’m talking to are pushing back and, frankly, au- tomakers have a greater need for suppliers due to technology, so it’s becoming more difficult to navigate the relationships.” Henke said if GM, Ford and FCA had improved by that 8.7 percent, they could have increased operat- ing profit, earnings before interest and tax, by nearly $1.8 billion in 2014. Those figures break down as an increase in operating profit in 2014 of $750.2 million for GM, $661.3 million for FCA and $354.3 million for Ford. “Clearly, collaboration equals profits,” Henke said. “If the (au- tomakers) put as much money into their relationship as they did con- tract management, they’d make more money.” The number of suppliers who were identified as having a poor re- lationship with GM and FCA reached a three-year high of 58 per- cent and 54 percent, respectively, according to the survey. Henke attributes this to an in- crease in price pressures from the automakers without effective com- munication. Julie Fream, president and CEO of the Troy-based Original Equip- ment Suppliers Association, said the relationship between automakers and suppliers breaks down when the needs of each company aren’t considered. “It’s more than costs … it’s trust that allows suppliers to move for- ward and support the (automakers) on whatever their goals may be,” Fream said. “When the buyers at the (automakers) understand that being the advocate for the supplier internally and vice versa, that’s what translates to the strongest relation- ships.” Ⅲ Dustin Walsh: (313) 446-6042 Twitter: @dustinpwalsh 20150518-NEWS--0007-NAT-CCI-CD_-- 5/15/2015 5:36 PM Page 1

CRAIN’S DETROIT BUSINESS // May 18, 2015 7 Mattress man trades in law for a good night’s sleep

By Laura Cassar land. The mattresses he sells are On June 1, Crain’s will announce its 10th class of 20 in their 20s winners. In Special to Crain’s Detroit Business closeouts, clearance and liquida- honor of this milestone of recognizing rising leaders, we’re catching up with When Crain’s honored Gregory tions, name brands at half off. dozens of former winners to see where they are now. Yatooma in 2007, he was a corpo- He tries to make buying a mat- Check in on Annis Stubbs — now Brown — who is leading innovation for Teach rate attorney at Foley & Lardner LLP tress fun for his customers. “Our for America, or Sharon Carney, who left Detroit to become the chief of staff handling mergers and acquisitions. closing table is a foosball table; we for the Urban Institute in Washington, D.C. Each day leading up to our June 1 He also was chairman for the non- have basketball nets, televisions report on the 2015 class of winners, we’ll highlight someone new at profit he founded, Michigan Tourna- and iPads in the stores. I couldn’t crains.com/20slookback. ment of Charities. ask for a better gig. Best of all, I Today, he sells several thousand come to work in shorts.” To get you started, catch up with Gregory Yatooma in the story below, who is perhaps the “most changed” out of all mattresses a year through his four His staff is paid hourly, not on previous nine classes. Mattress Closeout Center locations. commission, and Yatooma says — Amy Haimerl, entrepreneurship editor And, unfortunately, the Michigan they get a ton of referrals, recom- Tournament of Charities was a “vic- mendations and repeat business. tim of the Great Recession.” Now married with one child and he has no regrets. thing. My law degree is very helpful have extreme pride in my time at Yatooma didn’t intend to open a another on the way, Yatooma said “I would not change a single in running a small business. and I Foley & Lardner.” chain of mattress stores. He just “fell into it. I didn’t even know what a good mattress was,” he said. What Yatooma knew was that he did not enjoy practicing law: “My personality GregoryYatooma: is not a big-firm “CAN DTE ENERGY A soft landing for lawyer. It wasn’t former lawyer. the life for me.” He left Foley & Lardner in 2009 and started doing HELP MY BUSINESS legal work for a handful of clients while trying to figure out what was next. Meanwhile, a friend who works for a mattress manufacturer offered SAVE MONEY?” Yatooma a $4,000 mattress — a floor model from a Las Vegas trade show DTE Energy wants to help your business manage your energy usage to save money. We — for $900. Yatooma bought the mattress and had the “best night of offer all kinds of energy efficiency information and tools, plus easy tips to help you be more sleep in his life.” efficient. For instance, you’ll cut heating and cooling costs by simply adding insulation “I didn’t toss, I didn’t turn. I don’t where there isn’t any, especially along piping and ductwork. Install a programmable think I moved,” he said. “And when I woke up in the morning, my back thermostat to automatically lower heating and raise air conditioning temperatures during didn’t crack. I felt great.” off hours. Seal doors and windows to prevent air leaks. You’ll find even more ways to save Over the next six months, he bought similar mattresses for his using our Interactive Business tool. And you can find a certified contractor with our Energy mother, aunt, cousin and brother. Efficiency Directory. It’s easy. Just go to dteenergy.com/savenow and start saving today. There was so much demand that he finally asked his friend if he could buy a truckload. The friend agreed and Yatooma purchased 60 mattresses and bor- rowed a warehouse from another friend. He put an ad on Craig’s List and did a cash-and-carry business — until a woman needed one delivered. “Another friend had an out-of- work buddy who owned a truck,” he said “He helped me out and now he’s the general manager of all my stores.” From a truckload of mattresses, Yatooma has grown his business into four locations: Bloomfield Hills, Rochester Hills, Wixom and West-

BANKRUPTCIES

The following businesses filed for protection in U.S. Bankruptcy Court in Detroit May 8-15. Under Chapter 11, a company files for reorganiza- tion. Chapter 7 involves total liqui- dation. Therma-Scan Reference Labora- tory LLC, 34100 Woodward Ave., Suite 100, Birmingham, voluntary Chapter 11. Assets: $59,737.77; lia- Start saving today, visit: bilities: $526,909.42. dteenergy.com/savenow Zahn’s Auto Body Inc., 723 Wagner Road, Ann Arbor, voluntary Chapter 11. Assets and liabilities not available. — Natalie Broda 20150518-NEWS--0008,0009-NAT-CCI-CD_-- 5/15/2015 5:37 PM Page 1

8 CRAIN’S DETROIT BUSINESS // May 18, 2015 CRAIN’S OPINIONDETROIT BUSINESS ‘Visteon Village’is a cautionary tale nother local government is finding how risky economic devel- opment can be. Especially when it’s liable for the bonds it sold to Afinance a company’s project. Case in point: Visteon Corp.’s Van Buren Township headquarters, fi- nanced by township-backed, tax-increment bonds. The idea was that “Visteon Village” would lead to additional investment and tax rev- enue would increase, enough to pay off the 30-year bonds. The town- ship sold $29 million in bonds to pay Visteon’s developer. (See story, Page 1.) But Visteon — and its “Visteon Village” — ended up in bankruptcy in 2009 when the supplier filed for Chapter 11 reorganization. And proper- ty values and tax collections never hit expectations. Now the township is facing a shortfall in bond payments to the project. And lawyers are arguing over the meaning of the word “assist” in agreements that pledged the supplier would “assist” should a shortfall LETTERS occur. The township has company; other municipalities have shared this particular kind of pain. Fairness must drive rules on companies like Uber This should be instructive for other governments desperate to add jobs and tax base to their rolls. Editor: Detroit Business) for bringing the At Quicken Loans, we have been Send your letters: Crain’s Detroit Modern Healthcare “road show” on following the debate in Lansing Business will consider for population health to Michigan on Right-to-work didn’t snag Volvo about the degree to which trans- publication all signed letters to the May 7. With a panel represented by portation network companies like editor that do not defame three strong health care leaders — When Michigan enacted a “right-to-work” law in 2013, the expecta- Uber should be regulated, and we individuals or organizations. Letters Tom Simmer, M.D., Blue Cross Blue tion was the state would soon attract new investment from union-wary recently read Matt Oddy’s April 27 may be edited for length and clarity. Shield of Michigan; Herman Gray, companies. Asian companies in particular are noted for antipathy to- opinion piece with great interest Email: [email protected] M.D., Detroit Medical Center; and ward unionized workforces. (“New for-hire vehicles must be Bruce Muma, M.D., Henry Ford And yet, when Chinese-owned Volvo announced it would build an as- subject to transportation laws,” Physician Network — Michigan sembly plant in South Carolina, it was a competition between Carolina Page 9). looked like the leader it is in ad- and Georgia. Michigan wasn’t even on the “maybe” list. Volvo plans to Between Quicken Loans and oth- ing field in which passengers are vancing health care initiatives that employ up to 4,000 people and make 100,000 vehicles a year. The new ers in our family of companies, we adequately protected, we must be provide outstanding, coordinated plant is near the Port of Charleston. have more than 12,000 team mem- sure that any such framework pro- care while increasingly looking to “We didn’t even have the opportunity to pitch,” a state official told a bers working in downtown Detroit vides for fair and open competition establish community support sys- breakfast briefing of the Association for Corporate Growth last week. — many of whom also live down- and does not include onerous re- tems for underserved populations “We weren’t on the radar.” town. Our people rely heavily on quirements that would effectively in the region. Tony Vernaci, vice president of global business development at the Uber to get around. In addition, we eliminate Uber as a choice for con- Equally important: The growing Michigan Economic Development Corp., said the state needs to delve have many tenants in our down- sumers. collaboration among Southeast into the “why” of that omission. Vernaci said the state hoped to meet town buildings whose customers David Carroll Michigan’s health care community with officials at Geely, the Chinese owner of Volvo, to understand the dy- frequently use services like Uber as VP of miscellaneous stuff, Quicken Loans was palpable at the event, as those namics of the decision — not to change it. an additional transportation op- of us who lead patient-centric or- For years, as more foreign-owned auto companies elected to build as- tion. Michigan’s leadership apparent ganizations come to deeply under- sembly plants in southern states, some faulted Michigan’s unionized Our team members and cus- stand the need for shared expertise reputation for missing out. At the same time, Michigan has bragging tomers find Uber to be very safe and at health care road show and programming to realize true rights for R&D tied to auto. convenient. While we agree with Editor: health reform. Does right to work in Michigan matter? Economic developers and Mr. Oddy that the regulatory frame- A thank you to Crain Communi- Ewa Matuszewski policy makers should be ready to answer that question. work should provide for a level play- cations (parent company of Crain’s CEO, Medical Network One, Rochester Congress must act to put an end to patent trolls

tures and new products but are wor- the purpose of filing patent lawsuits any product. It was just purchased Clara University School of Law, the ried about the threat posed by and extorting others. by a patent troll and used to threaten average patent troll settlement costs OTHER VOICES “patent trolls,” shell companies that These tactics stifle innovation small businesses. a company $1.33 million — and to exist solely to extort other compa- and force companies to spend Ultimately, the Federal Trade defend a patent in court costs $1.75 Joe Golden is the co-founder and co-CEO nies for alleged patent infringement. money litigating instead of hiring Commission stepped in to curb this million. of Collage.com. We hold a patent and have several workers or coming up with new, company’s abuses. This was a good Congress must act to fight back currently pending for our propri- useful products and services. outcome, but it does nothing to against patent trolls in 2015. The re- e at Collage.com make cus- etary software algorithms. We ab- For example: One troll company stop the wider problem of using cently introduced bipartisan Patent Wtom products like photo solutely respect the right of compa- threatened more than 16,000 small patents to stifle innovation. Act is a great place to start, as it books and photo blankets for any- nies and individuals to legitimately and midsize businesses for using How big is the problem? Patent would curb the worst practices of one to make using simple and pow- protect their own innovations. How- scanners that can email documents, trolls filed more than 2,700 lawsuits patent trolls and increase trans- erful software tools our team de- ever, patent trolls seek only to sue claiming a patent that covers nearly in 2014, up nearly three times from parency around our patent system. signs in-house. others for broad and exceptionally any modern multifunction printer or 2010. According to Colleen Chien, Patents should be used to protect We’re always rolling out new fea- vague patents that they hold only for scanner. This patent wasn’t used for assistant professor at the Santa innovation, not stifle it. Ⅲ 20150518-NEWS--0008,0009-NAT-CCI-CD_-- 5/15/2015 12:41 PM Page 2

CRAIN’S DETROIT BUSINESS // May 18, 2015 9 There’s not so much difference between ‘old,’‘new’Detroit Skillman’s annual report pulls to- among the RiverWalk and Belle neurial interest is strong. urbanites are re-discovering the city. gether some numbers compiled by Isle’s walkers, joggers and bicyclists; Ⅲ George Stewart risked his re- But how many people — black or Data Driven Detroit to compare “old” Noel Night in December; the fire- tirement fund from General Motors white — want to pay $12 for a glass of and “new” Detroit. (Disclosure: I am works in July. Those are affordable to stake his investment in the Gar- wine? Or eat “small plates” of food MARY KRAMER: a trustee on the Skillman board.) — and fun — and plenty of Detroi- den Theater block. Today, this high on the list of many “foodies” but Publisher The data shows that “old” Detroit ters of all backgrounds enjoy them. African-American entrepreneur has maybe not as satisfying as, say, a and “new” Detroit are predominant- And Detroit is attracting invest- a restaurant, theater venue and plate of ribs at one of Detroit’s many n December, Detroit News colum- ly African-American. And the medi- ment from people of color. Some ex- apartments to show for it. restaurants that serve them? Inist Nolan Finley noticed that the an income for the greater downtown amples: Ⅲ Detroit native John Rhea, for- It may not be a racial divide as customers in the “hot new” restau- — about 7 square miles out of the Ⅲ PowerMoves in April drew mi- mer public housing chief in New much as an economic one. rants in downtown Detroit were city’s 139 — is actually less than the nority entrepreneurs to boot camps York City, recently announced an largely white in a city that’s largely citywide median of $24,472. It is a re- and public pitch events. It was a investment in housing in Brush Mary Kramer is publisher of Crain’s black. minder that not everyone living in great opportunity to spotlight entre- Park, joined by prominent African- Detroit Business. Catch her take on The topic of “two Detroits” has the core is earning big bucks. preneurial opportunities in the city. American Detroiters. Ⅲ business news at 6:10 a.m. Mondays kind of gone viral, with commen- Because I live in the city, I proba- About 45 percent of 500 gradu- Detroit’s new restaurants could on the Paul W. Smith show on WJR tary on local TV, at live and online bly see more diversity than Finley ates of the Build Detroit, formerly not survive if they relied solely on AM 760 and in her blog at forums, and in print. Finley and does: in restaurants I frequent; in D:hive program for aspiring entre- Detroiters — remember that median www.crainsdetroit.com. WDIV anchor Devin Scillian will Eastern Market on Saturdays; preneurs, are black, so the entrepre- income — so it’s fortunate that sub- lead a “town hall” discussion at the Detroit Regional Chamber’s Mack- inac Policy Conference on May 29. (A mite ironic that two white guys will head up this discussion.) Are there really two Detroits? In a recent blog, Tonya Allen, CEO of the Skillman Foundation, called for “legacy Detroit” and “new Detroit” to rally around the idea that there’s real- ly “one” Detroit. She also calls for in- tentional diversity by ensuring we set a table for everybody in Detroit. (Which is a good reminder that De- troit is not solely black and white; it includes Hispanic, Middle Eastern and Asian populations, too.) IT’S NOT HOW WELL THEY WORK FOR US. TALK ON WEB IT’S HOW WELL THEY WORK FOR YOU. Reader responses to stories and blogs that appeared on Crain’s website. Comments may be edited for length and clarity. Eric W. Dietz Shari Krasinski, CTP, CPCP Re: Van Buren Township sues SVP, Regional Manager SVP, SaleS Manager Visteon Corp.over bond payments Private Client Group Treasury Management    oFlCe    oFlCe This idea of government acting    Cell    Cell as a lender to corporate entities eriCDieTZ HUnTingTonCoM SHariKraSinSKi HUnTingTonCoM makes no sense at all. There was a reason that Visteon didn’t use con- ventional lending sources, and it was so wrong of the local politicians Brian Marshall Brad Norman to step into this role. MikeInMI SVP, #oMMerCial Region Manager SVP, MiCHigan Regional SaleS Manager Middle Markets Auto Finance & Dealer Services Government will get a new city    oFlCe    oFlCe hall with posh desks and hefty re-    Cell    Cell tirement packages. Lawyers will be BrianMarSHall HUnTingTonCoM BraDnorMan HUnTingTonCoM wealthy for life. And the people of Van Buren Township will have to eat hot dogs and drive on bad roads. Steve Petrovich Terrance B. Pryor Scott Wolffis SVP, Regional Manager SVP, !rea Manager oF MiCHigan Re: Beaumont Health turns Commercial Real Estate Business Banking blue,renames hospitals    oFlCe    oFlCe Choice of color on a sign has zero    Cell    Cell impact on quality and a negative (al- TerrYPrYor HUnTingTonCoM SCoTTWolFlS HUnTingTonCoM beit small) impact on cost. Hire good people, pay them and treat them well, practice evidence-based medicine, and don’t worry about the color of your sign. MobiusStrip

Business types are worrying about signage and branding, rather than the product. I am a loyal Botsford fan and will try it out as Beaumont Bots- The Huntington National Bank is an Equal Housing Lender and Member FDIC. and Huntington are federally registered service marks of ford, but if it doesn’t deliver the great Huntington Bancshares Incorporated. Huntington. Welcome. is a service mark of Huntington Bancshares Incorporated. 2015 Huntington medical care and fast service that Bancshares Incorporated. Botsford had, I am gone. Sharon Finch 20150518-NEWS--0010-NAT-CCI-CD_-- 5/15/2015 10:32 AM Page 1

10 CRAIN’S DETROIT BUSINESS // May 18, 2015 Young companies to pitch for DVP,others to hear fall funding at growth symposium pitches at Demo Week By Tom Henderson On Sept. 10, Techstars, a Boul- By Tom Henderson Rapids, a website for high school [email protected] der, Colo.-based organization that [email protected] sports that won the $500,000 first Starting this September, in provides mentoring and seed Forty early- and growth-stage prize at the 2013 Accelerate Michigan what is being billed as Demo funding for tech startups, will hold companies from around the Mid- Innovation event; Ann Arbor-based Week, area startup companies a demo day at a location yet to be west will make pitches for funding Stratos Inc., which markets one card will have a series of venues in determined in downtown Detroit Tuesday and Wednesday at the 34th that tracks all credit cards and mem- Ann Arbor and Detroit to make for the 10 members of the inaugu- annual Michigan Growth Capital bership reward programs; Ann pitches for equity capital and ral class of Techstars Mobility, a Symposium at the Eagle Crest Mar- Arbor-based HistoSonics Inc., which customers. partnership with Ford Motor Co. riott in Ypsilanti. Brad Keywell: Bill Coughlin: makes devices that use ultrasound to Until recently, this week’s that was announced last Septem- About 450 will attend the confer- CEO, Uptake CEO, Ford Global noninvasively shrink prostates and long-running Michigan ber. ence, including angel investors, ven- Technologies Technologies destroy cancer cells; and Ann Arbor- Growth Capital Symposium in Each year for three years, 10 ture capital investors and service based SkySpecs LLC, a maker of Ypsilanti was the chief venue startups will spend three months in providers from around the county. To get involved drones for infrastructure inspection. for groups of startups and an accelerator program headed by Tuesday’s keynote address will be An addition to the agenda this growth-stage companies to Ted Serbinski, a former partner at by Brad Keywell, CEO and co- For information on registering for year is a university pitch track meet angel investors and ven- DVP, with graduation being a pitch founder of Chicago-based Uptake the symposium, go to Wednesday afternoon that will fea- ture capitalists and persuade for funding. Technologies LLC, a data analytics www.michigangcs.com/ ture emerging startups from UM, them to invest. (See story, this On Sept. 11, two accelerator-in- company for industrial clients, and register/registration.asp. University of Notre Dame, University of page.) cubator programs — the Desai Fam- managing partner of Lightbank, a Chicago and University of Pittsburgh. Some of the 40 companies ily Accelerator and Coolhouse Labs Chicago-based venture capital firm. Women in the entrepreneurial Another addition is a shark-tank making pitches at the sympo- — will put on a joint demo day at a Keywell is a graduate of the busi- ecosystem. contest Wednesday afternoon by sium this week will get anoth- location yet to be determined in ness school and law school at the The Internet of Things. participants in the Fast Forward er crack at funding this fall. Ann Arbor. University of Michigan. Cybersecurity. Medical Innovation program at Others will be making their Last year, it was announced Bill Coughlin, president and CEO Venture capital investment UM’s medical school. debut before would-be in- that Bharat Desai, the founder of of Ford Global Technologies, will be trends and opportunities in the Former Michigan Economic Devel- vestors. Troy-based Syntel Inc., and his Wednesday’s keynote speaker. Midwest. opment Corp. President Mike On Sept. 9, Detroit Venture family had donated $1 million to In addition to ongoing 15- Companies making pitches will Finney, now an adviser to Gov. Partners, the VC firm founded the University of Michigan to minute presentations by compa- include Plymouth Township-based Rick Snyder, will moderate. Four by Dan Gilbert, Josh Linkner and launch the accelerator, a joint nies seeking between $1 million Delphinus Medical Technologies Inc., a venture capitalists will serve as Brian Hermelin, will hold a venture of the Ross School of Busi- and $20 million in equity funding, spinout from the Karmanos Cancer In- judges, with the winning startup demo day for its most promising ness and the College of Engineering there will be a series of panel dis- stitute that makes a device for ultra- getting $2,500. portfolio companies at the Madi- to support student startups. cussions over the two days of the sonic detection of breast cancer; Var- Tom Henderson: (313) 446-0337 son Building in downtown De- Kelly LaPierre, the former mar- symposium, including: sity News Network LLC of Grand Twitter: @TomHenderson2 troit. keting director at Detroit-based Grand Circus, is the managing direc- tor at Desai. Coolhouse Labs launched its first incubator class of companies in Harbor Springs in 2013. It has since moved to Petoskey and is about to start its third class of startups from around the U.S. Coolhouse Labs will open a second incubator facility in Ann A winning game plan doesn’t just happen. It takes planning, insight Arbor next year, but it will kick and teamwork to put together the strategy your dealership will need off its presence there when this for the coming years — a strategy that addresses: year’s class of companies travels south in September to pitch for • Accounting, consulting and tax capital. • Strategic and succession planning “The growth • Technology risk management of the startup scene in Detroit The Rehmann Dealership Group has the drive to help you with continues to these and other essential services. Contact me today to learn more. amaze me. When I moved here three years ago from San Francisco, I never imagined Ted Serbinski: there would be “The growth of four different JIM GOERLICH, CPA, CGMA the startup scene in Principal groups putting 248.614.6401 | [email protected] Detroit continues on demo days to amaze me.” in the same month,” said Serbinski. “It is very exciting to FREE DOWNLOAD be seeing true momentum and density forming.” Download our latest whitepaper — Thinking about selling your dealership? Prepare “I think it’s important to focus now. — to learn how to enhance your dealership’s value, protect yourself against risk on how cool it is to see actual col- and plan for a bright future. Visit rehmann.com/dealership-2015 today. laboration within the startup ecosystem, to see collaboration between Detroit and Ann Arbor, from DVP to Techstars to Cool- house Labs and Desai,” said DVP partner Jake Cohen. “It’s very rehmann.com | 866.799.9580 promising for the future of our startup community.” Tom Henderson: (313) 446-0337 Twitter: @TomHenderson2 20150518-NEWS--0011-NAT-CCI-CD_-- 5/15/2015 11:31 AM Page 1

CRAIN’S DETROIT BUSINESS // May 18, 2015 11 PEOPLE IN SPECIAL REPORT HEALTH CARE Submit news items and photos to [email protected].

Kathleen Yaremchuk, M.D., chairwoman of the department of HEALTH CARE Read more health care news and sign up for our Health Care Extra newsletter at crainsdetroit.com/healthcare otolaryngology and head and neck surgery at Yaremchuk Henry Ford Hospital,was recently appointed to a two-year term as co-chair of the National Quality Forum’s Steering Committee. Eden Wells, M.D., a clinical associate professor at the University of Michigan School of Public Health, was named chief medical executive of the Michigan Department of Health and Human Services. Michael Simon, M.D., leader of the breast cancer multidisciplinary team and co- leader of the population studies and Simon disparities research program at the Barbara Ann Karmanos Cancer Institute,was honored with the 2015 Blue Cross Blue Shield of Michigan Foundation McDevitt Excellence in Research Award for Physicians. Kelly Smith, senior vice president of Oakwood Healthcare; Judith McNeeley, senior manager of [LARRY PEPLIN] Oakwood public relations and Sue Craft of Henry Ford Hospital on the challenge of reducing readmissions: “We have put a lot of interventions in place, but they are very people-intensive. It requires case sponsorships; and Beverly Beltramo, managers to do a lot of follow-up to make sure patients are getting the services they need when they are discharged.” director of Oakwood spiritual support services, were given the Shining Star Award by Michigan Secretary of State Ruth Johnson. Theresa Duller, R.N., a staff nurse in the Unhappy returns rehabilitation unit at Beaumont, Royal Oak; Hospitals cut readmission rates but continue to pay stiff penalties Anne Ronk, R.N., director of nursing By Jay Greene for women’s, [email protected] Medicare fines: What local hospitals pay Duller children’s and ust because hospitals in Michigan have improved their own (1) Percent penalty is the percentage deducted from each Medicare inpatient psychiatric services at Beaumont, Royal Medicare patient readmission rates the past three years doesn’t (2) Financial penalty is the estimated penalty deducted in 2015 Oak; and Michelle Wood, R.N., a staff mean fewer hospitals are paying financial penalties to the Centers for Medicare and Medicaid Services. nurse in the intermediate care unit at J Percent Financial Nationally, Medicare fined a record number of hospitals last year — Oakwood Hospital-Taylor,were Name penalty (1) penalty (2) recently awarded top honors at the 2,610 — for having too many patients return within a month for Oakland University School of additional treatments under the Beaumont Hospital, Royal Oak 1.68% $3.86 million Nursing and Board ofVisitors’27th 3-year-old Hospital Readmissions Readmission rates. The Medicare Providence Hospital, Southfield 1.50% $1.94 million annual Nightingale Awards for Reduction Program. hospital readmission rate in Beaumont Hospital, Troy 1.36% $1.37 million Nursing.. In Michigan, some 71 hospitals, or Southeast Michigan is higher than 52 percent, will be fined this year a total St. John Hospital, Detroit 1.26% $1.31 million Stan Chetcuti, M.D., the Eric J. that of the rest of the state, Page 13 of $25 million for having too many Topol Collegiate Professor of Minding mental health. Anew St. John Macomb-Oakland, Warren 1.29% $1.31 million non-managed care Medicare patients Cardiovascular Medicine; and study suggests that one way to readmitted for heart attack, heart Henry Ford Hospital, Detroit 0.74% $1.12 million Himanshu Patel, M.D., the Joe D. reduce hospital readmissions is to failure, pneumonia, and two new DMC Sinai-Grace Hospital, Detroit 1.28% $1.07 million Morris M.D. Collegiate Professor of do a better job at identifying people categories — knee or hip replacements Cardiac Surgery, were named co- with mental health conditions, Oakwood Hospital, Dearborn 0.65% $812,234 and chronic bronchitis and directors of the University of Page 14 emphysema. DMC Harper Hospital, Detroit 0.82% $747,481 Michigan Frankel Cardiovascular The average financial penalty in Center’s structural heart program. St. Mary Mercy Hospital, Livonia 1.28% $733,262 Michigan this year will be 0.48 percent deducted per Medicare hospital Southeast Michigan totals: Debra Guido-Allen, R.N., vice patient stay, a slightly higher percentage than in 2014, when only 55 president and chief nursing officer at hospitals were fined a total of $14 million at an average 0.23 percent Total Medicare fee-for-service payments: $2.28 billion Beaumont Hospital-Troy, recently penalty rate. Total penalties: $20.8 million received the 2015 Macomb Source: Centers for Medicare and Medicaid Services, MPRO Foundation Athena Award. See READMISSIONS, Page 12 20150518-NEWS--0012,0013-NAT-CCI-CD_-- 5/15/2015 11:28 AM Page 1

12 CRAIN’S DETROIT BUSINESS // May 18, 2015 SPECIAL REPORT: HEALTH CARE READMISSIONS,from Page 11: Medicare fines hit Southeast Michigan hospitals harder

Some 39 hospitals nationally lost the maximum 3 percent of their Medicare payments because of high Medicare hospital readmission rate higher in region than rest of state readmission rates relative to the national average, but none of those Medicare claims data show the overall hospi- missions per 1,000 beneficiaries, and the admis- to hospitals each year, costing Medicare $26 bil- are in Michigan. tal readmission rate was 67.67 readmissions per sion rate was 305.97 admissions per 1,000 benefi- lion. Officials have estimated that $17 billion is The fine works this way: If 1,000 beneficiaries in Southeast Michigan from ciaries, during the same study period, MPRO said. lost through avoidable readmissions. Medicare normally pays a hospital July 2013 to June 2014, said Farmington Hills- Wayne County had the highest readmission In 2015, Medicare estimates that more than $15,000 for a kidney failure patient, based MPRO, a quality improvement organiza- rate of 81.38 per 1,000 while Livingston had the 2,600 hospitals – more than half of the nation’s a hospital with a 1.5 percent penalty tion. lowest at 38.04, MPRO said. total – will be fined about $428 million. would be paid $14,775 from On the other hand, the hospital admission rate Last year, nearly 18 percent of Medicare pa- While some penalties are as small as a hun- Medicare, after deducting the $225 was 351.38 admissions per 1,000 beneficiaries re- tients who had been hospitalized were readmit- dredth of a percent, hospitals with the highest fine. siding within Southeast Michigan, which includes ted within a month, said the Centers for Medicare readmission rates are losing 3 percent of each Readmission penalties are part of the counties of Livingston, Macomb, Monroe, and Medicaid Services. payment, an increase from a maximum punish- a broader push under health care Oakland, St. Clair, Washtenaw and Wayne. While that percentage is lower than past ment of 2 percent last year. reform to improve quality while Statewide, the readmission rate was 53.07 read- years, about two million patients are readmitted — Jay Greene saving federal money and extending the life expectancy of the Medicare Trust Fund. Each year, unnecessary that has been studying hospital There are several reasons for this. sion rate is higher than the national health agencies and area agencies on hospital readmissions account for readmissions since 2008. First, the readmission data for the average. In other words, hospitals aging, but they have a very challeng- more than $17 billion of Medicare For example, executives at 2015 fines were calculated from the must reduce their rates faster than ing patient population.” costs. Beaumont Hospital in Royal Oak period from July 1, 2010, to June 30, the industry average to pay less in Yellan said Michigan hospitals But some are criticizing Medicare and Henry Ford Hospital in Detroit 2013. Thus, improvements in read- financial penalty in any given year. have steadily reduced readmis- for lowering payments to hospitals said they have lowered their mission rates the past 18 months Traditionally, hospitals earned sions, but much work needs to be — even those that have reduced readmission rates over the past haven’t led to reduction in fines. money for readmissions because done to meet Medicare’s goal of 20 their readmission rates from the several years. Yellan said Medicare uses a con- Medicare and private payers reim- percent reduction. He said Michi- year before, said Bob Yellan, CEO of But these two hospitals, and sev- troversial formula and grading scale bursed them for all admissions. gan hospitals have reduced read- Farmington Hills-based MPRO, a eral others in Southeast Michigan, — similar to curved grading — that Now, hospitals are losing private missions by about 13 percent from quality improvement organization continue to pay relatively high fines. penalizes hospitals whose readmis- and government payments by im- 2012 to 2014. proving their readmission rates, and “Southeast Michigan hospitals in some cases also are having their have reduced readmissions (faster Medicare rates cut. than other hospitals in the state), “There is a push in Congress to but they (had higher rates) than the consider socioeconomic factors rest of hospitals in Michigan,” said when penalizing Yellan, a former hospital adminis- hospitals,” said trator. Yellan, noting The average readmission penalty that Detroit fared in Southeast Michigan for 2015 was more poorly than 0.72 percent of total Medicare pay- most of Michigan ments compared with 0.42 percent because of such last year, MPRO said. The total factors. penalty payments for the 34 hospi- “Inner-city tals this year will be about $21 mil- Bob Yellan: Inner- communities lion compared with $12 million in city hospitals face have higher re- penalties for 31 hospitals in 2014. greater burden admission rates, Yellan said the increase in penal- and large teach- ties for 2015 is likely because of the ing hospitals have higher rates three added conditions and the (more complex medical cases) than maximum penalty increased to small community hospitals” be- 3 percent from 2 percent. cause it is more difficult for lower- Southeast Michigan income people to afford necessary hospitals medications and transportation to see their doctors for follow-up vis- Beaumont Hospital in Royal Oak is its,” Yellan said. projected to pay the largest readmis- Health systems that operate sion penalty this year at $3.86 million inner-city hospitals like Detroit for a 1.68 percent financial penalty Medical Center, Henry Ford Health rate, which is based on patients SOMETIMES EVEN System and St. John Providence served between 2010 and 2013. But Health System are working hard to Oakwood Hospital in Wayne had the HEALTHCARE HEROES reduce their readmission rates, Yel- highest readmission penalty rate, lan said. 2.22 percent, and will pay about NEED A CHAMPION “The penalties affect them consid- $645,160 in penalties in 2015. erably,” he said. “They are working Healthcare professionals and executives rely on our attorneys with skilled nursing facilities, home See Next Page to obtain the right results in the boardroom and courtroom, so they can stay focused on their patients and business. The readmission fine works this way: If Q Licensure Actions QTransactions QMedical Liability QCON QIntegration QManaged Care Contracting & Disputes QMedicare & Medicaid QCompliance Medicare normally pays $15,000 for a kidney failure patient, a hospital with a 1.5 percent penalty would be D. Jennifer Andreou Mark S. Kopson paid $14,775 from Medical Liability Practice Group Leader Healthcare Industry Group Leader 586.466.7607 | [email protected] 248.901.4061 | [email protected] Medicare, after deducting the Michigan • Ohio • Indiana • www.plunkettcooney.com $225 fine. 20150518-NEWS--0012,0013-NAT-CCI-CD_-- 5/15/2015 11:28 AM Page 2

CRAIN’S DETROIT BUSINESS // May 18, 2015 13

SPECIAL REPORT: HEALTH CARE

From Previous Page economic factors connected to read- ple intensive,” Craft said. “It requires Hospital for 0.61 percent ($299,000). “The ability to transfer electronic mission rates. People who are poorer case managers to do a lot of follow- Over the last several years, Yellan information is limited outside one’s Collectively, eight-hospital Beau- have higher readmission rates be- up to make sure patients are getting said MPRO has learned that hospi- own system,” Yellan said. mont Health will pay $7.9 million, cause they lack transportation and the services they need when they tals cannot reduce readmissions on Besides barriers with provider which includes the four former Oak- basic services.” are discharged.” their own. communication, Yellan said the wood Healthcare hospitals and Bots- Depending on the discharge, For example, nurse case man- “The causes of readmission are ability of some patients, especially ford Hospital in Farmington Hills. Craft said Henry Ford gives patients agers follow up with patients to en- multiple. There are medication is- the elderly, to understand and re- Sam Flanders, M.D., Beaumont’s a 30-day supply of medications and sure they have seen their primary sues, behavioral health issues, pa- call physician and hospital post- chief quality officer, said the health sets up primary care physician ap- care physician and taken their med- tient discharge management, get- discharge instructions is challeng- system has em- pointments. ication, she said. ting them to see their doctors in a ing. barked on many Craft also said it was difficult for Overall, Henry Ford Health Sys- timely manner, transportation, and “Addressing readmissions is less readmission re- Henry Ford to reduce readmissions tem is projected to pay $1.7 million having good communication” with what the particular diagnosis is duction projects in 2014 because the health system in penalties this year. The other post-acute care facilities, Yellan said. than whether you have a process over the past was in the final throes of installing Henry Ford hospitals include Henry Despite improvement in online and communication in place for all several years, in- its electronic health record, Epic Ford Macomb Hospital with a 0.4 per- electronic health record exchange, of your patients once they leave cluding stan- Corp. CareConnect. cent rate ($278,000); Henry Ford West Yellan said the major barrier is ex- your hospital,” Yellan said. Ⅲ dardization of “We have put a lot of interven- Bloomfield Hospital at 0.21 percent changing information among pro- Jay Greene: (313) 446-0325 care in the or- tions in place, but they are very peo- ($65,000); and Henry Ford Wyandotte viders. Twitter: @jaybgreene Sam Flanders: thopedics unit. Some readmissions The readmis- can’t be avoided sion penalty for Beaumont, Royal Oak, “reflects the high volume of Medicare patients that we serve” compared with other hospitals in the nation, said Flanders. “Royal TOP FIVE SIGNS YOUR EMPLOYEES MIGHT HAVE INFERIOR DENTAL COVERAGE: Oak’s low mortality rate is also a fac- tor that drives readmissions up.” Flanders also said readmissions sometimes are beyond a hospital’s ability to control. Patients’ socio- economic status, ability to afford medications and their diet can af- THEIR NETWORK INCLUDES ONLY TWO DENTISTS. fect post-discharge health, he said. Barb Medvec, Oakwood’s chief nursing officer, said the Dearborn hospital has been working CLEANINGS CAN ONLY BE SCHEDULED hard to reduce ON THE LAST TUESDAY OF THE MONTH. infections by working with physicians to prevent urinary tract infections, blood stream in- ONLY THE TOP FRONT TEETH ARE COVERED. Barb Medvec: fections and sep- Oakwood targeting sis. infections Oakwood also is working with Wayne-based The Senior Alliance to CAVITIES ARE NOT TREATED BECAUSE THEY make home visits with recently dis- ARE CONSIDERED “CHARACTER BUILDING.” charged patients who are consid- ered high risk for readmission, Eric Widner, president of Oakwood Hos- pital — Wayne. Henry Ford Health System oper- ates four medical-surgical hospitals. Its flagship, Henry Ford Hospital, an 802-bed hospital in Detroit, is ex- pected to pay $1.12 million in penal- ties this year for a 0.74 percent read- mission rate for the previous year. Sue Craft, a nurse and director of Henry Ford’s care-coordination ini- tiatives in the office of clinical quali- THEY DON’T HAVE DELTA DENTAL. ty and safety, said Henry Ford Hos- pital has improved readmission rates in each of the first three years and has also reduced the percent- age of the financial penalty. For example, in 2012 Henry Ford Give your employees access to two large networks of Hospital was penalized the maxi- mum 1 percent rate, but that number contracted dentists and award-winning customer service. dropped to 0.8 percent in 2013 and to 0.74 percent in 2014, Craft said. Learn more at deltadentalmi.com/dentaldonebetter. This year, Craft said Henry Ford is concerned because three new con- ditions are being added to the fi- nancial penalty mix: hip and knee replacements, and such lung ail- ments as chronic obstructive pul- monary disease. “The challenge with COPD is the cost of inhalers, which are expen- sive,” Craft said. “There are socio- 20150518-NEWS--0014,0015-NAT-CCI-CD_-- 5/15/2015 11:39 AM Page 1

14 CRAIN’S DETROIT BUSINESS // May 18, 2015 SPECIAL REPORT: HEALTH CARE Mental health screenings could reduce readmissions,study says

By Jay Greene within 30 days. “We wanted to start to raise [email protected] Hospitals, in- awareness of implementing screen- A new study suggests that one cluding Henry ing, providing education and ex- way to reduce readmissions to hos- Ford, have lost pand current screening processes,” pitals is for health care professionals millions of dol- said CEO Bob Yellan. “We build very and doctors to do a better job at lars in penalties strong (links) between mental identifying people with mental each year, de- health authorities, providers, area health conditions. spite reducing agency on aging and hospitals.” The study, conducted by the Cen- readmissions. Yellan said providers now have a ter for Health Policy and Health Ser- Brian Ahmedani: Ahmedani better idea where to send patients vices Research at Detroit-based Henry A little extra work recommended who have multiple conditions, in- Ford Health System, concluded that would cut costs. that hospitals cluding mental health issues. patients with psychiatric conditions, conduct a closer Henry Ford, which participated along with other medical problems, psychiatric evaluation for the three in the project, has been working on in the previous year were readmitted medical conditions — heart failure, its depression screening admission to the hospital 3 percent to 5 percent acute myocardial infarction and process the past several years, said more often within 30 days than those pneumonia — covered by readmis- Sue Craft, a nurse and director of without a psychiatric diagnosis. sion penalties. Henry Ford’s care-coordination ini- “About 16.5 percent of people “We think that doing that little tiatives in the office of clinical quali- without a mental health condition extra work would definitely result in ty and safety. are getting readmitted within 30 cost savings down the line,” he said. Since Henry Ford completed the days, but about 21.5 percent of those At Henry Ford, Ahmedani said ad- installation of its Epic Corp. electron- with a mental health condition are ditional screenings have been made ic health record system a year ago, readmitted,” said Brian Ahmedani, a since 2007, but more need to be done. Craft said the Detroit-based system research scientist with the Henry “This study is new and needs to be has been screening all patients for Ford health policy center. disseminated to hospitals,” he said. depression, anxiety and other be- Ahmedani, who was lead author Last year, Farmington Hills- havioral health conditions so it can of the study published in the Feb. 1 based MPRO completed a depres- provide appropriate care such as issue of the journal Psychiatric Ser- sion screening pilot program with home care and telehealth services. Ⅲ vices, said the researchers did not several Southeast Michigan hospi- Jay Greene: (313) 446-0325 look at why the patients needed to tals and mental health providers. Twitter: @jaybgreene be readmitted. Marketing Management The study looked at data on more than 160,000 patients who had been admitted to the 11 health centers af-

filiated with the Mental Health Re- Strategic Communications search Network between January 2009 and December 2012. The study was conducted by re- searchers in the Mental Health Re- Business Development Services search Network, a consortium of 13 large health care systems with affili- ated health insurance plans. The systems include Henry Ford, Executive Suite Services Group Health Cooperative, Harvard Pil- grim Health Care, HealthPartners, Bay- lor Scott & White Health and Kaiser Permanente plans in Colorado, Geor- Special Solutions gia, Hawaii, Oregon and California. The patients reviewed were diag- nosed with the three medical condi- tions targeted by Medicare for read- mission financial penalties. The three conditions are heart failure, pneumonia and acute myocardial infarction, or heart attack. Mental health conditions includ- ed depression, anxiety, substance abuse disorders, paranoia and schiz- ophrenia. “It appears that mental health conditions may complicate the gen- eral medical conditions,” Ahmedani said. “We believe these conditions are complicating the diagnosis and make it more difficult to heal.” Medicare does not adjust hospital financial penalties based on whether patients have mental health condi- tions, Ahmedani said. “We feel there are quite a few peo- ple not identified, not part of the cal- culations, and are at an increased risk for readmissions,” Ahmedani said. In 2012, the Centers for Medicare and Medicaid Services began penal- izing hospitals for readmissions 20150518-NEWS--0014,0015-NAT-CCI-CD_-- 5/15/2015 11:31 AM Page 2

CRAIN’S DETROIT BUSINESS // May 18, 2015 15 SPECIAL REPORT: HEALTH CARE Bortz Health Care to be sold after 57 years of family ownership

By Jay Greene more acute care, fee-for-service re- rules have changed,” he said. “Back [email protected] imbursement is ending and experi- then, there were no rules. You provid- Donald Bortz Jr. bought his first mentation is taking place with other ed shelter and food for patients. They nursing home in 1958 with his father, reimbursement models such as were much different, not as sick as Don Sr., when there were no rules or bundled payments, risk-based today. You could talk with them.” regulations for nursing homes, just a managed care contracts and quality But over the years, the rules start- promise to patients that they would incentive withholds,” LaLumia said. ed piling up and the residents were be cared for in their old age. admitted to the homes with more Autos to nursing homes Now, 57 years later, Bortz Jr., 89, serious medical conditions, includ- has decided with his wife, Valeria, After Don Bortz Jr. was honorably ing many more with Alzheimer’s and reluctant consent of his three discharged from the U.S. Navy in disease, Bortz Jr. said. adult children, Donald Jim Bortz III [BORTZ FAMILY PHOTO] 1946, he went to work for his father, Under health care reform, Bortz and daughters Bridgett and Shaun, “My wife (Valeria) has been asking me to slow down,”said Donald BortzJr.,explaining who owned a used car business. But Jr. said, it is difficult for smaller all of whom are key managers in why he’s selling Warren-based Bortz Health Care.“ The more we talked with (Villa in 1957, Bortz Jr. said, his father nursing home chains to flourish. He Warren-based Bortz Health Care, to Healthcare),the more we found out their slogan — ‘We Care’ — is exactly like ours.” wanted another challenge, and to- said chains need to diversify rev- sell the family business. gether they bought a nursing home enue sources into rehabilitation The buyer is Villa Healthcare, a force (1,500 employees),” McCul- are all required to maintain a com- in Orchard Lake. and physical therapy and own their Skokie, Ill.-based nursing home chain lough said. “Some upper manage- petitive edge,” he said. “I was known as the buyer of very own laboratories to generate suffi- with 16 long-term care and assisted ment (Bortz family) have contracts Mills said Villa plans to invest poorly run nursing homes,” Bortz Jr. cient profit margins. living homes in Illinois, Wisconsin to stay on for at least one year.” several million dollars to upgrade said. “I would take those over, some Jim Bortz III said he understands and Minnesota. Villa was selected as While there are no contractual the physical plants, add health in- in bankruptcy and in bad shape, all the reason his father is selling the the buyer, said Bortz Jr., because the promises to keep all employees or formation technology and expand in trouble with the state, and would family business. 4-year-old company has a similar facilities open, David Mills, Villa’s rehabilitation services. immediately improve the status of “We understood the pressure he business philosophy as Bortz. COO, said Villa understands it is in- “We see this (purchase) as being them.” is under daily,” said Bortz III. “Dad is “My wife has been asking me to heriting high-quality homes with a part of the Bortz family. They have Bortz Jr. said he personally would getting older. … It is hard because slow down,” Bortz Jr. said. “I’ve had staffs that have been on the job in taken a group of facilities over last judge the quality of care in his homes we have been so close, talking daily 10 to 12 offers the past three or four some cases 20 to 30 years. 50 years and done an exceptional by staying overnight in them. about the business, even at 11 p.m.” years. The more we talked with “When you walk through the job, focusing on patient care, em- “We would stay there a few Interrupting, Bortz Jr. said: “My (Villa), the more we found out their door, the people, the personalities ployee and patient satisfaction,” he nights, and we knew how well it was state nursing home license is slogan — ‘We Care’ — is exactly like and the culture, you can see it and said. run,” he said. “We would be on that 0000024. I am the oldest operator in ours. That has been a very strong feel it,” Mills said. “Our team feels Mills said Villa plans to continue floor at 12:30 in the night and in the the state of Michigan … and maybe motivation for our company over very fortunate to continue the lega- to expand in the Midwest, and pos- morning. We didn’t get much sleep, in the country.” the years.” cy that Bortz created.” sibly Michigan, with selective ac- but it gave you a feeling of accom- So what is next for Bortz Jr.? Re- The transaction is expected to David LaLumia, CEO of the Health quisitions. plishment” when a troubled nurs- tirement? close in July or August, said Bortz Care Association of Michigan, said the LaLumia said nursing homes are ing home became a successful one. “If a business pops into a picture, and Villa officials, who declined to Bortz family has a reputation over the forging close relationships with Over the years, state and federal I might be interested in buying,” disclose the sale price. years of providing high-quality serv- hospitals, health plans and physi- rules governing nursing homes be- Bortz Jr. said. “I don’t want to limit Bortz Health Care, which posted ices to patients at its nursing homes. cian practices to create integrated came more and more difficult to myself. I like a flexible approach to $95 million in annual revenue in He said he expects Villa Healthcare to delivery systems of care to address meet, especially with reimburse- business.” Ⅲ 2014, operates 11 nursing homes continue with that tradition. changing patient needs. ment payment cuts, Bortz Jr. said. Jay Greene: (313) 446-0325 and assisted living facilities, 10 in “A number of long-standing nurs- “Patients are sicker and require “You wouldn’t believe how the Twitter: @jaybgreene Michigan and one in Hobe Sound, ing facility owners and operators in Fla. Six are in Southeast Michigan. Michigan have sold their businesses In 2013, Bortz sold two nursing over the past few years,” said LaLu- homes, Elmwood Geriatric Center mia, adding that besides owners who and Cranbrook Geriatric Village, to are retiring, major changes in reim- Detroit-based Lakeshore Healthcare bursement and regulations appear to LLC . be accelerating the process. Possible is everything. Earlier this month, Bortz filed “Skilled nursing facility operators WARN (Worker Adjustment and Re- are being affected by an expanding Today, more than ever, global competition, new technologies, and training Notification Act) notices number of payers as managed care with the state that seemed to indi- becomes more commonplace,” corporate streamlining require innovative thinking and leadership abilities. Continuing cate massive layoffs at its 10 Michi- LaLumia said. your education can be key to your success. From automotive and mechanical gan nursing homes. Unlike hospitals and physicians, But that state filing is misleading which are partially reimbursed by engineering to engineering because the plan all along has been the federal government to meet in- to sell to Villa, said Brian McCullough, formation technology requirements, management and transportation a partner with Bloomfield Hills- LaLumia said, nursing homes have design, Lawrence Technological based Strobl & Sharp PC who has to foot the bills themselves. worked for Bortz the past 35 years. “Infrastructure and building im- University offers innovative “I have every anticipation Villa will provements and the importance of retain the vast majority of the work- installing electronic health records degrees and fast-track certificate programs to prepare you for the CON REPORT careers of the future.

The following are selected certifi- ing host site that is served by one or cate of need filings for April 13-May 12. more mobile MRI units; $3.4 mil- lion. 2015 Explore over 100 undergraduate, Letters of intent TOP 100 UNIVERSITY master’s, and doctoral programs Decisions 2 Ⅲ Harper University Hospital Highest Alumni , De- Salaries troit: Purchase a fixed MRI unit that Ⅲ Interventional Pain Center PayScale in Colleges of Architecture and was leased and approved under PLLC, Warren: Initiate a new, free- 2015 Design, Arts and Sciences, AMERICA’S BEST CON No. 06-0120; $3.7 million. standing surgical outpatient facility UNIVERSITIES Engineering, and Management. Ⅲ Sinai-Grace Hospital U.S. News & , Detroit: with one operating room; $3.9 mil- World Report® Purchase a fixed MRI unit that was lion. Conditional approval. leased and approved under CON Ⅲ Holly Convalescent Center: 2015 BEST COLLEGES No. 07-0516; $2.8 million. Renovate space and replace nursing in the Midwest Princeton home beds in a newly constructed Review® Applications received space; $5.7 million. Conditional ap- Ⅲ Lawrence Technological University Oakwood Hospital, Taylor: Ini- proval. 21000 West Ten Mile Road, Southfield, MI 48075-1058 | 800.225.5588 | [email protected] | www.ltu.edu tiate a fixed MRI service at an exist- — Natalie Borda DBpageAD_DBpageAD.qxd 5/12/2015 2:43 PM Page 1 20150518-NEWS--0017-NAT-CCI-CD_-- 5/15/2015 11:32 AM Page 1

CRAIN’S DETROIT BUSINESS // May 18, 2015 17

CRAIN'S LIST: LARGEST LOCAL AUTO DEALERS SPOTLIGHT: Ranked by 2014 revenue LOCAL AUTO DEALERS Number of new Company Revenue vehicles sold/ Number of used Address ($000,000) Number of leased vehicles sold Rank Phone; website Top executive(s) 2014/ 2013 dealerships 2014/2013 2014/2013 The Suburban Collection David Fischer $1,914.5 38 34,621 18,425 1 1795 Maplelawn Drive, Troy 48084 chairman and CEO $1,599.3 29,629 16,319 (877) 471-7100; www.suburbancollection.com Who was at the top B B B Victory Automotive Group Inc. Jeffrey Cappo 1,033.5 NA 21,321 14,532 B Ranked by revenue, in millions 2 46352 Michigan Ave., Canton Township 48188 president 830.1 NA NA (734) 495-3500; www.victoryautomotivegroup.com LaFontaine Automotive Group Michael LaFontaine 663.3 12 12,508 6,615 Company 1985 revenue 4000 W. Highland Road, Highland Township 48357 owner and president 577.1 10,016 6,199 3 1 (248) 887-4747; www.thefamilydeal.com Maureen LaFontaine 1. Bill Wink Chevrolet/GMC $253 owner and vice president Southfield Dodge Chrysler Jeep Ram Paul Steel 477.4 NA NA NA 2. Buff Whelan Chevrolet Inc. $102 4 28100 Telegraph Road, Southfield 48034 president 368.7 NA NA 2 (248) 354-2950; southfieldchrysler.com 3. Don Massey Cadillac Inc. $99 Prestige Automotive LLC Gregory Jackson 400.1 4 15,071 2,168 5 20200 E. Nine Mile Road, St. Clair Shores 48080 chairman and CEO 414.3 13,963 2,183 (586) 773-2369; www.prestigeautomotive.com Company 1990 revenue Stewart Management Group Inc. Gordon Stewart 342.2 NA NA NA 1. McInerney Inc. $196 6 20844 Harper Ave., Suite 100, Harper Woods 48225 president 320.8 NA NA 2 (313) 432-6200; www.gordonchevrolet.com 2. Don Massey Cadillac Inc. $183 Elder Automotive Group Tony Elder 303.3 8 4,284 3,067 3. Suncare Dealerships 3 $141 7 777 John R Road, Troy 48083 president 343.6 3,972 3,282 (248) 585-4000; www.elderautogroup.com Snethkamp Automotive Family Mark Snethkamp 235.0 NA 5,500 2,200 Company 1995 revenue 8 16400 Woodward Ave., Highland Park 48203 president 198.0 4,050 1,850 2 (313) 868-3300; www.snethkampauto.com 1. Don Massey Cadillac Inc. $774 Jim Riehl's Friendly Automotive Group Inc. James Riehl Jr. 231.7 NA NA NA 2. Troy Motors $468 9 32899 Van Dyke Ave., Warren 48093 president and CEO 184.5 NA NA (586) 979-8700; www.jimriehl.com 3. Mel Farr Auto Group 4 $382 Buff Whelan Chevrolet Kerry Whelan 183.9 1 4,705 1,341 10 40445 Van Dyke Ave., Sterling Heights 48313 president 162.8 4,151 1,296 (586) 939-7300; www.buffwhelan.com Company 2000 revenue Pat Milliken Ford Inc. Bruce Godfrey 165.0 1 4,488 678 1. Don Massey Cadillac Inc.2 $1,000 11 9600 Telegraph Road, Redford Township 48239-1492 chairman 153.0 4,163 635 (313) 255-3100; www.patmillikenford.com 2. The Suburban Collection $543 Royal Oak Ford/Briarwood Ford Eddie Hall Jr. 157.7 2 4,062 1,324 3. Elder Ford $484 12 27550 Woodward Ave., Royal Oak 48067 president 148.9 3,984 1,290 (248) 548-4100; www.royaloakford.com Bill Perkins Automotive Group Bill Perkins 146.9 2 3,009 3,226 Company 2005 revenue 13 21800 Gratiot Ave., Eastpointe 48021 president 134.3 2,625 3,274 (586) 775-8300; www.merollischevy.com 1. Penske Automotive Group $10,190 Jeffrey Tamaroff Automotive Family Marvin Tamaroff 146.1 NA NA NA 2. Prestige Automotive $1,010 14 28585 Telegraph Road, Southfield 48034-1928 chairman emeritus 133.1 NA NA (248) 353-1300; www.tamaroff.com Jeffrey Tamaroff 3. The Suburban Collection $932 chairman and CEO Milosch's Palace Chrysler-Jeep-Dodge Inc. Donald Milosch 142.3 1 2,655 1,496 15 3800 S. Lapeer Road, Lake Orion 48359 president 112.2 2,033 1,395 Company 2010 revenue (248) 393-2222; www.palacecjd.com Ray Laethem Inc. Jeff Laethem 134.0 NA NA NA 1. Penske Automotive Group $10,714 16 1677 Mack Ave., Grosse Pointe 48224 president 104.5 NA NA (313) 886-1700; www.raylaethem.com 2. The Suburban Collection $1,055 Avis Ford Inc. Walter Douglas Sr. 125.7 NA NA NA 3. Prestige Automotive $524 17 29200 Telegraph Road, Southfield 48034 chairman and CEO 126.1 NA NA (248) 355-7500; www.avisford.com 1 Lost GM franchise as a result of bankruptcy Village Ford Inc. James Seavitt 120.4 1 2,787 634 18 23535 Michigan Ave., Dearborn 48124 president and CEO 103.0 2,427 597 restructuring. Continued to operate a Class B (313) 565-3900; www.villageford.com dealership. 2 Gorno Automotive Group Ed Jolliffe 118.5 1 3,161 1,276 Sold in 2002 to Sonic Automotive Inc. 19 22025 Allen Road, Woodhaven 48183 president and general 110.4 NA NA 3 Sold in 2002 to Victory Automotive Group. (734) 676-2200; www.gornoford.com manager 4Mel Farr sold the last of his franchises in 2003. George Matick Chevrolet Karl Zimmermann 115.4 1 2,476 1,127 20 14001 Telegraph Road, Redford 48239 owner and operator 92.4 2,022 878 (313) 531-7100; www.matickchevy.com Roseville Chrysler Jeep Inc. Michael Riehl 96.3 1 2,232 813 21 25800 Gratiot Ave., Roseville 48066 president 76.7 1,759 571 (586) 859-2500; www.mikeriehls.com What about Penske? Rodgers Chevrolet Inc. Pamela Rodgers 74.1 NA NA NA 22 23755 Allen Road, Woodhaven 48183 president 67.3 NA NA Crain’s has changed the criteria for the (734) 676-9600; www.rodgerschevrolet.com auto dealers list to better reflect the big Bob Jeannotte Buick GMC Truck Inc. Robert Jeannotte 53.0 1 1,097 282 players in metro Detroit. That means 23 14949 Sheldon Road, Plymouth 48170 CEO 41.0 815 340 Penske Automotive Group, which is (734) 453-2500; www.jeannotte.com locally headquartered but doesn’t have Glassman Automotive Group Inc. George Glassman 51.6 1 1,257 935 local car dealers, is no longer part of the 24 28000 Telegraph Road, Southfield 48034 president 38.0 898 651 list. Penske’s Michigan holdings are three (248) 354-3300; www.glassmanautogroup.com motorcycle dealerships at 1765 S. Telegraph in Bloomfield Township. This list of local auto dealers is an approximate compilation of the largest such businesses in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. Dealership companies must have local stores to be included on this list. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies. Actual revenue figures may vary. NA = not available.

B Automotive News.

LIST RESEARCHED BY SONYA D. HILL 20150518-NEWS--0018-NAT-CCI-CD_-- 5/15/2015 10:33 AM Page 1

18 CRAIN’S DETROIT BUSINESS // May 18, 2015 Hampton Inn first of 4 new hotels in Troy

By Sherri Welch Troy’s inn flux [email protected] HEALTH CARE Hampton Inn & Suites Detroit/ UPDATE Last week’s opening of a new Troy, 122 rooms/suites, now open Hampton Inn & Suites in Troy launched the first of four hotels set Hilton Garden Inn, 114 rooms, to open in the city by late this year or open near end of year early next. Fairfield Inn & Suites,90 The four projects will add 416 rooms, to open early next year Presented by: hotel rooms to the market. Towneplace Suites by Marriott, Hampton Inn & Suites Detroit/Troy, 90 rooms, to open early next year on Wilshire Drive near Big Beaver Road and I-75, opened last week with 122 new rooms and suites. percent completed. &KDQJHV&RQWLQXH Owner Farmington Hills-based Not far away, Marriott TownePlace FREE Group 10 Management Co. Inc. is also Suites Hotel, a three-story, extended- ZLWKWKH$&$ developing a Hilton Garden Inn next stay hotel with 80 rooms, opened in to the new Hampton Inn. The two April near Great Lakes Crossing Out- :KDWZHFDQH[SHFWLQ will share a parking lot. lets. The $4.6 million development, Webinar The Hilton Garden is expected to on Baldwin Road next to the outlet • Trends that employers are watching, open with 114 rooms near the end center, is owner and developer Basil of this year, Hampton Inn General Bacall’s fourth hotel in Auburn Hills based on a recent survey Wednesday, June 17 Noon-1 p.m. Manager Peggy Desrosier said. for a total of 352 rooms and an in- Meanwhile, two hotels on the vestment of about $16 million, • A look forward at impacts of the west side of Stephenson Highway Steve Cohen, director of communi- Affordable Care Act just north of 14 Mile Road in Troy ty development, wrote in the city’s trends are to open by early next year. community development blog. • Ways to stay ahead of health care Local hotel owner and developer Bacall’s Ring Hospitality Manage- To register go to Akram Namou, a shareholder and ment Inc. manages the new hotel. His crainsdetroit.com/webinars principal at A&M Hospitality Man- other developments include the Powered by agement, said construction of a Hampton Inn and Holiday Inn Ex- Fairfield Inn & Suites and a Towne- press, both of which are north of the place Suites by Marriott extended new hotel along the mall’s ring road stay, each with 90 rooms, is about 20 near I-75. Ⅲ

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CRAIN’S DETROIT BUSINESS // May 18, 2015 19

Angela Rogensues to executive director, Playworks Michigan, De- PEOPLE troit, from program director.

Caen Thoma- son-Redus to ON THE MOVE community cata- Send news items and photos to [email protected] lyst/director of community pro- SPOTLIGHT CONSTRUCTION grams, Detroit William Parker Symphony Orches- CHARLES MOORE: to safety man- tra, Detroit, from managing director, ager, Roncelli Thomason-Redus director of corpo- Alvarez & Marsal Inc., Sterling rate partnerships, Heights, from the Sphinx Organization, Detroit. Charles Moore, who recently corporate safety played a pivotal role in the re- director, Ric- Trish Dewald to executive director, structuring of the city of Detroit, Man Construc- development and communications, has joined the global profession- tion Inc., Ster- Danialle Karmanos’ Work it Out Inc., De- al services firm Alvarez & Marsal Parker ling Heights. troit, from chief development officer, as a manag- Coalition on Temporary Shelter, De- ing director MANUFACTURING troit. in its Detroit Rob Speed to president, after- office. market and trailer and chief pro- Kelly Kozlowski to COO, Downtown Moore fa- curement officer, Meritor Inc., Troy, Detroit Partnership, Detroit, from sen- cilitated the from vice president and chief pro- ior director, Automation Alley, Troy. $1.7 billion curement officer. Also Gina Cavaliere to director, Busi- reinvestment ness Improvement Zone, from Moore plan for the Diane McCormick deputy director, Wayne County Eco- city of De- to director of se- nomic Development Growth Engine, troit’s bankruptcy. He also was curity and facili- Detroit. operational adviser to the Detroit ties, Carhartt Public Schools and provided ex- Inc., Dearborn, Julie Ermler to vice president of fi- pert testimony in the Stockton, from senior di- nance and administration, Hudson- Calif., municipal bankruptcy. rector of global Webber Foundation, Detroit, from di- Moore led Greektown Casino- security pro- rector of finance and administration. Hotel, the first commercial casi- McCormick grams, Kelly Ser- no owned by an American Indi- vices Inc., Troy. People on the Move an tribe, through its bankruptcy announcements are limited to reorganization. NONPROFITS management positions. Email Moore, 43, joins Alvarez & Lettice Craw- [email protected]. Marsal from Conway MacKenzie ford to vice pres- Include person’s name, new title, Inc., where he was a senior man- ident-credit, In- company, city in which the person aging director. Earlier in his ca- vest Detroit, will work, former title, former reer, he was CFO of Horizon Tech- Detroit, from company (if not promoted from nology Group. banking analyst, within) and former city in which the Moore holds a bachelor of arts Urban Partner- person worked. Photos are degree and an MBA from Michi- ship Bank, De- welcome, but we cannot guarantee gan State University. troit. they will be used. Crawford

Energy Products Inc., Madison tive that provides commercial real DEALS Heights, a battery distributor, has estate multiple listing services to its been named master distributor in members. Websites: ziplogix.com, the Michigan and Ohio regions, for commercialmls.com. & DETAILS Trojan Battery Co., Santa Fe Springs, Submit news to [email protected] Submit news to Calif., a manufacturer of deep cycle EXPANSIONS Domino’s Pizza Inc. [email protected] batteries. Energy Products will sup- , Ann Arbor, ply and support batteries used in opened a store in Tbilisi, Republic aerial lifts, floor cleaning equip- of Georgia. Domino’s Pizza in CONTRACTS ment, renewable energy, marine Georgia is a joint venture between Matchbox Learning Solutions Inc., and golf and electric vehicle mar- Turkven, Domino’s master fran- Johns Creek, Ga., has been named kets. Websites: energyprod.com, chisee in Turkey, and Geo Pizza LLC, charter management organization trojanbattery.com. led by Tea Shengelia, Domino’s for Michigan Technical Academy with CEO, Tbilisi. Website: schools in Detroit and Redford Logi-Serve LLC, Farmington Hills, a dominos.com. Township. Websites: mtacademy.us, software-based business execution matchbooklearning.com. and talent assessment firm, was se- Cornish, Zack, Hills & Associates Inc., lected by American Express Global Busi- an insurance and surety agency, has Jervis B. Webb Co., Farmington ness Travel, New York City, to provide moved its headquarters to the Hills, a subsidiary of Daifuku North tools and services to help select and Penobscot building, 645 Griswold St., America Holding Co. and a provider train its customer service staff. Web- Suite 3274, Detroit. The company of material handling solutions, an- site: logi-serve.com. will continue to operate its service nounced that Bastian Solutions, In- center at 24225 W. Nine Mile, Suite dianapolis, an independent system Dynamic Computer Corp., Farming- 204, Southfield. Telephone: (248) integrator, will join its network of ton Hills, a reseller of hardware and 353-58950. Website: SmartCart automatic guided cart software, was selected as a prime cornishzack.com. value added resellers. Websites: contractor to U.S. federal and de- daifukuwebb.com, bastian fense agencies under a contract Deals & Details guidelines. solutions.com. managed by NASA. Websites: Email [email protected]. dcc-online.com, sewp.nasa.gov. Use any Deals & Details item as a Atwater Brewery, Detroit, a craft model for your release, and look for brewery, contracted with Elite ZipLogix, Fraser, a real estate the appropriate category. Without Brands of Colorado, Denver, to dis- technology company, agreed to complete information, your item will tribute its beer throughout Col- provide its products to members of not run. Photos are welcome, but we orado. Websites:atwaterbeer.com, the Commercial Brokers Association, cannot guarantee they will be used. elite-brands.com. Seattle, a member-owned coopera- 20150518-NEWS--0020-NAT-CCI-CD_-- 5/15/2015 10:34 AM Page 1

20 CRAIN’S DETROIT BUSINESS // May 18, 2015

WEDNESDAY Crain’s2015 General & MAY20 In-House Counsel Summit Inforum 53rd Annual Meeting. 11:30 CALENDAR a.m.-1:30 p.m. Inforum Professional Crain’s fifth annual General & Women’s Alliance. Writer and public Contact: (616) 331-7278 or visit Building No. 104, Ann Arbor. Civil Engineers and the Urban Land In-House Counsel Summit will speaker Iyanla Vanzant. The Henry, gvsu.edu/fobi. $77.50 for nonmembers. Preregis- Institute. Speakers include Kirk Steu- feature keynote speaker John 300 Town Center Drive, Dearborn. tration is required at washte- dle, director of the Michigan Depart- Dean, former counsel to Presi- Tickets: $50 Inforum members, $75 UPCOMING EVENTS naweconclub.org. Tickets will not ment of Transportation; Mark Hackel, dent Richard Nixon. guests (nonmembers), $700 table Summit on Information Technolo- be available at the door. Phone: Macomb County executive; and Dean’s most recent book — sponsors, $25 students. Register: gy and Cybersecurity. 8 a.m.-2:30 (734) 973-3637; email: Tom Murphy, senior resident fellow The Nixon Defense:What He inforummichigan.org. p.m. May 28. Schoolcraft College. [email protected]. of the Urban Land Institute. $175 Knew and When He Knew It — is Elevate the role and awareness of Website: washtenaweconclub.org. members; $250 nonmembers; $85 a cautionary tale of mistakes THURSDAY Michigan’s IT and cyber commu- government agency. Inn at St. that can been avoided, much like MAY21 nities at the local, state and federal Inclusive Nonprofit Workplaces. John’s, Plymouth. Phone: (517) 332- the legal issues organizations Family Owned Business Institute levels. $75. VisTaTech Center, 8:30 a.m.-4 p.m. June 3. Michigan 2066. grapple with daily. Summit. 8 a.m.-noon. Grand Valley Schoolcraft College, Livonia. Con- Nonprofit Association. Presenta- Also included in the summit State University’s Family Owned tact: Alexander Masters, (734) tions by local nonprofit experts, 5th Annual Compensation and are educational sessions on Business Institute. Workshop in- 462-4438; email: panel discussions on developing Benefits Conference. 8 a.m.-noon managing the ups and downs of cludes working with family and [email protected]. inclusion strategies with Stephen June 9. American Society of Em- the business cycle, what your nonfamily managers to find solu- Henderson of the Detroit Free Press, ployers. The conference provides a CFO wants you to know, e-dis- tions unique to each business; Zingerman’s 12 Natural Laws of and a keynote presentation by in- look into pay and benefit covery and cybersecurity. defining core strengths and un- Business. 11:30 a.m.-1:30 p.m. May spirational speaker Steve Robbins. trends,best practices in compen- The event is 2-7:30 p.m. derstanding how to leverage 28. Washtenaw Economic Club. Ari McGregor Memorial Conference sation and benefits; and identify- June 10 at the Westin Book Cadil- them more profitably; learning Weinzweig, CEO, Zingerman’s, will Center, Wayne State University. ing ways to make an impact on lac, 114 Washington Blvd., De- the 10 types of innovation and share the approach to business $75 members and $115 nonmem- the bottom line. $89 ASE mem- troit. Tickets are $150 in advance how leveraging them gives com- that has led to Zingerman’s suc- bers. Contact: cvent.com/events/ bers; $119 nonmembers. VistaTe- or $140 each for groups of 10 or panies a competitive edge; turn- cess, including the natural laws of inclusive-nonprofit-workplaces. ch Center, Schoolcraft College, more. Preregistration closes at 9 ing ideas into action; and leaving business as introduced in his Livonia. Contact: Kevin Marrs, a.m. June 8. If available, walk-in with a plan to implement new book, Zingerman’s Guide to Good Michigan Infrastructure Conference. (248) 223-8025; email: registration will be $170 per per- concepts in a way that will inspire Leading: Part 1, A Lapsed Anar- 7:30 a.m.-5:30 p.m. June 4. Ameri- [email protected]. son. growth. $100 per person, $75 two chist’s Approach to Building a can Council of Engineering Com- For information, contact Kacey or more. L. William Seidman Cen- Great Business. Washtenaw Com- panies of Michigan, the Michigan Michigan Marketing Minds - Inter- Anderson at (313) 446-0300, ter, Pew Grand Rapids Campus. munity College, Morris Lawrence Section of the American Society of national Marketing Momentum. 5-7 email [email protected] or visit crainsdetroit.com/events.

p.m. June 9. Ann Arbor Spark. Panelists share the best practices for marketing across borders. Moderator is Paul Koch, creative strategist, Q LTD. Panelists are Jimmy Hsiao, Logic Solutions; Fran- cis Glorie, TechTown; Julie Oldham, Small Business Development Council. Ann Arbor Spark, Ann Arbor. Free. Email: alissa@ annarborusa.org.

The Talmer Bank Story: Concept. Acquisitions. Marketing. 8-10:30 a.m. June 10. Marketing and Sales Executives of Detroit. Talmer Bankcorp Inc. Chairman Gary Tor- gow will share how purchasing troubled banks in the middle of the recession enabled the organi- zation to grow nearly 8,000 per- cent. Management Education Center, Troy. $35 MSED mem- bers, $50 nonmembers. Website: msedetroit.org.

Small Business Unlocked Morning Mingle 7:30 a.m. June 11. Detroit Regional Chamber. Interact with potential business clients and strengthen relationships with other chamber professionals. Flagstar Bank, 2050 W. Big Beaver For your mission-critical infrastructure, our world- Road, Troy. Cost: Free for cham- class data centers keep you secure, powered and ber members, $595 for future connected to multiple global carriers 24/7. Backed members. Contact: Marianne Al- by 2(n+1) redundancy that guarantees continuous abastro, (313) 596-0479. network uptime, and an array of outbound and inbound connection options, 123Net gives you unrivalled speed and control over your network. Calendar guidelines. Visit crainsdetroit.com and click “Events” near the top of the home page. Then, click “Submit Your Events” YOUR BACKBONE FOR BUSINESS from the drop-down menu that will appear. Fill out the submission form, FIBER • COLOCATION • VOICE • WIRELESS 866.460.3503 123.NET then click “Submit event” at the bottom of the page. More Calendar items can be found at crainsdetroit.com/events. 20150518-NEWS--0021-NAT-CCI-CD_-- 5/15/2015 6:25 PM Page 1

CRAIN’S DETROIT BUSINESS // May 18, 2015 21 GOLF,from Page 1: Bringing the sport to Belle Isle takes a lot of drive for range operator

For example, the clubhouse’s and-run practice area, sand bunker Detroit Public Schools, Pegues said, to market the center to businesses. wooden steps and ramp need practice area, five-hole mini course and is developing programming for She’s just launched a five-week $2,000 in repairs because they were that will be expanded to six, three the golf range and finding grants. learn-to-golf program at $50 a per- never treated for long-term weather United States Golf Association- Pegues, Anthony-Ryan and Golf son that she’s taking to local compa- exposure, she said. quality sand-based putting greens, Links were part of a group that bid a nies as an offer for their employees. “They’re starting to disintegrate,” and a clubhouse. few years ago on the city’s golf She said she intends to discuss the Pegues said. Cost and program details are at course management deal, for his- program with the Downtown Detroit But that’s not the worst belleislegolfrange.com. toric Rackham Golf Course and three Partnership. headache. “The power surges and The golf facility pays four other links, but lost to Oakland The Detroit Medical Center electrical problems here are just groundskeepers for maintenance, Township-based Vargo Golf Co. signed up and sent 40 employees on horrific,” she said. and three to four more staffers to Pegues is solely financing the Wednesday and Thursday. When the power goes out — she work inside and for events, Pegues Belle Isle effort. For company outings, the center said it happens for hours at a time, said. A college student will be hired Anthony-Ryan is bringing four divides participants into groups, sometimes for days — she has to this summer to handle social media teaching professionals to work at sorted by the area of interest (put- take her groundskeepers off the and other tasks, she said. the center, and the women’s golf ting, etc.) to golfers. course and have them fill buckets. The facility has 12,000 new golf team from the University of Detroit Already signed up for outings are That’s because one of her startup [LARRY PEPLIN] balls purchased from Wilson Sport- Mercy, coached by Anthony-Ryan, a group from within Pegues’ old expenses was an electronic point- Francine Pegues hopes to use business ing Goods Co., along with a few sets will work with kids at the range. employer, Blue Cross Blue Shield of of-sale system that also operates the connections built as a former of clubs and some individual 7- and Michigan, and another from the The contract, the kids machine that fills buckets of balls. marketing executive at Blue Cross Blue 9-irons, and putters. Detroit CPA firm George Johnson & “Blackouts, brownouts, power Shield and as a member of nonprofit Dave Coy, who operated the golf Pegues said the programming Co., she said. failures,” she said. “I cannot operate boards to build business for the Belle center for 16 years prior to the state plans, especially programs focused The origins if I am always losing power.” Isle Golf Range. takeover, couldn’t be reached for on kids, are what earned her the Plans are to buy an uninterrupt- comment. contract. The golf practice range opened in able power supply, another unex- The intent is to have potable The deal to run the Belle Isle golf June 1999. It was built by Ford Motor Building relationships pected expense, she said. Tempo- water from the city system, she said, center has fairly simple terms: Pay Co. for $2.1 million and donated to rary fixes have been made by DTE and to separately install a pump, at Pegues, 67, retired in 2007 after the state $4,000 annually or 5 per- the city, with Visteon Corp. donating Energy Co. her own cost, to draw water from 24 years in marketing with Blue cent of revenue, whichever amount $1 million for operations. The driving range is on the unre- the Detroit River to use to water the Cross Blue Shield of Michigan, and is greater, she said. All proceeds from the center sup- liable city-owned electrical grid facility’s greens. she’s using her business connec- In addition to teaching golf, the ported the nonprofit First Tee of that’s being replaced over the next Golfers see the verdant turf, lush tions to build up the golf center’s center will have someone from Michigan Foundation, which aimed four years by DTE, which is spend- trees and landscaping — and in clientele. Wayne State University’s medical to teach life skills, build character ing $200 million on electric cables, Belle Isle’s case, water and boats — She also has relationships built school on hand to do short sessions and reinforce math and science les- transformers and substations as it but they don’t see the headaches through her board memberships, on healthy eating. sons to youth through golf. assumes service for Detroit. behind the scenes, said Kate Moore, including The Parade Co. and Girl She said she’s working with the The relationship with the city So far, Pegues has spent about executive director of the Michigan Scouts of Metro Detroit. MWGA to subsidize the cost of up to and First Tee eventually fell into $45,000 of her own money on the Golf Course Owners Association, a A few years ago, Pegues, a Grosse 200 kids to learn golf at the center. limbo as the economy soured and golf center, including $5,000 in golf Lansing-based trade group. Pointe Park resident, was president Other plans include launching a Detroit went into bankruptcy. equipment. She’s purchased ma- “The general public really doesn’t of a company called Dan Teak LLC women’s golf league, and another When the state took over the is- chinery to cut the grass, aerate the understand what goes into running that kept a database of registered for military veterans and their fami- land last year, it included control of turf and trim the trees, and 12,000 a golf facility,” Moore said. “It’s businesses for subcontractors lies. The range has a golf cart, and a the golf center. The Michigan De- golf balls. about infrastructure, it’s about working on the now-mothballed cart will be added that allows some- partment of Natural Resources cre- The grass must be cut four times staffing, it’s about history...” Wayne County Jail project in down- one who doesn’t have use of his or ated a slew of contracts for various a week, and the driving range can Moore said Pegues has the town Detroit. her lower legs to play golf. operations on the island. take more than a day to cut. willpower to overcome the Belle Isle Collaborating on the Belle Isle golf Pegues also said she’s talked to “In golf, it is the short game that A major uncertainty is the utility issues. effort are Terri Anthony-Ryan, who the physical therapy department at kills everybody. You can drive the bill: Belle Isle has a single electric “She’s a good businessperson. I has been head teaching pro for the Beaumont Hospital about starting a ball 250 yards, but from 100 yards meter and a single water meter, and don’t think there could be anyone city of Southfield’s golf courses for rehab golf program for patients. in, can you get it in the hole?” users are sent a bill diced from mas- more driven to make this happen more than 20 years, and Huntington Pegues said. “We have the best facil- Revenue streams ter bills, she said. Her plan is to for the community than Francine,” Woods-based nonprofit Golf Links De- ity in Southeast Michigan for you to wade into the bureaucratic process she said. troit, which was created to promote The primary revenue will come do that.” Ⅲ to get her own electric and water The 9-acre facility has 30 natural golf to underserved groups. Golf from regular golfers seeking prac- Bill Shea: (313) 446-1626 meters, she said. grass driving range stations, a chip- Links Detroit has relationships with tice time, and from Pegues’ efforts Twitter: @Bill_Shea19

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22 CRAIN’S DETROIT BUSINESS // May 18, 2015 VISTEON, from Page 1: ‘Local governments are going to be a lot more cautious’

would deteriorate after the national Communities were eager to lure the $150 million. But soon after Visteon late the township’s potential short- bonds in November 2009 for the financial meltdown. But questions automotive supplier and its head- moved into its new headquarters in fall in bond payments tied to the project and another $2.7 million of remain about whether the 28,000- quarters in hopes of securing a 2004, it began asking for a reduction project, according to the lawsuit. general obligation limited tax bonds resident township did enough to pro- windfall in property taxes. in the property’s taxable value, the The firm established that the in June 2010 toward the build-out of tect its own interest in structuring the By July 2002, Van Buren Township township said in its May 12 lawsuit. township would see a shortfall Unity Studios. bond deal. Visteon is holding to its successfully wooed Visteon, and its Visteon, meanwhile, continued ranging between $23.7 million and Bond payments were to be cov- claim that the township alone took board of trustees established the to bleed cash, and reported a net $36.4 million by 2018 — barring an ered by rental fees for the studio, on the liability. Local Development Finance Authority loss of $1.5 billion in 2004. influx of additional tax revenue. which the city owned, but the devel- The township, for its part, claims to secure bonds to pay for public fa- By 2006, tax revenues from the In September 2013, Van Buren opment never fully materialized and Visteon is a poor corporate citizen cilities for the development. property were already failing to Township asked Visteon to begin ne- the city was stuck with $2.6 million in and is culpable for a projected bond The township agreed to pay meet bond payments, according to gotiations toward a shortfall pay- annual bonds payments. payment shortfall as high as $22 million to the contracted devel- the suit, and Visteon reported its ment. The shortfall payment, the The U.S. Securities and Exchange $36.4 million by 2018. The shortfall oper, Detroit-based Walbridge sixth straight year of losses. payment-in-lieu of tax the company Commission eventually filed fraud has potential to bankrupt the small, Aldinger Co., using proceeds from The township refinanced the ultimately offered, was just $6,125.06. charges against city officials, alleging mostly rural community. 30-year tax increment financing bonds, delaying bond repayment — Robert Rhodes, partner at Detroit- they lied about the project’s viability. “This case should send ripples bonds. The total bonds issued for and alleviated the projected short- based Dickinson Wright PLLC and The SEC reached settlements with through the economic development the project were $29 million. falls at that time. representation for Visteon, respond- two former officials, including a community,” said Kurt Brauer, a part- On its end, Visteon agreed to ed in a letter dated Oct. 8, 2013. $10,000 fine to former Allen Park Bankruptcy ner specializing in business incen- spend $270 million toward the Vis- Rhodes wrote: “The township Mayor Gary Burtka. A judge in U.S. tives at Warner Norcross & Judd LLP in teon Village build-out. The compa- On May 29, 2009, in the midst of undertook the liability for the District Court for the Eastern District Southfield who is not tied to the case. ny initially expected Visteon Village an economic and industry collapse, bonds. If there is to be a shortfall for of Michigan later vacated those settle- “Local units of government are going to be home to more than 4,000 em- Visteon filed Chapter 11 bankruptcy. which the townships is liable, Vis- ments, but the SEC asked the court to be a lot more cautious about how ployees. About 800 employees work Van Buren Township quickly be- teon promised no more than an as- earlier this year to reinstate them. they draft these agreements going for- there now. came an unsecured creditor over its sist, which means the township East Lansing narrowly missed its ward.” Initially, Visteon struggled with tax abatement agreement, in which would have to pay any shortfall with own bond debacle in 2012 when it profitability coming out from under it said Visteon failed to meet the only an ‘assist’ from Visteon.” planned to issue $20 million in city- The lure of development Ford and reported mounting net terms of the plan. Specifically, the Rhodes declined to comment fur- backed municipal bonds toward Visteon was a hot commodity for losses in 2001, 2002 and 2003. township said, Visteon didn’t meet ther on the case. the $105 million City Center II proj- local economic development man- The township projected the as- the terms of the agreement because ect. The city planned to use the Big stakes agers following its spinoff from par- sessed value of the property to be it didn’t further develop Visteon Vil- bonds to pay for a parking structure ent company Ford Motor Co. in 2000. $300 million with a taxable value of lage to increase the corporate cam- Doug Bernstein, managing part- and performing arts center. pus’ taxable value. ner of the banking, bankruptcy and But after an assessment of the Visteon, in turn, sought yet anoth- creditors’ rights plan, it was revealed that the tax in- WHEN YOU LEAST EXPECT IT, er reduction of the assessed value of practice group at cremental finance revenue wouldn’t the property, threatening legal action Plunkett Cooney increase enough to cover the bond RISK BITES if a new agreement wasn’t reached, PC, said vague payments, leading to a $3.1 million the township said. terms like “assist” shortfall. The township and Visteon came could be the The city council voted unani- to yet another agreement over value product of an in- mously in June 2012 to ditch the and bonds, which dropped the as- volved negotia- project. It has since began enter- sessed value from $165 million to tion with bank- taining new plans for that site. $60 million, $30 million of which Doug Bernstein: ruptcy creditors, Brauer said municipalities must was taxable, according to the “You obviously want where more sub- engage in proper due diligence and suit.Van Buren Township then sold more definition” stantive language indemnity clauses before entering its $9.8 million unsecured claim tied or a pledge of into these agreements and issuing to the tax abatements to Fulcrum collateral weren’t feasible objectives. bonds. Credit Partners for $5.7 million, the “With the benefit of hindsight, “Frankly, I’m working with sever- proceeds of which were delegated you obviously want more definition. al communities on these types of to meet the bond payments. But it’s a process, and this is the deals, but they are being responsi- Visteon has since recovered fi- product of a negotiation,” he said. “If ble,” Brauer said. nancially by scrubbing $2 billion in you wanted the agreement to say It’s possible other municipalities debt from its books during bank- ‘cover the shortfall’ for example, it’s a with tax capture bonds may try to ruptcy and implementing an ag- guarantee, it’s an unlimited guaran- get better terms in future deals due gressive M&A strategy. For 2014, it tee, and one the company can’t be to this deal, Bernstein said. reported revenue of $7.5 billion and a prepared to make in its position.” “What you do in these situations loss of $295 million. Van Buren Township Supervisor is learn from other cases and adapt Linda Combs said in a statement your (strategy),”he said. Sticking points last week that Visteon’s inaction Bad corporate citizenship? Visteon agreed to consider the Van could lead the township to default Buren Township’s bond shortfall as on the bonds, “which would lead to The court will likely decide part of the bankruptcy settlement financial chaos for the township.” whether Visteon is culpable, but the agreement, but only as an “assist.” Kaveh Kashef, partner at Clark Hill company’s lack of compassion for The agreement states that Vis- PLLC and representation for Van the community is indicative of a bad teon agrees to “negotiate with the Buren Township, said the courts corporate citizen, Brauer said. township in good faith to determine should hold Visteon accountable. “Visteon, it appears, is doing the amount of the shortfall with re- “A shortfall has been identified, everything it can to duck responsi- IT’S OUT THERE, LURKING, spect to these bonds and make a and the language (in the agreement) bility for shortfall,” Brauer said. WAITING TO STRIKE. non-payment, payment in-lieu-of states very clearly that they should He said regardless of Visteon’s ul- tax, to the township to assist the make a payment,” Kashef said. timate legal liability, economic de- DON’T JUST MANAGE YOUR RISK, AVOID IT. township in making timely pay- Brauer, on the other hand, isn’t as velopment agencies at the local and If your commercial insurance spend is $100,000.00 or more, ments on the bonds.” confident. state level should take note. Visteon sold Visteon Village in “The township so badly wanted In the Visteon project, the Michi- contact a Certified Risk Architect to minimize exposure and 2012 for $81 million to New York this project, they took on the risk gan Economic Development Corp. had drive down your insurance costs. Call 586.323.5700. City-based real estate firm Sovereign and seemingly didn’t indemnify Vis- authorized a 13-year, $15.7 million Partners LLC, which later renamed teon,” Brauer said. “The township tax credit. However, the MEDC ter- the development Grace Lake LLC. tied its own hands.” minated the credits before they were It’s likely Visteon cleared Sover- distributed. The reasons why aren’t The learning curve eign of any liability to the bonds, clear. but that remains unclear. Visteon Van Buren Township joins a list of “Visteon should absolutely be declined to answer questions con- municipalities burned by economic denied any economic assistance by It’s time to rethink your insurance strategy cerning the matter. Calls and emails development efforts. local or state entities if they come to Sovereign were unreturned. Allen Park, for example, lost out looking for a handout in the future,” 888.525.7575 | 586.323.5700 | sterlingagency.com In 2013, Van Buren Township in its ill-fated plans for an upstart Brauer said. Ⅲ hired Philadelphia-based Public Fi- movie studio in the city. Allen Park Dustin Walsh: (313) 446-6042 Sterling Insurance Group is a Michigan based company. nancial Management Inc. to calcu- issued $28.3 million limited tax Twitter: @dustinpwalsh 20150518-NEWS--0023-NAT-CCI-CD_-- 5/15/2015 5:38 PM Page 1

CRAIN’S DETROIT BUSINESS // May 18, 2015 23 SYSTEMS, from Page 3: Beaumont, Henry Ford bounce back on bottom lines

for Michigan’s health systems puts ted by hospitals to the Southeast gan, Keuten said Healthy Michigan approved last on what the Legislature does in the them in a good position to deal with Michigan Data Exchange. Medicaid expansion has been a big month in the full next week or two on no-fault.” reimbursement cuts or other finan- “We have seen growth in Troy and contributor, adding 11 percent, or Senate, Beau- If no-fault reform is approved in its cial challenges this year. Dearborn (hospitals), and at our $30 million in net revenue, to $305.5 mont would lose current form, Keuten said the change “Michigan has lower costs than Royal Oak campus,” Keuten said. million during the nine months the $55 million per could cut no-fault insurance pay- the two other states we studied (In- Outpatient volume was up about 2 expansion was in effect last year. year in reim- ments to 150 percent of Medicare diana and Wis- percent, he said. “Every month when Healthy Michigan, which began bursements, and directly affect the system’s bot- consin),” Udow- we close the books we are always April 2014, also helped Beaumont Keuten said. tom line. The payment reduction Phillips said. surprised our inpatient is so strong reduce uncompensated care, John Keuten: In- The House could affect patient care, he said. “The (Michigan) and continues to beat budget.” which includes bad debt and char- patient volume approved similar But business and insurance in- health systems While inpatient admissions ity care. stays strong legislation, but dustry supporters of no-fault reform will become dropped about 2 percent for Henry For example, Beaumont reduced legislative contend one of the main reasons for more profitable Ford in 2014, Schlichting said Henry uncompensated care costs by 31 sources told Crain’s that the House Michigan’s high automobile insur- as Medicaid ex- Ford’s market share in Southeast percent to $265 million last year. doesn’t yet have the votes needed to ance rates is provider reimburse- pansion” takes Michigan remained about 18 percent. Charity care dropped to $112 million approve auto no-fault. ment charges that are four times Udow-Phillips: hold in 2015. “We are not trying to grow inpa- from $182 million and debt dropped Henry Ford spokesman David Ole- higher than Medicare rates and Profits looking up At Beaumont tient care,” she said. “The real growth to $154 million from $203 million. jarz said SB 248 would cost the five- three times higher than what Blue for systems in state Health, which is happening in the outpatient side.” At Henry Ford, Medicaid expan- hospital system $6 million annually. Cross pays. last September Chadwick said total revenue sion added about a 15 percent rev- “The proposed legislation would Under health care reform, hospi- became the region’s largest system growth is a better indication of a enue increase from $330 million to impact our high-level trauma, tals also face various Medicare re- through the merger with Oakwood system’s strength because it com- about $381 million. emergency medicine and other imbursement cuts, financial penal- Healthcare and Botsford Hospital, bines inpatient and outpatient. While Henry Ford’s bad debt specialty services that care for trau- ties for high readmission rates and 2014 was a year in which the eight- In 2014, Henry Ford’s net patient costs increased 9.5 percent to $92 ma patients as well as diminish ac- excessive hospital-acquired infec- hospital system bucked conven- service revenue increased 3.6 per- million in 2014 from $84 million, cess to essential health care servic- tions. For some hospitals, the tional wisdom that the first year of a cent to $2.172 billion from $2.095 charity care costs declined 22 per- es for patients injured in an auto Medicare payment cuts could be as merger is fraught with peril. billion in 2013. cent to $48 million from $62 mil- accident,” Olejarz said in a state- high as 5 percent. CFO John Keuten said Beaumont “We are not as hospital-centric as lion. Overall, uncompensated care ment to Crain’s. For these reasons and to improve increased consolidated revenue for other organizations,” Chadwick said. declined 4 percent to $140 million Statewide, the Michigan Health & health care efficiency, system exec- its eight hospitals by 5 percent to “Most of our growth is in ambulatory last year from $146 million in 2013. Hospital Association has estimated utives at Henry Ford and Beaumont $3.95 billion and net income by $40 with good growth” in its two HMOs, that proposed changes in no-fault say they continue to seek lower per No-fault proposals’ impact million to $182.6 million, a 4.6 per- Health Alliance Plan and HAP Mid- insurance reimbursement could patient operating costs through var- cent total margin. Unlike the overall west Health Plan, its Medicaid HMO. Despite positive financial news, cost the health care industry more ious cost containment projects. market, which was flat, Beaumont in- Health insurance premiums for Keuten said storm clouds are gath- than $1 billion in revenue. Beaumont’s merger savings are creased admissions by 4 percent to Henry Ford increased 4 percent to ering on the horizon. Proposed For 2015, Keuten said Beau- projected to total about $130 mil- 174,675 and saw emergency room $2.27 billion in 2014 from $2.17 bil- changes in the state’s auto no-fault mont’s “goal is to continue to hit 4 lion over the next three years, in- visits rise by 2.9 percent to 506,743. lion the prior year. medical reimbursement system percent margins and our projec- cluding saving $37 million in 2014, Beaumont Health’s combined could impact Beaumont’s future fi- tions are to slightly beat the $123.8 Keuten said. Ⅲ Medicaid expansion’s impact market share last year was about 35 nances. million in operating income.” Jay Greene: (313) 446-0325 percent, according to data submit- Like at most hospitals in Michi- Under Senate Bill 248, which was However, he said, “A lot depends Twitter: @jaybgreene

VITAPERK,from Page 3: The iconic morning cup of joe enters the era of ‘stealth health’

15 vitamins and minerals packaged about six months after having the nancial sense to keep the flavor. on board. “He told us he showed all ice brokers, Florida-based National in a thin, single-serving pouch. idea. “There are so many factors with potential investments to his wife. Coffee, which will use its interna- As Kifferstein said: “While people The first round, which took about startups, especially with food,” said He took some Vita Perk home and tional broker network to supply in- may often forget to take a vitamin, or five months to produce, was too Nicole Nassif, COO of Solutions A La whatever creamer his wife uses co- terested clients with Vita Perk. The even dislike swal- sweet in flavor. They scrapped Carte, a Royal Oak-based opera- agulated when the Vita Perk was contract is being finalized now. lowing one, they 100,000 sticks (1.5 grams each) of tional consulting business specializ- added,” Kifferstein said. “He called Projected revenue for 2015 is never forget their product. The second round was ready ing in restaurants and food retail. us to say he decided not to invest.” $456,000. morning coffee.” in fall of 2012. This time the taste issue “It’s operating within your business Another 100,000 sticks were dis- Next up, the company plans to “Stealth was resolved, but the product didn’t plan and knowing, ‘If I do this, I make carded, and it was back to the release a Vita Perk product for tea health” is a grow- quite dissolve in the coffee. that.’ If a company veers from that, drawing board. and a Vita Perk sweetener made ing trend in the “It would float on top and create the hemorrhaging of pennies starts.” with a sugar substitute, stevia. Both Staying positive food industry, a sludge on the bottom of the cup,” One of the “eureka” moments for lines should be on the market in according to Belchinsky said. Another 100,000 Vita Perk’s leaders was the realiza- “It’s all about the P’s when you’re 2016 when Vita Perk projects rev- Brad Kifferstein: Darren Tristan, sticks were disposed of. tion that instead of fighting with the trying to create something that’s enue to grow to $1.6 million. May forget vitamin executive vice Starting a product is never for the mocha, they could replace it with never been made before,” Kifferstein With business growing, Vita Perk — but not coffee. president of faint of heart, but around this time an energy option to round out their said. “Patience, persistence, passion, brought on Shaylyn Silorski, 23, as Technomic, a the founders got a dose of positive four offerings (the other three being perspiration and staying positive.” vice president of marketing and Chicago-based food research and feedback at Coffee Fest 2013, an in- original, vanilla and hazelnut). It took three more months to re- business development. She is a re- consulting firm. “We’re seeing vita- ternational trade show held that Kifferstein and Belchinsky, who engineer the product, finding the cent graduate of the University of mins moving into food space — year in New York. still does sales for Spinal Fuzion LLC three problem minerals and replac- Notre Dame. She, in turn, brought whether it’s kale in smoothies or fish “We found out our product has in addition to his Vita Perk work, ing them. Vita Perk’s West Bloomfield their biggest investor on board: one oil in more foods.” legs,” Belchinsky said. brought on a local consultant to office became its own research/de- of her former professors, Chris With an idea of the product they raise capital through individual in- velopment lab with cups of coffee Stevens, who encouraged his stu- Moving on from mocha wanted, the duo turned to a vitamin vestors and build a board of advis- and every kind of creamer spread dents to keep in touch. consultant who liked the concept Kifferstein and Belchinsky decid- ers. The company is closing in on its over all surfaces. Stevens is a retired vice president and recommended a formulator, ed to step up their game. They first half-million, the co-owners Round 4 is “as perfect as it can get,” of corporate relations for Keurig Pre- Best Life PharmaNaturals in Tempe, made the move from Best Life to said. Up to this point, the pair had according to Shanahan. It launched mium Coffee Systems, and one of Ariz. Kifferstein, Vita Perk CEO and DSM Fortitech based out of New financed Vita Perk through their on Feb. 1 and is available in about 50 the original members of Keurig’s co-founder, and Belchinsky, Vita Perk York after their three-year contract own savings, about $250,000. Midwest stores and online. Single senior leadership team. He became president and co-founder, presented with Best Life ended. DSM was ca- In addition, Brad Shanahan, 46, a sticks sell for 99 cents in convenience a Vita Perk investor in April. He said the scientists with their concept. pable of bigger batch production. CPA with experience working for stores, gas stations and coffee shops. he’s “thrilled” with consumer re- They imagined the product would be It took the new company a year big-box retailers like Wal-Mart, A seven-stick package can be pur- sponse to the idea of smart coffee. on the shelves in about a year. to re-engineer the product. Along Kmart and Target, was brought on. chased at grocery stores — like Fresh The Vita Perk executives say as They were wrong. the way, there was another compli- Nassif said recruiting top talent can Thyme Farmers Market, Hiller’s Mar- they work on brewing business deals “Like any big project, you should cation with one of their planned fla- be an important move for a startup. kets (which is being acquired by and expanding distribution, they’ve expect it to take two to three times vors. Kifferstein said they spent “You have to have the people on Kroger Co.) and Nino Salvaggio Inter- also learned a lot along the way. longer and cost two to three times eight months trying to develop a board that can support the growth national Market — for $4.99, and the “You have to believe everything more than originally planned,” said mocha flavor that didn’t clog the within your best business prac- 30-stick box can be bought online for happens for a reason,” Shanahan Kifferstein, who left his position as production machines; when they fi- tices,” she said. $19.99. said. “After everything we went head of business development at nally got it right, the price of cocoa In the fall of 2014, the team was Vita Perk also has a contract with through with the mocha flavor, its re- Bloomfield Hills-based Crypton Inc. skyrocketed. Then, it didn’t make fi- excited to have a possible investor one of the largest office coffee serv- placement, energy, is our top seller.” Ⅲ 20150518-NEWS--0024-NAT-CCI-CD_-- 5/15/2015 5:35 PM Page 1

24 CRAIN’S DETROIT BUSINESS // May 18, 2015 CHURCHES, from Page 3: Havens for creatives

thing it needs to keep the lights on and the building maintained. Church spaces find new uses in Midtown It’s exactly the type of space-shar- ing arrangement Philadelphia- The concept of repurposing sa- outdoor patio and stage area and based Partners for Sacred Places cred spaces may not be common, a permanent restaurant/bar in- 2015UPCOMING hopes to spur further in Detroit, but it isn’t brand-new in Detroit. side the sanctuary that will oper- Baltimore and Austin. Here are two other local examples: ate even when the performances PARTNER EVENTS The organization is in town, talk- Ⅲ In 2011, First Unitarian-Uni- spaces are dark, said Executive Di- ing with churches and religious sites versalist Church in Midtown do- rector Sue Mosey in an email. Built Marketing & Sales Executives of Detroit (MSED) about the potential value of open- nated its complex of buildings, in- in 1915, the two-story brick build- Annual Automotive Roundtable: ing their doors to artists, nonprofit cluding the sanctuary and ing built in the Late Gothic Revival International Edition cultural groups and even creative attached church house with social style originally housed the Church Join us and our panel of experts for this annual off- businesses. A $100,000 grant from hall and second-story church, to of the New Jerusalem. Crossroads the-record discussion. Panelists include Tom Bodell, the Doris Duke Charitable Founda- the East Michigan Environmental of Michigan subsequently operat- Dirk Hartmann, Sujit Jain and Michael Robinet. tion is funding its assessment of cre- Action Council. ed a soup kitchen and food pantry Moderator: David Andrea, Senior VP, Industry ative sector space needs and the Those buildings are now part of from the church until 2008. Analysis & Economics, OESA. availability of sa- the council-managed Cass Corri- Art Place America awarded a May 21 • 5-8 p.m. cred space in dor Commons, a multiuse, non- $900,000 grant to Midtown Detroit Somerset Inn, Troy Detroit, Balti- profit and green space for tenants in 2011 to do due diligence and ac- MSED Members: $45 more and such as the Sugar Law Center for quire the property. Mosey said Mid- Non-Members: $60 Austin, Texas. Economic and Social Justice. town is continuing to fundraise for For additional information and to register, visit The hope is Ⅲ Midtown Detroit Inc. is con- the $4.7 million project and plans to www.msedetroit.org or call Meeting Coordinators that foundations verting a former church on East also seek federal and state historic at (248) 643-6590. might make Forest Avenue west of John R tax credits, foundation grants, le- grants to help fa- Street into an intimate music/per- nient-term loans and other fund- Concept. Acquisitions. Marketing: The Talmer Karen DiLossi: cilitate space- forming arts venue in the main ing, with a goal to begin the renova- Bank Story Promoting shared sharing agree- sanctuary and a 100-seat black tions next spring. Learn the perils, pitfalls and rewards of starting a space ments between box theater. It will also include an — Sherri Welch new business. Speaker: Gary Torgow, Chairman, the two in the Talmer Bancorp Inc. three cities, said Karen DiLossi, di- June 10 • 8-10:30 a.m. rector of arts in sacred places at moved to St. John-St. Luke Evangeli- been hosting training sessions to Management Education Center, Troy Partners for Sacred Places. cal to create space sharing there as help artists and congregations un- MSED Members: $35 Such agreements give arts and he had done at his Saginaw church. derstand the logistics of sharing Non-Members: $50 cultural groups suitable and afford- “We also wanted a cultural out- space and facilitating agreements For additional information and to register, visit able space, while helping bring more reach in the community, (so) I invit- between arts groups and religious www.msedetroit.org or call Meeting Coordinators people and more donations to reli- ed Art Lab J to be involved, too” Far- organizations over the past four at (248) 643-6590. gious organizations, DiLossi said. ley said. “I believed Art Lab J was years in Philadelphia and Chicago, It sounds like a partnership made also trying to work with the com- DiLossi said. Southfield Area Chamber of Commerce in heaven, but one local creative munity, give voice to it, express its Here in Detroit in early May it held 3rd Thursday sector leader cautioned about angst and life.” a town hall-style meeting for local guarding against the potential con- nonprofit arts and cultural groups May 21 • 4:30-6:30 p.m. The fine print Plum Hollow Country Club, Southfield flict between religious views and and artists to brief them on the study Non-Members: $10 artistic expression. As a condition of being nonprof- and ask for their participation in focus www.southfieldchamber.com “It appears that Partners for Sa- it, St. John-St. Luke cannot rent groups and an online survey. cred Spaces have dealt with similar space or engage in other profit- “We hear from our members all Annual Golf Outing concerns in other cities, and have making activities, said board secre- the time, ‘I wish I had a place ... a June 15 • 11 a.m. strong processes in place to help tary Tracy Craig. presence downtown,’ ” said Lynn Plum Hollow Country Club, Southfield negotiate,” said Matthew Clayson, The church, built in 1874 by Ger- Friman, acting executive director of Tickets available online director of the Detroit Creative Corri- man immigrants, was looking for a CultureSource. www.southfieldchamber.com dor Center. way to signal to the surrounding Partners for Sacred Places came community that it was not closed, in almost a year and a half ago and Scarcity of space Great Lakes Women’s Business Council as many believed, she said. looked at half a dozen locations up Detroit Entrepreneur Roundtable, presented by ArtLab J and its contemporary “If we could have people here and down Woodward and now is CEED modern dance company had a during the week, the community expanding its reach, she said. This event will focus on the construction industry tough time finding suitable, afford- would see there was something “The idea is they will work with and what small construction companies can do able space after it launched in 2012. going on and the church was open.” CultureSource to (identify) funding to succeed and what they can do to be part of the The organization, which is oper- It’s slowly working. and gauge opportunities.” revitalization of Detroit. ating on a budget of just over So far, a few people who’d come The plan is to share the findings May 27 • 12:30-4 p.m. $245,000 this year, was one of the to the church for a performance from Detroit and the other two cities Focus: HOPE Conference Center, Detroit John S. and James L. Knight Founda- presented by ArtLab J or Young in September during meetings at To register, visit MICEED.org or call (734) 677-1400 tion Arts Challenge grantees last fall, Fenix have shown up for Sunday the Doris Duke offices in New York with a $100,000 matching grant. morning services, Craig said. and at Drexel University in Philadel- Initially, ArtLab J operated from a And, coincidentally or not, there phia, which is assisting with re- Detroit Society for Human Resource Management loft space above Nikki’s Lounge in have been more donations in the search on the project, DiLossi said. (Detroit SHRM) Greektown, but being located in a donation box recently, she said. And Partners for Sacred Spaces will Workshop: “The Hidden Language of Business – nightlife district wasn’t ideal, and that’s a help: “It costs at least bring best practices and “hopefully Workplace Power, Politics & Influence” & bonus parking was a challenge. $20,000 to operate the church an- ... a framework that ensures long- session “Workplace Trends – Survival Secrets for Last spring, ArtLab J moved to nually ... and you certainly can’t term access and affordability for ... the Next Decade” space in the Virgil H. Carr Cultural bring that in (from) donations from creative groups,” the creative corri- Speaker: Margaret Morford, CEO, The HR Edge, Inc. Arts Center. It was suitable but not 20 people each Sunday.” dor’s Clayson said. By sharing her eye-opening, sometimes jaw- dedicated space. Such space-sharing agreements Partners for Sacred Places is fo- dropping, personal experiences and those of others, Through a performer, Jung met help both the congregation and the cusing initially on repurposing sa- Margaret reveals the secret political skills you need the Rev. Todd Farley, senior minister nonprofit arts sector, said Sacred cred spaces for the arts here in De- to achieve peak influence and effectiveness in your of First Congregational Church United Places President Robert Jaeger, a Mt. troit, but in a way, it’s an extension of workplace – as you earn the devotion of your boss, Church of Christ in Saginaw and Young Clemens native who became fasci- what many churches offer in the way coworkers and clients. Participants need to start Fenix Fellowship UCC — an alternative nated with historic Detroit churches of hosting emergency food and shel- today to be ready for what the work world will look church that does a Sunday service while pursing his MBA at the Univer- ter and senior programs, Jaeger said. like in 2018 and even 2025. Don’t be caught unaware. through performance rather than sity of Michigan in the 1970s. “I think we’re also delivering a June 2 • 7:30 a.m.-Noon preaching — that he brought to St. Most of the Detroit churches he broader message — these sacred Management Education Center, Troy John-St. Luke in Detroit. This was at fell in love with back then are still spaces have an enormous value as Detroit SHRM Members: $50 the request of the Michigan Conference here. And space-sharing agree- places that shelter, support, host Non-Members: $75 of the United Church of Christ. ments help them “to hang on ... and incubate a wide range of non- Register at www.detroitshrm.org Farley was operating Young Fenix (and) continue to take care of their profit or community purposes.” Ⅲ or call (248) 478-6498. Physical Theatre from the 1515 buildings,” he said. Sherri Welch: (313) 446-1694 Broadway Café in Detroit but Partners for Sacred Places has Twitter: @SherriWelch 20150518-NEWS--0025-NAT-CCI-CD_-- 5/15/2015 6:18 PM Page 1

CRAIN’S DETROIT BUSINESS // May 18, 2015 25 ROADS,from Page 1: Poll finds biz willing to pay for roads,with right plan CRAIN’S DETROIT BUSINESS would have generated. Exit polling, Cranson said, has www.crainsdetroit.com Sales or fuel tax hikes are the most shown rejection of Proposal 1 “was Editor-in-Chief Keith E. Crain Biz people to Lansing: Hands off schools Group Publisher Mary Kramer, (313) 446-0399 popular picks when quizzed about not a case of the voters saying, one, or [email protected] funding sources; only 31 percent that we don’t need to fix the roads, About 300 respondents in a re- Other highlights from the sur- Associate Publisher Marla Wise, (313) 446-6032 or [email protected] supported finding the road money and two, that we don’t need to pay cent survey by Crain’s Detroit Busi- vey, when respondents were asked Executive Editor Cindy Goodaker, (313) 446-0460 via cuts to the existing state budget. more to fix the roads.” ness and Honigman Miller Schwartz where to look for cuts: or [email protected] Managing Editor Jennette Smith, (313) 446-1622 Debate over the roads issue has Proposal 1 would have raised and Cohn LLP said they would not Ⅲ The idea of cuts to universi- or [email protected] reached a fever pitch with many more than $1.2 billion by raising the support major state budget cuts to ties and community colleges Director, Digital Strategy Nancy Hanus, (313) 446- 1621 or [email protected] business owners and civic leaders state sales tax from 6 percent to 7 pay for improving Michigan’s earned the most support — 44 Managing Editor/Custom and Special Projects — enough to push forward the in- percent and removing it from fuel crumbling roads and bridges — es- percent — but failed to achieve a Daniel Duggan, (313) 446-0414 or [email protected] troduction of new legislation last sales while also boosting the gaso- pecially when schools or human majority. Senior Editor/Design Bob Allen, (313) 446-0344 week from Republican lawmakers. line tax. But 80 percent of statewide services spending were potentially Ⅲ Twenty-six percent of re- or [email protected] Senior Editor Gary Piatek, (313) 446-0357 Dennis Nordmoe, executive di- voters turned it down, in part be- on the chopping block. spondents supported cutting rev- or [email protected] rector of Detroit-based nonprofit cause of its complexity. Fewer than half of undecided enue sharing to cities and town- Web Editor Kristin Bull, (313) 446-1608 Urban Neighborhood Initiatives, and respondents — and the 31 percent ships that fund police and fire or [email protected] Business tax changes? Research and Data EditorSonya Hill,(313) 446-0402 one of those surveyed, said he who initially recommended budg- protection. or [email protected] Ⅲ Web Producer Norman Witte III, (313) 446-6059 thought Proposal 1 was a “terrible In the Crain’s survey, respondents et cuts to fund roads — supported Fifteen percent favored cuts or [email protected] proposal” but voted for it anyway be- were given options to choose their cutting from higher education, to health care for the poor and 14 Editorial Support (313) 446-0419; YahNica Craw- ford, (313) 446-0329 cause he wanted to support invest- preferred method of generating state public schools, local governments percent cuts to K-12 education. Newsroom (313) 446-0329, FAX (313) 446-1687 , ment for roads. He said he would revenue; options ranged from the and health care. — Lindsay VanHulle TIP LINE (313) 446-6766 prefer to pay higher fuel taxes before various forms of fuel and sales tax REPORTERS a higher sales tax, due to Michigan’s hikes to actual income tax changes. Jay Greene, senior reporter Covers health care, in- growing income disparity. (See box, this page.) surance, energy, utilities and the environment. Selected survey results (313) 446-0325 or [email protected] “We have to take that issue seri- Business owners surveyed were Findings from Crain’s/Honigman survey: 49% total favor Amy Haimerl, entrepreneurship editor Covers ously,” Nordmoe said. “Maybe we nearly split on whether to expand entrepreneurship and city of Detroit. (313) 446- 25% strongly favor 0416 or [email protected] should just go right at the issue of the state’s 6 percent corporate in- Ⅲ How important is it for Gov. Rick Chad Halcom Covers litigation and the defense in- 24% somewhat favor dustry. (313) 446-6796 or [email protected] people using the roads pay for the come tax to an estimated 100,000 Snyder and the Legislature to develop 49% total oppose Tom Henderson Covers banking, finance, tech- roads.” companies not considered C corpo- an alternative road funding plan as nology and biotechnology. (313) 446-0337 or 39% strongly oppose [email protected] But Bob Munoz, general manager rations that currently are exempt soon as possible? 10% somewhat oppose Kirk Pinho Covers real estate, higher education, for Madison Heights-based mail pre- from paying it. Forty-seven percent Oakland and Macomb counties. (313) 446-0412 or 67% essential Ⅲ [email protected] sort firm Zip Mail Services Inc., said a of respondents favored the idea, 24% very important Would you favor a proposal to Bill Shea, enterprise editor Covers media, expand the Michigan business tax advertising and marketing, the business of sales tax increase would allow the while 45 percent were opposed.“I 6% somewhat important sports, and transportation. state’s growing number of out-of- was a little bit surprised, too, at the 2% not important at all beyond “C” corporations to include the (313) 446-1626 or [email protected] state tourists to help foot the bill for willingness of Crain’s subscribers to roughly 100,000 commercial Lindsay VanHulle, Lansing reporter. (517) 657- Ⅲ Should additional funding come 2204 or [email protected] roads they also use. even entertain the notion of an ex- enterprises that pay no business tax? Dustin Walsh Covers the business of law, auto from increased taxes, fees or by cutting suppliers, manufacturing and steel. (313) Higher fuel taxes could also be pansion of the base of the existing 47% total favor 446-6042 or [email protected] part of the answer, he said. But over- business tax,” said John Cavanagh, a state programs and services? Sherri Welch, senior reporter Covers nonprofits, 25% strongly favor services, retail and hospitality. (313) all, he’s worried that drawing on ex- co-founder of Epic-MRA. 56% Raise state taxes, fees or 22% somewhat favor 446-1694 or [email protected] isting state spending would not both New bills 45% total oppose ADVERTISING generate the amount of needed 31% Cut state programs and services 38% strongly oppose Sales Inquiries (313) 446-6032; FAX (313) 393-0997 road dollars without raiding gov- Sentiment supporting tax hikes 4% Both cuts and new taxes 7% somewhat oppose Sales Manager Tammy Rokowski ernment services. appears to counter the idea behind a Senior Account Executive Matthew J. Langan Ⅲ Do you agree with increasing the Ⅲ Advertising Sales Christine Galasso, Catherine “It’s robbing Peter to pay Paul. It new proposal from Republican law- Which funding alternative would state sales tax by one penny and Grace, Joe Miller, Sarah Stachowicz will just cause problems somewhere makers that would rely heavily on you prefer the most? Classified Sales Manager Angela Schutte, (313) specifying in the constitution that all 446-6051 else,” Munoz said. “An extra tax existing revenue, mostly from eco- 36% Increase the sales tax a new revenue must go to roads, bridges Classified Sales Lynn Calcaterra, (313) 446-6086 somewhere is going to be required.” nomic development, to pay for infra- penny to 7 cents on the dollar Audience Development Director Eric Cedo structure. and transportation? and guarantee in the Events Manager Kacey Anderson Buy-in from voters Creative Services Director Pierrette Dagg House Speaker Kevin Cotter, R- 62%: total favor constitution that all of this Senior Art Director Sylvia Kolaski Businesspeople are raising their Mount Pleasant, last week intro- 41% strongly favor funding go to transportation, Marketing Coordinator Ariel Black hands to pay taxes? duced a proposal that would raise 21% somewhat favor roads and bridges Special Projects Coordinator Keenan Covington Sales Support Suzanne Janik, YahNica Crawford Yes, that’s how important the issue more than $1 billion by 2019 in part 36% total oppose 24% Raise the gas tax by 11 cents a Editorial Assistant Nancy Powers has become to many of those sur- through expected state revenue 28% strongly oppose gallon a year for the next three years Production Manager Wendy Kobylarz veyed, and the state is paying atten- growth. The plan would raise the tax 8% somewhat oppose and limit future increases to the rate Production Supervisor Andrew Spanos tion. on diesel fuel of inflation or 5%, whichever is less CUSTOMER SERVICE Ⅲ Do you favor increasing the 19- “It’s a good sign that the public from 15 cents to Main Number: Call (877) 824-9374 cent-a-gallon state gas tax? One idea 17% Raise taxes on state businesses or [email protected] recognizes that we need to invest 19 cents, the would be to raise it by 11 cents a year Subscriptions $59 one year, $98 two years. Out of more in our foundation,” said Jeff same as regular 1% Make deep budget cuts in other state, $79 one year, $138 for two years. Outside for each of the next three years, then state programs, including schools, U.S.A., add $48 per year to out-of-state rate for sur- Cranson, Michigan Department of fuel, and charge face mail. Call (313) 446-0450 or (877) 824-9374. Transportation tie its growth to inflation, and also universities and community colleges, Single Copies (877) 824-9374 spokesman. fees to drivers of Reprints (212) 210-0750; or Lauren Melesio at The state this year expects to hybrid and elec- raise annual vehicle registration fees. health care and police and firefighters [email protected] To find a date a story was published (313) 446- spend $1 billion on road construc- tric vehicles. 0406 or e-mail [email protected] tion and $300 million on mainte- But Cotter’s Crain’s Detroit Business is published by nance, a figure that includes patch- Kevin Cotter: plan also would come Tax Credit for low-income Kulbacki Inc. The Clinton Township- Crain Communications Inc. Chairman Keith E. Crain ing, shoulder repairs and snow Pushing proposal in eliminate the workers and divert money from based construction firm builds President Rance Crain removal, MDOT said. state House. state’s Earned In- economic development programs, schools, churches and retail centers, Treasurer Mary Kay Crain Executive Vice President/Operations including the 21st Century Jobs among other buildings. Concrete William A. Morrow INDEX TO COMPANIES Fund, tribal casino funds and film and asphalt costs are difficult to Executive Vice President/Director of Strategic Operations Chris Crain These companies have significant mention in this week’s Crain’s Detroit Business: incentives. guarantee, Maul said. Executive Vice President/Director of Corporate In an interview with Crain’s last She supports finding road dollars Operations KC Crain A&M Hospitality Management ...... 18 Mattress Closeout Center ...... 7 Vice President/Production & Manufacturing ArtLab J ...... 3 Michigan Department of Transportation ...... 25 week, Snyder withheld comment on in the current budget, although not Dave Kamis Beaumont Health ...... 3, 4, 13 Michigan Golf Course Owners Association .... 21 the specifics of Cotter’s proposal, say- from public schools, higher educa- Chief Financial Officer Thomas Stevens Belle Isle Golf Range ...... 1 Midtown Detroit ...... 24 ing only that he looks forward to tion or health care for the poor as Chief Information Office Anthony DiPonio Bortz Health Care ...... 15 MPRO ...... 12,14 G.D. Crain Jr. Founder (1885-1973) CenterforHealthcare Research & Transform. .... 3 Oakwood Hospital ...... 12 working with the Legislature on a asked in the survey questions. Mrs. G.D. Crain Jr. Chairman (1911-1996) Clark Hill ...... 22 Original Equipment Suppliers Association...... 6 new plan. But, she said she strongly oppos- Editorial & Business Offices Coolhouse Labs ...... 10 Planning Perspectives ...... 6 “My first plan was a combination es raising sales or fuel taxes, saying 1155 Gratiot Ave., Detroit MI 48207-2732; Desai Family Accelerator ...... 10 Plunkett Cooney ...... 22 (313) 446-6000 Cable address: TWX 248-221-5122 AUTNEW DET Detroit Medical Center ...... 4 Ring Hospitality Management ...... 18 of user fees and registration fees. doing so would crunch a class of Detroit Venture Partners ...... 10 St.John-St. Luke Evangelical UCC ...... 3 CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is There is a way to work through workers whose wages are not keep- published weekly, except for a special issue the Epic-MRA ...... 1 Solutions a la Carte ...... 23 this,” he said. ing up with cost-of-living increases. third week of October, and no issue the fourth FCA US ...... 6 Urban Neighborhood Initatives ...... 25 week of December by Crain Communications Inc. “You’re in a Catch-22,” Maul said. Ford Motor ...... 6 Visteon ...... 1 Contractor questions at 1155 Gratiot Ave., Detroit MI 48207-2732. Peri- General Motors ...... 6 Vita Perk ...... 3 “They want to crush the middle odicals postage paid at Detroit, MI and additional Golf Links Detroit ...... 21 Warner Norcross and Judd ...... 22 mailing offices. POSTMASTER: Send address Group 10 Management ...... 18 WDIV-Channel 4 ...... Whatever is decided on funding, class. Who’s spending money? If the changes to CRAIN’S DETROIT BUSINESS, Circula- 4 tion Department, P.O. Box 07925, Detroit, MI Health Care Association of Michigan ...... 15 WWJ-TV62 ...... 4 the state needs to take more ac- middle class isn’t spending, then 48207-9732. GST # 136760444. Printed in U.S.A. Henry Ford Health System ...... 3, 4, 12, 14 Young Fenix Physical Theatre ...... 3 countability on road projects to who is?” Ⅲ Entire contents copyright 2015 by Crain Commu- Honigman Miller Schwartz and Cohn ...... 1,25 Zip Mail Services ...... 25 nications Inc. All rights reserved. Reproduction or IHS Automotive ...... 6 make sure the work is done well the Lindsay VanHulle: (517)657-2204 use of editorial content in any manner without first time, said Kim Maul, CFO for Twitter: @LindsayVanHulle permission is strictly prohibited. 20150518-NEWS--0026-NAT-CCI-CD_-- 5/15/2015 6:19 PM Page 1

26 CRAIN’S DETROIT BUSINESS // May 18, 2015 WEEKON THE WEB/MAY 9-15 RUMBLINGS Molina to On deals and deal-makers New DEGC biz development chief acquire parts takes charge amid staff changes There’s a new face in town, and homeless women to make jewelry of HealthPlus he’s responsible for selling the city. — cuff links, necklaces, rings — out The Detroit Economic Growth Corp. of Detroit graffiti. And finally, a sec- Nearly three months after recently hired Kenneth Chapa to be ond-generation family business, Flint-based HealthPlus of Michigan the new executive vice president of Sweet Potato Sensations, will be on was placed under state supervi- business development. The former site with its delicious sweet potato sion for financial difficulties, Moli- economic development head for pies and other goodies. na Healthcare of Michigan Inc., a for- Mesa, Ariz., will oversee corporate “The small businesses of today profit Medicaid HMO, has attraction as well as helping existing are the big businesses of tomorrow, acquired some of the assets of businesses stay and expand. and when there’s robust civic and in- HealthPlus, the companies an- [AARON ECKELS] “His national network and strong stitutional support of small busi- nounced. The purchase price was Former Compuware Corp.CEO Bob Paul talked about former Detroit reputation will raise the profile of ness, we remove barriers to retaining not immediately disclosed. Mayor Kwame Kilpatrick and other topics during a Q&A with Crain’s Detroit with site talent,” said Cindy Pasky, president finance reporter Tom Henderson last week at the annual Crain’s M&A selectors and and CEO of Strategic Staffing Solu- ON THE MOVE Awards at the Troy Marriott. During the event, three M&A deals and four corporate real tions and a sponsor of the event. deal-makers also were honored (see crainsdetroit.com/ma2015). estate execu- Ⅲ Ferndale Downtown Develop- Kilpatrick gets partial credit, in a roundabout way, for the source tives,” said Ro- Ethan Davidson releases ment Authority executive director relationship forged between Henderson and Paul. The result of that drick Miller, free album of folk music Cristina Sheppard-Decius is leaving relationship was a series of scoops for Crain’s, including the news last DEGC president her job May 28 after 15 years . A year of the sale of Compuware’s iconic building at Campus Martius to and CEO. Birmingham singer-songwriter message from the DDA sent to Meridian Health and Bedrock Real Estate Services. Chapa comes Ethan Daniel Davidson — son of the “downtown stakeholders” said the Miller into a role that late Detroit Pistons owner William board and Sheppard-Decius, a first of five planned branches in had been filled Davidson — has released his 10th stu- 2009 Crain’s 40 Under 40 honoree, Southeast Michigan Kroger stores, Detroit Digits by Olga Stella. But this year, Stella dio album of folk music, “Drawnigh.” entered a separation agreement. in Macomb Township at 26 Mile A numbers-focused look at the was promoted to COO and head of The record is billed as “filled with Ⅲ Marcella Wilson plans to step and Romeo Plank roads. week’s headlines: small-business initiatives, which fiery tales of hard times, dark nights Ⅲ down as president and CEO of Ma- Arbor Hospice of Ann Arbor 9 Miller said will have a much more lit only by a whiskey moon, trou- trix Human Services in February but reached agreements to expand prominent role in the organization. bled soldiers returning after long will not retire from the Detroit- services to Glacier Hills Retirement The jersey number of “Mr. Hockey,” The staffing changes are part of wars, and unfaithful servants based nonprofit. Wilson, 58, will Community, C.S. Mott Children’s Hos- Detroit Red Wings great Miller’s efforts to restructure the or- straight out of the Old Testament.” lead the national expansion of the pital and Henry Ford Village in Washt- Gordie Howe, whose name will ganization post bankruptcy: “The It’s Davidson’s first album since Matrix Transition to Success enaw and Wayne counties. live on in infrastructure. It was DEGC over the past 30 years has “Silvertooth” in 2012, and it’s being poverty model that she developed. Ⅲ With its $90,000 purchase of announced May 14 that the had to be in a defensive posture. released on his own label, Seeds- Ⅲ Kyle Caldwell, former president a Mount Clemens building, Ma- proposed $2.1 billion bridge Now we’re shifting to an offensive men Co., and distributed for free. of the Michigan Nonprofit comb County Rotating Emergency connecting Detroit and Windsor posture. For the first time in many His wife, musician Gretchen Gonza- Association, is leaving the Flint- Shelter Team will be able to estab- will be called the Gordie Howe years, Detroit is in a position where les-Davidson, plays lead guitar. based Charles Stewart Mott Founda- lish its first permanent shelter for International Bridge. there is an appropriate business Davidson, who stepped away tion to lead the Grand Rapids- homeless women and children. case for investment.” from a full-time touring music ca- based Dorothy A. Johnson Center for Ⅲ Ann Arbor-based social Miller also hired Virginia Wilkinson reer to help run his father’s billion- Philanthropy at Grand Valley State media firm Seelio Inc. was named $1 billion as director of strategy and research dollar William Davidson Foundation, University as executive director. entrepreneurial company of the The amount General Motors Co. and Regina Bell as a special advisor. had a performance scheduled for year at the annual meeting of Ann plans to spend on construction and Additional staffing changes: Ma- Saturday night at the UFO Factory in COMPANY NEWS Arbor Spark, the nonprofit eco- renovations at its Warren linda Jensen to vice president of Detroit, where the nine-track CD nomic development organization. Technical Center. The top-to- business development, Art Papa- was to be given away. Ⅲ The new Troy-based Beau- bottom overhaul is expected to panos to senior vice president and Fans can get the album, for the mont Health will change its signs OTHER NEWS result in 2,600 new jobs. chief board administration officer, cost of shipping, by emailing from green to cobalt blue and re- Kenyetta Hairston Bridges to direc- Davidson’s publicists at Blue Arrow brand five of its eight hospitals Ⅲ The Regional Transit Authori- tor of business development and Records in Cleveland, at with the Beaumont name. ty of Southeast Michigan, launch- 1.1 small-business programs, Jennifer [email protected]. Ⅲ According to an internal staff ing efforts to create a master plan The megawatts to be generated as Kanalos to director of brownfield re- The album may also be available memo written by executives at the on future regional transit, said part of a DTE EnergyCo. solar development, Tim Miles to director on vinyl at some point, said Debbie parent company of The Detroit routes along Woodward, Michi- project at Domino’s Farms in Ann of construction management and Gulyas at Blue Label. It also is ex- News, New York City-based Digital gan and Gratiot avenues will be Arbor Township.The project is Kelly Shovan to controller. pected to be available at First Media, a sale of the newspa- studied over the next year in cre- expected to produce enough drawnighmusic.com. per conglomerate is off the table ating the Building Equitable Sus- electricity to power 185 homes. Retail pop-up hopes to for now. The note was obtained by tainable Transit plan, with a goal attract Mackinac attendees ‘8 Mile’showing set for Crain’s. of putting a regional transit tax Michigan Theatre garage Ⅲ German auto supplier ZF before voters in 2016. $16.5 million Bring your wallet to the Mackinac Friedrichshafen AG said it completed Ⅲ Michigan tax revenue is pro- The value of the arbitration award a Policy Conference this year. Four De- Yo, check it. On May 30, you’ll be its $12.4 billion acquisition of safety jected to be $365 million higher circuit judge upheld in favor of troit small businesses are hosting a able to watch rapper Eminem’s “8 systems supplier TRW Automotive over two years than previous esti- former Compuware Corp. pop-up shop and cocktail party May Mile” in the parking garage that once Holdings Corp. Livonia-based TRW mates, AP reported. Lawmakers Chairman-CEO PeterKarmanos 28 from 3 p.m. to 7 p.m. at the Mis- was the opulent Michigan Theatre. will operate as a ZF division. hope to approve the 2015-16 against his former company. The sion Point Hotel as a way of highlight- One of the rap battle scenes in Ⅲ Jackson-based Consumers Ener- spending plan by early June. award stems from a lawsuit against ing the impact of small business. the 2002 biopic starring the Detroit gy Co. has received conditional ap- Compuware by Karmanos after he “We want to tell the success sto- native was filmed in the former the- proval to begin a 10 megawatt OBITUARIES was terminated in 2013 and stripped ries of Michigan’s economic turn- ater, built in 1925 by John Kunsky community solar program — of his stock options. around at the micro level,” said and opened in 1926. Michigan’s first — by the state Public Ⅲ Rachel Jacobs, CEO of Penn- Rachel Lutz, who is organizing the The flick starts at 9 p.m. and is free Service Commission. sylvania-based e-learning compa- event and is the owner of women’s to attend, but you have to be 18 or Ⅲ Livonia-based A123 Systems ny ApprenNet and co-founder of 14 clothier The Peacock Room. older — which makes sense because LLC will settle its lawsuit against digital expatriate alliance Detroit The number of stops on a planned Lutz will make available goods the movie is rated R for a whole lot of Apple Inc. over alleged employee Nation, died May 12 in an Amtrak transit system on the Detroit River from the Peacock Room as well as swearing, sexuality, violence and poaching by the California tech passenger train crash in Philadel- by the Detroit RiverFront her second shop, Frida. Joining her drug use. Bring your own chair. giant. In a document filed in U.S. phia. She was 39. Conservancy. The nonprofit will be Cyberoptix, which produces There will be concessions and District Court in Boston, although Ⅲ Sister Mary Canice Johnson, plans to raise $3 million to fund the whimsical, hand-screened men’s food from Detroit investor Dennis the final agreement is incomplete. founder of the Detroit nonprofit project, which is expected to ties that have been featured every- Kefallinos’ Niki’s Pizza restaurant. Ⅲ Lathrup Village-based Michi- Mercy Education Project, died May include water taxis and trolley where from Details to The New York Kefallinos owns the former theater gan First Credit Union opened the 12. She was 81. buses. Times. Rebel Nell, which hires and the attached Michigan Building. DBpageAD_DBpageAD.qxd 5/14/2015 3:47 PM Page 1

GC JOIN CRAIN’S AS WE Rewind The Tape IN AMERICAN HISTORY

with keynote speaker JOHN DEAN, former White House Counsel to President Richard Nixon Wednesday When it comes to fascinating tales of abuses of power and coverups, nothing tops Watergate. June 10 Join Detroit’s legal community to hear those stories from the trenches — direct from the attorney who had a front-row seat: John Dean.

Westin Book Cadillac, In recent years, Dean has become a national speaker on ethics and policy. His speeches for attorneys include tapes from the Library of Congress archives and his own take on an attorney’s Detroit role in advising the president of a potential wrong-doing.

2 p.m.-7:30 p.m. He’s written numerous books on his time in the White House, including the most recent: The Nixon Defense: What He Knew and When He Knew It.

Speakers throughout the day will help in-house attorneys hone their craft with perspectives from other attorneys but also from c-suite executives who interact with in-house attorneys. 3OXV PANEL DISCUSSIONS WILL HIGHLIGHT:

David Behen Dan Follis Mike Heneka • Managing the ups and downs of a CIO, State of Michigan former general counsel, CEO, business cycle Cybersecurity strategies Compuware Faurecia North America for attorneys Lessons learned taking a Expectations of a CEO • Practical information on managing public company private for the legal team finance topics • Trends in e-discovery • Strategies for cybersecurity • Proactive approaches for social media policies Michael Hluchaniuk Janet Kelley Jim Merklinger • Lessons to learn on taking a judge, U.S. District Court general counsel, Meijer chief legal officer, Association company private Trends in e-discovery Strategies to protect of Corporate Counsel digital networks Best practices for attorneys

Seating is limited. Register today: crainsdetroit.com/events, or call (313) 446-0300

IN PARTNERSHIP WITH SESSION SPONSORS NOTEBOOK SPONSOR BAG SPONSOR MAJOR SPONSOR TITLE SPONSOR

IN COOPERATION WITH BREAK SPONSOR LOCATION SPONSOR DBpageAD_DBpageAD.qxd 5/12/2015 1:55 PM Page 1