Dillon's Health Insurance Pool Plan Draws Biz Backing
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20090720-NEWS--0001-NAT-CCI-CD_-- 7/17/2009 6:03 PM Page 1 ® www.crainsdetroit.com Vol. 25, No. 28 JULY 20 – 26, 2009 $2 a copy; $59 a year ©Entire contents copyright 2009 by Crain Communications Inc. All rights reserved Page 3 Hospital turns losses to Tigers’ ticket gains; what’s the secret? Acquisitions drive Boosters hope arts deals sales fall, Ilitch will be music to young ears Inside new auto supplier still spending Are high-end restaurants feeling the pinch? Page 4 Cerion buys bankrupt metal-parts makers Are team finances Small Business Monthly BY RYAN BEENE Revstone is headed by George Hofmeister, a now at full count? CRAIN’S DETROIT BUSINESS Kentucky industrialist with a track record of executing automotive deals in metro Detroit BY BILL SHEA Rising from the ashes of three bankrupt and the Midwest. CRAIN’S DETROIT BUSINESS auto parts manufacturers in the stamped- and Contech’s castings business generated rev- cast-metal component sector is Cerion L.L.C., a enue of $156.7 million in 2008. PPI posted rev- The division-leading Detroit Tigers have a new manufacturer coming to life through ac- enue of $141 million from January to October large-market payroll with midsize market at- quisitions that could be ca- last year, and Intermet posted revenue of tendance that’s off 22 percent from last year, THE PRINCIPAL pable of generating nearly about $310 million in the 12 months ending something the team said it was prepared for but $1 billion in revenue. July 31, 2008, according to records from the has baseball insiders speculating about the Hofmeister: Plymouth-based Cerion Name behind companies’ bankruptcy cases. team’s long-term financial health. Cerion and and parent company Revs- Each of the metal stampings and castings And to the delight of fans, if not economists, Revstone may tone Industries L.L.C. of Paris, suppliers filed for Chapter 11 bankruptcy be- the team’s owner is willing to jog memories, Ky., have since December tween August 2008 and January 2009 and spend even more to return to WEB EXTRA Page 24 acquired the die-cast metal failed to reorganize and emerge intact. the World Series — even if it’s component business of Con- For about $43 million, Revstone and Cerion a money-losing endeavor. Bill at the bat: tech L.L.C., almost all the assets and operations were able to pick up at least 20 manufacturing Attendance through last Shea faces of fine blanking and metal stamping firm Preci- operations throughout the U.S. and Mexico week’s All-Star break was av- Dave Rozema Spy biz, three others sion Parts International Inc. and, on July 14, the eraging 30,875 per game on the mound, www.crains assets of castings producer Intermet Corp. See Cerion, Page 24 find their niches, Page 15 through 40 games at 41,255-seat detroit.com Comerica Park compared to /extra last season’s 39,761 through the This Just In same number of home games. At an average ticket price of $25.15, that Land bank authority roughly translates into $8.9 million less in tick- et revenue so far this season. getting off the ground Dillon’s health insurance The fan drop-off is attributed to both the Almost one year after the team’s last-place finish in 2008 and the subse- Detroit City Council approved quent national economic plunge that’s been es- the creation of the Detroit pecially harsh in metro Detroit — vaporizing Land Bank Authority, that body fans’ disposable income and making them hesi- has held its first meeting. pool plan draws biz backing tant to buy tickets for a team three years removed The board’s seven mem- See Tigers, Page 25 bers are appointed by the BY JAY GREENE mayor of Detroit and the De- CRAIN’S DETROIT BUSINESS STATE INSURANCE POOLS troit City Council, and in- About 23 states have some type of government- clude the heads of the admin- Several representatives of Southeast Michigan businesses and other organiza- run health insurance pool that includes istration’s Planning and municipalities, universities and school districts. Development Department tions are expressing early Ⅲ support for a plan offered States with highest participation: Georgia, and the City Planning Com- North Carolina, Wisconsin, Delaware, California. mission, an advisory body to last week by Michigan Ⅲ House Speaker Andy Dil- Potential savings with pooled plans: Some the council. Those positions states have reported savings of 2 percent to are held by Warren Palmer and lon, D-Redford Township, 5 percent. Massachusetts cities that didn’t join Marcell Todd, respectively. to cut health care costs by the state’s pool faced a 13 percent average Land banks are designed creating a large public em- increase, compared with 8 percent for those to speed up the sale of tax-re- ployee purchasing pool. cities that joined the pool. verted properties. State law Dillon said he will soon Union vs. non-union: Most states with pools gives a local land bank the introduce legislation to ex- had low levels of union membership. It is NATHAN SKID/CRAIN’S DETROIT BUSINESS pand the state’s employee harder to incorporate unions into state pools Detroit Tigers fans wait to get into Comerica Park ability to clear titles and Dillon buy, sell, demolish or reha- health benefit program to because of their contracts, officials said. on Opening Day 2009. bilitate derelict properties. include local governments, universities and Source: National Conference on State Legislatures, Denver Parcels funneled through school districts. AT THE BALLPARK By increasing the number of covered lives Dillon acknowledged that he expected to the land bank are automati- Here’s a look at attendance at 41,255-seat cally eligible for brownfield in the state health program, Dillon said the save additional money by continuing a trend Comerica Park since Detroit set the Major tax credits. state can generate greater savings by negoti- in the public and private sector that shifts League Baseball American League record for ating deeper discounts with health plans, in- more health care costs to public workers. most losses in 2003: See This Just In, Page 2 surers, physicians, hospitals and other However, low-income public workers would Average MLB providers. pay lower out-of-pocket costs for health in- Record per game rank Total surance, he said. 2003 43-119 17,103 27 1,368,245 “Some (public) plans are run well. If your 2004 72-90 23,962 22 1,917,004 costs are lower than the state plan, we are 2005 71-91 25,306 21 2,024,485 not going to force people to roll into it,” Dil- 2006 95-67 32,048 13 2,595,937 lon said. “We are not talking about a govern- ment-run system or replacing private insur- 2007 88-74 37,619 9 3,047,139 ance. We will go out to bid and let the private 2008 74-88 39,538 8 3,202,645* sector run it.” 2009 48-39 30,875 11 1,235,007** Dillon said his plan can save $700 million * Franchise record attendance NEWSPAPER ** Through All-Star break See Insurance, Page 24 20090720-NEWS--0002-NAT-CCI-CD_-- 7/17/2009 6:10 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS July 20, 2009 named Shrawan Tiwari as its first Hotels’ ex-owner back Openings remain the U.S. House Transportation THIS JUST IN president. Committee on Friday. Tiwari has served as executive in bankruptcy court for Israel trade mission The funding for the transit cen- ■ From Page 1 manager at Pat Engineering in A former owner of the Hotel St. Up to 10 businesses can partici- ter is part of a $76 billion trans- Doha since its inception in 2002 Regis in Detroit and the Plaza Hotel pate in an October trade mission portation appropriations bill that The group met July 15, but and will continue in that role as in Southfield is back in federal to Israel through Troy-based Au- cleared a subcommittee vote earli- board member Deborah Younger, well as serving as North American bankruptcy court for tax liens tomation Alley. Registration for the er in the week and the full commit- executive director of Detroit LISC, president. against another hotel company he Oct. 23-29 mission closes Sept. 4. tee vote Friday. The bill proceeds said the authority has ground- The local subsidiary identifies owns. Stops on the trade visit include to the House floor Thursday. work to complete before the land partners, products and services Remo Polselli, 53, of Bloomfield Haifa, Tel-Aviv and Jerusalem. Some $5 million in funding has bank can get to work. for engineering and consulting Hills is the owner of Oakland Targeted industry segments in- been proposed in a Senate version Younger said the authority is projects in India, Kuwait, Qatar County-based Waterfront Hotel Ven- clude aerospace, defense and of the appropriations bill, but that in the process of selecting an at- and South Korea, in areas includ- tures L.L.C., which bought the St. homeland security, life sciences, bill is idle, as the House appropria- torney to write its articles of in- ing green construction, telecom, Clair Inn in St. Clair County in IT, nanotechnology and renewable tions bill usually advances first, corporation and has engaged the IT and security. 1997 and filed Chapter 11 reorgani- energy. said Dan Beattie, director of gov- Flint-based Genesee Institute, a In the month since it opened, zation this week at U.S. Bankruptcy — Chad Halcom ernment relations at the Washing- nationally recognized land bank- the local office has signed joint- Court in Detroit.