DETROIT BUSINESS MAIN 03-26-07 A 1 CDB 3/23/2007 6:16 PM Page 1

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http://www.crainsdetroit.com Vol. 23, No. 13 MARCH 26 – APRIL 1, 2007 $2 a copy; $59 a year

©Entire contents copyright 2007 by Crain Communications Inc. All rights reserved THIS JUST IN Rival plans 2 WSU residency programs Biz execs: Cut find new health systems for new border Two of the four Wayne State University School of Med- icine residency programs crossing that The Detroit Medical Cen- ter is dropping have moved state budget more to other health systems. On Nov. 22, Wayne State move forward and the DMC agreed to a 3½ year contract for many resi- BY ANDREW DIETDERICH Some support tax increase if need proven dency programs, but that the CRAIN’S DETROIT BUSINESS university would become sole sponsor of four: derma- Parties on both sides of the U.S.-Canadi- BY AMY LANE business leaders are saying tology; ear, nose and throat; an border are moving toward building a SURVEY: CUT THE BUDGET CAPITOL CORRESPONDENT that when you’ve demon- urology; and family medi- new bridge between the countries, but in strated that you’ve cut Can the budget be balanced with LANSING — Business ex- enough, we are open to a tax cine. different locations and with different own- budget cuts alone without ecutives aren’t convinced increase,” said Ed Sarpolus, Last week, Dearborn- ership plans. negatively impacting state that government has cut vice president of Epic-MRA based Oakwood Healthcare Inc. What the entities agree on is a need for programs and services or is it deeply enough and they don’t said it would house the der- additional capacity and the price tag for a necessary to raise taxes and fees? Corp. in Lansing, which con- like the idea of higher taxes. ducted the survey of Crain’s matology program. And, Crit- new bridge, which each estimate at about But a new survey also tenton Hospital in Rochester $1 billion. Detroit Business readers for shows that if businesspeople Crain’s and Honigman Miller Hills said it would be home That leaves a laundry list of unknowns, 18% are certain of the need, then of the family-medicine pro- including how — or if — each will contin- Undecided Schwartz and Cohn L.L.P. some will support higher tax- But some say that higher gram. ue to push their own plans concurrently. 54% es to increase funding for ed- Crittenton officials also Progress continues for each. taxes would hurt an already- Budget ucation or other government struggling business sector. are negotiating to house the Last Monday, Canada’s Minister of Fi- 28% cuts Need services that are important David Otto, president and ear, nose and throat program nance recommended the Canadian gov- alone to Michigan’s quality of life. along with others that Frank ernment set aside $400 million of the fed- to raise owner of Administrative Em- taxes And as budget skirmishes ployer Services Inc. in Sterling Sottile, chief medical officer eral budget for a new section of highway continue in Lansing, that at Crittenton, said he could- to lead to a new bridge. Heights, said that “first and sentiment may make it more foremost, like we do in the n’t talk about yet. The moves A plan for that bridge is the subject of politically palatable for Gov. From a survey of 500 Michigan private sector, you need to are part of Crittenton’s the Detroit River International Bridge Project, Jennifer Granholm and law- plans to become more of a a consortium of the Michigan Department of business owners and executives. make sure that government Part of a series of surveys co- makers to ultimately include is operating as lean and effi- teaching hospital, Sottile Transportation, U.S. Federal Highway Adminis- a tax increase in the state’s said. tration, Ontario Ministry of Transportation and sponsored by Crain’s Detroit cient as possible. I think you Business and Honigman Miller budget solution. The Crittenton family- Transport Canada, that recommends a need to look there, before Schwartz and Cohn L.L.P. on key “Senate Republicans have medicine residency program bridge originating from one of three possi- you increase the tax burden business issues. Full results are time to play hardball on the on the businesses and citi- starts July 1. It has received ble sites in the Brighton Beach area of available under the “Features” tax thing and push every zens of Michigan.” a full three-year accredita- Windsor across from Zug Island. A recom- heading at www.crainsdetroit.com nickel-and-dime cut that tion from the Accreditation or www.honigman.com. See Border, Page 27 they can get. But in the end, See Budget, Page 29 Council for Graduate Medical Education, said Maryjean Schenk, chair of the WSU School of Medicine depart- ment of family medicine and public health sciences. Harwell cries ‘foul’overbootlegged CD set The initial class will con- sist of 17 resident physi- cians. An additional eight are expected in year two. BY BILL SHEA audio books from the dock of DMC CEO Michael Duggan CRAIN’S DETROIT BUSINESS the Detroit shipping company said the program was discon- where he works and sold When “Ernie Harwell’s Audio tinued at the DMC because ex- some online. Scrapbook” was unveiled in De- ecutives “weren’t sufficiently “The gentlemen we arrest- cember, sales skyrocketed like a satisfied with the program’s ed had it on eBay,” said Sgt. home run at Michigan and Trum- performance to continue to Sam Milanovich, who is in bull. subsidize it at $3 million a charge of the investigation. “He year.” The four-hour, four-CD compila- started distributing them to friends tion of interviews and broadcast snip- and family. To make a couple extra He said the DMC would at Police believe a Warren man pets from the former Detroit Tigers some point like to rebuild took a box of 112 of the audio bucks, he put them on eBay.” the residency to attract stu- broadcaster’s 55-year career quickly books from a shipping dock. Ninety-one CDs remained in the dents from a broader base of sold 20,000 copies. box police seized. medical schools. Then the trouble began. Milanovich, who declined to release the man’s name The program at Critten- Reports began to filter in to Gary Spicer, Harwell’s St. pending his arrest on specific charges, said the man’s ton will be led by eight WSU Clair Shores-based attorney and adviser of 31 years, computer was seized and is being searched to see if faculty physicians. that copies of the CD were being sold illegally online, there is more to the story. He said copies of Harwell’s NEWSCOM CD have shown up for sale online in Kansas City, priced — Andrew Dietderich Ernie Harwell’s CD set has turned and counterfeit copies were turning up, too. The Wayne County Sheriff’s Office is investigating a significantly cheaper than its $19.84 cover price. See This Just In, Page 2 up being sold illegally online, his attorney says. Warren man who police believe took a box of 112 of the See Harwell, Page 27

Big wrestlers mean American Dreamers help big bucks for Detroit, keep business rolling, Page 35 NEWSPAPER Page 11 DETROIT BUSINESS MAIN 03-26-07 A 2 CDB 3/23/2007 5:49 PM Page 1

Page 2 CRAIN’S DETROIT BUSINESS March 26, 2007

firm in Detroit. the DDP through a 2005 merger 2005 and was LAST CALL FOR SMALL THIS JUST IN Hodgman said his departure with the Greater Downtown Partner- named associate from the firm he helped found in ship Inc. Bade worked on establish- publisher in Oc- BUSINESS AWARDS ■ From Page 1 1989 resulted from “different ideas ing a Business Improvement Dis- tober. He previ- Crain’s Detroit Business is about the firm’s future.” trict and on the organization’s ously served as seeking entries for its 2007 Williamston Products bids Hodgman headed the business main project — Super Bowl XL ad director, and Small Business Awards. and health care practice groups at preparations. was an early on C&A blow-molding plant the firm. — Robert Ankeny member of the The awards Williamston Products Inc. bid $2.9 Effective today, Cox, Hodgman corporate new has changed its name to Giarmarco, media depart- will million to purchase Collins & Aik- Mullins & Horton P.C., firm Presi- New president named at ment. honor man Corp.’s blow molding facilities Crain dent William Horton announced. Merpi joined local in Williamston, which employ Michigan Heritage Bank The name partners are Horton, Automotive small about 170. Williamston CEO Frank Farmington Hills-based Michigan Julius Giarmarco and Timothy Mullins. News as a sales- busi- Remesch declined to comment until Heritage Bancorp Inc. (OTCBB: Horton said the firm has hired person 31 years nesses the deal is complete. An auction for MHBC), the holding company for Strategic Management Associates ago and was that have proven to be the sites took place on March 14. Michigan Heritage Bank, announced L.L.C. to help develop a plan for named publish- exceptionally innovative or Williamston Products has no op- firm growth. Friday afternoon that its board of er of AutoWeek erations and a business address in directors has elected Raymond Biggs have overcome difficult — Robert Ankeny in October. He problems and become a Troy. But Remesch has run plas- II to be president of the bank, in ad- was named a better organization in the tics operations for Ford Motor Co. dition to his current title of CEO. vice president of process. and its parts operation — later Kilpatrick names Bade He replaces Anthony Albanese, Crain Communica- Merpi spun off as Visteon Corp. who retired. tions Inc. in 2000. To be eligible, companies chief city assessor The bank has branches in Farm- Southfield-based C&A has been Foster came must have been profitable in Linda Bade, vice president of the ington Hills, Livonia, Novi, Troy in Chapter 11 protection with the to Crain’s corpo- 2005; be at least 3 years Downtown Detroit Partnership, has and Wixom. U.S. Bankruptcy Court in Detroit rate office in old; have no more than 150 been appointed chief city assessor — Tom Henderson since May 2005. The Williamston employees and annual by Mayor Kwame Kilpatrick, return- 1997 as a finan- plants supply headrests for Daim- revenue of $10 million or ing to a post she held from July cial analyst be- lerChrysler Corp. minivans and 3 promoted at AutoWeek fore joining Au- less; and be headquartered molded pillar trim for Ford’s Lin- 1994 to July 1997. Bade first joined the assessing AutoWeek, sister publication to tomotive News as in Wayne, Oakland, coln Town Car, among other au- department in 1992 after serving Crain’s Detroit Business, has named a salesperson in Macomb, Washtenaw or tomakers and suppliers. from 1979 to 1992 as executive as- Keith “K.C.” Crain Jr. publisher, Tony 1999. He most re- Livingston counties. — Crain News Service sistant on health and human ser- Merpi publishing director and Tony Foster cently served as Winners will be featured in vices issues to then-Mayor Cole- Foster advertising sales manager. Midwest adver- the June 18 issue. To enter Kitch gets new partner; man Young. She is expected to Crain joined AutoWeek in June tising manager for AutoWeek. your company, go to Cox Hodgman changes name assume her duties April 2. www.crainsdetroit.com and In July 1997, Bade became presi- click on “Small Business dent of the Central Business District William Hodgman, co-founder, CORRECTIONS Awards” in the left-hand past chairman and president of Association, succeeding long-time Ⅲ World Asset Management, a unit of Comerica Inc., should have ranked column under “Forms and Troy-based Cox, Hodgman & Giar- CBDA chief Diane Edgecomb. That No. 2 on the list of largest money managers on Page 20 of the March 19 is- Surveys.” The deadline for marco P.C., has joined the Kitch organization eventually became sue with $17 billion in assets under management. entries is April 2.

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March 26, 2007 CRAIN’S DETROIT BUSINESS Page 3 CRAIN’S Survey: Raises stay under 4% INDEX

Pushing Borders: SALARY SURVEY RESULTS Economy, increase in performance pay are factors Bookseller to close more Waldenbooks, end BY JENNETTE SMITH cent of total compensation. Also, 40 erage 2.2 percent in 2007 compared Amazon relationship. Merit pay increases Page 4. CRAIN’S DETROIT BUSINESS percent of eligible employees at the with 3.62 percent in 2006 and 3.56 in 2007* 2006 347 companies surveyed receive a 2005. (For more results, see box, at Second take: Payroll budgets for 2007 point to Former Eastern Hourly 3.22% 3.21% form of variable pay. That’s up from left.) For companies that offer a merit Market meat- lower base pay bumps and average Salaried 3.26% 3.29% 31 percent in 2003. raise structure, 2007 projections processing merit increases well under 4 percent “(Employers) have to get more out range from 3.22 percent to 3.4 percent. building to Executive 3.40% 3.74% for local workers. Of the companies surveyed, 84 per- be new of their employees,” said Matthew home of Michigan’s economic state is part Pulliam, a Southfield-based consul- cent have less than 500 employees Detroit General wage increases of the explanation, but another factor tant for Watson Wyatt who presented a and just less than half are manufac- Film is a trend toward more employees session on variable compensation at turing-related. Kevin Marrs, director Center. Hourly 2.85% 2.85% Page 25. who are eligible for performance- the society’s conference Thursday at of survey services for ASE, said given Salaried 3.06% 2.79% based variable pay such as bonuses the Rock Financial Showplace. “They the cost-cutting pressure in the man- Auto suppliers: Executives 3.18% 3.24% ufacturing sector, the modest results Consortium wants or profit sharing. Data announced will not pay out unless they have the research center in Shelby *Projected Thursday by the American Society of performance to back it up.” are similar to recent years. Merit Township. Page 6. Source: American Society of Employers Employees in Southfield found that Overall payroll reports from em- raises have hovered under 4 percent variable pay accounts for about 8 per- ployers show base salaries up an av- See Pay, Page 27

These organizations appear in this week’s Crain’s Detroit Business:

8 Mile Foodland ...... 26 Administrative Employer Services Inc. 1 American Society of Employers . . . . . 3 Plot twist or final chapter? Arab American National Museum . . 12 Asterand plc ...... 15 Bakers Loaf Inc...... 11 Beach Communications L.L.C...... 3 Biz owner may pull reading Borders Group Inc...... 4 Chaldean American C of C ...... 26 Chrysan Industries Inc...... 16 program out of Detroit if Danou Enterprises ...... 15 Delphi Corp...... 26 Detroit Film Center...... 25 Detroit Institute of Arts...... 13 elementary school is closed Detroit International Bridge Co. . . . 27 Detroit Regional Chamber...... 6 Detroit River Intern. Bridge Project . 1 BY BILL SHEA Detroit Tigers ...... 1 CRAIN’S DETROIT BUSINESS DMCVB ...... 21, 25 EView 360 ...... 13 The future of a successful, privately funded read- First Michigan ...... 1 ing program is tied to the fate of a Detroit elementary First Spirit ...... 1 school threatened with closure in a cost-cutting Freudenberg-NOK...... 18 move. General Motors Corp...... 12 Global LT Ltd...... 17 For the past five years, Rex Smith has spent nearly Henry Ford Health System . . . . 15, 17 $1 million of his own money to develop the “Read a Henry Ford West Bloomfield ...... 20 Book, See the World” program aimed at at-risk sec- Honigman Miller ...... 1 ond-graders who read at least two grade levels below Hotel St. Regis ...... 12 their own. Integrated Sensing Systems Inc.. . . 17 Smith, owner of Pleasant Ridge-based marketing Intraco Corp...... 12 Kojaian Cos...... 26 firm Beach Communications L.L.C., is a passionate ad- Latino Press Inc...... 15 vocate of the program he and his wife, Sue, started Lear Corp...... 4 and actively participate in at Mason Elementary School Level One Bank ...... 1 on Mitchell Street between Seven Mile and Eight Lotus Bank...... 1 Mile roads. McKinley Inc...... 14 “If you can’t read, you can’t do social studies, sci- MEDC ...... 29 ence and math. You can’t do anything,” he said. Medical Network One P.C...... 16 Menawat & Co. Inc...... 16 “These are bright kids. They have the capability to Mich. Inst. for Health Advancement 15 be successful.” Michigan Chamber of Commerce . . . 6 JOHN F. MARTIN The Detroit school system has 43 schools recom- Rex Smith has spent nearly $1 million of his own money to develop the “Read a Book, See the World” program Michigan Credit Union League . . . . . 6 Mich. Hotel, Motel & Resort Assn. . . 6 See School, Page 28 at Detroit’s Mason Elementary School. OESA ...... 26 Olympia Entertainment Inc...... 25 Pacific Industrial Develop. Corp. . . 20 Plante & Moran ...... 17 Premier Realty ...... 16 SmithGroup Inc...... 16 Somat Engineering Inc...... 18 4 community banks to open in growth spurt Spire Integrated Systems L.L.C. . . . 18 Synergy Group Inc...... 17 Think 360 Creative ...... 27 Titus Associates ...... 25 has its eye on southwest Detroit. here because of the size of the mar- Travel Michigan ...... 6 Oakland to get 3; The newest to apply for state and ket. He ultimately settled on a site United Way of SE Mich...... 11 regulatory ap- on Orchard Lake Road, just south of Watson Wyatt ...... 3 1 set for Detroit proval is Level 14 Mile Road, because a market Wayne County Community College. . 25 One of Farming- study showed 7,700 businesses with- Wayne County EDC ...... 14 ton Hills. Its CEO in three miles and 14,000 within five BY TOM HENDERSON and president is miles. CRAIN’S DETROIT BUSINESS Patrick Fehring, Fehring said organizers — who BANKRUPTCIES ...... 26 Community banking continues to former president include Mark Herman, president CALENDAR ...... 23 be a rapid growth industry in of Fifth Third Bank, and COO of Anyi Management Co., a CAPITOL BRIEFINGS ...... 6 Southeast Michigan with four new Eastern Michigan, Brighton-based real estate manage- CLASSIFIED ADS...... 22 NEW IN 2007 KEITH CRAIN ...... 8 community banks scheduled to who said he will ment company; Jim Bellinson, pres- Ⅲ Level One Bank, Farmington Hills. Fehring LETTERS ...... 8 open this year — three targeting begin formal ident of Birmingham-based River- MARY KRAMER...... 9 Ⅲ Lotus Bank, Novi. Oakland County and one in Detroit. fundraising in May and hopes to be stone Communities, an owner and OPINION ...... 9 Ⅲ First Michigan Bank, Troy. Level One Bank, Lotus Bank and open by the end of September. manager of mobile-home communi- PEOPLE ...... 24 Ⅲ First Spirit Bank (above), First Michigan all plan Oakland Fehring said he looked at several ties; Dominic Pangborn, president RUMBLINGS...... 30 southwest Detroit. County startups, while First Spirit areas, including Ohio, but chose See Banks, Page 28 WEEK IN REVIEW ...... 30 DETROIT BUSINESS MAIN 03-26-07 A 4 CDB 3/23/2007 5:27 PM Page 1

Page 4 CRAIN’S DETROIT BUSINESS March 26, 2007 TAKING STOCK NEWS ABOUT DETROIT AREA PUBLIC COMPANIES Borders plan: Less Waldenbooks, more exclusives, end Amazon deal

BY SHEENA HARRISON Borders CEO George Jones said pares with net income of $119.1 mil- CRAIN’S DETROIT BUSINESS the new site will allow customers lion or $1.78 on revenue of $1.48 bil- to use the Borders Rewards loyalty lion for the same quarter last year. Borders Group Inc. will close more program online as well as in For 2006, Borders reported a net Waldenbooks stores, offer exclusive stores. About 17 million customers loss of $151.3 million or $2.44 a products and roll out a new store are enrolled in Borders Rewards, share on revenue of $4.1 billion. format as part of a plan to boost the which was rolled out last year. That compares with net income of bookseller’s sales and profitability. Meanwhile, the company plans to $101 million or $1.42 on revenue of Ann Arbor-based Borders introduce several exclusive books $4.08 billion for 2005. (NYSE: BGP) plans to cut its in hopes of driving customers to its Borders said it expects its new Waldenbooks stores to 300 from stores. strategic plan will return the com- 564 by the end of 2008. The Walden- Borders plans to launch a new pany to profitability by 2008. books unit, which Borders has store format early next year. The The plan is also part of Jones’ been cutting since at least 1996, company did not specify elements strategy to differentiate Borders saw a 2.7 percent decline in same- of the format, but said it will slow from its biggest competitor, New store sales in 2006. its efforts to remodel and add stores York City-based Barnes & Noble Inc. The company also said it will end until the new format rolls out. In a report outlining challenges its partnership with Amazon.com The plan comes as Borders CEO at Borders and Barnes & Noble, and launch its own sales Web site George Jones discussed the compa- Goldman, Sachs & Co. analyst early next year that will let the com- ny’s “disappointing” 2006 fiscal re- Matthew Fassler said a merger of pany capture all proceeds from its sults in a conference call Thursday. the companies would make finan- online sales. Amazon currently op- For the fourth quarter ended cial sense — though he said such a erates, provides inventory and ful- Feb. 3, Borders reported a net loss deal is “not likely.” fills orders for Borders.com, and of $73.6 million or $1.25 a share on Sheena Harrison: (313) 446-0325, Borders receives part of those sales. revenue of $1.52 billion. That com- [email protected]

corporate center 25200 Northwestern Highway · Southfield, Michigan Pzena: Icahn didn’t tell the whole Lear story

BY BRENT SNAVELY tial.” Tuesday outlining additional de- CRAIN’S DETROIT BUSINESS Pzena has been publicly lobbying tails with the U.S. Securities and Ex- against Icahn’s buyout offer since change Commission. New York-based Pzena Investment Lear’s management announced its Lear, meanwhile, has hired pub- Management L.L.C. said Carl Icahn decision to support it on Feb. 9. lic-relations firm Brunswick Group of left out important facts when he The offer, which is to buy out New York as a communications ad- criticized Pzena for passing up an Lear shareholders at $36 a share viser. Brunswick specializes in rep- investment opportunity with Lear and to assume $2.5 billion in debt, resenting companies dealing with Corp. (NYSE: LEA) last October. undervalues Lear, Pzena says. complex financial and litigation For More Information, Please Call: Pzena was reacting to a quote • 195,000 Square Foot Building Pzena believes that Lear is on the matters. from Icahn that ran in Crain’s brink of a financial turnaround Lear is a supplier of automotive • Soaring 5-Story Atrium 248.324.2000 March 19 issue. • Recently Renovated Common Areas and says the company could easily seating, electronics and electrical “The fact is that I bought it at $23 be worth $60 a share, which Lear distribution systems with $17.8 bil- • Easy Access to Major Freeways a share, and I believe that gave the • Abundant, Close Proximity Parking was trading at in January 2004. lion in 2006 sales. company a lot of credibility,” Ic- The battle is expected to heat up Brent Snavely: (313) 446-0405, ahn said in the interview. “Since I after Lear filed a proxy statement [email protected] www.friedmanrealeste.com bought in in October, the stock is up 45 percent. It is interesting that Pzena now says $36 is not enough. He had an opportunity to buy a big STREET TALK block at $23 in the same transac- tion with the company that I en- THIS WEEK’S STOCK TOTALS: 61 GAINERS, 15 LOSERS, 5 UNCHANGED

tered into, and turned it down.” 3/23 3/16 PERCENT Icahn invested $200 million to CDB’S TOP PERFORMERS CLOSE CLOSE CHANGE buy 8.7 million shares of Lear’s 1. Somanetics Corp. 20.43 18.27 11.82 stock and has since offered to buy 2. Covansys Corp. 27.09 24.70 9.68 the entire company for $5.3 billion. 3. General Motors Corp. 31.99 29.17 9.67 But Pzena partner Ken Brown 4. Detrex Corp. 9.00 8.26 8.96 said, “(Lear) basically did an 5. American Axle & Mfg. Holdings 28.02 25.84 8.44 overnight quick equity offering. We Universal Truckload Services Inc. 24.25 22.45 8.02 essentially had six hours to re- 6. spond.” 7. Valassis Communications Inc. 17.70 16.41 7.86 Unlike Icahn’s company, Pzena is 8. Energy Conversion Devices Inc. 35.52 33.04 7.51 not a private-equity fund. Rather, it 9. Origen Financial Inc. 6.54 6.20 5.48 is a value-investment manager that 10. ArvinMeritor Inc. 18.20 17.28 5.32 invests money on behalf of individ- CDB’S LOW PERFORMERS 3/23 3/16 PERCENT ual investors. Brown said Lear was CLOSE CLOSE CHANGE a good deal at $23 per share, but said 1. ProQuest Co. 8.41 8.97 -6.24 Pzena consults with its clients be- 2. Dearborn Bancorp Inc. 17.50 17.98 -2.67 fore making investment decisions. 3. Oxford Bank Corp. 47.00 47.58 -1.22 “We just couldn’t do it, by logis- 4. TechTeam Global Inc. 12.65 12.74 -0.71 tics of it,” Brown said. 5. PSB Group Inc. 15.95 16.00 -0.31 Brown also questioned Icahn’s 6. Clarkston Financial Corp. 12.96 13.00 -0.31 decision to publicly discuss the Oc- 7. SEMCO Energy Inc. 7.64 7.60 0.53 tober offer. 8. Saga Communications Inc. 9.83 9.77 0.61 “We agreed to keep that offer con- 9. Handleman Co. 6.67 6.62 0.76 fidential,” Brown said, “and so we 10. UnitedAuto Group Inc. 20.66 20.45 1.03 haven’t said a word to anybody. Icahn is going out and telling you Source: Bloomberg News. From a list of publicly owned companies with headquarters in Wayne, Oakland, Macomb, Washtenaw or Livingston counties. Note: Stocks trading and others something we were un- at less than $5 are not included. der the impression was confiden- DBpageAD.qxd 3/19/2007 12:13 PM Page 1 DETROIT BUSINESS MAIN 03-26-07 A 6 CDB 3/23/2007 5:28 PM Page 1

Page 6 CRAIN’S DETROIT BUSINESS March 26, 2007 Tourism industry preps for funding push

LANSING — Michigan cy and business officials. TIME coalition, said the goal is to budget for Travel Michigan, the ference will include the presenta- tourism businesses are The coalition, which in- deliver a simple but consistent state’s tourism-marketing agency. tion of a first-ever strategic plan preparing an $89,000 game cludes organizations repre- message on tourism’s economic The coalition’s immediate goal, for the industry, and a detailed plan to secure higher state senting Michigan’s lodg- importance to the state, its rapid however, is for the state to at least tourism-industry forecast from promotional funding. ing, retail, restaurant, return on investment, and the sustain Travel Michigan’s current Michigan State University. The Tourism Improving boating, campground and need for higher state funding with- $13.2 million annual spending lev- The forecast predicts tourism Michigan’s Economy coali- other industries, as well as out tax, fee or surcharge increases. el, after a one-time boost of money should improve modestly in 2007. tion is mobilizing support, the Michigan Chamber of To finance its campaign, the from the state’s 21st Century Jobs Don Holecek, director of MSU’s raising funds and eyeing Commerce, hopes to emu- coalition is seeking to raise $38,000 Fund ends this year. Travel, Tourism & Recreation Resource advocacy campaign tac- late the success of a past from industry members. The mon- A presentation on the coalition’s Center, said the center’s annual out- tics such as news confer- grass-roots campaign that ey will supplement $51,000 in in- agenda, by newly hired public-rela- look predicts business and leisure CAPITOL BRIEFINGS ences, viewpoint columns, won the industry a law re- kind contributions from the hotel tions firm Martin Waymire Advocacy travel volume will rise a combined media and legislative con- Amy Lane quiring schools to open af- association, covering lobbying Communications Inc., is scheduled 1 percent to 2 percent in 2007, while tact and promotional op- ter Labor Day. costs, coalition staffing and admin- Tuesday at the March 26-27 indus- travelers’ spending will increase by portunities at the Detroit Regional Steve Yencich, president of the istration, and other expenses. trywide Michigan Lodging and 4 percent to 5 percent. Chamber’s Mackinac Policy Con- Michigan Hotel, Motel & Resort Asso- Ultimately, the coalition wants Tourism Conference in Traverse City. Tourism spending rose 3.3 per- ference of lawmakers, public-poli- ciation, which is spearheading the the state to fund a $30 million ad As Crain’s has reported, the con- cent in 2006, but that was largely be- cause of price increases and not tourism volume, which remained essentially flat, according to MSU research. Continuing weakness in the state’s economy is expected to con- tinue to have an impact. Michigan Who can save any business residents traditionally make up as Q: much as 70 percent of state tourism business, Holecek said. Still, he said, the industry has coped well under challenge. “I think what’s surprising to me up to 30% on health care? is that it’s held up as well as it has,” Holecek said. “We’re kind of hang- ing on by our fingernails, but we haven’t crashed either. That tells me we’ve got some resilience, we’ve got some things going for us.” Changes to no-fault auto insurance law head to Senate Legislation that broadens the ability for motorists injured in car accidents to sue for noneconomic damages faces an uncertain future in the state Senate, after recently A: passing the House. House Bill 4301, sponsored by Rep. Paul Condino, D-Southfield, amends Michigan’s no-fault auto- mobile insurance law in a variety of ways, including a revised definition of what constitutes a “serious im- pairment of body function,” a threshold that allows a lawsuit. The bill targets a 2004 Michigan Supreme Court decision that those seeking the bill have said prevents seriously injured people from pur- suing legitimate claims. But others say the changes in the House bill will prompt lawsuits, lead to higher rates, and negate the no-fault law’s balance between ben- efits and limits on lawsuits. The bill was referred to the Sen- ate Judiciary Committee, chaired by Sen. Wayne Kuipers, R-Hol- land. A similar bill, sponsored by HAP’s Value PlansSM can save you up to 30% off your Sen. Bruce Patterson, R-Canton current health care premiums. How? Our alternative plan Introducing Township, has been in the commit- tee since January. Angie Dozema, designs feature higher deductibles and co-insurance that Kuipers’ legislative director, said reduce your premiums. Your employees continue to have the senator is currently focused on access to leading hospitals and physicians along with Michigan Department of Corrections SM reforms and has no immediate consumer-friendly online health informational tools, plans to take up the legislation. preventive care coverage and optional Health Savings $FFRXQW +6$ +$3·V9DOXH3ODQVSM help offer powered by Comings & goings predictability with the cost savings you seek. Patrick LaPine of Farmington, executive vice president of associa- Great benefits and coverage with no hidden costs. tion services of the Northville Now that’s value. Township-based Michigan Credit Union League, has been appointed to the Ferris State University Board of Control by Gov. Jennifer Gran- Contact your Agent or Account Executive or call (800) HAP-PLUS toll-free. holm. His term runs through 2014. Amy Lane: (517) 371-5355, [email protected] DBpageAD.qxd 3/6/2007 12:51 PM Page 1

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Page 8 CRAIN’S DETROIT BUSINESS March 26, 2007 OPINION Keep politics out of state investment fund onflicts of interest? Phantom companies angling for “free” money? C Alan Sanborn, Republican chair of the state Sen- ate’s Economic Development Regulatory Reform Committee, leveled those serious allegations earlier this month. In a hear- ing, he criticized the process of awarding money to companies through the state’s 21st Century Jobs Fund. It looks like the state Senate Republican majority agrees. The Senate voted last week to transfer $34 million intended for the next round of awards to the state’s general fund. (See story about the budget deliberations and a survey of Crain’s readers, Page 1). Sanborn’s criticism is off-base. The state’s process of using a science advisory group to vet and recommend proposals for funding insulated the process from favoritism, of the political or old-boy-network variety. A 19-member Strategic Economic Investment and Commercialization Board makes the final funding decisions, but its members are required to recuse themselves if they have any conflicts. The state might tweak the mix of awards from the jobs fund to ensure more existing businesses are considered for funding LETTERS versus pure research projects. But Sanborn’s suggestions that conflicts were rampant be- tween SEIC board members and grantees are far-fetched. More to the health care story Members of the board, which include representatives from the state’s major universities, have regularly recused themselves Editor: tempts to deal with the physician Crain’s Detroit Business from voting on proposals tied even tangentially to their insti- I was impressed and distressed shortage now and in the future in welcomes letters to the editor. simultaneously with your March this state. Physicians must lead tutions. All letters will be considered for More troubling was the suggestion that one grant recipient 12 issue with regards to Focus: publication, provided they are this because we are the ones who Health Care “Health coverage really understand the health care appeared to be a paper-only, fake company, set up quickly only signed and do not defame faces hurdles.” individuals or organizations. system. to get its hands on state cash. I understand the need to fit sto- Letters may be edited for length This comprehensive document But the company he singled out as a phantom company was ries into a short amount of space, and clarity. is available from the Michigan State Medical Society and I believe formed on the premise that it would be able to obtain and com- but you unintentionally gave short Write: Editor, Crain’s Detroit shrift to the Michigan State Med- that your other readers who are mercialize intellectual property owned by another company. Business, 1155 Gratiot Ave., ical Society and its “Future of Detroit, MI 48207-2997. not shareholders will profoundly When that company instead sold the IP to another company, Medicine” document that was benefit from the education and E-mail: [email protected] the startup rightfully dissolved and declined state funding. rolled out over one year ago simul- principles contained within this Sanborn, who hails from Macomb County’s Richmond taneous with the groundbreaking document. mocrats and Republicans and the All of this can only positively Township, and his fellow Republicans should heed the advice news from Massachusetts. Our multilayered comprehen- state of Michigan as well as other impact the discussion in the prop- of entrepreneurs, researchers and their legal and financial ad- sive approach is similar, but far groups such as the Automotive In- er direction to help all Michigan- visers who are working to build the companies of the future. better in how it addressed the dustry Action Group to the table. ders, especially in these trying One such adviser is David Parsigian, who runs the Ann Ar- health of the residents of Michi- All have responded positively. times, now and in the future. We as a medical society believe that bor office of the law firm Honigman Miller. “We have a budget gan. You only alluded to the Essen- This is a program led by physi- tial Benefits Work Group which is cian leaders that can dramatically this will keep medical costs down crisis,” he told Crain’s last week. “This is risk capital. Some of only one of several work groups improve access — universal access while simultaneously providing it isn’t going to work out. And we need appropriate oversight within this plan. This is a nonpar- (no capitals) and provide universal broader better care. so money isn’t thrown away, but this (transferring the money) tisan, all-inclusive blueprint that care (no capitals). Universal Care This can only help the business sends the wrong message to the technology community. It will is financially sound. is defined as a single-payer system. climate in the state of Michigan. We have invited stakeholders, This is not advocated as this will This is not a “pie in the sky” belief, take time and investment and some disappointments before including the Chamber of Com- not solve the problem. but actuarially based, practical we have successes, but we must invest in our future.” merce, the unions, business, De- Included in this plan are at- See Letters, Page 9

KEITH CRAIN: Some folks get it, and some folks don’t

Three cheers for the mayor of what’s going on in the rightsizing, a process who simply wants to expand gov- that is shrinking. Take a look at Detroit. His State of the City state where she lives. that is difficult and ernment by raising taxes. Unfortu- what they are doing at companies message, which I unfortunately Michigan is in a one- painful. Our govern- nately she doesn’t seem to get it. like General Motors or Ford or Del- missed attending in person, was state depression. It’s ment has to do exactly Tough decisions, yes. Make some phi. They are firing thousands of nothing short of statesmanlike. tempting to think the the same thing. It will enemies, of course. But it’s got to be people and shutting down plants. The message: We shouldn’t expect rest of the country is also be a difficult and done. It’s time our state govern- They aren’t mothballing them. any help from outside. We’re going suffering like we are, painful process. But it’s ment realizes it has to cut expenses They are shutting them down per- to have to do this on our own. but it’s not true. The not time to think about to match a shrinking revenue base. manently. The mayor seems to be on the rest of the country is do- growing government or This is not about a cycle that is Auto executives are migrating right, although painful, track. ing pretty good. even trying to keep it going to come back in a few months. from our state. They are leaving. Meanwhile in Lansing, the gov- Because we are in this the same size. The state It’s a permanent change in the cor- Houses sit unsold and lose value. ernor still is trying to figure out economic meltdown, can’t afford that luxury. porate structure of our companies. Our government has to under- how to raise our taxes in an envi- we’ve got to make sure There are some in the Fewer people, probably earning less stand what’s going on in the Michi- ronment that requires lowering that our government understands Legislature who understand what money. We all have to adjust. Some gan economy. taxes. She simply has to learn how what’s happening. Companies all has to be done, but it’s going to be a get it, and some don’t get it. The mayor of Detroit gets it. to get tough and understand over our state are shrinking and very tough fight with a governor It’s no fun running a business Our governor doesn’t. DETROIT BUSINESS MAIN 03-26-07 A 25 CDB 3/23/2007 6:36 PM Page 1

March 26, 2007 CRAIN’S DETROIT BUSINESS Page 25 Muscles — and moolah

been here for awhile or have never It’s (openly) a big show, but the economic impact is far from imaginary been here.” She said the bureau’s role has BY BILL SHEA past 20 years with WWE. He han- day event in WWE history. been far more limited in promoting CRAIN’S DETROIT BUSINESS dles local promotion for WWE While the crowd may rival the Wrestlemania because it’s not a bid events. He said fans are coming Super Bowl, the wrestling event event, nlike the Super Bowl. De- The body slams, bulging biceps from 23 countries, including 5,000 doesn’t share the same parade of troit didn’t have to compete with and boisterous crowds that are from Canada, and noted that VIA exclusive corporate functions and trademarks of professional other cities to secure Wrestlema- Rail Canada has set up a “Wrestle- star-studded sponsor parties lead- nia, which WWE bills as an “annu- wrestling translate into something mania Express” to bring 700 fans to ing up to the event. Instead, al pop culture extravaganza.” else: Big bucks. the city from Toronto. wrestlers will appear at schools, As part of the pop culture extrav- While no official study has been The WWE picked Detroit for this charity events and at retail stores aganza, Motown’s own Aretha compiled, Wrestlemania 23 at Ford year’s event because it’s the 20th an- in the days leading to the show. Franklin will sing “America the Field could have about half the eco- niversary of Wrestlemania III at the “We tend to be more grass-roots Super nomic impact generated by Pontiac Silverdome, which set a WWE than VIP-oriented,” Collins said. Beautiful” as she did 20 years ago at Bowl XL, or about $25 million for the attendance record with 93,000 fans. And that’s just fine, said Carolyn the Silverdome, Davis said. April 1 event. “It was a very important mile- Artman, manager of media rela- Detroit-based Olympia Entertain- The estimate is based on a new stone in our company’s history, tions for the Detroit Metro Convention ment Inc., which is part of Ilitch Hold- study by the Central Florida Sports and that’s why we wanted to come & Visitors Bureau. ings Inc. and owns or operates the Commission that predicts next year’s back to Detroit,” Davis said. “It’s different audiences, but it’s Fox Theatre, Joe Louis Arena, Comerica Wrestlemania at the 65,000-seat Cit- The WWE’s Shawn Michaels drops a flying elbow on Edge. The WWE announced on Feb. 15 good to show them what we have,” Park and Cobo Arena, is handling the rus Bowl in Orlando will generate it had sold 63,000 tickets and she said. “It’s a chance to expose a local promotion. about $25 million in economic im- six post-season games in 2006. reached the $5 million sales mark, lot of the positive new development Bill Shea: (313) 446-1626, pact, and World Wrestling Entertain- A 2004 report prepared by Toron- making it the highest-grossing one- in Detroit to people who haven’t [email protected] ment has said that number should to-based Enigma Research Corp. cal- be about the same for this year. culated that Wrestlemania 20 at “Detroit is likely to be similar in 18,000-seat Madison Square Garden range,” said Gary Davis, vice presi- generated $13.5 million for New dent of corporate communications York City. for Stamford, Conn.-based WWE. Super Bowl XL on Feb. 5, 2006, Wrestlemania is the WWE’s annual was attended by 68,206 fans at Ford marquee pay-per-view television Field. The venue typically seats event and is expected to draw 65,000, but can be expanded to 70,000-plus fans to Ford Field. 80,000. Additional seating for the The Anderson Economic Group, a wrestling show is under construc- private economic consulting firm tion on the field, said Risa Balayem, in East Lansing, last year estimated public-relations manager for Ford Super Bowl XL generated $49.3 mil- Field. lion for Detroit. The same report es- “Our goal is to set the Ford Field Michigan’s Bank timated that Detroit Tigers playoff attendance record,” said Bob games brought in $37.8 million for Collins, a senior adviser for the Detroit Film Center to move to Eastern Market

BY MARTI BENEDETTI ing has been empty, but Evanski SPECIAL TO CRAIN’S DETROIT BUSINESS has used the ground floor as his law office. He will move his office An Eastern Market building to the second floor. used for many years to process The nonprofit Detroit Film Cen- meat will become a place to make ter, which has about 200 members, and study films. was founded by Andersen in 1993. The almost 10,000-square-foot, three-story structure at 1347 E. It has operated out of the Redford Fisher Freeway will be the new Theatre and various leased down- home of the Detroit Film Center. town buildings. The early 1900s structure was The center provides education purchased by Bob and Raquel An- and resources to prospective film- dersen from Detroit attorney makers and artists and offers Joseph Evanski in early Decem- screenings of independent films ber. Andersen is the founder of the and videos. Classes are taught by Detroit Film Center, which now is local film producers and college downtown at 1227 Washington and university instructors. Blvd. He sees the new location as a The film center will occupy the “catalyst for future growth. We CITIZENS BANK. ground floor as soon as May but continue to grow in terms of audi- 135 years ago, Citizens Bank opened its doors with a promise of more likely in September, Ander- ence. We’re a nonprofit media-arts dedication to the communities and businesses of Michigan. Soon to be the largest sen said. Raquel, Bob Andersen’s center fueled through volunteer wife and a certified yoga instruc- help and part-time staff. We have bank-holding company headquartered in Michigan, we feel a responsibility tor, will operate a yoga studio on an active board.” the second floor. She also is associ- to provide Michiganders a great local banking option. With more branch locations in According to guidestar.org, the ate dean at the western campus of Detroit Film Center, using its pre- Michigan than any other bank in Michigan as well as locations throughout five Midwest Wayne County Community College in vious moniker Detroit Filmmakers Belleville. The third level will be states, our priorities are clear – to provide a national-caliber banking experience right Coalition Inc., had revenue of developed into lofts, Andersen in your hometown. said. $108,967 and expenses totaling $117,337 in 2004, the last year post- Andersen is working on obtain- TO TALK TO YOUR VERY OWN CITIZENS BANKER, CALL (248) 293-3199 ing a construction loan and is co- ed on the Web site. ordinating plans with Ann Arbor Since last June, Andersen has architect Titus Associates on the been manager of Division X, a divi- building’s renovation. sion of Grace & Wild Inc., which pro- The building was bought on a vides computer graphics and visual land contract. Much of the build- effects for television commercials. DETROIT BUSINESS MAIN 03-26-07 A 26 CDB 3/23/2007 6:15 PM Page 1

Page 26 CRAIN’S DETROIT BUSINESS March 26, 2007 Group of local independent grocers considers bid for Farmer Jack

BY SHEENA HARRISON ha said he’s interested in bidding Jack said the company could not CRAIN’S DETROIT BUSINESS for Farmer Jack locations. His comment. Richard De Santa, se- family owns 8 Mile Foodland in nior director of communications Rumors that Farmer Jack grocery Southfield and two Family Foods for A&P, declined comment. stores could be up for sale have stores in Detroit, both of which are Local 876 President Roger Robin- presented an opportunity for inde- former Farmer Jack locations. son said in a statement last week pendent Chaldean grocers to con- Denha said he’ll consider the union believes A&P is courting sider buying the stores. putting in a bid for more Farmer bidders, but has not released infor- Martin Man- Jack stores depending on the price mation about the process. na, executive di- and whether he deems any of the “I suspect that A&P has been ac- rector of the stores would do good business. tively pursuing a deal to spin off Chaldean Ameri- “You’ve just got to find the right Farmer Jack for quite some time can Chamber of location,” said Denha, who did not and could be closer to reaching a Commerce, said discuss sales for his grocery stores. deal than anyone is letting on,” a group of Buzz about whether Montvale, Robinson said in the statement. Chaldean gro- N.J.-based Great Atlantic & Pacific Tea Manna said Chaldean grocers cers is consider- Co. (NYSE: GAP) will sell Farmer have been a mainstay in the south- ing whether to Jack has been circulating because east Michigan community for at put in a bid for Manna an agreement with the United Food least 50 years — something he said Farmer Jack, and Commercial Workers Local 876 ex- could bode well for local Farmer which has more than 60 stores in pired earlier this month. The union Jack stores if bought by members metro Detroit. represents 5,100 Farmer Jack work- of the community. “It’s a natural that the Chaldean ers at 66 locations. “History has shown that these independent grocers would look at An amended union contract rati- chains have come and gone while it as an opportunity to expand in fied in November 2005 guaranteed this community has remained,” markets that they already know,” that A&P would keep at least 60 Manna said. Manna said. stores open until at least March 2007. Sheena Harrison: (313) 446-0325, Grocery store owner John Den- A representative for Farmer [email protected]

Suppliers sought to fill Delphi’s Shelby center

BY BRENT SNAVELY ing due to be vacated by Troy- OESA with its plan. CRAIN’S DETROIT BUSINESS based Delphi Corp. The building is an asset because Delphi received approval on of its proximity to the suppliers The Original Equipment Supplier Thursday from a federal bankrupt- and customers. Plus, it is equipped Association is leading an effort to cy judge to reject leases at seven for a wide range of industry re- establish a consortium of suppli- research and development centers search. The goal, Andrea said, is ers that would operate a research and plans to consolidate into a sin- for suppliers to collaborate on center in a Shelby Township build- gle location in Auburn Hills that “precompetitive research.” will employ about 1,400. Possible areas include testing of “Delphi came to OESA to be … a advanced materials and research conduit to the supplier base to see into biomaterials that are viewed if the suppliers would be interest- as possible alternatives to plastic ed in joining a consortium to run automotive components. that lab as an industry resource,” “We are in the discussion phases said Dave Andrea, vice president and the critical aspect of it is defin- of the association. ing what research themes the cen- It’s likely that a nonprofit orga- ter should undertake,” Andrea said. nization would operate from the Keeping the center open would 56,000-square-foot building at 51786 benefit both the region and the lo- Shelby Parkway, Andrea said. Ac- cal automotive industry, Andrea cording to CoStar Group, the build- said, and shows that as Delphi and ing is owned by Southfield-based the North American automotive Kojaian Cos. industry go through a restructur- About eight tier-one suppliers ing period that “we can convert are involved in discussions, but the resources that we have in Andrea declined to name them. Southeast Michigan into new ac- Lindsey Williams, Delphi’s man- tivities that keeps Michigan at the ager of corporate affairs, con- forefront of automotive research.” View a replay On April 23, Crain’s Detroit Business will publish a landmark guide firmed that Delphi is working to Brent Snavely: (313) 446-0405, of our March 19 see if there is a way it can assist [email protected] webinar to venture capital in the State of Michigan. Following As a bonus, 10,000 copies will be mailed to venture capitalists, angel The Money: investors, corporate venture capital executives and private equity firms Where Angel outside the state of Michigan. The Michigan Economic Development Investors and BANKRUPTCIES Corporation and the Michigan Venture Capital Association will distribute Venture Capitalists The following businesses filed for Ave., Detroit, voluntary Chapter 11. an additional 5,000 copies as their official guide to VC activity in the Chapter 7 or 11 protection in U.S. Assets: $1,904,554.86; liabilities: See Opportunity Bankruptcy Court in Detroit March 16- $3,356,290. go to Great Lakes State. The Guide will be distributed at events, tradeshows 22. Under Chapter 11, a company files A&H Fuel Stop Inc., 15880 Livernois and trade missions, including BIO, Growth Capital Symposium, etc. a reorganization plan that the court Ave., Detroit, voluntary Chapter 11. crainsdetroit.com must approve. Chapter 7 involves to- Assets: $41,351.82; liabilities: tal liquidation. SPONSORED BY $2,310,490. ISSUE DATE: April 23 To advertise, telephone 313.446.6052 Northeast Mechanical Services Inc., Starfire Limousine Services L.L.C., CLOSE DATE: April 9 or e-mail [email protected]. 26401 Northline Road, Taylor, volun- 12003 Kilbourne St., Detroit, volun- tary Chapter 11. Assets and liabilities tary Chapter 11. Assets and liabilities not available. not available. Cattleman’s Meat Co., 1825 Scott St., H.G. Hicks Inc., dba Top Value Car & Detroit, involuntary Chapter 7. Assets Truck Service, 44731 Woodward Ave., and liabilities not available. Pontiac, voluntary Chapter 7. Assets A&A Land Co. Inc., 15880 Livernois and liabilities not available. Ave., Detroit, voluntary Chapter 11. 417 Boyne Ave. L.L.C., Royal Oak, vol- IMPORTANT TO IMPORTANT PEOPLE Assets: $2,000,000; liabilities: untary Chapter 11. Assets and liabili- www.crainsdetroit.com $2,300,490. ties not available. A&A Sunoco Inc., 13300 Livernois — Compiled by Bowdeya Tweh DETROIT BUSINESS MAIN 03-26-07 A 27 CDB 3/23/2007 6:35 PM Page 1

March 26, 2007 CRAIN’S DETROIT BUSINESS Page 27 Bridge: Rival plans move forward Pay: Raises below 4% ■ From Page 1 ■ From Page 3 mendation is expected this sum- since 2001-2002. ers offering variable compensa- mer. Some form of a variable pay tion to a broader range of the em- The Minister of Finance also system seems to be more impor- ployee population,” Marrs said. recommended authorizing Trans- tant for larger companies, and “Even the administrative assis- port Canada to seek private part- while 20 percent of variable pay tant might be eligible for some ners for the Canadian side of a plans have no effect on business type of reward. In years past, publicly owned bridge. Transport outcomes, about 80 percent do, ac- those rewards were just for the Canada is the Canadian equivalent cording to other industry re- top management.” of the U.S. Department of Transporta- search, Marrs said. Factors Norm Fletcher, marketing and tion. important in a variable compen- creative director for Think 360 Mark Butler, communications sation plan include accuracy in Creative in Troy, said he works al- specialist for Transport Canada, ORDER measuring performance, commu- most exclusively on a perfor- said Canada’s House of Commons B nication and an emphasis on indi- mance-based pay system. likely will vote on the budget with- vidual performance, Marrs said. Fletcher has a small staff and CROSSINGS Another survey by Watson in two weeks and both items relat- pays a stable of freelancers on a The Detroit River Wyatt found that employers are ed to the Detroit River Internation- per-project basis. al Bridge Project are being International Crossing Project putting more money into perfor- Overall, he said, inflated his- supported strongly. is considering three possible mance-based rewards. A third of crossings. The exact points torical pay scales in the local ad- Meanwhile, the Detroit Interna- the participants in a 2006-2007 na- of entry and departure are vertising industry because of tional Bridge Co., owner and opera- tional strategic rewards report still being determined. longstanding automotive ac- tor of the Ambassador Bridge, re- said they had increased cash in- counts have made it hard at mains committed to building a centives in 2006. twin span to the bridge that it Of the companies that use vari- times to negotiate competitive would own and pay for. The com- able pay for hourly, salaried and rates. pany announced two weeks ago executive employees, annual However, rates are coming down to reality and more in line that it has been granted two envi- traffic is expected to grow 128 per- requires, we’re required to grant bonuses are the most common with other cities such as Min- ronmental permits by the Michigan cent, according to the Detroit Riv- them a permit.” type of variable pay. neapolis, he said. At the same Department of Environmental Quality. er International Crossing Study. McCann said the company is Sales and marketing positions time, quotes for clients are in- Karen Thompson, communica- The Detroit International working with other agencies on are most weighted with variable creasingly based on specific busi- tions specialist for the U.S. Environ- Bridge still must receive environ- other permits. pay, followed by legal, human re- ness goals, such as helping a mental Protection Agency, told mental approval from the Canadi- Matt Allen, press secretary for sources and accounting jobs. In- creasingly, not only are managers bank increase deposits. Crain’s Friday that the EPA is re- an government, Butler said. Detroit Mayor Kwame Kilpatrick, eligible, but so are support staff. Jennette Smith: (313) 446-0414, viewing documents related to the Butler said a decision on said the mayor is most concerned project but couldn’t elaborate. “We’re finding more employ- [email protected] whether to issue the permit to De- with keeping the crossing in De- Dan Stamper, president of De- troit International Bridge would troit, regardless of owner, builder troit International, said the bridge likely be made by the end of the or operator. company’s schedule remains on year. The environmental assess- “With so much trade going back track and that the company plans United Solar gets $9.1M Air Force solar-cell contract ment includes studying noise, air and forth, we just don’t want it to begin construction in early 2008. here, it needs to be here,” Allen Auburn Hills-based United So- contract with United Solar to de- The MDEQ permits help cement quality, vibration and water said. “The mayor is committed to lar Ovonic L.L.C., a subsidiary of velop solar-cell technology for meeting that goal, he said. drainage issues, Butler said. Cana- whatever stays in Detroit. Not in Energy Conversion Devices Inc. spacecraft and airplanes. “It’s one of the important steps dians have until April 5 to submit Ecorse, not Downriver, not at the (Nasdaq: ENER), said March 15 Since 2003, United Solar has and keeps us on schedule,” Stam- public comments. Blue Water Bridge or Buffalo, New that the Air Force Research Labora- worked with the lab to develop ul- per said. “We have our presiden- Butler said federal law in Canada York.” tory at Kirtland Air Force Base in tralight solar arrays on thin stain- tial permit authorization. We are requires that Transport Canada re- Andrew Dietderich: (313) 446- New Mexico has exercised an op- less steel foils and polymers. moving forward based on what we view the application on its merits. 0315, [email protected] tion on an 18-month, $9.1 million — Tom Henderson said we would do 15 years ago.” Robert McCann, press secretary A presidential permit is needed for the MDEQ, said issues such as for any construction project that noise and air quality are handled connects the U.S. with a foreign by other agencies in the U.S., such country. The permits are typically as the Michigan Department of issued by the U.S. Department of Transportation. State. The MDEQ deals more with is- About 25 percent of all goods sues such as water runoff and how traded between the U.S. and Cana- a project might affect wetlands. da cross the border at Detroit. By “Ours was a small piece of what Sigma 2035, passenger traffic is expected they need to get,” McCann said. “If to increase 57 percent and truck an application meets what the law congratulates this year’s Harwell: CDs bootlegged “American Dreamers” ■ From Page 1 and everyone “There are possibly other people potential number that could be in around the country doing the same the marketplace,” Spicer said. “It’s thing,” Milanovich said. “We’re taken a project that was off the working to realize the not sure if they’re directly con- chart initially and forced us to step nected. It something we’re going to back and spend time on enforce- American dream. look into and then refer to the ju- ment and investigation rather risdiction they’re in. It’s most like- than marketing the product. It has- ly out of state.” n’t helped the sales.” Elham Shayota, P.E. Two calls to Wayne County Harwell, who has written a Prosecutor Dennis Doherty were number of books and found suc- President & CEO not returned. cess as a corporate spokesman The audio book is for sale at since leaving the broadcast booth, eharwell.com and through major isn’t alone in being targeted by CD online retailers. It will be avail- pirates. In 2005, 1.2 billion counter- able at Comerica Park this season. Spicer said an unknown number feit CDs were sold worldwide, or 37 percent of all compact discs sold, Sigma Associates, Inc. is a multi-disciplinary consulting of counterfeit copies of the CD col- engineering firm headquartered in Detroit. For over 28 according to the International Feder- lection have been made, and he es- years, we’ve been dedicated to our clients, to the timates the potential financial loss ation of the Phonographic Industry, details, to the bigger picture. Our specialized to Harwell at $500,000. He said the which fights piracy on behalf of expertise ranges from water/wastewater, shipping companies involved in 1,400 companies worldwide. industrial/institutional facilities, to infrastructure, distribution of the CDs say they “I’m a little disappointed that it transportation and related IT and asset have no knowledge of missing or happened,” Harwell said. “I guess management services. counterfeit copies, and that his that’s the way of life these days.” own investigation is continuing. Bill Shea: (313) 446-1626, bshea@ www.sigmaassociates.com “We are terrified to think of the crain.com DETROIT BUSINESS MAIN 03-26-07 A 28 CDB 3/23/2007 6:06 PM Page 1

Page 28 CRAIN’S DETROIT BUSINESS March 26, 2007 Banks: Go through growth spurt School: Final chapter? ■ From Page 3 ■ From Page 3

and CEO of Detroit-based Pangborn Design Ltd.; mended by a committee for closure or successful at fighting that number. In Shukri David, chief of cardiology at Providence SMALL BANKS, BIG PLANS merger in 2007-08, including Mason, fact, Smith guarantees kids in his pro- Hospital in Southfield; and former Fifth Third, which it termed underutilized, as the gram will improve their reading scores Eastern Michigan CFO Daniel Davis — have The following is a summary of planned community bank activity for this year. For district tries to fight the loss of state by 100 percent. raised nearly a third of the minimum target of information from 2005 and 2006, see the online funds because of declining enrollment. “The program has made a difference $15 million. version of this story at www.crainsdetroit.com, The school board was scheduled to vote here for our children,” said Mason Prin- The first of the new community banks to be- under “This week’s Crain’s.” on the closure list cipal Edrire Wilson. gin operations, with a soft opening on Feb. 28 late Friday. “It’s working. We for friends and family and an official opening 2007 new banks If Mason closes, it A CLOSER LOOK are having kids to the general public scheduled for April 19, is will be the second Rex Smith, 52 who are nonreaders Lotus Bank on Grand River Avenue in Novi. It Ⅲ Level One Bank, Farmington Hills. Applying for state and regulatory approval. CEO and time Smith’s reading read. The program is targeting health care and information-tech- Ⅲ Residence: Birmingham President is Patrick Fehring, former president, program has been has made a signifi- nology service companies and members of the Ⅲ Company: Founder of Beach Fifth Third Bank, Eastern Michigan. He has forced out. Two Communications L.L.C. in Pleasant Ridge. cant difference.” Indian and Asian communities. raised nearly a third of $15 million minimum years ago, Grayling El- She said Wilson’s Ⅲ College: Master’s in adult and CEO and President Satish Jasti was a loan target from co-founders and directors and plans ementary, where guarantee is solid: officer at National Bank of Detroit and Standard to begin fundraising among general public in continuing education and bachelor’s Smith started the degree in education from Michigan State 100 percent of stu- Federal Bank as they went May and open in September. program and the University. dents who complete through mergers and name Ⅲ Lotus Bank, Novi. Had a soft opening in Hand-in-Hand Founda- Ⅲ Other experience: Taught the program read at changes. As headquarters February and has official opening planned for tion that supports it, their grade level. April 19. Targeting health care and information- government, economics and U.S. history moved out of state, he said closed for similar in New Haven and Croswell-Lexington Wilson is frus- the tendency was for loan technology companies, as well as members of the Indian and Asian communities. reasons. school districts after college. Also trated because she decisions to move, too. “We’re very pro- worked at Michigan State and for Ross feels her school has Ⅲ First Michigan Bank, Troy. Hopes to open in In August 2005, he quit his Detroit. We’d like to Roy Advertising, now a subsidiary of too much to offer to last big-bank job, with Key May or June. Funded mostly by high net-worth Omnicom Group’s BBDO Worldwide. individuals but in part by MBT Financial Corp., stay at the school, close, and she Bank, having decided he Ⅲ Family: Wife, Sue. Daughters Jessica, the holding company for Monroe Bank & Trust. but that may not be hears little from could have more impact as a 16; Emily, 14, Erica, 12. Ⅲ First Spirit Bank, southwest Detroit. Hopes possible,” Smith the district about community banker, with his Jasti to open by June 30. Will target African-American said. It takes at least what’s going on. local decision-making au- and Hispanic small-business owners and Wayne six months for the program to get up to “They don’t tell us anything. We don’t thority. He began organizing the holding com- State University-affiliated start-ups and young speed, and there’s a significant cost in know. There are lots of rumors out pany, Lotus Bancorp Inc., full-time. The bank got technology companies at the TechTown creating the reading area. there,” she said. “There are some approval from state and federal regulators in incubator just north of campus. Smith, a former teacher himself, said schools that have to close, but this is not July and has raised $12.6 million with a goal of he’s talked to other school districts he one of them.” hitting $16 million by June 30. Expansions/changes considers more stable, but in the mean- Privately funded programs such as The bank’s chairman is Jitendra Patel, presi- Ⅲ Dearborn Bancorp Inc., holding company for time is campaigning to keep Mason Smith’s are the sort of investment criti- dent and CEO of Michigan Inns Inc. Vinaya Gavi- the Community Bank of Dearborn. Closed in open. His company, whose clients in- cal to the not only the success of stu- ni, a pediatrician who has clinics in Dearborn January on the $70 million purchase of clude The Detroit dents, but the dis- Heights and Novi, is chairman of the holding Birmingham-based Fidelity Financial Corp. and Medical Center and trict itself, said Tom company. Other board members of the holding its seven branches in Oakland County. General Motors Corp., THINKING (AND DOING) BIG Watkins, who was company include Jay Shah, former chairman Ⅲ New Liberty Bank, Plymouth. In site selection has sent promotion- Rex Smith’s desire to better his state superinten- and president, Spalding DeDecker Associates Inc., for a second branch to open this year in al materials to each community is extending beyond the dent from 2001-05. Detroit; and Farmington Hills immigration at- Plymouth, Canton Township, Northville or school board mem- reading program he funds at Detroit’s “It’s absolutely Westland. Plans to open a third branch in 2008 torney Amarnath Gowda. The bank expects to ber to lobby for the Mason Elementary. critical that we or 2009, according to CFO Rebecca Stephens. begin trading on the over-the-counter bulletin school and pro- On March 15, he launched the “Do have this kind of Ⅲ Main Street Bank, Northville. Opened a board in a year to 18 months, once a market in gram. Something” campaign that’s built around philanthropy and second downtown branch on Main Street in its stock has been established. “We’re empathet- a blog (www.dosomethingblog.com) giving in Detroit. January. Received federal approval on March 12 where visitors are asked to “express Most investors in community banks are ic to the fact they’ve The hope is to find a to open a branch in Plymouth. their hopes and dreams.” high-net-worth individuals, but at least one of got to make some way to keep the pro- the new banks, First Michigan Bank of Troy, Ⅲ Peoples State Bank, Madison Heights, The site asks: “If you could do anything opened its 13th branch in Troy in January and hard decisions,” he gram alive for the which hopes to open in May or June, is funded today, what would it be? Would you do has broken ground on a new branch in Grosse said, but pointed children,” he said. in part by the MBT Financial Corp., the bank- something nice for yourself or would you Pointe Woods expected to be open in the fall. out that the pro- want to do something for someone else? Such programs holding company for Monroe Bank & Trust. Doing site selection for its first bank in Detroit. gram “doesn’t cost Would you seek to heal a personal issue pick up where MBT President and CEO H. Douglas Chaffin — Tom Henderson the district a cent.” or redeem a social cause?” schools often can- said his bank’s $540,000 investment in First On Smith’s pay- By Thursday, there were 143 entries. The not, he said. Michigan is a less-expensive entry to Oakland chise in Detroit and Kentucky Fried Chicken roll are five reading hope is that as submissions build, “Without the ex- County than opening a branch or making an franchises in Illinois and Georgia — con- specialists, four of others will offer suggestions on how tra help, it’s very acquisition. MBT will own just under 5 per- vinced him that a communi- whom are retired participants can accomplish their difficult (for stu- cent. The two institutions will share some objectives. ty bank can fill a niche larg- Detroit teachers. dents) to catch up,” loans. er banks can’t. They work with 95 Smith, owner of Pleasant Ridge-based he said. The investment “diversifies us geographi- marketing firm Beach Communications Don Parker, a former vice kids at Mason, District adminis- cally into an area that’s been growing. We L.L.C., plans to have his team seek out president of private banking about a quarter of tration officials liked the area and we liked the management trends from the submissions and publish at Comerica, will be president. the school’s stu- could not be reached team,” he said. the findings. Kathy Bledsoe recently left dents, one-on-one for comment. The Gerald Wasen, a former senior loan officer at “It’s all about impacting behavior,” Smith her position as president of every day in a phon- Rev. Jimmy Wom- the Metropolitan Bank of Farmington before it was said. “The focus should not be on First Independence Bank of De- ics-based program. ack, president of the bought by Citizens First Bank of Port Huron in negative times, but on how we can troit to help First Spirit raise Mason paid to create positive things.” Detroit school 2004, is CEO and president of First Michigan. money. Snider said the bank, have two custom- board, did not re- First Michigan’s board of directors includes The campaign is being publicized through Snider which will be privately held, designed, air-condi- an e-mail campaign and an outdoor turn three messages. Frank Hennessey, CEO and chairman, Hen- is about one-third of the way to its target for tioned rooms that board on Woodward Avenue north of Nine Wilson expressed nessey Capital, Huntington Woods; Walt fund-raising of $10 million. replicate the Mile Road, and through public-relations another frustration: Watkins, Detroit’s former chief development The build-out of the headquarters in the ecosystems of a rain partnerships. lack of parent sup- officer and former president, Bank One, Michi- forest and a beach — Bill Shea port. While some gan; Garry Carley, former vice chairman of Brinker Building on Michigan Avenue and West Grand Boulevard is nearly finished. built in the school. have signed a peti- Standard Federal Bank; Shirley Stancato, presi- Both are painted in tion to keep the Sergio Mazza, a First Spirit board member, dent and CEO, New Detroit; Joe Dumars, presi- vibrant colors and have unique features school open, few have attended meetings is the former president of the American National dent, Detroit Pistons; and Gary Shiffman, CEO, such as kid-size chairs made out of foam or been active campaigners for the Standards Institute and of Memorex Computer Southfield-based Sun Communities Inc. and molded to look like rocks. Shelves of school or Smith’s program. Supplies, a division of Memorex Products Inc. He The bank will be privately held, with about books are everywhere — as are children “The parents have not given it the at- 100 shareholders. Wasen said the bank is close is president and CEO of SenSound L.L.C., a reading on their own or with the teach- tention we hoped they would have,” she to raising its minimum target of $11 million. Wayne State spin-off that is about to move into ers. said. First Spirit Bank hopes to open before the end TechTown. SenSound offers analysis software The program also provides guest Smith remains hopeful the school will of June and will target African-American and to reduce noise in finished products and manu- speakers and field trips for the students. stay open. He and his wife read there sev- Hispanic small-business owners and Wayne facturing systems. “Most of these kids, their chance of eral times a month, and employees from State University-affiliated startups and young Mazza said he will help First Spirit vet tech success in life is limited,” Smith said. his company come monthly. The couple technology companies at the TechTown incuba- companies and evaluate their technologies. “Without being able to read, they have tentatively plans to expand the program tor just north of campus. “You can’t use the same loan evaluation no chance.” to adults and younger children. Donald Snider is president and CEO of De- methodologies for technology companies,” said Smith points to a statistic from the Na- “This isn’t magic,” he said. “Kids that troit-based Paper Plas Inc., a DaimlerChrysler sup- Mazza. “It’s a little more work for the bank, but tional Assessment of Educational Progress, have the capability to learn, you have to plier, and chairman of First Spirit Bancorp Inc. in the long run it presents a tremendous growth known as the “nation’s report card” is- provide the environment. They just He said years of frustrations with a variety opportunity and develops long-term loyalty.” sued by the U.S. Department of Education, need a little something extra.” of big banks with his current and past busi- Tom Henderson: (313) 446-0337, thenderson that 37 percent of U.S. fourth-graders Bill Shea: (313) 446-1626, bshea@ nesses — he used to own a McDonald’s fran- @crain.com don’t read at grade level. His program is crain.com DETROIT BUSINESS MAIN 03-26-07 A 29 CDB 3/23/2007 6:19 PM Page 1

March 26, 2007 CRAIN’S DETROIT BUSINESS Page 29 Budget: Some support tax hike if need is proven www.crainsdetroit.com ■ From Page 1 EDITOR-IN-CHIEF Keith E. Crain PUBLISHER Mary Kramer, (313) 446-0399 or Otto, whose company provides human-re- the Senate avoided deeper cuts in the per-pupil [email protected] ASSOCIATE PUBLISHER Christopher Crain, (313) source management services to businesses, like SURVEY RESULTS: COMERICA MADE RIGHT allowance and in revenue sharing, as well as 446-1645 or [email protected] payroll and tax administration, benefit plan- the alternative of increasing taxes on already- EXECUTIVE EDITOR Cindy Goodaker, (313) 446- MOVE SERVICE TAX UNPOPULAR 0460 or [email protected] ning and risk management, said he’s convinced ; struggling residents and businesses. DEPUTY MANAGING EDITOR Michael Lee, (313) that “if the business community is healthy and Forty-four percent of Crain’s readers surveyed by He said lawmakers had to set priorities and 446-0416 or [email protected] ASSISTANT MANAGING EDITOR/FOCUS Michelle vibrant, then we’ll have enough money to sup- Epic-MRA say they think that Comerica Inc. made “distinguish between what we need, and what Martinez, (313) 446-1622 or port social programs.” the right choice in moving its headquarters to we want. And that’s a difficult job for anybody [email protected] Texas. BUSINESS LIVES EDITOR Shawn Selby, (313) The survey also found that many business- to do.” 446-1654 or [email protected] people believe a gross-receipts tax would be less Thirty-two percent thought it was the wrong Kinley said the Senate action was “a step in GRAPHICS EDITOR Nancy Clark, (313) 446-1608 fair than Michigan’s current single-business decision, while 24 percent weren’t sure. the right direction, in that the Senate Republi- or [email protected] COPY EDITOR Vic Doucette, (313) 446-0410 tax. A gross-receipts-type tax is a component Twenty-two percent attributed the move to cans have put forward enough spending reduc- or [email protected] being considered in several SBT-replacement Michigan’s poor economy, while 25 percent tions and reforms and DATA EDITOR Anne Marks, (313) 446-0418 or cited growth in Texas. [email protected] plans in Lansing, including some from busi- changes to solve the current WEB EDITOR Dan Eizans, (313) 446-0473 or ness organizations. Other survey results include: budget issues.” [email protected] WEB DESIGNER/PRODUCER Ai-Ting Huang, Forty-three percent of those surveyed viewed 84 percent were dissatisfied with the state’s Bishop said the Senate ac- (313) 446-0403, [email protected] a gross-receipts tax as less fair than the SBT, economy, but slightly more than half believe the tion “is not a perfect solu- EDITORIAL SUPPORT Anita Duncan, (313) outlook for their own business is good. 446-0329; Joanne Scharich, (313) 446-0419 while 19 percent said they thought it would be tion,” and the state still Gov. Jennifer Granholm’s proposed 2 percent NEWSROOM (313) 446-0329, FAX (313) 446- more fair and 38 percent were undecided. needs to find more ways to 1687 TIP LINE (313) 446-6766 Sarpolus said the survey’s findings may re- services tax was unpopular with 60 percent or more opposing it for both consumer and significantly cut government REPORTERS flect that many businesses don’t pay the cur- business-to-business transactions. However, 47 and save money. For exam- Robert Ankeny: Covers the city of Detroit, Wayne rent SBT and fear they would have to pay some- County government, and law. (313) 446-0404 or percent preferred the services tax to an increase ple, the state needs to do [email protected]. thing under a gross-receipts structure. in the state income tax. more to control corrections Bishop Sherri Begin: Covers nonprofits and education. Otto said a gross-receipts tax doesn’t take 70 percent said they think a 2 percent spending, he said. (313) 446-1694 or [email protected] Andrew Dietderich: Covers health care, into consideration whether the business is services tax, if enacted, would be increased in Bishop said other growing areas like Medic- transportation, international business and earning a profit. “I think you should tax profits. the future. biotech. (313) 446-0315 or aid are difficult to address, with budget choices [email protected]. To tax other components that have nothing to 76 percent said beer taxes also should being actions that affect the providers or Med- Sheena Harrison: Covers small business, retail do with profits I think is a mistake,” he said. increase if taxes are raised on tobacco products icaid eligibility. This time, it was the providers. and nonautomotive manufacturing. (313) 446- and liquor. 0325 or [email protected]. The survey, taken last week in the days lead- But ultimately “we’re going to have to talk Tom Henderson: Covers banking, finance and ing up to Thursday’s flurry of budget action, technology. (313) 446-0337 or about eligibility in our state, and the benefits [email protected]. shows 48 percent of businesspeople wanting the gets. Combined with spending cuts in an execu- we provide,” Bishop said. Bill Shea: Covers media, advertising and state to continue to cut taxes and state pro- marketing, entertainment, the business of sports, tive order presented by Granholm and ap- As for the Jobs Fund shift, Bishop said the and Livingston and Washtenaw counties. (313) grams, while 36 percent said all possible budget 446-1626 or [email protected] proved by the Senate Appropriations Commit- money helped avoid higher cuts in the Michigan cuts had been made and taxes should not be cut Jennette Smith: Covers real estate and tee, the moves would erase the state’s Department of Community Health and Medicaid. hospitality. (313) 446-0414 or further. [email protected]. current-year, $942 million deficit. Bishop said he is concerned about issues that A majority, 54 percent, believe the budget Brent Snavely: Covers auto suppliers, steel and Senate-passed cuts included: have been raised with the fund’s awards restaurants. (313) 446-0405 or can be balanced without negative impact just [email protected]. ■ Moving $34.1 million available for the next process and its ultimate job-creation track by making cuts. But 28 percent said all possible LANSING BUREAU round of awards under the 21st Century Jobs record. “What I want to see happen with that budget cuts have been made, and tax and fee in- Amy Lane: Covers business issues at the Capitol, Fund, to the state’s general fund. (See related sto- Jobs Fund is what I voted for (in the fund’s 2005 telecommunications and utilities. (517) 371- creases are needed. 5355, FAX (517) 371-2492, [email protected]. or inception,) and that’s to create jobs,” Bishop 115 W. Allegan, Suite 220, Lansing 48933. Sarpolus said the support for further budget ry below.) ■ said. He said he is open to negotiation on the cuts shows that Granholm has not convinced A $39.9 million reduction in revenue-shar- ADVERTISING Jobs Fund issue. businesspeople that the state has cut all it can, ing payments to local governments, about $12 ADVERTISING DIRECTOR Marla Downs, (313) Mike Shore, chief communications officer 446-6032 or [email protected] amid continuing messages from others, includ- million of which would affect Detroit. ■ for the Michigan Economic Development Corp., SALES INQUIRIES: (313) 446-6052; FAX (313) ing business organizations, that government is A $10 million reduction in the Bureau of 393-0997 said that “when all is said and done, the Legis- too fat. “The only thing they’ve been hearing State Lottery’s $18.6 million advertising budget. NEW BUSINESS DEVELOPMENT MANAGER Cathy The money was shifted to the school aid fund lature will realize the value of the MEDC and Ross, (313) 446-0307, [email protected] for years is that more cuts can be had,” Sarpo- ADVERTISING SALES Jeff Anderson, Terri lus said. budget. keeping our programs whole.” Engstrom, Matthew J. Langan, Tamara Rokowski, ■ A $7 million, 1 percent cut in Medicaid Indeed, the Epic-MRA survey shows signifi- Dale Smolinski Until businesspeople feel the pain of budget WESTERN ACCOUNTS Ellen Mazen (Los Angeles) cuts or are sure of the depth of the state’s bud- provider rates. cant support for investments in new and (323) 370-2477 ■ A $3.6 million reduction in arts and cultur- emerging areas of the economy like alternative CLASSIFIED MANAGER Melissa McKay, (313) get crisis, they’ll continue to feel more can be 446-1692 eliminated, he said. al grants. energy and biotechnology, as well as tourism. CLASSIFIED ACCOUNT EXECUTIVE Christina Tricia Kinley, director of tax policy and eco- ■ A $57.4 million, $34 per-pupil cut to schools. Sixty-three percent of respondents said the Jaranowski, (313) 446-1655 ■ A 4 percent cut to the Legislature’s budget state should increase investment in such areas, MARKETING DIRECTOR Michelle Minor nomic development at the Michigan Chamber of MARKETING ASSISTANT Jennifer Dunn Commerce, said that state government’s budget and a 4 percent reduction to most state depart- while 30 percent said investment should stay MARKETING ARTIST Sylvia Kolaski is at “an all-time high” and businesspeople ments. the same. SALES SUPPORT Suzanne Janik, Andrea The survey also found support for Beckham, YahNica Crawford want government to reign in spending the way Senate action also included elimination of CIRCULATION Candice Yopp, Manager. they’ve had to, making difficult choices on is- the state’s Healthy Michigan Fund, elimination of Granholm’s “No Worker Left Behind” propos- PRODUCTION MANAGER Wendy Kobylarz pay increases in areas like adult home help, re- al, in which the state would provide up to two PRODUCTION SUPERVISOR Larry Williams, sues like health care benefits, future pension (313) 446-0301 benefits and administrative expense. ductions in transportation programs and a $21 years of free community college tuition to train SUBSCRIPTIONS (313) 446-0450, Budget cuts were the path that Senate Repub- million cut to the Detroit-Wayne County Communi- unemployed workers for new careers in high- (888) 909-9111 TO FIND A DATE A STORY WAS PUBLISHED: licans took last week. They voted down ty Mental Health board. demand jobs. Fifty-eight percent of business- (313) 446-0367 or e-mail the Crain Information Granholm’s proposed 2 percent services tax The Senate restored funds to prevent Michi- people surveyed said they favored the idea, Center at [email protected]. and approved $632.7 million in reductions in gan State Police trooper layoffs, and Senate Ma- while 37 percent were opposed. CRAIN’S DETROIT BUSINESS IS PUBLISHED BY CRAIN COMMUNICATIONS INC. the state’s general fund and School Aid Fund bud- jority Leader Mike Bishop, R-Rochester, said Amy Lane: (517) 371-5355, [email protected] CHAIRMAN Keith E. Crain PRESIDENT Rance Crain SECRETARY Merrilee Crain TREASURER Mary Kay Crain Executive Vice President/Operations William A. Morrow Group Vice President/Technology, Manufacturing, Circulation Michigan VC-funded firms generate impact, study says Robert C. Adams Vice President/Production & Manufacturing Dave Kamis Corporate Director/Circulation BY TOM HENDERSON The study showed that $6.55 in Fund and the $95 million Venture vestors L.L.C. Patrick Sheposh CRAIN’S DETROIT BUSINESS revenue was created for every dol- Michigan Fund, should boost Michi- Those venture capital firms, G.D. Crain Jr. Founder (1885-1973) lar spent on Michigan companies, gan’s ranking in years to come. which had to make matching in- Mrs. G.D. Crain Jr. Chairman (1911-1996) Though Michigan continues to and one job was created for every “That $200 million of direct in- vestments, will in turn invest in EDITORIAL & BUSINESS OFFICES: lag national leaders California, 1155 Gratiot Ave., Detroit MI 48207-2732; (313) $19,959 spent. vestment will be leveraged with emerging companies. Nth Power, 446-6000 Texas and Massachusetts in the Cable address: TWX 248-221-5122 AUTNEW DET That figure for job creation other venture capital and will like- which will partner with NextEnergy amount of venture capital invested Subscriptions $59 one year, $98 two years. Out ranked Michigan 18th among ly total $800 million,” he said. of Detroit, invests in alternate-en- of state, $79 one year, $138 for two years. in its companies, investments here states. Those companies had com- “Michigan had $438 million in ven- Outside U.S.A., add $48 per year to out-of-state ergy companies; Venture In- rate for surface mail. since 1970 have had a significant bined revenue of $13.1 billion, 24th ture capital under management in Reprints: For inquiries call the reprints department vestors, which is negotiating on an impact, according to a study re- among states; and the $2 billion cu- 2005, so to go from $438 million to at: (800) 494-9051, Ext. 144 , or at office in Ann Arbor, invests in [email protected] leased Wednesday by the National mulatively invested in 227 compa- over $1 billion in a couple of years health-care and IT companies; Ar- CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is Venture Capital Association. nies over the years also ranked (would be) a dramatic increase.” published weekly by Crain Communications Inc. at boretum focuses on health-care 1155 Gratiot Ave., Detroit MI 48207-2732. From 1970-2005, about $2 billion 24th. In January, the first three in- Periodicals postage paid at Detroit, MI and companies. additional mailing offices. POSTMASTER: Send was invested in Michigan compa- Ned Staebler, director of capital vestments from the Venture address changes to CRAIN’S DETROIT BUSINESS, nies, which in turn generated $13.1 markets development for the Michi- Michigan Fund, for undisclosed The study was conducted by Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in billion in revenue. In 2005, compa- gan Economic Development Corp., amounts, were made to Arboretum Waltham, Mass.-based Global In- U.S.A. nies in the state that had been said two recent pools of invest- Ventures L.L.C. of Ann Arbor, San sight Inc. Entire contents copyright 2007 by Crain Communications Inc. All rights reserved. funded with venture capital em- ment money created by the state, Francisco-based Nth Power and Tom Henderson: (313) 446-0337, Reproduction or use of editorial content in any ployed 100,202. the $109 million 21st Century Jobs Madison, Wis.-based Venture In- [email protected] manner without permission is strictly prohibited. DETROIT BUSINESS MAIN 03-26-07 A 30 CDB 3/23/2007 6:37 PM Page 1

Page 30 CRAIN’S DETROIT BUSINESS March 26, 2007 RUMBLINGS WEEK IN REVIEW FROM WWW.CRAINSDETROIT.COM, WEEK OF MARCH 17-23

Ad agency chief takes Holdings L.L.C., an invento- new Web-based service Meijer plans to ry-counting firm based in called Click-to-Talk, which Chamber starts over as chairman of CATCH Auburn Hills. allows patients to make an Jim Berline, co-founder Terms of the deal, which electronic request to speak and chairman of Bloomfield invest $123M is expected to close in the with a DMC representative Hills-based advertising first half of 2007, were not instantly, talk to a nurse, group for young agency Berline Inc., has been disclosed. RGIS reported schedule an X-ray or test, named chairman of Caring in Michigan $560 million in revenue in schedule an appointment Athletes Team for Children’s & 2005 with a doctor or get help Henry Ford Hospitals chil- in 2007 RGIS ownership will finding a doctor. professionals dren’s charity. keep a significant stake in Pontiac-based St. He succeeds Edsel Ford II, eijer Inc. plans to in- the company after the deal Joseph Mercy Oakland who was chairman for the he Detroit Regional that the city does consider- vest $123 million in closes, according to a com- launched a new electronic past 13 years. M Michigan opera- pany statement released Chamber today able business with Comeri- medical records system CATCH was T launched its solution ca and also would tions this year — a sign Thursday. Thursday that will cut pa- founded in 1987 by to preventing Southeast “consider the global that the Walker-based gro- per use at the hospital by 70 then-Detroit Tigers Michigan’s “brain drain.” banking market cery chain remains com- percent annually in the manager Sparky An- Siemens VDO to separate Fusion, a networking and place.” mitted to the state, Presi- derson and has a hospital’s clinical areas professional development Allen said that dent Mark Murray told from parent; prelude to IPO board-designated and save about $500,000 a organization, aims at keep- Kilpatrick has been Crain’s Tuesday. endowment fund Siemens VDO Automotive year, the hospital said. ing young talent between working on his 2007- Meijer’s 2007 spending of nearly $7 mil- Group will be carved out of Automotive News re- 21-40 living and working in 2008 budget, due to will include two new stores lion. parent corporation Siemens ported that Canadian sup- the region. be presented to city in Allen Park and Lenox AG in May, Automotive plier Magna International Inc. The chamber is soliciting council April 12, Township and an $18 mil- News reported, in a “neces- has joined with an un- participants and its Web and hasn’t consult- BITS & PIECES lion expansion of its region- Berline sary step” toward an initial named private-equity group site, fusiondetroit.org, is up ed with city Treasurer Jef- al distribution center in Crain’s sister publica- public offering of the auto- to make an offer to buy the and running, said Jon frey Beasley or CFO Roger Lansing. The Allen Park tion, Advertising Age, count- motive unit, a Siemens Chrysler Group from Daimler- Kreger, director of commu- Short about changing banks. store is expected to open in ed the Woodward Dream May and the Lenox Town- VDO spokesman said. Chrysler for $4.6 billion to nications for the chamber. Allen also said that if Kil- Cruise among its Top 10 The group’s first event is patrick and his top finance ship store in August. Siemens VDO Automo- $4.7 billion, according to Brand Events in its March Murray said Meijer has Thursday at the Pulse aides should decide to tive Group will be re-estab- Brett Hoselton, an analyst for 19 issue. The Woodward invested $463 million in lounge. The chamber de- switch banks, the mayor lished as Siemens VDO Auto- KeyBanc Capital Markets. cruise — going on its 13th Michigan since 2005, in- clined to offer details on doesn’t need council ap- motive AG, which will Former Reagan admin- year— attracts more than cluding $246 million in Friday afternoon, saying operate as a stand-alone istration budget director proval, but might consult 1.7 million car buffs and Southeast Michigan. they will be on the Web site business but remain a sub- David Stockman could face with council members on gives presenting sponsors Meijer has 89 Michigan today. sidiary of Siemens AG in federal criminal charges as such changes. such as Eaton Corp. reach stores — 43 in Southeast Annual individual mem- Munich, said spokesman early as today for account- akin to audiences it would Michigan. The company has David Ladd. ing irregularities and in- bership is $48 for chamber get “advertising on niche bought more than $6 million Jaffe starts Israel complete financial disclo- members and $65 for non- cable shows,” Ad Age said. in Southeast Michigan land Collins & Aikman members. The March 29 practice group The cruise includes for future expansion, but ON THE MOVE sure at and April 12 events are free. 40,000 classic cars and will has not yet announced any Corp., according to Wednes- Southfield-based Jaffe Allen Park-based Vincent Archer, vice presi- roll down Detroit’s main new store plans for the re- day’s Washington Post. Stock- Raitt Heuer & Weiss P.C. has Meridian Automotive Systems dent of the Diversity Network, street Aug. 18. gion after 2007. man was CEO of the South- a for-profit human-re- established an Israel prac- Pontiac is sharing with Inc. has named former field auto interiors supplier sources company in De- tice group chaired by part- Troy-based advertising Chrysler group CEO Jim from 2002 until it filed Chap- Holden troit, and son of former ner Noam Raz. The group agency Leo Burnett Detroit an Schools to fight separate its nonexecutive ter 11 in May 2005. chairman. mayor Dennis Archer, and will assist U.S. individuals award for its interactive on- A group of shippers research funding Kimberlydawn Wisdom to Karrie Doman, founder of Af- and companies with trans- line promotion of its 2006 and other interests are su- Nine Michigan universi- vice president of communi- ter5Detroit.com, a social Web actions in Israel, and advise Pontiac Solstice GXP. The ing the state to invalidate a bronze Reggie award is for ties have formed a coalition ty health, education and site that covers metro De- Israelis in their U.S. affairs, new requirement that interactive/online/wireless to fight a move by Michi- wellness, Henry Ford Health troit events are heading the Raz said. oceangoing vessels must promotion, including an in- gan’s three largest research System, Detroit, remaining group. Jaffe will inaugurate the obtain a state permit before group with a breakfast teractive pavilion for the universities to be carved surgeon general of the state into their own budget bill. they can use Michigan April 26 at 7:30 a.m. in the car in the 3-D real-time vir- of Michigan. City not moving accounts The Education Alliance for ports, and are also seeking Townsend Hotel in Birming- tual universe Second Life (www.secondlife.com). Michigan announced its for- a permanent injunction to from Comerica — yet ham. Four local companies mation on Monday. The BRIEFLY prevent state enforcement. Yaacov Fisher, former se- The city of Detroit isn’t rank on the 2007 list of Top coalition contains Oakland Howell-based Smarts Oil The parent company of nior research economist planning to move any of its 50 Companies for Diversity University, Eastern Michigan & Gas Inc. has bought a 640- Troy-based LaSalle Bank for the Bank of Israel and ex- funds from Comerica Bank compiled by DiversityInc., University, Western Michigan acre piece of land in North- Midwest N.A., Netherlands- managing director of Prae- “right now,” Mayor Kwame which publishes a monthly University, Central Michigan west Texas and plans to hire based ABN Amro Holding N.V., dicta Ltd., Israel’s first Kilpatrick’s press secretary magazine and a Web site de- University, Ferris State Univer- a company to drill for more has entered into merger provider of computerized Matt Allen said last week. voted to racial and gender sity, Grand Valley State Univer- than 2 billion cubic feet of talks with London-based economic information sys- sity, Lake Superior State Uni- On March 6, when Com- equality. They are: Ford Mo- natural gas and almost Barclays plc, a press release tems, will be the keynote versity, Michigan erica announced the bank tor Co., No. 5; General Motors 600,000 barrels of oil, a com- issued Wednesday said. speaker. To register, call Corp., No. 34; Comerica Inc., Technological University, and was moving its headquar- pany release said Monday. The Federal Communica- ters and 200 top employees Sue Robinson at (248) 351- No. 37 and DaimlerChrysler Saginaw Valley State Universi- Fewer low-income par- tions Commission approved ty. to Texas, Kilpatrick noted 3000. Corp., No. 42. the sale of 24 radio stations, At issue is House Bill ents are being offered including WJR AM 760, WDVD 4351, which embodies Gov. health insurance on the job Jennifer Granholm’s pro- in Michigan, according to a 96.3 FM and WDRQ 93.1 FM, posal to place funding for new study by the Princeton, from Disney-owned ABC Ra- Webinar rewind the University of Michigan, N.J.-based Robert Wood John- dio to Las Vegas-based Michigan State University and son Foundation, with employ- Citadel Broadcasting Corp. Did you miss Crain’s Detroit PowerPoint presentations from Wayne State University in a er offers of health insur- The sale agreement was Business’ first foray into Webinars speakers David Weaver, president of separate appropriations ance to parents with modest originally announced in the Great Lakes Angels Inc.; last week? Not to worry; we’ve got bill. incomes falling three times March 2006 and at the time you covered. Mahendra Ramsinghani, senior vice president, As introduced, bills in as fast as offers to parents had a $2.7 billion price tag. Crain’s panelists revealed which Plymouth Venture Partners I L.L.C.; Jan Garfinkle, managing the Legislature propose to who earn more money. It’s unclear when the deal company attributes make angel director of Ann Arbor-based Arboretum give all universities the Trading of Ann Arbor- may close. investors and venture-capital firms Ventures L.L.C.; and Ned Staebler, same 2.5 percent funding based education software decide to write a check, and which director of capital markets increase. maker ProQuest Co.’s shares business sectors are showing the OBITUARIES development, Michigan Economic will be suspended on the greatest opportunity for investment in Development Corp. New York Stock Exchange John O’Neill, who ran a Southeast Michigan. You owe You can view the program in its Blackstone affiliate buys starting March 28, the com- Detroit law firm and was a yourself a lunch hour to watch this WEB WORLD entirety free of charge at our Web controlling stake in RGIS O’Neill Kaichen and program. Daniel Eizans site. To launch the program, visit pany said Wednesday. partner in The Webinar, “Following the Money: www.crainsdetroit.com and click on An affiliate of The Black- The Detroit-based De- Mills in Bloomfield Hills, Where Angel Investors and Venture Capitalists the Webinar Archive link in the upper right- stone Group has bought a troit Medical Center an- died of multiple myeloma see Opportunity,” includes the audio and hand corner of the page. controlling interest in RGIS nounced the launch of a March 16. He was 82. DBpageAD.qxd 3/1/2007 11:26 AM Page 1

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©2007 Aetna Inc. Plans are offered by Aetna Health of California Inc., Aetna Life Insurance Company and its affiliates. Health benefits and health insurance plans contain exclusions and limitations. The Aetna Personal Health Record (“PHR”) should not be used as the sole source of information about the member’s health conditions or medical treatment. 200707 REV 02/07 DBpageAD.qxd 3/7/2007 3:19 PM Page 1

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