20110221-NEWS--0001-NAT-CCI-CD_-- 2/18/2011 6:43 PM Page 1 ® www.crainsdetroit.com Vol. 27, No. 8 FEBRUARY 21 – 27, 2011 $2 a copy; $59 a year ©Entire contents copyright 2011 by Crain Communications Inc. All rights reserved Page 3 What’s the next chapter Ready for for bankrupt Borders? Snyder’s bet emergencies Will lower taxes trump lost incentives? Law change may raise BY AMY LANE But executives also placed high importance CAPITOL CORRESPONDENT on tax factors, ranking tax exemptions third, state interventions state and local incentives fifth and corporate BY NANCY KAFFER LANSING — Gov. Rick Snyder is wagering tax rate sixth. CRAIN’S DETROIT BUSINESS that an improved business tax structure Incentives can be “a tie-breaker when all trumps the need for widespread tax incentives. other things are equal,” said magazine Editor By the end of the month, the law that deter- Fast-growing First Michigan “Let’s stop the tax credits and Geraldine Gambale. mines when and how the state takes over fi- has an even bigger plan realize, in many cases, that the Snyder proposes to eliminate nancially troubled Michigan cities and school only reason they’re in the tax code It is time for the Michigan Business Tax and its districts could change — and that means state is because someone had more po- “ accompanying array of tax credits intervention could come earlier and more of- litical power,” Snyder said last simple, and incentives and replace ten. Inside week in presenting his budget. them with a new 6 percent State Treasurer Andy Dillon expects a wave “We’re eliminating all those cred- fair and corporate income tax on of financial emergencies in Michigan’s cities Plan to waive UI interest its. We will honor past credits, but “C” corporations. and school districts and has begun a series of it is time for simple, fair and effi- efficient The governor said the training sessions for prospective emergency fi- now could hurt later. cient on the business side. plan would result in a near- nancial managers. “It will make us among the most on the ly $1.8 billion tax cut for Now, the Legislature is debating amend- Capitol Briefings, Page 7 competitive in the country for Michigan businesses and a ments to Public Act 72, the law that details the business taxation” and will create business simpler, fairer and more triggers for a state takeover and defines the jobs, Snyder said. competitive tax structure. scope of an emergency manager’s power. But for now, it’s an open ques- side. Gone will be tax credits Dillon said he hopes the bills, HB 4214-4218, Focus: Law tion whether the strategy will ” for brownfield redevelopment, the will pass by the end of this month or early work as envi- Gov. Rick Snyder Michigan Economic Growth Authority March. Top verdicts, settlements LOSER LOOK sioned. program, alternative energy, film, Here’s how the existing law works: A re- C While a number of fac- renaissance zones and other areas. view of a city or school district’s finances is of 2010, Page 9 Cities: Fearing tors go into corporate deci- Jeff Finkle, president and CEO of the Wash- triggered when one of several events happens, cuts, sharing sions to expand or locate, ington, D.C.-based International Economic Devel- like payless paydays or a failure to meet pen- services, Page 24 with labor costs and high- opment Council, a more than 4,600-member orga- sion obligations. The state treasurer puts a re- Credits: Many way accessibility often top nization of economic development face budget ax, considerations, incentives professionals, said Michigan isn’t unilaterally See Takeovers, Page 23 Page 24 rank high in importance to disarming because “to the extent that they’re Health care: Medicaid spared, both businesses and site- also reducing taxes, that’s an incentive.” Crain’s List teaching hospitals location consultants. But will Michigan be at risk to having busi- face cuts, Corporate executives nesses picked off in instances where another Largest 1st-quarter SBA Page 25 surveyed in 2010 by Area state offers a large incentive and Michigan has A new voice for Film: Doubts slow Development magazine, a flat tax policy? “I don’t know the answer to lenders, Page 18 industry, Page 25 which covers corporate that,” he said. site selection and reloca- While the governor’s proposal takes incen- SNYDER Q&A tion, ranked highway ac- tives out of the tax code, Michigan still will This Just In cessibility and labor costs have some incentives it can offer. black business Snyder answers as the top two most impor- Snyder’s budget anticipates using $50 million pressing questions tant factors in in 21st Century Jobs Fund revenue and $25 Cumulus to buy WJR in deal at Crain's Detroit Chamber gathers members Business's selecting sites. million in general fund for 3 area radio stations Newsmaker of the revenue for broad eco- BY NANCY KAFFER Year event. Hear nomic development pro- CRAIN’S DETROIT BUSINESS Detroit radio station WJR the audio, grams and purposes. 760 AM is set to be sold along crainsdetroit.com That $75 million There were roughly 72,000 with two other Detroit sta- would support areas black-owned businesses in tions after Atlanta-based Cu- Michigan in 2007, according See Budget, Page 24 mulus Media Inc. entered into to U.S. Census data, up from negotiations to acquire the about 44,000 in 2002. The owner of the Detroit stations, metro Detroit area is home Las Vegas-based Citadel to about 39,000 black-owned Broadcasting Corp. businesses, ranking fourth Detroit’s other Citadel sta- in the nation. tions, Top 40 WDVD 96.3 FM And those businesses and WDRQ 93.1 FM, are also need a voice, said Ken Har- Harris part of the deal, which still ris, president and CEO of must be reviewed by the Fed- the newly created Michigan Black Chamber of eral Communications Commis- Commerce, the group that aims to give the sion, Cumulus said Friday. state’s black-owned businesses a leadership seat in local, state and national politics and See This Just In, Page 2 ISTOCKPHOTO.COM See Chamber, Page 22 Wed., March 23, 2011 | 8 a.m. – 4:30 p.m. Networking/cocktail reception 4:30 p.m. – 7 p.m. A. Alfred Taubman Center for Design Education at the College for Creative Studies • Detroit reinvention + revitalization Visit www.regonline.com/2011ideas NEWSPAPER 20110221-NEWS--0002-NAT-CCI-CD_-- 2/18/2011 6:11 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS February 21, 2011 marketing into the widely ac- bor-based New Enterprise Forum, a received a $15.6 million contract Signature managing director THIS JUST IN claimed Pure Michigan brand monthly gathering of business for retrofit work on the Stryker Mark Woods said the office is im- that’s been used for tourism pro- experts who hear pitches from armored vehicle. portant for the firm’s presence ■ From Page 1 motion, said Michael Finney, presi- would-be entrepreneurs and in- The U.S. Army Tacom Life Cycle on the west side of Michigan, dent and CEO of the Michigan Eco- troduce them to investors. Management Command in Warren covering a market that can’t be Under the agreement, Cumulus nomic Development Corp. Tom Porter, who helped found granted the single-bidder award covered from its Grand Rapids would pay $37 per share for He said the state has started to the nonprofit, received the first to GDLS for work to be complet- or Muskegon offices. Citadel — $30 per share in cash develop marketing messages to Tom Porter Leadership Award. ed by March 2012. The work will “There is a strong inventory and a maximum of $14 per share in business under Pure Michigan. Porter also co-founded the state’s be performed at GDLS’ Shelby of office and industrial real es- Cumulus stock. Industry trade There also will be use of public oldest VC firm, Ann Arbor-based Township offices along with tate in Holland, and as a result, publication Radio Ink reported the relations, social media, website EDF Ventures, and currently serves Kandahar Air Field in there’s a need for good commer- deal will be valued at about $4 bil- promotion, and the state will as an adviser to the Frankel Fund. Afghanistan, and facilities in cial real estate services.” lion, $2.4 billion and $1.5 billion in work with university alumni, Winning the lifetime achieve- Seattle, Alabama and Georgia. — Daniel Duggan market equity. members of the business commu- ment award was Dick Sarns, who — Chad Halcom Citadel exited Chapter 11 bank- nity and others to help identify designed what is still the world’s ruptcy in June, cutting more than business-attraction opportuni- most widely used lung and heart Pulte CFO to retire $1 billion in debt. ties, Finney said. pump machine during surgeries. Signature Associates adds PulteGroup Inc. said Friday The New York-based private eq- — Amy Lane Other winners were: Entrepre- new West Michigan office that CFO Roger Cregg plans to re- uity firms Crestview Partners and neur of the year, Farnam Jahanian, tire from the homebuilder later Southfield-based Signature As- Macquarie Capital are expected to founder of Arbor Networks Inc., a this year, after a successor is SBAM names new director sociates has expanded on Michi- provide up to $500 million in equi- provider of network security soft- named. ty financing. of government relations ware; best company presentation gan’s west side with the opening of an office in Holland. Cregg joined Bloomfield Hills- Cumulus expects to obtain the David Jessup has been named of 2010, Ann Arbor-based Fami- based PulteGroup in 1998 as se- remainder of the cash necessary to lyMint Inc., which makes software As part of the office’s opening, the director of government rela- Signature has hired Tom Elhart as nior vice president and CFO.