FEBRUARY 20 - 26, 2017

Cottage Inn A mini-boom bakes up a in home growth plan construction? Pizza chain looks to expand in Midwest — and Fewer homes are on the to China, Page 4 market, spurring demand for new building, Page 3

Entrepreneurship For Moosejaw co-founder, a whirlwind of big deals By Annalise Frank any time soon. But if he could see him- [email protected] self doing something else much further For most entrepreneurs, the sale of down the line, it would be advising and a business they started is an achieve- possibly investing in startups with his ment of a lifetime. For Robert Wolfe, brother Jerey. ey recently helped it’s just another week. their cousin Anthony Mendelson start Wal-Mart Stores Inc.’s purchase last California-based Mighty Audio. week of Madison Heights-based out- “It isn’t something I’ve investigated door apparel and gear retailer Moose- at all” as an option for the future, jaw for $51 mil- Wolfe said. But “we have some experi- lion even ence in startups. … We’ve made all the surprised its mistakes before.” co-founder. Moosejaw will continue to operate When the its online sales at Moosejaw.com and company’s rst 10 existing storefronts, Wal-Mart store opened, “I said in a statement. Moosejaw’s loca- was 21 years old tions include downtown , Bir- and I had no idea mingham and Ann Arbor. what I was do- e company vows to maintain its Robert Wolfe: ing,” said Wolfe, independent identity as part of the re- Co-founded who still owned a tail world’s biggest goliath, but Wal- Mike Ilitch’s x-up of the was one of the most consequential restoration projects in Detroit history, and in 1990, he MooseJaw and minority share in Mart adds nancial and marketing accepted the National Preservation Award from the National Trust for Historic Preservation. CrowdRise. the company at muscle that could help it expand. the time of the “We’ll still be selling the same sale. “I would have never, ever antici- brands, same marketing voice, but pated that this would have hap- have a much bigger budget, I suppose Ilitch: A complex legacy pened.” you’d say,” said Eoin Comer- It was the second sale of one of ford, Moosejaw’s CEO. Fox restoration a jewel, preservation community, which lauds him Wolfe’s startups this year, after the Comerford and his team will over- for his restoration of the Fox but laments January sale of the crowdfunding site see outdoor retail across all of Wal- but tensions over what it views as unnecessary levelings of CrowdRise to GoFundMe. Wolfe is Mart U.S. e-commerce properties as demolitions simmered old buildings. still CEO of CrowdRise. part of a change in how those sales are e Fox was one of most consequen- Wolfe said he hasn’t “even taken 10 structured, Wal-Mart spokesman By Kirk Pinho tial restoration projects in the city’s his- seconds o” since the sale of either Ravi Jariwala told Crain’s. [email protected] tory. It was a $12 million grenade that company. Moosejaw’s expertise, rich visual In 1990, Mike Ilitch accepted the Nation- Ilitch, who died Feb. 10, threw at the no- He said he has no intention of leav- marketing material and wealth of al Preservation Award from the National tion that Detroit wasn’t a good place to ing CrowdRise, a company he adores, SEE MOOSEJAW, PAGE 18 Trust for Historic Preservation for the reno- do business or invest. vation of the Fox eatre. Fifteen years later, But the national award and other Mike preservationists stood in front of a bulldoz- plaudits that project won weren’t on Ilitch er to try to stop his demolition of the Il- Nancy Finegood’s mind 12 years ago itch-owned Madison-Lenox Hotel. when she did something she had e controversial 2005 demolition in the never done before and hasn’t done run-up to Super Bowl XL illustrates just since. how complex — and sometimes testy — Il- e executive director of the itch’s relationship was with the historic SEE ILITCH, PAGE 21 Who owns the Tigers? Family plan a matter of trust

By Bill Shea pher Ilitch, the son of Mike and [email protected] Marian who has run the team’s day- It’s a simple question with a to-day business operations since somewhat complex answer: Who 2004, became the de facto owner TYLER CLIFFORD/CRAIN’S DETROIT BUSINESS owns the ? and chief executive of the Tigers Madison Heights-based Moosejaw was sold to Wal-Mart Stores Inc. last week. Mike Ilitch, who bought the team upon his father’s death. He ulti- for $85 million in 1992, died Feb. 10 mately will decide the nancial di-

© Entire contents copyright 2017 at age 87. Because his widow, Mari- rection of the franchise, and the by Crain Communications Inc. All rights reserved an Ilitch, owns MotorCity Casino ownership change comes after the crainsdetroit.com Vol. 33 No 8 $2 a copy. $59 a year. Hotel, she is prohibited from inher- team’s senior management had al- Runs : iting the Tigers under Major League Chris Ilitch: ready signaled that the era of Mike the team’s Owns MotorCity ’s rule that forbids team Ilitch’s free spending on players is operations. Casino. owners from having any stake in over. gambling operations. e actual owner of the team is at complicates the ownership League has no such prohibitions. the trust, however, and such trusts question for the Tigers in ways it As part of estate and succession oer a way around MLB’s gambling

NEWSPAPER doesn’t for the Ilitch-owned Detroit planning, the Tigers at some point rules. Red Wings; the National Hockey were put into a trust, and Christo- SEE TIGERS, PAGE 22 2 CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017

INSIDE BRIEFS BANKRUPTCIES 19 CALENDAR 14 MC Sports les Chapter 11, Sleeping Bear Dunes Visitors Bureau the Michigan Republican Party and a CLASSIFIED ADS 17 plans liquidation sales violates his First Amendment rights. prominent Ann Arbor real estate de- State law allows tourism agencies to veloper, was unanimously elected as DEALS & DETAILS 15 Grand Rapids-based MC Sports levy a tax if lodging owners vote. A chairman again after Ronna Romney KEITH CRAIN 8 led for Chapter 11 bankruptcy last similar lawsuit was dropped last year McDaniel stepped down to become MARY KRAMER 9 week and said it planned liquidation after a Cheboygan County resort head of the national party. Weiser was sales at all 68 of its stores in seven owner sold his property. elected to the University of Michigan OPINION 8 states, including three in Southeast J Although automakers expect a drop board of regents last year and was am- PEOPLE 16 Michigan. e privately held sport- MC SPORTS in auto sales this year after a spike in bassador to the Slovak Republic under The MC Sports store at Lakeside Mall in RON FOURNIER 8 ing goods company cited poor holi- 2016, Comerica Bank projects Michi- President George W. Bush. Sterling Heights is among three day sales, increased competition, gan’s economy will grow 2.6 percent in J LG Chem Michigan Inc. an- RUMBLINGS 23 locations in Southeast Michigan. the growth of e-commerce and the 2017 on the heels of automaker in- nounced an expansion project that WEEK ON THE WEB 23 “blurring of distribution channels” 7-4, would ful ll a nearly decade-old vestments. e Dallas-based bank, in could yield upward of 150 new jobs at as being among its challenges. promise to reduce the 4.25 percent its latest Michigan Economic Out- its headquarters in Holland, MiBiz COMPANY INDEX: MC Sports’ plan to wind down tax to 3.9 percent after it was raised to look, said new technology develop- reported. e manufacturer of lithi- SEE PAGE 22 and sell o its merchandise won the help balance the budget in 2007. Op- ments such as autonomous vehicles um ion battery cells said it will begin interim approval of a U.S. Bankrupt- ponents said the reduction would will spur new economic activity. construction of the 100,000-square- turing positions, with 20 technical cy Court judge on ursday. It was cost the state’s $10.5 billion general J e Michigan Public Service foot expansion in March and expects positions. e company is expanding not immediately clear what would fund $680 million in revenue next Commission said all power provid- the project to conclude in August. its workforce, currently at around happen to MC Sports’ approximately budget year and $1.1 billion the fol- ers met or exceeded a requirement e company did not share how 330, because of a contract signed 1,300 employees. lowing year at a time the budget will to supply 10 percent of their electric- much it invested in the project. with Chrysler in November. Ful lling Among its stores are locations at tighten due to other tax cuts and pol- ity from renewable sources in 2015, J High-end luxury carpet manufac- the contract will require the compa- Lakeside Mall in Sterling Heights, icy changes. AP reported. e standard will in- turer Scott Group Custom Carpets ny to expand to an additional build- Briarwood Mall in Ann Arbor and J e owner of two inns in northern crease to 12.5 percent in 2019 and to LLC acquired Grand Rapids cross- ing and purchase more equipment. Town Square Shopping Center in Michigan is challenging a room tax 15 percent in 2021. e MPSC said town rival PWV Studios Ltd., MiBiz J A new addition to the luxurious Brighton. MC Sports opened its rst that is used to promote tourism the 10 percent standard has led to reported. PWV makes luxury carpets e H Residence development in store in Grand Rapids in 1946. around Sleeping Bear Dunes Na- the development of more than 1,670 for business aviation, commercial downtown Midland is Gratzi, an up- tional Lakeshore, AP reported. David megawatts of new renewable energy and high-end residential markets. scale Italian restaurant. e 200-seat MICH-CELLANEOUS Gersenson, who runs Sylvan Inn and projects, mostly wind farms. e acquisition will allow the Scott eatery, with an unspeci ed opening J A Republican-led House panel Lakeshore Inn in Glen Arbor, led a J Gov. Rick Snyder named former Group to expand its product line into date, is owned and operated by voted to cut Michigan’s income tax lawsuit last week that could impact state Rep. Aric Nesbitt as Michigan the business aviation market and of- Mainstreet Ventures, the Ann Ar- next year and eliminate it over a the more than 50 tourism agencies lottery commissioner. e Lawton fer additional textures and patterns. bor-based company behind e Real number of decades despite “serious around the state that rely on the spe- native, will replace M. Scott Bowen, J US Farathane in Port Huron ex- Seafood Co. in Bay City and Ann Ar- concerns” lodged by Gov. Rick Sny- cial room tax. Gersenson said he can who is resigning to pursue pri- pects to add 155 jobs through the bor, MLive.com reported. Mainstreet der’s administration, AP reported. eectively advertise on his own and vate-sector work. summer, e Times Herald in Port operates a similar Italian restaurant, Supporters said the bill, approved that the 5 percent tax collected by J Ron Weiser, a former chairman of Huron reported. Most are manufac- also called Gratzi, in Ann Arbor.

ilitchbusiness.wayne.edu CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017 3

Real estate Health care Ordinance McLaren Flint would require at odds with aordable state, Fieger housing Detroit rule targets home on water crisis projects of 20 units or more By Chad Livengood By Kirk Pinho [email protected] [email protected] and Jay Greene A proposed Detroit ordinance [email protected] would require developers to make McLaren Flint Hospital is en- 20 percent of their units a ordable snarled in a high-stakes ght with for low-income renters. the state’s health department and e plan, being worked on by De- attorney Geo rey Fieger over its troit City Council member Mary handling of a deadly outbreak of Le- Sheeld and Mayor Mike Duggan’s gionnaires’ disease linked to Flint’s administration, would be another water contamination crisis. requirement for developers, just a e long-simmering battle with few months after city voters ap- the Michigan Department of Health proved an ordinance requiring those and Human Services burst into full seeking large projects to negotiate public view last week when the state benets for the surrounding com- agency used condemnatory lan- munity. guage to describe the hospital as “e development community “unsanitary” and a potential hazard prefers to have clear guidelines and for patients. expectations,” Sheeld said. “If they e state health agency has fo- know what we are requiring, it’s writ- KIRK PINHO/CRAIN’S DETROIT BUSINESS cused its attention on McLaren Flint ten; they prefer that to coming in and The Stonegate subdivision in Lake Orion near Squirrel and Dutton roads will have 111 homes ranging from $350,000 to $450,000. because 10 of 12 people who died in not exactly knowing. I don’t think it’s Genesee County’s 2014-15 Legion- going to hinder the process and slow naires’ outbreak had contact with anything down.” McLaren before contracting the re- As currently written, the draft or- New housing shows growth spiratory disease. dinance would require developers of Only two patients were genetical- residential projects with at least 20 ly connected to legionella bacteria units make 20 percent of them af- found at the hospital. However, a fordable based on area-median in- as fewer homes ready to sell third person with the same strain of come if they are built on city-owned Legionnaires’ had no contact with land or in city-owned buildings, or Steep drop in inventory spurs increase in residential construction McLaren, which is part of a state- receive funding from the city through wide, multibillion-dollar hospital things such as a Community Devel- By Kirk Pinho Realcomp Ltd. in Lake Orion near Squirrel and chain that includes McLaren Pontiac opment Block Grant or HOME In- [email protected] II, which tracks Dutton roads with 111 homes rang- and McLaren Mt. Clemens. vestment Partnership Program that Buyers are having an increasingly sales, median ing from $350,000 to $450,000. More McLaren Flint ocials say the come to the city through the U.S. De- dicult time nding move-in-ready sale prices and than half of those have been sold, state is trying to shift blame for its partment of Housing and Urban De- homes in metro Detroit, helping how quickly Wertheimer said. failure to act on the legionella out- velopment. drive an increase in new homes be- homes are sold. Sure enough, SEMCOG shows break in 2014 and 2015 when at least e ordinance has not yet been ing built. In January modest increases in building per- 78 other people in Genesee County introduced. But don’t expect the region to 2016, there mits issued every year since 2009. became sick with the u-like and Richard Hosey II, who owns De- come close to the housing boom of were 18,194 Still, the 5,519 issued last year pale sometimes deadly disease. troit-based Hosey Development LLC the early and mid-2000s, which listings. By last in comparison to the 16,471 issued e nger-pointing between Mc- and is a partner with Detroit-based helped bring the national economy Howard Fingeroot: month, there in 2000. Laren and state health ocials is Capitol Park Partners LLC, said he to its knees by 2008. Rather, the mar- Saw strong sales in were just Howard Fingeroot, managing backdropped by Attorney General understands the intent of the ordi- ket for new construction is looking December. 10,172, a 44.1 partner of Bloomeld Hills-based Bill Schuette’s lingering criminal in- nance. But, he said, it's important to increasingly healthy for homebuild- percent plunge. Pinnacle Homes, says his home- vestigation into the Flint water crisis ensure the rules don't hinder devel- ers. And this January’s numbers were building company’s sales last year and a looming $100 million civil law- opment. More than 11,000 single-family not an aberration: In each of the last were the highest they’ve been — suit against McLaren over the Le- “e issue is making sure that it’s building permits were issued every several months, year-over-year even in December, traditionally a gionnaires’ deaths. always nancially feasible,” said year, and nearly 87,000 in all, from on-market listings have fallen by at slow sales month. “You’ve got criminal, civil, admin- Hosey, who is also a member of the 2000 to 2005 in the region, accord- least 38 percent. “December was actually the istrative and then add in politics. I Downtown Development Authority ing to Southeast Michigan Council “ere is not a lot of really good strongest sales month of the year for don’t think you could make for a board of directors. “Because there of Governments data. But with the used homes for sale, so we are see- new homes,” he said. more toxic situation,” said Peter are fewer incentives available to help region reeling from an economic ing some slow growth,” said Randy A report released last week by Re- Henning, a law professor at Wayne get things across the nish line, it’s a uppercut, in 2009 there were just Wertheimer, CEO of Farmington alcomp Ltd. II said that home and State University. “is is going to careful balance to make sure it’s not 1,331, the fewest this century. Hills-based builder Hunter Pasteur condo sales fell 0.1 percent from take years to sort out.” stopping development, especially in And the number of homes avail- Homes. 3,778 in January 2016 to 3,775 last Last week, DHHS took extraordi- the expanse of the city.” able for sale has plummeted, ac- For example, the company is month in Wayne, Oakland, Macomb nary measures to impose an SEE HOUSING, PAGE 19 cording to Farmington Hills-based building the Stonegate subdivision SEE BUILD, PAGE 19 SEE WATER, PAGE 17

Hospital MUST READS innovation OF THE WEEK Beaumont Hospital plans to commercialize mobile oxygen Costs of climate change tank-IV system to ease Insurance industry works to plan for expectation of more natural disasters, patient movement, Page 6 Special Report, Page 10 4 CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017

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©2017 Pentastar Aviation®. Air charter transportation services are provided by Pentastar Aviation Charter, Inc., D86)$53DUWRQGHPDQGDLUFDUULHURUE\RWKHU86)$53DUWFHUWLÀFDWHGRQGHPDQGDLUFDUULHUV arranged by Pentastar Aviation, LLC. Cottage Inn Pizza growing in Midwest, looks to open 200 locations in China By Kurt Nagl e restaurants in China will be Masse said. [email protected] primarily full service, with menu When competitor Domino’s Piz- Ann Arbor-based Cottage Inn tweaks to cater to the culture, in- za dipped its toe into the Chinese Pizza is expanding with 10 locations cluding oerings like Durian fruit, market, it found tough going for a in Indiana, Illinois and Ohio as it seafood and vegetables not com- while. prepares for even more growth in mon in the U.S. Ann Arbor Township-based China. “It was evident that going out to Domino’s has nearly 100 stores in e 10 Midwest locations are set eat is more tting for the culture in China, primarily around Beijing and to either open or be in development China, although the Cottage Inn Shanghai, but got o to a slow start by the end of the year, according to a Pizza restaurants in China will oer there due to locals’ eating habits. news release. delivery through third-party ven- Now, Domino's is seeing more Owned by the Michos family, Cot- dors and do oer pickup as well,” growth in the country. tage Inn operates more than 50 loca- tions — most of them franchised — HELPING COMPANIES NAVIGATE THROUGH in Michigan, Ohio, Florida and DIFFICULT BUSINESS SITUATIONS North Carolina. Nine delivery loca- tions in the Ann Arbor and Lansing • Turnaround, Workouts & Restructuring markets are corporate-owned, as • Performance Improvement well as two full restaurants in Ann • Litigation Support Arbor, including the original that • Fraud Investigations & Forensic Accounting opened in 1948, said Deborah • Executive Coaching Masse, senior vice president at Cot- tage Inn. e investment required to open a Cottage Inn Pizza franchise is $200,000-$350,000. calderonelight.com “Our pizza is a mainstay of both college students and families in Michigan, and now we’re ready to bring our brand to pizza lovers across the country,” Masse said. is Midwest expansion coin- cides with the company’s eorts to grow internationally, with up to 200 locations planned to open in China LAST CHANCE over the next 15 years. Cottage Inn opened its rst and only restaurant in China in Qingdao late last year. TO NOMINATE “China’s population and love of the western world, especially pizza, ENTRY DUE: is reason enough” to expand there, Masse said. “Since Pizza Hut has FEB. 28 been in China for a while, our inves- tors say the Chinese people are look- ing forward to more choices, some- Crain’s Twenty in their 20s thing new.” celebrates young professionals e pizza chain has partnered who are making waves within their with Chinese investment group Kai- company, have shown success xin-ke Catering to develop the or originality as an entrepreneur restaurants. ey hope to open 30 or have made a positive and stores by the end of 2018, and 30 noteworthy impact in their more every two years through 2030. community. e expansion will begin in Qingdao and ideally spread to Shanghai and Beijing. Find the details at CrainsDetroit.com/nominate at ambitious plan “depends on the developers’ reach with investors and how far they can go,” Masse said.

6 CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017 Beaumont to commercialize its mobile oxygen tank/IV system By Jay Greene [email protected] Beaumont Hospital clinical de- signers Greg Megahan and Rocco Ottolino were asked in 2014 by nurs- es in the Royal Oak hospital’s pulmo- nary mobility unit to nd a safer and less expensive way for patients to get mobility exercises. Patients in pulmonary units are attached to multiple medical devic- es, including heavy oxygen tanks for breathing and delicate IV infusion lines for medicine delivery. ey also often need to move around hos- pital oors for exercise. When they do, sometimes two or three nurses or aides must accompany them to keep the medical devices from falling o the rolling carts or the tubes from crossing or crimping. Assisting patients to move around safety is costly from a stang per- spective and can potentially lead to accidents if sta members aren’t careful. Megahan, a clinical engi- neer, and Ottolino, a health care equipment planner, felt there must be a better way. “ere is a need for a nurse and other sta members to help ambu- BEAUMONT HEALTH late patients on oxygen,” said Ottoli- Beaumont health care equipment planner Rocco Ottolino (right) tests the design no. “What they had available to them features of a mobile oxygen tank/IV carrier he and clinical engineer Greg Megahan wasn’t sucient. It had an IV pole developed. Joe Tuchman, president of RiseMobility LLC, which is marketing the with an infusion or medicine pump, device, is posing as a patient for the test. and an oxygen tank on a rolling cart that required many people to help” with because it is large, heavy and unbalanced. Over a series of shifts, Megahan, a clinical engineer, and Ottolino ob- served the mobility exercises with the patients. ey analyzed the problem with the existing IV/oxygen tank carriers. en they came up with an innovative solution — a metal clamp that secures all medical devices with a single mount on a four-wheeled rolling cart. If the product tests underway in the Beaumont's 35-bed pulmonary unit are successful, which so far they appear to be, the mobile IV/oxygen tank holder may be commercialized and sold to other hospitals. Beaumont has signed a licensing and marketing agreement with a Detroit-based startup company, RiseMobility LLC, headed by Joe Tuchman, an Oakland University business school graduate. “I did market research to see if the product was viable,” Tuchman said. “I called 50 hospitals in Michigan, Illinois and Wisconsin to nd out what problems they had (with IV poles on rolling carts) and if they were interested in a solution.” Tuchman then needed to nd a manufacturer that would mass-pro- duce the devices for much less than the $300 it cost Beaumont to build in its machine shop. He found Opus Mach, a startup manufacturer in Warren. “ey were able to do it for $63. Beaumont bought 12 to test.” Richard Kennedy, vice president of the Beaumont Research Institute, said the invention is a relatively straightforward design to improve SEE MOBILE,PAGE 7 CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017 7

“This will free up porate this into their budgets,” he said. MOBILE Ottolino said they did not estimate Penske completes acquisition of FROM PAGE 6 hands and cost savings because it is dicult to U.K. used car dealership CarShop patient care, safety and sta eciency. minimize the prove. “is will save nurses time and “is will free up hands and mini- require less nurses to ambulate pa- By Tyler Cli ord our diversication strategy within mize the number of people needed number of people tients,” he said. tcli€[email protected] the transportation services indus- to help transport people with oxygen needed to help So far, Tuchman said he has re- Penske Automotive Group Inc. try,” Penske Automotive Group tanks,” Kennedy said. ceived interest from the MidMichigan completed its acquisition of United Chairman Roger Penske said in a Kennedy also oversees the Beau- transport people Medical Center in Midland and St. Kingdom-based CarShop, the auto statement. “e CarShop acquisi- mont Commercialization Center, with oxygen John’s Hospital in Detroit. “ey are retailer announced ursday. tion along with the acquisition of which tests employee ideas and pur- waiting on more feedback from the e Bloomeld Hills-based com- CarSense in the United States sues patents for innovations. tanks.” test,” he said pany said it expects the deal to gen- strengthens our position in our “is is a perfect example of how Richard Kennedy, Once he has the test results, Tuch- erate about $340 million in annual core markets and provides scalable Beaumont, Oakland University and Beaumont Research Institute man plans to start selling the devices revenue. CarShop, founded in 1999, future growth opportunities.” its graduates can improve patient for about $120 each using traditional operates ve large-scale retail loca- Last month Penske said that it safety and care,” Kennedy said. complete the trial stage this month phone sales and has a website, tions in Europe that specialize in will retain CarShop’s 500 employ- “Beaumont wants to be more in- and make the devices available to de- www.detroitmedicalsupply.com, high-quality used vehicles. ees and name. Penske said that an- volved in local companies, and the partments, which could include pul- where he can sell through the internet. “e acquisition of CarShop nual used car sales in the U.K. are technologies we can develop can monary and intensive care units. Jay Greene: (313) 446-0325 complements our existing core almost three times that of new ve- have applications elsewhere.” “It will take time for people to incor- Twitter: @jaybgreene auto retail business and furthers hicle sales.

Design features

After talking with nurses and eval- uating older mobile oxygen/IV de- signs, Ottolino said he and Megahan in mid-2014 approached Joseph Ko- bryn, Beaumont’s instrument mak- er, with their design. Kobryn, who got his start in the automotive indus- try, had a few extra ideas and the rst prototype was built. Oakland Uni- versity was contacted in late 2015. “e sta loved it. ey didn’t have to worry about the old ones breaking,” said Ottolino, adding that none of the oxygen tank carriers ac- tually broke but sometimes nurses heard the IV poles make cracking sounds. “e ones sta used were temporary, just a snap on and o de- sign. We wanted something dura- ble.” Ottolino explained there are other IV/oxygen tank poles on the market, but most are insuciently strong and fall over too easily. Beaumont's IV/oxygen tank holder design features include the following: a top and base that are more closely in line with the size of the oxygen tanks; tanks that rest in the base and are stabilized with a top bracket; and an adjustable spine applicable for shorter and longer “Almost everything I have in my life tanks. resulted from my MBA at Michiggan State Ottolino said Beaumont’s design University. How many people can say ensures that no matter how the de- they were able to raise two children as a vice is rotated, it will not tip over. It single para ennt, work a full time,, and earrn also was designed and tested to en- an MBA all at the same timee. There’s really sure it rolls smoothly on a variety of not much you caan’t do afa ter that.” types of oors. Megahan said their design has four screws to hold the With classes held every other weekend for pole onto the cart. Other designs 20 months, an Executive MBA from the have two screws with wing nuts, he said. Broad College of Business gives you the “We are always considering pa- opportunities to make business happeen. tient safety and felt we needed a du- rable one that could be used by one RRAACHC EL BAUAUERER, MBBA ’113 sta member,” Ottolino said. RERREGEGGIONONO ALAL LEALEEANNMMANANAANAAGERGEG As part of the ongoing evaluation, DETDEDETTROIT MEDIEDD CACALALAL CEENTENTTEER the 12 purchased devices from Opus Mach are being tested on the 35-bed pulmonary oor. One unanticipated problem, however, has slowed down the evaluation. “Other units are poaching them. Learn more at: IV poles (on rolling carts) are not ex- BROAD.MSU.EDU/RACHEL clusive to any one room. ey are moved with the patient. When a pa- tient goes to another oor, the pole goes with them,” Ottolino said. “We have the devices wandering away, and getting them back is like a nee- dle in a haystack in a 1,100-bed hos- pital.” Still, Megahan said they hope to 8 CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017 Clash over closings reignites interest in citywide education commission

est Michigan businesswoman the value in bringing organization, OPINION Betsy DeVos’ ascension to U.S. strategy and accountability to all Weducation secretary and renewed un- public schools in Detroit — regard- certainty in Detroit's public schools less of the adults or institution in A beautiful friendship could be an opportunity to nish an charge. overhaul of how public education is But the commission concept died delivered to Detroit children. in the Michigan House of Represen- with our readers e month-old Detroit Board of tatives, where the powerful school disappointed reader wrote: Education and Mayor Mike Duggan CHAD LIVENGOOD choice lobby wielded its inuence “Have been a subscriber and have threatened to sue Gov. Rick Sny- [email protected] over rst- and second-term members Areader of Crain’s Detroit Business for der’s administration to stop the state Twitter: @ChadLivengood in an election year. over 30 years. Always enjoy the news School Reform Oce’s plans to shut- One of the leading opponents of and the ‘behind the scenes’ columns. ter 25 public schools in Detroit. Detroit business, philanthropic, civic, the DEC was the Great Lakes Educa- ere is news in Crain’s that can’t be Duggan and the board members education and religious leaders who tion Project, or GLEP, a group Betsy found in other publications. Recently contend the Detroit Public Schools pushed Snyder and Duggan in 2014 DeVos founded in the early 2000s af- though, maybe with a change in RON FOURNIER Community District hasn't been giv- to endorse the creation of the Detroit ter two stints as chair of the Michigan leadership, the publication has taken Editor/Publisher en a chance to turn around failing Education Commission. Republican Party. a new route and there seems to be an schools after they just got relieved of e Coalition for the Future of De- GLEP, which operates both as an overabundance of news with a strong crushing debt by the Legislature. troit Schoolchildren was as diverse of education reform advocacy group political vein and I nd that trouble- Here’s the simple ey also argue that the School Re- a coalition as anyone can remember and a political organization that in- some! Articles such as … ‘Local biz fact about my form Oce has no concrete plan for in recent . e co- uences the outcome of Republican worries …,’ ‘Resettlement agencies ...,’ politics: I’m an where the estimated 18,000 students chairs varied from Rakolta to the Rev. primaries, considered the commis- ‘Duggan’s future …’ and ‘Rise up, De- in Detroit should attend school next Wendell Anthony, president of De- sion a way for the government to troit …’ are just some examples of a independent. I year — a point the Snyder adminis- troit Branch NAACP. Politically, those prop up DPS at the expense of charter new political focused trend. If this is cover issues tration hasn’t disputed. two men are polar opposites. schools. the new philosophy and trend, count e latest city-state hostilities have As coalition leaders envisioned, e School Reform Oce, or SRO, me out!” objectively. ... some Detroit business leaders think- the Detroit Education Commission which is under Snyder’s control, has is is a business publication and Where others see ing it’s time to reignite debate over could better organize a fractured sys- eectively assumed the role of the it always will be. But we live and creation of a citywide commission tem of public schools run by a dozen Detroit Education Commission, de- work in hyper-politicized times, red or blue, I see that could have the power to open charter school authorizers, Detroit ciding which schools close. But un- which means part of Crain’s mission gray. new innovative schools and close Public Schools and the Education like the commission concept, the is to help readers navigate the unruly poor-performing schools in Detroit Achievement Authority, an entity SRO has no real plan for providing intersection of public policy and Here’s the simple fact about my — regardless of who operates them. Snyder created in 2012 in a Hail Mary alternative solutions to the Detroit business. politics: I’m an independent. I cover “If it turns out that the mayor and attempt to turn around the worst of children in these schools. I replied to the subscriber, Bill issues objectively and form my opin- the school board and the governor Detroit’s worst-in-the-nation public e SRO’s own letter to Detroit Kalmar of Lake Orion, who gave me ions freely. I don’t respect either par- and the (School Reform Oce) are schools. parents provided other school op- permission to publish his notes and ty. Where others see red or blue, I see going to get embroiled in a lawsuit, Snyder, Duggan and the coalition tions for their children that were al- name. gray. then I think we need to dust o our got the $617 million nancial lifeline most entirely outside of the city lim- “Hello, Bill. Two of the stories you I’m not perfect. (Detroit Education Commission) they sought to relieve DPS of crush- its. e list included far-ung places mentioned happened to be my opin- I’m not predictable. proposal and pass that,” said John Ra- ing debt, most of which was piled up like Anchor Bay, Monroe, South Lyon ion column: Just one man’s opinion, I’m not political. kolta Jr., chairman and CEO of Wal- by a succession of emergency man- and Whitmore Lake. designed to provoke thought and ac- I’m just a new publisher and edi- bridge Aldinger Co. agers that ran the state’s largest Duggan says the SRO’s letter has tion, and even disagreement. Please tor who writes columns — the new is would require all sides to set school system from 2009 until Jan. 1. caused parents to begin looking for feel free to write your opinion on the guy in town who wants to tell your aside their talking points and precon- e Republican-controlled Michi- other school options outside of the mayor’s re-election or the president’s stories and help nudge our commu- ceived notions about each other’s in- gan Senate voted in favor of the com- city, raising the specter that the order and we will likely publish it. nity toward a common good. I will terests — just as the coalition leaders mission, an idea that was champi- school closures could fuel more pop- “Our pages are your pages. make you happy some days, angry did two years ago. oned by Goe Hansen, a GOP senator ulation loss for Detroit at a time when “ e other two stories came from on others, as I slowly earn your trust Rakolta co-chaired the coalition of from Oceana County. Hansen saw SEE CLOSINGS,PAGE 9 straight-news reporting. We asked lo- as a business columnist, editor and cal business leaders how the presi- publisher. dent’s order might aect the business Like reader Bill Kalmar, you might community and reported to you what need to set me straight. they told us. No fear or favor.” As our email exchange contin- One of the columns that jarred ued, Bill told me: “Guess I will moni- A tough choice on jail issue Bill Kalmar (and, judging from my tor the ‘new direction’ of Crain’s De- Every day, I get to see the very bad supposed to be. inboxes, many other readers) was troit Business and respond when I feel reminder of Robert Ficano’s mis- It sounds like a great idea, but my Feb. 6 argument against Presi- passionate about something … .” judgment on the never-completed like all plans such as this, the devil dent Trump’s executive order on im- I replied: Wayne County jail. It is certainly a is in the details. And it appears that migration, based on moral, organi- “Hi, Bill. Please do respond and millstone around County Executive Evans has hired a few devils to sort zational and economic grounds. push and criticize. at’s what friends Warren Evans’ neck, and I am sure out the details for him, delaying the While the column was accurate and do. that no one would like the issue set- decision-making for a while longer. the topic is important to Crain’s “ e paper reports the news and tled more than Evans. e idea of adding a soccer sta- readers, I regret my preachy tone. uncovers stories that other outlets And last week, just to make mat- KEITH CRAIN dium to this sports complex down- e emotionally charged lan- might have missed. Its columnists ters worse, a bunch of protesters Editor-in-chief town makes a lot of good sense, guage (“Rise up, metro Detroit. Lean frame that news with analysis and took over the county meeting room clustering them all together, but the in. Speak out”) was, in hindsight, at even opinions to challenge Detroit’s where commissioners were deciding we have to pick between ugly and taxpayers are growing weary of least a tad arrogant. I haven’t been big thinkers. People like you.” whether to fund reviews of compet- lousy. footing the bill for sports stadiums. back home long enough to make a Bill quickly replied with a quote ing proposals on that unnished jail. Now I am the rst to admit that We will have to nd out just how call to action. Also, I should have led from “Casablanca,” the movie clas- ey were protesting the jail. Not the 3-year-old unnished jail is just much it would cost to move every- with the economic argument rather sic. “Louis,” he wrote, “I think this is the new jail, not the unnished jail, about right across the street from thing in our justice system out of than save it for the column’s conclu- the beginning of a beautiful friend- but any jail. ey would like some- our oces. Sort of a Detroit version downtown. sion. ship.” thing else being done with the mon- of Alcatraz: Pretty unattractive, but We don’t even know whether Finally, I should have known that I think he’s right. ey earmarked for some jail. It would you get used to it after a couple of their idea for a soccer team will some people would read the column appear that they are simply against years. have the support that baseball, and assume I’m an anti-Trump lib- Ron Fournier is editor and publisher of any sort of civil order and prefer Dan Gilbert and Pistons owner football, basketball and hockey al- eral, a narrowed mind. In my old life Crain’s Detroit Business. Catch his some sort of anarchy. have been dangling a ready have in our city. in the nation’s capital, I saw how take on business news at 6:10 a.m. Meanwhile, Evans has to take a tempting oer in front of Evans to Warren Evans will have to gure Democrats misconstrued my critical Mondays on the Paul W. Smith show look at a couple of choices and ip a swap that site, put the jail and that out. But let’s not get mad at coverage of Hillary Clinton as proof on WJR AM 760. coin to decide. Neither choice seems courts farther north and build a him if he rejects the plan. We will that I’m conservative. very appealing, but sooner or later soccer stadium where the jail is just have to wait and see. CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017 9 Family business focus at Ilitch school could help other rms Mike Ilitch Arena? I heard a couple but still kept vestiges of the “mom- chronicled over the past week. eir School of Business. It’s under con- of people last week wonder if the Ilitch and-pop” roots where it all started. investment and the move of the Little struction just north of the arena. family would rename the new sports And an Ilitch — Christopher — is now Caesars headquarters to the Fox e- I have a modest suggestion: Fami- arena in the late patriarch’s honor. the family leader of the combined atre earned Mike the Crain’s News- ly-owned business built the Ilitch em- My guess is that Ilitch himself family-owned enterprises. maker of the Year award for 1987. In pire. ere have been rough patches would be the rst to veto that idea. Lit- is is a family that could have been 2016, he and son Christopher were over the years, including the parts vari- tle Caesars Arena supports the brand Detroit royalty, but you didn’t see the honored — for an even bigger invest- ous siblings played — or didn’t play — he and his wife built from a one-store Ilitches or their seven adult children ment in the new Arena in the kingdom. Maybe a focus on pizza joint to a more than $3 billion-a- MARY KRAMER out on the social circuit so much. But and e District Detroit development “family business” at the Ilitch School of year operation, the largest takeout piz- Group Publisher you often saw them at the games. I just that will surround it. And Marian Ilitch Business would help other companies za chain in the country and the don’t think the family has ever gotten has been on our list of Most Inuential learn how to navigate the delicate rela- third-largest pizza company in the organization ever obtained the com- used to being in the public spotlight. Women, not just for her role in the tionships that every family business country (behind its No. 2 rival, Ann Ar- pany’s nancial statements. Maybe last week’s outpouring of love family businesses but as owner of Mo- has, regardless of size. bor-based Domino’s, and Pizza Hut). At that time, the pizza company was and respect for the patriarch will let torCity Casino Hotel. How about an additional invest- Why not promote the brand where it just over $1 billion in revenue. As the them relax a bit more. Recently, the Ilitch family gave ment in an endowed professorship in all started? company grew, it professionalized its e many lasting impacts of Mike $40 million to family business in Marian Ilitch’s Crain’s Detroit Business covered management in the pizza business, and Marian Ilitch have been well rename and build the Mike Ilitch name? that growth, but it hasn’t always been easy. e Ilitches own a ercely private company that happens to have a huge, public-facing impact. A couple times in the mid- and late 1990s, we ran stories about the size and the nancials of the company, de- tails gleaned from nancial disclo- sures required by the certain states, Whether it’s old money with depending on their franchise laws. Mike Ilitch, who was always in- new needs or new money with tensely secretive about the company’s nancial information, was upset. And he showed up at our oce in person to old desires, it has to be wisely let Keith Crain know just how much, asking that he kill one of the stories. But it was public information, Keith managed to endure. told him. And the pizza company was fueling so many other great invest- Consider the distinctive wealth management approach ments in Detroit — the Red Wings and Tigers, to name two — that it was a of Greenleaf Trust. Privately held with approximately good business story, too. e story ran. $9B in assets under management, a commitment But Ilitch told Crain that Little Caesars would have to get out of franchising. to fi duciary excellence, and a client centric culture that Instead, Little Caesars lawyers, in eect, created a separate company eliminates confl icts of interest, we help you make the most that handled franchising matters — and it apparently didn’t have to report of your wealth, so you can make the most of your life. the parent company’s nancials. at Let’s talk. was the last time, to our knowledge at Crain’s Detroit Business, that any news

CLOSINGS the city's business and philanthropic communities have bet big on a come- back. DeVos, a powerful Republican Par- ty donor whose money has made and destroyed political careers, was never publicly engaged in that debate over the future of education in Detroit. She stayed in the background as GLEP and other allied pro-charter school lobbying interests beat back creation of a commission of guberna- torial and mayoral appointees that they believed would put restrictions on where free market-oriented char- ter operators could set up schools. As DeVos takes over the nation’s education agenda, Rakolta thinks she should get publicly involved in De- troit and explain why there shouldn’t be some semblance of school organi- zation and accountability in Michi- gan's largest city. “Now that she’s secretary of educa- tion, I think she owes us a direct re- sponse to that,” Rakolta said. “We need to know where she stands on the unregulated aspect of charter 34977 woodward avenue birmingham, mi 48009 greenleaftrust.com 248.530.6200 schools in the state of Michigan.” Chad Livengood: (313) 446-1654 Twitter: @CradLivengood 10 CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017 SPECIAL REPORT: BUSINESS INSURANCE

Measuring the risks of climate Insured losses from natural disasters Insured change Natural losses Year catastrophes (billions) 2005 161 $124.2 2006 141 $14.8 2007 152 $27.5 2008 150 $48.8 2009 140 $24.4 2010 177 $47.0 2011 181 $125.8 2012 170 $74.0 2013 167 $36.6 2014 191 $28.7 2015 198 $27.8

Source: Swiss Re

GETTY IMAGES/ISTOCKPHOTO

Insurance industry tries to cause no hurricanes made landfall in the U.S. the system by causing fundamental shifts in How prepared is the industry? ough politically controversial, the notion the location, frequency, and intensity of ex- come to grips with potential of climate change is not controversial among treme events,” said Eric Robinson, senior sci- A report from the Boston-based corporate insurers. e industry is working to come to entist at risk-management  rm AIR Worldwide sustainability nonpro t Ceres released last Oc- losses from extreme events grips with how to measure the risks as scien- in Boston. tober found that only 22 out of 148 insurers re- By Michael Lee tists study the e ects on a world in which the In the long term, that uncertainty is compli- ceived its high quality marks on a survey that [email protected]  ve warmest years in records dating to 1880 cated by the fact that the concentration of homes measured governance, climate risk manage- Climate change presents a knotty problem have all occurred since 2010. and businesses in an area will change over time, ment, use of catastrophe modeling to evaluate — and big risks — for insurers. and construction practices will also change. and manage risk, greenhouse gas manage- Severe weather events such as hurricanes, Measuring the risk at means predicting an insurer’s exposure ment and stakeholder engagement. at  gure tornadoes and droughts are expected to occur over a long period can be di cult and isn’t usu- had doubled from the group’s previous report with more frequency as the climate warms up, At their core, insurers are in the business of ally re ected in the models, Robinson said. two years before. experts say. at presents the risk of greater measuring and assigning a value to risk. Pre- “ irty years ago, houses were smaller, peo- For its part, a coalition of the largest insurers losses for insurers to cover damage claims. cisely measuring the future risk of climate ple were more spread out. On top of these called the Smarter, Safer Coalition in a 2015 re- ere were 198 natural disasters worldwide change is di cult because insurers base their changes there are also things like changes in port called on the federal government to shift in 2015, according to the most recent annual re- pricing and risk assessments on historical building codes and building practices,” Robin- its e orts toward disaster preparedness and port by Swiss Re, the most it has ever recorded, data. A changing climate means that data son said. “All of these combine to create a lot of mitigation to help reduce losses as the expec- though the $28 billion in losses stemming from could become of less use. uncertainty as to what the average annual loss tation of weather-related damages increases. them was relatively low for recent years be- “Climate change can throw a wrench into might look like 50 years from now.” SEE RISKS ,PAGE 11 CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017 11 Bills would expand nonprots’ ability to raise funds in charity poker games By Sherri Welch ing a service.” sales as Snookers once did no longer J Allowing nonpro ts to apply for [email protected] “We need to e Michigan Gaming Control exist,” she said. each year to four, and allowing each Legislation that would expand the codify into Board is closely monitoring the legis- With limits the gaming control to be used for up to four consecutive ability of nonpro ts to raise money statute exactly lation and will provide Gov. Rick Sny- board has placed on the amounts days of games. through charity poker games and der with a thorough analysis if it pro- that can be paid to the location and J Allowing two millionaire party preserve permanent poker rooms’ what the rules are gresses through the Legislature, said the supplier — no more than 45 per- events to take place concurrently at ability to pro t at some level from so all the charities communication specialist Mary Kay cent of gross pro ts can go to cover any single location and limiting the them is back on the table. Bean said in an email last week. costs — the net pro t to nonpro ts number of events to take place at a e bills come in the wake of sig- can earn a few Criminal activity tied to “million- from the games increased the past location to no more than four per ni cant declines in charitable gam- bucks” to support aire parties” was a reality when Sny- two years to $8.8 million in 2016 from week. ing in Michigan over the past six der shifted regulation of them to the $6.9 million in 2014. J Allowing games to take place from years as the state has tightened regu- their missions. Michigan Gaming Control Board Last year, judges ordered $106,000 8 a.m.-2 a.m. the next day. lations of the games and halted them Sen. Rick Jones from the Michigan State Lottery in in restitution to charities for million- J Prohibiting players from using at permanent poker rooms where il- 2011, she said. aire party-related crimes, Bean said. chips to tip dealers. legal activities were taking place. ere was a system in place for a “Michigan law does not authorize “Based on our research, Michigan J Limiting expenses to no more than Last year, poker game fundraisers decade that was working ne, Jones ‘charitable poker rooms.’ Yet many has one of the biggest casino-style 45 percent of gross pro t. hosted by Michigan nonpro ts said. He agrees with Rick Kalm, exec- places ran games illegally on behalf of charitable gaming programs of its J Prohibiting nonpro ts from rent- brought in $93.5 million, less than utive director of the Gaming Control the charities and operated like casi- kind in America ... in the past three ing poker tables, chips and other half of the $197.3 million they raised Board, that there were “a few bad ap- nos without oversight or accountabil- years, we’ve authorized 30,000 mil- equipment, from a location owner or in 2011, according to numbers ples” and supports going after them. ity,” Bean said, which led to corrup- lionaire party games, which resulted lessor. self-reported by nonpro ts to the “However, (Kalm) has been so tion and illegal activities. in about $270 million in chip sales.” e Lansing-based Michigan Michigan Gaming Control Board, onerous and Scrooge-like, he’s made e state was forced to halt games As passed out of the Senate Feb. 9, Charitable Gaming Association rec- which regulates the games. it impossible for most of these chari- at 24 locations, and more than 30 in- SB 35 would amend the Traxler-Mc- ognized there were some bad actors Net pro t to charities decreased ties to continue with this form of reve- dividuals have pleaded guilty to Cauley-Law-Bowman Bingo Act to, at the time the governor moved over- along the same lines to $8.8 million in nue raising,” Jones said. crimes ranging from embezzlement among other things, allow $20,000 in sight of the millionaire parties to the 2016 from $17.4 million in 2011. Nonpro ts can’t replace what to charitable gaming law violations. chips to be in play during a million- Michigan Gaming Control Board, During the same period, the num- they’ve raised through the poker As a result of tighter regulations, aire party event or up to $80,000 if the said Executive Director Katharine ber of charities hosting games games with candy and cookie sales, many popular places operating as nonpro t licensee is not using deal- Hude. And it applauds the board’s ef- dropped to 911 from 2,720, and the Jones said. “We need to codify into permanent poker rooms prior to the ers from a supplier and is hosting forts to address issues. number of licensed events declined statute exactly what the rules are so all new rules, such as Snooker’s Poker fewer than four days of events. In that “Our contention is they’ve done a to 2,619 last year from 7,894. the charities can earn a few bucks” to Room in Utica, no longer function as case, the amount in play would be good job of cleaning up some of A multiyear battle between non- support their missions, he said. millionaire party locations. $80,000 divided by the number of those lingering bad actors ... but they pro ts and poker rooms on one side Part of the concern is that the Gam- But the state has authorized new days the event is being hosted. Cur- keep insisting there are bad actors and the Michigan Gaming Control ing Control Board would go further in locations for the games, and today rently, chip sales are limited to (still) out there,” she said. Board on the other, led to turnover in regulating, Barrett said, blocking per- there are more locations hosting mil- $15,000 per day. e legislation introduced by Jones the rules regulating the games up un- manent poker rooms from hosting lionaire parties on a regular basis It would also reduce the number and Barrett will take away “arbitrary til June 2015, when the current rules the games on behalf of nonpro ts. than existed before the administra- of representatives that must be on decision making” from the Gaming took eect. e board has suggested it could tive rules took eect, Bean said. hand from the bene ting charity or Control Board, Hude said. “If it’s codi- ose rules have limited the abili- grant more licenses for charities if the “Although more locations now nonpro t to two from the current re- ed, our charities know exactly what ty for permanent poker rooms to organizations hosted the games on may host millionaire parties than quirement of three. to expect and the Gaming Control pro t from the games and required their own grounds, but part of the were operating a few years ago, the At the same time, the legislation Board knows what to expect.” more charity representatives to be problem is many don’t have their own large-volume operations processing would uphold some of the current Sherri Welch: (313) 446-1694 present at the charity Texas Hold ’Em buildings to host the games, “and some more than $25 million a year in chip rules, including: Twitter: @SherriWelch games, among other things. feel they shouldn’t have to,” he said. Sen. Rick Jones, who introduced “We would like to stipulate that the Senate Bill 35 in January, and State Rep. permanent poker rooms would not Tom Barrett, who introduced duplicate be prohibited by rule. ... e Gaming House Bill 4081, say the current rules Control Board has shown an intent to are too restrictive, both for nonpro ts really cut (rooms) out, and we don’t and for permanent poker rooms. think they should be. ey’re provid-

“e one thing they’re really good RISKS at is data,” he said. at data could be FROM PAGE 10 used to properly price and sell poli- Much of the work being done on cies by ZIP code according to risk, adjusting risk models for climate but state-by-state regulations limit change and unusual weather events their ability to do that, and compa- is being done by the large European nies have generally gotten out of the reinsurers, the companies that help ood insurance business, leaving insure other insurers against cata- that coverage to federally funded strophic losses. Munich Re, Swiss Re programs. and Lloyds of London are among “eir models are sophisticated those Ceres cites in its report as lead- enough to price risk for any environ- ing on such adjustment. ment,” Taylor said. It’s an area in whichU.S. insurers could improve, said Rod Taylor, a Risks in Michigan managing director with Aon Risk Solu- tions, which has a South eld oce. ough the best-known risks “In the U.S., there are very few com- from climate change are along the panies that have any kind of public coasts because of fears that sea levels policy on climate change,” he said. could rise, a 2014 study by a 60-per- He said the industry also faces son federal advisory committee risks on its own side of the nancial highlighted risks to sheries and ledger. tourism from increased erosion of “One area where they haven’t Great Lakes beaches and risks to the done much is to look at their own in- forests of northern Michigan. vestments to see whether their own Agriculture could bene t from portfolios have risks from climate longer growing seasons but also change,” he said. would be threatened by heightened In some cases, Taylor said, the risks of drought, according to the re- patchwork of state regulation on port, called the ird National Cli- how insurers can price coverage gets mate Assessment, raising uncertain- in the way. ty for sellers of crop insurance. DBpageAD_DBpageAD.qxd 2/17/2016 10:35 AM Page 1 CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017 13

CRAIN'S LIST: LARGEST MICHIGAN BUSINESS INSURANCE AGENCIES AND COMPANIES Ranked by 2016 revenue Premium Employees Company Revenue Revenue volume Jan.2017 Worldwide Address ($000,000) ($000,000) Percent ($000,000) Michigan/ employees Rank Phone; website Top executive(s) 2016 2015 change 2016 Total U.S. Jan.2017 Insurance category H.W. Kaufman Financial Group Inc./Burns & Wilcox Ltd. Alan Jay Kaufman $2,050.0 $1,830.0 12.0% $2,050.0 275 1,721 Insurance Company 1 30833 Northwestern Highway, Farmington Hills 48334 chairman, president and CEO 1,551 (248) 932-9000; www.kaufmanfinancialgroup.com Meadowbrook Inc. Kenn Allen B 146.0 135.0 8.1 718.6 347 928 Insurance Agency, 2 26255 American Drive, Southfield 48034-6112 president and CEO 928 Insurance Company (248) 358-1100; www.meadowbrook.com Aon Corp. (Aon Risk Solutions) Carol Williams 135.3 130.0 4.1 0.0 180 72,000 Insurance Company 3000 Town Center, Suite 3000, Southfield 48075 resident managing director, CEO, 36,000 3 (248) 936-5200; www.aon.com Aon Risk Solutions Paul Barbick Michigan market leader, Aon Hewitt Brown & Brown of Detroit Todd Piersol, executive vice 62.9 75.0 -16.1 371.3 514 7,591 Insurance Agency 35735 Mound Road, Sterling Heights 48310 president; Angela Garner, president; 7,561 4 (586) 977-6300; www.bbdetroit.com Paul Glantz and Doug Shepson, administration Arthur J. Gallagher & Co. Bryan Hirn 56.0 46.0 21.7 NA 193 24,790 Insurance Agency 30150 Telegraph Road, Suite 408, Bingham Farms 48025 area president, benefits and HR NA (248) 203-0626; www.ajg.com consulting 5 Ryan Isaacs area president, Insurance & Risk Management Marsh Nina Maggart 54.0 51.2 5.5 NA 291 30,280 Insurance Company 6 One Towne Square, Suite 100, Southfield 48076 Southfield office head 9,713 (248) 945-5600; www.marsh.com Marsh & McLennan Agency LLC - Michigan Thomas McGraw 36.8 32.4 13.6 1,581.4 140 140 Insurance Company 7 3331 W. Big Beaver Road, Suite 200, Troy 48084 CEO, Michigan 140 (248) 822-8000 and (734) 525-2463; www.mma-mi.com LSG Insurance Partners Jay Schreibman 34.3 32.5 5.3 1,372.0 95 109 Insurance Agency 8 2600 S. Telegraph Road, Suite 100, Bloomfield Hills 48302 president and CEO 109 (248) 332-3100; www.lsgip.com Valenti, Trobec, Chandler Inc./VTC Insurance Group Alan Chandler 31.1 29.2 6.3 177.5 151 155 Insurance Agency 1175 W. Long Lake Road, Troy 48098 president and CEO 155 (248) 828-3377; www.vtcins.com Terry Griffin 9 COO Robert Trobec CFO/executive VP Kapnick Insurance Group Jim Kapnick 29.4 27.3 7.7 300.0 157 157 Insurance Agency 10 769 Chicago Road, Troy 48083 CEO 157 (248) 352-4455; www.kapnick.com Hylant Group Patrick McDaniel 27.3 25.7 6.1 404.5 148 651 Insurance Agency 11 24 Frank Lloyd Wright Drive, Suite J4100, Ann Arbor 48105 president, Detroit Office 651 (734) 741-0044; www.hylant.com Michigan Financial Cos. Inc. Nick Valenti 17.1 17.7 -3.5 15.6 91 119 Insurance Company 12 28411 Northwestern Highway, Suite 1300, Southfield 48034 president and CEO 119 (248) 663-4700; www.michiganfinancial.com Daly Merritt Insurance Martin Daly 12.4 12.1 2.1 127.5 60 4,025 Insurance Agency 13 3099 Biddle Ave., Wyandotte 48192 president and CEO 4,000 (734) 283-1400; www.dalymerritt.com The Huttenlocher Group David Huttenlocher 11.8 C 6.3 C 87.3 NA 79 NA Insurance Agency 14 1007 W. Huron, Waterford Township 48328 CEO NA (248) 681-2100; www.hgway.com A. E. Mourad Agency Inc. Anthony Mourad 10.8 9.9 9.0 620.3 17 19 Insurance Agency 28277 Dequindre Road, Madison Heights 48071 president 19 15 (248) 336-1600; www.aemourad.com Peter Mourad and Steve Mourad vice presidents Ralph C. Wilson Agency Inc. Stefano Vannelli 8.5 8.2 3.7 300.0 56 56 Insurance Agency 16 26026 Telegraph Road, Suite 100, Southfield 48086 president, CEO and owner 56 (800) 638-1174; www.rcwa.net Oswald Cos. Catherine Kosin 8.0 8.0 0.0 40.0 31 368 Insurance Company 17 39572 Woodward Ave., Suite 201, Bloomfield Hills 48304 senior vice president, Detroit market 368 (248) 433-1466; oswaldcompanies.com leader KIG Korotkin Insurance Kenneth Korotkin 7.8 7.3 6.6 60.0 49 49 Insurance Agency 18 26877 Northwestern Highway, Suite 400, Southfield 48033 president 49 (248) 352-5140; www.getkig.com Capital Insurance Group Robert Moglia Jr., president; 6.0 4.6 30.4 0.0 26 26 Insurance Agency 19 1263 W. Square Lake Road, Bloomfield Hills 48302 Edmund George, Tom Moglia, Donn 26 (248) 333-2500; www.capitalinsuranceagent.com Johnson, vice presidents J.S. Clark Agency Inc. Joel Clark 5.1 5.0 3.7 0.0 29 29 Insurance Agency 20 25900 W. 11 Mile Road, Suite 210, Southfield 48034 president and CEO 29 (248) 355-9600; www.jsclarkagency.com Johnston Lewis Associates Inc. Jay Sawmiller 5.0 4.7 6.4 38.0 33 33 Insurance Agency 575 E. Maple Road, Troy 48083 president and CEO 33 21 (248) 528-2400; www.johnstonlewis.com Mike Cardella and Dan Wilhelm vice presidents Allied Insurance Managers Inc. Ron Kosmal, chairman and CEO; 4.4 4.1 7.7 34.0 34 34 Insurance Agency 22 1055 S. Blvd. E., Suite 110, Rochester Hills 48307 Paul Murad, president; 34 (248) 853-0930; www.alliedinsmgr.com Jayson Bass, vice president Goodman Venegas Insurance Agency Inc. M. Paul Venegas 3.4 3.3 3.0 31.0 15 15 Insurance Agency 2800 Livernois, Suite 170, Troy 48083 president 15 23 (248) 740-9090; www.goodmanvenegas.com Regina Goodman co-owner

This list is an approximate compilation of the largest such agencies in Michigan. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Michigan office. NA = not available. B Replaced Robert Cubbin as president and CEO in November. C Southeast Michigan revenue only.

LIST RESEARCHED BY SONYA D. HILL 14 CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017 CALENDAR TUESDAY Prize-winning editorial page editor for the De- FEB. 21 troit Free Press. MotorCity Casino Hotel, De- J Young Professionals Panel — The Changing troit. $159 chamber members; $235 nonmem- Face of Leadership. 7:30-9 a.m. Leadership bers. Contact: Sarah Nagel, phone: (313) Oakland. Moderator: Jennifer Korman, Mer- 596-0384; email: [email protected]. cedes-Benz Financial Services. Panelists: Tal- isa Norton, co-owner/COO, All Pro Color; J Trump Economics and Its Impact on the Middle Sara Stoddard, chief of emergency manage- Class. 11:30 a.m.-1:30 p.m. March 7. Detroit ment, Oakland County Homeland Security Economic Club. Speaker Neera Tanden, presi- Division; Jordan Twardy, community and dent, Center for American Progress. Townsend economic development director, city of Fern- Hotel, Birmingham. $45 members; $55 guests dale. MSU Management Education Center, of members; $75 nonmembers. Website: Troy. $32 members; $36 nonmembers. Web- econclub.org. site: leadershipoakland.com. J Asian PaciŽc American Chamber of Commerce J Inside the CEO Mind. 8-10 a.m. Detroit Re- 14th Annual East-West Business Connection. 9:30 gional Chamber. Shinola President Jacques a.m.-3:30 p.m. March 8. Global business net- Panis talks about the Shinola business model, working event, comprised of Asian and U.S. its reputation as a leader in the Detroit resur- businesses and minority business enterprises gence and his professional career. Following throughout the Midwest. Edward Village, his presentation, audience members are in- Dearborn. $70 APACC members; $95 non- vited to participate in a question-and-answer members; $100 walk-ins. Contact: Leonie Te- session. College for Creative Studies, Detroit. ichman, phone: (248) 430-5855; email: leonie@ $30 chamber members; $50 nonmembers. apacc.net. Preregistration is required. Contact: Mari- anne Alabastro, phone: (313) 596-0479; J Economic Prospects for the U.S. and Regional e-mail: [email protected]; web- Economy in 2017-2018. 11:30 a.m.-1:30 p.m. site: detroitchamber.com/events. March 16. Detroit Economic Club. Stuart Ho- man, senior vice president and chief economist THURSDAY at PNC Financial Services Group, will share his FEB. 23 insights on Trump policy impacts and he will J Garden Fresh Entrepreneur David Zilko. 7:30-9 forecast important indicators such as U.S. ener- a.m. Inforum. Dave Zilko founded his rst spe- gy production, unemployment and interest cialty food company more than 20 years ago rates, the stock market and consumer spend- with a $2,500 credit card loan. He remains an ing. Westin Book Cadillac, Detroit. $45 mem- equity partner in several food-oriented enter- bers; $55 guests of members; $75 nonmem- prises, but exited active involvement in the in- bers. Website: econclub.org. dustry when he engineered the sale of Garden Fresh Gourmet, makers of the No. 1 brand of J Real Estate Forecast Breakfast. 8-9:30 a.m. fresh salsa in North America, to the Campbell March 23. Birmingham Chamber of Com- Soup Co. for $231 million in 2015. Zilko is now merce. New housing trends in southeast Michi- an investor in and CEO of Fuel Leadership gan and the developments in Detroit. Speakers: LLC, a company dedicated to elevating profes- Dan Elsea, president, brokerage services, Real sional performance through events and digital Estate One; Mike McNally, vice president, oper- media. Gem eater, Detroit. $50. Website: ations, Olympia Development; Michael Sto- inforummichigan.org. skopf, Home Builders Association of South- eastern Michigan. e Reserve, Birmingham. FRIDAY $40 members; $50 nonmembers. Website: FEB. 24 bbcc.com. J The State of Manufacturing 2017: A New Way Forward. 11:30 a.m.-1:30 p.m. Detroit Economic J 9th Annual Trade Secrets with Connie Holzer. Club. Jay Timmons, president and CEO, Na- 6-9:30 p.m. March 29. JVS. Keynote speaker Con- tional Association of Manufacturers, speaks on nie Holzer, owner of Tom Holzer Ford, who has today’s industry, the latest on the Trump ad- built it into one of the top Ford dealerships in the ministration, the new Congress and manufac- country. Holzer took over the dealership when turing in America. Westin Book Cadillac, De- her husband died in 2006, at the same time the troit. $45 members; $55 guests of members; $75 country was going into an economic tailspin. nonmembers. Website: econclub.org. Troy Marriott. $150. Contact: Judy Strongman, phone: (248) 233-4213; email: jstrongman@ UPCOMING EVENTS jvsdet.org; website:jvsdet.org/tradesecrets. J Vistage Executive Breakfast. 7-10:30 a.m. Feb. 28. Vistage Michigan. Includes keynote “What J Who Do You Trust? Leading in an Era of Popu- in the World Is Going On? A Global Intelligence lism. 11:30 a.m.-1:30 p.m. April 19. Detroit Eco- Brie ng for Executives” by Herb Meyer, former nomic Club. Richard Edelman, president and special assistant to the director of the CIA CEO of Edelman, will discuss the 2017 Edelman during the Reagan administration. Troy Marri- Trust Barometer and actions business leaders ott. Free. Contact: Anna Morton, phone: (586) can take to climb back from a position of deteri- 443-5880, Ext. 205; email: amorton@vistage orated trust, and ultimately restore belief in a michigan.com; website: http://michigan. system that too many believe has failed them. vistage.com/event/feb28/ MotorCity Casino Hotel, Detroit. $45 members; $55 guests of members; $75 nonmembers. J 2017 Detroit Policy Confer- Website: econclub.org. ence: Reigniting an Innova- tive Spirit. 7:30 a.m. March 2. Detroit Regional Cham- Calendar guidelines. Visit crainsdetroit.com ber. Toni Grin, founder of and click “Events” near the top of the home Urban Planning for the page. Then, click “Submit Your Events” from the American City, will deliver drop-down menu that will appear. Fill out the a keynote address, and De- submission form, then click “Submit event” at troit Mayor Mike Duggan the bottom of the page. will have a one-on-one Mike Duggan conversation with Stephen More Calendar items can be found at Henderson, Pulitzer crainsdetroit.com/events. CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017 15 DEALS & DETAILS EXPANSIONS J Ghafari Associates LLC, Dearborn, a global engineering, architecture, process design, consulting and con- struction services rm, has opened a rm at 211 W. Fort St., Suite 510, De- troit. Telephone: (313) 502-5474. Website: ghafari.com.

J Capital Title Insurance Agency, South eld, has opened at 7030 Gate- way Park, Clarkston. Telephone: (248) 625-4210. Website: capitaltitle.net.

MOVES J Balanced Home Care has moved its oce from 189 E. Big Beaver Road, Troy, to 2125 Butter eld Drive, Suite 299, Troy. Telephone: (248) 528-2600. Website: balancedhomecare.com.

J Re/Max Eclipse has moved its of- ce from 5744 Williams Lake Road, Waterford Township, to 4468 W. Wal- ton Blvd., Waterford Township. Tele- phone: (248) 599-3124. Website: eclipseagents.com.

J Gardner Builders Inc., Troy, a de- sign and build specialist, has opened at the Michigan Design Center, 1700 Stutz Drive, Suite 106, Troy. Tele- phone: (248) 649-4772. Website: gardnerbuilders.com.

NEW PRODUCTS J Meritor Inc., Troy, launched a vir- tual reality app that customers can use to learn about the company’s products during a virtual ride in a semi-truck. Website: meritor.com.

NEW SERVICES J Bluestone Executive Communica- tions, Birmingham, began oering executive etiquette training with new programs in ne dining, international Real Estate Litigation Experience protocol, digital decorum and man- ners. Website: bluestoneexec.com. ®

J In Your Corner. Community & Home Supports Inc., Detroit, a provider of resource Ŷ Real estate litigation in state and federal navigation, case management and support services to the homeless, be- courts, landlord-tenant and lease disputes gan a new permanent housing pro- gram through a $504,620 contract Ŷ Construction lien and quiet title matters. with the U.S. Department of Housing and Urban Development. CHS will be providing housing to 35 house- holds of chronically homeless people who have disabilities. Website: chsinc.org.

STARTUPS J FranCPA PLLC, South eld, an accounting and consulting services rm to franchise businesses, has opened at 20750 Civic Center Drive, Suite 418, South eld. Tele- phone: (248) 331-5465. Website: francpapllc.com.

Deals & Details guidelines. Email [email protected]. Use any Deals & Details item as a model for your release, and look for the First Tier Ranking appropriate category. Without Real Estate Law complete information, your item will not run. Photos are welcome, but we Contact Brad Defoe at [email protected] Ŷ Detroit Ŷ Novi Ŷ Grand Rapids Ŷ Kalamazoo Ŷ Grand Haven Ŷ Lansing Ŷ Ann Arbor Ŷ Hastings cannot guarantee they will be used. 16 CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017 Focus: Hope puts eyes PEOPLE: SPOTLIGHT Federal-Mogul Holdings program director at Georgia adds co-CEO in shakeup Southern University and sports on basics in IT program medicine program director at the Federal-Mogul Holdings LLC has University of Hawaii. By Sherri Welch named Bradley Norton as the new [email protected] “We’d like to add more trainings, more co-CEO and CEO of the South- Broder & Sachse Focus: Hope, which has struggled pathways into employment, as we field-based promotes Hurwitz to nd its workforce development quantify employer demand.” auto parts sup- niche in recent years, is among the plier’s motor Birmingham-based develop- agencies playing a central role in a JeŒ Donofrio, director of workforce development for the city of Detroit parts division. ment company Broder & Sachse program quietly launched by the city Rainer Real Estate Ser- last fall to train Detroiters at all skill motive supplier through the rst-tier training are all Jueckstock will vices named levels for information technology Android Indus- somewhere along the job placement remain as the Lee Hurwitz as jobs. tries in March in spectrum with employers, from em- other co-CEO its new presi- It’s a shift for Focus: Hope, which response to pro- ployed to interviewing or preparing of the compa- dent. is perhaps best known for manufac- duction cut- for interviews, said DESC President ny and CEO of Hurwitz, turing job training. backs, Focus: and CEO Nicole Sherard-Freeman. Bradley Norton its powertrain who joined the e Tech Hire program is creating Hope got calls e network technician and soft- division. company in a pipeline of IT employees to work from companies ware developer jobs, which can com- Norton will succeed Daniel Nini- 1996, was pre- for Detroit companies, with addi- oering to take mand $15 per hour during appren- vaggi, who had served in that posi- viously CIO. tional training services provided by some of the af- ticeships and about $25 per hour in a tion since 2014. He was CEO of Lee Hurwitz Hurwitz, 44, Nicole Sherard- Southwest Solutions and Grand Cir- fected employ- full-time position, according to Icahn Enterprises LP, the parent replaces John Freeman: DESC cus, under the Detroit Employment ees. Donofrio, could be a ticket into the company of Federal-Mogul, from Hamburger, who joined South- president and CEO. Solutions Corp.’s management. “We talked to middle class. 2010-14. eld-based Signature Associates It’s a model, the city said, for how several companies … and asked what “One of our biggest challenges is Ninivaggi will return to Icahn Inc. in November as its senior vice the program is approaching creation (they) need from a workforce,” Lee nding jobs inside the city for Detroi- Enterprises, where he will serve as president of property and asset of a talent pipeline for the Mayor’s said. “Everybody said the same thing: ters,” said Donofrio. managing director of the parent management. Workforce Board’s other industry fo- We want people who want to come to TechHire is “helping Detroiters get company’s automotive segment. Hurwitz joined Broder & Sachse cus areas: health care, manufactur- work, who can think on their own into family sustaining, middle-class e changes are eective March as assistant property manager, ing, construction/skilled trades and and can be trainable.” jobs and employers nd local talent 8. then was property manager from retail/hospitality/entertainment. “ at’s a space we work very well that is desperately needed for the Federal-Mogul had struggled 1997 to 2000. He was director of And it’s likely to get a mention in in. Whether we do the training or jobs that are being created in the since emerging from bankruptcy property management from 2000 Mayor Mike Duggan’s State of the whether the company does the city,” he said. in 2008, reporting a net loss of $45 to 2003. City address Tuesday, given that Fo- (hands-on) training, we can gure Southwest Solutions launched the million in 2009 and a net loss of Broder & Sachse has been active cus: Hope is hosting the event on its that out. But we can get you that second cohort of basic skills training $117 million in 2012. e company in downtown Detroit recently, de- northwest Detroit campus. workforce that is willing and ready to as part of the TechHire program with has since implemented cost-cut- veloping the newly opened e ough Focus: Hope’s network learn.” 12 trainees in January, and Focus: ting strategies, including the clo- Scott at Brush Park development, technician apprenticeship is part of Focus: Hope launched the initial Hope is set to start a third basic skills sure or downsizing of seven plants. which has 199 units at Woodward the oerings included in the Tech- cohort of basic skills for 26 people in cohort in July. Billionaire investor Carl Icahn will Avenue and Erskine Street, and Hire program, a large part of the role the TechHire program in October. DESC did not disclose the dollar take full ownership of Federal-Mo- e Albert apartments in Capitol it’s playing is in making sure people e 10-week program included re- amount of grants made to the Tech- gul in a $300 million deal. Park, among others. have the basics. medial reading and math education Hire training providers but said it is Norton joined Federal-Mogul’s Broder & Sachse also has an af- “We are really good, as an organi- as needed to bring people up to 10th- combining federal Workforce Inno- motor parts division in 2014 as se- liated construction company, zation, (in) working with people who or 11th-grade math and reading lev- vation and Opportunity Act dollars nior vice president and general Sachse Construction Inc., which is have barriers in their lives, to get els, soft-skills training and training in that come to the city for adult train- manager. He previously was presi- based in Detroit and run by Todd them to a point where they can be additional areas including customer ing, with a $2 million grant from the dent of Freudenberg-NOK, a Sachse. workforce-ready,” CEO Jason Lee service, problem-solving and ad- Ralph C. Wilson Jr. Foundation to Plymouth Township sealing tech- said last week. vanced Excel work to prepare them fund the program over the next four nologies supplier. e programs that Focus: Hope is for an entry-level IT career working years. Michigan tech group noted for, such as its Earn and Learn in a call center or on a help desk, e program is expected to create appoints top o‡cers program, which helps open job op- making $11-$13 per hour, or go onto 100-200 training spots per year for McLaren Oakland tabs portunities for people ages 18-24 and other immediate job opportunities. each of the next four years, Donofrio Buxton as president, CEO e Michigan Council of Women in formerly incarcerated and chronical- Participants of the “Accelerator” or said. Technology Foundation announced ly unemployed adults, and now the basic-skills tier of the TechHire pro- “We’d like to add more trainings, Barton Buxton was named presi- it is appointing Carey Pachla, a Novi TechHire program, all center around gram also receive an introduction to more pathways into employment, as dent and CEO of the McLaren Oak- resident who giving people the skills they need to IT careers available to them in De- we quantify employer demand,” he land medical heads Ohio- be workforce-ready, Lee said. ey troit. said. center in Pon- based IT con- include ensuring that people have “ e hope is the entry-level jobs “We don’t want the ‘train and tiac. He replac- sulting rm adequate math and reading skills, are a steppingstone into a mid- pray’ initiatives where you train es Chad Grant, Fast Switch soft skills like an understanding of dle-skill job, a middle-class life,” said someone and hope they get a job at who left in De- Ltd., as presi- the need to show up to work on time, Je Donofrio, director of workforce the end.” cember to be- dent. and problem-solving and con- development for the city of Detroit. e TechHire program gives De- come presi- e Dear- ict-resolution skills. TechHire trainees who choose to troiters who would not otherwise dent and CEO born-based “ ose are things we know we can go on to a second tier of IT train- have had a chance to consider an IT at McLaren nonprofit teach very well,” Lee said. “ e issue ing, either the network technician job or career that option, She- Flint. Carey Pachla group also said for the organization is we never really apprenticeship Focus: Hope pro- rard-Freeman said. “It’s that basic set Barton Buxton Buxton, 55, Rebecca Bray, marketed those pieces as a commod- vides or a preapprenticeship at of skills that opens a door for them.” will transition who had been serving as its vice ity.” Grand Circus to prepare them for an People who were fortunate to the 328-bed medical center after president of events, will be general Focus: Hope’s board approved a apprenticeship at area employers, at enough to have jobs in high school serving as president and CEO of vice president, assuming Pachla’s larger focus on basic skills training at companies like Blue Cross Blue gained those skills. But for many McLaren Lapeer Region for more previous role. the end of January, Lee said. As it g- Shield of Michigan, DTE Energy Co., years, there were too few opportuni- than 13 years and managing the Pachla, 47, is president of Fast ures out what its workforce develop- GalaxE.Solutions Inc., Marketing As- ties for young Detroiters to gain work McLaren Homecare Group for two Switch and has worked there since ment programmatic lineup should sociates and Quicken Loans. experience, she said. years. 2003. Bray, 38, is chief sales ocer be, it’s talking with local employers Twenty-three people graduated With employee input, DESC and In his new role, Buxton will also of Epitec, a Southeld-based tech- that have funded specic training it’s from the inaugural basic skills cohort the other organizations working on provide administrative support to nology talent search agent. She provided to see what other manufac- provided by Focus: Hope in Decem- TechHire have found there’s a large McLaren Clarkston. has been with the company since turing and IT training is still in de- ber, and 10 of them went on to sec- demand for those soft skills, She- Before joining the McLaren 1998. mand. But it’s clear that all compa- ond-tier IT training at Grand Circus. rard-Freeman said. group, Buxton was COO of Critten- Pachla and Bray will start their nies have seen issues on the “Grand Circus is saying the folks “What we’re nding from employ- ton Hospital Medical Center in new roles immediately and serve work-readiness front of some of their who came through the Focus: Hope ers is that the demand for that train- Rochester, associate vice president for one year. employees, he said. training are the best-qualied ap- ing is broader and deeper than any of of Tulane University Hospital and Pachla replaces Cindy Warner, When the news broke in January prenticeship candidates they’ve seen us knew,” she said. Clinic in New Orleans, associate who had led the foundation since that it would have to lay o 120 of the so far,” Donofrio said. Sherri Welch: (313) 446-1694 professor and sports medicine 2014. 252 employees contracted to auto- e other 13 people who came Twitter: @SherriWelch February 20, 2017 CRAIN’S DETROITC BUSINESSRAIN’S DETROIT B USINESS// FEBRUARY 20, 2017 Page17 17

Schuette’s critics believe he’s using 2014, letter McLaren received from a WATER the Flint investigation to propel an all- consultant at Environmental Testing FROM PAGE 3 but-certain bid for governor in 2018. & Consulting Inc. about the rm’s MARKET PLACE independent monitor to oversee water e Republican attorney general tests of water supply lines going into testing and sanitation at the hospital, at has repeatedly said the probe is fo- the Flint hospital. BUSINESS OPPORTUNITIES McLaren’s expense, and accused Mc- cused on bringing justice to Flint resi- “It seems that the supply water Laren of not following protocols rec- dents “without fear or favor” to all in- coming from the City of Flint is not Turnkey opportunity of former ommended by the U.S. Centers for Dis- volved. A spokeswoman for Schuette contributing to the Legionella issues MITSUBISHI HITACHI POWER ease Control and Prevention. declined to comment for this story at McLaren and that any issues are FOR McLaren Flint CEO Chad Grant because of the ongoing investigation. likely internal to the hospital system,” SYSTEMS CANADA, LTD shot back ursday, saying MDHSS Last September, Schuette’s special ETC Vice President Jeremy Westcott SALE Saskatoon, SK, Canada did not suciently protect the public prosecutor sent MDHHS Director wrote in the letter. against an outbreak of Legionnaires’ Nick Lyon a letter saying Lyon was a McLaren Flint ocials told Crain’s Heavy Precision Machining disease while Flint was using the Flint “target” of the investigation. Lyon has that the ETC test only took samples for River as its source of drinking water. not been charged with any crimes, a two-week period in December & Metal Fabrication Facility e state and county health de- and Schuette has not ruled out any when water temperature conditions in partnership with: Contact: John Sharpe at partments never notied the public other state ocials, including Gov. were unlikely to produce any legio- [email protected] or +1 616.420.1652 or all area physicians about the spike Rick Snyder, from being charged. nella. McLaren also conrmed that IL License #444.000215 www.hilcoind.com/MHPS in Legionnaires’ cases until January no follow-up tests were conducted on 2016 — three months after it ended. Bacterial testing incoming water. FRANCHISE OPPORTUNITIES A recent report by Bridge Magazine “ is is a snapshot in time and raised questions about whether a McLaren and DHHS are at odds does not reect conditions at any oth- REAL spike in pneumonia deaths in Gene- over whether the hospital has ade- er time period, including from warm- see County in 2014 and 2015 may quately disinfected areas of the hospi- er months,” McLaren spokeswoman ESTATE have been additional cases of undiag- tal where legionella bacteria can grow Rosemary Plorin said in an email. “At nosed Legionnaires’ disease that doc- in water pipelines and be transmitted the time the hospital received the let- AUCTIONS: COMMUNITY PROPERTY tors did not test for because they through respirators, air conditioning ter, it had already begun making in- didn’t know about the outbreak. cooling towers and hot tubs. vestments in its program to monitor McLaren’s Grant promised to com- e state agency used a conrmed and treat the water it purchases from ply by March 10 with the state order to mid-November case of Legionnaires’ the City of Flint.” FRANCHISES AVAILABLE submit documents on improvements to justify the order. DHHS obtained Westcott’s letter CHECK US OUT AT to its water quality management plan, In what appears to be a defense on Jan. 31 in a batch of McLaren re- WWW.PASSPORTPIZZA.COM CALL (586) 992-8800 which he said already is a best prac- against Fieger and the state health de- cords turned over by the Genesee OR EMAIL [email protected] tice designed by a national water partment, McLaren ocials are in- County Health Department. e local quality expert and follows CDC rec- sisting the source of the bacteria was health department obtained them  INDUSTRIAL SERVICES ommendations. Flint’s corrosive river water. from Genesee County Prosecutor Da-  C.W. JENNINGS In its defense, McLaren has hired vid Leyton’s oce, which is working INDUSTRIAL EXCHANGE The Fieger factor legionella expert Janet Stout, M.D., a with Schuette’s special prosecutor, Pittsburgh-based clinical and envi- Todd Flood, on the wide-ranging Global Industrial Consulting Complicating matters for McLar- ronmental biologist. Stout, who is probe of the Flint water crisis. Construction • Acquisitions en: Fieger, the bombastic South- credited with discovering the link be- e state health department had INDUSTRIAL PROPERTY Exporting • Financing eld-based plaintis attorney, is su- tween legionella in hospital water sys- no access to McLaren’s records for (855) 707-1944 ing McLaren hospital and state tems and Legionnaires’ disease in nearly six months while the protective ROMEO, MI environmental ocials for $100 mil- 1982, contends Flint’s municipal wa- order was in place. 75 Ac. Vacant Ind’l zoning, poss. multi- Call or email today for information resid’l or comm’l. opp. All Util’s. 1,334 on a custom advertising plan! lion on behalf of Legionnaires’ survi- ter was a conducive environment for Lyon said the letter suggested Mc- Rd. Frontage, 1/2 Mi. from X-way exit. vors hospitalized at McLaren and the legionella bacteria to grow. Laren was more aware of its own in- [email protected] Call George @ 586-531-2436 313.446.6068 estate of Debra Kidd, a 58-year-old Flint switched from Detroit’s Lake ternal plumbing issues than the hos- [email protected] woman who died from Legionnaires’ Huron pipeline to the Flint River for pital has previously acknowledged. in July 2015 after being treated for a its drinking water source in April 2014 “ ey certainly were put on notice persistent headache at McLaren. as a cost-savings measure while a new that their hospital was a potential Fieger has refused to accept Mc- regional pipeline to Lake Huron was source of the problem as early as De- Laren’s contention that Flint’s corro- being built. Flint’s lack of corro- cember 2014,” Lyon told Crain’s. JOB FRONT sive water during between April 2014 sion-controlling chemicals damaged Henning, the Wayne State law pro- and October 2015 was the leading fac- pipelines and joints, allowing bacteria fessor, said the conicting consul- MISCELLANEOUS POSITIONS AVAILABLE tor in causing legionella bacteria to to ourish inside the city’s troubled tant’s report “calls into question the OPERATIONS thrive inside the city’s damaged water water system, Stout said. strength” of the attorney general’s SURVEY pipelines. “Without that switch, those condi- case that Flint’s water was solely to Advisory Manager, MC Operations “McLaren knew people were dying tions for legionella to multiply within blame for the legionella outbreak. (Mult. Pos.), PricewaterhouseCoopers ANALYZE Advisory Services LLC, Detroit, MI. … and they didn’t tell anybody,” Fieg- the buildings in Flint, Michigan would “It makes Todd Flood’s case that Help clients operationalize their bus. er said in an interview with Crain’s. not have occurred,” said Stout, a re- much more dicult,” Henning said. strats & transform their value chain funct. McLaren ocials told Crain’s they search associate professor at the Uni- Westcott said he couldn’t com- MATCH from product dev. through supply chain, manuf. & product support. Req. Bach’s reported both cases of patients con- versity of Pittsburgh. ment on ETC’s work for McLaren be- deg. or foreign equiv. in Ops Research, In- tracting Legionnaires’ disease to the Victor Yu, M.D., Stout’s business cause the health care system remains dus & Ops Engg, Indus & Systms Engg, CDC and that MDHHS has access to partner at Special Pathogens Labora- a client. Bus Admin or rel. + 5 yrs post-bach’s prog. rel. work exp.; OR a Master’s deg. such reports. tory, a legionella-testing lab in Pitts- But Westcott said he’s never been or foreign equiv. in Ops Research, Indus In McLaren’s corner appears to be burgh, is listed as an expert witness in contacted by the attorney general’s & Ops Engg, Indus & Systms Engg, Bus Attorney General Bill Schuette, whose Schuette’s criminal charging docu- oce, county prosecutor or any other CrainsDetroit.com/JobConnect | Admin or rel. + 3 yrs rel. work exp. Travel up to 80% req. Apply by mail, referencing special team investigating Flint’s wa- ments against former Flint Emergen- law enforcement agency regarding Job Code MI1134, Attn: HR SSC/Talent ter crisis sought to shield the hospital cy Managers Darnell Earley and Ger- the legionella outbreak at McLaren. Management, 4040 W. Boy Scout Blvd, and the Genesee County Health De- ald Ambrose. Stout said the ndings of ETC that The Crain’s Reader Tampa, FL 33607. partment from being investigated by Stout said she rst tested McLar- the legionella may have been growing 26.5% influence the purchase of MDHHS. Schuette’s oce contends en’s water around September 2015, inside the building is “not unusual.” office/industrial and commerical space. € TECHNOLOGY € the protective order was necessary to just before Snyder’s oce moved to “ e fact that it was negative com- Help them find you by advertising in preserve the integrity of its criminal switch Flint back to Detroit’s water ing into the building in this report Crain’s Real Estate Section. Ally Financial seeks a Sr. Cognos investigation of MDHHS ocials. system after the discovery of high lev- from ETC is normal,” Stout said. Dev.: Req. a BS in CS, CIS, or MIS In December, a Michigan Court of els of lead. Stout also declined to reveal any 313.446.6086 • FAX: 313.446.034 7 & 5 yrs exp as a Systems Analyst E-Mail: cdbclassif [email protected] in large-scale, enterprise Cognos Appeals panel tossed out the protec- Stout said Yu was not involved in details about her own legionella in- environments creating complex tive order a Genesee County judge her work for McLaren. vestigation, such as whether it fo- reports & data modeling. Position granted McLaren and Genesee Coun- cused on water coming into the build- req. 10% travel and is located in ty health ocials that had shut out the The 2014 test ing or testing at various locations Detroit, MI. Mail resumes to Erica state health department for months. inside the hospital. Day at 440 South Church St., Fieger thinks the order was an eort Last week, the state health depart- “I can’t comment specically Charlotte, NC, 28202. EOE by Schuette to extend criminal and civ- ment attempted to cast doubt on about ndings at McLaren,” she said. il immunity to McLaren. Stout’s long-standing conclusion that Chad Livengood: (313) 446-1654 Advertise your “ ey’re all scratching each other’s Flint’s water was to blame for the le- Twitter: @ChadLivengood Products and Services in back. It’s 100 percent political,” Fieger gionella outbreak. Jay Greene: (313) 446-0325 said. DHHS released a copy of a Dec. 23, Twitter: @jaybgreene Crain’s Detroit Business 18 CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017 Lockhart’s BBQ team plans District Detroit restaurant By Annalise Frank down has gained traction and fame [email protected] “We love it down as high-prole chains like Chipotle e owners of Lockhart’s BBQ are there. We love Mexican Grill Inc. and Panera Bread seeing opportunities in metro De- what they’re capitalize on it. troit, and they want in. e Lockhart’s partners opened Owners Drew Ciora and Rick developing.” their most recent location a year ago Ghersi are “in talks” to open a Drew Ciora, Lockhart’s BBQ at 37 E. Flint St. in Lake Orion. In the INAUGURAL 2017-18 SEASON full-service restaurant in e District rst full year there, they’ve seen sales Detroit, Ciora said. Lockhart’s BBQ for future Lockhart’s BBQ Shack lo- of nearly $2.5 million. e original is the rst known potential retail cations. restaurant in Royal Oak makes about tenant for the 50-block district of re- Ciora said they could be locking $3.3 million per year in sales, Ciora tail, restaurants and entertainment down two spots soon, possibly in said. under construction around Little Wixom and Northville, or elsewhere ey’re best known for their bris- Caesars Arena. in Oakland or Macomb County. ket, a “very Texas thing,” Ciora said. With two Texas-style sit-down e Shacks will be “upscale, He and Ghersi rst came together barbecue joints — the original quick-serve style,” Ciora said. to open the Detroit Beer Co. down- opened in Royal Oak in 2010 and the “ey’re smaller, they’re easier to town in 2003 with Mike Pelsz. en, second in Lake Orion in 2015 — Cio- build out, they’re less expensive to in 2010, the two saw an opportunity ra and Ghersi are planning to grow build and ... it’s an opportunity to to bring Texas smokehouse avor to their smoked-meat success by ex- grow quicker.” Southeast Michigan with Lockhart’s. panding out of their traditional Customers will walk up to a Ghersi is from Fraser, while Ciora model to take advantage of the grow- counter lined with traditional barbe- hails from Texas, where he grew up ing fast-casual trend with new loca- cue o erings and either create a cus- eating wood-smoked brisket served tions dubbed Lockhart’s BBQ tom plate or select a sandwich or with sliced pickles and a hunk of Shacks. salad o the menu. A couple of serv- white bread. So that’s how they plate If Lockhart’s BBQ closes on a deal ers will also monitor the dining it at Lockhart’s. for the specic District Detroit spot room, relling drinks, clearing tables ey smoke all meat on premise, it’s looking at, Ciora said, his guess is and taking additional requests. purely with wood. at tradition will that construction would start before Ciora and Ghersi said they plan to continue at the Shack locations, de- the end of the year. open two to three Lockhart’s BBQ spite the size di erence. Ideally Messages were left with District Shacks in the next year to 14 months. they'll be 3,000 square feet, Ciora Detroit media relations sta seeking If that goes well, they'll expand to be- said. at’s about half the size of the comment. tween 10 and 30 locations, aiming to full restaurants, which are 5,700 and “We love it down there,” Ciora put up four or ve new locations per 7,000 square feet, but they’ll still fea- said. “We love what they’re develop- year. ture a similar open kitchen design. ing. We’ve been fortunate enough to “It seems there’s a trend toward As for fast-casual pricing, “our see their nice models and display going smaller. People are enjoying goal is no more expensive than we they have, and it’s just fantastic, hav- the fast-casual (concept) more … have, and possibly a little cheaper,” ing four professional teams within a just from our research and what Ciora said. But it depends on issues stone’s throw away down there.” we’ve read,” Ciora said. such as location and rent. ere is a lot on the horizon for e fast-casual trend isn’t any- “We have a couple of sites we’re Ciora, 48, and Ghersi, 57. ey are thing new, but the concept some- very fond of right now,” he said. also scouring Southeast Michigan where between fast food and sit- “We’re just excited to keep growing.”

for customers. the breadth of Wal-Mart’s sustain- MOOSEJAW A tough spot could be the compa- ability initiatives — a topic extremely FROM PAGE 1 nies Moosejaw works with, Nisch important to outdoor product retail- industry relationships made the said. Many can be protective of their ers. company a good choice to manage distribution. Moosejaw sells prod- Moosejaw was founded in 1992 the national retail giant’s outdoor ucts from 400 brands, with big brand when Robert Wolfe and David Ja e online sales e ort, Jariwala said. names including e North Face and opened the rst store. e Moosejaw team will decide Patagonia. Ja e sold his share to Wolfe the which items will be available on the e company will aim to widen following year. en Moosejaw sold ve Wal-Mart-owned sites — the number of brands available on a majority stake to Dallas-based pri- Walmart.com, Moosejaw.com, Wal-Mart’s sites and ll in any gaps, vate-equity rm Parallel Investment Hayneedle.com, Shoebuy.com and Comerford said. Some brands have Partners in 2007. Wolfe and his sib- Jet.com — and manage the overall already said they want their gear list- lings, Julie and Je rey, maintained outdoor gear online shopping expe- ed on a Wal-Mart e-commerce mar- stakes in the company after the ac- rience, he said. ket, while others want to continue quisition. ey were minority share- Wal-Mart made the move as it working with Moosejaw individual- holders and Robert Wolfe was on the aims to grow its e-commerce divi- ly, he said. He did not identify specif- board until the sale to Wal-Mart, sion, which made $14 billion in sales ic brands. Comerford said. for its scal year that ended Jan. 31, In the transition, Moosejaw’s Glencoe Capital LLC, a Chica- 2016. leadership “is sticking together,” go-based private-equity rm with “Wal-Mart and Amazon are really Comerford said. e company, oces in Birmingham, invested in going to be dening e-commerce which employs more than 350 — not Moosejaw in 2009, and with Parallel here in the near future, and for counting seasonal workers — will re- Investment Partners helped Moose- Moosejaw to be at the epicenter of main in metro Detroit. jaw double its revenue, according to that is just extremely exciting,” Comerford could not release rev- a Glencoe Capital statement. New DON’T MISS YOUR OPPORTUNITY Comerford said. enue details, but estimates from In- York City-based W Capital Partners e purchase of Moosejaw, “one ternet Retailer show Moosejaw saw bought out Glencoe Capital in 2013, LOCK IN YOUR SEATS TODAY of the earliest hybrid companies in about $97.2 million in online sales in Comerford said. terms of both brick-and-mortar 2015, a 16 percent increase from the Robert Wolfe was a Crain’s Detroit and online,” makes a lot of sense as previous year. Business 40 under 40 honoree in Wal-Mart acquires websites like Jet. As for any backlash on the choice 2004. Robert and Je rey co-founded For more information, call 248-377-0100 com and faces what many analysts to align with the Arkansas-based re- CrowdRise in 2010. Following the or visit www.pistons.com would call its biggest challenge, tail giant, which has been criticized sale, CrowdRise will retain its brand Amazon.com Inc., said Ken Nisch, by labor groups for low wages and and focus on charitable fundraising, chairman of Southeld-based JGA. for its foreign-made goods, Comer- while GoFundMe coordinates on- JGA designs branded environments ford said he was happy to discover line fundraising for individuals. CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017 19

46 days last month, down from HOUSING BUILD 54 days in January 2016, a 14.8 FROM PAGE 3 FROM PAGE 3 percent drop. ere was an 8.5 e draft ordinance includes a and Livingston counties. at percent drop, from 47 to 43 provision that would allow a waiver mirrors the 0.1 percent drop in days, year-over-year in Decem- of its requirements if the rules year-over-year home sales from ber. “would have a signicant negative December. Market conditions like these impact on the economics of the res- Yet the median sales price and others — such as low inter- idential housing project thus ren- rose 6.7 percent from $142,000 est rates — make builders opti- dering it unviable.” It would also re- to $151,500 year-over-year in mistic, in spite of construction quire that the units remain January and 7.2 percent from cost increases caused by hikes aordable for at least 30 years after $149,200 to $159,900 year-over- in labor and materials costs. an issuance of a certicate of occu- year in December. “ is year, going into 2017, I pancy. Much of that is being caused see an uptick in new construc- e ordinance would require by the 44.1 percent inventory tion. I think we are going to see 10 percent of the units to be aord- drop. at is also driving quick- an uptick higher than what able to those making 80 percent of er sales as buyers look for we’ve seen,” Fingeroot said. AMI; 5 percent aordable to those KIRK PINHO/CRAIN’S DETROIT BUSINESS move-in-ready homes: e av- Kirk Pinho: (313) 446-0412 making 60 percent of AMI; and More than half of the homes in the Stonegate subdivision in Lake Orion have been sold. erage listing was on the market Twitter: @kirkpinhoCDB 5 percent aordable to those mak- ing 50 percent of AMI. If a developer failed to abide by the ordinance, nes would be as- sessed and then deposited in a fund geared toward promoting and prior- itizing aordable housing and in- creasing accessibility to it. Last year, the city hired New York City-based real estate consulting rm HR&A Advisors Inc. to study “HOW CAN I KEEP the Detroit rental market and pro- vide advisory services on an aord- able housing plan. e contract was extended and is for $357,200. MORE OF MY According to a study prepared by HR&A, 97 percent of rental units are aordable — meaning that the household spends no more than 30 percent of its monthly income on PROFITS?” rent and utilities — for those making 80 percent of AMI. Eighty-six per- cent are aordable for those making When your business is more energy efficient, it’s also more profitable—and 60 percent of AMI and 67 percent are aordable to those earning DTE Energy wants to help make that happen. Take John Logiudice, owner 50 percent of AMI. However, just of Florentine Pizzeria, for example. DTE worked with him to make some 23 percent of the units are aord- able for those making 30 percent or small changes that led to big savings. Simply installing a programmable less of AMI. thermostat, sink aerators, LED bulbs and a pre-rinse spray valve in the For a family of four, 80 percent of AMI was $53,520 per year, while kitchen saved John around 10% a month on his energy bill. 60 percent of AMI was $40,140 and 50 percent of AMI was $33,450, ac- If you’d like to manage energy use to save money at your business, cording to the report. e 30-per- cent-of-AMI limit was $20,070. e visit dteenergy.com/savenow. aordable rent, including utilities, for those families was $1,338, $1,003, $836 and $452 per month, respec- tively. Detroit is signicantly more rent-burdened than Michigan and the nation as a whole, according to the report. Fifty-nine percent of families in the city paid at least 30 percent of their income toward housing costs, compared to 50 per- cent in Michigan and 48 percent na- tionwide. And 19 percent of Detroit households paid more than 50 per- cent of their income on housing costs, compared with 10 percent in Michigan and 11 percent nation- wide, the report says. Kirk Pinho: (313) 446-0412 Twitter: @kirkpinhoCDB

BANKRUPTCIES

e following businesses led for bankruptcy protection in U.S. Bank- ruptcy Court in Detroit Feb. 10-16. Under Chapter 11, a company les for reorganization. J Sweet ree LLC, 42757 Wood- ward Ave., Detroit, voluntary Chap- ter 11. Assets and liabilities not avail- able.

CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017 21

Developers ranging from Dan Gil- front oce space for his Little Cae- ILITCH bert to Richard Karp to David Di Rita sars headquarters stood out in 1989, FROM PAGE 1 have been buying and renovating Blanchard said. Michigan Historic Preservation Net- historic buildings downtown in the “Some people criticized him for work allowed her employees to last several years amid a wave of in- getting subsidies, using Detroit pen- stand in front of a bulldozer in an ul- vestment. But Ilitch was the pioneer sion money, but the reality is he was timately futile e ort to spare a his- when he moved his employees doing it — nobody else was doing it,” toric but dilapidated building from downtown from Farmington Hills Blanchard said. “Nobody else would. being demolished. nearly 30 years ago. ey were all building their stu in e building under re was the “I do believe the Ilitches have the suburbs. Period.” Madison-Lenox Hotel downtown done a lot of good for the city,” Jay Lambrecht, owner of Bookie’s across from the Detroit Athletic Grunow said. “But ... there are still a Bar & Grill in the shadow of the Dis- Club; the owner of the two-building lot of preservation opportunities. trict Detroit project that spans 50 city hotel was Ilitch, the billionaire own- ere is huge potential upside. e blocks, understands some people’s er of Little Caesars, the Detroit Red opportunity is now more than ever, frustration with Ilitch holding on to Wings and the Detroit Tigers. and myself and others saw that op- land for long periods without rede- “e Madison-Lenox certainly portunity. We were frustrated that veloping it, or tearing buildings was a pivotal point, but there were a someone with so much resources down. number of hands in that decision,” didn’t see the structures and historic “But as time has gone on and said James Turner, owner of De- assets as opportunities to take a risk THE DISTRICT DETROIT you’ve seen the investment opportu- troit-based Turner Restoration LLC, to do what we thought was the right A conceptual rendering of the exterior of , which is now under nities in the city, I think you kind of who was a volunteer with the Preser- thing.” construction, as part of the District Detroit. see the bigger picture now,” he said. vation Wayne (now called Preserva- It wasn’t just the Madison-Lenox “I felt the frustration, too. But at the tion Detroit) group. demolition that rankled preserva- at decision was made with the other building.” end of the day, like him and his in- Francis Grunow, who battled the tionists. approval of the Detroit Historic Dis- e most prominent one Ilitch vestments or not, you have to give city and Ilitch over the Madison-Le- You can also look to the demoli- trict Commission over objections did save is the 5,041-seat Fox e- him credit where credit is due.” nox demolition, has since come to tion of the Adams eatre/Fine Arts from historic preservationists. e atre, which he bought in 1987 and Turner realizes that Ilitch wasn’t understand why the decision to level Building on Grand Circus Park and next-door historic Eddystone Hotel spent 18 months restoring, accord- unilaterally making demolition deci- the building was made. the Chin Tiki restaurant in Cass Cor- was spared, and is expected to be re- ing to HistoricDetroit.org, which sions. “It’s a di erent time, obviously,” ridor, which was far less historic, as developed as apartments in the Dis- chronicles Detroit history and build- “We had a city that was looking at he said. “What might have been true examples of Ilitch buildings being trict Detroit plan, which is to be ings. nothing with any creative thought as far as development in the city in razed. anchored by the now-under-con- Former Gov. Jim Blanchard, who about development,” he said. “e 2005 and 2006 is di erent, especially More recently, in July 2015, Ilitch’s struction Little Caesars Arena. led the state from 1983 to 1991, said city wanted development at any cost in downtown. I just have to wonder, Olympia Development of Michigan “ey were both structurally that before Ilitch renovated the Fox, downtown, and it didn’t matter in terms of that one particular prop- imploded the historic Louis sound,” said Finegood. “We request- the historic theater “was really rough which buildings stood in its way.” erty, would that building be under Kamper-designed Park Avenue Ho- ed that both buildings be saved. at around the edges and not attractive.” Kirk Pinho: (313) 446-0412 renovation now and be home to tel — which had “ZOMBIELAND” ‘compromise’ was due to the view “After the renovation, it was fabu- Twitter: @kirkpinhoCDB hundreds of people? I think it spelled out in grati across its top that the arena was more important lous,” he said. Chad Livengood would.” story. to Detroit’s economy than saving an- Ilitch’s use of the historic theater’s contributed to this report.

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tate planners would have been keen- TIGERS ly aware of the Davidson situation, FROM PAGE 1 and crafted succession to avoid re- www.crainsdetroit.com Details of the trust arrangement peating those problems. are private, and the family isn’t Editor-in-Chief Keith E. Crain Executive Vice President KC Crain commenting on its structure. e Il- Where problems arise Publisher/Editor Ron Fournier, (313) 446-1674 or itch family issued a succession-plan- [email protected] ning statement in May 2016 that Tax attorneys say the value of as- Group Publisher Mary Kramer, (313) 446-0399 or [email protected] conrmed Chris Ilitch would con- sets within an estate is the classic Managing Editor Michael Lee, (313) 446-1630 tinue to oversee their holdings, but battleground for the IRS and the or [email protected] it didn’t reveal specics of owner- heirs. Managing Editor/Custom and Special Projects Kristin Bull, (313) 446-1608 or [email protected] ship structures. “You always run into the issue of Product Manager/Marketing Kim Winkler, (313) “All companies remain under Il- valuation. at’s always where there 446-6764 or [email protected] itch family ownership and in com- is some risk,” Malis said in a 2015 in- Deputy Product Manager/Digital Carlos Portocarrero (313) 446-6056 or [email protected] pliance with MLB regulations,” terview with Crain’s about estate tax- Membership Director Nancy Hanus, (313) 446-1621 or Doug Kuiper, vice president of cor- es. [email protected] porate communications for Ilitch e clash over estates comes News Editor Beth Reeber Valone, (313) 446-5875 or [email protected] Holdings Inc., said in a statement. when the IRS and the family each put Design and Copy Editor Beth Jachman, (313) 446-0356 Matt Bourne, MLB vice president of a value on a team and other assets for or [email protected] business public relations, deferred tax purposes. For example, when Research and Data Editor Sonya Hill, (313) 446-0402 questions about the Tigers’ owner- Minnesota Twins owner Carl Pohlad or [email protected] Newsroom (313) 446-0329, FAX (313) 446-1687, ship structure to the team and Ilitch CRAIN’S DETROIT BUSINESS died in 2009 at age 93, his estate val- TIP LINE (313) 446-6766 family. A Tigers spokesman referred Mike Ilitch put the Tigers and other assets into trusts, a common practice that can ued his stake in the MLB team — set ownership questions to Kuiper. shield heirs from federal estate tax bills. up in a complex fashion — at $24 REPORTERS During a visit to the Tigers’ Flori- million. IRS auditors disagreed, and Tyler Cli­ord, breaking news. (313) 446-1612 or tcli˜[email protected] da spring training complex urs- such as pitcher , but beneciary of the trust (and receive the estate was billed $293 million for Annalise Frank, breaking news. (313) 446-0416 or day, MLB Commissioner Rob Man- no deals emerged. But leaner pay- income from the trust) while Chris the ownership value and penalties. [email protected] fred spoke to reporters about Chris roll is the business strategy for the Ilitch is the controlling trustee. MLB Eventually, after a lawsuit by Pohlad’s Jay Greene, senior reporter Covers health care. (313) 446-0325 or [email protected] Ilitch. foreseeable future, along with a new allows such arrangements because sons, the estate settled for $36 mil- Chad Livengood Covers Detroit rising. (313) 446-1654 or “Chris has become increasingly focus on analytics, and Chris Ilitch its gambling prohibition applies to a lion in 2015, according to the Minne- [email protected] involved in will ultimately shape the team’s di- trust’s controlling trustee, not its apolis Star Tribune. Kurt Nagl Breaking news. (313) 446-0337 or knagl@ crain.com activities, attending owners meet- rection. beneciary. Selling an asset eliminates the val- Kirk Pinho Covers real estate. (313) 446-0412 or ings, starting about the time that I e succession planning, if suc- Some team owners, such as Jerry uation ght, Malis said: “If you con- [email protected] became commissioner (in 2015),” cessful, should mean the family’s - Buss of the National Basketball As- vert it into cash, there is no squab- Bill Shea, enterprise editor Covers the business of sports. (313) 446-1626 or [email protected] Manfred was quoted by e Associ- nancial resources don’t get tied up sociation’s Los Angeles Lakers, pur- ble.” e Ilitches have said they have Lindsay VanHulle, Lansing reporter. (517) 657-2204 ated Press as saying. “He’s been a in a massive inheritance tax battle chased insurance policies intended no plans to sell their teams. or [email protected] positive force, obviously he has — something that has forced other to pay o estate taxes so that heirs “None of our businesses or teams Dustin Walsh, senior reporter Covers economic issues. great sports background because of families to sell their teams. wouldn’t struggle with tax bills — are for sale. Careful planning has (313) 446-6042 or [email protected] Sherri Welch, senior reporter Covers nonprošts and the hockey side, where he’s been which sometimes can force a team been done over many years by Mike philanthropy. (313) 446-1694 or [email protected] more involved historically. I think Teams and trusts sale. Estate tax bills from the Inter- and Marian Ilitch to ensure the De- the Tigers are in really good hands.” nal Revenue Service fueled the sale troit Tigers, the ADVERTISING e Ilitch family, whose fortune A Crain’s examination of public of the National Football League’s and our entire family of businesses Sales Inquiries (313) 446-6032; FAX (313) 393-0997 Director of Sales Lisa Rudy stems from ownership of the Little records in 2015 conrmed that Mike Miami Dolphins in 1993 and St. remain under ongoing and long- Senior Account Manager Katie Sullivan Caesars pizza chain, earned a repu- Ilitch had put the Tigers and other Louis Rams in 2008. e Lerner term Ilitch ownership,” Chris Ilitch, Advertising Sales Christine Galasso, Gerry Golinske, tation as sports owners willing to assets into trusts, a common prac- family had to sell 40 percent of its who is CEO and president of Ilitch Diane Owen ClassiŽed Sales Manager Angela Schutte, spend their way to championships. tice that can shield heirs from feder- stake in credit card giant MBNA to Holdings, said in the family’s 2015 (313) 446-6051 Under their ownership, the Red al estate tax bills that can run into pay its estate tax bill after Cleveland succession planning statement. ClassiŽed Sales Lynn Calcaterra, (313) 446-6086 Wings evolved from a moribund the hundreds of millions of dollars Browns owner Al Lerner died in Events Manager Kacey Anderson franchise to one of the NHL’s elite for pro sports franchises. Ilitch has 2002. Senior Art Director Sylvia Kolaski The estate tax Special Projects Coordinator Keenan Covington clubs, winning four Stanley Cups. used the value of his sports assets as If the Tigers were entrusted a long Sales Support Suzanne Janik e Tigers struggled under Mike Il- collateral for various business time ago, that freezes the value un- It’s easy to understand why sports Media Services Director Geof Innis itch for years until he hired Dave moves related to the teams, such as der federal gift tax law at the time team owners craft detailed succes- Media Services Manager Hussein Abdallah Dombrowski as team president and renancing the private debt on Co- the team was put into trust, Malis sion plans: e current top federal CUSTOMER SERVICE — and opened his merica Park, according to nancing said. at’s one way to reduce the estate tax rate is 40 percent, with an Main Number: Call (877) 824-9374 checkbook to spend more than $1.6 statements led with the Michigan eventual tax bill because sports exemption for the rst $5.49 million. or [email protected] billion on players over the past de- Secretary of State. team values have been skyrocketing Some quick cocktail-napkin math: Subscriptions $59 one year, $98 two years. Out of state, $79 one year, $138 for two years. Outside U.S.A., add $48 cade in a spree that won a lot of How the trust and estate planning because of enormous local and na- If the Tigers were theoretically valued per year to out-of-state rate for surface mail. Call (313) games and a pair of American has been specically arranged to tional TV rights deals and other rev- at $1 billion, and $5.49 million was 446-0450 or (877) 824-9374. League pennants, but no World Se- shield Ilitch’s heirs from a massive enue streams. Forbes most recently shaved o for the exemption, the tax Single Copies (877) 824-9374 Reprints (212) 210-0750; or Krista Bora at ries titles. estate tax or gift tax bill is unknown. valued the Tigers at $1.15 billion. bill would be 40 percent of the re- [email protected] In 2015, Mike Ilitch red Dom- “A trust is its own legal entity,” maining value — $398 million. To Žnd a date a story was published (313) 446-0406 browski and replaced him with said George Malis, managing part- Best laid plans ... Federal tax law stipulates that if an or e-mail [email protected] Dombrowski’s longtime lieutenant, ner with Detroit-based Abbott Nich- asset accounts for 35 percent or more Crain’s Detroit Business is published by . After last season, the mes- olson PC and a specialist in estate Even when an estate is thought to of an estate’s value, the tax bill can be Crain Communications Inc. sage from the Ilitches and Tigers planning. “If shares of the Tigers are be well prepared, plans can unravel spread over 14 years — a proviso in- Chairman Keith E. Crain was that payroll — which will top owned by the trust, the trust contin- when a team owner dies. tended to help families keep family President Rance Crain Treasurer Mary Kay Crain $200 million this year again — will ues to own them (after Mike Ilitch’s After Bloomeld Hills multibil- businesses. Otherwise, it’s due with- Senior Executive Vice President William A. Morrow begin to shrink to eventually get the death). It now falls into Chris’ hands lionaire and Detroit Pistons owner in nine months. Executive Vice President/Director of Strategic team under MLB’s luxury tax thresh- to manages the trust assets.” William Davidson died in 2009 at age If shares of the Tigers were trans- Operations Chris Crain Executive Vice President/Director of Corporate old ($197 million in 2018). Spouses are exempt from estate 86, his widow assumed ownership of ferred directly to Chris Ilitch and any Operations KC Crain e Tigers in late 2016 let the rest taxes, but children are not. the team. Davidson had wanted the of his six siblings, a federal gift tax at Vice President/Production & Manufacturing of baseball know they were open to While the trust’s structure is un- Pistons to remain in his family, but the time of the transfer would have to Dave Kamis trading any player on the roster, in- known, Malis said it’s possible that Karen Davidson decided she didn’t have been paid. e gift tax rate also Chief Financial O”cer Bob Recchia Chief Information O”cer Anthony DiPonio cluding beloved but pricey starters Marian Ilitch could be named the want to own a sports team and sold it tops out at 40 percent, and the ex- G.D. Crain Jr. Founder (1885-1973) and other assets in 2011 for $325 mil- emption is $5.49 million. Mrs. G.D. Crain Jr. Chairman (1911-1996) lion to Tom Gores. In addition to the use of trusts, if a Editorial & Business O”ces 1155 Gratiot Ave., Detroit MI 48207-2732; INDEX TO COMPANIES Additionally, the Davidson estate team owner’s death is expected to (313) 446-6000 These companies have signicant mention in this week’s Crain’s Detroit Business: was hit in May 2013 by the IRS with a produce an onerous estate or gift tax $2.7 billion tax bill, which was settled bill, he or she can buy insurance to Cable address: TWX 248-221-5122 AUTNEW DET Beaumont Hospital 6 Mich. Dept. of Health and Human Services 3 CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly for $457 million — in addition to cover some or all of it. Or, because of by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI Cottage Inn Pizza 4 Michigan Gaming Control Board 11 $168 million in estate taxes and $82 their enormous wealth, they can 48207-2732. Periodicals postage paid at Detroit, MI and additional Detroit Red Wings 1 Moosejaw 1 million in gift taxes already paid. e simply pay the bill. mailing o¦ces. POSTMASTER: Send address changes to CRAIN’S estate sued Deloitte Tax LLP, which Mike and Marian Ilitch’s net worth DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, Detroit Tigers 1 Opus Mach 6 MI 48207-9732. GST # 136760444. Printed in U.S.A. had crafted Davidson’s estate plan, in was estimated at $6.1 billion by Contents copyright 2017 by Crain Communications Inc. All rights Focus: Hope 16 Penske Automotive Group 7 what was ultimately an unsuccessful Forbes.com last week. reserved. Reproduction or use of editorial content in any manner Lockhart’s BBQ 8 RiseMobility LLC 6 bid to recover $500 million. Bill Shea: (313) 446-1626 without permission is prohibited. McLaren Flint 3 Malis said the Ilitches and their es- Twitter: @Bill_Shea19 CRAIN’S DETROIT BUSINESS // FEBRUARY 20, 2017 23 THE WEEK ON THE WEB RUMBLINGS FEBRUARY 11-17 Couple shoots for sales Detroit Digits creative industries with the help of a German $1 million grant over the next three with retro golf club years from the Miami-based John S. A numbers-focused look at last and James L. Knight Foundation. Who says entrepreneurs have to developers week’s headlines: J Barbat Holdings LLC has begun start out early? buy 4 buildings work on the former Philip J. Neudeck Lorna Utley, recently retired $1.2 million oce building, the third downtown president and CEO of Goodwill In- The amount of a donation by the Detroit renovation project for devel- dustries of Greater Detroit, and her near TechTown Kosch family, owners of Dearborn oper Joe Barbat. Demolition began husband, Jay Utley, an engineer by Munich-based develop- Sausage Co., for elderly patient in January on the $12.8 million rehab trade and owner of Grosse Pointe ment group plans a 60-unit care and healthy living initiatives at 415 Cliord St., Barbat said. Philip Woods-based industrial electron- multifamily development at the Beaumont Skilled Nursing Houze, an eight-story building with ics company Marathon Cable Co. Aat Second Avenue and York Street and Rehabilitation Center in a modern metal exterior, is expected and manufacturers’ rep Brush near TechTown Detroit after closing Dearborn. to open in spring or summer 2018. Controls, are just getting started. on the $3.1 million purchase of four J Detroit’s three casinos had a total And it’s all in the name of fun. buildings from Texas investors. In $48 million aggregate revenue of $112 million in e avid golfers plan to begin addition, Optima Aegidius Group The revised price tag for the January, 2.7 percent higher than the making and selling replicas of a has the 14,000-square-foot John taxpayer-funded renovation of same time last year but 4.2 percent Scottish sand wedge passed down King-owned Big Book Store in Mid- the Detroit Tigers’ spring training lower than December, the Michigan by Jay Utley’s father as retirement town under contract for purchase facility in Lakeland, Fla. It’s up Gaming Control Board reported. gifts. ey already have a prototype with plans for 20 more loft-style from the original estimate of in hand, with a head cast from condos there. $40.2 million. OTHER NEWS steel, a hickory shaft and a leather J e Wayne County Commission grip to make it look like it’s from COMPANY NEWS $900 million approved funding requested by days gone by. LORNA AND JAY UTLEY J New premium club spaces, reno- The estimated worth of the County Executive Warren Evans to e Ayres Golf replicas fulll a Lorna and Jay Utley plan to sell this vated suites, a freshened aesthetic Detroit Pistons, according to evaluate options for the half-built jail lifelong dream of her father-in-law, protoype of a Scottish sand wedge and replacement of the audio-visual Forbes.com. That’s up $50 million project on Gratiot Avenue. e ap- Lorna Utley said, noting that while replica as a retirement giŠ. system will highlight the $100 mil- from Forbes’ number last year and proval enables the county to decide you could play with the wedge, you lion in privately nanced upgrades doesn’t re‡ect a likely spike when whether a proposal by Dan Gilbert’s certainly wouldn’t be competitive. ing retro technology that’s beloved to Ford Field planned by the Detroit the team relocates downtown in Rock Ventures LLC to build a new e pair aren’t stopping there. by some audiophiles. Lions until August. Team President September. criminal justice complex on another ey plan to make a headphone “We’re not going to be the next Rod Wood presented the renovation site or a plan to continue building amplier using vacuum tubes. Like Apple, that’s for sure,” he said. plan to select suite holders, corpo- the unnished jail would be most the sand wedge, the Detroit Glass “But there are enough people rate sponsors and other VIPs at a pri- Other stores set to open by April in a practical and cost-eective. Audio headphones will be sold on- doing similar things, there’s a small vate event at Ford Field. rebranding by the family-owned J U.S. manufacturers are rapidly line and be a bit of a throwback, us- market for it.” J Shinola announced plans for its company are in West Bloomeld, boosting investment in advanced second Chicago store as the De- Detroit, Clinton Township and digital technologies, according to a troit-based watchmaking brand ex- Grand Rapids. new survey by Troy-based technolo- Menon receives rst award named for him pands into products ranging from J Busch’s Fresh Food Market agreed gy business association Automation turntables to jewelry. Shinola leased to purchase VG’s Fresh Market in Alley. According to the survey, 85 Mani Menon, M.D., the world-re- kidney cancer and kidney trans- 2,500 square feet at a Rush Street site Brighton, which will be the Ann Ar- percent of U.S. manufacturing exec- nowned pioneer of robotic surgery plantation. expected to open around July. Shi- bor-based grocery chain’s 17th utives responded that they plan to at Henry Ford “More than 3 million patients nola has 22 shops and plans to open Michigan location. e store will re- increase existing budgets for new Health System, from around the world have under- nine to 11 more this year. main open during a remodeling that technologies, with nearly a third has been gone robotic surgery” since 2001, J Maumee, Ohio-based supplier will follow completion of the deal in planning to increase budgets by up named as the Menon said in a statement to Crain’s. Dana Inc. reached an agreement April. to 15 percent. rst recipient of “Henry Ford Hospital was the func- with Warren-based axle housing and J Ford Motor Co. is investing $200 J More than 70 businesses in and the Menon tional birthplace of robotic surgery, driveline shaft maker U.S. Manufac- million in a new vehicle testing com- around Detroit’s Mexicantown Medal for ro- and I feel privileged to be a part of turing Corp. to purchase the latter’s plex in Allen Park that will include a closed for a “Day Without Immi- botic surgery that. I am very appreciative of this production operations and facility wind tunnel and climatic chamber, grants,” a national movement aimed from the North recognition, and for the ongoing sup- for $100 million in cash. e transac- Automotive News reported. Con- at highlighting the importance of American Ro- port of my colleagues, peers in the tion, expected to close in the rst struction will begin later this year migrants to the country’s economy, Mani Menon: botic Urology urological community and Henry quarter, will include USM’s Van Dyke and should be completed by the according to the Southwest Detroit Honored for Symposium. Ford Health System administration.” Avenue facility and 800 employees. Dearborn automaker in 2019. Business Association. robotic surgery. Last week, Each year, the Menon Lecture- J MJR Brighton Towne Cinema 20 J Detroit-based Blue Cross Blue J A two-year, $60 million state con- Menon, direc- ship in Robotic Surgery will recog- will undergo a $4.3 million renova- Shield of Michigan and Blue Care struction project on M-59/Hall Road tor of the Vattikuti Urology Institute nize a robotic surgeon who has tion later this year to update its lobby Network on March 1 will stop paying between M-53 and Romeo Plank at Henry Ford Hospital in Detroit, made important contributions to and 20 auditoriums, Bloomeld for the pricey brand-name allergy Road is set to begin next month in gave the inaugural lecture at the advancing robotic surgery, said Hills-based parent company MJR drug EpiPen and will only authorize Macomb County, ocials said. event held in Las Vegas. Robotic Craig Rogers, M.D., director of re- Digital Cinemas announced. payment for the lower-cost generic surgery includes prostate, bladder, nal surgery at Henry Ford Hospital. J A winning bid of $15.3 million in version. EpiPen is manufactured by OBITUARIES cash at a bankruptcy auction in Salt Mylan Pharmaceuticals. J Delores Bennett, founder and ex- Lake City enabled Vesta Modular J e nonprot Detroit Creative ecutive director of North End Youth UM approves $21M plan for eld house and Housing Solutions Inc., a portfo- Corridor Center is moving ahead Improvement Council in Detroit, lio company of Birmingham-based with its vision to mobilize the city’s died Feb. 6. She was 84. e University of Michigan Oosterbaan facility is an indoor Simon Group Holdings, to gain more Board of Regents last week ap- practice facility for UM athletics. It than $100 million in assets of Salt proved a preliminary $21 million also serves as a temporary in- Lake City-based M Space Holdings Fire‹ghters battled plan to refurbish the Oosterbaan door-home playing eld for the LLC. an early morning ‹re Field House and add a new football men’s and women’s lacrosse teams J Detroit City FC is beginning its Friday at Katoi training center. until construction of the south ath- second phase of renovations at restaurant in Detroit’s Built in 1980, the 78,000-square- letic complex is completed next Hamtramck’s Keyworth Stadium. Corktown neighbor- foot eld house will receive a year, a spokesman said. e $112,000 project is expected to hood. There were no 5,000-square-foot mezzanine level e project will be funded increase capacity to 7,325 for the injuries reported. An and 32,000-square-foot strength and through university gifts and supple- semi-pro National Premier Soccer investigator on the conditioning center. e renovations mented by the athletic department. League team, which begins its sea- scene told Crain’s the will also replace the roof and update New York City-based Kohn Ped- son in May. blaze was being the re alarm, ventilation and light- ersen Fox Associates will work with J Elite Mr. Alan’s opened its rst investigated as a ing systems, among others. Detroit-based HNTB Corp. to design Lansing store as part of a ve-store “suspicious ‹re” and a Connected to Schembechler the project, which will create more expansion of the Redford-based possible burglary. Hall and the Al Glick Field House, than 50 construction jobs, with com- sneaker and sports apparel chain. ANNALISE FRANK/CRAIN’S DETROIT BUSINESS which house the football team, the pletion expected by the end of 2018. Let’s grow, right now.

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