NEI Focus: City Creatives Economy Initiative, Round Two
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20140203-NEWS--0001-NAT-CCI-CD_-- 1/31/2014 6:25 PM Page 1 ® www.crainsdetroit.com Vol. 30, No. 5 FEBRUARY 3 – 9, 2014 $2 a copy; $59 a year ©Entire contents copyright 2014 by Crain Communications Inc. All rights reserved Page 3 ROUND-TWO FUNDERS OF NEI Here are the 10 funders of the New Budget cuts put defense NEI focus: City creatives Economy Initiative, round two. Ⅲ The John S. and James L. Knight contracts in line of fire Foundation (Miami): $5 million “Entrepreneurship and innova- Ⅲ Ford Foundation (New York): $5 million 2nd funding round tion, as stand-alones, are valuable Ⅲ The Kresge Foundation (Detroit): in growing the economy,” said $5 million LARRY PEPLIN NEI Executive Director Dave Eg- Ⅲ W.K. Kellogg Foundation (Battle to target innovation, ner. “But the more we can con- Creek): $5 million nect them, the greater we can ac- Ⅲ The William Davidson Foundation celerate each. (Troy): $5 million entrepreneurism “In the end, without innova- Ⅲ Hudson-Webber Foundation tion, there are no new ideas to (Detroit): $2.5 million Amid financial emergency, BY SHERRI WELCH commercialize. And without en- Ⅲ Charles Stewart Mott Foundation CRAIN’S DETROIT BUSINESS Egner trepreneurs at the ready, there’s (Flint): $2 million Highland Park’s hopeful no one to commercialize them.” Ⅲ Community Foundation for After seven years and nearly $100 million in invest- NEI’s initial funders and one new foundation have Southeast Michigan (Detroit): Calif. firm poised to buy ment, the New Economy Initiative has figured out the committed a second-round investment of $33 million $1.5 million types of projects that will give it the most bang for its toward a $40 million target, Egner told Crain’s last Ⅲ The Max M. and Marjorie S. Fisher vacant American Axle land buck. week. Foundation (Southfield): $1.5 million In its second round, NEI plans to direct new fund- NEI spent two years studying different approach- Ⅲ McGregor Foundation (Detroit): ing primarily to agencies providing supportive ser- es to building the regional economy before focusing $750,000 Inside vices to spur innovation and entrepreneurism in the Ⅲ Skillman Foundation (Detroit): TBD city of Detroit — areas it honed in on two years ago. See NEI, Page 18 Horse tracks bet future on thoroughbreds, Page 4 Belle Isle hotel? Canadians For budget, float boat club plan, Page 5 Geared This Just In Snyder must Priority Health to move local office to American Center Priority Health is renovating for play resell plan 20,000 square feet on the 13th floor of the American Center in Southfield to prepare for a Olympics, soccer help mid-May move from the Ar- on Medicaid boretum II office complex in Farmington Hills. Warrior build global brand BY CHRIS GAUTZ The Grand Rapids-based CAPITOL CORRESPONDENT nonprofit insurer opened a BY BILL SHEA LANSING — When Gov. Rick customer service center at CRAIN’S DETROIT BUSINESS Snyder unveiled his state budget the American Center last fall. proposal last year, it included two Priority Health currently hen the men’s ice hockey competi- big-ticket items employs about 130 and ex- tion begins at the Winter Olympics — a $1.2 billion pects to hire 25 additional W next week in Russia, nearly a hun- increase to im- customer service employees dred players — including Detroit Red Wings prove the state’s and other staff in Southeast Henrik Zetterberg, playing for Sweden, and roads and Michigan over the next sev- Jimmy Howard, playing for the United bridges and the eral years, said Don Whit- States — will be using equipment from War- expansion of ford, senior vice president of ren-based Warrior Sports Inc. Medicaid. Priority’s east region. Outfitting pro athletes The trans- Priority Health has occu- and teams is the latest step portation pro- pied space in Arboretum II RUSH IN? the sporting goods manu- posal never hap- since 2007, when it acquired facturer is taking to be- As Games Snyder pened. And the former Care Choices come a global brand. begin, suppliers while Medicaid expansion was ap- health maintenance organi- consider The company — proved, it will be of significant in- zation from Livonia-based investing in launched in founder David terest in the new budget that Sny- Trinity Health, Whitford said. Russia, Morrow’s Princeton Univer- Page 15 der will present to the state The 25-floor American Cen- sity dorm room in 1992 as a Legislature on Wednesday. ter, at 27777 Franklin Road, is manufacturer of hand- One of Snyder’s selling points for a 508,000-square- foot Class A made titanium lacrosse sticks — has grown Medicaid expansion was that it office building managed by into a retailer of equipment, footwear and ap- would save the state $206 million Southfield-based Redico Real parel for lacrosse, soccer, ice hockey and gen- this fiscal year, and Snyder planned Estate Development. It was the eral lifestyle wear. to put half of that amount in a spe- headquarters of the now-de- At the Olympics, players on 12 national JOHN SOBCZAK cial savings account. That money funct American Motors Corp. teams will use Warrior sticks, gloves, hel- Warrior Sports Inc. began in the dorm room of David Morrow, who — Jay Greene played lacrosse at Princeton University. Morrow’s company now is See Warrior, Page 16 making a global push, using the English soccer team Liverpool FC. See Budget, Page 17 Purchase a one-year subscription to Crain’s Hey! Get Detroit Business and get a FREE copy of your own both the 2014 and the 2015 Book of Lists. 877-824-9374 | crainsdetroit.com/boloffer NEWSPAPER copy! OFFER ENDS 3/31/14 20140203-NEWS--0002-NAT-CCI-CD_-- 1/31/2014 5:37 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS February 3, 2014 MICHIGAN BRIEFS ConAgra to close snack food plant Grand Rapids office and 41 more offices of Wells Fargo Insurance, part near Grand Rapids, idle about 260 Amid heat from investor to split up, Dow posts profit of San Francisco-based Wells Fargo ConAgra Foods Inc. will close its & Co., the Grand Rapids Business plant in the Grand Rapids suburb Midland-based Dow Chemical Co., facing pressure Third Point, founded by billionaire Dan Loeb, Journal reported. of Kentwood next year, costing from the New York City-based investment fund Third said last month that Dow is its top holding and Ⅲ Randy Thelen, who has run about 260 people their jobs, MiBiz Point LLC to break itself in two, tripled a share buy- could add billions of dollars to earnings by spinning the economic development organi- reported. The Omaha, Neb.-based back program to $4.5 billion and raised its dividend off commodity chemicals and plastics. Liveris said zation Lakeshore Advantage for the food processor will wind down pro- while posting better-than-expected fourth-quarter Dow can realize more from the commodity business past decade, is leaving to take an duction starting in April and end earnings and sales last week. with projects such as its $4 billion plan for U.S. Gulf economic development job in Om- Chairman and CEO Andrew Liveris defend- Coast plants to take advantage of cheap natural gas. aha, Neb., MLive.com reported. most operations by summer. Dow ed his strategy of integrating commodity chemicals While Dow has plans to divest as much as $4 bil- The resignation comes less than a Products made at Kentwood in- with specialty products after Third Point called for lion worth of subsidiaries to concentrate on more- week after Lakeshore Advantage clude cereal and nutrition snack the company to spin off its petrochemicals assets. profitable operations, Argus Research Co. said the said it would merge with the Ot- bars. In a Sept. 9, 2013, story in only makes commodity chemicals, such as eth- chemical producer should consider a full breakup. tawa County Economic Development Crain’s on Grand Rapids’ growing Dow ylene and propylene, to provide ingredients for its Dow’s disparate businesses, from plastics to geneti- Office, the other major economic snack food industry, ConAgra said higher-value products in agriculture, electronics cally modified seeds, make it difficult for sharehold- development agency in the county. it intended to spend $73 million on and plastics, Liveris said last week during the com- ers to value the company, according to Barclays plc. Ⅲ Mott Community College Presi- new equipment, relocate a re- pany’s earnings conference call. dent Richard Shaink plans to retire search and development lab and — Bloomberg this year, he wrote last week in an improve efficiencies on produc- email. Shaink has been president of tion lines in the plant. Also last week, Meijer an- the Flint-based school since 2000. The company has received state Ⅲ Jackson-based Consumers Ener- Ⅲ Passenger traffic continued to nounced that it planned to start a Ⅲ Grand Rapids ranks No. 7 on and local tax breaks at the plant. gy Co. plans to purchase a power rebound at Flint’s Bishop Interna- $100 million dairy production plant Amtrak’s list of “10 Best Places to Kentwood has given breaks worth plant on the east side of the city for tional Airport in November and De- in Tipp City, Ohio, north of Dayton, Visit in 2014,” the Grand Rapids about $40 million, Rich Houtteman, $155 million — a move that would cember, increasing 8 percent com- the Grand Rapids Business Journal Business Journal reported. Kentwood’s deputy city administra- move to the back burner plans to pared with the same two months reported. Meijer already has a dis- tor, told MLive.com. The city is like- build a $700 million natural-gas one year earlier, MLive.com re- tribution center there and has 42 Find business news from ly to get some of that back.