20100816-NEWS--0001-NAT-CCI-CD_-- 8/13/20105:36PMPage1 ©Entire contentscopyright2010byCrainCommunicationsInc.Allrightsreserved stores andmuchmore.” trading activities,retail crease theregion’sworld businesses thatseektoin- “Opportunities couldinclude McCoy saidinastatement. prises,” tribalChairmanJoe types ofjob-creatingenter- are idealformanydifferent cent toPinnacleRaceCourse plans. announced development Huron Townshipbuthasnot track inWayneCounty’s Race Course acres adjacenttothe Friday thatithasbought7 Chippewa Indians Pages 14-15 family-owned companies, 3Q SBAlendersandlargest Page 10 adding management, face challengeof Growing companies Page 6 suites atMichiganStadium, See who’s leasingluxury lining toeconomicclouds Staffing firmsfindsilver trouble forinsurancebrokers Health reformcouldbring NEWSPAPER to PinnacleRaceCourse Tribe buyslandnext Crain’s Crain’s Second StageExtra This JustIn Inside Page 3 “We believethelandsadja- The www.crainsdetroit.com Vol.26,No.33 Sault Ste.MarieTribeof See ThisJustIn,Page2 Lists thoroughbred confirmed Pinnacle that extensionwilloccur. gress extendsthewaiver. paying interestin2011unlessCon- at year’sendandstatesmuststart ing money,butthatreprieveends Michigan andotherstatesborrow- ed atemporaryinterestwaiverfor benefits. U.S. DepartmentofLabor the statehasborrowedfrom to repayinterestonthe$3.8billion paid, isslatedtoreturninJanuary ceed theunemploymenttaxesthey whose employee-benefitclaimsex- “negative balance”employers of employers. starting inJanuaryforthousands that couldmeanadditionaltaxes al unemploymentborrowing,and next yearstemmingfromitsfeder- estimated $140millioninterestbill UI agency,saidthatbasedonapre- heading theirway. to $67.50peremployeecouldbe ers thatthestatesolvencytaxofup is gettingthewordouttoemploy- gan UnemploymentInsuranceAgency sources atthe health policyandhumanre- Geskey $67 aworker fee couldhit If nowaiver, to UIdebt face taxtied of employers Thousands Given theuncertainty, State andbusinessofficialshope The federalstimuluslawinclud- A statesolvencytax,assessedon LANSING —Michiganfacesan Stephen Geskey,directorofthe CAPITOL CORRESPONDENT B Y See Solvencytax,Page26 A Michigan Chamberof MY director of current count. is conductinga but theagency tax wouldapply, ers towhomthe ance” employ- “negative-bal- be some60,000 view therecould vious agencyre- L ANE Wendy Block, to helppay Michi- AUGUST 16–23,2010 of the Sports &EntertainmentInc. tion sincetheMarch2009deathof umbrella managementorganiza- sociation owned the iar withthesituationsaid. as astrategicfactor,becausesavings aregoingright estate asanevilexpensearereally nowlookingatit said Gantner.“CFOswhohave alwayslookedatreal pecially whenyoulookatthe lifetimeofalease,” and there,penniespersquare foot,theyaddup,es- dent fortheDetroitofficeof Gantner,executivevicepresi- cient office,saidRon moves fromanolder,inefficientspacetoanew,effi- can befrom10percentto15whenacompany of payingforrealestateandhowemployeesuseit— look atwaystocutcosts. getting tractioninC-suites,especiallyascompanies an officelayoutisimportantpointthathasbeen real estateconsultantssaythebusinessstrategyof is aseriousbusinessstrategybehinditsdesign. neon chairsandroomswithpopcornpoppers,there space for increase performance Cool spaces savecash, Quicken HQ:Designedtothrive Market won’t asking support price,insiderssay $500M forPistons? buyers, Other prospective streams, Ilitch’s revenue arena, Pistons, new likely hasplanfor D crainsdetroit.com/quicken Detroit officespace, Quicken’s newdowntown Slideshow: S The bankhiredtobrokerasale Karen Davidson,whohas “When youstartcreatingsmallefficiencieshere Total occupancysavings—comprisingallthecosts While thenewdowntownDetroitheadquarters EKPEEK NEAK A DETAILS EAL Who else: Deep pockets: Financing: CRAIN’S DETROITBUSINESS Detroit Pistons Page 29 Page 29 B franchise andthePS&E Page 29 Quicken LoansInc. Y Look around National BasketballAs- B Ilitch CRAIN’S DETROITBUSINESS ILL B Y S D HEA source famil- market, a lion inthis by $100mil- sider inflated bidders con- and likely try insiders price indus- buyers —a tential lion frompo- ing $500mil- ANIEL and is seek- D Jones LangLaSalle Palace is filledwithgraffitiart, UGGAN plan. company’s business cost savingsandthe the workplace. the sciencebehind dows —areallpartof placed nearlargewin- and workstations orative seatingareas, work stations,collab- portable employee en’s officedesign— Architects and And theyplayinto Elements ofQuick- cause IlitchinFebruaryhired market, thesourcesaid,andbe- cally depressedmetroDetroit anonymity. on theconditionof to speak source, whoagreed both, saidthe $400 millionfor would paylessthan and PS&E,likely to buythePistons Davidson hewants that he’stold nounced Aug.9 trialist MikeIlitch,whoan- Davidson throughherspokesman. advisory teamtobrokerasale. Private Bank hired NewYorkCity-based Inc. her husband, That’s becauseoftheeconomi- Detroit sportsandpizzaindus- Citi declinedtocomment,ashas Chairman BillDavidson,has . ’s sportsfinanceand Crain’s Guardian Industries move fromLivonia.MorepicturesonPage28. Cadillac Towersendsamessageaboutthecompany’s Viewed fromQuicken’snewDetroitoffices,amuralonthe less network. space, employeesuselaptops and connecttoawire- work space.Innewlayouts, suchasQuicken’s of movingwires,officefurniture andexpandinga ployee is$500to$600whenfactoringintheexpense expense ofmovinganemployee’sworkspace. to thebottomline.” an extraordinary “ In someoffices,hesaid,thecostofmovinganem- One targetforcostsavings,Gantnersaid,isthe Marc Ganis,SportscorpLtd. achieved. That wouldbe price tobe Citi Palace’s financialsituations. details ofthePistons’and president whoknowstheinside Tom Wilson,thelongtimePS&E lysts warnthatthefinancialpub- lion by markets. he’s familiarwiththelocalsports Tigers ” Ilitch alreadyownsthe The mostrecentNBAteam NATHAN SKID/CRAIN’SDETROITBUSINESS and Forbes.com Detroit RedWings See Quicken,Page28 See Pistons,Page29 valued at$479mil- cantly inflated. NBA team,signifi- ever paidforan which isthemost called thesale, try insidershave riors Golden StateWar- lion dealforthe sale wasa$450mil- $2 acopy;$59year The Pistonsare , althoughana- in July.Indus- Detroit ® , so 20100816-NEWS--0002-NAT-CCI-CD_-- 8/13/2010 5:03 PM Page 1

Page 2 CRAIN’S DETROIT BUSINESS August 16, 2010

In June, the Michigan Gaming Con- tion and air pollution. About 23,000 tute Hospice, Mercy Hospice and THIS JUST IN The way it was: 1986 trol Board approved the transfer of commuters cross the border daily. VNA Hospice. Greektown’s ownership from the — Bill Shea — Jay Greene ■ From Page 1 Throughout our 25th-anniversary tribe to publicly owned Greektown year, Crain’s will use this space to Superholdings Inc. and the private Group buys 40 acres in Macomb look at interesting items from past group Greektown Newco Sub Inc. Women’s Committee The track’s owner, Jerry Camp- In a rare Macomb County land bell, sold the tribe the parcel for issues. The casino entered Chapter 11 for Hospice Care closes bankruptcy protection two years sale, 40 undeveloped acres have $179,000 through his J.L.L.J. Corp. A down economy and growing been sold to a group of investors. Two 5-acre parcels also are for sale. ago. A U.S. bankruptcy judge ap- We’re loyal proved an exit plan in January. difficulties in fundraising have The listing price was $1.35 mil- The tribe previously owned De- “ led to the closure of the nonprofit lion for the property at the south- troit’s Greektown Casino and cur- to Detroit, Jerry Campbell, the retired chairman and founder of the for- Women’s Committee for Hospice west corner of North Avenue and rently owns five Kewadin branded Care, Bloomfield Hills, after 23 26 Mile Road, said Joe Sowerby, casinos in northern Michigan. but we’re a mer Republic Bancorp Inc. in Ann Arbor, led a consortium making a years, said President Julie Beals. partner at Mt. Clemens-based An- The Sault tribe and J.L.L.J. “Our all-volunteer organiza- ton, Zorn & Sowerby Inc. Corp. are doing studies to deter- corporation. $100 million bid to buy a 40 per- cent stake in Greektown in 2008, tion has worked diligently to pro- Sowerby represented the seller, mine the best use for the land, ” Thomas Cox, mote hospice care awareness and NLR Properties, a husband and they said in a statement. but the deal later fell apart. — Bill Shea raise funds to support the non- wife who bought the property as Development could be linked to United Brands Co., Cincinnati profit communities in Macomb, an investment. The property was the track, the nearby air logistics From a June 23, 1986, article Detroit ferry in run for funding Oakland and Wayne counties, sold to North Avenue Investments industry or gaming. It’s unclear if about Vernors Co., then owned by granting nearly $7 million during LLC, registered to Peter Dinoto of United Brands, retreating from the land could be used as a possi- The Detroit/Wayne County Port the last 23 years,” she said. Shelby Township, according to ble casino site. Indian casinos are plans to expand in Detroit’s Authority is a finalist for federal Eastern Market and eyeing a move The Women’s Committee sup- state records. exempt from 2004’s Proposal 1, funding that would pay to launch ported a number of local hos- Charles Ginster, a senior vice which requires a statewide and out of state. United had closed a commuter ferry service across Vernors’ Detroit bottling plant in pices, including Angela Hospice president in the Southfield office the Detroit River under the U.S. local referendum on any new 1985. Vernors was bought by A&W Home Care, Beaumont Hospice, Hos- of CB Richard Ellis, represented the gambling in the state, but would Beverages in 1987 and later owned Department of Transportation’s Ma- pices of Henry Ford, Hospice of buyer. require other state and congres- by Cadbury Schweppes. It is now rine Highway Program. Michigan, Karmanos Cancer Insti- — Daniel Duggan sional approvals. part of Dr Pepper Snapple Group Detroit’s project was announced Campbell and his wife, Lisa, Inc., based in Plano, Texas. last week as one of eight finalists through their Jackson-based Post- from a pool of 35 bids nationally. In Stables Inc., have been building She deferred all comment on The department has set aside CORRECTIONS since 2007 what eventually will be the land sale to the tribe. $7 million in initial funding, and A story published on Page 3 of the Aug. 9 edition should have said a $142 million horse track on 20 Post-It bought all of its land for the eight projects will compete for that the $300 fee associated with using the OfferSubmission.com system acres at the corner of Pennsylva- $1 from the Wayne County Land Bank shares of that money. is paid by a buyer only if the deal is closed. nia and Vining roads in Huron Authority in April 2008 with that dis- The Marine Highway Program A story on Page 24 in the Aug. 9 edition omitted two hospitals that Township, a mile southwest of De- counted price contingent on the launched this year nationally con- are part of Ann Arbor-based St. Joseph Mercy Health System: St. Joseph troit Metropolitan Airport. creation of at least 1,100 jobs by sists of all-water routes through 11 Mercy Oakland in Pontiac and St. Joseph Mercy in Port Huron. Some of the land was bought 2014. It has not yet reached that corridors, four connectors and A story on Page 12 of the Aug. 9 edition should have said that Al Juo- with the intent of selling it to enti- number and is continuing plans to three crossings that can serve as cys is a D.O., not an M.D. The profile also incorrectly said Medical Net- ties that would build things to build a 4,000-seat grandstand start- extensions of the surface trans- work One is based in Troy. It is in Oakland Township. complement the race track, Lisa ing next year and 15 more horse portation system. The program is A story on Page 13 of the Aug. 9 edition should have said Gilbert Raff Campbell told Crain’s on Friday. barns, Campbell said. aimed at reducing traffic conges- was a physician at Beaumont Hospital in Royal Oak, not Troy.

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August 16, 2010 CRAIN’S DETROIT BUSINESS Page 3 Unhealthy time for insurance brokers Focus said Mike Embry, senior account Health reform RELIEF MAY BE COMING director with Comerica Insurance Services in Detroit. There could be some relief for health insurance brokers if the U.S. Department of Health and Human Services decides commissions would be “We advise people regularly on could put some excluded from administrative fee limitations and considered a pass-through how to get the most out of benefits item paid by consumers. and to bend the cost curve down,” out of business That could reduce the pressure on payers to cut commissions since it said Embry, who also is regional would not be counted as an administrative or claims expense. vice president for the National Asso- BY JAY GREENE The National Association of Insurance Commissioners has been asked to ciation of Health Underwriters, which CRAIN’S DETROIT BUSINESS submit recommendations to HHS. An NAIC subcommittee recommended represents agents. Chemical producer fits mold that commissions be counted as administrative expenses. William Berenson, Aetna’s for UM research hub in Health insurance brokers that The NAIC could vote on the proposed rule this month, but it is more likely to Michigan market head, said health serve small businesses and indi- be decided by fall, said Michigan Insurance Commissioner Ken Ross. care reform is expected to reduce former Pfizer complex, viduals are concerned that new broker commissions over the next federal regulations cause of changes stemming from other insurance areas like proper- several years. Page 17 due next year could the recently ap- ty because they would have no in- Berenson said new federal rules CASE reduce their sales proved health come from health insurance.” that require insurers to pay at STUDY commissions, forc- care reform bill. The commission cuts could ben- least 80 percent of premium dol- Company index ing some out of busi- “It will have a efit some employers, though, be- lars out in claims for groups under Stage Two ness and others to dramatic effect cause the payment reductions 100 could cause some insurers to These organizations appear in this week’s Crain’s Strategies: lay off employees. on small bro- could help slow annual health care increase payments to providers Detroit Business: Insurance and leave fewer dollars available Aetna ...... 3 website Some health in- kers,” said Joe benefit cost increases that have av- changes surers that serve Haney, presi- eraged 5 percent to 8 percent over for sales commissions and other AGIS ...... 26 direction, Southeast Michigan, dent of Sterling the last decade. administrative expenses. AlixPartners ...... 24 Page 4 including Priority Insurance Group But fewer agents could lead to Some insurers pay only 70 per- Blue Cross Blue Shield of Michigan ...... 3 Health, Cigna and in Sterling less information and guidance that cent to 75 percent of premium dol- BoroPharm ...... 17 Blue Cross Blue Shield of Michigan, Heights. “They Haney help clients select the least-expen- lars out in claims, which leaves Brown & Brown of Detroit ...... 26 already have informed agents of wouldn’t be able to compete. Some sive, most-effective plans and keep Cigna ...... 3 commission cuts, partially be- might go out of business or look at up with legal and tax law changes, See Insurance, Page 26 Comerica Insurance Services ...... 3 Davis & Davis Interior Design ...... 28 Detroit Land Bank Authority ...... 27 Detroit Pistons ...... 1 Detroit Regional Chamber ...... 3 Dipsol of America ...... 12 Economic clouds Chamber, Fusion Dorey-Reagan & Associates ...... 10 EOS Worldwide ...... 10 Epitec Group ...... 25 start new course Express Employment Professionals ...... 25 have silver lining Family Service Alliance for Southeastern Michigan . 7 Fisher/Unitec ...... 10 Meetings to chart future of Fusion ...... 3 Ghafari Associates ...... 27 for staffing firms young professionals group Grand Valley State University ...... 20 Harley Ellis Devereaux ...... 28 Henry Ford Hospital ...... 4 BY NANCY KAFFER Ideal Gases ...... 13 Impact is positive CRAIN’S DETROIT BUSINESS Identity Marketing & Public Relations ...... 10 More people are open to A Friday meeting between leaders of the Impact Management Services ...... 3 as biz puts off hires “ Detroit Regional Chamber and Fusion has left Incept Biosystems ...... 21 using contract services right both sides enthusiastic about the future of Jawood Business Process Solutions ...... 25 Jones Long LaSalle ...... 1 BY SHERRI WELCH the young professionals’ group. Joyce Julius & Associates ...... 29 CRAIN’S DETROIT BUSINESS now because of the Crain’s first reported on Aug. 2 that the chamber planned to find another home for Fu- Kelly Services ...... 25 Business uncertainty about the economy’s uncertainty. sion. President and CEO Sandy Baruah said Little Caesar Enterprises ...... 29 strength is continuing to buoy demand for con- ” the group hadn’t had the membership levels Macomb Family Services ...... 7 tract staffing — and boost the revenue of many Peter Davis, Impact Management Services that would lead to top programming or real McTevia & Associates ...... 4 local staffing companies. clout, which led to bruised feelings among Michigan State University ...... 21 Southfield-based Impact Management Services Impact’s customers include Allen Park-based some Fusion members. Myinsuranceexpert.com ...... 4 is one of several companies projecting revenue Home Care of Michigan Inc., Farmington Hills- Last week, Baruah apol- Oakland Family Services ...... 7 increases this year. It is hiring employees and based Aco Inc., the Michigan territory of Boston- ogized for those remarks, Olympia Entertainment ...... 29 expanding into new office space. based document management company Iron saying the message was Online Tech ...... 13 After merging engineering and technical Mountain Inc. (NYSE: IRM), Shelby Township- “mishandled” and that he Palace Sports & Entertainment ...... 1 staffing firm BAS Technologies and its light in- based plastic-injection molder MollerTech LLC, could have done a better Phimation ...... 13 dustrial and skilled trades subsidiary American and a number of automotive suppliers. job of communicating the Priority Health ...... 3 Labor Solutions in April and rebranding them as Davis believes those strategies are helping chamber’s vision for Fu- Quicken Loans ...... 1 Impact Management Services, President and Impact take market share from competitors. sion to the group. Rehmann Group ...... 10 CEO Peter Davis projected the joint company Several clients that previously had two or three Baruah has said he Rossetti ...... 28 RTI Laboratories ...... 12 will post $10 million in revenue this year. staffing suppliers have switched solely to Im- hopes Fusion could part- Baruah That’s up from just under $3 million last year. pact, he said. ner with another young Small Business Association of Michigan ...... 13 Impact also is hiring another salesperson and But the 33-year-old Davis also acknowledges professionals organization to form a group SmithGroup ...... 28 two recruiters to add to 11 existing employees. that Impact is one of many staffing and human with a larger membership and the potential Starfish Family Services ...... 7 Within the next month it also will add 50 con- resource services companies benefiting from for real impact. Sterling Insurance Group ...... 3 tract pipefitters, machine operators, electri- employers’ historical tendency to hire more At Friday’s meeting, Fusion and chamber St. Joseph Mercy Health System ...... 4 cians and machine builders to its pool of 300 contract employees following an economic leaders discussed the way forward. University of Michigan ...... 17 contract employees, Davis said. downturn. “I think we’ll look back at it as the first Wayne State University ...... 19 Impact also is diversifying its customer base “More people are open to using contract ser- step on collaboratively creating a stronger beyond engineering and manufacturing. vices right now because of the underlying un- Fusion group moving forward,” said Jeff Department index It is targeting new clients in industries like certainty around the strength of the economy Helminski, Fusion vice chairman and durable medical equipment leasing and com- and how fast or how long it’s going to rebound,” founder and managing partner of Ferndale- BANKRUPTCIES ...... 6 munications — and with companies that never he said. based Moravian Development Co. BUSINESS DIARY ...... 22 used contract employees before. It plans to offer What’s different this time is the sustained in- “I think the vision Sandy and the chamber CLASSIFIED ADS ...... 24 more consulting services to help companies re- creased demand for contract employees, said leadership shared with us today, and what KEITH CRAIN...... 8 think their employment needs, and offer other services such as employee training, Davis said. See Staffing, Page 25 See Fusion, Page 27 LETTERS...... 8 MARY KRAMER ...... 9 OPINION ...... 8 Tweet, tweet ... Crain’s Michigan Business PEOPLE ...... 23 4,900 people get our news instantaneously Sign up for the newsletter for a roundup of THIS WEEK @ RUMBLINGS ...... 30 for FREE! You can, too. Follow us: statewide news every Wednesday: WWW.CRAINSDETROIT.COM twitter.com/crainsdetroit crainsdetroit.com/getemail STAGE TWO STRATEGIES ...... 4 WEEK ON THE WEB ...... 30 20100816-NEWS--0004-NAT-CCI-CD_-- 8/13/2010 4:49 PM Page 1

Page 4 CRAIN’S DETROIT BUSINESS August 16, 2010

StageTwo Strategies A weekly look at problem-solving by second-stage companies. StageTwoStrategies is a weekly feature that analyzes a To sign up for the twice-monthly recent business decision by a second-stage company. e-newsletter, go to crainsdetroit.com/getemail. The For more second-stage coverage, go to Second Stage print section will appear in Crain’s on the crainsdetroit.com/secondstage. third Monday of each month. MYINSURANCEEXPERT.COM Location: Troy portunity to sell services to the es- surance plans a week to more Description: Website that offers timated 46 million Americans than 100 per week now, with ex- individual health, life, disability who will gain health coverage be- pectations of reaching 300 plans a and Medicare insurance quotes cause of the law. week by mid-September. from more than 10 insurance “The government has created a Life insurance plans now repre- providers, including Aetna Inc., chasm that would put us upside sent 40 percent of its sales, and Za- ING North America Insurance Corp. down immedi- lesin expects that to double by the and the Principal Financial Group. ately,” he said. end of the September. CEO: Lorne Zalesin “(The law) will Risks and considerations: The un- Founded: 2007 bleed the indus- known return on investment kept Employees: 50 try dry for Zalesin up many nights. Revenue: $3.5 million in 2009, years before we “All of the metrics around run- with $7 million projected for 2010 could even try ning the business, we had perfect- Problem to be solved: When Pres- to pivot and ac- ed,” he said. “We didn’t know the ident Barack Obama signed into quire new (profit) margins (of the new prod- law on March 23 the Patient Pro- clients.” uct).” tection and Affordable Care Act of Solution: Za- Expert opinion: Jim McTevia, Zalesin 2010, he unknowingly delivered a lesin com- managing partner of Bingham death blow to Myinsuranceexpert. menced a “tour de force” of meet- Farms-based business consulting com’s business model. ings with health care providers, firm McTevia & Associates LLC, said The law will require health in- and the company decided to shuf- a change in policy leaves a busi- surance companies to meet a med- fle its product line. ness with few choices. ical loss ratio of 80 percent on Jan. The company invested $500,000 “There are only three choices: 1, 2011, meaning that 80 cents of to shift away from health insur- Change the business you’re in, every $1 must be spent toward ance quotes and toward life insur- modify the business you’re in, or Self-Employed? medical claims. This leaves only 20 ance, Medicare supplement plans you can fight the policy,” he said. percent to be spent on overhead, and disability coverage quotes. “It takes a lot of money to fight investment and service providers “We essentially had to change policy, so unless you’re a large Affordable Insurance like Myinsuranceexpert.com. everything in the business to con- company, the best bet is to modify This would have cut the cimpa- centrate on the new lines,” Za- your business.” ny’s profit margins by 60 percent, lesin said. “We looked at our core McTevia said Zalesin took the as 98 percent of its business was competencies and decided that if right step in keeping its core com- Life focused on health care insurance, we defined ourselves as a health petencies and making an adjust- said Zalesin. insurance company, we might as ment toward life insurance. Health The individual mandate which well just wait for the government “He did exactly what he should requires that all individuals have to put us out of business.” have done,” he said. “If you’ve al- Retirement insurance takes effect in 2014, Myinsuranceexpert.com ready got the infrastructure, your leaving a three-year void between launched the new product lines best return on investment is Long-Term Care when providers’ margins are cut July 1. The company went from maintaining that infrastructure.” and when they will have the op- selling an average of two life in- — Dustin Walsh (800) 987-0290 If your second-stage company has recently made a tough business decision, contact Michelle Welsh, entrepre- neurship editor at Crain’s Detroit Business, at [email protected].

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BY JAY GREENE pitals sometime this fall, Faja said. the patient will be diverted to the se- CRAIN’S DETROIT BUSINESS “The re- nior emergency department area, sponse by se- Spivey said. All seniors, however, St. Joseph Mercy Health System is niors, care- receive special emergency care. developing Michigan’s first spe- givers and In addition to emergency care, cialized emergency medical care families has seniors also will receive pharmacy program for a growing senior pop- been terrific,” and social work consultations to ulation at its eight hospitals in said David help them and their caregivers de- Southeast Michigan and in Port Spivey, CEO of velop care plans when they leave Huron. St. Mary Mercy. the hospital, Faja said. Designed to better serve seniors, “We believe we Joyce Farrer, administrator of especially those who are frail and can improve the the emergency department at Hen- Faja sometimes come into emergency comprehensive ry Ford Hospital in Detroit, said departments in confused or anx- care for seniors, and we will see there is a growing need for geri- ious states, Ann Arbor-based St. our market share increase.” atric specialists. Joseph Mercy has created a spe- During the first month of the “Anytime you serve the commu- cial care track using physicians program at St. Mary Mercy there nity it behooves you to look at the and nurses trained in geriatrics. was a 5 percent increase in senior needs of the population in your In January, the first baby emergency visits, Spivey said. market,” Farrer said. “With the boomers will start to turn 65. Over Of 3,145 total emergency pa- population aging, it makes sense to the next 15 years, metro Detroit’s tients at St. Mary Mercy, 1,116, or me that more hospitals will do population of seniors age 65 or older 35 percent, were over age 65. Of more of this.” will nearly double — to 25 percent of those, 443 were seen in the senior While the hospital does not have the 4.4 million regional population, emergency department. a specialized track for seniors, from about 14 percent now. Systemwide, seniors account for Henry Ford emergency staff is “This is part of our senior initia- 46.8 percent of inpatient admis- trained to treat people of all ages, tive to respond to the various sions, a figure that is expected to taking special problems into con- needs of our senior population that increase with the senior emer- sideration, Farrer said. is growing,” said CEO Garry Faja gency department. “Henry Ford Macomb Hospital of St. Joseph Mercy. When a senior arrives at one of in Warren has an elder care inpa- In July, St. Mary Mercy Livonia be- the hospitals, a multidisciplinary tient unit that is specially de- gan offering the system’s first se- team assesses physical function, signed with lighting and noise nior emergency department. The cognitive status and risk level. buffers,” Farrer said. system will begin offering the se- During the triage evaluation, if Jay Greene: (313) 446-0325, nior program at its other seven hos- the senior requires additional care, [email protected] DBpageAD.qxd 8/11/2010 4:11 PM Page 1 20100816-NEWS--0006-NAT-CCI-CD_-- 8/13/2010 4:48 PM Page 1

Page 6 CRAIN’S DETROIT BUSINESS August 16, 2010 25 companies lease UM Stadium suites; one’s from Ohio Glassed-in BY SHAWN WRIGHT Roth Stadium sales and leases 16-seat SPECIAL TO CRAIN’S DETROIT BUSINESS Club have been have topped the luxury suites sold. The club We have a number 70 percent figure ring part of Southfield-based Lear Corp., Bat- was named after “ needed to cover the field at tle Creek-based Kellogg Co. and Jack Roth, presi- of discussions that debt payments, Michigan Stadium, Midland-based Dow Chemical Co. — dent and CEO of he said. costing and even a company from subur- Los Angeles- should lead to Suites cost leaseholders ban Columbus, Ohio — are among based advertis- $55,000 to $85,000 from the 25 corporate lessees of luxury ing firm Admar- additional annually based $55,000 to suites in the Big House. keting Inc. and the on location and $85,000 a After being marketed for three stadium project’s commitments. include 16 seats. year. Sixty- years, 63 of the 81 luxury suites in largest donor. ” Owners can pur- three of the Michigan Stadium were leased for “We have a Joe Parker, University of Michigan chase four addi- 81 suites three, five or seven years as of Fri- number of discus- tional standing- have been room seats. Suite purchasers also leased. day, said Joe Parker, senior associ- sions that should lead to additional ate athletic director. commitments” before Michigan’s will have two passes per game to in- Separately, 84 percent of the first game, Sept. 4, Parker said. vite someone with a standard ticket. 2,952 seats that are part of the Jack The transactions so far mean The club seats, which include DANIEL DUGGAN/CRAIN’S DETROIT BUSINESS access to an indoor club area, cost $1,500 to $4,000 per season. But what about that Buckeye suite lease? Kern Inc., a Grove City, Ohio- based mail insertion and deliver- ing system company, leased a suite because President and CEO Thomas Brock is a Michigan alum- nus. Brock, who earned a bache- lor’s degree in business, played baseball for UM before being draft- ed by the Seattle Mariners in 1988. Other companies leasing luxury suites are: National Construction En- terprises Inc., Ypsilanti; Delta Dental, Lansing; NSS Enterprises, Toledo; DTE Energy Trading, Ann Arbor; The International Brotherhood of Electrical Workers Local 252, Ann Arbor; Co- lumbia Pipe and Supply Co., Chicago; Hylant Group Inc., Toledo; ITC Transco, Novi; BorgWarner Inc., Auburn Hills; Akasha-USA Inc., Ann Arbor; Health Partners, Blooming- ton, Minn.; UM Alumni Association, Ann Arbor; Beliza Design, Ann Ar- bor; DML Management, Franken- muth; Bug Juice Brands Inc., Brighton; Victory Auto Group, Can- ton Township; Con-way Freight, Ann Arbor; IMG College, Lexington, Ky.; VILLCo Aviation, Bloomfield Hills; Doeren Autoliv Inc., Auburn Hills; and Gar- All Middle-Market,Mayhew Privately Cordially Held Invites Companies ber Management Group, Saginaw. Companies that purchased club seating are: Pepsi-Cola; Blue Cross Blue Shield of Michigan; National City to Receive a Complimentary Quote for Bank; PNC Financial Services Group Inc.; Accident Fund Insurance Co. of Accounting, Tax, and Consulting Services. America, Lansing; Advanced Vehicle Engineering Inc., Brighton; Beliza Design, Ann Arbor; Chrysler Jeep of Call Today and Join the Many Companies Ann Arbor, Ann Arbor; Curtis and Curtis PC, Jackson; ES3 Inc., Rochester Hills; Manheim Corporate That Have Chosen Doeren Mayhew Services, Atlanta; Mid Michigan Re- gional Imaging LLC, Auburn; Mid- for Superior Service at a Very Competitive Rate. States Bolt and Screw Co., Burton; Rhome Team LLC, Novi; Roncelli Inc., Sterling Heights; RTP Co., Winona, Minn.; Sesi Lincoln Mercury, Ann Arbor; Underground Printing, Ann Arbor; and the University of Michi- gan Health System.

BANKRUPTCIES The following businesses filed for Chapter 7 or 11 protection in U.S. Bankruptcy Court in Detroit Aug. 6-12. Under Chapter 11, a company files for reorganization. Chapter 7 involves liquidation. Tech-Knowledgies Inc., 27840 Lathrup Blvd., Lathrup Village, voluntary Accounting, Audit, and Tax  International Tax and Consulting  Corporate Finance and Strategic Services  Payroll Services Chapter 7. Assets and liabilities not Financial Advisory Services  Litigation Support and Forensic Services available. Troy, Michigan 248.244.3000 www.doeren.com Beacon Pointe Pharmacy Inc., 15200 East Jefferson Ave., Suite 102, Grosse Pointe Park, voluntary Chapter 11. Assets and liabilities not available. — Shawn Wright 20100816-NEWS--0007-NAT-CCI-CD_-- 8/13/2010 3:16 PM Page 1

August 16, 2010 CRAIN’S DETROIT BUSINESS Page 7 Family Service Alliance sees benefits of sharing: New grants, revenue

BY SHERRI WELCH share problems and solutions. The U.S. Department of Health and tems and governmental agencies CRAIN’S DETROIT BUSINESS “By seeing some quick wins ear- Human Services for the past couple with the help of retired and work- ly on, like the implementation of of years has asked Oakland Family ing executive and professional vol- The cost savings, new grants this electronic records system … Services to replicate what the fed- unteers. and revenue and benefits of shared it’s become a very safe process,” eral agency considers promising The alliance members are open expertise continue to add up for Kalass said. practices, Earl said. “The alliance to all levels of collaboration, even the Family Service Alliance for South- Given that the four agencies de- offers that opportunity at the re- though they are still competitors, eastern Michigan as it enters its cided early on against mergers in gional level to be a testing site for she said. third year. order to remain rooted in their com- these types of practices.” The transition by all four mem- The alliance has four members munities, “there isn’t the threat of a Staff know the day-to-day ineffi- bers to an evidenced-based model and a number of new grants and Earl Kalass merger, and there’s also something ciencies and “if they can reach out in behavioral services is also a contracts based on their joint work safe in that we represent different to their peers and begin to learn huge indicator of success because and geographic reach. this fall. service areas,” she said. from each other, that’s the door that transition is very hard, Mc- Beyond that, as trust increases, But Kalass and Earl both stress Of equal or greater importance opener,” said Deanna McGraw, in- Graw said. the agencies are learning from that cost savings and increased to the agencies is quality of care. terim executive director of Detroit “If they’ve been successful, it each other about all aspects of revenue aren’t the only goals or Each now uses an evidence-based Executive Service Corps, a South- makes evaluations of programs their businesses, sharing best benefits the members are seeing. model to deliver services to their field-based agency that provides more reliable.” practices and discovering unex- Employees from billing to hu- collective 20,000 behavioral health management consulting to local Sherri Welch: (313) 446-1694, pected areas for improvement, man resources call each other to clients. nonprofits, K-12 educational sys- [email protected] said Michael Earl, managing part- ner of the alliance and president and CEO of Oakland Family Services. “Once you lower barriers, you find opportunities for mutual learning, mentoring, process im- provements and greater efficien- cies … people start to talk to each other and uncover new ideas (and) … opportunities,” he said. New funding the alliance has at- tracted includes $960,000 for the year from United Way for Southeast- ern Michigan to help run its Early Learning Communities program, which teaches early childhood de- velopment to non-professional caregivers with the goal of getting more children entering school ready to learn. Inkster-based Starfish Family Ser- vices, which became the fourth member of the alliance last year, was the first to begin work with the centers and was followed six months later by the other alliance members: Oakland Family Ser- vices, Macomb Family Services and Family Services Inc. in Detroit. The latest United Way grants to the alliance come in addition to a $1.5 million grant made two years ago to improve access to services for families in Wayne, Oakland and Macomb counties. Oakland Family Services recent- ly secured a $3 million, three-year contract under a new program to serve severely emotionally dis- She wanted her employees to turbed children in the county, thanks to assistance from Starfish. have lower health insurance costs. “This was a natural extension to things we were already doing, but Blue Care Network made that happen. there were several things … (the county was) impressed by,” in- cluding the fact that the alliance Healthy employees can help make your business healthy. Blue Care Network can help make that already had an electronic record Blue SM system and that Oakland had happen for your business... with Healthy Living . A revolutionary plan that actually rewards tapped Starfish’s expertise, Earl your employees for adopting healthier lifestyles and working with their doctors to improve their said. health. Real rewards, like lower copays and lower deductibles. It’s no wonder over 100,000 Starfish, in turn, tapped Oak- Blue SM land Family and Macomb Family employees across the state have already signed up with Healthy Living . Services for help in diversifying to more private-pay mental health clients from government-pay To learn more, just go to MiBCN.com/HealthyBlueLiving, or contact your local independent clients, an effort that should bring agent. Got a healthy business story? Share it at our online community: ahealthierMichigan.org. in about $200,000 in new revenue the first year, said CEO Ann Kalass. Early on, the alliance pooled purchases of office equipment, shaving 15 percent off of its com- bined costs. Since then, it has jointly licensed an electronic med- ical record system and is sharing the cost of a systems administra- tor, collectively saving $300,000 on

system implementation and about SM $50,000 each on the system admin- Leading Michigan to a healthier future. istrator’s salary. The alliance also is looking at pooling health care, and Starfish and Oakland plan to share a full- time child psychiatrist beginning 20100816-NEWS--0008-NAT-CCI-CD_-- 8/13/2010 4:48 PM Page 1

Page 8 CRAIN’S DETROIT BUSINESS August 16, 2010 OPINION LETTERS Wayne State makes Light-rail plan not a dead end Editor: nership, “could be a model for the Crain’s Detroit Business Your Aug. 9 editorial, “Rail pro- country ... and an economic engine welcomes letters to the editor. ject will fall short if not regional,” for this community.” The fact that All letters will be considered for displays a disappointing lack of publication, provided they are he was accompanied by Adminis- an inspired choice understanding of how light-rail signed and do not defame trator Peter Rogoff, head of the systems get built and how much individuals or organizations. FTA, underscores the federal sup- xperience counts. And core skills from one industry can progress has been made in making Letters may be edited for length port for the proposed rail line. translate to another. light rail a reality in Detroit. and clarity. So it is especially regrettable that Anyone seeking federal assis- Crain’s, rather than welcoming the Detroit has become a textbook for that kind of trans- Write: Editor, Crain’s Detroit E tance for a light-rail project must impact such a project will have on lation, courtesy of retirement-age executives who skillfully Business, 1155 Gratiot Ave., follow precise steps laid out in the Detroit, MI 48207-2997. Detroit and the region and the have guided major institutions to health. Examples: 65-year- Federal Transit Administration’s strong federal support, can only fret E-mail: [email protected] old Alan Mulally, an engineer and aviation executive who New Starts program. about the fact that the route would transformed Ford Motor Co., and the 68-year-old lifelong tele- That is what the city of Detroit stop at Eight Mile Road. com exec Ed Whitacre Jr., who stepped into the CEO and did in 2006 when the Detroit De- corporated into the Southeast Woodward light rail is intended Michigan Council of Governments chairman role at General Motors Co. to lead it to profitability. partment of Transportation se- to be a starter line. The city, SEM- cured a federal grant to begin an regional long-range transporta- COG, everyone involved envisions Now it’s Wayne State University’s turn. The appointment alternatives analysis study, the tion plan in June 2008 and the re- that additional links will be added last week of Allan Gilmour, 75, as WSU’s interim president, was first step in the New Starts gional transportation improve- in the future. inspired. Gilmour will step in to replace Jay Noren, who re- process. The Detroit Transit Op- ment plan in July 2008. Even a cursory look at other signed for personal reasons in July after two years on the job. tions for Growth study resulted in While there has been a great cities would show you that no city deal of talk about regional transit Gilmour has come out of retirement before — the last time the selection of light-rail service or region builds out an entire sys- on Woodward from downtown to on a number of fronts, no other tem at the beginning. Of the 17 light- in 2002 to help Ford. He has financial chops and the skills to Eight Mile Road as the locally pre- unit of government or agency in rail systems that have been begun keep WSU’s many critical initiatives in motion, including ex- ferred alternative. Southeast Michigan has taken in this nation since San Diego start- panding research and medical education and entrepreneur- An important next step required even an initial step to enter into ed its in 1981, 16 have built exten- ship programs, and partnering with hospital systems nearby by the FTA is to have the transit the New Starts process. sions of their initial line. Building a Clearly, federal officials who to rebuild Detroit’s Midtown into a vibrant, walkable district. project incorporated into the local truly regional system is something Metropolitan Planning Organiza- fund light-rail projects throughout that happens in segments and takes tion’s transportation improve- the country recognize the poten- 25 to 30 years to complete. ment plan and long-range trans- tial here. As far as the length of the pro- portation plan. Secretary of Transportation Ray ject is concerned, a check of other Chamber should help Fusion That occurred when the Wood- LaHood said the project, being ward light-rail alternative was in- funded by a public-private part- See Letters, Page 9 On the other end of the talent spectrum, the Detroit Region- al Chamber has learned not to take the young folk for granted. New CEO Sandy Baruah has apologized for clumsy public relations in the chamber’s attempt to divest itself from Fusion, the young professional program launched with much fanfare TALK ON THE WEB in 2007. It has grown to become a network of between 200 and 600 From www.crainsdetroit.com young adults who are enthusiastic about the future of the re- be an absolutely fantastic president of Re: Keith Crain: A crazy idea Reader responses to stories and WSU. What an exciting choice. gion. Membership includes small-business owners, up-and- that would be great blogs that appeared on Crain’s coming executives in large organizations and elected leaders, Michael Layne (Rick Snyder picking Andy Dil- Web site. Comments may be including two Detroit City Council members, a Macomb coun- lon for a running mate) is a great edited for length and clarity. Re: Dow Kokam plant to create ty commissioner and the mayor pro tem of Ferndale. idea. Perhaps that is why Andy has Midland hub for advanced batteries Baruah believes the chamber is trying to do too many not jumped on the bandwagon for work smart, and they surround things and wants to focus on a narrower agenda. So the cham- (Virg) Bernero. themselves with good people. Sixty Dow Kokam Advanced Battery Karen Fisher ber may not be the best home for this group, but the chamber years of continued success says it all. Group is a huge win for the state of Let’s get the full Legislature work- Michigan — more proof to the world should work with the leadership of the organization it created And their philanthropy and chari- ing for Michigan — not political par- ty to the DIA, to the University of that we have the manufacturing to find a new structure rather than play marriage broker in ties. Michigan hospital, and to South- knowledge and talent to become a finding a new host organization. Scupper east Michigan are testaments to center of alternative energy manu- Talent attraction and retention are key issues for area em- This is a bold new thought, and their character and the communi- facturing. The future is bright. both Snyder and Dillon should ployers — even in a sluggish economy. And Fusion was em- ty in which they live. Midlandtomorrow consider it. I think Michigan voters 115762 braced by many companies as a way to connect their young would be ready for this team. Re: Red Wings at Joe Louis for 2010-11 talent in meaningful networks and activities. Tom Scholl The JLA is an absolute dump. If it’s So it’s up to the chamber to assist the young leadership of Re: Allan Gilmour interim president torn down, Cobo could be expand- the Fusion organization in forging a new path. Engaging Re: Taubman comes back from recession of Wayne State University ed so that it can compete with young professionals in meaningful ways will make the re- The Taubmans have succeeded As a WSU grad, I can say with- Chicago, L.A., NYC, etc. gion’s future stronger. because they work hard, they out a doubt that Allan Gilmour would Galivantstom KEITH CRAIN: Time for the second celebration of the year Each year there are two wonder- about the latest activi- you couldn’t stop even It, too, is a celebration of the au- ward. But folks will watch for ful celebrations of the automobile. ties of the world’s auto- if you wanted. They tomobile. It celebrates mainly the hours. In fact, they’ve already Once, in the winter at Cobo Center, mobile manufacturers. come by the hundreds cars made by the Detroit automak- started today, getting a bit ahead Detroit hosts the annual North And then once it’s of thousands. And they ers. It brings back sweet memories of themselves, but what the heck, American International Auto open to the public, the line Woodward Avenue of a nicer, kinder time for these it’s a celebration. Show, an event that is now a must- city plays host to hun- six deep to watch the companies and a few more Ameri- These are two great celebrations attend on the part of just about dreds of thousands of never-ending parade of can companies and brands that of Detroit iron. This Saturday, every automotive executive from people who simply have all sorts of cars and have quietly slipped beneath the we’ll watch the history of the city around the world. I am told that it a love affair with the au- trucks, mainly made by waves. as the cars drive up and down brings in close to half a billion (with tomobile and want to see the Detroit 3 but not But next Saturday, the only Woodward. a B) dollars for the local economy. It the latest and greatest without exceptions. thing that is remembered is the There is a love affair with the is far and away the most important from these manufactur- People bring their cars. good times. The good times cruis- automobile in Detroit, like no oth- event on the community’s calendar. ers. It’s truly a celebra- They bring them from ing Woodward Avenue. It is quite er. And in case anyone wants to For a few days, it’s only open to tion of the automobile. all over the country. a celebration. No admission and know, it’s alive and well. the automotive press, some 7,000 And then there is the Woodward Just about all 50 states will be rep- not much besides watching the You can watch and celebrate strong, who are in Detroit to learn Dream Cruise. It’s an event that resented. thousands of cars cruising Wood- that love affair this Saturday. 20100816-NEWS--0009-NAT-CCI-CD_-- 8/13/2010 10:48 AM Page 1

August 16, 2010 CRAIN’S DETROIT BUSINESS Page 9 LETTERS CONTINUED MARY KRAMER: ■ From Page 8 Restructuring is state’s top job light-rail systems built around the When General Motors issues its That ’s actually an ty commissioners, fac- The Deloitte report outlines a country over the past decade initial public offering, it will be opportunity to delay the ing a $90 million budget number of remedies, but the ap- shows that Detroit’s proposed line another huge step for Detroit’s inevitable. The struc- gap, insisted they petite of elected leaders has not falls right in the middle in terms of auto industry. ture for most tax-sup- would continue to pay been great in Michigan to push its proposed length. Michigan should be so lucky. ported services, retirees a “13th check” for many — or any — of them. New systems built since 2000 and But our state won’t really revive whether it’s public edu- in December — at a GOP candidate Rick Snyder has their initial lengths are: Hudson- until it gets its public house in or- cation or snowplowing, cost of $34 million. been very clear he plans to take Bergen in New Jersey, 10 miles; der, too. That’s why the choice in can’t be maintained. That’s just crazy. on restructuring. Houston, 7.5 miles; Minneapolis, November for governor is so criti- We have too many And it’s just the tip Now voters must demand the 11.5 miles; Seattle, 7.2 miles; and cal. Michigan needs an overhaul, school districts, too of the iceberg. same of candidates for the Legis- Charlotte, N.C., 9.6 miles. That’s an not a tuneup. much overhead, high A report by Deloitte lature. average of just more than 9.1 miles Too many elected leaders don’t pension and health care (“Pension Reform: Pay- Mary Kramer is publisher of per project, slightly under the 9.3 seem to get just how big that costs across the board. ing for Tomorrow”) Crain's Detroit Business. Catch her miles proposed for Detroit. That is transformation needs to be. Last The new federal cash just allows suggests that state and local gov- take on business news at 6:10 a.m. the length of startup projects the week, Democrats cheered when lawmakers to push restructuring ernments across the country share Mondays on the Paul W. Smith show federal government is funding on WJR AM 760 and in her blog at these days. Congress passed a bill that will off to another year. the same problem: not enough cash www.crainsdetroit.com/kramer. We have to start somewhere. send Michigan about $300 million That type of delay played out lo- to fund current pension liabilities. E-mail her at [email protected]. For Detroit and Southeast Michi- to hire or rehire teachers. cally, too. Last week, Wayne Coun- That will only get worse. gan, the only somewhere that will bring us light rail in the foresee- able future is Woodward light rail. Starting over at this point, as you seem to suggest, which would mean going back to step one in the New Starts process, would erase four years of progress toward mak- ing light rail a reality. Woodward light rail is the only alternative that has entered the federal process, the only alterna- tive that is following federal guide- lines to qualify for funding and the only alternative that stands poised to actually begin construction within 18 months. If you truly want to see light rail become a reality in this region in the foreseeable future, Woodward light rail is the only feasible plan to make it happen. I hope as you gain more understanding of the federal process and of the progress we have made, Crain’s will get on board to support this project that holds so much promise for this city and region. Norman White CFO City of Detroit Light rail a rallying point Editor: In response to the Aug. 2 crains- detroit.com article “Transporta- tion Secretary Ray LaHood an- nounces launch of environmental study for Woodward Avenue light YOUR INNOVATION rail project,” the Woodward Av- enue Action Association is excited to be part of this ground-breaking change along with the other re- gional stakeholders. As managers of Woodward Av- PARTNER enue’s prestigious National Scenic Byway and All-American Road iLabs is the University of Michigan-Dearborn’s Our recent projects and partners include: designations — awarded by the Center for Innovation Research. Connecting s4ECHNOLOGY#LIMATE3URVEY U.S. Department of Transportation campus resources with businesses, government — we believe Woodward light rail agencies and non-profits, iLabs helps develop s 2ECOVERY0ARK provides the opportunity to build innovative business solutions that position s#HALDEAN.EWSAND*EWISH.EWS awareness of the impact of these organizations at the forefront of their fields. sE#ITIES designations for residents, busi- This is achieved through quantitative and nesses and visitors. qualitative research, behavioral and economic s7AYNE#OUNTY!IRPORT!UTHORITY Additionally, the designations experiments and direct observation of provide a source of funding in feder- organizational practices. al highway National Scenic Byway funds to support physical improve- ments, business development, plan- To learn how iLabs is helping Michigan’s businesses, non-profits and economic development organizations ning, marketing and interpretive tackle their toughest challenges and answer their most difficult questions, visit umdilabs.com. improvements for Woodward’s en- tire 27 miles. Since 2004, more than $4 million has been awarded to Woodward Avenue Action Associa- tion. Woodward light rail is the rally- ing point for our region to cele- brate the world-class attractions, historic sites and events that com- prise our one-of-a-kind All-Ameri- can Road. Heather Carmona Executive Director Woodward Avenue Action Association 20100816-NEWS--0010-NAT-CCI-CD_-- 8/13/2010 10:23 AM Page 1

Page 10 CRAIN’S DETROIT BUSINESS August 16, 2010

Extra WHAT IS A SECOND-STAGE COMPANY? Second-stage companies have between about $1 million and $50 million in annual revenue or 10-100 employees. They are led by growth-focused entrepreneurs with market-ready products or services. Survival is no longer a day-to-day worry. The Edward Lowe Foundation found that such firms provided 35.7 percent of Michigan’s jobs in 2007, more than any other company category in the state.

REPORTER’S NOTEBOOK

Nancy Kaffer covers small business and second-stage companies and Detroit and Wayne County government. Call (313) 446-0412 or write nkaffer @crain.com Nancy Kaffer A partner may not be best fit When you’re making a high-level hire, is it necessary to offer an ownership stake in the company to attract top talent, or will a typical compensation package be sufficient? There’s no single right answer, said Gino Wickman, a business coach and founder of Livonia-based EOS Worldwide. “I’ve got some owners with phenomenally talented management teams who would never think to give up any percentage of (their) business as part of an incentive package,” he Growing companies face challenge of expanding management said. “Then there are some who are very comfortable with partners and BY NANCY KAFFER For Fish- “I’ve got a fundamental be- with offering that incentive to a CRAIN’S DETROIT BUSINESS er/Unitech — lief that a healthy manage- management team. a process-im- ment-to-employee ratio is un- isher/Unitech President and provement company der 10 people as direct “Some people want a partner, and CEO Charlie Hess was a they need a partner,” he said. “Others reporting $18 million in ing the total capa- reports,” Hess said. “Having F hands-on guy. For a long sales for 2009 with $22 million bility of the organiza- access to a manager for men- should stay miles away from that time, Hess and co-founder structure.” projected for 2010 — expanding tion,” he said. “You’re remov- toring will allow people to suc- Greg Fisher were the compa- the company’s management ing some bottlenecks and ceed, and when people succeed, A CEO who wants to take on a partner ny’s senior management. And has two options, Wickman said: Allow structure was necessary to constraints on decision mak- they drive revenue. By escalat- with a relatively small staff, drive growth, Hess said. ing.” ing our top performers into a that partner to buy a stake through the system worked. But the sweat equity or with a straight buy-in. “By delegating a little bit More manager-employee in- management or leadership company grew — and Fisher more authority to people, what teraction benefited the compa- An owner reluctant to sell a stake moved on to another venture you’re really doing is leverag- ny. See Management, Page 11 could offer phantom stock, he said. — and Hess was left at the top “If the business would ever sell, of an organization grown too that person would receive a large for one person to oversee. percentage of the proceeds because Hess, of course, was forced they have phantom stock, and would to reorganize, but creating that also get a distribution on the phantom first layer of management was stock, but they don’t have voting difficult. rights,” Wickman said. “We were learning how to do There are other ways to sweeten it as we went,” he said. the pot for a prospective executive Fisher/Unitech’s situation hire, he said, generally based on isn’t unique among second- direct financial compensation. stage business owners, man- Phil Bahr, managing principal at the agement experts say. Entrepre- Troy office of the Rehmann Group, a neurs tend to take a hands-on financial services firm, said making approach in a company’s in- the hire is a good way for a business fancy, but when the business owner to decide if an employee would make a good partner. starts to grow, it’s no longer possible to have the close-knit “Many times if you can hire them management team that charac- and bring them in, you get a chance to terized the company’s startup see do they fit your culture and are they the right person.” You don’t have days. to give up an ownership stake before But for many entrepreneurs, you really know, he said. A good sharing authority is a chal- potential partner, Bahr said, will have lenge. grown businesses in the past. If you ask a business owner “There are exceptions, obviously — if he really wants to give up sometimes you can’t attract people control, “I suspect the answer, without bringing them in (as a at the end of the day, is, ‘I’d like to, but I just can’t. I partner),” he said. NATHAN SKID/CRAIN’S DETROIT BUSINESS And there are advantages to taking haven’t found the way there,’ ” on a partner, Bahr said. said Paul Reagan, principal at Birmingham-based Dorey- I’ve got a fundamental belief that a healthy management- “They have more invested; they Reagan & Associates and lectur- “ have more personally at stake, so it to-employee ratio is under 10 people as direct reports. can increase their commitment at er at Wayne State University what you’re trying to accomplish.” School of Business ” Administration. Charlie Hess, Fisher/Unitech 20100816-NEWS--0011-NAT-CCI-CD_-- 8/13/2010 10:24 AM Page 1

August 16, 2010 CRAIN’S DETROIT BUSINESS Page 11 Second Stage Extra Management: Growing companies face expansion challenge ■ From Page 10 role, we have more mentors to “There’s a series of judg- four or five people,” Nixon said. For Hess, it’s a shift that’s still help new hires who were critical ments they’ll make, and the “So something needed to change.” in process. for our growth.” chief executive has to trust I think it’s Identity recently created three He’s assigned executives to ar- Hess said Fisher/Unitech now them to make it and see how “ new positions, promoting two ex- eas in which he lacks expertise but has three layers of management: it will turn out,” he said. a mental or isting employees to vice president has yet to give up sales — his core manager, director and vice presi- Bingham Farms-based and one to senior vice president. strength. dent. Identity Marketing & Public Re- psychological Although the company had been “That’s a hard step to take, but I “The difference between manag- lations went from eight to 19 working to nurture the next crop do recognize that it has to happen, er and director is that a director is employees in a year, said shift to let of leaders, the transition wasn’t and I’m developing a plan to make policy-setting and a manager is partner Tom Nixon, and go. easy. it happen,” he said. “That’s the fi- policy-implementing. The vice now has 25 workers. Having ” “I think it’s a mental or psycho- nal step to take for me to mold this president level is strategy-setting,” company founders Mark Winter, Tom Nixon, Identity Marketing logical shift to let go and say, ‘I am into an organization that will have he said. Paul Kesman and Nixon managing & Public Relations going to entrust this person to take the right structure for long-term A second-tier of managers, Rea- all employees just wasn’t working. over some of the management of success.” gan said, must fully participate in “It gets more and more difficult one-on-one time to each employee, this company that I have so closely Nancy Kaffer: (313) 446-0412, setting the company’s course. to devote a significant amount of which is totally possible when it’s held since it began,’ ” Nixon said. [email protected] “Development of a second cadre is exceedingly dependent on the orientation of the chief executive to allow participation in strategic decision making,” he said. “Many of them only find their way to A SECOND OPINION SAVED US more inclusion in the decision-

making process over time, but they have to really be quite sensi- tive to letting go and letting others *

assist them.” Business owners may differ on

whether to promote from within or to bring in outside talent. But of-

ten, Reagan said, a company al- ready has employees with manage- ment potential. $ “If they want higher levels of 8,0008 000 performance, they typically need to enable people they’ve hired,” he $ said. “(Entrepreneurs) are typical- ly outstanding judges of talent. … The chief executive learns who is learning, who’s able to step up as they learn. Frequently what you TIMES ARE TOUGH, BUT WE’RE STILL GOING, and a Citizens Bank Second Opinion helped us get there. After see in an emergent, high-growth phase is (a CEO) selecting from examining every aspect of our business, a Citizens Banker found ways we could save more money, be more people you have internally be- efficient – for our business and personal accounts. cause they’re the best operational people.” CALL 800-946-2264 It can take time for a CEO to Make time to meet with a Citizens Banker. To schedule your Citizens Bank Second Opinion, gain confidence in a new manager, or go online to CITIZENSBANKING.COM/OPINION. Reagan said.

CRAIN’S WORKSHOP TACKLES HANDLING SUDDEN GROWTH Growth is the goal among second- stage companies, but if it happens, it can be surprisingly hard to handle. Local second-stage executives will discuss how they managed a specific area of their company through sudden growth on Sept. 14 at a Crain’s Second Stage Workshop called “Scaling Up Fast,” held 7:30-10:30 a.m. at the MSU Management Education Center in Troy. Attendees will be able to talk with panelists during roundtable discussions. Speakers include Michelle Crumm, chief business officer, Adaptive Materials Inc.; Bill Johnson, CFO, Xcend Group LLC; Tom Nixon, partner, Identity Marketing & Public Relations LLC; and Jason Teshuba, CEO, Mango Languages. Tickets are $35 each, $40 at the door. Groups of 10 or more pay * Results may vary depending on your business situation. $30 each. For more information or to sign up, go to regonline.com/septsecondstage. 20100816-NEWS--0012-NAT-CCI-CD_-- 8/13/2010 10:25 AM Page 1

Page 12 CRAIN’S DETROIT BUSINESS August 16, 2010 Second Stage Extra

DUSTIN WALSH/CRAIN’S DETROIT BUSINESS RTI Laboratories Inc. President Jerry Singh rents extra space such as this in his two Livonia facilities to “strategic tenants” — entrepreneurs whose services complement RTI’s and whose rent helps the bottom line. GETTING YOUR RTI’s recovery plan: Help startups grow

MESSAGE ACROSS? BY DUSTIN WALSH lion in 2009 revenue, more than CRAIN’S DETROIT BUSINESS 10 percent came from tenant re- Being an ferrals. At RTI Laboratories Inc. in Livo- “ “When I bought the new build- nia, scientists and chemists toil incubator is ing, I knew I didn’t need this over chemical compounds and much space, (but) being an incu- the material properties of alloys. contagious. I have to bator is contagious,” Singh said. Working among them are entre- “I have to have all of this equip- preneurs who also call its two fa- have all of this ment for my company anyway, cilities home. why not share it and cooperate to- Jerry Singh, president of the equipment for my gether to get more business for metallurgic testing and environ- everyone.” mental compliance firm, rents company anyway, Tarek Nahlawi, vice president extra space at his laboratories to of Dipsol of America Inc., an inde- “strategic tenants” with comple- why not share it? pendent subsidiary of Tokyo- mentary services to help cover ” based Dipsol Chemicals Co. Ltd., Jerry Singh, RTI Laboratories Inc. his bottom line and nurture local moved his company into a rough- entrepreneurs and their startups. ly 200-square-foot space at In 1990, Southfield-based Detrex been a blessing having these com- Singh’s facility in 2000. Corp., RTI’s former parent compa- panies here, and it’s really helped The metal-finishing firm con- MARKETING ‡ PR ‡ DESIGN ‡ NEW MEDIA ny, leased and retrofitted a new reduce my occupancy costs at a sulted with RTI’s materials scien- identitypr.com 12,000-square-foot lab in Livonia time when every dollar counts.” tists while developing new prod- for the growing segment. When Space at RTI is $46 a square uct lines, Nahlawi said. the recession hit and manufactur- foot. It generates nearly $1,200 “It’s like a big family opera- ing slowed, RTI’s revenue took a per month from each of its five tion,” Nahlawi said. “When I nose dive. tenants, or around $72,000 a year. “The CEO demanded I reduce And of his company’s $3.6 mil- See Startups, Page 13 costs,” said Singh, who was RTI’s general manager at the time. “Ex- pectations for a revised business plan that could save the company money were high.” With the reduced workload, Singh could rent out excess space and let the tenants use his high- coffee!! end equipment. “They say necessity is the opportunity!! mother of all invention,” he said. “They saw cost reduction; I saw a chance to become an incubator interested?? for entrepreneurs.” Singh purchased RTI from De- trex in 1999. To move into envi- franchise?? ronmental testing, he bought and retrofitted a second building in the same industrial park for $1.5 million in 2008. With it came Contact us at more space for small companies. When the automotive industry (517) 913-1987 or collapsed later that year, RTI’s [email protected] revenue dropped nearly 19 per- cent, from $4.3 million in 2008 to $3.5 million in 2009. But rent money from tenants continued to cover costs. www.biggby.com “When the recession hit, we re- ally got blindsided,” he said. “It’s 20100816-NEWS--0013-NAT-CCI-CD_-- 8/13/2010 10:25 AM Page 1

August 16, 2010 CRAIN’S DETROIT BUSINESS Page 13 Second Stage Extra Startups: Lab rents space to entrepreneurs ■ From Page 12 needed expertise, Jerry’s people fact, it’s called “incumentoring,” were right there, in the build- he said. ing.” “It’s an informal and often un- When Dipsol began its hunt for organized activ- a company to manufacture its ity, but I think product line, Singh introduced it’s beginning Nahlawi to three potential busi- to happen more nesses. and more under In 2003, Dipsol outgrew the RTI the radar,” he space and acquired a 20,000- said. “It makes square-foot facility in Livonia. good economic The company now employs 22 sense, and it’s and projects revenue to hit $8 mil- encouraging to lion this year. hear that peo- “If we needed help with the Fowler ple who know business, (Singh) was always the ropes, so to speak, are men- there for us,” he said. “He’s been toring small businesses. It’s a good to us, and because of that real win-win.” trust, we’re good to him.” To fill excess space and support Nahlawi frequently refers his local entrepreneurs, Yan Ness, When you have a position to fill, you want someone clients in need of testing to RTI, CEO of Online Tech Inc., housed who’s qualified and ready to hit the ground running. including Toyota Motor Co. and startups at his Ann Arbor head- Baker College’s HireQualified® can help. Our candidates General Motors Co. quarters and Flint facility from are highly trained in very specific areas by instructors Calibration-gas supplier Ideal 2005 to 2009. who are working professionals. They know what’s Gases LLC moved from Southgate “Injecting the startup mentali- into RTI’s facility in April. RTI’s ty into your business is a good needed in their industries and teach practical experience environmental segment used thing,” Ness said. “It just makes over theory. The service is free—the result is just the Ideal’s calibration gases for its sense (for established companies person you are looking for. testing, so it made sense to coop- to support startups) and supports To learn more about how we can help you find the best erate, said Rick Moore, owner. the whole idea of economic gar- candidate for your needs, or to schedule a meeting at “As a small company, we don’t dening.” your place of business, visit HireQualified.com. have the capital to move my prod- Dave Haviland of Ann Arbor- Free recruiting services from ucts to market as we can here,” based management consultancy America’s leading career college. he said. “Seeing my products Phimation, said a company looking work in this laboratory setting to become an incubator should P6310HQ has enabled us to make our prod- enter cautiously, because sup- ucts more effective much quick- porting entrepreneurs takes re- er.” sources. RTI and Ideal Gases have “There are lots of moving parts, worked together on several envi- and it could very well be distract- ronmental contracts, including ing,” he said. “However, it’s a real work with U.S. Steel and the Oak- success if you can balance how land County Road Commission. much is charity and how much is RTI’s two labs are also home to for profit effectively.” polymer development research Singh is evaluating another life firm Sanza LLC, life sciences firm sciences laboratory space in Urobiologics LLC, engineering con- metro Detroit, which he’d parcel sulting firm Fire and Materials Re- out to small research companies, search Laboratory LLC, and testing he said. software developer Khemia Soft- “I’m proud of the businesses ware Inc. that have turned out of this Rob Fowler, president and CEO space,” he said. “If the economics of the Small Business Association of permit, I’m going to continue to Michigan, said chatter about this do this kind of work.” type of activity is growing in the Dustin Walsh: (313) 446-6042; small-business community. In [email protected]

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Page 14 CRAIN’S DETROIT BUSINESS August 16, 2010

UPCOMING PARTNER EVENTS CRAIN'S LIST: LEADING

Meet the 2010 Candidates for Attorney General, SMALL-BUSINESS LENDERS Secretary of State and Mich. Supreme Court Justice. Sept. 9 • 3:30 p.m. – 6 p.m. 7(a) Guaranty-loan activity by lender, through third quarter 2010; Rock Financial Showplace, Novi Tickets: $50 each. After Sept. 2: $60 each. Visit www.msae.org for information/registration ranked by number of SBA loans in Michigan

Meet the Buyers – A Procurement Matchmaking Event Number of approvals This half-day program to help small businesses begin Total number or expand their business with government agencies. of loans/ Preferred Sept. 1 • 8 a.m. – 1 p.m. Total loaned Lender Schoolcraft College – VisTaTech Center Lending institution amount Program SBA Express Other $25 each. Registration required: Rank City Call (734) 462-4438 for information 1. Huntington Bancshares Inc. 187 44 140 3 10th Annual Great Lakes Women’s Business Columbus, Ohio $43,760,700 Conference. Network with business owners and supplier J.P. Morgan Chase & Co. 112 14 96 2 diversity and procurement representatives. 2. New York City $15,509,800 MotorCity Casino Hotel, Detroit Oct. 12 at 8:00 a.m. through Oct, 13, at 4:30 p.m. Citizens Republic Bancorp Inc. 88 40 43 5 More information online at www.miceed.org. 3. Flint $17,606,100 Fifth Third Bancorp 72 29 35 8 Networking Reception/Annual Business Meeting. In an 4. Cincinnati $26,081,100 Era of Health Reform, Putting Payment Reform in Action Sept. 16 • 4 – 6:30 p.m. Lake Michigan Financial 44 03212 NextEnergy facility,461 Burroughs St., Detroit 5. Petoskey $12,992,600 To register, go to www.gdahc.org. Superior Financial Group 44 0044 5. $472,500 Library Policies Seminar Walnut Creek, Calif. Employment legislation/employment litigation issues Mercantile Bank Corp. 34 12 6 16 affecting libraries. 7. Grand Rapids $14,014,700 Aug. 19 • 8:30 -11:30 a.m. Walsh College Novi Campus 41500 Gardenbrook Road 8. Mackinac Financial Corp. 32 01220 Free courtesy of Foster Swift. Register at https:// Manistique $11,917,600 www-secure.walshcollege.edu/blifreeregistration/ 9. Charter One 30 0291 TM Cleveland $1,767,600 The SBTDC Invites Second-Stage Businesses to Join PeerSpectives for upcoming information session. 10. Chemical Financial Corp. 28 0226 For more info go towww.misbtdc.org/region9/ Midland $5,817,300 TM peerspectives or call Richard King at (734) 487-0490. United Bancorp Inc. 24 0717 11. Tecumseh $9,282,100 Horizon Bancorp 23 0185 12. Michigan City, Ind. $3,216,900 Comerica Inc. 23 15 0 8 12. Dallas $16,483,900 Hillsdale County National Bank 21 0165 14. Hillsdale $6,429,200 Founders Financial Corp. 20 0164 15. Grand Rapids $2,639,300 Wells Fargo & Co. 18 15 2 1 16. San Francisco $6,053,400 TCSB Bancorp Inc. 18 0126 16. Traverse City $4,284,200 KeyCorp 14 761 18. Cleveland $3,974,000 PNC Bank 14 473 18. Cleveland $4,004,000 Capitol Bancorp Ltd. 14 518 18. Lansing $5,495,500 First State Bank 14 077 18. Eastpointe $6,976,800 Live Oak Bancshares Inc. 12 12 0 0 22. Wilmington, N.C. $14,862,000 Northwestern Bancorp 10 433 23. Traverse City $2,898,000 Borrego Springs Bank N.A. 10 307 23. La Mesa, Calif. $3,555,500 First Michigan Bancorp 9 621 25. Troy $3,510,000 West Shore Bank Corp. 7 070 26. Ludington $3,169,000 Independent Bank Corp. 7 016 26. Ionia $3,730,500 Honor Bancorp Inc. 7 070 26. Honor $646,000 Commercial National Financial Co. 7 025 26. Ithaca $2,455,000

ቢTotals 1,118 254 559 305 $324,316,300

This list was compiled from information provided by the Michigan district office of the SBA through the fiscal third quarter, ending June 30, 2010. The Preferred Lender Program allows selected lenders to make certain SBA loans without prior approval from the SBA. SBA Express allows PLP lenders to use many of their own forms, analyses and procedures to process, service and liquidate SBA loans of up to $350,000. Other includes Regular 7(a), Community Express, Patriot Express, Certified Lenders Program, Dealer Floor Plan Loans, Export Working Capital, Export Express and Lenders Advantage Program. B Figures are statewide totals, including institutions not listed because they had fewer than seven approvals. 20100816-NEWS--0015-NAT-CCI-CD_-- 8/13/2010 10:27 AM Page 1

August 16, 2010 CRAIN’S DETROIT BUSINESS Page 15 CRAIN'S LIST: LARGEST FAMILY-OWNED BUSINESSES Ranked by 2009 revenue

Company Year founded Percent of Address Revenue Percent First-generation Family members in management with relation to the business family- Rank Phone; website 2009/2008 change owner first-generation owner owned Type of business Guardian Industries Corp. $4,950.0 B -8.3% 1932 Ralph Gerson, executive vice president, nephew NA Manufacturer of glass, automotive and building 1. 2300 Harmon Road, Auburn Hills 48326 $5,400.0 B William Davidson products (248) 340-1800; www.guardian.com Kelly Services Inc. 4,314.8 -21.8 1946 Terence Adderley, son, chairman NA C Staffing services 2. 999 W. Big Beaver Road, Troy 48084 5,517.3 William Russell (248) 362-4444; www.kellyservices.com Kelly Ilitch companies D 2,100.0 5.0 1959 Christopher Ilitch, president and CEO, Ilitch Holdings Inc., 100 Food, sports and entertainment industries. 2211 Woodward Ave., Detroit 48201 2,000.0 Michael and son; Atanas Ilitch, president, Olympia Development, son; Lisa Companies include Little Caesars Pizza, Olympia (313) 983-6600; www.ilitchcompanies.com Marian Ilitch Ilitch Murray, director, Little Caesars Amateur Sports Entertainment, Detroit Red Wings, Blue Line Foundation, daughter Foodservice Distribution, Champion Foods, 3. Olympia Development, Uptown Entertainment, and Little Caesar Pizza Kit Fundraising Program. Michael Ilitch owns the Detroit Tigers. Marian Ilitch owns MotorCity Casino-Hotel Plastipak Holdings Inc. 1,778.7 -7.6 1967 William C. Young, CEO and president, son 90 Plastic containers for household goods 4. 41605 Ann Arbor Road, Plymouth 48170 1,924.7 William P. and (734) 455-3600; www.plastipak.com Mary Young Barton Malow Co. 1,246.9 -24.6 1924 Ben Maibach III, chairman and CEO, son; Doug Maibach, 69 Construction services 5. 26500 American Drive, Southfield 48034 1,653.1 Ben Maibach Jr. senior vice president, son; Sheryl Maibach, chief marketing (248) 436-5000; www.bartonmalow.com officer, daughter; Ryan Maibach, vice president, grandson Sherwood Food Distributors 1,222.8 -3.7 1969 Howard Ishbia, executive vice president of sales and 100 Wholesale food distributor 12499 Evergreen Road, Detroit 48228 1,269.9 Earl Ishbia and Alex marketing, son; Jason Ishbia, executive vice president of 6. (313) 659-7300; www.sherwoodfoods.com Karp finance and CFO, son; Joel Ishbia, executive vice president of inventory management, son; Gary Karp, executive vice president of corporate affairs, son; David Ishbia, sales, son Walbridge Aldinger Co. 961.9 -27.4 1916 John Rakolta Jr., chairman and CEO, son NA Construction company 7. 777 Woodward Ave., Suite 300, Detroit 48226 1,325.0 John Rakolta (313) 963-8000; www.walbridge.com The Suburban Collection 934.3 -21.0 1948 David Fischer, president and CEO, son; David Fischer Jr., 100 Automobile sales and service 8. 1795 Maplelawn Drive, Troy 48084 1,182.9 Richard Fischer general manager-director, grandson; Zachary Fischer, director, (877) 471-7100; www.suburbancollection.com grandson H.W. Kaufman Financial Group/ 850.0 -2.9 1969 Alan Jay Kaufman, chairman, president and CEO, son 100 Specialty insurance, reinsurance and premium 875.0 Herbert W. finance holding company 9. Burns & Wilcox Kaufman 30833 Northwestern Highway, Farmington Hills 48334 (248) 932-9000; www.burnsandwilcox.com Wolverine Packing Co. 820.0 -8.3 1937 Jim Bonahoom, president, son; Roger Bonahoom, vice 100 Wholesale meat packer and processor; wholesale 10. 2535 Rivard, Detroit 48207 894.2 Alfred Bonahoom president, son; Jay Bonahoom, general manager, grandson meat, poultry and seafood distributor (313) 259-7500; www.wolverinepacking.com

This list of family-owned businesses is an approximate compilation of the largest such businesses based in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. It is not a complete listing but the most comprehensive available. Unless otherwise noted, the companies provided the information. NA= not available. B Crain's estimate. C Terence Adderley owns or controls 93 percent of Kelly Services’ Class B shares, the only shares with voting power. Adderley also owns 13 percent of the company’s nonvoting Class A stock. D There is not a holding company for the Ilitch family of businesses. Some are owned individually by Michael and Marian Ilitch, others are owned jointly. LIST RESEARCHED BY ANNE MARKS

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Wayne State University Searching for solutions

Researchers at Wayne State University ask questions that matter – and then discover answers that make a difference. Concepts developed in Midtown Detroit are resonating around the world. Health care, industry, education and the environment – all of society is touched by innovation that begins at Wayne State. WSU has a strong partnership with Michigan State University and the University of Michigan through the University Research Corridor, which attracts 93 percent of all federal research funding coming into the state – and uses it to renew our economy. Wayne State spends nearly $254 million each year on research; find out how these dollars make a difference at www.research.wayne.edu.

AIM HIGHER 20100816-NEWS--0017-NAT-CCI-CD_-- 8/13/2010 10:28 AM Page 1

August 16, 2010 CRAIN’S DETROIT BUSINESS Page 17

REPORTER’S NOTEBOOK Tom Henderson WHAT’S NEW IN RESEARCH covers banking, finance, Studies range from air pollution technology and to in vitro fertilization, biotechnology. Call (313) 446- Pages 19-21 0337 or write thenderson @crain. com. Innovations: university research

Tom Henderson VC picture poses major ‘what-ifs’ Senate Majority Leader Mike Bishop, 1st move, right move R-Rochester, defending the diversion of tobacco settlement money from the 21st Century Jobs Fund program to general budget needs, told Crain’s recently that “a legislator is just like a Chemical producer fits the mold for UM research hub businessperson. … We look at return on investment. And legislators are not BY TOM HENDERSON seeing the kind of return on CRAIN’S DETROIT BUSINESS investment that we hoped for out of our 21st Century Jobs Fund program.” oroPharm Inc. was everything the Some returns are harder than others to University of Michigan was looking quantify. You easily can quantify jobs B for in the first tenant for its North gained from companies moving here Campus Research Complex, the 174-acre, because of tax credits or abatements. 30-building former Pfizer campus that But some companies aren’t going to the school bought in June 2009 for leave the state no matter what, so their $108 million. staying and growing may or may not be That BoroPharm — a chemical pro- attributable to money their investors got ducer specializing in boron-related mol- from the Job Fund’s $109 million 21st ecular building blocks for drug compa- Century Investment Fund or from the nies and agricultural chemical $95 million Venture Michigan Fund. companies — was created at Michigan Yet, had state money been available State University, with much of its equity from the investment fund or the VMF owned by two MSU scientists, might to venture capitalists in Michigan in have some loyalists to each school the late 1990s, or to venture aghast. capitalists willing to open offices here, But, said UM President Mary Sue two of California’s big innovation Coleman, it proves that UM is serious success stories of the past three about the University Research Corridor, a years might have been Michigan’s. collaboration by the state’s three Ronald Kurtz and Tibor Juhasz, of largest research universities — UM, Ultrafast Laser Medical Group at the MSU and Wayne State University — to TOM HENDERSON/CRAIN’S DETROIT BUSINESS Todd Zahn (right), CEO of BoroPharm Inc., stands outside the company’s new lab at the University of University of Michigan, founded share resources and drive commercial- IntraLase Corp. in 1997. It made the Michigan’s North Campus Research Complex in Ann Arbor (complex shown below) with Vice President ization. of Lab Operations Paul Herrinton and discovery chemist Suzi Miller. superfast femtosecond lasers And that UM is serious about having required for LASIK surgery. the complex be a showcase of private in- They and the company later moved to dustry working alongside university re- ny founded here can stay here instead about 300 people from its administra- California, where a new facility and searchers, and of spinning technology of being pulled out to the coasts,” he tive group into four buildings on the major funding were available. LASIK created on campus into for-profit com- said. site. Another 160 employees are sched- became a household word, and Kurtz panies and jobs. BoroPharm is just the beginning, said uled to move in this month, and the and Juhasz got rich when, in 2007, Landing BoroPharm, said Coleman, David Canter, who took over as execu- school will move its tech transfer office IntraLase was sold for more than shows “how the university will con- tive director of the complex July 19 in in the next couple of months. $800 million to Advanced Medical tribute to changing the state’s economic what was a homecoming. Previously, he “You don’t want to go too fast, be- Optics Inc. future. The reason we like them as our had led Pfizer’s pharmaceutical re- cause that’s when you make mistakes,” Kurtz and Juhasz cofounded another initial tenant is they actually sell prod- search there. said Coleman. She said the research company in California, LenSx Lasers uct. This is a perfect example of what “The average tech park in the United complex “will be the interface between Inc., to commercialize the use of we’re trying to do.” States has 250,000 square feet. We have us and the rest of the world. It will be lasers in cataract surgery. “It is a perfect example of what we’re 2 million square feet here,” he said. our outward face to the world.” In July, the two struck gold again trying to achieve,” said Jeff Mason, the “This represents such an opportunity.” In May, Ora Pescovitz, UM’s execu- when LenSx sold to Alcon Inc. for URC’s executive director. “We’re trying The research complex, which sat tive vice president for medical affairs $361.5 million at closing, plus up to to leverage the strengths of three world- empty after Pfizer left in 2008, is show- and CEO of the health system, told a $382.5 million more based on future class universities to complement each ing other signs of life in addition to the venture capital conference that UM milestones. other and work together instead of few cars parked outside the BoroPharm plans to use the complex as the focus to Kurtz’s and Juhasz’s investors included competing against each other. lab. Venture Investors LLC of Madison, Wis. “And it’s an example of how a compa- The UM Health System recently moved See Research complex, Page 18 Ironically, Venture Investors now has an Ann Arbor office, having opened it in 2007 after a commitment of $10 million from the 21st Century Investment Fund and $10 million from the Venture Michigan Fund. Who knows? Had the state programs that got the Wisconsin firm to open a local operation been up and running in the late-1990s, maybe — just maybe — IntraLase wouldn’t have moved West. After all, in January, Venture Investors was part of an $11 million investment in HistoSonics Inc., a UM spinoff that plans to make ultrasonic devices to noninvasively destroy cancer tumors. Here. Not out West. Public policy vis-à-vis entrepreneurship and job diversification isn’t just about getting companies here, it’s about the one that got away, too. Michigan needs all the IntraLases and LenSxes it can get. 20100816-NEWS--0018-NAT-CCI-CD_-- 8/13/2010 10:29 AM Page 1

Page 18 CRAIN’S DETROIT BUSINESS August 16, 2010 Focus: Innovations: University Research Research complex: Chemical producer fits mold as first tenant ■ From Page 17 double its annual spending on re- “One of the reasons I came here plex of $108 million meant “we got search from $1 billion to $2 billion last year is what you see here, it for a penny on the dollar,” said over the next 10 years. One of the reasons I came here everything you see around us and Pescovitz. UM officials say they That growth would be kick- “ the potential it brings to the Uni- are aggressively planning new re- started, she said, by raising last year is what you see here, versity of Michigan, to Southeast- search projects at the campus, $200 million to recruit new re- ern Michigan and to the state of with several undergoing final searchers, finance multidiscipli- everything you see around us Michigan.” analysis. nary projects and reopen shut- And bought cheaply, she said. BoroPharm, with a business of- tered labs. She said the vision is to and the potential it brings. During the tour, Canter pointed fice and headquarters now in Novi have for-profit scientists working ” out six stainless steel reactors that but moving to Ann Arbor, was side by side with academics and to Ora Pescovitz, University of Michigan lined one short hallway. He said founded in 2005 by MSU chemists have potential technology users said he has already begun explor- searchers. they alone cost Pfizer more than Mitch Smith and Rob Maleczka. It collaborating with technology in- ing collaborative projects with At a recent tour to show off the $30 million and are nearly brand had outgrown its lab space at MSU ventors. UM researchers to augment pro- former Pfizer facility and the new. and had looked into moving to Todd Zahn, BoroPharm’s CEO, jects under way with MSU re- BoroPharm lab, Pescovitz said, The price tag for the entire com- Ohio and Texas. But that changed after UM bought the Pfizer cam- pus, which included a 4,300- square-foot standalone specialty lab that offered the ability to do high-pressure chemistry, which was exactly what BoroPharm was looking for. Zahn was familiar with the lab and had inquired about buying it from Pfizer before the UM deal was announced, but Pfizer wasn’t in- terested in selling the complex piecemeal. High-pressure chemistry cre- ates the potential for explosions, hence the need for a standalone fa- cility separate from larger, main- stream wet and dry labs. The lab also comes with specialized fire- suppression equipment. Zahn said he started calling Joan Keiser, interim managing di- rector of the research complex, months ago. UM determined that none of its researchers had any projects in the works that required s Educates more students than any of the nation’s best high-pressure chemistry, and both parties agreed on a three-year R&D clusters. lease, with two five-year options by the company. BoroPharm, which employs 25, s A quarter of URC graduates earn degrees preparing them began moving chemists into the for high-tech fields. lab in July. It plans to hire three to five chemists for the facility over the next year and to augment re- s Spun off an average of more than twenty new companies search and product development per year over eight years—160 companies from 2002 with UM interns. The company expects 20 percent through 2009. to 30 percent growth annually in sales. Zahn, who declined to disclose s Expended $1.6 billion in research dollars in 2009, 93% of all revenue, says the company now university-based R&D in the state. has about 700 molecules in its cata- log and sells around the world, in- cluding to most large pharma com- panies. He said nondisclosure agreements prohibit him from naming them. He said the company, which got seed money from Lansing-area an- gel investors in 2005, has been profitable since it began selling its first products in 2007. It has been able to fund growth from revenue without having the owners dilute their equity by taking on further investments from the venture cap- BHJÉh7^dbZY^XVaGZhZVgX]7j^aY^c\ J"BÉhCdgi]8VbejhGZhZVgX]8dbeaZm LVncZHiViZÉhIZX]Idlc ital community. Zahn said BoroPharm has patented processes that allow the The University Research Corridor. Transforming, strengthening, and diversifying Michigan’s economy. firm to make its chemicals cheap- er, faster, greener and with a larg- er variety of molecular configura- tions that offer potential for new drugs or chemicals. “Think of Legos,” he said. “Le- gos are building blocks. Instead of offering just rectangular Legos, our processes allow us to offer the www.urcmich.org equivalent of round and triangular Legos. It opens up what you can build.” Tom Henderson: (313) 446-0337, [email protected] 20100816-NEWS--0019-NAT-CCI-CD_-- 8/13/2010 10:29 AM Page 1

August 16, 2010 CRAIN’S DETROIT BUSINESS Page 19 Focus: Innovations: University Research Software targets water system energy use

BY DUSTIN WALSH draulic modeling by Detroit-based organization backed the program CRAIN’S DETROIT BUSINESS Tucker, Young Jackson Tull Inc. with hopes that Miller’s system “We’re at- will reduce air pollution and, in- Reducing energy use and emis- tempting to look evitably, reduce heavy metals in sions of water systems is the goal at a better link the Great Lakes. of software being developed by a between emis- Detroit-based DTE Energy Co. and research team based at Wayne State sions and energy energy organization Midwest Inde- University. consumption,” pendent Transmission System Opera- Water utilities account for Miller said. “The tor are also involved in the project. 3.5 percent of all energy consump- water distribu- Miller expects the system to im- tion in the U.S. And the Detroit Water tion system is prove efficiency of the Detroit water and Sewerage Department, one of the complex, and system by 10 percent to 15 percent. country’s largest systems, pumps creating a more “The system is so large that any more than 228 billion gallons of wa- Miller efficient control decrease you can make in energy ter each year from the Detroit River system will reduce emissions.” consumption will result in a great and Lake Huron. More than 3,000 Miller related the water system breakthrough for emissions con- miles of pipelines traverse below to a “roadway network of piping trol,” she said. the surfaces of 124 communities, with an infinite number of The system will be in place for distributing water to homes in busi- choices” to deliver water to mil- full-capacity testing in late 2011, nesses in Southeast Michigan and lions of homes and businesses she said, with hopes of implement- as far away as Flint. through Southeast Michigan. ing the system at other water dis- With substantial energy con- “There are different options that tribution sites across the U.S. sumption comes substantial emis- take the water to different pump- Currently, water utility sites in sions, but Carol Miller, chair- ing stations that require different Ohio and Illinois are interested in woman of civil and environmental amounts of energy,” she said. “If installing the software, she said. engineering in the College of Engi- the (pumping station) operator Miller said her team will likely neering at Wayne State, is leading had information on how to supply make the software available to wa- a team creating software to man- water at times of low-peak energy, ter utilities for free online follow- age water system energy consump- the system could be optimal from ing trials. However, they are con- tion and reduce pollutants. Miller an energy standpoint and lower sidering commercializing special- is testing the software at the De- emissions.” ized accessories toward the tech- troit system in conjunction with The pilot program is funded by a nique. researchers from the University of $1.5 million, five-year grant from Dustin Walsh: (313) 446-6042, Dayton, University of Illinois and hy- the Great Lakes Protection Fund. The [email protected] Mobile lab studies effects of air pollution

BY SHAWN WRIGHT these small particles have been other six months in Los Angeles as SPECIAL TO CRAIN’S DETROIT BUSINESS found to increase mortality and part of a six-university partner- morbidity among people with pre- ship known as the federal South- Researchers from Michigan State existing health conditions, such as ern California Particle Center. University, the University of Michigan heart disease. and Ohio State University are using a “It’s really for public health, but mobile air research laboratory to we’re always looking at different find out where, and how bad, air ways to get better science out of pollution is in southern Michigan. it,” he said. Jack Harkema, professor of As part of the project, the four re- pathobiology and diagnostic inves- searchers also will deploy the lab in tigation in MSU’s College of Vet- rural areas to study the cardiovas- erinary Medicine, and his team cular health effects of air pollution use the mobile lab — known as the originating from distant emission air Collaborative Air Research Ef- sites, such as factories in the Down- fort, or AirCARE 2 — to help better river area or adjacent states. understand the damaging health The mobile laboratory works by effects of air pollution and air- pulling in air through an air-parti- borne particles. cle concentrator, which allows sci- The 53-foot, 36,000-pound lab will entists to selectively collect parti- be housed in a converted semitrail- cles and analyze them for er and taken throughout southern health-damaging chemicals. Michigan, including metro Detroit. “What’s unique about the mo- Areas of concentration include De- bile labs is the air-particle concen- troit, Dearborn and more rural trator takes in 5,000 liters of air per communities like Dexter. The re- minute,” Harkema said. search will extend as far as East Researchers can study the sub- Lansing and Columbus, Ohio. tle effects of controlled particle ex- “Because Michigan has such di- posure on animal and human sub- verse pollution sources, we are try- jects, providing clues as to why ing to determine what those are and and how pollutant particles are where they are coming from,” harmful to the heart and lungs. Harkema said. “We’re starting to AirCARE 2, which was built in look at multi-pollutant atmospheres 2008, was partly funded through the from different sources — roadways MSU strategic partnership grant, near where people are living, and the Michigan Agricultural Experi- near industries like steel factories ment Station, the College of Veteri- and coal-fired power plants.” nary Medicine and the Office of the Harkema, UM cardiologist Vice President for Research and Robert Brook, UM atmospheric Graduate Studies. The new fine-par- scientist Gerald Keeler and OSU ticle concentrator in the lab re- cardiologist Sanjay Rajagopalan ceived some funds from the Electric will conduct the study, which is Power Research Institute and the funded by the U.S. Environmental American Petroleum Institute. Protection Agency. MSU’s first mobile air research The $400,000 lab has about 450 laboratory, AirCARE 1, built in square feet of indoor space to 1999, spends six months a year in study fine and ultrafine particles metro Detroit conducting air pol- in air pollution. Harkema said lution studies. The lab spends the 20100816-NEWS--0020-NAT-CCI-CD_-- 8/13/2010 10:30 AM Page 1

Page 20 CRAIN’S DETROIT BUSINESS August 16, 2010 Focus: Innovations: University Research Grand Valley State, UM team to study feasibility of Great Lakes wind farms

BY DUSTIN WALSH CRAIN’S DETROIT BUSINESS This project will allow us to The Great Lakes are fundamen- “ tal to creating renewable energy in produce smarter systems for Michigan, according to research under way by Grand Valley State Uni- generating energy. versity and the University of ” Michigan. Arn Boezaart, Michigan Alternative and Renewable Energy However, it’s not the water but Center the harnessing of wind power over the water that could lead to low- emission sustainable energy for bine farms miles offshore in Lake ter months.” the state. Michigan, Lake Huron and Lake The project has received Grand Valley’s Michigan Alterna- Erie. $3.1 million in funding, including a tive and Renewable Energy Center Arn Boezaart, director of the re- $1.4 million grant from the U.S. De- will study the wind speeds and pat- newable energy center, said his partment of Energy, a $1.33 million terns over the Great Lakes that team and the Ann Arbor-based grant from the Michigan Public Ser- could eventually lead to wind tur- Michigan Memorial Phoenix Energy In- vice Commission and $350,000 from stitute, affiliated with the University the Phoenix Institute. of Michigan, will deploy several The project was dead even be- buoys equipped with anemome- fore it hit water until DTE Energy ters, Light Detection And Ranging Co., Consumers Energy Co. and Wis- equipment and other instruments consin Energy Corp. stepped in. The to measure speed and gather other utilities plan to announce this information. week funding that will push the The buoys will be placed in the project’s total budget to more than late spring or early summer of 2011 $5 million. and are scheduled to collect data “This project is the pathway, the year-round for at least two years, precursor, to the eventual develop- Boezaart said. ment of renewable energy using “Most data-capturing technolo- wind available over the Great gies are pulled out of the lakes by Lakes,” Boezaart said. “This pro- Michigan Tech is committed to being Nov. 1” because of harsh condi- ject will allow us to produce tions, he said. “The scientific com- smarter systems for generating en- the leader in using technology to solve the munity and utilities are very inter- ergy.” greatest challenges of our time. ested in knowing what goes on Dustin Walsh: (313) 446-6042, above the water during those win- [email protected]

Wayne State researcher seeks drug to stop epilepsy, seizures

BY SHAWN WRIGHT same mechanism, but we need to SPECIAL TO CRAIN’S DETROIT BUSINESS find out.” Loeb has been researching By using donated brain tissues epilepsy for 10 years. Behind the from epilepsy patients, Wayne State current study is the Systems Biolo- University’s Jef- gy of Epilepsy Project, a multidis- frey Loeb, M.D., ciplinary collaboration among Ph.D., is work- Wayne State experts in areas rang- ing to develop a ing from neurosurgery to informa- drug that will tion technology. prevent epilep- The project is funded by the sy. In addition to Wayne State President’s Research helping people Enhancement Program and the Na- born with the tional Institutes of Health, from disease, Loeb which much of Loeb’s nearly also hopes the $4 million in funding has come. At drug will pre- Loeb least $800,000 comes from federal vent seizures that come as a result stimulus funds. of brain injuries. “Right now, there are no drugs Through the study, donated tis- that can prevent epilepsy in hu- Sustainability—The state of National Security—Faculty sues will be cataloged into a data- mans. The only treatment we have Michigan has invested $25 million and students are working together base to shed light on the disease’s that can cure a seizure is where we electrical, anatomical and molecu- into our Great Lakes Research to develop the next generation of cut out that part of the brain,” Loeb lar features. said. Center, a new facility to help us wearable video cameras for The donated tissues come from “Drugs right now can only sup- protect our most precious resources. military use. epilepsy patients who underwent press the seizures. All we have is brain surgery at the Detroit Medical like the equivalency of Tylenol, Energy Independence—In the Disease Discovery—Michigan Center’s Harper University Hospital which takes care of the headache af- Wood to Wheels program, we are Tech researchers have isolated and DMC Children’s Hospital of ter it has already happened.” investigating the use of forestland genes responsible for ailments from Michigan, both in Detroit. Loeb Loeb said he is optimistic the re- said this has been a big advantage search group is close to finding a biomass to fuel engines of the future. Type 2 diabetes to ALS. over previous epilepsy research. preventive treatment that can be “We’ve found a group of genes commercialized. They have one www.mtu.edu • Houghton, Michigan that are different in patients of drug that looks promising, he said, epilepsy, throughout children and and are working with various Michigan Technological University is an equal opportunity educational institution/equal opportunity employer. adults,” Loeb said. drug companies, though he de- “We think that it may be the clined to say which ones. 20100816-NEWS--0021-NAT-CCI-CD_-- 8/13/2010 10:31 AM Page 1

August 16, 2010 CRAIN’S DETROIT BUSINESS Page 21 Focus: Innovations: University Research UM researchers tackle in vitro success rates BY DUSTIN WALSH Currently, in vitro fertilization ter, were able to improve pregnan- lion dollars in Series A venture CRAIN’S DETROIT BUSINESS takes place in a culture dish before cy rates in mice by 22 percent capital funding, led by Venture In- the embryo is placed in a woman’s with the device over traditional in vestors LLC in Ann Arbor, plus Mimicking the movements of an uterus. vitro methods. $1.25 million from the 21st Century embryo within the human body, a The device could someday im- “The gentle motion of the device Jobs Fund. device created by researchers at prove in vitro fertilization suc- creates a more natural environ- The researchers have moved the University of Michigan might be cess rates — which the American ment for the cells,” he said. SMART out of the rodent lab and able to improve success rates for Pregnancy Association says average The device contains similar flu- into clinical trials on human em- in vitro fertilization. 35 percent for women under age ids to the fallopian tube, and sets of bryos, Takayama said. The device, System for Microflu- 35. Braille pins push the fluid through Incept Biosystems will launch idic Assisted Reproductive Tech- Shu Takayama, associate pro- channels in the device, as muscle the device for full commercializa-

nology, or SMART, replicates out- fessor in the department of bio- contractions would in the body. tion next year if it receives FDA COURTESY OF UNIVERSITY OF MICHIGAN side the body the motion an medical engineering at UM, and Takayama and Smith created a approval following the clinical tri- Researchers Shu Takayama (left) and embryo experiences as it travels Gary Smith, associate professor spinout company, Incept Biosys- als, he said. Gary Smith invented a device that through the fallopian tube to the in the department of obstetrics tems Inc., in 2005. Dustin Walsh: (313) 446-6042, creates a more natural environment uterus. and gynecology at UM Medical Cen- It has since raised several mil- [email protected] for in vitro fertilization. Protein research may hold hope for Parkinson’s

BY DUSTIN WALSH CRAIN’S DETROIT BUSINESS

While many researchers investi- gate methods to prevent Parkin- son’s disease, John Goudreau, di- rector of Michigan State University’s Translational Neurobiology Re- search Unit, seeks to treat the de- generative condition in its early stages. Operating off a $1.5 million Na- WE DISCOVER, CREATE AND SUSTAIN. tional Institutes of Health grant, Goudreau is studying how a pro- tein called parkin helps nerve cells recover from injury. Parkin allows Whether it’s helping a life sciences startup dream become a reality, discovering certain damaged cells to regener- ate in the brain. pockets of untapped Michigan oil reserves or making sustainability the centerpiece Goudreau believes parkin may hold the answer to treating cells of manufacturing, Western Michigan University researchers are creating higher damaged by Parkinson’s. “Researchers have long suspect- ed/private-sector partnerships that spell success. Here are just a few campus centers ed that this protein can help re- verse injury, and we’ve found a that use WMU research to enhance our state and nation’s economic climate. group of neurons that recover,” said Goudreau, an associate pro- fessor in the departments of neu- rology and pharmacology and toxi- sMICHIGAN GEOLOGICAL REPOSITORY FOR RESEARCH AND EDUCATION cology at MSU and director of its Research and tech transfer focused on Michigan’s subsurface, recovery of Movement Clinic. “We now need to figure out how fossil fuels and CO2 sequestration that exactly works and identify targets for therapy development.” If Goudreau and his team can sCENTER FOR THE ADVANCEMENT OF PRINTING ELECTRONICS uncover the link between parkin Development and fabrication of state-of-the art printed flexible electronic devices and cell recovery, they say they can create a therapy to help treat Parkinson’s Disease. sGREEN MANUFACTURING INDUSTRIAL CONSORTIUM “We currently just have medica- tions that cover up the symptoms,” Materials selection in product design, green manufacturing processes, he said. “We need a treatment to prevent the disease from getting lean manufacturing and energy conservation worse.” The research is still years away from the clinical trial stage, he said. sCENTER AND CONSORTIUM FOR ADVANCED VEHICLE DESIGN AND SIMULATION The Michael J. Fox Foundation is Computer simulation to enhance motor vehicle product development funding other research by Goudreau’s team in clinical trials at Massachusetts General Hospital in sBIOSCIENCES RESEARCH AND COMMERCIALIZATION CENTER Boston and at Northwestern Universi- ty in Chicago. Resources and expertise to develop life sciences startups. If the researchers identify an ef- fective therapy, Goudreau said he will seek to work with a drug com- pany to commercialize treatment methods. “In our lifetime we’ll see a drug wmich.edu/research to employ in patients that will be able to slow or arrest the disease in early stages,” he said. Dustin Walsh: (313) 446-6042, [email protected] 20100816-NEWS--0022-NAT-CCI-CD_-- 8/13/2010 10:32 AM Page 1

Page 22 CRAIN’S DETROIT BUSINESS August 16, 2010 BUSINESS DIARY ACQUISITIONS grams and graduate medical education. will license slip-control systems tech- nationalphysicianstaffinginc.com. health care reform will affect cus- nology to its joint venture, Brakes India tomers. General Motors Co., Detroit, has RKA Petroleum Cos. Inc., Romulus, Safety King, Utica, has opened a Limited, Chennai, India, to enable it to agreed to sell Nexteer Automotive, has contracted with Women In Truck- branch 7034 12th Ave., Jenison. Tele- Botsford Hospital, Farmington Hills, manufacture and provide local engi- Saginaw, to Pacific Century Motors, ing, Plover, Wis., to lead its fuel indus- phone: (800) 247-3828. has added a fellowship-training pro- neering and development capability as Beijing, China, a joint entity of Beijing try expert forum, titled “Ask The Fuel gram in geriatrics. Website: E-Town International Investment and Expert.” part of its service to customers in India. MOVES www.botsford.org. Development Co. Ltd. and Tempo In- Specialty Coatings Inc., Fraser, a dis- SolidThinking Inc., Troy, has signed a Wayne County Airport Authority, De- reseller agreement with Tokyo-based Planning Alternatives Ltd., an inde- ternational Group Ltd. tributor of paints and coatings to the in- pendent investment and financial ad- troit, and Delta Air Lines, Atlanta, Ga., Stratadyne LLC, Livonia, a provider of dustrial, automotive and military mar- Sumisho Computer Systems Corp. to have introduced a public recycling pro- sell solidThinking’s 3D conceptual de- visory firm, from 838 W. Long Lake engineering support for the finishing kets, has been awarded a multiyear Road, Suite 100, Bloomfield Hills, to gram at Detroit Metropolitan Airport. industry, has acquired Hosco Finish- contract by the General Services Admin- sign software in Japan and surround- Website: www.metroairport.com. ing regions. 36800 Woodward Ave., Suite 200, ing System Components, Livonia, istration, Detroit, to supply the U.S. De- Bloomfield Hills. Telephone: (800) 645- The Michigan Association of Certified from Illinois Tool Works, Glenview, Ill. partment of Defense, Washington, D.C., Pilz Automation Safety LP, Canton 1710. Website: www.planningalt.com. Public Accountants, Troy, has Azure Dynamics Corp., Oak Park, has with a corrosion inhibitor used primar- Township, installed Pilz’ PNOZmulti launched a redesigned, interactive ily on military vehicles and aircraft. modular safety systems for Buhler agreed to sell 21.08 million common NEW PRODUCTS website at www.michcpa.org. Eternal Image Inc., Farmington Hills, Inc., Plymouth, Minn., to control ex- shares to Johnson Controls LP, Blue Care Network of Michigan, has selected Root Candles, Medina, plosive vents and emergency stops in PPG Industries, Troy, a manufacturer Markham, Ontario. Johnson Controls Southfield, has introduced Healthy Ohio, as its distributor of Vatican ob- Buehler’s flour heat treatment, brew- of transportation coatings, has LP will then own approximately Blue Living Rewards, an outcome- 3.4 percent of the issued and outstand- servatory liturgical candles and gifts ing and malting equipment. launched the first use of its next gener- based HMO plan that rewards people ing common shares of Azure. to Catholic churches across the U.S. Ilumisys Inc., Troy, a developer and pro- ation B1:B2 waterborne paint technolo- gy in the United States. Website: with lower health care costs for ImageSoft Inc., Southfield, signed ducer of solid-state lighting, has grant- www.ppg.com. achieving healthy results. Website: CONTRACTS agreements with the following cus- ed a license for its patents on light-emit- ting diode fluorescent tube Caraco Pharmaceutical Laboratories www.mibcn.com. Esperion Therapeutics, Plymouth, a tomers: New Breed Logistics Inc., High Point, N.C.; Glimcher Realty replacements to: ATG Electronics, Lake Ltd., Detroit, has started shipping aze- privately held biopharmaceutical Elsinore, Calif.; Diogen Lighting, Cen- lastine ophthalmic solution, 0.05 per- STARTUPS company, has contracted TransGenRx, Trust, Columbus, Ohio; XChanging, London, UK; Clinton County, St. tennial, Colo.; Hudnut Co. Inc., Portland, cent. This product was approved by Astute Artistry, a special-effects school Baton Rouge, La., a transgenic tech- Ore.; LEDtronics Inc., Torrance, Calif.; the U.S. Food and Drug Administration nology company, to produce protein- Johns; Team Legal Solutions, Kalama- of makeup, has reopened at 33033 Sev- LumaSmart, Macomb Township; and for Sun Pharma’s abbreviated new based therapeutics to be used in the zoo; and Park Township, Holland. en Mile Road, Livonia. Telephone: Roush Performance Products, Livo- NCS Power Inc., Vancouver, Wash. drug application. Website: www. (248) 477-5548. Website: www. company’s research targeting HDL caraco.com. therapies for the treatment of cardio- nia, and Micro Bird Inc., Drum- astuteartistry.com. metabolic disease. mondville, Quebec, have signed a con- EXPANSIONS Maggie’s Organics, Ypsilanti, a produc- er of clothing made with organic fibers, Wagner Design Associates, Ann Ar- tract to incorporate the Roush liquid Federal-Mogul Corp., Southfield, has sells clothing independently certified to DIARY GUIDELINES bor, contracted with Premiere Land propane system into a new 30-passen- opened an Asia Pacific headquarters a new standard for fair labor practices Services, Traverse City, to develop its ger Micro Bird bus by Girardin. and tech center at 118 Jinqiao Road, and community benefits. Website: Send news releases for Business new logo and identity and to redesign TechToolSupply.com, Plymouth, a sell- Jinqiao, Pudong, Shanghai, China. www.maggiesorganics.com. Diary to Departments, Crain’s its website. er of tools and equipment, has en- Ecostore USA, Birmingham, a manu- Detroit Business, 1155 Gratiot gaged B2B CFO, Lake Orion, to pro- Lear Corp., Southfield, an automotive facturer of eco-friendly plant- and NEW SERVICES Ave., Detroit, MI 48207-2997 or supplier, has expanded its use of Soy- vide part-time CFO services. mineral-based products, has opened a send e-mail to cdbdepartments@ Foam, a soybean oil-based flexible ERT Systems, Ann Arbor, was chosen 37,000-square-foot manufacturing fa- 1 Stop Computer Shop, White Lake crain.com. Use any Business Diary foam material, to the 2011 Ford Motor by the Mt. Gilead, Ohio, Fire Depart- cility in Auburn Hills. Website: Township, sellers of refurbished com- item as a model for your release, Co. Explorer seats. ment to implement OnSite ERT, a www.ecostoreusa.com. puters and laptops, has launched a and look for the appropriate MedHub Inc., Ann Arbor, signed an tracking technology to determine National Anesthesia Services Inc., “green” program. Telephone: (248) category. Without complete agreement with Hamad Medical Corp., crew status and locations during Beverly Hills, has formed a new divi- 360-3000. information, your item will not run. Doha, Qatar, to deploy its MedHub en- emergencies. sion, National Physician Staffing Inc. to Blue Cross Blue Shield of Michigan, Photos are welcome, but we cannot terprise residency management system TRW Automotive Holdings Corp., Livo- meet demand for medical personnel in Detroit, launched www.bcbsm.com/ guarantee they will be used. across all residency and fellowship pro- nia, an automotive supplier, says it several specialties. Website: www. healthreform, to explain how national

Oakland University | Applied Research

Oakland is a known leader in many applied research disciplines including biomedical research, manufacturing, information technology, alternative energy/power train and homeland defense. To foster emerging discoveries, the university features several noted research centers, including:

Fastening and Joining Research Institute Eye Research Institute Automotive Antenna Measurement Center for Biomedical Research Instrumentation Lab OU’s SmartZone Business Incubator (OU INC) Center for Robotics and Advanced Automation Prevention Research Center

Office of Grants, Contracts and Sponsored Research 544 O’Dowd Hall, 2200 North Squirrel Road, Rochester, MI 48309-4401 (248) 370-2552 | [email protected] | oakland.edu/research

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August 16, 2010 CRAIN’S DETROIT BUSINESS Page 23

PEOPLE ENGINEERING from assistant coach. Eleonora Iaconelli to vice president, SUPPLIERS Marsh Inc., Detroit, from associate IN THE SPOTLIGHT Tim Sante to North American sales Kim Madaj to vice president of North FINANCE client executive; and Kristin Peach to Birmingham-based advertising manager, ATS Engineering, Plymouth, American corporate finance and ac- agency McCann Midwest has from Eastern regional sales manager, Mary Fowlie to managing director of vice president, from client adviser. counting, Denso International Ameri- named Joe Garcia president. Dyne Systems Inc., Jackson, Wis. regulatory affairs, First Michigan ca, Southfield, from director of corpo- Bank, Troy, from president, Compli- rate accounting. Garcia, 46, had HEALTH CARE ance Results Associates PLLC, Birm- Scott Bethke to director of bulk han- been president ENTERTAINMENT Jennifer Morgan to administrator, ingham. dling systems sales, Jervis B. Webb and CEO of Brian Sommariva to assistant general Jay Cummings to vice president, Guy Martha T. Berry Medical Care Facility, Co., Farmington Hills, from director BBDO Detroit in manager for the Plymouth Whalers, Hurley Blaser & Heuer LLC, Troy, from Mt. Clemens, from administrator, of Sys-T-Mation, Roberts Sinto Corp., Troy, which Compuware Sports Corp., Plymouth, vice president, Hylant Group, Troy. Samaritan Manor, Detroit. Lansing. was entirely dedicated to Chrysler Group LLC’s advertising until the automaker Garcia announced last year that it was switching to other agencies. He ran the office for six years; it closed at the end of January. Garcia, a native of Australia, has also worked for D’Arcy Masius Benton & Bowles and Saatchi & Saatchi Sydney. He succeeds Garry Neel, who becomes executive vice president, global account director for General Motors Co. Neel will have overall management responsibilities for GM, one of parent group Neel McCann Worldgroup’s largest multinational accounts. Neel, who has spent 13 years with McCann Worldgroup, has also been general manager of the Zurich office and European head of the GM Opel business. McCann, GM’s largest global agency, handles Chevrolet and Cadillac in 60 countries, including lucrative emerging markets such as China, India and Latin America. It also handles GM’s corporate work and retail advertising, such as employee discounts, along with Sirius XM Satellite Radio and Saab. McCann lost the $122 million Buick account in 2006 after 50 years to Leo Burnett in Troy and Chicago, then last November was eliminated as a candidate for the $270 million Cadillac account that wound up at the New York office of British agency Bartle Bogle Hegarty. GM moved its corporate ad account to Los Angeles-based Deutsch in 2007, but gave it back to McCann two years ago. Advertising Age reported this year that McCann Worldgroup’s most recent global revenue was $530 million, with the local office being responsible for about $50 million last year. That’s up about 20 percent from the year before. EDUCATION Rae Anne Cinder to director of devel- opment for the College of Health and Human Services, EMU Foundation, Ypsilanti, from development director, Hospice of Michigan, Detroit; also Ed- ward Davis II to assistant director of development for the College of Arts and Sciences, from development in- tern, EMU Autism Collaborative Cen- ter, Ypsilanti; Ceci Riecker to director of development for the College of Arts and Sciences, from director of prospect research, St. Joseph Mercy Health System, Ann Arbor; and Jill Hunsberger to chief development offi- cer, from senior director of develop- ment. 20100816-NEWS--0024-NAT-CCI-CD_-- 8/13/2010 10:34 AM Page 1

Page 24 CRAIN’S DETROIT BUSINESS August 16, 2010 Debt-laden auto suppliers may get help from private-equity restructuring deals

BY JAMES TREECE ten preferred to “amend and ex- Enter private equity — perhaps. CRAIN NEWS SERVICE tend, or amend and pretend,” Hof- Although private-equity funds fecker said. Instead of writing off a raised significantly less money last Private-equity funds, which loan to a troubled supplier, the year than in each of the two prior have been quiet in the auto indus- lender “extended the loan term out years, they still have a lot of cash try after being dragged through a a ways to have it due in a few available. Those funds have about mud puddle of bankruptcies, will years,” he said. $400 billion available, which Hof- return as major investors in auto- Lenders may not extend those fecker called “dry powder,” ready to parts suppliers because of trends debts again. use if enticing targets appear. in credit markets, consulting firm Financial-market experts pre- “Companies with significant debt AlixPartners predicts. dict a “wall of debt” amounting to due in the near term and healthy The industry’s restructuring approximately $1.2 trillion in junk operations may become attractive Right-sized legal has left suppliers, as a group, as bonds and bank loans will come targets through ‘loan to own’ or oth- profitable as due by 2015, with the largest share er restructuring deals,” he said. they were in coming due in 2013 and 2014. In such a deal, Hoffecker said, a strategies. 2006 despite pro- With lots of bond offerings to private-equity fund loans money duction vol- choose from, investors could stick to a supplier under terms that umes that have to quality borrowers and leave the mean “if the company goes under, Meeting the needs of fallen 35 percent weakest automotive suppliers in they can take it over.” from 2006 levels, the lurch. From Automotive News said John Hof- your growing business. fecker, a manag- ing director of AlixPartners’ Hoffecker global automo- CAREER MOVES tive practice in Southfield. But the weakest 25 percent of REAL ESTATE suppliers — as measured by earn- MANAGEMENT ings before interest, taxes, depreci- Court Services Manager Visit the new How can we assist? ation and amortization — face a re- P: 248.539.9900 financing challenge. More than 85 United States District Court, fosterswift.com E: [email protected] percent of their debt will come due Eastern District of Michigan Now could be the perfect time to become a This position is located in the Court Services commercial real estate agent. within the next five years. department in Detroit, Michigan. The Court Some of that debt came due dur- Services Manager reports to the Deputy To find out why, contact ing the recession in 2008-09. But in- Court Administrator and is responsible for David Greene at 248-415-2300 providing administrative services to judges’ stead of calling the loans, banks of- chambers, the Clerk’s Office, Probation Lansing | Farmington Hills | Grand Rapids | Detroit | Marquette | Holland Department and Pretrial Services Agency. The Court Services Manager has responsibility for all financial, procurement, Call or email today for information space and facilities, and security services provided to the Court. The employee will on a custom advertising plan! occasionally travel and work in the different CRAIN’S SEEKS BEST-MANAGED court locations within the district. Court Services Manager Vacancy [email protected] Announcement and instructions for NONPROFITS application can be found at: 313.446.6068 The economy is starting to http://www.mied.uscourts.gov improve, but challenges for 800-292-3831 nonprofits remain. This year’s Crain’s Best-Managed indiantrails.com Nonprofit Contest will honor successful collaborations, partnerships and outright mergers MARKET PLACE among area nonprofits. Those relationships could include sharing resources, sharing facilities, ANNOUNCEMENTS & HEALTH & FITNESS consolidations or joint ventures. SERVICES

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E S C 100 Finalists in this year’s contest will Routine Service/One-Time Cleanouts be interviewed in person by judges Hard Drive Destruction, Recycling Programs 313-343-9600 www.GeneralShredding.com the morning of Nov. 10. aHealthierMichigan.org Applicants for the award must be a Call Us For Personalized 501(c)(3) with headquarters in Service: (313) 446-6068 LEGAL SERVICES Wayne, Washtenaw, Oakland, Macomb or Livingston counties. FAX: (313) 446-1757 Problems with delinquent commercial Applications must include an entry E-MAIL: [email protected] accounts receivable? form, a copy of the nonprofit’s INTERNET: Attorney who has collected business debts most recent audited financial www.crainsdetroit.com/section/classifieds and rents for more than 35 years can help. statements and a copy of the See Hourly fee or contingent fee arrangements can be negotiated. most-recent IRS Form 990. Crainsdetroit.com/Section/Classifieds FRED MANN, Attorney at Law Previous first-place winners are not for more classified advertisements [email protected] or (248) 645-0120 eligible; neither are hospitals, HMOs, medical clinics, business and professional organizations, schools, churches or foundations. Comfort and The winners will be profiled in the Nov. 29 issue, receive a special “best-managed” logo from Crain’s t
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4FSWJDF promotional code at time of booking: CDB52aug Cindy Goodaker at [email protected] or call (313) 446-0460. 20100816-NEWS--0025-NAT-CCI-CD_-- 8/13/2010 3:17 PM Page 1

August 16, 2010 CRAIN’S DETROIT BUSINESS Page 25 Staffing: Economic clouds have silver lining for staffing firms ■ From Page 3 Richard Wahlquist, president and they bet wrong … and the economy 0.3 percent, or 5,600 jobs, from Southeast Michigan’s largest leased space in Southfield by the CEO of the Alexandria, Va.-based takes a double dip,” Wahlquist June to July. staffing company, on Aug. 11 post- end of August, in part because of American Staffing Association. said. To meet growing demand, Im- ed second quarter net income of pent-up corporate demand for IT In past recessions, staffing firms The temporary and contract pact moved in April from Novi to $3.9 million compared to a net loss services. led the economic recovery about employment sector has led all oth- about 4,000 square feet of leased of $66 million for the same quarter Southfield-based Epitec Group, six months before companies re- er sectors over the past nine space on Telegraph Road in South- in 2009. which projects $35 million in rev- hired permanent employees, he months, adding 379,000 jobs field. Kelly also reported a 17.5 per- enue this year, up from $31 million said. across the U.S. since September The company plans to lease cent increase in revenue for the last year, and expects to add 150- Now, companies are adding per- 2009, he said. more office space in Utica and quarter, year over year. President 175 contract employees before the manent employees at much slower With the exception of holidays, somewhere between Belleville and and CEO Carl Camden attributed end of the year, as well as 10-15 re- rates and much more strategically contract staffing employment has Saline, and to open at least one of the earnings increase to strength- cruiters and salesmen. than in the past, he said. shown steady growth over past 24 those satellite locations by the end ening global labor markets and in- Shelby Township-based Ex- “In talking to our members, weeks, Wahlquist said. He noted of the year, said Davis. creased demand for temporary press Employment Professionals, even with slower projections of that contract employment was “It’s easy to recruit on the Inter- staffing. which recently purchased a sec- GDP … they are seeing there’s go- 25 percent higher in July than in net, but we’re doing a lot of driving Troy-based Jawood Business ond franchise to serve the Troy- ing to be an increased reliance on July 2009 and up 1 percent from to interview people who live in Process Solutions L.L.C., which pro- Auburn Hills area, is looking to temporary and contract employ- this past June, according to the those areas,” he said. jects at least $37 million in revenue lease additional office space in ees,” Wahlquist said. American Staffing Association’s Impact is just one of several lo- this year, up from $30 million in Troy and projects that its 2009 rev- Part of the bargain that staffing Staffing Index. cal staffing companies projecting 2009. The company plans to consol- enue of $4.9 million will increase companies offer is flexibility. U.S. Bureau of Labor Statistics increased revenue this year. idate its Troy headquarters and 40 percent this year after a 32 per- “(Companies) don’t want to data released Friday, however, Some of the other companies in- the Novi site it acquired with the cent increase last year. make a commitment to new fixed showed a marginal slowdown in clude: March acquisition of Felix Health Sherri Welch: (313) 446-1694, costs that they have to get rid of if contract employee hiring, down Troy-based Kelly Services Inc., Technologies to 19,000 square feet of [email protected] REAL ESTATE

INDUSTRIAL PROPERTY INDUSTRIAL PROPERTY INDUSTRIAL PROPERTY ANNOUNCEMENTS

Troy -- Sale or Lease Pontiac Warehouse for Lease Best Deal in Town! Location, Location, Location! 67,700 Sq. Ft. Mfg. or Whse. Rail - Easily Accessible - Low Rates Primary Power • 3 Truckwells Picture Your Business Here Available: On-site Mgmt - Exterior Storage $1.95/Sq. Ft. Lease Rate www.waretechindustrialpark.com 83,719 SF Possible Seller Financing Downtown Rochester CATELLUS GROUP, LLC 43,000 SF (810) 695-7700 Broker/Owner (248) 705-0835 Property Tour • Warehousing, Machine/Die Storage, Manufacturing AUCTIONS • M/59, Widetrack, and Woodward Area Thursday, August 26th, 1-7:00pm • 5,000 to 200,000 Sq. Ft Available Starting Location — 335 Main Street with Offices, Short or Long Term Leases Presented by the Rochester DDA Luxury Real Estate Auction • 8 Interior Truck Wells, 16 Ft. Ceiling Heights, Sprinklers, Heated, Buss Duct, www.DowntownRochesterMI.com 3060 Stone Meadow, Milford Twp., MI and Air Lines. 248-496-3405 248-656-0060

AVAILABLE NOW MISCELLANEOUS OFFICE SPACE Builder Investor looking for lots in Flint Township Office Building Macomb or Oakland Township. 4,000 to 100,000 sq. ft. Minimum of 25 lots. Also 10,000 & 25,000 sq. ft. 586-201-9235 or 586-405-4581 Free Standing Bldgs w/truckwells. Open Houses: Investor Wanted 1 Mile from Metro Airport • Class A Office Building Wednesday, September 8th 4-7pm 12% Cap rate on AA tenant. 5-year • I-69 / I-75 / US23 near Bishop Airport Sunday, September 12th 12-3pm lease plus (1) 5. Building in Taylor, new, • Up to 20,000 Sq. Ft. Available - 300 car parking REA CONSTRUCTION 28,000 sf; $950,000 return for $114,000 • Fully Furnished with 100 pre-wired workstations • 800 kw backup generator Held on-site Sunday, September 19th at 1pm (734) 946-8730 per year plus depreciation. • General Offices, Call Center, Data Center or Bill McMachen, [email protected] Medical Offices This extraordinary mansion situated on a 2.75 acre wooded lot is overflowing Also Heavy Industrial 248-496-3405 with elegance and distinction. At 8622+/- sq. ft., this residence features 5 586-915-4441 bedrooms, 5 baths, 2 lavs, library, custom spiral staircase, 2000 bottle wine cellar, Land Available WATERFRONT PROPERTY sauna, and home theatre, where no expense has been spared. A finished lower OFFICE SPACE level walkout with 2nd kitchen takes you to your backyard sanctuary with a www.reaconstruction.net — Watefront Condo for Sale — custom swimming pool, sports court, fire pit, and terrace. 6 car heated garage Space for Lease with portico and so much more! Beth Rose Downtown Rochester 1638 N. Edison Shores Place, Port Huron. Rose Auction Group, LLC CAI Auctioneer International view of the Blue Water Bridge on 877.696.7653 2009 Michigan State AUCTIONS the St. Clair River! 3350 sq. ft. condo, 4br, 3.5 Auctioneer Champion baths, att gar, fin bsmt, all the ammenities! RoseAuctionGroup.com ID#2801000078 LENDER DIRECTED INDUSTRIAL REAL ESTATE AUCTION C#3683 $459,900 Former Lo-Temp Brazing Properties - Toledo, OH Mike Basey — O’Connor Realty 810.334.6800 Auction of Golf Course and Banquet/Club House Wednesday, 09/01/10 at 12 PM Novi, Michigan Oakland County’s Growth Community Location of Auction: Call Us For Personalized 3122 South Ave - Toledo, Ohio Service: (313) 446-6068 On-line Auction Novi, MI Property ON-SITE OPEN HOUSE Minimum Bid - $600,000 — No Reserve held on 08/18 & 08/25  Approx 4,600 rental square feet from 11 AM - 1 PM  Adjacent to 4-Star Royal Park Hotel CLOSING TIMES: Monday 3 p.m., and Paint Creek River. one week prior to publication date. Four Buildings Totaling 46,192 Sq. Ft.  Walking distance to downtown Please call us for holiday closing times. & Approximately 3.992 Acres: Rochester.  Premium underground parking. FAX: (313) 446-1757 ORDER OF SALE - OFFERED IN 3 TRACTS: Contact Kathy White at 248.202.2264 E-MAIL: [email protected] Tract 1 - 3106 South Avenue or e-mail [email protected] INTERNET: Tract 2 - 3116 & 3122 South Avenue www.crainsdetroit.com/section/classifieds Tract 3 - 330 & 334 Elmdale Confidential Reply Boxes Available Due Diligence Materials Available at • Bank-Owned. 14,000+/- SF Clubhouse, 30 +/- acres of land, Class C Liquor License • 9-Hole Executive www.signatureassociates.com/lo-temp.htm Call or email today for information PAYMENT: All classified ads must be Golf Course with Bentgrass Fairways • 2007 Bank Appraisal Value - $2,100,000 • 750 +/- Housing Units For more information, contact Auctioneer: on a custom advertising plan! prepaid. Checks, money order or in Four Fully-Developed Subdivisions Surround Golf Course • Novi, Michigan Median Household Income - Craig Herschel - [email protected] Crain’s credit approval accepted. Credit cards accepted. $81,793 (2009 data) • Seller Financing Available to Qualified Buyers (20% down required) THE TEAM No Signature. No Results. REALTORS On Line Auction Date: August 26, 2010 888.708.7070 [email protected] See www.BratemanAuction.com/NoviGolf 313.446.6068 Crainsdetroit.com/Section/Classifieds Contact: Jonathan Brateman Properties (248) 477-5000 Crain’s Classifieds Gets Results for more classified advertisements 20100816-NEWS--0026-NAT-CCI-CD_-- 8/13/2010 3:19 PM Page 1

Page 26 CRAIN’S DETROIT BUSINESS August 16, 2010 Insurance: Tough time for brokers ■ From Page 3 more for administrative expenses, “With all of the complexities in- be paid commissions based on the including commissions. volved with health care reform, we volume of contracts sold, accord- Berenson also said the introduc- anticipate increased need and de- ing to a letter to agents. tion in 2014 of insurance exchanges mand for independent agent ser- The compensation model, effec- for individuals and groups of fewer vices, particularly in the area of le- tive Oct. 1, also applies to agents than 50 also could reduce sales com- gal compliance,” Nixon said. who sell Blue Care Network HMO missions for brokers if clients can “We also feel the carriers be- policies to employer groups of 50 purchase insurance directly. lieve that they cannot internalize employees or less. “Brokers who support individ- these functions as cost effectively For Blue Cross’s top agents, ual insurance are very concerned, as the current independent-agent commissions range from 2 percent and a lot of them probably won’t be system,” he said. for groups of two to four people to 5 in business because they rely on Humana also plans to change its percent for groups of 25 to 49. For commissions for income and for commission schedule soon be- Blue Care, commissions range the work they do,” said Berenson, cause of health care reform, said from 3 percent for groups of two to who also is president of Aetna’s Lindsey Minella, Humana’s re- four, to 5 percent for groups of 50 to Mid-America region, which in- gional media relations executive. 99. Standard commissions range cludes Indiana, Ohio and Illinois Juanita Vorel, senior communi- from 0.5 percent to 4.25 percent. along with Michigan. cations specialist with Priority Hans Brieden, vice president Berenson said Aetna hasn’t Health in Farmington Hills, de- with Sterling Heights-based Brown made any decisions on lowering clined to comment on agent com- & Brown of Detroit, said the insur- commissions. missions, citing it as proprietary. nace broker has been working to Mike Nixon, president of AGIS But in a July 26 letter to agents, reduce commissions. LLC, a Troy-based insurance bro- Priority Health announced it is “We further believe that a lower- ker that serves groups of 50 to 2,500 lowering commissions on groups ing of the commission amounts is employees, said with two to four enrollees to re- overdue and a good response to the small groups duce costs and prepare for health economic challenges our clients and individuals care reform. face,” Brieden said. “Part of our re- are “an extreme- Effective Oct. 1, agents who rep- sponsibility is to find ways to pro- ly unprofitable resent groups with prescription tect the expenses of our clients’ business seg- coverage will be paid $10 per em- business, and we should be willing ment for most ployee per month instead of $19.80, to put our skin in the game.” insurers.” and groups without prescription But Brieden agreed that health For example, coverage will be paid $7.25 per em- care reform will negatively affect Cigna recently ployee per month instead of $14.50. agents and will put some compa- eliminated com- Some states pay much higher nies out of business. Nixon missions for rates. For example, Utah pays “There are even talks of some many individual and family poli- agents $37 per employee per carriers dropping commissions cies effective Oct. 1, Nixon said. month while Massachusetts pays and setting up a $30 one-time fee,” But Nixon said he doesn’t believe about $8. he said. “This is a huge difference insurers will cut commissions too Andy Hetzel, Blue Cross’ vice from the hundreds of dollars a much for larger groups of more president of communications, said month agents have previously than 100 employees, primarily be- changes are necessary to increase earned. … Now may be the time for cause commissions have been cut agent productivity. many insurance agents to find sup- already to 1 percent to 2 percent, Under “Blue Alignment,” agents plemental income.” down dramatically from the double- who sell Blues policies in the 100- Jay Greene: (313) 446-0325, digit commissions of the 1980s. employee-and-under market will [email protected] Solvency tax: Fee could hit employers ■ From Page 1 Commerce, said the chamber is vency taxes would be credited to em- third of what the state needs to pay concerned about the solvency tax. ployers’ tax accounts, Geskey said. its interest bill. “Certainly that would be a blow to Block at the state chamber said Geskey said the tax probably negative-balance employers who’ve that “there are several options out would generate around $50 million, already had to make tough deci- there to buy the state more time.” leaving a shortfall of some $90 mil- sions to lay off employees,” she said. Even if the solvency tax does go lion. “The solvency tax would only make into effect in January, it’s only ex- Amy Lane: (517) 371-5355, decisions about the workplace and pected to generate a little over a [email protected] the balance sheet even tougher.” Geskey said he has talked with Michigan congressional staff and others in Washington and is opti- Jazz up this year’s Metro Cars will handle all your transportation needs mistic about the possibility that Congress could extend the waiver, From 1 to 56 passenger vehicles available particularly given that 31 states face holiday party! the prospect of repaying interest. The National Governors Associa- Metro Cars is the official and exclusive provider of sedan tion in July urged Congress to ex- Our cultural places offer creative tend the waiver through Dec. 31, spaces for your next event. service for the Detroit Metro Airport 2012. Even if Congress doesn’t ex- Call today to discover (and help support) tend the waiver, Michigan may get a nine-month deferral of its inter- our region’s treasured cultural gems est payment by virtue of the state’s through our one-stop service. high unemployment rate. Federal law allows states whose unemployment rates are at least the 13.5 percent to delay paying inter- cultural est for nine months, which would concierge push Michigan’s required pay- a program of the cultural alliance Metro Cars Powered by Propane ment into 2012. of southeastern michigan, Geskey said projections indicate a 501(c)(3) organization Michigan will meet that threshold. The state would need to apply for the deferral by July 1; the full in- Find out more! terest payment is otherwise due by www.theculturalconcierge.org 800-456-1701 Sept. 30, 2011. If the state seeks a deferral, mon- 248.766.5599 [email protected] ey that has been collected from sol- 20100816-NEWS--0027-NAT-CCI-CD_-- 8/13/2010 5:38 PM Page 1

August 16, 2010 CRAIN’S DETROIT BUSINESS Page 27

Land bank works to acquire Lawrence Technological University is leading the way toward a safer world with the development homes to make federal deadline of innovative materials designed for defense, homeland security, and infrastructure applications. BY NANCY KAFFER The land bank also has hired the CRAIN’S DETROIT BUSINESS Detroit-based Community Improve- From protecting soldiers to strengthening bridges, ments Group to help manage the sta- the applied research opportunities provided to With a $6.2 million share of De- bilization program. Up to 10 per- troit’s Neighborhood Stabilization cent of the funds may be used for Lawrence Tech students enhances their academic Program funds, the Detroit Land administrative costs. Bank Authority is working to acquire Wallace said the land bank experience and creates a brighter future. homes before a September deadline hopes to acquire more than 200 — and build the kind of track record properties in the city with its first [ Waive your application fee at ltu.edu/applyfree ] that will bring more funding. round of funding. The City Council approved the How the land bank proceeds, he funding shortly before its summer said, will play a key role in deter- recess, leaving the land bank with mining its eligibility for future Engineer a Brighter Future a short time to allocate the money, funding rounds. which the federal government “This is really the first acquisi- says must be spent by September. tion step for the land bank, so Explore over 100 undergraduate, master’s, and doctoral “What we’ve been doing thus far showing our market savviness in programs in Colleges of Architecture and Design, Arts and Sciences, Engineering, and Management. is drafting our acquisition strate- terms of how we actually acquire gy, developing a list of (lender- property to basically restore some owned) properties throughout the stability within the actual neigh- Lawrence Technological University 21000 West Ten Mile Road, Southfield, MI 48075-1058 800.CALL.LTU [email protected] ltu.edu city that fall within the targeted borhood is very key for us from a (stabilization program) communi- land bank standpoint,” he said. ties and filtering the list, trying to “The savviness of how we’re do- look at our population density plus ing things, we think, will go a long growth and occupancy rates, then way in showing capacity to the U.S. housing values, housing condi- Department of Housing and Urban De- tions,” said Aundra Wallace, exec- velopment to show our value as a Cash. Flow. utive director of the land bank. tool to assist in redevelopment in Because of the short amount of Detroit.” time, land bank staff are working Nancy Kaffer: (313) 446-0412, These two words mean more around the clock, he said. [email protected] at Level One Bank. Ghafari Associates wins Bombardier contract Dearborn-based Ghafari Associ- bec, to support Bombardier pro- ates Inc. announced last week it duction of the CRJ aircraft and has received a contract with Bom- house a final assembly center for We can help your business with a complete bardier Aerospace for engineering the CSeries aircraft. and architectural services at a The new award follows a previ- range of Treasury Management solutions complex near Bombardier’s head- ous Ghafari contract in early 2009 which expedite your deposits, manage your quarters in Montreal. to design Bombardier’s Complete payments and consolidate your funds for Terms of the contract, awarded Integrated Aircraft Systems Test in July, were not disclosed. Work Area, a pre-prototype systems test- greater control. for Bombardier will be divided be- ing center in Mirabel. tween Ghafari offices in Dearborn Bombardier launched develop- WORKING CAPITAL: Maximize your access to cash with accounts and Chicago, where it maintains ment on the CSeries in 2008 and ex- receivable financing. some operations for its aerospace pects the aircraft to enter service customers, said marketing coordi- by 2013. It already has received POSITIVE PAY: nator Nicole Ghafari. and processed 90 orders to date Protect your business against fraudulent checks. Ghafari will handle design work from buyers such as Lufthansa and at a Bombardier production and Republic Airways Holdings. SWEEP: Increase your invested cash in a secured account. testing complex in Mirabel, Que- — Chad Halcom REMOTE DEPOSIT: Process deposits at your desk top. BUSINESS BILL PAY: Pay your bills online at any time, day or night, Fusion: New course to anyone in the U.S. ■ From Page 3 LOCKBOX: Process incoming remittances efficiently. we in the broader young profes- ber meetings, Baruah said, will be sional community have been talk- meetings with organizations that ing about for years, is one that’s might provide a home for Fusion. more collaborative and pulls in Baruah said he would meet more resources than we have.” “with my counterparts to see how Baruah and Helminski said the interested they really are, and next step is a large meeting with those (meetings) will occur .. over Fusion’s 200 to 300 members. the next few weeks. Then we’ll “We’ll hear more voices, get bring Fusion representatives to- more input,” Baruah said. “Then gether along with other young pro- there will be another meeting or a fessionals groups.” separate meeting with committee Chris Uhl, vice president of mid- chairs, not just to hear those voic- dle-market banking at Comerica es but to make sure the chamber is and chairman of the United Way for www.levelonebank.com supportive of existing Fusion pro- Southeastern Michigan’s young pro- gramming that is going on.” fessionals group Leadership Next, 30201 Orchard Lake Road, Ste. 165 21211 Haggerty Road The chamber has pledged to keep said he’s interested in learning Farmington Hills, MI 48334 Novi, MI 48375 supporting already-planned Fusion more about Fusion. (248) 737-0300 (248) 380-6590 programming while the group is in “I’ve always thought that there flux. Fusion’s programming budget needs to be better cohesion among for the just-ended 2009-10 fiscal year the various groups, and believe was $10,043, said Jamie Patlevic, the there is some commonality,” he chamber’s marketing strategies di- said. rector. The figure doesn’t include Uhl said he will learn more the cost of former Fusion staff about opportunities for the rough- salaries and benefits or support ser- ly 800-member Leadership Next vices. Chamber officials are unsure and Fusion at coming meetings. what the 2010-11 budget will be. Nancy Kaffer: (313) 446-0412, Following those Fusion/cham- [email protected] 20100816-NEWS--0028-NAT-CCI-CD_-- 8/13/2010 4:45 PM Page 1

Page 28 CRAIN’S DETROIT BUSINESS August 16, 2010 Quicken: Designed to thrive ■ From Page 1 “We have clients that have it Health Care Reform: down to $30 to move an employee,” Gantner said. “If you start off with a file cabinet that can be rolled somewhere else, a phone system Change = Opportunity that’s flexible, you’re saving mon- ey long term in employee moves.” NATHAN SKID/CRAIN’S DETROIT BUSINESS New federal health care reform laws offer incentives Creating an office where people A lobby area at Quicken Loans Inc. new headquarters features graffiti-style are more likely to collaborate or artwork on the floor and plenty of vibrant color. and funding for initiatives that promise high-quality care where they can more easily get to at a lower cost. where they need to be can create op- erational efficiencies that add up, INSIDE QUICKEN’S HQ Can Southeast Michigan get in line? said Sam Bayne, a design principal This week, employees are to start moving from Quicken Loans Inc. offices in This summit will give attendees ways to break through with Southfield-based architecture Livonia into 244,000 square feet on floors nine through 12 of Compuware firm Harley Ellis Devereaux Corp. Corp.’s building in Detroit. Over the next 30 days, 1,700 employees will industry and geographic silos to agree to and act on “When it is done correctly, there move in, including employees of related companies Fathead, Quizzle, In- specific plans to help the region benefit from these can be an increase in performance House Realty and One Reverse Mortgage. With eye-popping colors and quirky elements such as custom art from a graffiti artist, the office space new federal incentives. by — at the high end — 20 percent,” he said. “But even at the lower end, has many features that architects and real estate consultants cite as office efficiencies and cost-saving measures: Who should attend? if you can make your employees 1 percent more efficient, you are talk- Keep your computer, find a new desk Hospitals, physicians, employers, life sciences/ ing about millions of dollars to the Ⅲ Feature: Employees will use laptops to plug in at different desks. pharma, industry insiders and suppliers, academics bottom line over time.” Moving out of an office with Ⅲ Strategy: Moving an employee to another department can cost $600 in and economic developers. an older office. “Office hoteling” saves money by using less space and poor lighting and bad ventilation allows employees to move. Featured speakers: and into an of- fice with natur- Mobile workstations al light and good Paul Keckley, Deloitte Center for Health Ⅲ Feature: Workstations can be moved easily into different configurations. ventilation has Solutions – Reports from Washington Ⅲ Strategy: Teams working on a project can sit together then reconfigure been shown, Crain’s with different people for another project. and on the Big Ideas from the anecdotally, to 2009 Summit. make employees Vacant offices more produc- Ⅲ Feature: Private rooms are designed to have multiple purposes. Rachel Maguire, Health Horizons Program tive, said Ⅲ Strategy: The rooms can be used as individual offices when needed, or Brooke Smith, a Institute for the Future, Palo Alto, CA easily converted to a conference room for a meeting. Provides flexibility and principal with Can technology improve care -- and reduce Smith requires fewer square feet per employee because more people can SmithGroup Inc. regularly use cubicles. cost? This futurist, with expertise on new “Offices that are LEED certified media and mobile technologies, will offer are getting higher rental rates Common areas her perspective. right now,” he said. “Because … Ⅲ Feature: A kitchen with a popcorn machine and slush maker. it’s something that is being de- Ⅲ Strategy: Collaboration doesn’t happen at desks. Employees spending What employers need to know about manded by the workplace.” time in informal settings paves the way for new ideas. Featured panel: On the business development health care reform. Panelists include: side, a modern, professional-look- Views ing office sends a message to poten- Ⅲ Feature: Large windows and glass walls give employees views of Detroit. Chris McSwain tial clients about the company, said Ⅲ Strategy: Natural light makes employees feel better and more Director, Global Benefi ts Howard Davis, co-owner and presi- productive than dark areas with poor lighting. Whirlpool Corp. dent of Farming- ton Hills-based Davis & Davis Inte- Scott Lyon rior Design. While Davis & VP & Health Insurance Expert Davis has done Small Business Association build-outs for of Michigan many compa- nies in the re- gion, it renovat- ed its own space Davis two years ago Thursday, Oct. 14, 2010 and has seen a benefit, he said. “It seems like our clients put us Rock Financial Showplace higher on the map when they come into our space,” he said. “They’re I 46100 Grand River, Novi 8 a.m. - 5 p.m. seeing a more professional level of operation.” REGISTER at www.regonline.com/2010healthcare The typical build-out cost for an office space averages $25 to $30 per NATHAN SKID/CRAIN’S DETROIT BUSINESS FULL DAY CONFERENCE: square foot, Davis said, with $50 Natural light from a bank of windows at right illuminates workstations at $99 each until Oct. 1 Quicken offices in the Compuware Building. FULL DAY REGISTRATION INCLUDES a year subscription to being on the higher end. Quicken declined to disclose the Crain’s Detroit Business with Health Care Extra cost of its new build-out, but it did new Quicken office. a boost in recruiting.” SAVE! Groups of 10 or more: $90 each. Reserve groups by say the company toured Google’s “The employee work space was Creating an office environment space for inspiration. Google’s designed by Birmingham-based that keeps employees engaged and phone only, 313.446.0300. build-out is rumored to be near Von Staden Architects and Pontiac- excited is a goal that has been at- HEALTH CARE HEROES AWARD LUNCHEON ONLY: $50 each $100 per square foot. based Facility Matrix Group Inc.” tained with the new Quicken head- Keeping employees and clients “The whole concept with the quarters, said Melissa Price, direc- Compuware Building is integration tor of facilities for the company. She PRESENTING SPONSOR PLATINUM SPONSORS interested as they walk through a building and an office space is an and creating interesting elements oversaw the design and build-out. important concept as part of a de- at intersection points,” he said. “A dated space brings down the sign, said Kelly Deines, design “But at the end of the day, when energy level,” she said. “Giving principal at the Southfield-based you are creating a lot of cool new the team something new to see Rossetti architecture firm. stuff in an office, you’re getting a makes it fun, and it brings more Rossetti designed the Compuware return on that investment — peo- energy to the company.” Sponsorships available. Please contact Marla Downs at 313.446.6032 ple aren’t leaving, you’re not pay- Daniel Duggan: (313) 446-0414, or e-mail [email protected] for more information. Building and is designing the execu- tive suites on the 10th floor in the ing to retrain them. You’re getting [email protected] 20100816-NEWS--0029-NAT-CCI-CD_-- 8/13/2010 5:39 PM Page 1

August 16, 2010 CRAIN’S DETROIT BUSINESS Page 29

Ilitch likely to have financing plans What’s in Ilitch’s www.crainsdetroit.com EDITOR-IN-CHIEF Keith E. Crain PUBLISHER Mary Kramer, (313) 446-0399 or [email protected] EXECUTIVE EDITOR Cindy Goodaker, (313) 446- in place for Pistons deal, new arena deep pockets 0460 or [email protected] MANAGING EDITOR Andy Chapelle, (313) 446- 0402 or [email protected] BY BILL SHEA diums and baseball parks. They’re smaller and Adding the Detroit Pistons and its parent ASSISTANT MANAGING EDITOR/FOCUS Jennette Smith, (313) 446-1622 or [email protected] CRAIN’S DETROIT BUSINESS homogenous. HOK knocks them out three at a company to his other sports and entertain- ENTREPRENEURSHIP EDITOR Michelle Darwish time worldwide. Construction activity is much ment holdings — and one day building a new Welsh, (313) 446-1621 or [email protected] No one involved is talking, but it’s believed more canned,” he said. downtown arena for them — will require a COPY DESK CHIEF Gary Piatek, (313) 446-0357 that Mike Ilitch has a financing plan in place St. Louis-based HOK is the fourth-largest ar- significant investment by Mike Ilitch, but he or [email protected] ASSISTANT NEWS EDITOR Jeff Johnston, (313) for his bid to buy the Detroit Pistons and Palace chitectural firm in the world, and its Populous has deep pockets and significant revenue 446-1608 or [email protected] of Auburn Hills Inc. sports subsidiary built Comerica Park and a streams he can access. DATA EDITOR Anne Marks, (313) 446-0418 or “I don’t think they go to (Pistons owner Karen) number of NBA arenas, including the Orlando Ilitch is worth $1.4 billion, according to [email protected] WEB EDITOR Christine Lasek, (313) 446-0473, Davidson with an offer without a way to take Magic’s new $480 million city-owned facility Forbes. [email protected] care of it,” said Rodney Fort, a professor of that will open this season. Darren Tristano, executive vice president of WEB DEVELOPER Steve Williams, (313) 446- Chicago-based research firm Technomic Inc., 6059, [email protected] sports management at the University of Michigan A new Detroit arena, which would replace ag- EDITORIAL SUPPORT Robertta Reiff (313) 446- who has been monitoring the situation. ing city-owned Joe Louis Arena, is expected to put the Little Caesar Enterprises Inc. pizza chain’s 0419, YahNica Crawford, (313) 446-0329 Financing the Pistons sale might be the easy cost less than that but likely would still involve systemwide sales at about $1.055 billion and es- NEWSROOM (313) 446-0329, FAX (313) 446- 1687 TIP LINE (313) 446-6766 part. Paying for a new downtown arena is ex- public funding. timates its restaurant count at 11,000. pected to be more complex, and controversial. “It would behoove the Ilitches, if they obtain Little Caesar President Dave Scrivano, REPORTERS without giving specifics, has said that esti- Daniel Duggan: Covers retail, real estate and Fort wouldn’t be surprised if Ilitch not only the Palace, to already be talking to Detroit city hospitality. (313) 446-0414 or has that financing arranged, but possibly the government on the subsidy that’s going to be mate is low. The company doesn’t release fi- [email protected] strategy for building a new downtown arena as (sought),” he said. nancial data. Jay Greene: Covers health care, insurance and the environment. (313) 446-0325 or well. A facility for both the Red Wings and Pistons The Ilitch family has other sources of in- [email protected]. “They may have that whole thing set up,” he is believed to be what the Ilitches want, a venue come, such as concerts and events via their Chad Halcom: Covers law, non-automotive manufacturing, defense contracting and Oakland said. that is expected to cost about $300 million or Olympia Entertainment Inc. business, a food dis- and Macomb counties. (313) 446-6796 or Money for the Pistons probably will come in more. tribution and restaurant equipment service [email protected]. and three movie theaters. Whatever revenue Tom Henderson: Covers banking, finance, the form of cash and some borrowing. “If that’s the ultimate goal, we should expect technology and biotechnology. (313) 446-0337 or The recession economy isn’t a problem for the Ilitches to behave as others have in the past is generated by Olympia is expected to be bol- [email protected]. stered by $70 million in annual revenue from Nancy Kaffer: Covers small business, the city of the superwealthy, Fort said. in that situation, which is to suggest to city and Detroit, Wayne County government. (313) 446- “I’m not so sure somebody who’s worth a bil- possibly state government that a subsidy is need- PS&E’s venues. 0412 or [email protected]. lion can’t borrow a few hundred million over a ed to make this happen,” Fort said. MotorCity Casino, owned by Marian Ilitch’s Bill Shea: Covers media, advertising and marketing, entertainment, the business of sports, reasonable length of time,” he said. “Times Fort believes Detroit can be creative enough to Detroit Entertainment LLC since 2005, ended 2009 and transportation. (313) 446-1626 or have been tight before and people can borrow help finance a new arena, through a special as- with $445 million in total adjusted revenue. [email protected]. Nathan Skid: Multimedia reporter. Also covers the money, especially rich people.” sessment like the tourist tax, or something else. There’s one other major revenue stream: If food industry. (313) 446-1654, [email protected]. Fort doesn’t expect the Ilitches to create a “It’s not a place without resources,” he said. the Ilitches end up executing a deal, they also Sherri Begin Welch: Covers nonprofits and consortium of investors. Corporate investment would come via nam- will become the sole beneficiary of a 10-year services. (313) 446-1694 or [email protected] cable broadcast rights deal, worth a collec- Dustin Walsh: General assignment. (313) 446- “That’s not consistent with their other hold- ing rights and marketing dollars, said Eric 6042 or [email protected] ings,” he said. “Even if you keep the number of Wright, vice president of research and product tive $1 billion, that the Pistons, Wings and LANSING BUREAU shareholders small and keep the majority of the development at Ann Arbor-based Joyce Julius & Tigers signed with Southfield-based Fox Amy Lane: Covers business issues at the Capitol, telecommunications and utilities. (517) 371- stock, you’re still going to get half the value.” Associates Inc., which specializes in measuring Sports Detroit in 2008. 5355, FAX (517) 371-2492, [email protected]. or That said, Taylor-based fuel distributor Atlas sponsorship scope across all forms of media. Owning all three teams could help the Ilitch- 115 W. Allegan, Suite 220, Lansing 48933. Oil Inc. owner Sam Simon, a longtime Ilitch “From an arena-entitlement standpoint, es leverage a better deal down the road, or ADVERTISING friend and Pistons season-ticket holder, has you’d be looking at a very full event calendar even start their own regional sports network. ADVERTISING DIRECTOR Marla Downs, (313) — Bill Shea 446-6032 or [email protected] been linked to the Ilitches’ effort to buy the and daily exposure from mid-October through SALES INQUIRIES: (313) 446-6052; FAX (313) team — a situation those involved declined to the end of the playoff runs. These multiuse fa- 393-0997 ADVERTISING SALES Matthew J. Langan, Lori confirm or deny. cilities, similar to the United Center in Chica- Tournay Liggett, Tamara Rokowski, Kimberly As for an arena, Fort doesn’t see any bank fi- go, can really drive media exposure for a title Ronan, Cheryl Rothe, Dale Smolinski nancing problems. sponsor.” CLASSIFIED SALES (313)-446-0351 MARKETING MANAGER Irma Clark “Arenas are much more predictable than sta- Bill Shea: (313) 446-1626, [email protected] MULTIMEDIA MANAGER Alan Baker, (313) 446- OTHER POTENTIAL BUYERS 0416 or [email protected] In addition to Mike Ilitch, here are other EVENTS MANAGER Nicole LaPointe possible prospective buyers of the Pistons MARKETING ARTIST Sylvia Kolaski and/or Palace Sports either provided to SALES SUPPORT Suzanne Janik, YahNica Crawford Crain’s or who have appeared in media CIRCULATION Candice Yopp, Manager. Pistons: reports: MARKETING COORDINATOR Kim Winkler Can team fetch $500M? PRODUCTION MANAGER Wendy Kobylarz Andy Appleby: Founder PRODUCTION SUPERVISOR Larry Williams ■ From Page 1 of Rochester-based CUSTOMER SERVICE lication’s valuations are suspect. That figure is ple and City theaters. General Sports & MAIN NUMBER: Call (877) 824-9374 or write believed to include the Palace of Auburn Hills The Ilitches will see an “immense amount of Entertainment Inc. [email protected] but not the DTE Energy Music Theatre or the return” if they buy Palace Sports, said Rodney Previously worked for SUBSCRIPTIONS $59 one year, $98 two years. Palace Sports. Out of state, $79 one year, $138 for two years. contract to operate Meadow Brook Music Festi- Fort, a professor of sports management at the Outside U.S.A., add $48 per year to out-of-state David Checketts: rate for surface mail. Call (313) 446-0450 or val on behalf of Oakland University. University of Michigan, because they will have (877) 824-9374. Founder of New York City- Other sports industry insiders agree that the “market cornered on everything.” SINGLE COPIES: (877) 824-9374. based Sports Capital REPRINTS: (800) 290-5460, ext. 125; (717) 505- $500 million, or even $400 million, is unlikely. “It will generate an even larger return than Partners Worldwide, a 9701, ext. 125; or ashley.zander@theygsgroup “Today, with the financial uncertainty, the most people think about,” he said. “The prof- consulting and investment .com. Appleby TO FIND A DATE A STORY WAS PUBLISHED: tremendous dislocation of the Michigan econo- itability of what they do is going to go up com- service firm for sports (313) 446-0367 or e-mail [email protected]. my, that would be an extraordinary price to be pared with what it currently is. The big money teams that owns the St. Louis Blues of the CRAIN’S DETROIT BUSINESS IS PUBLISHED BY achieved,” Marc Ganis, president of Chicago- seems to be in all the other entertainment National Hockey League and Real Salt Lake of CRAIN COMMUNICATIONS INC. based sports consulting firm Sportscorp Ltd. events. Between Olympia and Palace, they got Major League Soccer. CHAIRMAN Keith E. Crain “If it were two years ago, maybe.” ’em all.” Jonathan Ledecky: Venture capitalist who PRESIDENT Rance Crain SECRETARY Merrilee Crain Instead, he also thinks a sale price under The Ilitches funded their sports and enter- previously held a minority stake in the TREASURER Mary Kay Crain $400 million is likely. tainment empire with the proceeds from the investment firm Lincoln Holdings, which Executive Vice President/Operations “If the sellers are very lucky, and they’re Little Caesar Enterprises Inc. pizza chain they owned the NBA’s Washington Wizards and the William A. Morrow NHL’s Washington Capitals. Group Vice President/Technology, able to get a competitive bid going, the number founded in 1959. Manufacturing, Circulation Tom Gores: Chairman and CEO of Beverly Robert C. Adams might start with a four,” Ganis said. If there are a number of bidders for the team, Vice President/Production & Manufacturing If Davidson wants to sell quickly — she said auction style, then the price could quickly es- Hills, Calif.-based private-equity investment Dave Kamis firm Platinum Equity, ranked No. 27 last year Chief Information Officer recently a deal likely will be done before the calate from what a single buyer might pay, said by Forbes in its listing of largest private U.S. Paul Dalpiaz NBA season begins in October — then the price Michael Rapkoch, president and founder of Ad- Corporate Circulation/Audience Development firms. The magazine ranks him as the 437th Director will be lower. dison, Texas-based Sports Value Consulting LLC, richest man in the world with a worth of $2.2 Kathy Henry The Golden State sale price included a “loca- which does sports team valuations and advis- billion. His company has $27.5 billion in G.D. Crain Jr. Founder (1885-1973) tion premium” for the team’s Oakland setting ing in all four major leagues. annual revenue. He’s an Israeli native who Mrs. G.D. Crain Jr. Chairman (1911-1996) EDITORIAL & BUSINESS OFFICES: — near the deep pockets of Silicon Valley and “If you really want it, you’re going to pay it,” grew up in Flint and later graduated from 1155 Gratiot Ave., Detroit MI 48207-2732; (313) Michigan State University. 446-6000 San Francisco. he said. Cable address: TWX 248-221-5122 AUTNEW DET “There’s a location discount for the Pistons,” Rapkoch thinks the Pistons would be a good George Postolos: President and CEO of CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 Houston-based The Postolos Group LP, which is published weekly, except for a special issue the Ganis said. fit for the Ilitches, and considers them a lead- third week of January, a special issue the fourth The entertainment venues are believed to be ing contender to complete a sale because they looks to acquire sports teams, entertainment week of August, and no issue the third week of equally or more attractive to Ilitch because have the money. (See story, this page.) businesses, venues and media properties December by Crain Communications Inc. at 1155 that service the sports and live entertainment Gratiot Ave., Detroit MI 48207-2732. Periodicals they are profitable, generating an estimated “People who have the financing in place, and postage paid at Detroit, MI and additional mailing industry. He was president of the NBA’s offices. POSTMASTER: Send address changes to $70 million annually in revenue, and because the equity and ability to fund future losses (are CRAIN’S DETROIT BUSINESS, Circulation Houston Rockets from 1998 until 2006, and Department, P.O. Box 07925, Detroit, MI 48207- they have long been competitors with facilities the front-runners),” he said, while those who also spent time as special assistant to league 9732. GST # 136760444. Printed in U.S.A. owned or operated by Ilitch-owned Olympia En- have to assemble partners are less likely to get Entire contents copyright 2010 by Crain commissioner David Stern. Communications Inc. All rights reserved. tertainment Inc. — Cobo Arena, Joe Louis Are- consideration. Source: Crain’s research, media reports Reproduction or use of editorial content in any na, Comerica Park and the Fox, Masonic Tem- Bill Shea: (313) 446-1626, [email protected] manner without permission is strictly prohibited. 20100816-NEWS--0030-NAT-CCI-CD_-- 8/13/2010 5:40 PM Page 1

Page 30 CRAIN’S DETROIT BUSINESS August 16, 2010 RUMBLINGS WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF AUG. 7-13

injuries after his Beechcraft State University effective care for wounded sailors. Premier jet crashed and Pet Supplies Aug. 30 Ⅲ Marriott International split in half July 27 at following Inc. is pursuing an order in Donations go Wittman Regional Airport in the resig- New York Bankruptcy Court to Oshkosh, Wis. He was re- Plus to be nation of have all Residence Inn signs leased on Wednesday fol- President removed from a Troy hotel lowing treatment. Jay Noren. after its owners refused to from PAC to This isn’t the first time acquired Noren remove them on their own. Roush has survived a plane left to be The request was made as crash. He also was in a armington Hills- closer to part of the bankruptcy pro- crash in Alabama in 2002. based Pet Supplies his wife, ceedings for Palm Beach, There’s no word when F Plus will be acquired provost Fla.-based Innkeepers USA Gilmour PAC to attack Roush will return to the by Irving Place Capital, a at Illinois Trust, which owns the hotel. race track to support his New York-based private- State University, who was di- Ⅲ Farmington Hills- etroit businessman and I have a hard time be- team. However, he was at equity firm. Terms were agnosed with breast cancer based Agree Realty Corp. has Jim Nicholson was the lieving he knew this was the Roush headquarters in not released. The transac- earlier this year. acquired its third CVS store D largest contributor to how the money was being Livonia on Thursday. tion is expected to close in in as many months in an ef- an organization that indi- spent. Probably he was con- Roush Fenway’s Greg Bif- the third quarter. fort to diversify holdings rectly funded attack ads tacted by someone tied to fle got the team’s first win of The headquarters will COMPANY NEWS away from its base of Kmart against Republican guberna- the Cox campaign to write a the NASCAR season at the remain in Farmington Ⅲ Rock Gaming LLC, a com- Corp. and Borders Group Inc. torial candidate Pete Hoek- big check in his support,” Sunoco Red Cross Pennsyl- Hills and the current CEO, pany headed by Quicken leases. The purchase price stra. he said, adding that inde- vania 500 at the Pocono COO and CFO — Harvey Sol- Loans/Rock Financial founder was $5.8 million. Accord- pendent committees do not Raceway in Long Pond, Pa. way, Dominic Buccellato and and Cleveland Cavaliers own- ing to a always have to inform the on July 31 — the first race Richard Valade —will con- er Dan Gilbert, has selected campaign LIONS, TIGERS, WINGS donors how their contribu- following the crash. tinue to have minority Harrah’s Entertainment Inc. as finance Ⅲ tions will be used. “Our teams and drivers shares in the company. its partner in a joint venture The Detroit Lions will statement, “The one hope I have out have not missed a beat in that would develop and op- begin selling individual Nicholson, of this is that it illustrates my absence, and I am proud erate planned downtown game tickets for the 2010 president Detroit newspaper unions the need to change campaign of the effort they have put casinos in Cleveland and season on Aug. 25. and CEO Ⅲ finance law so that dona- forth,” Roush said in a asked to take 12% pay cut Cincinnati, Crain’s Cleve- Detroit Tigers owner of PVS tions like these are disclosed statement. “I look forward Mike Ilitch says manager Jim The Detroit Media Partner- land Business reported. Chemicals in real time, and everyone is to rejoining them at the Leyland and general manag- Nicholson ship that manages the joint Ⅲ Ford Motor Co., Detroit Inc., con- aware of the process.” track soon.” er Dave Dombrowski will re- business operations of the Edison Co., Texas-based tributed $100,000 of $167,111 Nicholson could not be Roush also braved the turn next season. Detroit Free Press and The Xtreme Power and the state raised by the Canton Town- reached on Friday. Cox skies for his trip home. John Ⅲ The Detroit Red Wings Detroit News is asking all of are working together on a ship-based Commander’s Ma- campaign manager Stu San- Clark, communications will play this season at Joe its unionized staff to take a $5.8 million solar power jority Fund in the four dler and Commander’s Fund manager for Roush Perfor- Louis Arena, as talks continue months preceding the Aug. 12 percent pay cut. generation system at Ford’s Treasurer Chris Gillett also mance, confirmed he re- with the city about a possi- 3 primary. The unions are Teamsters Michigan Assembly plant could not be reached. turned to Detroit by plane. ble new home for the team. The fund, in turn, con- Local 372, GCIU Pressmen Lo- in Wayne. Ford expects to Other Commander’s Fund eventually save an estimat- tributed $152,500 of its donors included attorney cal 13-N, Detroit Typographi- $166,713 in expenses to Mt. cal Union Local 18 and News- ed $160,000 annually in en- OTHER NEWS Alan Kaufman, Kaufman Payton BITS & PIECES ergy costs. Clemens-based Michigan & Chapa P.C. in Farmington paper Guild Local 34022. Ⅲ Michigan Corps, a newly Business United, a PAC op- Ⅲ The Westin Book Cadillac The contracts, which ex- Ⅲ In an effort to repay its formed national philan- Hills, $15,000; Tony Atsalakis, has been awarded AAA’s U.S. and European bank posed to Hoekstra and sup- president, Atsalis Brothers pire this month, have been thropy based in Detroit, porting Attorney General prestigious Four Diamond extended to Oct. 15. debts, Livonia-based Tower hopes to recruit and con- Painting Co. in Clinton Town- award for its hotel opera- Automotive LLC said it plans Mike Cox, which spent at ship, $15,000; and Grosse nect people who are willing least $290,000 on advertising tion. to sell $450 million in sev- to donate a dollar or more. Pointe attorney Sean Cotton, The award is based on a Supplier-GM relations may en-year notes. during the primary, includ- $10,000. Ⅲ New York native Rishi ing ads alleging Hoekstra rigorous examination of a go well with new GM CEO Ann Arbor-based Swift Jaitly started Michigan voted for the Wall Street hotel and has been given to Biosciences Inc. has secured Corps with his wife, Detroit The appointment of Daniel bailout and missed the con- Roush out of the hospital, 13 other Michigan hotels, $3 million in Series B ven- native Anuja Jaitly, a Univer- Akerson as CEO of General gressional vote on federal including the MotorCity Casi- ture capital financing from sity of Michigan graduate. back in the air after crash Motors Co. health care reform. no-Hotel and the MGM Grand Houston VC firm DFJ Mer- Founding members include may bode John Truscott, president of Jack Roush, chairman of Detroit. cury and several Michigan- Google Inc. CEO Eric well for Lansing-based John Truscott Livonia-based Roush Enter- Ⅲ The Detroit District Coun- based individual investors. Schmidt, CNN medical corre- GM’s fu- Group L.L.C. and Hoekstra prises Inc. and co-owner of cil of the Urban Land Institute is Swift is developing molecu- spondent Sanjay Gupta and ture sup- campaign spokesman, said Roush Fenway Racing honoring Edsel Ford II and lar biology reagents for re- author Jeffrey Eugenides. plier rela- Nicholson might not have NASCAR team, is back in Compuware’s Peter Karmanos search and diagnostics. To start, Michigan Corps tions been aware his donations business after a hospital for their contributions to the Ⅲ Borders Group Inc. plans to help fund two estab- because were supporting attack ads, stay at the Mayo Clinic. development of Campus (NYSE: BGP) confirmed lished nonprofits: Detroit’s of his ex- which he estimates totaled Roush was released from Martius Park in downtown that some employees have Bizdom U and Northern Initia- perience $3 million to $4 million the hospital in Rochester, Detroit, AP reported. They been laid off at the compa- tives, a Marquette-based will receive the group’s in- with au- ny’s Ann Arbor headquar- against Hoekstra during the Minn., last Wednesday fol- Akerson community development tomotive primary season. lowing a July plane crash. augural Placemaker Award ters, though no details have corporation. takeovers, said Bill Wildern, “Jim’s a really great guy, Roush, 68, suffered facial on Nov. 11. been released. Ⅲ The Macomb County CEO of Farmington Hills- Ⅲ Ann Arbor-based in- Planning and Economic Devel- based Hydra Professionals LLC, vestment fund Huron River opment Department reported a company that specializes Ventures will receive $6 mil- that the county made 19 eco- in automotive industry lion from the Michigan Strate- nomic-development deals turnarounds. gic Economic Investment and for businesses to invest a Akerson, 61, currently is Commercialization Board. combined $53.8 million and general manager and head Ⅲ Southfield-based Doner add a combined 975 local BEST FROM THE BLOGS of global buyouts for Wash- has signed a deal with Com- jobs in the first six months READ THESE POSTS AND MORE AT WWW.CRAINSDETROIT.COM/BLOGS ington D.C.-based private- merce Township-based of 2010, compared with 18 equity firm The Carlyle HoMedics Inc. to market and deals to invest $52.9 million Group, a company that has Narrower scope for DRIC bill Hotel prices hit new lows create advertising for the and add a combined 322 new purchased the assets of sev- company’s consumer elec- jobs in the first half of 2009. The legislation that A hotel in Auburn eral bankrupt Detroit auto tronics and House of Mar- would“ allow the Michigan Hills“ is under contract suppliers over the years. ley licensed products. Department of to be sold for He will become GM’s Ⅲ Walbridge Brasfield & OBITUARIES Transportation to move $5 million. Dallas- fourth CEO in the past 18 Gorrie, a joint venture of De- Ⅲ Mario Lelli, 97, founder ahead with its based Ashford months when Ed Whitacre troit-based Walbridge of Mario’s Restaurant in De- participation in the Hospitality Trust has steps down Sept. 1. Aldinger Co. and Birming- troit, died Aug. 7. $5.3 billion Detroit River revealed that the Hilton Ⅲ International Crossing Suites has a buyer ham, Ala.-based Brasfield & James Robinson, former project is being whittled under contract. Gorrie LLC, received a U.S. attorney, partner at down. ON THE MOVE $40.6 million contract from Honigman Miller Schwartz ” ” Ⅲ Allan Gilmour, former the U.S. Naval Facilities Engi- and Cohn LLP and dean of Reporter Bill Shea’s blog on sports, the media, Reporter Dan Duggan’s blog on commercial real estate vice chairman of Ford Motor neering Command in Wash- the Wayne State University transportation and marketing can be found can be found at www.crainsdetroit.com/duggan Co., has been appointed in- ington, D.C., to build a fa- Law School, died of cancer at www.crainsdetroit.com/shea terim president of Wayne cility in Bethesda, Md., to Aug. 6. He was 66. DBpageAD.qxd 2/17/2010 12:32 PM Page 1