20150622-NEWS--0001-NAT-CCI-CD_-- 6/19/2015 6:36 PM Page 1 CRAIN’SReaders first for 30 Years DETROIT BUSINESS June 22-28,2015 Wesley Berry: House goes on 30 years of break, leaves change ... and a roads funding thorn in its side to Senate PAGE 3 PAGE 6 Fisher, Kahn buildings eyed for multifamily use SHINOLA By Kirk Pinho [email protected] Maybe the Fisher Building and Albert Kahn Building need new leases on life ‘Friends and — or maybe they just need new leases from a different type of tenant. The three-day auction for the iconic New Center office buildings be- gins today, and real estate experts say out-of-state investors are viewing at least one of the buildings as a multifamily conversion. This potential- ly would bring hundreds of new rental units to an area short on such housing — and a new residential emphasis to two Detroit landmarks. family’plan to Portions of both buildings — perhaps 20 percent to 40 percent or 185,000 to 370,000 square feet of their total square footage of 925,000 — could be converted to multifamily in an area that multifami- ly real estate experts see as ripe for such redevelopment. By the time the high bidder closes on the deal, receives city approvals and completes construction, the $179.4 mil- grow Shinola lion M-1 Rail mass transit project likely would be finished, and New Center would become the next pocket of greater downtown ripe for multifamily redevelopment. A big sell- Rock,Kresge among investors in $125M ing point of New Center is a market option for renters funding round to expand company Multifamily in the Fisher? It’s possible,real estate experts say See BUILDINGS, Page 23 PIERRETTE DAGG/CDB By Kirk Pinho and Tom Henderson [email protected], [email protected] Advertisement n infusion of capital to support the growth of Shinola and other American-made consumer product lines was signed Special Aunder a sort of “friends and family” financing plan last month. Bedrock Manufacturing Co. raised $125 million, sources say, in a Report funding round that includes Dan Gilbert’s Rock Ventures LLC and the Troy-based Kresge Foundation, plus other investors. The funding is in Do copyright rules for exchange for a minority equity stake in Bedrock Manufacturing, the Are you managing literature and music also Plano, Texas-based parent company to Shinola/Detroit LLC. apply to the technology Shinola, Rock and Kresge declined to confirm the terms of the deal, your entire which closed in May. underneath the hood? The funding is described by the Shinola leadership team as databerg? Read about the car relationship-based outreach to a close circle of conundrum in a report friends and colleagues as part of a mission to (see page 2) expand the business and create more on intellectual property, American jobs. Page 11 “In the process of getting to know each other, we recognized that we have several mutual friends who are adventurous and like-minded,” said Tom Kartsotis, founder of Shinola, in a © Entire contents copyright 2015 statement to Crain’s. Bicycles are also part of the by Crain Communications Inc. All rights reserved. “As time passed, we decided that a small Shinola product lineup crainsdetroit.com Vol. 31 No 25 $2 a copy. $59 a year. ‘friends and family’ round of financing would enhance our ability to aggressively build businesses that are predicated on creating world-class manufacturing jobs in America,” he said. “We are excited to welcome our new partners who include Dan Gilbert and Kresge.” Bedrock Manufacturing is not related to Bedrock Real Estate Services LLC, Gilbert’s real estate company that owns more than 70 properties in NEWSPAPER See SHINOLA, Page 22 20150622-NEWS--0002-NAT-CCI-CD_-- 6/19/2015 4:55 PM Page 1 2 CRAIN’S DETROIT BUSINESS // June 22, 2015 stage business to Mason County in agers since 2011. MICHIGAN West Michigan, The Muskegon Ⅲ The Kalamazoo City Commission INSIDE Chronicle reported. will sell Eastern Hills Golf Course for THIS ISSUE The Momentum Business Plan $2.2 million to JTM Management, BANKRUPTCIES . 6 CALENDAR . .17 Competition is open to any inde- which plans to redevelop the site CAPITOL BRIEFINGS . 21 pendent for-profit or nonprofit ven- into commercial and residential CLASSIFIED ADS . 21 ture with a viable business idea, properties, the Kalamazoo Gazette DEALS & DETAILS . 20 plan or invention. Existing organi- reported. The move comes amid OPINION . 8 BRIEFS zations or companies with less than debate about the use of the city’s OTHER VOICES . 9 $100,000 in sales or annual revenue golf courses and as officials work to PEOPLE . 20 also are eligible. deal with an anticipated $3 million RUMBLINGS . 26 MSU Human Medicine dean try riding a train from one to the budget deficit in 2016. WEEK ON THE WEB . 26 other. You can buy a train ticket in MICH-CELLANEOUS Ⅲ Organizers with the newly an- leaving; led move to GR Grand Rapids, but the first leg of the Ⅲ The Michigan State University nounced Michigan Good Food Fund Marsha Rappley, who led the trip is on a bus to Kalamazoo. board of trustees approved a cam- seek potential borrowers, investors COMPANY INDEX: Michigan State University College of Enter the Michigan Environmental puswide tobacco-free ordinance and others to get involved with the SEE PAGE 25 Human Medicine’s move to Grand Council, which is trying to determine that goes into effect Aug. 15, 2016, fund, which aims to address the Rapids, plans to leave her position whether demand would be suffi- and includes electronic cigarettes lack of access to healthy food in un- this summer as dean to join Virginia cient for a direct rail line. and vaporizers. derserved communities statewide, starting with the 2016-17 school Commonwealth University in Rich- Liz Treutel of the Environmen- Ⅲ Saranac-based Herbruck’s Poul- The Associated Press reported. The year, The Flint Journal reported. mond, Va., and run its health sys- tal Council, who is managing the try Ranch plans to spend $44 million fund will provide financing and Students will begin school in late tem, MiBiz reported. project, told Michigan Radio that, to expand its organic and cage-free business assistance to entrepre- August and end in late June, with Rappley’s last day is Aug. 14. based on public feedback, people egg production and create 50 jobs, neurs involved in food production, one-week breaks in October, Febru- She’ll become vice president for “want to see at least two trains a The Associated Press reported. Her- distribution, processing, marketing ary and May. health sciences and CEO of VCU day, and it has to be competitive. bruck’s received a $750,000 grant and retail projects. The goal is to Ⅲ This week’s summer bummer Health System, which includes a If you’re traveling for work or if from the Michigan Strategic Fund. raise $30 million. brought to you by your friends at cancer center and children’s hospi- you’re traveling for fun, you still Ⅲ Kalamazoo-based distributor Ⅲ The Benton Harbor Area Schools Michigan’s public universities, tal, has more than 1,100 beds and want it to be at least as fast if not Imperial Beverage Co. tripled is had to give up an $18 million grant which announced the following in- serves more than 600,000 people faster than being able to drive in warehouse space in Southeast to improve student success because state tuition increases last week: annually. your own personal car.” Michigan by moving from Ply- it lacked the staff to support it, offi- Michigan State University, 2.7 per- Also last week, MSU broke The council plans to release a mouth to Livonia, MiBiz reported. cials of the district told Michigan cent; Eastern Michigan University, 7.8 ground on an $88.1 million bio- report by the end of the year. The company distributes craft Radio. Last year, Gov. Rick Snyder percent, which means EMU loses medical research center in down- beer, wine and other beverages determined that a financial emer- $1 million in state incentive funding town Grand Rapids. W.Mich.chamber contest: across the state. gency existed in the district, which by exceeding the state cap of 3.2 $50K if you locate biz here Ⅲ Jody Lundquist started work faces a deficit of about $16 million. percent so it can generate $10 mil- Train route linking Grand last week as the new CFO of the city Enrollment has fallen 43 percent to lion in new revenue; Michigan Tech- Rapids,Detroit studied The Ludington and Scottville Cham- of Flint. She formerly was finance 2,680 in the past decade. nological University, 3.1 percent; ber of Commerce is holding a contest director and treasurer in Benton Ⅲ The Davison Community Schools Northern Michigan University, 3.2 per- Grand Rapids and Detroit are the that will award $50,000 to an owner Harbor. Flint has been run by four Board of Education voted to go to a cent; and the University of Michigan, two biggest cities in Michigan, but looking to start or relocate an early state-appointed emergency man- year-round academic calendar 2.7 percent. Ⅲ Enterprise data doubles every two years. Are you prepared? Are your records management, eDiscovery and privacy/security policies sufficient to manage your enterprise databerg? We provide full life-cycle support for enterprise data to lower costs, reduce liabilities and optimize data value. 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