20120319-NEWS--0001-NAT-CCI-CD_-- 3/16/20126:48PMPage1 ©Entire contentscopyright2012byCrainCommunicationsInc.Allrightsreserved Chamber ated bythe interninmichigan.com Rogers said. not dozensorhundreds,” business internshipsfilled, to helpgetthousandsofsmall- with thestudents.Ourgoalis help andarewillingtowork businesses (that)needthe them connectedwithsmall munications forSBAM. Rogers seeking internships,said 8,000 studentsregisteredas link toSBAM. ber toincreasewiththenew organizers expectthatnum- tered asseekinginterns,and has 410smallbusinessesregis- ing forinterns. other smallbusinesseslook- students withstartupsand based programtohelpmatch the tion ofMichigan launched inNovember. Strategic Alliance Page 20 Largest generalcontractors, survived loans; one sought fed Two companies introduction expectedsoon Personal propertytaxbill Michigan matchingprogram SBAM joinsInternin

NEWS- www.crainsdetroit.com Vol.28,No. Crain’s Crain’s Second StageExtra This JustIn Page 3 Intern inMichigan,at “The challengeistoget Intern inMichiganhas Intern inMichiganalready The Intern inMichigan , vicepresidentofcom- Small BusinessAssocia- and the Lists Zero to$1M- plus: Managing Detroit Regional — SherriWelch West Michigan plans tojoin quick growth, , wascre- Page 11 and re- web- Mike 12 in place1994. broadcast revenue.Itwasfirstput indexed againsttheNFL’syearly which is$120.6millionfor2012, petitive parity. socialism aimedatensuringcom- teams —ameasureofcorporate split evenlyamongtheleague’s32 lion inannualrevenueandare largest sourceoftheNFL’s$9bil- cap spaceperteamstartingin2013. $20 millionto$30insalary expected tomeananadditional from thebroadcastdeals,whichis $2 billioninnewannualrevenue for thespanofcontracts. That’s a63percentaverageincrease a combinedworthof$28billion. year andrunthrough2022have Fox ers approvednewTVdealswith pansion intelevisionrevenue. salary capthankstoaloomingex- der the Johnson lastweekispossibleun- troit Lions $132 millioncontractgivento advantage ofchange New contracts take to paybig frees Lions NFL TVdeal the DetroitLions. eight-year, $132millioncontractfrom Wide receiverCalvinJohnsongotan The annualsalarycaplimit, Broadcast revenuesarethe That translatesintonearly In December,theleague’s32own- The eye-poppingeight-year, , CBS CRAIN’S DETROITBUSINESS National Football’sLeague B and Y wide receiverCalvin B NBC ILL See Lions,Page25 THE ASSOCIATEDPRESS S that beginnext HEA De- ’s MARCH 19–25,2012 nor, withmanyofthecity’sfunc- board controlledbythegover- nine-member financialadvisory on ashortleash,answeringto the dealcouldhingeonone financial ruin.Butthesuccessof agreement tokeepDetroitfrom gotiating thetermsofaconsent Morgan Stanley city ultimatelychosea fers frominvestors.The to respond,withmultipleof- meters in2008. private operatorforitsparking tem, thecityofChicagosoughta maintain itsstreetparkingsys- ing. (Thecity’s city’s streetpark- year leaseofthe $1.15 billionfora75- partnership, netting Standoff swingsonconfidence,trust Game on Bing vs.Snyder Leasing ofassetscouldbringquickcashtocity picture, complicate the Credit swaps City finances: Page 26 Snyder’s draft, Lawyers lookat Will itfly? C State andcityofficialsarene- The privatesectorwasquick Short oncashtoimproveand OE LOOK LOSER CRAIN’S DETROITBUSINESS CRAIN’S DETROITBUSINESS B B Y Y Page 26 N N ANCY ANCY -backed K K troit, Bingis vision forDe- skills. agement Bing’s man- Mayor Dave has inDetroit Rick Snyder dence Gov. much confi- point: How AFFER AFFER In Snyder’s who spokethesamelanguage, businessmen-turned-politicians der andBingweretoutedastwo very differentrelationship.Sny- Snyder. consent agreementproposedby ernor, sayinghewouldn’tsigna troit. Bingvowedtodefythegov- nor isstagingatakeoverofDe- that thegover- Snyder and sure hetrusts that he’snot part, hassaid week. leased last agreement re- state’s consent draft ofthe according toa pointees selectedbythatboard, tions overseenbyateamofap- general hasquestionedwhether vers, andthecity’sinspector sial, unpopularamongmanydri- separate 2006deal.) parking garageswereleasedina Just ayearago,themenhad Bing, forhis The dealhasbeencontrover- Snyder the about $200million.IfBingand last fiscalyear,itsdeficitwas of cashinApril.Attheend balancing thebudget. ment, changingthetaxcode,and has reinventedstategovern- gether. Inthepastyear,Snyder were committedtoworkingto- wanted tousherinchangeand municipal assetscouldbeaway grades. timated $40millioninsystemup- say thedealsavedcityanes- ger payout. the citycouldhavegottenabig- manager tothemayor,butwith of thepowersanemergency agreements, bothgrantingmost have produceddraftconsent heads. Thecityandthestate inevitable. er —orbankruptcyfilingis by Snyder,anemergencymanag- the consentagreementdrafted to bringincashwhilemoving The cityisexpectedtorunout Bing hasn’tfaredsowell. For thecityofDetroit,leasing But Chicagoparkingofficials Snyder andBingareatlogger- Detroit CityCouncil the costsofoperations,main- tenance andinvestmentoff the books. Detroit couldlease See Standoff,Page26 JEFF JOHNSTON/CDB get neededcash. assets likeparkingto See Assets,Page27 $2 acopy;$59year JOHN SOBCZAK don’t sign ® 20120319-NEWS--0002-NAT-CCI-CD_-- 3/16/2012 6:05 PM Page 1

Page 2 CRAIN’S DETROIT BUSINESS March 19, 2012

MICHIGAN BRIEFS Two Men and a Truck picks Conversion Devices Inc. filed for bankruptcy in February, the com- first leader from outside family Comedy in cancer? Gilda’s Club in GR gets last laugh pany said it would sell its United So- Randy Shacka, COO of Lansing- lar Ovonic subsidiary. Better hurry. based Two Men and a Truck Interna- The idea was not so much to make money as to cies. It featured Bill Cosby, Betty White and Mar- Grand Rapids officials were ex- tional LLC, will become president of make merry. But it turns out that the second annual garet Cho; called on 1,300 volunteers; won a spot in pected to rescind a commitment to the moving company franchise in Gilda’s LaughFest might do both. The 10-day festival, the Guinness World Records for the largest rubber- use panels made in Greenville by August. Current president and CEO which ended Sunday, featured a mix of professional chicken toss; and drew visitors from 25 states, Cana- United Solar Ovonic on the city’s Brig Sorber will continue as CEO. and amateur comedians, improv groups, musicians, da and nearly every county in Michigan. water building, The Grand Rapids Shacka’s appointment marks dancers, speakers, films and exhibits. Traffic in the city’s restaurants and bars, particu- Press reported. Instead, the con- the first time the company will be The first LaughFest, held last March, attracted larly those that hosted events, appeared to increase tract will go to Canadian Solar Inc. led by someone outside the Sorber 472 performers and about 55,000 visitors and raised during the inaugural LaughFest, said Doug Small, “With Uni-Solar going through family. He has worked for Two $300,000 for Gilda’s Club, a nonprofit that provides president of Experience Grand Rapids, the city’s con- Chapter 11 bankruptcy, we do not Men and a Truck since 2002, serv- counseling, classes and other support for cancer pa- vention and visitors’ bureau. know how it’s going to be set up ing in operations management and tients and their families. Gilda’s Clubs are part of an international network and what the courts are going to al- franchise development. LaughFest originated as a way to celebrate the called the Cancer Support Community. low in terms of warranty items for Two Men and a Truck is the 10th anniversary of the Grand Rapids Gilda’s Club The Washington, D.C.-based network encompass- this project,” city engineer Mark largest franchise moving company — affiliated with a network of clubs named after Gil- es 52 clubs, 25 of which are called Gilda’s Club. DeClercq told The Press. “The orig- in the country, with more than 200 da Radner, the late comedian and member of the Michigan has a second Gilda’s Club in Royal Oak, inal base bid was to use Canadian locations and 1,400 trucks. original “Saturday Night Live” cast. plus the Cancer Support Community of Greater Ann Ar- Solar as the supplier, so we want to — Meghana Keshavan The first LaughFest was a collaborative effort of bor. go back to them.” 79 businesses, nonprofits and government agen- — Pat Shellenbarger Find business news from Lansing City Council set to decide around the state at crainsdetroit fate of proposed downtown casino as well as plans for a parking ramp band Internet access in Michigan: United Solar’s Ch. 11 costs it .com/crainsmichiganbusiness. on property near Cooley Law School Why are you not looking out the Sign up for Crain's Michigan All the debate about whether the Stadium. Those plans include a pro- window of your vehicle if not GR contract; Ontario firm gets it Business e-newsletter at crains city of Lansing can build a casino posed brownfield tax incentive. watching the road? When Auburn Hills-based Energy detroit.com/emailsignup. downtown is irrelevant unless the The project would construct a Last week, Ann Arbor-based Mer- Lansing City Council gives the OK, 125,000-square-foot casino next to it Network said it had reached a deal something it is scheduled to con- the Lansing Center and create 2,200 with the Mackinac Bridge Authority CORRECTION allowing Merit to buy access to ca- sider tonight, the Lansing State jobs, casino developers contend. Journal reported. The $245 million ble strands crossing the five-mile- Ⅲ A March 12 story identified Jeffrey Trent, Ph.D., as president and re- project is a joint effort of the city long bridge. Merit will use the ca- search director at Grand Rapids-based Van Andel Research Institute. and the Sault Ste. Marie Tribe of Mackinac Bridge’s wires to help bles in a fiber-optic project called Trent stepped down from that position earlier this month when Van An- Chippewa Indians, which would own REACH-3MC, designed to expand del Institute, the parent organization of the research institute, ended its and operate the casino. create statewide wireless network broadband access in Michigan. 3-year-old affiliation agreement with Translational Genomics Research In- Council members will be asked Set aside for the moment the ob- The first phase involves building stitute in Phoenix, Ariz. Trent will continue as president and research to approve the sale of city property vious question that arises when nearly 2,300 miles of fiber-optic in- director of T-Gen. Joint clinical research between the two organiza- to the tribe and agreements that you read a report about using the frastructure in rural and under- tions will continue. govern the sale and construction, Mackinac Bridge to expand broad- served communities in Michigan. 20120319-NEWS--0003-NAT-CCI-CD_-- 3/16/2012 6:53 PM Page 1

March 19, 2012 CRAIN’S DETROIT BUSINESS Page 3 Biz tax reform bills near action Focus: Real Estate the state’s business community. End of month is target on personal property levy “It’s a burdensome tax, and yet it’s a source of much revenue for BY MIKE TURNER Harrison Township, said he hopes der took office in January 2011, he the municipalities,” Nicholson said. So a plan to get rid of it has to SPECIAL TO CRAIN’S DETROIT BUSINESS to hold initial hearings on the sev- said revamping the system was a Developers with plans en-bill package before the Legisla- top priority. Lt. Gov. Brian Calley be thoughtful, he said. LANSING — Legislation that ture goes on break during the first is leading the administration’s ef- Brandenburg and Sen. Mike for Detroit wait on would change Michigan’s personal two weeks of April. fort. Nofs, R-Battle Creek, said last property tax system by eventually “I’d like to get these bills into Proponents of reforming the tax week that legislative staffers are market, Page 15 eliminating the industrial portion committee and move them for- law argue that the personal prop- crafting legislation that would re- — and also exempting most com- ward,” he said. Brandenburg erty tax makes it more expensive move or phase out the tax on all in- mercial businesses — is expected thinks the package will proceed to locate or expand in Michigan dustrial equipment by 2021. to be introduced by the end of the quickly through the Legislature than in other states. Also, businesses with less than Company index month, said senators involved because reform of the personal James Nicholson, president and $40,000 in commercial and indus- with drafting the plan. property tax will prove to be popu- CEO of Detroit-based PVS Chemi- trial property no longer would These companies have significant mention in this The plan also would provide im- lar during an election year. cals Inc., called the tax on equip- have to pay the tax beginning Jan. week’s Crain’s Detroit Business: mediate relief to small businesses. The expected introduction of the ment a disincentive for companies 1, 2013, Brandenburg said. The A Pass Educational Group ...... 13 Senate Finance Committee legislation comes after months of to locate in the state. He called it ALTe ...... 3 Chairman Jack Brandenburg, R- discussion. When Gov. Rick Sny- one of the next areas of focus for See Tax, Page 28 Angle Advisors-Investment Banking ...... 27 Belfor Holdings ...... 20 Beztak Properties ...... 3 Bright Automotive ...... 3 Business Leaders for Michigan ...... 19 Investors find Charter One-Michigan ...... 19 Citizens Research Council of Michigan ...... 26 Conway McKenzie ...... 26 Core Partners ...... 28 lots of value CoStar Group ...... 17 Critical Signal Technologies ...... 14 Detroit Lions ...... 1 Energy Conversion Devices ...... 2 in Birmingham EOS Worldwide ...... 14 Etkin Equities ...... 3 Excellent Schools Detroit ...... 9 Funeral home, other Farbman Group ...... 17 Flagstar Bank ...... 6 deals show land’s worth Fluid Cooling Systems ...... 12 Friedman Integrated Real Estate Solutions ...... 17 BY DANIEL DUGGAN Giarmarco Mullins & Horton ...... 26 CRAIN’S DETROIT BUSINESS Gilda’s Club ...... 2 Global Detroit Neighborhood Development ...... 18 A former funeral home in Birmingham JOHN SOBCZAK Former Business Development Manager David Donoughe looks over a plywood mock-up at the closed offices GroupGolfer ...... 11 will be transformed into a more than $23 mil- of Bright Automotive Inc. in Rochester Hills. In the foreground is a clay model of Bright’s planned fuel- Grubb & Ellis ...... 15 lion, 135-unit senior housing complex. efficient delivery van. Meanwhile, other Birmingham sales and Hired My Way ...... 11 lease deals are under way. Real estate bro- J.C. Beal Construction ...... 15 kers and developers say the city’s tony repu- Johnson Rosati Schultz & Joppich ...... 26 tation has helped drive strong property val- Kenneth J. Dalto & Associates ...... 26 ues and interest in new commercial Mackinac Bridge Authority ...... 2 developments. DOE program stalls out McGraw Morris ...... 26 “Birmingham land has more value than Merit Network ...... 2 anyplace else in metro Detroit,” said Bob Newmark Knight Frank ...... 15 Pliska, managing director of the Sperry Van Rising equity demands deter tech investors Phimation Strategy Group ...... 11 Ness office in Birmingham. PVS Chemicals ...... 3, 19 “There’s a high value for BY DUSTIN WALSH ceived a $535 million loan from the DOE in a small parcels of land be- CRAIN’S DETROIT BUSINESS similar program for clean energy. Quicken Loans ...... 15 cause everything is built The $25 billion federal advanced vehicles pro- Reising Ethington ...... 4 Bright Automotive Inc. and ALTe LLC have aban- up, and it’s in the center of gram was created in 2008 to spur development Renaissance Venture Capital Fund ...... 29 doned three-year efforts to secure U.S. Depart- everything. It’s Birming- of vehicles capable of 20 percent improvements Roxbury Group ...... 16 ment of Energy loans to bring their automotive ham.” in gas mileage. Current standards for corporate Sachse Construction ...... 20 technology to the market. The senior housing deal average fuel economy — or CAFE — require au- The paths for the two companies have proved Seneca Partners ...... 29 was closed by a joint ven- tomakers to meet a 54 mpg average across their to be case studies in the importance of a finan- Signature Associates ...... 3 ture of Southfield-based fleets by 2025. cial backup plan. Rochester Hills-based Bright Spark Force ...... 6 Etkin Equities LLC and Currently, the program has awarded $8 billion, Etkin went out of business this month; Auburn Hills- Sperry Van Ness ...... 3 Farmington Hills-based $5.9 billion of which went to Ford Motor Co. to up- based ALTe continues on with Chinese in- Taubman Centers ...... 19 Beztak Properties Inc. It was led by principals grade factories in five states. Only $50 million in vestors to float its business plan. Two Men and a Truck International ...... 2 Doug Etkin and Samuel Beznos from Etkin loans has been awarded since October 2009. But both think that the DOE’s Advanced Tech- and Beztak. A month after moving into its Rochester Hills Venture Investors ...... 25 nology Vehicles Manufacturing loan program The pair bought the closed William R. Hamil- headquarters, Bright Automotive is now defunct. Village Green ...... 15 confused the private equity and venture capital ton Funeral Home at 820 E. Maple Road. South- The startup abandoned its efforts to commer- markets and that the program’s slow pace crip- field-based Signature Associates was broker cialize its hybrid plug-in delivery van, called pled technology advancements toward greener on the deal. The asking price was $2.4 mil- Bright Idea, after withdrawing late last month its Department index cars. Both companies worked to manufacture hy- lion, with Birmingham real estate sources latest attempt to secure a $314 million DOE loan. brid and electric powertrains for fleet vehicles. saying the sale price was slightly less than $2 Bright, like many others, sought to revolu- BANKRUPTCIES ...... 4 The DOE, however, contends that these star- million. tionize the automobile by creating new power- BUSINESS DIARY ...... 22 tups’ inability to take “no” for an answer sealed Etkin said the building will be home to a train technology to achieve greater fuel econo- CALENDAR ...... 23 their own fates. 135-unit independent-living complex with a my and reduce U.S. dependence on foreign oil. DOE funding triggered a political maelstrom JOB FRONT ...... 24 development cost above $23 million. Con- But Bright wasn’t able to secure a loan before after the bankruptcy last fall of Fremont, Calif.- CLASSIFIED ADS ...... 25 struction will be under way once the city ap- running out of cash. based solar-panel maker Solyndra, and local KEITH CRAIN...... 8 provals are handled, with an 18-month con- Bright was founded in January 2008 from startups and financial experts are questioning LETTERS...... 8 See Birmingham, Page 28 See Loans, Page 29 the effectiveness of the funding. Solyndra re- MARY KRAMER ...... 9 OPINION ...... 8 Conference highlights Facebook news feed PEOPLE ...... 24 Video highlights from this month’s Crain's Make sure Crain's big stories of the week appear THIS WEEK @ RUMBLINGS ...... 30 Idea: Detroit conference can be viewed at in your Facebook news feed by liking us at WWW.CRAINSDETROIT.COM crainsdetroit.com/idea2012. facebook.com/crainsdetroit. STAGE TWO STRATEGIES ...... 14 WEEK ON THE WEB ...... 30 20120319-NEWS--0004-NAT-CCI-CD_-- 3/16/2012 5:52 PM Page 1

Page 4 CRAIN’S DETROIT BUSINESS March 19, 2012

CRAIN’S EXPANDS COOL PLACES TO WORK Patent office impact more than jobs: Crain’s Cool Places to Work www.coolplacestoworkmi.com by awards returns this year as Cool June 15. Places to Work in Michigan, Once registered, companies reflecting the expansion of the will be invited to participate in the A new local legal market could emerge program from covering surveys. businesses in Up to 400 Southeast employees will be Michigan to BY CHAD HALCOM The USPTO in Washington said review proceedings under the surveyed, businesses in the CRAIN’S DETROIT BUSINESS that it is “seeing really strong indi- Leahy-Smith America Invents Act, depending on entire state. cators” of local job interest and ap- enacted last year. company size. Detroit’s U.S. Patent and Trade- To manage the plicant skill sets and has coordinat- “Before the new act, there wasn’t The vetting mark Office will offer the city and its revamped ed some meetings with the local IP much post-grant review of a process runs from legal community more than sup- program, Crain’s is legal community, as well as South- patent,” he said. “Instead, there June through plemental research space or con- working with Best east Michigan universities and en- was a procedure for reissue, where August, with ference rooms to meet with patent Companies Group trepreneur organizations, for help a third party could bring up a ques- honorees receiving examiners when it opens in July. of Harrisburg, Pa. with talent and resources. tion and have an official just re- notification at the The patent office signed a five- In addition to an The patent examiner job open- view privately whether a previous- end of August. year lease to occupy 31,000 square employer ings, at salaries of $69,899 to $90,866, ly issued patent decision should be Businesses and feet of the Stroh Brewery head- questionnaire as are no real surprise. Neither is the revisited.” nonprofits can quarters building at 300 N. River has been done in focus on mechanical and electrical “Now, this opposition and other apply. Applicants Place. The Elijah J. McCoy United the past, Best engineering expertise in Detroit. proceedings put into place creates a Companies will must have a States Patent and Trademark Office is Up to six administrative patent more even and open battlefield be- survey employees minimum of 15 set to open July 16. judges, at salaries of $134,498 to tween the patent opposer and some- of participating employees working The federal agency has begun re- $165,300, could serve in Detroit as one seeking patent protection.” companies. The in Michigan and modeling in the former Parke- part of the USPTO’s Board of Patent The Board of Patent Appeals and combined, have been in Davis Laboratories space. It also 2012 business at least Appeals and Interferences. Interferences is expected to do less weighted results of one year, among quietly began listing jobs and re- Jim Stevens, immediate past work over time in “interferences,” the two will other criteria. viewing prospective patent exam- president of the Michigan Intellectu- or challenges to a patent applica- determine who qualifies for Cool iners and administrative patent al Property Law Association and a tion by a third party who claims to Places designation. Companies pay a fee based on judges last month. partner at Troy-based Reising be first inventor — and shoulder Best Companies supplies all company size to Best Companies to cover survey costs. The cost Also, the government is hosting Ethington PC, took part in one re- more of the formal opposition participating companies — ranges from $605 to $890 for a series of “USPTO Patent Examin- cent meeting with USPTO staff in processes in the act. regardless of whether they win online surveying, and $735 to ers Open House” sessions, starting Detroit and said the judges may re- Oppositions can include chal- the Cool Places recognition — with a Best Companies Group $1,630 for paper surveying. Saturday. flect a new market for post-patent lenges to a pending patent request Employee Feedback Report based Crain’s Detroit Business will based on failure to disclose a previ- on employee responses to the feature the recognized ous invention, or a claim that the 72-question survey. The report companies in the Nov. 5 issue patent is too broad and amounts to can help company executives and recognize their success at a an attempt by one business to lock identify strengths and Nov. 15 event at Emagine Theatre its competitors out of a market. weaknesses in their company in Royal Oak. The agency is also considering a culture and practices. Program details and samples floor plan design at River Place to To be considered for Cool of the employee surveys are include a public access area, where Places to Work in Michigan, available at visitors in Detroit could use com- companies must register at www.coolplacestoworkmi.com. puters to review government records for “prior art,” or past patents related to a proposed inven- tion that could affect the inventor’s legal standing to obtain a new one. Need growth capital? When businesses Business on There is also talk of “hoteling,” or face the up-and-down demands of modest office space devoted to em- The Data Privacy Challenge the rise? growth, purchasing goods, or even to make ployees who can telecommute, sug- payroll, Crestmark’s service and gesting some hires may come from innovative solutions can be the answer. outstate Michigan or elsewhere. We have the team for that. Recent estimates have placed Providing accounts receivable financing and staff levels between 25 and 50 em- asset-based lending to small- and mid-sized ployees when the office opens, then businesses nationwide for over 15 years. an increase to 100 by mid-2013. The average cost of a data breach is in Call me today for more information. Stevens said the local office, and the millions of dollars. Our legal team its judges, could create a local legal takes a comprehensive approach to data market for patent oppositions as privacy and network security to minimize Scott Frederick well as for overseas companies. The judgeships “might make De- risk and ensure an appropriate response. 248.267.1630 | [email protected] troit something of a destination for The stakes are high. that body of work, the way D.C. is a We are focused on destination for it right now,” he providing insight said. about best practices “It also opens a gate for interna- tional work to flow more directly and foresight for the into Detroit, since the cost of rep- data privacy issues resentation here is generally less on the horizon. than in the D.C. market.” Chad Halcom: (313) 446-6796, [email protected]. Twitter: @chadhalcom

BANKRUPTCIES The following businesses filed for Chapter 7 or 11 protection in U.S. Bankruptcy Court in Detroit March 9- 15. Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation. Sync Technologies Inc., 2727 Second McDonald Hopkins PLC Ave., Suite 123, Detroit, voluntary 39533 Woodward Ave., Suite 318, Bloomfield Hills, MI 48304 • 248.646.5070 Chapter 11. Assets and liabilities not available. Carl J. Grassi Stephen M. Gross James J. Giszczak Washtenaw Inc. Maintenance Ser- President Detroit Managing Member Co-Chair, Data Privacy and Network Security vices, 5819 Glen Creek Court, Ann Ar- bor, voluntary Chapter 7. Assets: Chicago • Cleveland • Columbus • Detroit • Miami • West Palm Beach $7,500; liabilities: $1,768,540. mcdonaldhopkins.com — Meghana Keshavan DBpageAD.qxp 3/9/2012 11:05 AM Page 1

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Page 6 CRAIN’S DETROIT BUSINESS March 19, 2012 At age 19, owner of 7 businesses a veteran entrepreneur

BY MAUREEN MCDONALD California. Foster called computer capacity resort hotel that employs “Initially his mom and dad were SPECIAL TO CRAIN’S DETROIT BUSINESS $250 A MONTH SURE ADDS UP teachers from schools in those areas 10 people and a travel agency that helping him out, but he had strong and asked for more referrals. Soon, employs two. ideas of his own. He got in the The holdings of Bradley Foster At age 10, when he barely could he expects to recruit supervisors At 17, Foster searched travel habit of depositing money from a ■ Spark Force LLC: computer get his arm over the teller’s counter, Spark Force LLC: computer and managers from nearby colleges. agencies for a good spring break very young age.” repair, Grosse Pointe Bradley Foster was depositing at “It’s all about building relation- spot and landed in the Castillo de With the success, Foster also has ■ Foster Equities LLC: real estate least $250 a month in the bank. The Foster Equities LLC: real estate ships,” said Foster, a full-time stu- Pavones resort in Pavones, Costa endured some glitches. At 15, he investment,investment, GrosseGrosse PointePointe money was revenue from his first dent at the Wharton School of Busi- Rica. He fell in love with the rural started a chauffeur service called ■ Castillo de Pavones SA: resort company, the Grosse Pointe Park- Castillo de Pavones SA: resort ness at the University of Pennsylvania atmosphere. Order My Ride because he wanted hotel, Pavones, Costa Rica based BCS Computers, Sales & Repair. in Philadelphia. He attends college A few months later, the travel an excuse to own and operate a ■ Sea-Earth SA: travel agency, Today, Foster, now 19, is the sole Sea-Earth SA: travel agency, on a full-ride scholarship and agent called to say the property BMW 760. But the competition San Jose, Costa Rica proprietor of seven small business- earns spending cash by selling could be bought and renovated for turned out to be overwhelming. ■ Tin Fish Boathouse: seafood es and the minority partner in an- Tin Fish Boathouse: seafood milkshakes to his dorm neighbors. $300,000. Walworth helped him Foster bought a restaurant at restaurant, Hubbard Lake, Mich. other. The businesses generated Not surprisingly, Foster has been conduct an accounting review Hubbard Lake east of Grayling be- ■ Edge Water Sports Camp: combined revenue of $800,000 last Edge Water Sports Camp: asked a few times whether he used while Foster researched the popu- cause his family owns a cottage Hubbard Lake, Mich. year, said Foster, who expects to his parents’ money to get started. larity of exotic vacation spots. nearby, and it ended up costing ■ Pics From Last Night: social top $1 million in 2012. Pics From Last Night: social “They helped, but it all started Walworth loaned Foster money to more than anticipated to make it media platform, Philadelphia The businesses range from real with the computer business,” he close the deal on the hotel. work. He draws young, affluent ■ SK8 Mile LLC (minority partner): estate to social media and travel SK8 Mile LLC (minority partner): said. “They always tell me that they Foster’s plan was to buy the facil- tourists with a water sports camp bike, board and skate shop, Romeo holdings. spent their money before I was ity, make physical improvements, on the restaurant property each Foster’s primary business is the born.” and turn it around for a profit. summer. computer repair service, now first one at 12. When the neighbors But he does credit his parents, One of Foster’s recent new en- Another dream Foster nurtures called Spark Force LLC, which gener- found out I could fix computers, Daryl and Elaine Foster, as the in- deavors is a humor website titled is to launch a social networking ated $250,000 in revenue last year they came calling.” spiration for going into business. “Pics From Last Night,” at pfln.me platform called Social Reel that and employs 25 part-time workers. Customers pay $50 an hour for For several decades, they ran Foster and inspired by the site Textsfrom- would rival Facebook. Craig Walworth, his best friend’s computer assistance, and the re- Graphics, which coordinated pub- lastnight.com. Foster’s principal at Grosse 57-year-old father, mentors Foster pair person gets $20 an hour. lishing and print services for maga- “Brad calls me every day with a Pointe South High School, Allan and helps manage Spark Force. When Foster was developing a zines, newsletters and advertising new idea for making money,” Wal- Diver, recalls the 4.0 grade-point The business employs high school strategy for recruiting laborers, a circulars. The automotive trade worth said. “His mind is constantly student with much regard. students as technicians. Foster saw math teacher suggested several journal Ward’s Auto World was one turning. He is maintaining his net- “Brad simply thought different- that friends, relatives and family ac- names of young people talented of their accounts. works and building websites from ly than his peers. He always quaintances felt more comfortable with computers, and Foster trained “Brad is the kind of kid who nev- his dorm room.” seemed to see the bigger picture when a familiar student came to them. They, in turn, trained other er hesitated. Everything he Foster’s longtime banker and made decisions for a greater their homes to fix their machines computer repair people in how to did, he followed through,” agrees. purpose,” Diver said. than when anonymous representa- respond to a dispatch, how to treat Daryl Foster said.The “Brad’s mind is always Foster offers this advice to other tives were dispatched from big-box customers and ways to test the younger Foster’s other going,” said Joe Semaan of young, would-be entrepreneurs: retail stores. Foster’s pediatrician quality of their work. businesses are not in the This story Flagstar Bank in Grosse Find a way to have fun and help was one of his first customers. Soon, he had a model for grow- same ballpark as Spark originally Pointe Park. He has worked others. Know when to stick with a “My parents worked out of the ing the business. Force. Two aren’t even in appeared at with Foster since the young business, but also recognize when house,” Foster said. “I was around www.detroit Referrals came in from family the United States. In Costa makeithere.com entrepreneur opened a sav- it’s become more of an ordeal than computers all my life and built my and friends in Ohio, Colorado and Rica, he owns a 30-person- ings account at age 9. it’s worth and should be disbanded.

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March 19, 2012 CRAIN’S DETROIT BUSINESS Page 7 ‘D’ gets nod from Vegas casino owners with local ties nority share in Riviera Holdings, the Foundation. hometown, as well as to Derek That investment follows their Stevens brothers parent company of the Riviera Hotel Greg Stevens is industrial engi- Stevens’ nickname and to the recent investment of $12 million to & Casino; a majority share in the neer and facilities manager for all downtown Las Vegas revitaliza- refurbish the Golden Gate casino, Golden Gate Hotel & Casino; and now four companies, vice president of tion taking place, VegasInc.com re- according to the report. operate Warren ownership of The D Vegas Casino Wolverine Carbide and treasurer ported last week. The Stevens brothers also dab- Hotel, according to Las Vegas Re- of The Cold Heading Foundation. Crain’s could not reach the bled in ownership of a minor- fastener makers view Journal reports. The brothers’ Las Vegas-based Stevens brothers on deadline Fri- league baseball affiliate of the Los Derek Stevens, the elder of the Desert Rock acquired The D casino day. Angeles Dodgers, acquiring the Las BY SHERRI WELCH two brothers, took over in 1994 as in October for an undisclosed The Stevens brothers plan to in- Vegas 51s (named for the nearby CRAIN’S DETROIT BUSINESS president and CEO of Cold Head- amount from the Don H. Barden vest $15 million in the Fremont Area 51 military base) in 2008 ing, the company his grandfather Trust, locking up a deal reportedly Street casino that will update its through their Stevens Baseball The Fitzgeralds Casino and Hotel Rene DeSeranno founded. initiated before Barden’s death in exterior and 640 rooms and estab- Group. in Las Vegas transferred to new Stevens continues to serve as May. lish a modern theme for the They sold the team in May for an ownership when the Detroit-based CEO of the company, plus the Barden had licensed the Fitzger- ground-floor casino and vintage undisclosed amount to Silver State Don H. Barden Trust sold it last year. three other affiliated companies at alds name, so it was not included slots on the second floor, while Baseball Group LLC. But it’s maintained its ties to De- that address, and Desert Rock, ac- in the sale. adding two bars — one inside, one Sherri Welch: (313) 446-1694, troit — including its new name. cording to the SEC filing. He is The D name pays homage to De- outside — according to the Review [email protected]. Twitter: The casino’s new owners, Derek also president of The Cold Heading troit as the Stevens brothers’ Journal. @sherriwelch and Gregory Stevens, operate sev- eral nut-and-bolt manufacturing companies locally, in addition to owning the Fitz and other casino interests. They renamed the casino last week The D Vegas Casino Hotel— re- portedly as an homage to their hometown, among other consider- ations. Locally, the brothers operate The Cold Heading Co., according to U.S. Securities and Exchange Commission filings. The third-generation family business in Warren produces fas- teners, nuts and bolts for the auto- motive, agricultural and heavy construction industries. Stevens is also CEO of several affiliates: Beachlawn Inc., Ajax Metal Processing Inc. and Wolverine Car- bide & Tool Inc. All four businesses are based from 21777 Hoover in Warren, ac- cording to the SEC filing, but Ajax has another site in Detroit, and Wolverine has a site in Roseville. The Stevens brothers also own Desert Rock Enterprises LLC, an in- vestment partnership that has holdings in several Las Vegas casi- nos. Those holdings include a mi-

NOMINATE ENTREPRENEURS FOR CRAIN’S SALUTE The deadline to nominate someone for Crain’s Salute to Entrepreneurs awards program has been moved to April 30. Crain’s is seeking nominations for entrepreneurs who deserve to be recognized for their innovation, problem-solving ability or sheer relentlessness. Anyone is welcome to nominate an entrepreneur, including entrepreneurs themselves. The awards are broken out by five revenue categories according to size. There is also a category for social entrepreneurs and one for “intrapreneurs,” or people within companies who have demonstrated an entrepreneurial spirit to help the company grow. Award winners will be recognized in the June 18 edition. Go to crainsdetroit.com/nominate for more information on the categories and the requirements to make a nomination. Questions? Contact Gary Anglebrandt, Web editor, at [email protected] or (313) 446-1621. 20120319-NEWS--0008-NAT-CCI-CD_-- 3/16/2012 5:50 PM Page 1

Page 8 CRAIN’S DETROIT BUSINESS March 19, 2012 OPINION LETTERS Bing shouldn’t dig in, PLAs go far beyond job sites Editor: I am curious why the article of March 12 (“Con- struction firms build cases for, against PLAs,” Page 3) omitted what the term project labor agreement really but help city dig out means. A PLA is not what it sounds like: a job site-specific etroit Mayor Dave Bing sounded more like someone agreement. It is a confusing label to encourage a re- thinking about his poll numbers than a steady-handed verse effect. leader last week in his sometimes petulant responses It is, simply put, to take out non-union contractors D by forcing them to sign a union agreement if they to a proposed consent agreement to rehabilitate city finances. want an opportunity to bid on or be awarded the job. In a public forum, the mayor said he was “100 percent op- The union will not allow a contractor to join for a sin- posed” to the proposed agreement and declared that “the gov- gle job site any easier than you can expect to become ernor does not run me or the people of Detroit.” only a little bit pregnant. Contrast that with the approach of City Council President A PLA is a full-blown union agreement that binds a shop as signatory to the union hall forevermore. There Detroit Free Press Pro Tem Gary Brown, who in a commentary is no distinction between a PLA and a regular union and widely distributed email explained the city’s dire finan- agreement between a union hall and a contractor. cial straits — it will run out of cash by the end of April — and I have firsthand knowledge of this fact. I was the gave his vision for how a consent agreement should work: successful low bidder on a several-million-dollar me- A messy agreement “A financial advisory board that is charged with the advising, chanical project at Wayne State University. A portion of the work connected steam to a new stu- Editor: reviewing and has complete oversight with strong teeth to en- Some thoughts about the consent agreement mess: dent dorm building that Walbridge Aldinger was con- Ⅲ force a recovery plan, while the mayor and city council are structing. The Walbridge-WSU contract (apparently) Mayor Bing’s ego is getting in Detroit’s way. If charged with implementing the plan and held accountable to the had a “harmonious labor” clause that mandated WSU you ask me, Gov. Snyder gave the mayor a way out that helped him save face. Sorry, governor, the mayor financial advisory board is the ideal solution. … The short-term to insist that any contractor working adjacent to their wants to ruin his legacy, without your help. sacrifices are necessary for the long-term gain of a thriving city.” dorm project sign a PLA. Ⅲ I arrived at negotiations with an open mind, think- Detroit officials need to stop whining about the Contrast that with Bing’s “you’re not the boss of me” alter- ing that a PLA would indeed be a PLA. It soon became $250 million dollars “owed” by the state. I doubt you’ll native consent agreement that proposes a largely ceremonial clear that there is no such thing as a PLA. To sign the find a city in Michigan that hasn’t gotten a major advisory board. PLA was to join the union, full up, 100 percent, period. haircut while revenue sharing has been slashed dra- matically. Gov. Rick Snyder’s administration has said that he’s open to All future projects my firm engaged in would be per- About that $250 million: That isn’t even a full year compromise. Brown’s constructive approach shows strong lead- formed with union-only labor if I signed the PLA. A PLA is no different than a union contract. of Detroit’s budget. In other words, you’ll get a couple ership in a difficult situation. The mayor should emulate it. PLAs remind me of the clever term “prevailing extra inches until you get to the cliff, but you’ll still wage.” The prevailing wage misleads the uninformed get to the cliff. into believing it is a realistic sampling of wages in a giv- Ⅲ Detroit was founded in 1701 — more than 300 Dearborn panel needs good will en area. The rate, published by the Labor Department years ago. This was 70 years before the Declaration of for the construction industry, is actually taken from Independence. It was French, then British before be- The resistance of the Dearborn Planning Commission to the collective bargaining units for each trade union. coming part of the United States. This has been De- Goodwill Industries of Greater Detroit’s plan for a thrift store This is another easily misunderstood dilemma for troit for a long time, and regardless of court actions or nonunion contractors in Michigan. financial status, it will always be Detroit. is starting to look a little tortured. Les Lenchner Alok Sharma A vote on whether to grant a special-use permit has been President, L A Mechanical Contractors Inc. Sharma Analytics tabled three times, and at the latest meeting, only five of the Royal Oak Detroit nine planning commissioners bothered to show up, Sherri Send your letters: Crain’s Detroit Business will consider for publication all signed letters to the editor that do not Welch reported last week on her blog at crainsdetroit.com. defame individuals or organizations. Letters may be edited for length and clarity. Email [email protected] Goodwill already has leaped several hurdles. Thrift stores are lumped in with adult entertainment in zoning regulations in Dearborn, so the nonprofit had collected signatures in sup- port of the store from 77 percent of nearby residents, well over the 50 percent required. TALK ON THE WEB But some still object, and the reasons appear to revolve From www.crainsdetroit.com around whether the store would adversely affect its neighbor- Re: Bing and consent agreement governor deserves our support. hood because of the “demographics” of the expected donors Reader responses to stories and Doug Jones Same old story: Just give us the blogs that appeared on Crain’s and shoppers. money and don’t tell us how to website. Comments may be edited You can see why Dave Bing was We would suggest those concerned drive the 15 miles along spend it. for length and clarity. such a fierce competitor in the Ford Road to Goodwill’s flagship store in Canton Township. Tired NBA. He never needed the job he’s Or check out thriving downtown Royal Oak, which has had a The people of Detroit have spo- ty of life in the city and education Salvation Army thrift store for years. ken with their feet about the quali- within Detroit Public Schools. The See Talk, Page 9 KEITH CRAIN: A real no-win proposition for Detroit What a mess. All we need in this any bargaining chips. the city of Detroit can no one has any money for Detroit. was brewing for almost half a cen- town is for the governor of Michi- None. And it is out of get out of this mess It looks like the governor gave tury. But that doesn’t mean you gan and the mayor of Detroit to time and out of money. without someone other the city a consent agreement that could continue to kick it down the stop talking to each other. It’s long overdue for than the citizens of De- was tough. Perhaps too tough to alley. The handwriting was on the This is not about politics. It’s the mayor and the De- troit kicking in some swallow on the part of Detroit wall for everyone to see for a very about survival. troit City Council to money. If he thinks that politicians. But it looks like it’s ei- long time, and Mayor Bing, the I sometimes get the feeling that face the stark reality. is a requirement, then ther a consent agreement or an City Council and their predeces- everyone in Detroit would be hap- It’s time for them to own he should be ready to re- emergency manager. Two choices, sors simply ignored it for too long. pier if the city imploded. Maybe up to the simple facts linquish control to who- neither one of which the folks in The governor is doing what has that’s what the city needs, and that they’ve had their ever brings the money. charge in Detroit are going to like. to be done. He’s giving the city of then the state would have to come chance and they’ve been Those folks, whether The Detroit politicians had a Detroit two choices, neither of in and pick up the pieces. unable or unwilling to they’re from Washing- chance to make some changes in which is pretty. Whenever you enter into negotia- make any of the necessary changes ton or Lansing, will be calling the the past few years because they Detroit doesn’t have a choice. tions with two sides, they usually that, regardless of how painful, shots. You can’t expect someone to knew what was coming. But for Let’s hope its leaders realize what both have something with which to might have averted or postponed give or loan money to this about-to- whatever reasons, they chose not choices they are facing and why. bargain. But unless I’ve been read- what is a rapidly approaching be-bankrupt city without taking to take the tough, painful medicine It’s time for them to face the ing the tea leaves differently than doomsday. control. Anything other than that that was required. harsh reality. In fact, it’s way over- everyone else, Detroit doesn’t have The mayor doesn’t believe that is unrealistic. The trouble is that This is a financial situation that due. 20120319-NEWS--0009-NAT-CCI-CD_-- 3/16/2012 11:31 AM Page 1

March 19, 2012 CRAIN’S DETROIT BUSINESS Page 9 MARY KRAMER: Biz can help workers with school choices

Here’s an idea for a new employ- performing schools. on. But the data can and private employers like DTE En- by 2020. ee benefit for large Detroit employ- (Call 313-309-1463 for help identify the very ergy Co. and Blue Cross Blue Shield Further, the ESD plan calls for ers that won’t cost a thing — but more information.) best schools and create adopted not just a school but helped Detroit to be the first major U.S. could have a big impact: Open the Parents are making a culture that demands their employees find the very best city with a 90-90-90 track record: 90 door to two nonprofits focused on choices, but they may the best. And some of schools? What if co-workers who percent of students graduate from helping parents make the best be choosing charters as those schools are tradi- were happy with their school choic- high school, 90 percent of those en- school choices for their children. bad as or worse than tional DPS schools. es helped spread the word to others? roll in college or post-secondary Then target employees who are the traditional public So how to spread the Word of mouth, after all, is the most job training and 90 percent of those residents of Detroit with school- schools they leave be- information more wide- powerful of all marketing media. do not need remedial work. age children. hind. That’s why the ly? Churches, obviously. Varner likes the idea of compa- 2020 is closer than we think. That Because it was featured last year parent, peer-to-peer The March 10 fair was nies allowing his group and Buck- school clock is definitely ticking. at the Detroit Regional Chamber’s counseling can work. held at a church. But man’s to bring information to em- Mary Kramer is publisher of Mackinac Policy Conference, the Dan Varner, CEO of employers are always ployees. “That’s a huge value-add,” Crain's Detroit Business. Catch her documentary “Waiting for Super- Excellent Schools De- talking about ways to he said last week. take on business news at 6:10 a.m. man” was seen by a lot of business- troit, says the marketplace is support education in Detroit. And Varner’s nonprofit, funded Mondays on the Paul W. Smith show people for the first time. The film evolving. Because DPS now has 40 they can provide an inexpensive largely by foundations, has a goal on WJR AM 760 and in her blog at follows parents in a handful of cities percent of all school-age children, way to do that. of ensuring that every child in De- www.crainsdetroit.com/kramer. desperately trying to get their chil- Varner says, the shopping is going What if the large medical systems troit attends an “excellent school” E-mail her at [email protected]. dren out of “failure factories” and into coveted spots at highly rated public schools, including charters. You would think that the top- performing schools in Detroit would have lines around the block, with parents begging to get their children enrolled. But you would be wrong. And that’s how employ- ers could help. A LOAN WITH Excellent Schools Detroit and the Detroit Parent Network held a “shopper fair” March 10 to tout nearly 30 of the best elementary, middle and high schools in Detroit and its fringes. Representatives from the schools were available, and the parent network had parent coaches on hand to interpret the school rankings and test scores, peer to peer. The schools included Chrysler Elementary, Edison Pub- lic School Academy, Bates Acade- my, Cornerstone primary and mid- dle schools, University Prep A CITIZENS BANK LOAN LETS YOU FOCUS ON THE FUTURE ... because the businesses Academy Science and Math and Cass Tech, Renaissance and Cesar that will succeed tomorrow are the ones that make the right choices today. They are Chavez Academy high schools. Hundreds of parents and chil- led by individuals who see opportunity for growth and expansion, and take action with dren attended the fair, but thou- complete confidence. A loan from Citizens Bank will keep you moving forward and sands will need to start making these kinds of choices. The sad fact never wondering, “What could have been?” is that some of the very best schools have plenty of openings. Last year, volunteers from De- Get the loan you deserve now. To make an appointment with a Citizens Banker, troit Parent Network knocked on 15,000 doors to bring information call 800-946-2264 or visit CITIZENSBANKING.COM/BUSINESS. to parents literally where they live, said Sharlonda Buckman, ex- ecutive director of the network and an alum of Crain’s 40 under 40 recognition. The network using Excellent Schools Detroit’s report card, found at www.excellentschools detroit.org, identifies schools that meet or exceed state test score av- erages and high schools that have composite student college ACT scores of 16.5 or better. “We’ll go door-to-door this year, too,” Buckman said. And on March 29, the network will run buses for parents to visit the best

TALK CONTINUED ■ From Page 8 in now, he did it to help the city. Don’t expect him to back down now, it’s not how he operates. john md

Re: Goodwill plans in Dearborn I swear I’m about ready to volun- teer for the Dearborn Planning Commission myself. These no-shows are inexcusable. If you can’t make meetings, resign. Matt Roush DBpageAD.qxp 3/12/2012 11:28 AM Page 1

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March 19, 2012 CRAIN’S DETROIT BUSINESS Page 11 Extra

growing small businesses

A CONVERSATION WITH

Dave Haviland, Quick off Phimation Strategy Group

Dave Haviland runs Phimation

Strategy Group, a consultancy based JEFF JOHNSTON/CDB in Ann Arbor. He has worked with the line second-stage companies since 2004 and speaks at events for second- stage leaders. Phimation’s 2012 Small Business To stay on track, fast-growing companies watch cash and hiring Trend Report offers advice for second- stage businesses. Haviland spoke with Crain’s Second Stage editor Gary BY GARY ANGLEBRANDT Anglebrandt about the report. AND MICHELLE MUÑOZ In your report, you advise second- CRAIN’S DETROIT BUSINESS stage companies to “consider how your o go from startup to $1 mil- business can be a platform for your lion or more in revenue in customers, partners and even other T a few years is impressive. competitors.” Can you expand on the It’s also stressful. competitor part? If you look at what Amazon has done with their Dealing with rapid growth marketplace, you realize that by right out of the gate without creating the infrastructure they losing control requires not needed to be able to offer books and only long hours but quick other products out to their customers, study in managing people and they realized that infrastructure could cash. also be useful to other companies. ... Here, Crain’s looks at a few One of the real strategic changes for businesses that started within companies is to realize that they can the past two years and have ei- deconstruct their own businesses and ther seen revenue pass $1 mil- say, “Let’s really focus on what we’re lion or expect to this year. really good at and be the best at that. How did the owners manage And if we really are the best at that, their rapid, early ramp-up? By then we can offer it out into the getting the right people and marketplace.” staying on top of cash flow. Can you give an example of how a product maker might do this? If a KENNY CORBIN ‘Fire, aim, ready’ Bobby Staszak, director of business development, formed GroupGolfer LLC with his brother and two friends in manufacturer were starting a new Web 2010. Last year, revenue was nearly $5 million. presence, or trying to figure out how to Bobby Staszak, director of get a broader presence, and they business development at “It can get out of control created an online store or an online GroupGolfer LLC, said people real quick. You can’t keep up portal, instead of just having it be have been the key to keeping their own content, they could say, The issue of any small business on customer service if you his business in line. “ don’t hire a customer service “Well, competitors, you come onto it, Staszak formed the business too.” By doing that, they’ll start getting bigger is growing as fast as person,” Staszak said. “Our in May 2010 with his brother, big thing was, as you’re start- creating some gravitational pull to Ron Staszak, and friends have that be more useful broadly. ... possible without losing control of it. ing to grow, you have to get Justin Ross and Don DeSeran- Strategically, a key issue for every ” someone to do more work. But no. They launched group- company these days is getting Bobby Staszak, GroupGolfer LLC to get more work, you have to golfer.com the following July. attention. get someone to find someone Last year, GroupGolfer to do more work.” So being less secretive can be brought in nearly $5 million tional 10 contractors. Last coming in, GroupGolfer had to beneficial? You have to believe that you One hiring issue Group- in revenue. April, after the sale of about have current staff handle cus- can run faster and better than anybody Golfer continues to struggle “The issue of any small 10,000 rounds, Staszak said an tomer service issues while else in your real core competency, and with is finding local, techni- business getting bigger is influx of customer service re- more people were hired. once you believe that, then you can cally skilled people. include all the other people, growing as fast as possible quests hit the company. Being “Our main thing that we did “We’re constantly hiring competitors, customers and anybody without losing control of it,” able to maintain the value of really well was being aware and (finding) that, ‘OK, this else, because even if they know what Staszak said. “I’ve gone 120 the GroupGolfer service for that this was going to happen, person won’t work out, get your playbook is, you’ll still be able to hours a week for the past two courses and customers was and it’s something we have to someone else in here,’ ” he execute it better than they will. years.” the top priority. take really seriously,” Staszak said. “We can’t find quality The report talks about how some The Mt. Clemens-based GroupGolfer’s main prob- said. “It comes fast, and you programmers in Michigan, “old guard” leaders will be cycled out company uses a similar model lem was in getting people to kind of have to react. It’s al- and Mt. Clemens especially. after the hunkering down of 2008 and as Groupon: If enough people handle the workload. most like ‘fire, aim, ready.’ ” Hiring is the biggest headache 2009 when businesses put leadership sign up for a deal to play a While it might be tempting The company quickly we have.” changes on hold. What is the biggest round at a given golf course, to hire ahead of time in antici- learned what to look for in Matt Mosher, co-founder and pitfall? The biggest pitfall is usually the discount kicks in. Group- pation of new work, the em- new hires. It was fine in the CEO of Detroit-based Hired My with the executive who has been Golfer lists deals for courses ployees will end up standing beginning to have people who Way LLC, which runs the job around a while, kind of politically in Michigan, Ohio, Florida around doing nothing if the could handle both customer site hiredmyway.com, said in- established. ... When you’re talking and California. expected growth doesn’t oc- service and technical matters. terest on both the hiring and about an executive who’s ... an old- The company employs 12 cur. The tradeoff is that when But eventually the company guard person, take it that it’s going to people directly and an addi- the new business did start needs to have specialists. See Quick, Page 12 be a yearlong process, or a year and a half, or two years. 20120319-NEWS--0011,0012,0013-NAT-CCI-CD_-- 3/16/2012 10:02 AM Page 2

Page 12 CRAIN’S DETROIT BUSINESS March 19, 2012 Second Stage Extra Quick: Control is key ■ From Page 11 When it came time to refinance my applicant side for Web development themselves in. commercial real estate loan, my former jobs in Southeast Michigan has Antaya has continued to operate spiked within the last few months. without a line of credit and plans bank decided my $2,000,000 loan Michigan has the talent, but the to seek one soon. Antaya subcon- problem is that talent immediately tracts fabrication of his systems to was small change to them. Thanks to looks outside of the state for jobs outside companies, which also First State Bank, my new loan is upon graduation from college, as- helps cash flow because he doesn’t suming tech jobs aren’t in Michi- have to pay them for 30 days once manageable. They realize it’s not about gan, he said. his customers pay. “It’s not that they aren’t here. “I’m not paying for labor until a building for my business…it’s about It’s that they aren’t looking here,” the product ships,” he said. “Being building my business. he said. in sales for years, I knew that cash GroupGolfer already has made flow is everything. ... That was my -Tom one adjustment to meet growth. In No. 1 concern.” First State Bank August, the company moved from As with his customers, Antaya Business Customer a “$600 back room” to a larger went into business with subcon- 3,000-square-foot space, Staszak tractor relationships in hand. said. The next hurdle is to hit new “They were all existing relation- advertising and marketing outlets ships from my previous employer. to fuel more growth. Staszak aims ... Before I started my business, in to double this year’s revenue from the planning stage, I knew I was last year’s. going to approach these compa- At First State Bank, we’re committed today – and every day – nies, that they were going to be to not only building businesses, but their success. With a range main subcontractors.” of commercial real estate loans, we offer financing for every Plan first Accepting a major purchase or- stage of your project. Cash flow control is a common der like the $730,000 one “keeps s#ONSTRUCTIONAND%ND-ORTGAGE&INANCING problem for rapidly growing small you up at night,” he said. “It’s an businesses. enormous amount of work, a pro- s/WNER/CCUPIED-ORTGAGE2ElNANCING!CQUISITION Bob Antaya, president of Fluid ject that size — keeping the sched- s3"! 3"!! 53$!AND-ICHIGAN3TRATEGIC&UND,OAN Cooling Systems LLC in Auburn Hills, ule, getting everything shipped on Programs knew that going into his startup, time and invoiced correctly — it’s which he launched in June. The a lot to think about and perform,” #ALL866-372-1275 today to learn more about the tools that company designs and supplies in- Antaya said. help move your business forward. www.thefsb.com/businessloans dustrial cooling systems, mostly for Fortunately for Antaya, Decem- 866-372-1275 use in automotive plants. ber is a slow month in his line of Earning your trust today…and every day. He left a job in the same line of work. But if other orders had come business to venture out on his own in at the same time, he “would and used his experience to safe- have been overwhelmed,” he said. guard against cash flow surprises “There’s a part of my business from the outset: His first customers cycle where I can’t tire out,” he were companies with which he’d said. “If I landed two or three other had relationships for years. jobs at the same time, ... I would That made it possible for him to have had to call the customer back get paid promptly for his first deliv- and say, ‘Look, I can’t do eight eries. He had conversations with weeks; I have to do 10.’ That’s not those customers from the start to acceptable. ... It becomes an in- make sure all parties were on the tegrity issue for me.” same page regarding payments. Planning ahead helped with “I knew I’d be able to rely on a cash flow but not planned out were portion of business coming from some of the easily overlooked them all the time. It’s a two-way things, like daily accounting. street. They want to see me do well, “On the everyday business stuff and I want to see them do well.” that needs to take place, I was Since the launch, his company weak,” Antaya said. has brought in $1.3 million in rev- Through his membership in En- enue — $883,000 of it by the end of trepreneurs’ Organization, he met an 2011. He expects revenue of $1.5 accountant and made the hire the million this year. next day. The trusted relationships al- lowed him to get paid early, often within a week, instead of the stan- Cash is king dard 30 days. His best customer Ed King, consultant to the Dear- pays well and early. born Chamber of Commerce and Troy “I invoice today, and sometimes Chamber of Commerce and former they cut me a check tomorrow,” director of Wayne State University’s Antaya said. Small Business Services, said cash In return, he gave prompt pay- flow is the most common problem ers a 2 percent discount. That for rapidly growing small busi- hurts when it’s for a large order — nesses. such as a $730,000 order he re- “Most people, when they get into ceived in December — but it’s business, they say, ‘If I grow too worth it to ensure cash stays flow- slow, I’m in trouble,’ ” King said. ing, he said. “But if you grow too fast, you’re in “It’s painful to take a 2 percent trouble.” cut out of that, but having that Customers may owe a business cash flow is everything. It keeps for services or products, and the my bank account full,” he said. company could go months without Payments for those first deliver- payment, King said. Meanwhile, ies were a crucial “quick shot in the business owner has employees the arm” for his startup, because to pay, resources to buy and other the money was needed in order to real expenses. Entrepreneurs end go after and fulfill new orders. up trying to make ends meet and Many new businesses, his includ- running out of cash. ed, can’t get a line of credit from “In the 30 years I’ve been work- banks, he said. ing with small business, I haven’t “I just started my business last met one that had enough cash,” month, and they’re asking me for King said. “It’s robbing Peter to credit references,” Antaya said of pay Paul.” the situation new businesses find See Next Page 20120319-NEWS--0011,0012,0013-NAT-CCI-CD_-- 3/16/2012 10:02 AM Page 3

March 19, 2012 CRAIN’S DETROIT BUSINESS Page 13 Second Stage Extra

From Previous Page as much of an issue as it is for oth- ference when you’re in the high When the Renaissance Center ers. But it’s still an issue. six figures,” Staszak said. opened, King said there was just Since nearly all of his incoming GroupGolfer at one point one office supply store. The store payments are online credit card changed processors to get better had a constant line out the door, payments, he’s had to renegotiate terms. Business owners should re- but where many people may have terms with his credit card proces- examine all contracts made at start- seen a thriving business, King saw sors. “Cash is king in any busi- up once money starts rolling in, he one in trouble. ness, and our thing was trying to said. “I went down there and I was figure out a structure where it was “You have ‘x’ amount in the talking to my friend and I said, on hand,” he said. bank when you start talking to ‘This guy is going to go out of busi- Credit card processing arrange- them. When ‘x’ amount of money ness,’ ” King said. “And within 120 ments that were appropriate for a comes in, you have a completely days he went out of business.” startup became less so when the different set of terms you’re talk- Cash flow for Staszak’s busi- company hit higher numbers. ing about,” Staszak said. ness, which has no inventory, isn’t “One percent makes a huge dif- The company faced a tense mo- ment one day last spring when it hit a predetermined limit on the volume of transactions it was sending through the processor. The processing agreement allowed for $250,000 in total transaction value for one year. The company did $300,000 in one day, triggering an automatic pause in the process- ing company’s system. When the people at GroupGolfer realized what was happening, “everybody’s stomach just dropped,” Staszak said. “We didn’t know it was bad to process more than what we thought we would.” After several phone calls to reach someone with authority to restart the processing, the prob- lem was soon fixed. “It took all hands on deck to get everything straightened out,” he said. “Within 15 or 20 minutes, we had the system back up, but it was a very quiet 15 minutes.” Hire, then trust Andrew Pass of Farmington- based A Pass Educational Group LLC also highlighted cash flow and peo- ple management as key stress points. He has learned to let em- ployees take more day-to-day re- sponsibility. He started A Pass in October 2009. The company hires free- lancers to generate educational content, such as course plans, syl- labi and assessment tests. Clients include Pearson, DeVry and Houghton Mifflin Harcourt. The company had $500,000 in revenue last year, and Pass projects $2 million this year. A Pass employs a few full-time ONE HU G ND IN R T E employees and about 75 free- A D R Y B E lancers, but that number can E A

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E S C 100 climb to 150. Pass said he is the only salesman, but he knows he can’t do it all and surrounds him- self with people he trusts to get things done correctly. “To run a company that is fast- growing, you need to have an un- derstanding of your own limita- Reinventing tions,” he said. “I’m not micro-managing.” Reinvesting His employees don’t make him nervous, but his cash flow does. As the company gets bigger, it has Reforms championed last year by the Michigan Chamber more bills to pay. Pass said wait- ing for payments has been his are saving job providers an estimated $3,984 per employee biggest stress. each year, spurring new jobs and investment in our Pass said it’s important to re- main calm and level-headed. He future. Michigan now leads the nation in job growth. has learned to trust others to han- dle operational tasks, such as let- But there’s more work to do to reinvent our state. Call ting his employees figure out schedules and hire writers. 517-371-2100 today and become a Michigan Chamber King said many entrepreneurs member to help move Michigan forward. face an identity crisis when going 00 from entrepreneur to administra- SAVE $100 OFF tor. Business owners work hard to get an idea off the ground, but at some point must let others take some of the responsibilities. “You must delegate,” King said. -PDBM

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Page 14 CRAIN’S DETROIT BUSINESS March 19, 2012 Second Stage Extra StageTwo Strategies A look at problem-solving by growing companies.

fied for the service ended up on Critical Signal Technologies Inc. If your company has overcome to share your story. waiting lists, while CST lost their Location: a tough challenge, other growing For other news on growing small We were able to get businesses want to hear about business. Farmington businesses, sign up for Crain’s “ it. Contact Web Editor twice-monthly Second Stage Solution: In 2009, the company Hills these agencies to Gary Anglebrandt at newsletter at launched a pilot program to offer a Description: [email protected] crainsdetroit.com/getemail. bare-bones version of its service to open up to other Personal emer- those customers. gency response The next year, CST did a full alternatives. service $15.8 million in 2011 budget cuts to programs such as rollout of the program, offering the ” Founder, presi- Medicaid began to hit more of the service for $18 a month, about half Jeffery Prough, dent, CEO: Jef- Problem to be solved: Critical company’s customers, especially the cost of the company’s typical Critical Signal Technologies Inc. fery Prough Signal provides 24-hour emer- those funneled to CST through or- offerings. Founded: 2006 gency response and remote health ganizations such as the Area Prough Those offerings come with bells Employees: 120 monitoring systems to sub- Agency on Aging. Revenue: $11.4 million in 2010; scribers. Over time, government Customers who no longer quali- and whistles such as glucose moni- toring, alerts that tell the company if a person has fallen out of bed and a machine that automatically dis- penses medications and alerts CST if the person doesn’t take them. The bare-bones version main- tained the 24-hour alert and two- way calling capabilities. “That way, (customers) at least have the ability to summon for help on a 24-hour basis,” CST President and CEO Jeffery Prough said. Should customers get back on agency support, their CST ac- counts can be converted to the agency. The program represented less than 2 percent of CST’s customers last year. But it did showcase CST’s other high-tech offerings to the other companies CST works with, Prough said. “We were able to get these agen- cies to open up to other alterna- tives like these automated pill ma- chines,” he said. “(Previously), they weren’t really receptive to other technologies.” The program helped fuel a 10 percent increase in CST’s govern- ment-funded business. Providing working capital Risks and considerations: Because CST is subscription-based and does not charge customers for to help GHAFARI reshape skylines equipment installation or usage, installation of its system for lower- rate customers represented an up- from the Midwest to the Middle East. front investment risk. And the reduced rate meant the TM investment would not see an im- Opportunity at every step. mediate return. The hope was that someday the customers would be able to come back to a service at a higher price A comprehensive export financing solution helped GHAFARI Associates grow in key expanding markets. As a point. leading architecture and engineering organization, GHAFARI operates worldwide. To help them, we coordinated “It basically took all of the profit out of that program,” Prough said. a full breadth of global credit, trade services and foreign exchange solutions. Structuring a groundbreaking “It was an if-then strategy.” Expert opinion: Gino Wickman, Export-Import Bank solution to expand working capital availability and reduce risks helped them continue founder of EOS Worldwide LLC in Livonia, said as a rule, pricing to build their business from Detroit to Abu Dhabi. structures should never be altered. If a company has a unique offer- ing and a correctly identified tar- Call 1.313.221.9394 or visit bankofamerica.com/businesssolutions get market, then pricing should not have to change. But there are exceptions, and those exceptions must be based on sound strategic reasoning, he said. “I have a very strong belief that you never mess with your pric- ing,” Wickman said. “You can

The Marvin I. Danto Engineering Development Center, designed by Ghafari, is located on Wayne State University’s campus in Midtown Detroit. find exceptions. ... If there’s a good reason to violate that, and “ Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment you’re willing to take on a loss- banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., all of leader ... then that’s an exception which are registered broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. Investment products offered by Investment Banking Affi liates: Are Not FDIC Insured y May Lose that can work. y Value Are Not Bank Guaranteed. ©2012 Bank of America Corporation ARM1N4G5 “But that’s rarely the case.” — Gary Anglebrandt and Michelle Muñoz 20120319-NEWS--0015,0016,0017-NAT-CCI-CD_-- 3/16/2012 10:47 AM Page 1

March 19, 2012 CRAIN’S DETROIT BUSINESS Page 15

REPORTER’S NOTEBOOK

Daniel Duggan BREAKING OUT OF THE CUBICLE covers real estate. Call (313) Apps let brokers be more 446-0414 or mobile, Page 17 write dduggan @crain.com. Real estate

Daniel Duggan Local tension rises over G&E Building patience The bankruptcy happening in New York for real estate firm Grubb & Ellis continues to cause headaches and rumors in metro Detroit. Developers ready their plans, await day when market outshines subsidies After more than a year of financial problems, the California firm — with BY DANIEL DUGGAN $2,000 a month. new,” he said. “You’re going to get a a significant Southfield presence — CRAIN’S DETROIT BUSINESS Filling that gap between rental in- higher rate on a new product, and you’re filed for bankruptcy in February and is come and project cost remains the role already seeing things in the $1.60 range. on the fast track to be restructured ocal and national developers have of subsidies from federal, state and local “The marketplace works, and espe- and sold. been quietly — or in some cases not so governments as well as philanthropy. cially when you’re 98 percent occupied The deal isn’t just a national issue, L quietly — shopping plans around De- There are hopes of a virtuous circle: with high demand, prices will go up.” it could wind up changing the troit for new residential developments. As more projects push up the limits of For example, units in the historic Brod- landscape of brokerage services in How long before plans become con- the rental rate, more development can erick Tower redevelopment are available the region. struction projects? That part remains a occur to push the limits higher yet again. for $1.35 per square foot, but In particular, the leading bidder for mystery. the penthouse units are more Grubb & Ellis is New York-based BGC Potential Detroit developers say eco- than $2 per square foot, said Partners Inc., owner of the New York- nomics, not demand, has kept projects Developers on the lookout Fred Beal, an investor in the based real estate company Newmark on the sidelines. Tony Goldman, the New York devel- project and president of De- Knight Frank. The market forces that drive rental oper who has taken on projects in Mia- troit-based J.C. Beal Construc- Farmington Hills-based real estate rates show newly constructed projects mi’s South Beach and New York’s SoHo, tion Inc., the construction investor David Friedman currently has don’t bring in enough money to support continues to show interest in Detroit. manager for the development. a license to operate an office of the construction costs. Instead, govern- Longtime developer Jonathan Holtz- “We expected to be above Newmark Knight Frank in Farmington ment subsidies and foundation grants man, who has built a national portfolio market, as we well should be,” Hills. continue to make projects feasible. of apartments from his Farmington Beal said. “We’re providing a Beal This situation has fueled a great That situation makes it a challenge Hills-based Village Green Cos., is also look- new product with upscale fin- deal of speculation as to what will for any developer to get a new project ing for a development project in Detroit. ishes and a glorious view of downtown. become of the Southfield Grubb & under way, said Richard Baron, co- Likewise, Cleveland developer John “We placed the rents a little bit above Ellis office and the Farmington Hills founder of St. Louis-based McCormack Ferchill, known for redeveloping the the market, and they’re gobbling it up.” Newmark office. Will they become Baron Salazar Development Inc., which has Westin Book Cadillac, has been looking at With 125 units for rent in the historic one office? If so, what name will be done projects all over the country and is Detroit projects. building on Grand Circus Park, the pro- on the door? Nobody at either firm is currently close to starting on a $15 mil- Quicken Loans Inc. founder and Chair- ject has reservations for 58 units. ready to touch that question yet. lion apartment project in Midtown. man Dan Gilbert has been exploring Also driving speculation is the next The trick is figuring out, down to the plans for a 350-unit apartment building move for Bloomfield Hills investor C. penny, what kind of revenue can be gen- on the site just north of the Compuware More to come Michael Kojaian. erated in Detroit to finance the cost of Building on Woodward Avenue. But duplicating the Broderick project Kojaian went into this bankruptcy developing or redeveloping a building. Gilbert said that while the current will require another complex layering of as the single-largest owner of Grubb In the central business district and rental rate might be lower than what is financial subsidies from foundations & Ellis stock, with 23 million shares Midtown, the average residential rental needed for development, a true analysis and multiple government programs. of common stock and 100,000 rate is $1.25 per square foot, Barron said. needs to reflect the idea It’s a series of hoops that any down- shares of preferred stock. “And if you can do something and that people will pay more town developer needs to jump through, What we do know: Shareholders make it work at that rental level, there for new product. as any of the speculative projects always lose in a bankruptcy. What we is strong demand,” he said. “But to have “A median will need some kind of subsidy. don’t know: Kojaian’s next move. a project that is profitable, you need to rental number A range of tax credits is ex- One thing is certain, given his shrewd be closer to $2, and that isn’t likely in combines old pected to be used for the next business acumen, he won’t go down Detroit right now.” product and round of developments, without a fight. For a 1,000-square-foot apartment, One indicator was his resignation that’s the difference between $1,250 and See Plans, Page 16 from the position as chairman of the board just before the filing. That move has fueled rumors that he will make a bid for the company when it ON THE HORIZON Dan Gilbert goes to an auction on March 21 Quicken Tony because it would be a conflict of Several developers are Loans Inc., interest for him to be chairman of the planning new projects in the John Ferchill Detroit. Has Goldman city of Detroit. Here’s a board and a bidder for the company. The Ferchill development Goldman Jonathan scorecard on the players and rights for the BGC remains the lead bidder, but the hints they’ve given about Group, Properties, Holtzman anyone with some money to spend Richard Baron Cleveland. part of the New York. the projects. Village Green will be able to bid for the company. At a recent old J.L. During a McCormack Cos., Baron Salazar social event, Hudson site speech at a Also complicating life in bankruptcy Ferchill told just north of Farmington is the situation regarding Development real estate a Crain’s the event in Hills. commissions paid to brokers. Inc., St. Holtzman Louis. reporter that Compuware October, It’s a bankruptcy and the brokers a rolled-up Building. He Goldman said he’s Pursuing a interested in are contractors. Contractors don’t get $15 million set of plans has yet to gave hints paid. So, while the local brokers are in his trench announce a that he’s taking on a project in development doing deals, they aren’t getting paid Midtown and coat pocket timeline but ready to their commissions. were for his has said it develop project in says he has a the city, but “significant” next project. will include something in A deal in court allows the company He declined retail on the he has yet to to issue a loan to the brokers rather project in the Detroit. He to unroll the ground floor has yet to disclose a than the commission, but there’s a planning location. stages that plans and and 350 announce a large catch. This loan is forgivable, has since units of project. only if the broker stays with the he can’t announce said residential. company for two years. If they leave yet. “there’s A rendering the company, they have to pay up. nothing to includes an It’s a commitment instead of a talk about ... Apple store. commission. yet.”

JEFF JOHNSTON/CDB 20120319-NEWS--0015,0016,0017-NAT-CCI-CD_-- 3/16/2012 9:58 AM Page 2

Page 16 CRAIN’S DETROIT BUSINESS March 19, 2012 NINE EXCITING INNINGS Focus: Real Estate NINE EXCITING REASONS TO ORDER 2012 TIGERS SEASON TICKETS Plans: Projects prepped for market Justin Verlander – AL MVP and 2011 Cy Young ■ From Page 15 such as the Capitol Park project, ing to talk about ... yet.” “The simple answer is ‘yes.’ The which will be the next major project Goldman, who announced in Oc- more difficult question is ‘how Miguel Cabrera – 2011 Batting Champ to be announced. tober that he wants to make a quickly?’ ” Three buildings clustered around splash in Detroit with the develop- An important component is the the site of Michigan’s first capitol ment of several projects, has yet to involvement of banks to invest, Jose Valverde – 49/49 Saves building are being marketed togeth- announce the specifics, though he Holtzman said. Minneapolis-based er by a group of public entities, led has said he’s close to a project. U.S. Bank loaned Village Green by the Detroit Economic Growth Corp. He could not be reached for a money for the acquisition of Trol- An announcement of the devel- comment on the latest status. ley Plaza on Washington Boule- Alex Avila – 2011 Silver Slugger oper was originally to be made at vard, recently renamed as Detroit the beginning of the year, but City Apartments. nothing has been released. Making the jump “The banks are an important Delmon Young – 5 Postseason Home Runs The Detroit-based Roxbury Group In many markets, there is a piece,” he said. “It’s not just that is close to financing the redevelop- jump in rent between older apart- the investors want to invest. You ment of the David Whitney Building, ments and new ones, said Holtz- need construction lenders. You Jhonny Peralta – 2011 All-Star which would include 108 apart- man. His Village Green Cos. own need mortgage lenders.” ments and a 118-room Aloft Hotel on 40,000 apartments worth $4.5 bil- Holtzman said he is exploring a Grand Circus Park. Construction lion nationwide. Detroit development but is not has not yet started. Village Green is building Ann Ar- ready to announce a project. Doug Fister – 8-1 • 1.79 ERA Like the Capitol Park buildings, bor City Apartments in Ann Arbor, the David Whitney is also expected for example, where rent is just to have significant levels of subsidy. above $2 per square foot, a figure How much farther? The historic Book Tower also has higher than the range of $1.50 to Creating a financial environment been a project rumored to be com- $1.75 for older apartments in the that will draw developers without ing soon. The building’s Milan, city, Holtzman said. the need for public money isn’t too Italy-based owner, Akno Enterprises, “My building is state of the art, far off, said Dave Blaszkiewicz, Prince Fielder – 3-Time All-Star & 2-Time Silver Slugger reportedly has been meeting with so there is a jump in price from old head of the Downtown Detroit Partner- local developers to redevelop the units to new product, but it’s not ship and Invest Detroit. building into residential units. very far,” he said. “But in Detroit, “We have a goal to be at a point 2012 SEASON TICKETS ON SALE NOW AS LOW AS $220 Akno founder Massimo Nouhi that jump from old product to new where we no longer need to make and other executives at Akno have product is still very far.” investments,” he said. Outstanding benefits include: not responded to nearly a dozen He said the need for subsidies A study related to transit-orient- • Opening Day tickets • Postseason ticket priority • Free food vouchers emails over the past two years will evaporate as rental rates in- ed development in Detroit — if a • Discounted parking • And more from Crain’s. crease, more companies invest in light-rail system is built — fore- Ferchill won’t disclose the loca- the city and more retail develop- cast the growth of rental revenue 313-471-BALL (2255) tion of his next project, telling ment occurs. Benefits apply to select packages Crain’s in an email: “There’s noth- “Will it get there?” he asked. See Next Page

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March 19, 2012 CRAIN’S DETROIT BUSINESS Page 17 Focus: Real Estate Brokers break out of their offices with help of mobile apps

BY DANIEL DUGGAN which has a map-based feature to of custom movies distributed on CEO, said the product added $5 floor plan for the buildings are CRAIN’S DETROIT BUSINESS show the location of properties it YouTube, said Gary Goodman, million of new revenue to the com- available. has for lease. Friedman’s managing director of pany’s top line 2011 revenue of The new technology, he said, is As the brokerage world becomes It follows a move that Farming- brokerage services. $251.7 million. pushing brokers to be less depen- more mobile, real estate firms are ton Hills-based Friedman Integrated “You just can’t rely on the same “It has been a key driver of sales dent on their offices — an ironic turning to smartphones and Real Estate Solutions implemented things that worked 20 years ago,” to new and existing clients, and we twist since it was the advent of the tablets as a way to market proper- last year. The firm has a smart- he said. expect that trend to continue in computer that has been keeping ties. phone-optimized version of its Leading the charge on mobile 2012,” he said. real estate brokers in the office for The Southfield-based Farbman website, giving brokers the ability real estate information has been During a tour of Campus Mar- the past 10 years. Group has launched a mobile appli- to access leasing information for the Washington, D.C.-based CoStar tius with the iPad product, “It forces you to go old school,” cation for its roster of owned and properties, floor plans and build- Group Inc., which has an iPad appli- Michael Weinstein, senior sales di- he said. “It’s how things used to be, managed properties, as well as sev- ing information through their cation featuring all of its real es- rector for CoStar’s metro Detroit that they were out all day, talking eral building-specific iPad applica- phones. tate data. office, demonstrated how informa- to folks and doing their thing.” tions for Chicago buildings. It is part of an overall marketing In a Feb. 23 conference call for tion can be accessed for any of the Daniel Duggan: (313) 446-0414, It’s a move to be more efficient strategy that involves search en- investors, Andrew Florance, nearby buildings. Vacancy rate, [email protected]. Twitter: in dealing with tenants and real es- gine optimization and the creation CoStar’s founder, president and asking rental rate and even the @d_duggan tate professionals, said CEO Andy Farbman. “It’s in its in- fancy right now, but it’s just an efficient way to get information to everyone,” he said. The firm has created an iPad application for Farbman two buildings owned in Chicago. The application is intended for tenants of the building and offers contact information for building services as well as nearby restau- rants. Shared conference rooms in the buildings can be reserved through the app. Farbman also has an application for the overall real estate firm,

From Previous Page michigan.gov/mshda and density on a five-year plan. The study was done by the De- troit Economic Growth Corp. and Invest Detroit. To bring Detroit in line with Philadelphia, it will take an in- crease in population density from eight to 10 per acre up to the 20 that Philadelphia sees in its University City area or 30 in the core down- town, said Robert Gregory, a se- nior vice president with the Down- town Detroit Partnership. Based on that goal, Gregory You’ve got a partner. Your MSHDA. said, Detroit needs 700 new resi- dential units per year for five years for the greater downtown Preventing foreclosure? area, including Midtown. In the core downtown area, the need is We help. 300 units per year. If that level of construction is met, the rental revenue will catch Resurrecting Main Streets? up with construction costs in five years, he said. “And from what we’re seeing in We’re there. the pipeline, that level of develop- ment is tracking with the goal,” Gregory said. Fixing up the neighborhood? More development will occur if a light-rail line is approved. Call us. Gilbert, one of the vocal support- ers of the rail line, said nothing will bring residential and retail de- velopment faster than the creation Helping to build affordable housing? of a downtown rail line. He said his own development We’re on it. plans and those of other develop- ers are based on a solid economic argument. We’re working to make Michigan vibrant, by utilizing cutting edge housing andTTY 800.382.4568community programs “I’d like to think that it’s the smart developers that are looking and providing sound advice. If you’re interested in improving your home, neighborhood or community, around right now to get on board you’ve got a partner. Your MSHDA. early,” he said. “We are at the be- ginning of this right now.” TTY 800.382.4568 Daniel Duggan: (313) 446-0414, Equal Housing Employer/Lender [email protected]. Twitter: @d_duggan 20120319-NEWS--0018-NAT-CCI-CD_-- 3/16/2012 10:18 AM Page 1

Page 18 CRAIN’S DETROIT BUSINESS March 19, 2012 Your Bank’s $2.4M backs initiative to provide biz Not Lending? training for 3 Detroit neighborhoods

BY SHERRI WELCH and working with community de- Kellogg thought it was important CRAIN’S DETROIT BUSINESS velopment organizations to to foster grassroots microenter- strengthen their operations so they prises, people who are on low A new effort is directing support can provide the program’s training. wages, who have been living in to an often-ignored category of en- Southwest is recruiting commu- those neighborhoods for long peri- trepreneurs: “underground” mi- nity development corporations ods of time,” she said. croenterprises in three of Detroit’s that have won residents’ trust in “We’d like to see more opportu- immigrant and impoverished the three neighborhoods and can nities for low-wage workers so neighborhoods. help identify local entrepreneurs they … (can) benefit in the (devel- The Global Detroit Neighborhood De- for the training and provide it. opment) … happening in Detroit.” velopment Collaborative will provide In the north end, where there is The Minneapolis-St. Paul effort training and microloans to grass- a large population of low-income has trained 4,000 residents of im- roots purveyors of goods and ser- African-Americans, the collabora- migrant and low-income neighbor- vices such as catering, automotive tive is talking with Vanguard Com- hoods since its 1993 inception. repair, haircuts and janitorial or munity Development Corp., Central Those entrepreneurs were doing ours are construction services in Detroit’s Detroit Christian Community Develop- hair, auto repair, cakes or child care . north end, southwest and western ment Corp. and Focus: Hope, Toboc- out of their homes, making up a Call for a free consultation. Cody-Rouge neighborhoods. man said. “kind of an informal economy un- Loan amounts: $1,000,000.00 and above. The goal of the three-year pro- In Cody-Rouge, where there’s a derground,” said Mihailo Temali, gram is to help create businesses strong Arab-American demograph- founder, president and CEO of the that will improve incomes for s Investment Real Estate s Equipment ic, it’s talking with Arab Community Neighborhood Development Center. neighborhood residents while s Owner Occupied Real Estate s Turnaround Consulting Center for Economic & Social Services. Of the total in training, about building the local tax base. And in southwest Detroit, where 800 started businesses and the oth- s Lines of Credit s Loan Modifications “The census data often doesn’t there’s a large Hispanic population, er 80 percent learned “the easy, in- s Accounts Receivable s Bank Workouts track all the economic hours and it’s in talks with the Southwest De- expensive way that their business entrepreneurism flowing through troit Business Association, SER Metro concept was not a viable idea at … low-income, Detroit, Latino Family Services, the this point,” Temali said. African-Ameri- Consortium of Hispanic Agencies, Soci- According to the Amherst H. can and immi- ety of Hispanic Business Owners and Wilder Foundation’s biennial evalu- grant communi- Professionals and the Michigan His- ation of the program in April 2011, ties,” said panic Chamber of Commerce, he said. there were 468 businesses 800.509.3552 former state rep- “If we can help get 600 people en- launched from trainees operating resentative gaged in training classes and help at that point, he said. www.eclipsecapitalgroup.com Steve Toboc- 2207 Orchard Lake Road, Sylvan Lake, MI 48320 10 to 15 percent of them start a Those businesses annually re- “Since 1997” man, who serves business … that helps beget jobs … turned $68 million to the economy as director of creates payroll for those individu- in the form of payroll, business ex- the larger Glob- Tobocman als (and) starts to contribute to the penses, taxes and rent, yielding a al Detroit initia- regional economy,” Southwest’s 64 percent return on investment tive, which is administered by the Thorland said. for the project. Detroit Regional Chamber and is The initiative is being finalized The payroll, property and sales leading work on the neighborhood but could call for 20 weeks worth of taxes, alone, paid by those busi- initiative. training that begins in a group set- nesses pays back the program’s Those neighborhoods are often ting and changes to one-on-one ses- cost every 18 months, Temali said. some of the most difficult to reach sions, Thorland said. While some To date, the program has for economic development initia- who sign on may have nothing more spawned 550 businesses that col- tives, he said. than an idea that needs to be moved lectively employ 2,000 people. The Global Detroit Neighbor- to achievable goals, others may Entrepreneurs in immigrant hood project aims to help meet have a microenterprise but need to and low-income neighborhoods grassroots entrepreneurs “where perfect a business plan, he said. have a variety of barriers to build- they are and give them the tools The grassroots nature of the pro- ing a business, “but they have the they need to build the American gram is what drew Kellogg’s fund- most essential ingredient of all, dream by growing their business ing, said program officer Linda Jo which is entrepreneurial talent and doing the things that are nec- Doctor. and energy,” Temali said. essary to get access to loan funds,” “While many other efforts focus Sherri Welch: (313) 446-1694, Tobocman said. on funding and training immi- [email protected]. Twitter: @sher- “If you look at who’s getting the grants with high-tech expertise, riwelch jobs, who is making the profits and where the jobs are being located, that’s what makes this work so powerful.” Based on a highly successful Professional Jet Management model launched 19 years ago in Minneapolis-St. Paul by the Neigh- borhood Development Center, the De- troit initiative will rely on commu- nity organizations to help identify entrepreneurs in each community and to get them engaged in training. The effort hopes to train more than 600 people from the neighbor- hoods over the next three years and create at least 60 businesses. Backing the effort is $2.1 million Experience the difference. from the Battle Creek-based W.K. Kellogg Foundation and another All inclusive management at an affordable fi xed cost. $335,000 from the New Economy Ini- tiative. •Forming partnerships now About $300,000 will go to fund mi- •Small, midsize and large cabin jets croloans of $2,000-$10,000, said Tim Thorland, executive director of •Reduce your total operating cost Southwest Housing Solutions, which is •Maximize your aircraft effi ciency administering the program. while enhancing your aircraft The remainder of the grant mon- appearance, performance & value www.skywayavjets.comwww skywayavjets com ey will go to fund the purchase of the Neighborhood Development Center’s training program, coordi- Call today for more information, Geoff Sherman 1.248.568.0979 nating staff at Southwest Housing 20120319-NEWS--0019-NAT-CCI-CD_-- 3/16/2012 12:22 PM Page 1

March 19, 2012 CRAIN’S DETROIT BUSINESS Page 19 Execs’ ideas for state turnaround: Focus on investors, higher ed, Detroit

BY DUSTIN WALSH make bolder moves, panelists at research and policies to support the AND MEGHANA KESHAVAN the Thursday event said. state’s growing life sciences sector. CRAIN’S DETROIT BUSINESS “What Michigan is doing right The Business Leaders plan also now in terms of building these calls for a renewed concentration Top Michigan business execu- blocks of additional venture capi- on natural resources by support- tives spoke at last week’s Michi- tal — what Dan Gilbert’s doing, ing policies designed to increase gan CEO Summit on strategies for what a lot of people are doing in the amount of farmland and food bolstering the state’s economic as- the state — it’s absolutely the exports, Pierce said. sets and spurring innovation and right thing to do,” said James Pe- “We are bullish on Michigan,” job creation. tras, managing director of Early said Jim Nicholson, president and The event, held Thursday at the Stage Partners, a venture capital fi- CEO of Detroit-based PVS Chemi- Westin Book Cadillac in Detroit, nancing firm based in Cleveland. cals Inc. and chairman of BLM’s attracted a top roster of speakers “It just takes a long time.” board of directors. “We feel we’ve and was a venue for hosting orga- Petras spoke during a panel of turned a corner, and Michigan is nization Business Leaders for Michi- national business executives who on a path toward a bright future, gan to explain the latest version of are Michigan natives. and this is how we compete nation- its Michigan Turnaround Plan in “There’s something to be said ally and globally.” more detail. about celebrating the successes … Robert Taubman, chairman, The plan seeks to create as many and the environment of risk-tak- president and CEO of Bloomfield as 500,000 jobs over the next decade ing. A lot of these things are very Hills-based Taubman Centers Inc., by focusing on six existing assets to risky. A lot of these entrepreneurs said more people also need to ac- turn Michigan into a top-10 state: are going to fail. But the second or knowledge that the state’s fate is Brand Michigan as an engi- third time they do it, they’re going tied to its largest city. But, he said, neering center. to succeed,” he said. Detroit won’t attract market-driven Make the state a logistics hub Sandra Pierce, president and projects without cleaned-up fi- for the Midwest. CEO of Charter One-Michigan and a nances and more people living here. Support affordability, growth, BLM board member, said the state’s “The state needs to find a way to and research and development at universities are another critical help the city of Detroit — whatever the state’s public universities. piece in Michigan’s turnaround. that means.” Better use Michigan’s natural “We must start to think about Taubman said that his company resources and agricultural econo- our higher-ed system as an eco- has no plans for retail projects in my. nomic engine,” she said. Detroit but that momentum and Create a mobility economy fo- The BLM plan calls for increas- good ideas are brewing. cused on all forms of transporta- ing out-of-state enrollment by 20,000 “I think we’ve said for a long time tion. students, which would bring in $200 — people like to shop where they Creating a life sciences re- million annually in direct revenue. live,” he said. “They’ll also shop search and development hub. Also proposed: an effort to attract where they work, but they tend to If the state builds on these six more federal dollars to university shop much more where they live.” existing assets, BLM board mem- bers say, the state’s per capita an- nual income will increase by as much as $18,000 by 2020. The first version of the plan, un- veiled in 2009, focused on founda- tion plans to turn the state’s once dire economic situation into pros- perity. Doug Rothwell, president and CEO of BLM, said the state is already making headway in many You Deserve Unbiased Tenant Representation areas of the original plan — in- cluding finance management, cre- ating a better business climate and investing for the future. Now the state must focus on ac- celerating growth and leveraging existing assets. One part of that is encouraging new investors to jump in and existing investors to

CRAIN’S CALLS FOR 40 UNDER 40 NOMINATIONS Crain’s Detroit Business is seeking nominations for the 2012 class of 40 under 40, which recognizes young achievers based on factors such as financial impact and community leadership. Winners will be profiled in the Oct. 1 issue, and Crain’s will celebrate their achievements at a late Real Estate Strategy October awards event. To be eligible, nominees must be Tenant Representation under age 40 as of Oct. 1, 2012. For event sponsorship Buyer Representation opportunities, please call (313) 446-6052. Project Feasibility Nominations must be received by Whether leasing, buying or building, users of space have the April 23. Visit Construction Oversight www.crainsdetroit.com/nominate upper hand in today’s real estate market. Let our experienced to fill out the online form. team of real estate professionals uncover every option. Incentives Questions? Contact Jennette Smith, managing editor, at Lease Administration [email protected] or (313) 446- pmcresa.com 248.223.3500 1622. 20120319-NEWS--0020-NAT-CCI-CD_-- 3/16/2012 9:56 AM Page 1

Page 20 CRAIN’S DETROIT BUSINESS March 19, 2012

CRAIN'S LIST: LARGEST GENERAL CONTRACTORS Ranked by 2011 revenue Belfor,

Value of Sachse are Company Revenue new contracts Local Total Detroit-area Address ($000,000) ($000,000) employees new projects projects started Rank Phone; website Top local executive(s) 2011/2010/2009 2011/2010 Jan. 2012 2011/2010 2011 standouts Barton Malow Co. Ryan Maibach $1,352.4 $1,035.8 881 330 33 for growth 26500 American Drive, Southfield 48034 president $1,122.3 $1,248.8 327 1. (248) 436-5000; www.bartonmalow.com $1,246.9 Two companies on the general contractors list Belfor Holdings Inc. Sheldon Yellen 1,280.0 1,210.7 1,355 85,000 C 3,574 have seen dramatic 185 Oakland Ave., Suite 150, Birmingham 48009 CEO 1,032.9 B 1,016.7 51,564 C growth because of specif- 2. 924.5 (248) 594-1144; www.belfor.com ic expanding lines of busi- ness. Walbridge Aldinger Co. John Rakolta Jr. 1,120.0 1,377.0 281 205 39 Last year’s slew of nat- 777 Woodward Ave., Suite 300, Detroit 48226 chairman and CEO 1,001.5 1,473.0 57 ural disasters helped 3. 1,000.0 (313) 963-8000; www.walbridge.com Birmingham-based prop- erty restoration company Lakeshore TolTest Corp. Avinash Rachmale 570.0 NA 107 NA NA Belfor Holdings Inc. grow 7310 Woodward Ave., Suite 500, Detroit 48202 president and CEO 624.1 NA NA its revenue by 24 percent, 4. 250.0 D (313) 875-4115; www.lakeshoretoltest.com from about $1.03 million in 2010 to $1.28 million Turner Construction Co. Steve Berlage 314.1 445.1 81 51 28 in 2011, said Chris Jones, 535 Griswold St., Suite 200, Detroit 48226 vice president and general manager 279.0 314.0 43 the organization’s group 5. 175.0 (313) 596-0500; www.turnerconstruction.com controller. Belfor does the repair Commercial Contracting Group Inc. William Pettibone 248.0 170.0 127 181 123 work for homes and busi- 4260 N. Atlantic Blvd., Auburn Hills 48326 chairman 224.0 145.0 167 nesses that are damaged 6. 135.0 (248) 209-0500; www.cccnetwork.com by events such as hurri- canes, floods, earthquakes Roncelli Inc. Gary Roncelli 243.0 145.0 225 48 43 and tsunamis, and added 6471 Metropolitan Parkway, Sterling Heights 48312 chairman and CEO 176.0 152.0 47 about 33,500 new pro- 7. (586) 264-2060; www.roncelli-inc.com Thomas Wickersham 139.0 president and COO jects last year. Most of its work outside of the U.S. Skanska USA Building Inc. Bob Skinner 235.0 226.0 69 NA 4 was done last year in 26100 American Drive, Suite 200, Southfield vice president of operations 267.0 449.9 9 Japan, Thailand, New 8. 48034-2367 327.5 (248) 351-8300; www.skanska.com Zealand and Australia. “We expect to grow Aristeo Construction Co. Joseph Aristeo 227.0 155.0 300 178 NA even more this year, with 12811 Farmington Road, Livonia 48150 president 206.0 243.5 233 all the tornadoes in the 9. 103.0 (734) 427-9111; www.aristeo.com Midwest,” Jones said. The company also in- Ideal Contracting LLC Frank Venegas Jr. 131.0 NA 47 NA NA creased its local presence, 2525 Clark St., Detroit 48209 chairman and CEO 85.0 NA NA adding 3,574 Detroit-area 10. 59.3 (313) 843-8000; www.idealcontracting.com projects in 2011 after ac- quiring Ypsilanti-based George W. Auch Co. Vincent DeLeonardis 127.6 133.5 85 144 144 Coach’s Catastrophe 735 S. Paddock St., Pontiac 48341 president and CEO 92.2 124.3 153 Cleaning & Restoration 11. 104.1 (248) 334-2000; www.auchconstruction.com Services in late 2010. Sachse Construction, DeMaria Building Co. Inc. Joseph DeMaria Jr. 108.0 113.0 143 56 56 also based in Birming- 3031 W. Grand Blvd., Suite 624, Detroit 48202 president 102.0 111.5 62 ham, nearly doubled its 12. 91.3 (313) 870-2800; www.demariabuild.com revenue from 2010 to 2011 — from about $35 The Colasanti Group Inc. Christopher Colasanti 104.0 119.8 150 14 7 million to $65 million. 672 Woodbridge, Suite 100, Detroit 48226 president 51.9 NA Todd Sachse, the com- 13. 47.5 (313) 567-0060; www.colasantigroup.com pany’s president, said that a key Alberici Constructors Inc. Mark Okroy 99.2 47.0 15 20 5 reason 13040 Merriman Road, Livonia 48150 vice president and general manager 82.4 90.4 20 the 14. 31.3 (734) 367-2500; www.alberici.com compa- ny was Walsh Construction Co. Sam Bahou 87.6 259.1 28 90 6 able to 3011 W. Grand Blvd., Suite 2300, Detroit 48202 program manager 106.5 50.1 84 grow 15. 104.1 (313) 873-6600; www.walshgroup.com last year was be- Sachse Construction Todd Sachse 64.5 64.5 55 130 NA Sachse cause it 260 E. Brown St., Suite 200, Birmingham 48009 president 35.3 36.1 52 didn’t downsize during 16. 27.6 (248) 647-4200; www.sachse.net the recession. “We kept most of our Micco Construction LLC Robert Washer 63.7 48.0 25 12 9 people during the down- 715 Auburn Road, Pontiac 48342 president 38.2 24.3 11 turn,” he said. “That hurt 17. 43.3 (248) 334-7753; www.miccoconstruction.com us from a profit stand- point, but it positioned us Synergy Group Inc. William Vermeulen 61.2 38.0 20 40 27 so that when opportuni- 39400 Woodward Ave., Suite 190, Bloomfield Hills Ennio "Pete" Petrella 65.3 50.0 NA ties did come, and they 18. 48304 principal partners 81.2 (248) 740-7400; synergygroup.biz did starting in the begin- ning of 2011, we were in T.H. Marsh Construction Co. Ryan Marsh 45.9 57.8 40 NA NA a position to capitalize.” 300 Balmoral Centre, 32121 Woodward Ave., president and CEO 54.0 68.0 NA The company does 19. Royal Oak 48073 65.0 (248) 586-4130; www.thmarsh.com most of the construction work for Quicken Loans Frank Rewold and Son Inc. Frank Rewold 43.0 55.5 49 27 27 Inc., which has recently 333 E. Second St., Rochester 48307 president and CEO 58.3 25.1 NA been expanding its office 20. 44.9 (248) 651-7242; www.frankrewold.com spaces into buildings in Detroit. Sachse also builds This list of general contractors is a compilation of the largest such companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. It is not a complete listing but the most comprehensive available. out the retail spaces for Crain's estimates are based on industry analysis and benchmarks, news reports and a wide range of other sources. Unless otherwise noted, information was provided by the companies. Companies with headquarters companies such as Louis elsewhere are listed with the address and top executive of their main Detroit-area office. Actual revenue figures may vary. NA = not available. Vuitton North America B 95 percent of Belfor Holdings Inc.'s total revenue, which represents its revenue generated from construction management. Inc. and Brooks Brothers C Given the disaster recovery nature of the jobs completed, many are smaller than the multimillion dollar construction projects done by traditional firms. As a result, Belfor has a much higher number of projects. Inc. around the U.S. and D Company estimate. Canada. LIST RESEARCHED BY CAMILLE PIPPEN — Meghana Keshavan DBpageAD.qxp 3/12/2012 3:45 PM Page 1

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Page 22 CRAIN’S DETROIT BUSINESS March 19, 2012

BUSINESS DIARY CONTRACTS ting company, to provide managed IT EXPANSIONS services. Qualitech, Bingham Farms, a technol- International Gospel Center, Ecorse, ogy integrator and software reseller, Living Essentials LLC, Farmington announced development plans of the was selected by Hermanoff Public Re- Hills, announced that its 5-Hour Ener- Gary L. Miles Veterans Home, Ecorse, lations, Farmington Hills, to upgrade gy brand entered into a sponsorship an 11-unit permanent supportive its computer network with an Intel agreement with professional golfer housing project for U.S. veterans who Windows 2008 file server and an on- Jim Furyk, Ponte Vedra Beach, Fla., struggle with homelessness. Tele- site and off-site backup and recovery for three years. phone: (313) 389-2700. system. Colasanti Construction Services Inc., Tim Hortons Inc., Oakville, Ontario, Mitsubishi Electric Automotive Ameri- Detroit, was awarded a contract to opened a restaurant at 7205 Tele- ca Inc., Northville, will supply a rear- construct the new Greektown Casino graph, Dearborn Heights. Telephone: seat entertainment system and new valet parking structure and pedestri- (313) 730-9810. Website: www.timhor- radio system to Mercedes-Benz, an bridge for Greektown Casino LLC, tons.com. Stuttgart, Germany, for its 2012 M- Detroit. Spalding DeDecker Associates Inc., Class and GL-Class vehicles. PublicCity PR, Southfield, added 1- Rochester Hills, a regional civil engi- Ecology Coatings Inc., Warren, which 800-Law Firm PLLC, Southfield; Ameri- neering, landscape architectural and develops nanotechnology-enabled, ul- can Coney Island Inc., Detroit; The surveying firm, opened an office at , Flushing; traviolet-curable advanced coatings, Coffee Beanery Ltd. The 39293 Plymouth Road, Suite 102, Livo- Heat and Warmth Fund, Detroit; and entered into a license agreement with nia. Telephone: (734) 293-5200. Web- Zoup! Fresh Soup Co. LLC, Southfield, German-based BASF Coatings GmbH, site: www.sda-eng.com. a chemical company, providing non- to its client base. Lush Lawn, Grand Blanc, opened a exclusive rights to some of its patents BorgWarner Inc., Auburn Hills, sup- branch at 2179 Avon Industrial Drive, in exchange for royalties. plies its B-series turbochargers for the Rochester Hills. Telephone: (248) 299- Greektown Superholdings Inc., De- new Mercedes-Benz 12.8-liter six- 5874. Website: www.lushlawn.net. troit, announced a marketing alliance cylinder in-line Blue Efficiency Power with Tropicana Las Vegas Inc. The engine. Assets International Inc., Southfield, an asset recovery company specializ- agreement affords Greektown guests R.L. Polk & Co., Southfield, an auto- ing in locating missing heirs, mineral expanded player’s club offers and ben- motive marketing intelligence firm, rights owners and other beneficiaries, efits with gaming opportunities at the has entered into an agreement with is expanding its work in oil and gas in Tropicana Las Vegas. Pivnet, Timonium, Md., an interactive Oklahoma with the opening of a satel- Brightside Consulting, Allen Park, a services agency, to provide enhanced lite office in Oklahoma City. Website: group benefit consulting firm, has marketing analysis for Central At- been selected by Realcomp II Ltd., lantic Toyota dealers. Also, Polk has www.assetsinternational.com. Farmington Hills, a real estate Multi- entered into a business agreement Huron Valley Financial Inc., Ann Ar- ple Listing Service provider, to man- with CityTwist, Boca Raton, Fla., a na- bor, a mortgage banking firm, opened age health care benefits for the compa- tional email marketing company, to a new branch at 8702 N. Second St., ny. provide proprietary in-market timing Suite 105, Brighton. Telephone: (810) Terumo Cardiovascular Systems, Ann and consumer brand affinity data for 224-5626. Website: www.huronvalleyfi- Arbor, has entered into an exclusive integration into CityTwist’s market- nancial.com. agreement with LAAx Inc., Livermore, ing for dealers; and entered into an FirstLight HomeCare Franchising LLC, Calif., to distribute the TigerPaw Sys- agreement with Autobytel Inc., Irvine, Cincinnati, Ohio, opened a new loca- tem II, a left atrial appendage closure Calif., to provide Internet lead conver- tion at 1639 W. Big Beaver Road, Troy. device, in the U.S. sion reporting for its dealer and OEM Telephone: (248) 928-1222. Website: Warrior Sports Inc., Warren, was con- customers. www.firstlighthomecare.com. tracted by Liverpool Football Club, Mercedes-Benz Financial Services England, to become the club’s official USA LLC, Farmington Hills, and Deal- MOVES kit supplier. erTrack, Lake Success, N.Y., an- Thomson IP Management Services, an Xpert Technologies Inc., Sterling nounced that MBFS will become a intellectual property asset management Heights, a technology services compa- lender on the DealerTrack credit ap- software provider and a part of Thom- ny, has been selected by Page Toyota, plication network used by 350 Mer- son Reuters, moved from Southfield to Southfield, an automobile dealership, cedes-Benz dealers in the United 30200 Telegraph Road, Suite 300, Bing- and Laser Cutting Co. Inc., Harrison States. ham Farms. Telephone: (248) 352-5810. 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March 19, 2012 CRAIN’S DETROIT BUSINESS Page 23

CALENDAR TUESDAY cate, author of Powering Up!; MEET RED WINGS MARCH 27 Gretchen Valade, chairwoman, MARCH 20 Carhartt Inc. and CEO of Mack Av- The Detroit Economic Club enue Records; others. MotorCity Casi- Detroit Economic Club. 11:30 a.m.-1:30 welcomes Detroit Red Wings no-Hotel, Detroit. $125. Contact: p.m. With Angela Ahrendts, CEO, Executive Vice President and Jacqueline Northrop, (313) 962-1920 Burberry. Townsend Hotel, Birming- General Manager Ken Holland and ext. 204; email: [email protected]; ham. $45 DEC members, $55 guests of head coach website: www.miwf.org. members, $75 nonmembers. Contact: Mike Babcock (313) 963-8547; email: to its meeting [email protected]; website: COMING EVENTS www.econclub.org. March 27, 11:30 a.m.- George Husband Distinguished Lec- 1:30 p.m. at ture Series. 2-3 p.m. March 27. Wayne Crain’s SBAM Grand Rapids Event: MotorCity State University School of Business Economic Gardening. 7:30-10 a.m. Casino-Hotel. Administration. With Helen Munter, Crain’s Detroit Business, Small Busi- Players are director of division of regulation and ness Association of Michigan. With expected to inspection, Public Company Account- Mark Lange, executive director, Ed- attend. ing Oversight Board. Wayne State ward Lowe Foundation; Robert Tickets are University, Detroit. Free. Contact: Fowler, president and CEO, Small Holland (313) 577-4530. Business Association of Michigan; $45 for DEC others. Amway Grand Plaza Hotel, members, $55 for guests of Grand Rapids. $35 current CDB sub- members and $75 for March Membership Reception. 5:30- scriber, $30 SBAM members/groups nonmembers. 7:30 p.m. March 29. Detroit Regional of 10 or more, $60 nonsubscriber, For more information, call (313) Chamber. Townsend Hotel, Birming- $59.50 special includes one-year sub- 963-8547, email ham. $15. Contact: Beverly Maddox, scription to Crain’s. Contact: Kacey [email protected] or visit (313) 596-0343; email: bmaddox@de- troitchamber.com; website: www.de- Anderson, (313) 446-0300; email: cd- www.econclub.org. [email protected]; website: crains- troitchamber.com. detroit.com/events. For sponsorship opportunities, contact Marla Wise at MONDAY How to Fully Take Advantage of (313) 446-6052 or [email protected]. MARCH 26 LinkedIn. Noon-1 p.m. April 5. Ma- comb-OU Incubator. With Nikki Wege Lecture on Sustainability. 5-7 Little, social media strategist, Identi- p.m. University of Michigan School of WEDNESDAY ty PR. Velocity Center, Sterling MARCH 21 Natural Resources and Environment, others. With Marie Lynn Miranda, Heights. Free. Contact: Joan Car- dean and professor, School of Natural leton, (586) 884-9324; email: Empowering Women in the Global [email protected]; website: Community. 9 a.m.-5:30 p.m. Automa- Resources and Environment, Univer- www.oakland.edu/macombouinc. tion Alley, Michigan Council for sity of Michigan. Rackham Auditori- Women in Technology, others. With um, Ann Arbor. Free. Contact: Kevin Sheryl WuDunn, senior managing di- Merrill, (734) 936-2447; email: Chrysler Day. 11:30 a.m.-1:30 p.m. April 9. rector, Mid Market Securities, and [email protected]; website: Adcraft Club of Detroit. With Saad others. Oakland University, www.snre.umich.edu. Chehab, president and CEO of Chrysler Rochester. Free. Contact: Benjamin brand, Chrysler Group LLC. San Mari- Eveslage, (248) 894-8970; email: bseves- Michigan Women’s Foundation 25th no Club, Troy. $35 members, $45 non- [email protected]; website: www.oak- Anniversary. 5:30-8:30 p.m. Michigan members, $25 junior and student mem- land.edu/symposium. Women’s Foundation, General Motors bers. Contact: Clarence Young, (313) Co., others. Honoring Anne Doyle, 872-7850; email: [email protected]; THURSDAY leadership and communication advo- website: www.adcraft.org. MARCH 22 Marketing and Sales Executives of De- troit. 5-8 p.m. Panel discussion with Pa- tricia Mooradian, president, The Henry Ford; Beth Chappell, president/CEO, Detroit Economic Club; others. MSU Management Education Center, Troy. $45 MSED members, $60 nonmembers. Contact: Cheryl Dry, (248) 643-6590; email: meetings@meeting- coordinators.com; website: www.msedetroit.org.

Salute to Distinguished Warriors Dinner. 5:30-8:30 p.m. Urban League of Detroit and Southeastern Michigan. Honoring Ismael Ahmed, associate provost for integrated learning and community partnerships, University of Michigan-Dearborn; Allan Gilmour, president/CEO, Wayne State Universi- ty; Florine Mark, president, The WW Group Inc.; and the late Kenneth Cock- rel, former Detroit City Council mem- ber, activist and attorney. Detroit Mar- riott Renaissance Center, Detroit. $150. Contact: Tonette Bryant-Carter, (313) 831-5532; email: [email protected]; website: www.detroiturbanleague.org.

CALENDAR GUIDELINES If you want to ensure listing online and be considered for print publication in Crain’s Detroit Business, please use the online calendar listings section of www.crainsdetroit.com. Here’s how to submit your events: From the Crain’s home page, click “Detroit Events” in the red bar near the top of the page. Then, click “Submit Your Entries” from the drop-down menu that will appear and you’ll be taken to our online submission form. Fill out the form as instructed, and then click the “Submit event” button at the bottom of the page. That’s all there is to it. More Calendar items can be found on the Web at www.crainsdetroit.com. 20120319-NEWS--0024-NAT-CCI-CD_-- 3/16/2012 10:16 AM Page 1

Page 24 CRAIN’S DETROIT BUSINESS March 19, 2012

Crain’s Job Front Visit www.crainsdetroit.com/jobfront to search for jobs, post a résumé or find talent. Job Front PEOPLE ARCHITECTURE Greg Mella to vice president, Smith- IN THE SPOTLIGHT AWARDS Group, Detroit, from principal, remain- ing co-leader of sustainable design ini- Detroit-based Goodwill’s Green IN PARTNERSHIP WITH tiatives. Also, Michael Weingartz to Works Inc., a wholly owned vice president, from principal, remain- subsidiary of Detroit-based ing engineering director of mechanical Goodwill Industries of Greater and electrical engineering. IN COOPERATION WITH Detroit, has appointed Jay Wilbur president. FINANCE Wilbur, 65, Maureen Moracci- had been Salute ni to principal, executive vice the best legal minds TITLE SPONSOR Gordon Advisors president and PC, Troy, from se- chief human working inside Michigan public, private, nior manager. resources Heather Paquette officer for to managing part- Southfield- nonprofit and government organizations ner, KPMG LLP, based Detroit, from Mid- Revstone west leader for IT Industries LLC. at a networking awards dinner Wilbur PREMIER SPONSOR Moraccini professionals and He succeeds WITH Guest Speaker national IT Kathy Laird, who remains with leader. Goodwill as vice president of Jon Cotton to pres- Nicole Lamb-Hale EVENT SPONSORS industrial operations. ident/COO, Merid- Wilbur earned a bachelor’s ian Health Plan of Assistant Secretary degree in business from the Michigan Inc., De- of Commerce for troit, from vice University of Michigan. Manufacturing and ® president of fi- Goodwill’s Green Works Inc. Services nance. provides asset recovery and recycling services to socially HEALTH CARE conscious municipalities, utilities and manufacturers. Cotton Ruth Fisher to vice president of Wednesday, April 25 | The Inn at St John’s heart and vascular services, Henry from vice president and COO, Applied Ford Health System, Detroit, from Security U.S. Inc., Grand Rapids. To register, please visit www.crainsdetroit.com/events chief administrative officer, physi- cian practice management, St. John MARKETING Providence Health System, Warren. Rick Bourgoise to vice president, auto- MAJOR SPONSORS Rita Fields to vice motive practice, The Quell Group, president, human Troy, from director of communica- resources, tions for Smart USA, Penske Automo- McLaren Oakland, tive Group, Bloomfield Hills. Pontiac, and McLaren Medical Group, Flint, from NONPROFITS vice president of Cheryl Rothe to human resources, marketing and Henry Ford West public relations Fields Bloomfield Hospi- manager, National tal, West Bloom- Multiple Sclerosis field Township. Society, Michigan Chapter, South- INFORMATION TECHNOLOGY field, from account Steven Lassig to cloud brokerage ser- executive, Crain’s vices business development manager, Detroit Business, Creative Breakthroughs Inc., Troy, Rothe Detroit.

JOB FRONT CALENDAR Employers enlist for ‘Hiring Our www.hoh.greatjob.net by April 3. A “Hiring Our Heroes” job fair is Heroes’ job fair for veterans also set for April 5 in Grand Rapids. About 70 employers have regis- Other Job Front notes: tered to take part in the first “Hir- Ⅲ The 1,400 jobs Quicken Loans Inc. ing Our Heroes” job fair for South- said it is looking to fill, most in east Michigan, co-hosted by the downtown Detroit, are being posted U.S. Chamber of Commerce and Dear- on hiredMyway.com/Crain’s Job born Chamber of Commerce to re- Front (crainsdetroit.com/jobfront), cruit veterans and their spouses. said a spokesperson for the job site. Organizers expect the event — About 300 positions are in technolo- 11 a.m.-3 p.m. April 11, at the Ford gy, and jobs also are open for under- Community & Performing Arts writers and other mortgage proces- Center on Michigan Avenue in sors, and in marketing, human Dearborn — will include more resources, accounting and finance. than 100 employers and 700-800 lo- Internships are also available. cal military veterans or active- Ⅲ A free “Professional Job Fair” duty personnel exiting the service. is being held 9 a.m.-3 p.m. March 29 Local employers taking part in- at the Radisson Hotel, 39475 Wood- clude Ford Motor Co. and Severstal ward Ave., Bloomfield Hills. Em- Dearborn LLC in Dearborn, Warren- ployers are looking to fill positions based Art Van Furniture Inc., Comerica in engineering, sales, IT, finance, Bank, auto supplier Johnson Controls automotive and more. The fair is Inc., Detroit-based Quicken Loans Inc. sponsored by JobFairGiant.com. and Wayne State University. Contact: Maria Westwood, (734) Attendance is free. Employers 956-4550, mwestwood@jobfair- and job seekers can preregister at giant.com. 20120319-NEWS--0025-NAT-CCI-CD_-- 3/16/2012 6:34 PM Page 1

March 19, 2012 CRAIN’S DETROIT BUSINESS Page 25 Lions: TV deal gives leeway on pay REAL ESTATE ■ From Page 1 The league’s total broadcast rev- INDUSTRIAL PROPERTY AUCTIONS enue, including deals with ESPN AVAILABLE NOW and satellite broadcaster DirecTV, In NFL, contracts not fully guaranteed real estate will be about $6 billion annually Taylor/Romulus Area — 4,000 to 80,000 sq. ft. Unlike the other three U.S. ma- last week, it was initially report- auctions starting in 2014, according to a De- Ideal for logistics company, jor pro sports leagues, National ed that $60 million is guaranteed, cember analysis by The Wall Street Football League teams do not fully but Mike Florio of CBS Sports’ manufacturing or warehousing. Journal. guarantee player contracts. “Pro Football Talk” blog wrote Yvon Rea 734-946-8730 Giving Johnson a new contract For example, Major League on Thursday that the contract to replace the six-year, $55 million Baseball contracts are typically truly guarantees money only in deal he signed as the No. 2 overall fully guaranteed, meaning new the first five years. RECREATIONAL PROPERTY draft pick in 2007 keeps him in De- Detroit Tigers slugger Prince Other guarantees in the deal troit for his peak career years and 1,144 acre 4 Season Resort Fielder will get all of the nine- can be made by the team in the 5491 E 12 Mile Rd, Warren gives the team an immediate $9 Gladwin, MI year, $214 million deal he signed future. million to $11 million in salary cap in January — even if the team re- And, the overall contract is All sports waterfront with Trophy hunting, resort relief for 2012, league insiders say. Detroit Area leases him or he plays poorly and smaller than billed. incl. first class restaurant, lounge, indoor pool, Johnson, who led the league in is demoted to the minor leagues. Johnson already was due to and banquet facility that seats 250 people. receiving yards in 2011 and earned March 24 - 28 Baseball players can be traded make $18.5 million in 2012, An exceptional property at a great price! $3.5M his second Pro Bowl berth, would in deals that have the new team which, Florio wrote, makes the WARREN, MI have cost the team about $22 mil- Contact Pat Fowler at 616-862-4838 t

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State fund to commit $15M to VC firm with Ann Arbor office HP Enterprise Services, LLC is accepting CLOSING TIMES: Monday 3 p.m., resumes for Services Information Developer one week prior to publication date. BY TOM HENDERSON based Customized Fund Invest- The first VMF fund of $95 mil- in Detroit, MI (Ref. #ESDETSID11). Please call us for holiday closing times. CRAIN’S DETROIT BUSINESS ment Group of Credit Suisse. lion was formed under the Michi- Conceptualize, design, develop, unit-test, Venture Investors has made four gan Early Stage Venture Invest- FAX: (313) 446-1757 configure, or implement portions of new or The state’s Venture Michigan Fund II investments in Michigan compa- ment Act of 2003. Both are funded enhanced (upgrades or conversions) E-MAIL: [email protected] LP is expected to announce today nies, including joining with three by outside investors through the business and technical software solutions INTERNET: that it has made a commitment of other state firms in the $11 million use of state tax vouchers. through application of appropriate standard www.crainsdetroit.com/section/classifieds $15 million in Venture Investors LLC, a round in 2010 that launched Ann The funds invest in VC firms software development life cycle method- Madison, Wis.-based venture capital Arbor-based HistoSonics Inc., a Uni- that in turn invest in early stage Confidential Reply Boxes Available ologies and processes. firm with an office in Ann Arbor. versity of Michigan spinoff that uses companies in advanced manufac- PAYMENT: All classified ads must be The investment is in a new fund ultrasound to noninvasively turing, healthcare and life sci- Mail resume to HP Enterprise Services, prepaid. Checks, money order or Venture Investors has been rais- shrink swollen prostates and de- ences, information technology, al- LLC, 5400 Legacy Drive, MS H1-6F-61, Crain’s credit approval accepted. ing, its Early Stage Fund V, which stroy cancer tumors. ternative energy, and homeland Plano, TX 75024. Resume must include Credit cards accepted. it hopes to close out at $150 million. Its other Ann Arbor invest- security and defense. Ref. #ESDETSID11, full name, email address & mailing address. No phone calls See This will be the fifth investment ments include Incept BioSystems Venture Investors invests in Crainsdetroit.com/Section/Classifieds from the VMF II, a $120 million Inc., Tissue Regeneration Systems spinoffs from Midwest-based re- please. Must be legally authorized to work fund managed by the New York- Inc. and NanoBio Corp. search universities. in the U.S. without sponsorship. EOE. for more classified advertisements 20120319-NEWS--0026-NAT-CCI-CD_-- 3/16/2012 6:35 PM Page 1

Page 26 CRAIN’S DETROIT BUSINESS March 19, 2012 Standoff: Bing, Snyder conflict swings on confidence, trust ■ From Page 1 key differences — the mayor could sell assets, eliminate or consoli- date city departments, and while Credit swaps complicate Attorneys: Snyder’s terms he couldn’t terminate existing union contracts, 30 days after the adoption of a consent agreement, the mayor could impose contracts Detroit’s financial picture likely to pass legal test on unions whose contracts had ex- pired. makes good sense to include.” Snyder’s consent agreement BY NANCY KAFFER million termination event pay- BY CHAD HALCOM CRAIN’S DETROIT BUSINESS Steven Joppich, partner at places a nine-member advisory CRAIN’S DETROIT BUSINESS ment could be re-negotiated. Farmington Hills-based Johnson board of financial and turnaround “When there are loan covenant Gov. Rick Snyder’s draft con- Rosati Schultz & Joppich PC and experts, largely chosen by the gov- With the city of Detroit’s cash defaults, there’s typically an sent agreement placing Detroit municipal attorney for Farming- ernor, as the ultimate authority in dwindling and efforts to craft a agreement that you’ll trigger under a proposed financial advi- ton Hills and Independence Detroit. Bing’s plan also creates an compromise consent agreement some economic punishment,” he under way, the city’s creditwor- sory board has some unconven- Township, could not recall any advisory board, a seven-member said. “But if you can’t pay them, thiness is also on the line. tional terms, but it would likely municipal agreement with such panel, with most positions con- how the heck are you going to According to Moody’s, the in- stand up to a legal challenge, lo- an expansive protest clause. But trolled by the mayor and with no pay more? The reality of it is yes, vestment rating service, the ap- cal municipal attorneys said. he also said he hasn’t fully re- real authority. those are probably mathemati- pointment of an emergency man- One provision states that “any searched Detroit’s agreement. What do the disparate plans cally correct (numbers) pursuant ager would trigger what’s called action by the city … or its unions “I can’t say I’ve ever crafted an show about the relationship be- to the loan agreements, but the a termination event in a series of to contest, through legal proceed- agreement with a provision like tween the two men, once touted as reality is they probably can’t pay credit swaps made by the city in ings or otherwise,” the power of it. But you do draft an agreement a unique political friendship? the bonds.” 2006 to fund some pension liabili- the board or the validity of a con- at the beginning in a manner that “It appears frayed, to say the But Conway said the swaps are ties, forcing a $400 million pay- troversial 2011 state law under re- best serves your client,” he said. least,” said Bill Ballenger, editor of symptomatic of a bigger problem: ment — money the city doesn’t view in court would scrap the “I … could see an attorney for the the newsletter Inside Michigan the city’s debt. have. pact in favor of a state-appointed state being concerned with pro- Politics. “These guys attended bas- Including pensions and post- Because of concerns about the employment benefits, the city has emergency manager or a munici- tecting (Act 4’s powers).” ketball games together, they were city’s deteriorating financial con- pal bankruptcy. The Sugar Law Center for Eco- supposed to be big buddies.” about $14 billion in debt, a 2011 dition, the language of the credit report by the nonpartisan Citizens Another states that a “material nomic and Social Justice last year Now, Ballenger said, “I think uncured breach” of agreement by swaps dealt with the possible ap- Research Council found. sued on behalf of a group of Snyder and the state are saying Detroit would empower state Michigan citizens, saying Public pointment of an emergency man- “The debt has to be dealt with the city is totally out of control, Treasurer Andy Dillon to imme- Act 4 violates the state constitu- ager. in the fixing of the city,” Conway we’ve given the mayor and the diately put the city in receiver- tion, in a case now before the Snyder acknowledged last said. “We have too much debt. Ef- council all this time to try and get ship. Michigan Supreme Court. Stand week that the credit swaps are a fectively, we have a balance sheet this act together, and it may be be- A third allows the agreement Up for Democracy, a coalition of concern. that’s broken, and the debt can- yond their control, they can’t do it “There’s an issue that if they to continue even if Public Act 4, labor organizations and some not remain untouched. ... If this under current law, we’ve got to go to an EM, it appears they have the state law allowing the state to churches and community is what brings them to the table, step in and have the tools to do the a number of swaps out there that declare a financial emergency groups, submitted more than so be it.” job, even if that means the mayor could be triggered,” Snyder said and appoint an emergency man- 225,000 signatures in a petition to Even if the city avoids an emer- has to be overridden or subjugat- at a media roundtable last week. ager of local governments, is put the law before voters in No- gency manager, said a source ed to our control or whatever “So if they go to an EM, that overturned in court or by voter vember. who didn’t want to be named, a else.” would be a complexity that would referendum. Mullins said the unusual pro- consent agreement could give the In part, that’s because the city have to be paid or refinanced in Municipal attorneys agreed visions could be part of the state’s swap counterparties an opportu- just can’t do the work that must be some fashion.” those provisions are unusual, but efforts to frame the agreement so nity to argue that the city’s finan- done to reach solvency with its But a consent agreement defensible. as not to inadvertently surrender current leadership in place, re- would give Detroit’s elected offi- cial condition had deteriorated to “It’s not standard language, be- any of its Public Act 4 powers. structuring experts say. cials many of the powers of an the point that a legal case could cause this is not a standard area Thomas McGraw, municipal law “It may not be Bing’s fault,” said emergency manager, without be made to change the terms of of practicing law for cities. I can attorney and president of Troy- Van Conway, triggering the payment. repayment. understand the purpose of it, based McGraw Morris PC, said the president of Treasury Communications Di- “The right way to manage this though,” said Timothy Mullins, agreement gives the state little or Birmingham- rector Terry Stanton said that re- is to be talking to the swap coun- partner at Giarmarco Mullins & Hor- no power that Public Act 4 didn’t based turn- financing or otherwise managing terparties and getting their un- ton PC in Troy. already bestow. around firm the swaps was the city’s responsi- derstanding of what’s going on,” “If you enter into a consent “The reality is, the state has Conway McKenzie bility; Naomi Patton, Bing’s the source said. “And what can agreement and then find later the right to appoint an emer- Inc. “He inherit- press secretary, told Crain’s that you put in a consent agreement to that if one party or portions of gency manager,” McGraw said. ed something no such negotiation or refinanc- keep them from seeing it this that party don’t continue to con- “The document as constructed is maybe nobody ing has taken place. way?” sent to the agreement, the state a (voluntary) peace offering from could fix” — at Van Conway, president of Nancy Kaffer: (313) 446-0412, can still go back to its original po- the state as it is, and if you don’t Conway least not with- Birmingham-based Conway [email protected]. Twitter: sition as allowed (by Public Act want to abide by it, the state is al- out money. McKenzie Inc., said that the $400 @nancykaffer 4). It’s not standard, but it still ready within its rights.” The state has said it will help the city obtain about $137 million by agreement.” refinancing debt and issuing new IN THE AGREEMENTS But that’s proven a tough pill for bonds, but Snyder said last week the mayor to swallow. that Detroit shouldn’t expect more Creation of a financial advisory members, and Bing controls four city’s corporate income tax rate. At Crain’s Friday deadline, funds from the state. board to oversee the city’s seats. The board would still oversee Both documents would mandate Bing’s staff and Detroit City Coun- Restructuring, Conway said, is a restructuring. In Gov. Rick Snyder’s restructuring, but would serve in a revenue estimation conferences, a largely advisory capacity on financial cil staffers were still working to different skill than managing a version, the board has nine provision that’s also in the city’s members; Snyder controls six matters. The board would report to hammer out a revised consent healthy city or business. new charter. The conferences would agreement. A new or revised appointments. The board would be the mayor. be held twice a year to determine “The restructuring field is a agreement could be produced on or the ultimate authority in Detroit, Both documents include reducing how much money the city has. very technical field,” Conway said. charged with tasks including: workforce, reducing vendors, before Monday. Both agreements bar city “You can see when large compa- establishing metrics to gauge the creating potential tax amnesties, State Treasurer Andy Dillon has nies go to restructure, have re- city’s recovery, overseeing improving the Detroit Department of employees or officials from taking said he hopes to bring an agree- legal action against the agreement structuring people involved … implementation of the recovery Transportation, outsourcing some or Public Act 4, the state’s ment to the Detroit City Council Dave Bing’s not a restructuring plan, approving the budget, city departments and functions, early next week; the city is expect- appointing Bing’s executive staff emergency manager law. guy; he’s a business owner. He reviewing collective bargaining ed to run out of cash in about six and evaluating the city’s debt. Both would create a new may be able to do something I agreements, considering selling city weeks. In Detroit Mayor Dave Bing’s assets, implementing the financing authority that could couldn’t, but when a business Conway said it’s likely that the version, the board has seven restructuring plan, and modifying the potentially sell bonds. needs to be restructured, he would- two sides will come to an agree- n’t have those skills. And from ment — allowing Detroit to fail is- what I can see, he doesn’t really what to do … but he has shown in touch the governor and his staff and clearly that indicates we lack n’t possible for the state, and not have restructuring people on his three years that he has not been could come up with that had any confidence in your ability to get it accepting state help isn’t possible team.” able to grasp the reality of the situ- real hope of being effective,” Buss done,” Conway said. “In the end, for Detroit — but said he hopes it’s Nor does the mayor’s track ation,” Dalto said. said. the agreement should be clear as to in time. record indicate things could Snyder’s consent agreement is The board would also select top who’s going to make the tough de- “I’m concerned that Rome is change, said Kenneth J. Dalto of about the best the city could hope appointees, like the COO, CFO and cisions to fix the city. If it’s wa- burning and they’re hung up on Farmington Hills-based manage- for, said Bettie Buss, a senior re- human resources director. tered down to where the right peo- terminology,” he said. ment firm Kenneth J. Dalto and Asso- search analyst at the nonpartisan “They’re saying we want to sup- ple are not making the decisions, Nancy Kaffer: (313) 446-0412, ciates. Citizens Research Council. plement management through the or have the ability to get in the way [email protected]. Twitter: “Intellectually, he may know “I think this was the lightest board and appointment of officers, of the decisions, it’s not a good @nancykaffer 20120319-NEWS--0027-NAT-CCI-CD_-- 3/16/2012 6:36 PM Page 1

March 19, 2012 CRAIN’S DETROIT BUSINESS Page 27 Assets: Leasing could bring city cash MEET BRUCE... ■ From Page 1 Two versions of draft consent criteria the government needed to “They will factor in controls to agreements include the possibility meet. Private-sector investors protect the public interest, so gov- of selling or disposing of city assets, would respond, and the city would ernments can relieve themselves and would bypass the anti-privati- evaluate the proposals, likely with of day-to-day operations while still zation ordinance. One draft was cre- the help of outside advisers. having a role in the services,” ated by Detroit Mayor Dave Bing’s Bonded debt or deferred mainte- Gilroy said. team and one by Gov. Rick Snyder. nance doesn’t make the investment Any such deal, Roesler said, Snyder’s plan would create a less attractive, Gilroy said, noting should include a performance nine-member financial advisory that investors and governments fig- covenant that would require the board and would tilt control heavi- ure the cost of retiring or renegoti- operator to maintain quality. ly in the state’s favor; Bing’s plan ating the debt into the lease price. Still, Michigan State University ex- would increase the mayor’s au- Upgrading the system is a part of tension professor Eric Scorsone thority over city matters and make making it profitable, Roesler said. said, enforcing such a contract a proposed financial advisory “Like any business, you have a could prove problematic. board largely ceremonial. revenue line and expenses to oper- “It’s one thing to write it into a No matter who pulls the strings, ate the business, and you have a contract, another thing to enforce experts say, private investment in profit or loss,” he said. “The hope it,” he said. “The bureaucrats have AT KP - WE’RE A TEAM. WHEN WE PARTNER WITH YOU ON A PROJECT municipal assets is increasingly among private investors is, if you to have contract management YOU BECOME AN EQUAL PART OF THE TEAM. WE WORK TOGETHER TO ENSURE popular for investors who see in- take a situation where the infra- skills, which many of them don’t. . AS SOON AS WE frastructure as a safe market. structure is antiquated, the If you can’t enforce the law, is it re- A QUALITY PRODUCT IS DELIVERED ON TIME AND ON BUDGET Asset sales, according to De- chances are that it is expensive to ally a law? It sounds good in theo- ARE AWARDED A PROJECT - YOU ARE CONNECTED TO THE “BRAIN” OF KERKSTRA troit’s City Charter, require ap- maintain on an annual basis, the ry, but management is always the PRECAST - ENGINEERING & DETAILING. proval by popular vote. Long-term operating costs are very high, and problem.” AS OUR ENGINEERING DIRECTOR, BRUCE HOPKINS IS RESPONSIBLE leases, called concessions, are less they may exceed revenue. … problematic, though they are still “If you make a serious invest- Not a silver bullet FOR ENSURING YOUR PROJECT IS DESIGNED EFFICIENTLY AND COST EFFEC- constrained by the city’s anti-priva- ment in infrastructure, to upgrade TIVELY. BRUCE AND THE REST OF THE ENGINEERING TEAM ARE EXPERIENCED IN tization ordinance, which restricts and modernize it, the idea being you Chicago and Indianapolis re- DESIGN-BUILD PROJECTS AND ENJOY WORKING DIRECTLY WITH OUR CUSTOMERS outsourcing work that could be can achieve substantial reductions cently leased their parking opera- done in-house, barring extensive in operating costs, then you can tions to private companies, Gilroy THROUGHOUT ALL PHASES OF THE PROJECT! JOIN BRUCE AND THE REST OF OUR documentation as to cost savings. turn a profit.” said, in different types of deals. TEAM ON YOUR NEXT PROJECT! Chicago got an up-front pay- ment of $1.15 billion for a 75-year Valuable infrastructure Raise money like water lease, but Indianapolis chose to Wastewater treatment, parking The Detroit Water and Sewerage take a smaller up-front payment — systems, roads, street lighting — all Department is a prime example of about $25 million — and receive a are targets for private investment, an asset that would be attractive to share of the system’s revenue over said Leonard Gilroy, director of investors. The department has op- the life of the lease. government reform at the libertari- erated under a consent agreement Typically, the entity that leases an think-tank the Reason Foundation. that settled a federal lawsuit over the infrastructure is composed of 800.434.5830 - WWW.KERKSTRA.COM The Detroit-Windsor Tunnel oper- environmental violations since an investment fund — Morgan ates under a long-term lease. Gov- 1977. The lawsuit is currently be- Stanley is one of the entities in the ernance of Cobo Center was trans- fore U.S. District Judge Sean Cox, joint venture that purchased the ferred to a regional authority in and the department is overseen by Chicago parking concession — 2009. While the city retains owner- a regional water authority. and an on-the-ground operator, ship of the convention center, a “Some investment could make Gilroy said. private management company is (the water department) more effi- That is the case for the Detroit- responsible for day-to-day opera- cient, give people better water ser- Windsor Tunnel, which is owned tions. In his third State of the City vice, bring it into compliance; those by the city of Detroit but operated Schechterize it address, Bing proposed the cre- would all be good things for the by the Detroit-Windsor Tunnel Co. ation of an authority to operate the city,” Roesler said. “The pushback That company is part of Ameri- city’s Public Lighting Department, would be water users’ concerns that can Roads LLC, said Neal Belitsky, but he didn’t say whether it might their water rates would go up, or CEO of both companies. American pursue a private operator. that the new concessionaire would Roads is a portfolio company of And Detroit currently has no ac- spend so much to upgrade the sys- Greenwich, Conn.-based Alinda tive plans to lease additional mu- tem that rates would go up.” Capital Partners, a fund that special- nicipal assets, said Naomi Patton, A government can dictate the izes in that sector to the tune of Bing’s press secretary. concessionaire’s ability to raise $7.4 billion in equity commitments But the market is there, experts rates, Roesler said, but that’s all to infrastructure worldwide. say. part of the equation that deter- Under the current deal, the De- “The appeal to the investor is mines the value of the concession. troit-Windsor Tunnel Co. pays the that, first of all, the concessions “The more they let the investor city about $1 million a year, Belit- tend to be for a relatively long peri- raise the rates, the more the in- sky said, declining to give annual od of time, 10 years or more,” said vestor would be willing to pay the revenue from the tunnel opera- Cliff Roesler, managing partner of city for the concession,” he said. tion. He noted that tunnel traffic is Birmingham-based Angle Advisors- “So that’s where your average wa- down about 50 percent since 2000. Investment Banking LLC, which does ter user gets a little itchy.” Scorsone warns that asset leas- not invest in public infrastructure. And in Detroit, the perceived ing is not a cure-all for the city’s fi- “You have a captive audience ac- outside “takeover” of city-owned nancial woes. {before} {after} customed to paying for the service, assets is always sensitive. “In principle, there’s nothing and there’s revenue associated “I know what it’s going to be — wrong with allowing the private with operating this entity.” no, it’s a takeover,” said Detroit sector to provide those kinds of Our experts are the difference. The captive market is a big draw political consultant Adolph Mon- services. … The upside is pretty for investors, who see a stability in go. “That’s been the perception for clear,” Scorsone said. “My con- We have big thinkers that understand the complicated issues that infrastructure that’s not present in a long time, since the days of Cole- cern with something like that is, if wealthy families and business owners face. Our team of CPAs, JDs, the traditional investment market. man Young. Detroit just doesn’t you take all the money now, are MBAs, CLUs, design life insurance strategies that have been coined Two examples, Roesler said, have the tax base it once had to you going to use it responsibly or “Schechterized” – a robust analysis and application of financial would be leasing a toll road or a maintain some of this stuff. … are you going to use it all up now water system. We’ve got to have a combination of and still have same structural tools that solve complex wealth transfer situations and can simply “You have an asset that in order what is good to operate, what is problems? ...” save money with existing life insurance policies. for the public to use, you have to good to lease out or sell.” And Detroit doesn’t have a great 75 years of sophisticated planning with 100s of wealthy families pay a toll,” he said. “If you don’t Public-private partnership deals track record for fiscal responsibili- pay the tax, you don’t pay the toll, can be constructed to suit the pref- ty, dating to the 1940s, he said. has made us a national leader in the life insurance arena. you have some inconvenience as- erences of the government that Asset leasing, like any other in- sociated with getting where you owns the asset. flux of cash, would only be positive want to go. “Cities go out and package up if combined with a long-term strat- “It’s the same with water — you what they want to take to the egy to fix the city’s financial prob- could get a well and a pump, but street,” Gilroy said. “Built in is lems. it’s very inconvenient.” what are they are trying to “If the rate of change of revenue Generally, Roesler said, a gov- achieve,” which could include isn’t greater than the rate of ernment would approach a public- standards for operation, what rate change of spending, you’ll always BIRMINGHAM, MICHIGAN 248.731.9500 private partnership by issuing a re- increases would be allowed and be running into problems,” Scor- WWW.SCHECHTERWEALTH.COM quest for proposals that included how proceeds will be paid. sone said. 20120319-NEWS--0028-NAT-CCI-CD_-- 3/16/2012 6:42 PM Page 1

Page 28 CRAIN’S DETROIT BUSINESS March 19, 2012 UPCOMING Tax: Reform legislation nears action ■ From Page 3 utilities portion of the tax would nicipal League, said funding that is PARTNER EVENTS remain intact, Nofs said. appropriated by the Legislature is The $40,000 threshold would elim- Our preference is too often subject to the whims of Crain’s inate the tax for about 80 per- “ lawmakers. partners with a variety of organizations cent of businesses that pay it (the tax is) “In any year, they can change on events and special subscription offers and represent a total tax cut of eliminated that,” he said. for their members. Please visit their Web sites below. $67 million, Brandenburg said. The league is part of Replace According to estimates from Don’t Erase, a coalition whose goal the Michigan Department of Trea- today. But is to guarantee full replacement of sury, the tax on industrial per- revenue lost through personal Marketing & Sales Executives of Detroit (MSED) Dinner sonal property generated about we’ve been at property tax reform. Other mem- Meeting. Panel Discussion: “Women Who Are Setting $412 million in 2010, although bers are the Michigan Association of a New Standard in Sales & Marketing.” PANELISTS: the 35 percent credit that was this for 20 Chiefs of Police, the Michigan Associ- Patricia Mooradian, president, The Henry Ford; part of the Michigan Business years. ation of Counties, the Michigan Asso- Joan Budden, chief marketing officer, Priority Health; Tax reduced that to about $268 mil- ” ciation of School Administrators, the Catherine Juon, co-founder and catalyst, Pure Visibility; lion. Taxes on commercial personal Michigan Association of School Mike Johnston, Andra Rush, president and CEO, Rush Group/Dakkota property were estimated at $399 Boards, the Michigan Library Associa- Michigan Manufacturers Association Integrated Systems; MODERATOR: Beth Chappell, million and utility personal proper- tion and the Michigan Professional president and CEO, Detroit Economic Club. ty taxes at about $397 million. ual rollback of the tax rather than Fire Fighters Union. Find out how these businesswomen have done an Large retailers would continue an immediate elimination. The Snyder administration has outstanding job in marketing and selling their respective to pay personal property tax under “Our preference is it’s eliminat- invited local governmental units companies and organizations and their tips and techniques the plan, but those businesses ed today,” he said, noting that re- to help devise a permanent re- for setting a new standard in sales and marketing. were “very well taken care of” by forming the tax is the association’s placement formula, but Schor said March 22 • 5 – 8:30 p.m. last year’s switch from the Michi- top legislative priority. “But we’ve they first want a constitutional The Management Education Center, Troy gan Business Tax to the corporate been at this for 20 years. Getting guarantee. MSED Members: $45 Non-Members: $60 income tax, Brandenburg said. something on the books is what’s Brandenburg said the Legisla- Register online at www.msedetroit.org or call meeting The corporate income tax, effec- important.” ture is unlikely to agree to a con- coordinators at (248) 643-6590 tive Jan. 1 of this year, is a 6 per- As has been previously dis- stitutional guarantee, saying, cussed by the Snyder administra- Southfield Area Chamber of Commerce cent tax on the income of C corpo- “There is no guarantee in life.” Open House. Southfield Area Chamber to unveil its rations. The switch from the tion, revenue from personal prop- The phase-out of the tax gives lo- new offices grand opening celebration. Meet the new unpopular MBT amounted to a $1.6 erty tax generated for local units of cal units time to adjust to the tax executive director and swearing in of new board of billion tax cut for businesses. government would initially be re- changes, he said. directors. Under the plan to eliminate per- placed by expiring tax credits that “We’re giving all the locals a March 22 • 4 – 6 p.m. sonal property tax, the tax on in- were awarded by the state for ad- four-year head start before they re- 24300 Southfield Rd., Suite 101 dustrial personal property pur- vanced battery manufacturing ally begin to feel this,” Branden- Southfield, MI 48076 chased between Jan. 1 of this year projects. The state is honoring burg said. NO COST through 2015 will be repealed on those tax credits in Michigan’s Statewide, personal property Jan. 1, 2016, and any equipment new business tax system, but they taxes provide 2.7 percent of non- How to Become a Government Contractor purchased thereafter will be free of have a limited life. school local government revenue Presented by the PTAC of Schoolcraft College – tax. The intent, Nofs said, is to en- As the credits phase out, the and 1 percent of school revenue, al- Did you know the federal government purchases more courage industrial companies to money that the state no longer though some communities rely than $524 Billion of goods and services a year, and that continue making purchases and would be paying on the credits heavily on the tax. the State of Michigan has a diverse portfolio valued at not wait until the tax is phased out. would go to local governments. Alex Rosaen, a consultant at An- billions of dollars? Find out what it takes to sell your “We’re trying to let them go The legislation in development derson Economic Group in East goods and services to the Federal Government and the ahead and buy it and not postpone would replace at least 81 percent of Lansing, said it’s still hard to State of Michigan. what they need to do,” he said. the property tax that will be elimi- quantify exactly how much busi- In addition, learn about the free services and Also beginning in 2016, all indus- nated, Brandenburg said. ness investment would come along continuous government contracting support that the trial equipment older than 10 years Local governments that have with the change in tax rules. PTAC (Procurement Technical Assistance Center) of would start coming off the tax rolls seen state revenue-sharing slashed “Generally, when you start taxing Schoolcraft College can provide to your company. until all of it was tax-free by 2021. in recent years, however, are something, people start buying less April 12 • 9 a.m. – Noon • Schoolcraft College Mike Johnston, vice president of pushing for complete replacement, of it,” he said. “We certainly can ex- $45 per person. Registration required: (734) 462-4438 government affairs for the Michi- and they want the funding consti- pect to see more personal property gan Manufacturers Association, said tutionally guaranteed. in the sate if we quit taxing it.” Greater Detroit Area Health Council presents Coffee the group understands that bud- Andy Schor, assistant director Meghana Keshavan contributed and Controversy “Oral Health: Its Effect on Overall geting complexities require a grad- of state affairs for the Michigan Mu- to this story. Health, New Findings in Oral Cancer.” sponsored by Delta Dental of Michigan. SPEAKERS: Jed Jacobson, DDS, MS, MPH, chief science officer and senior vice president, Delta Dental of Michigan, Ohio and Indiana; Eva Grayzel, oral cancer survivor and founder of “Six- Birmingham: Finding lots of value Step Screening,” an oral cancer awareness campaign. April 3 • 7:30 – 9:30 a.m. • Continental breakfast ■ From Page 3 Skyline Club in Southfi eld. GDAHC members: $35, $50 for non-members. struction time. square feet of office space. To register, go to www.gdahc.org. Beznos said the project will be Full occupancy of the Greenleaf one of the All Seasons facilities building followed the purchase, re- Breakfast Meeting “Solid Leadership” owned by Beztak, similar to the All development and full leasing of a Sponsored by AT&T. GUEST SPEAKER: Daniel Krichbaum, Seasons of Rochester facility the former post office at 320 Martin St. Ph.D., director, Michigan Department of Civil Rights. Solid company owns. That string of deals is a sign of leadership is multi-faceted. Companies and cities that lead “Birmingham is the perfect site the strong demand for office space are faced with a number of key beliefs that set them apart. for an independent living facility in Birmingham, which in turn Krichbaum will address some of those values, including the because of the very strong demo- keeps values equally strong for business case for diversity and inclusion in the workplace. graphics of the Bloomfield-Birm- COSTAR GROUP real estate, said Matt Farrell, ex- March 28 • 8 – 9:30 a.m. • MSU Management Education ingham market,” he said. “Seniors This former funeral home in ecutive principal of Birmingham- Center, 811 W. Square Lake Rd. (east of Crooks Rd.) want to live close to where they Birmingham will become a 135-unit based Core Partners LLC. $23 Troy Chamber members / $33 Non-members grew up, and downtown living can senior housing development. “There’s been ongoing demand To register, call 248-641-8151, e-mail: theteam@ help them stay active both physi- in Birmingham associated with troychamber.com or visit www.troychamber.com/cal. cally and mentally while enjoying unidentified hotel developer, ac- the consistency of office product all of the retail, restaurant and cording to sources familiar with and the walkable nature of the Proper, Purposeful & Powerful Posting on Social Networks community amenities of Birming- the deal. downtown area,” he said. “That’s Presented by the Women’s Business Forum. PRESENTER: ham.” Just to the south, on the west protected property values and al- Brenda Meller, Director of Marketing, Walsh College Near that site, wrangling has side of Woodward, discussions lowed for some relatively expen- Learn the purpose of posting on each of the big three: continued for ownership of the continue on the proposed con- sive land sales over the last couple LinkedIn, Facebook, and Twitter and the unspoken rules you land where the former Barclay Ho- struction of a five-story office and years.” need to know and more. Bring your Wi-Fi enabled laptop or tel once stood, at the southeast cor- retail building to be called the Bal- As Pliska points out, Birming- iPad for hands-on instruction. ner of Woodward Avenue and moral. The site is currently a va- ham has always set the top of the April 10 • 8 – 9:30 a.m. • Walsh College-Troy, 3838 Livernois Maple. cant lot; timing on a groundbreak- market. $16 Troy Chamber members /$23 Non-members. The property was under con- ing isn’t yet known. “It follows the old theory: You To register, call 248-641-8151, e-mail: theteam@ tract to be sold in January at a The Balmoral project would fol- buy high and sell higher,” he said. troychamber.com or visit www.troychamber.com/cal. price rumored to be $2.2 million, low the nearby Greenleaf Trust Daniel Duggan: (313) 446-0414, but it did not close. It is again un- building, completed in 2010 and [email protected]. Twitter: der contract, this time with an now fully occupied with 27,000 @d_duggan 20120319-NEWS--0029-NAT-CCI-CD_-- 3/16/2012 6:44 PM Page 1

March 19, 2012 CRAIN’S DETROIT BUSINESS Page 29 Loans: Equity demands deter tech investors www.crainsdetroit.com ■ EDITOR-IN-CHIEF Keith E. Crain From Page 3 PUBLISHER Mary Kramer, (313) 446-0399 or technology spun out of a consortium the fourth “near final” conditional ago this wasn’t going to happen, ply didn’t make sense without [email protected] EXECUTIVE EDITOR Cindy Goodaker, (313) 446- including Google Inc., Rocky Mountain commitment by the DOE since 2010 then why continue to put in signif- them,” he said in an email. “So, ef- 0460 or [email protected] Institute, Alcoa, Johnson Controls Inc. required more equity than the loan icant time into our loan applica- fectively, they were relying on MANAGING EDITOR Jennette Smith, (313) 446- 1622 or [email protected] and the Turner Foundation. amount be raised. In a letter to En- tion?” he said. “They were spend- some level of subsidies to fill in the DEPUTY MANAGING EDITOR Daniel Duggan, (313) The plan was to commercialize a ergy Secretary Steven Chu on Feb. ing a lot of taxpayer money to gaps where the technology and the 446-0414 or [email protected] SENIOR EDITOR Bob Allen, (313) 446-0344 or lightweight aluminum-bodied de- 28, Bright said: “The first three evaluate us for never intending to market weren’t quite there yet.” [email protected] livery van capable of achieving 85 were workable for us, but the last OK the loan.” LaVera declined to comment on WEST MICHIGAN EDITOR Matt Gryczan, (616) 916- mpg. Bright had secured General was so outlandish that most ratio- ALTe abandoned its efforts the availability of private equity. 8158 or [email protected] COPY DESK CHIEF Gary Piatek, (313) 446-0357 or Motors Co. as an investor and inked nal and objective persons would more than a year ago, with similar Rizik said companies like Bright [email protected] a manufacturing contract last fall likely conclude that your team was complaints as Bright, said John are the “bleeding edge” of ad- ASSISTANT NEWS EDITOR Jeff Johnston, (313) 446-1608 or [email protected] with AM General LLC. It employed 60 negotiating in bad faith.” Thomas, chairman and CEO of vanced auto technology and the DATA EDITOR Brianna Reilly, (313) 446-0418, workers — 40 in Michigan. Damien LaVera, deputy director ALTe. program may push technology for- [email protected] But Michael Brylawski, execu- of public affairs for the DOE, said “We made the strategic decision ward, but not without casualties. WEB EDITOR Gary Anglebrandt, (313) 446-1621, [email protected] tive vice president of business de- the loan program is designed to al- about 15 months ago because it “It’s not the most efficient way,” EDITORIAL SUPPORT Robertta Reiff (313) 446- velopment and strategy for Bright, low companies to negotiate terms was increasingly unlikely that he said. “To be effective, the govern- 0419, YahNica Crawford, (313) 446-0329 NEWSROOM (313) 446-0329, FAX (313) 446- said the DOE until it meets DOE approval. we’d close the ment could have come in where 1687 TIP LINE (313) 446-6766 consistently de- “We conduct extensive due dili- DOE loan be- they do the best work, in the re- REPORTERS layed loan ap- gence and attempt to work with ap- cause they kept search lab, continuing to develop Daniel Duggan, deputy managing editor: Covers proval by alter- plicants to negotiate terms that moving the goal- the technology as the market catch- real estate. (313) 446-0414 or [email protected] Jay Greene, senior reporter: Covers health care, ing the loan support their businesses while post,” Thomas es up, not at the company level. insurance and the environment. (313) 446-0325 or terms — asking protecting the taxpayers,” he said said. “The due There’s simply a market demand [email protected] Chad Halcom: Covers law, non-automotive for more and in an emailed statement. “While diligence kept problem that trumps everything.” manufacturing, defense contracting and Oakland more collateral this can be a rigorous and difficult expanding, and and Macomb counties. (313) 446-6796 or [email protected] over the course process, we will continue to negoti- we couldn’t sup- Tom Henderson: Covers banking, finance, of the three-year ate with a company as long as they port a burn rate From Uncle Sam to Red Dragon technology and biotechnology. (313) 446-0337 or [email protected] Brylawski evaluation. want to propose terms. forever. In a last-ditch effort to ensure Thomas Nancy Kaffer: Covers small business, the city of Brylawski said the original DOE “In the end, if we cannot come to “When you’re the financial viability of ALTe, Detroit and Wayne County government. (313) 446- 0412 or [email protected] paperwork required Bright to raise an agreement on terms that would asked to raise 80 percent to 100 per- Thomas flew to China last year to Bill Shea, enterprise editor: Covers media, private funds equal to 20 percent of protect the taxpayers, we will not cent of the loan amount, you don’t pitch the technology to investors. advertising and marketing, the business of sports, and transportation. (313) 446-1626 or the loan value for approval, then close a loan. These have been our need the loan. You might as well Earlier this year, ALTe was able [email protected] moved it to 40 percent, then 70 per- parameters from day one of this fund it without them.” to secure a deal with a large Chi- Nathan Skid, multimedia editor. Also covers the food industry and entertainment. (313) 446-1654, cent until finally requiring Bright program, and will continue to be as nese investment firm. Thomas de- [email protected] to raise $340 million in private we perform due diligence on the ap- clined to reveal the terms ahead of Sherri Welch: Covers nonprofits, services, retail The best laid plans … and hospitality. (313) 446-1694 or funds for the $314 million loan. plicants in our current pipeline.” its investor’s announcement. [email protected] “Every time we thought the loan Reports have surfaced saying Brylawski and Thomas said the As part of the deal, ALTe will con- Dustin Walsh: Covers auto suppliers, steel, higher education and Livingston and Washtenaw was weeks away, then we’d get a Bright was notified in fall 2010 that DOE program created a market dis- currently launch its electric power- counties. (313) 446-6042 or [email protected] new term sheet,” he said. “We’d go it was unlikely to get approval for tortion where the loan required pri- train technology in the U.S. and ADVERTISING back and get investors on board, a DOE loan. vate funding and private funding re- China in the first quarter of 2013. At ADVERTISING DIRECTOR Marla Wise, (313) 446- and then we’d see yet another term Brylawski denies the DOE ever quired the loan, limiting both launch, ALTe expects to have 258 6032 or [email protected] SALES INQUIRIES: (313) 446-6052; FAX (313) sheet.” expressed this to Bright. companies’ ability to secure either. U.S. employees, up from its current 393-0997 Bright decided to pull out after “If they knew a year and a half Private equity firms and ven- 50. ALTe is also building a plant in SENIOR ACCOUNT EXECUTIVES: Matthew J. China that is scheduled to be com- Langan, Tamara Rokowski ture capitalists offered up private ADVERTISING SALES Christine Galasso, Lori capital, but only if Bright could se- pleted by the end of 2013. Tournay Liggett, Dale Smolinski cure a DOE loan, Brylawski said. While pleased with the Chinese CLASSIFIED SALES (313)-446-0351 investors, Thomas said he wishes MARKETING DIRECTOR Jeff Kapuscinski “Having all that very cheap EVENTS DIRECTOR Nicole LaPointe money out there eliminated the op- ALTe could have survived as a EVENTS COORDINATOR Kacey Anderson ShowShow Them Them What What U.S.-powered entity. SENIOR PRODUCER FOR DIGITAL/ONLINE portunity for us to get private PRODUCTS Pierrette Dagg funding (independently),” he said. “It shouldn’t have been this way,” MARKETING ARTIST Sylvia Kolaski “We had no choice but to seek the Thomas said. “The government put SALES SUPPORT Suzanne Janik, YahNica Crawford YouYou StandStand For For themselves in a position where they AUDIENCE DEVELOPMENT MANAGER government loan, because without Candice Yopp it there was no private funding. don’t have expertise, and the rule of MARKETING COORDINATOR Jenny Griffith When the government throws unintended consequences applies. PRODUCTION MANAGER Wendy Kobylarz PRODUCTION SUPERVISOR Larry Williams money at an industry, that’s where Never in our wildest dreams did we is a commitment CUSTOMER SERVICE BBB Accreditation all business will flow through.” think we’d launch concurrently in China and the U.S.” MAIN NUMBER: Call (877) 824-9374 or write to fairness and honesty that lets Said Thomas: “They (DOE) have [email protected] kind of adulterated the classic ven- However, the U.S. government SUBSCRIPTIONS $59 one year, $98 two years. appears to support the investment, Out of state, $79 one year, $138 for two years. consumers know you are a business ture capital business model by in- Outside U.S.A., add $48 per year to out-of-state serting themselves.” as Thomas and other ALTe execu- rate for surface mail. Call (313) 446-0450 or tives were flown to Washington, (877) 824-9374. they can trust - a business that As the DOE presented increas- SINGLE COPIES: (877) 824-9374 ingly steeper terms, investors D.C., on Feb. 13 as part of Chinese REPRINTS: (800) 290-5460, ext. 125; honors its promises and embodies bailed on commitments, acknowl- Vice President Xi Jinping’s official (717) 505-9701, ext. 125; or lindsay.wilson visit with President Obama. @theygsgroup.com edging that more investment TO FIND A DATE A STORY WAS PUBLISHED: confidence they deserve. would diminish returns, Brylaws- Where ALTe succeeded, Bright (313) 446-0367 or e-mail [email protected] failed — but not without effort. ki said. CRAIN’S DETROIT BUSINESS IS PUBLISHED BY Mike Donoughe, Bright COO, CRAIN COMMUNICATIONS INC. Your customers start with “Investors will only take so flew to China and found interested CHAIRMAN Keith E. Crain much risk, and the final term con- PRESIDENT Rance Crain bbb.org. investors in the fall of 2011 but ditions were so bad, they pulled SECRETARY Merrilee Crain couldn’t secure a deal in time, Bry- TREASURER Mary Kay Crain out,” he said. Shouldn’t you? lawski said. Executive Vice President/Operations Raj Kothari, partner at Birming- William A. Morrow “The only path to private fund- Group Vice President/Technology, ham merchant banking and ven- ing led to China, and he heroically Manufacturing, Circulation ture capital firm Seneca Partners Robert C. Adams almost got the deal that could have Vice President/Production & Manufacturing Inc., said unproven technology is a saved Bright,” Brylawski said. Dave Kamis big risk for investors, and if the Chief Information Officer “The problem was timing; we Paul Dalpiaz government raised the investment didn’t have enough time to get the Chief Human Resources Officer amount, it’s an easy decision for Margee Kaczmarek deal done.” Director of Audience Development Operations investors to bail out of the deal. Four years later and $40 million Michelle Roth “The more capital that goes into a in cash gone — including millions G.D. Crain Jr. Founder (1885-1973) startup, the lower the returns get,” Mrs. G.D. Crain Jr. Chairman (1911-1996) from Bright’s founders and execu- EDITORIAL & BUSINESS OFFICES: he said. “The end goal is the same; tives — Bright’s concept vehicle 1155 Gratiot Ave., Detroit MI 48207-2732; (313) the profit projections didn’t change, 446-6000 sits alone in Rochester Hills. Cable address: TWX 248-221-5122 AUTNEW DET just the amount of capital needed, ® “Up until the last week, we CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 and that diminishes returns.” is published weekly, except for a special issue the thought we were getting the loan,” third week of August, and no issue the third week Start With Trust However, it’s unclear whether Brylawski said. “If I knew it was of December by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. venture capitalists would have going to happen this way, I Periodicals postage paid at Detroit, MI and funded these high-risk technology wouldn’t have sunk my life sav- additional mailing offices. POSTMASTER: Send address changes to CRAIN’S DETROIT BUSINESS, Better Business Bureau startups without a government pro- ings into this company. I know it Circulation Department, P.O. Box 07925, Detroit, Serving Eastern Michigan and the Upper Peninsula gram, said Chris Rizik, CEO and wasn’t their intention, but the exe- MI 48207-9732. GST # 136760444. Printed in U.S.A. fund manager for Ann Arbor-based cution of the DOE program un- Entire contents copyright 2012 by Crain Call 248-223-9400 to learn more Renaissance Venture Capital Fund. equivocally killed this company.” Communications Inc. All rights reserved. Reproduction or use of editorial content in any or go to bbb.org “Many of the venture capitalists Dustin Walsh: (313) 446-6042, manner without permission is strictly prohibited. wanted the DOE loans because the [email protected]. Twitter: economies of the companies sim- @dustinpwalsh 20120319-NEWS--0030-NAT-CCI-CD_-- 3/16/2012 6:51 PM Page 1

Page 30 CRAIN’S DETROIT BUSINESS March 19, 2012 RUMBLINGS WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF MARCH 10-16

The $40.95 fee to join gets signed to measure a bank’s ject to renovate the A. Alfred you a membership card, a Walbridge wins ability to survive a down- Taubman Health Care Center, hat, window sticker, 2012 turn worse than the Great one of the university’s 40 Vintage home MLB.com game day audio Recession. Lenders must outpatient centers to in- for the computer, access to $11.5M Navy submit plans within 30 clude new clinics and ex- special events, an online fo- days outlining how they panded departments. rum, a newsletter and 10 plan to get stronger, AP re- Earlier, UM learned it is newest haunt percent discounts for mer- contract ported. getting a $10 million gift chandise at Comerica Park Chicago-based Starcom from the Dow Chemical Co. and the team’s online store. etroit-based Wal- MediaVest Group, which lost for a sustainability pro- Club members also get $5 bridge Aldinger Co. the $3 billion media-buying gram to support students’ off the regular $28 price of D was the winner and planning duties for work in solving global chal- for Kid Rock lower baseline seats. among five proposals sub- General Motors Co. in Janu- lenges. Details are at Tigers.com. mitted for an $11.5 million ary, filed a notice with the Five Michigan law wight Street in De- one-woman musical, “Bern- work order from the U.S. state that it plans to lay off schools have been listed on troit’s Berry Subdivision hardt on Broadway,” it was Navy’s Naval Facilities En- 80 staffers at its downtown the 2013 Best Law Schools D Historic District has a natural, so to speak, for her Outdoor Hub expands gineering Command in Detroit office. ranking by U.S. News & new resident: Kid Rock. to make a video and post it online news presence Norfolk, Va. Water-sewer subcon- World Report. The University The rapper, who hails on YouTube under the title Walbridge will build a tractors L. D’Agostini & Sons of Michigan Law School from Macomb County and “Paparazzi Catches ‘Bern- Bingham Farms-based helicopter gearbox repair Inc. and DLZ Michigan Inc dropped to No. 10 out of 195 lives in Clarkston but is hardt on Broadway’ Stage & Outdoor Hub Holdings LLC has and test facility at the Ma- cannot be barred as bidders accredited law schools; it closely identified with De- Silent Movie Star in Her an expanded daily news rine Corps Air Station in on future Detroit projects was No. 7 last year. The troit, reportedly bought a Boudoir.” wire and is rapidly growing Cherry Point, N.C. The based on available evi- Michigan State University Col- 6,000-square-foot colonial Dunitz poses nude on a its online news, marketing, award includes an “unexer- dence connecting them to lege of Law rose to No. 82 last week on the street, couch and the floor, using advertising and production cised option” that could in- the alleged “enterprise” of from No. 95; Wayne State which is also home to the promotional poster prints of business. crease the total construc- disgraced former Detroit University Law School rose Manoogian Mansion. Bernhardt’s performances Outdoor Hub is focused tion contract to just over Mayor Kwame Kilpatrick, the from No. 121 to No. 110. The The six-bedroom, six- for discreet coverage. on content related to fish- $12 million. Detroit Water and Sewerage University of Detroit Mercy bathroom three-story home, “It’s the kind of thing ing, hunting, camping, pow- Board of Water Commission- Law School and the Thomas built in 1930, is along the Sarah Bernhardt would have er sports and other topics. ers has found. M. Cooley Law School are Detroit River and has a fin- done,” Dunitz said. “It’s pret- The company reported $10 ON THE MOVE Henry Ford Health Sys- among the unranked sec- million in revenue in 2011, ished basement. The Detroit ty gutsy for a mature Rainer Jueckstock, se- tem was one of only two ond-tier schools. compared to $7 million in Free Press broke the news woman. It’s in good taste. It’s nior vice president of South- hospitals to win the nation- Roy Roberts, Detroit Pub- 2010. on Thursday. suggestive, it’s provocative, field-based auto supplier al 2011 John M. Eisenberg lic Schools’ emergency man- The home was originally but that’s all it is.” When David Farbman Federal Mogul Corp., will be- Patient Safety and Quality ager, has signed a contract listed in March 2010 for Crain’s readers may re- launched the company in come CEO of the company Award for innovation. The extension for another year. $800,000. member Dunitz for another 2007, it consisted of a small and a member of the board other hospital is New York- Real estate blog Curbed- marketing gimmick she em- team of third-party brokers of directors April 1, replac- Presbyterian Hospital in New Detroit.com reported the ployed for many years. that sold advertising space ing the retiring Jose Maria York City. OTHER NEWS buyer as “Ritchie Robert Every week she ran a classi- on independent outdoor Alapont, who will remain Bert Dearing, owner of James Living Trust” — Kid The North American In- fied ad for her boutique ad- websites. Its content at out- with the company in a con- Bert’s Warehouse Theatre in Rock’s real name is Robert ternational Auto Show an- vertising doorhub.com sulting role and remain on Eastern Market, has James Ritchie — and a Jan. nounced it will begin in the and speech- now attracts 15 the board through 2013. launched a music promo- 19 closing date. The sale third week of January 2013 writing million unique Bloomfield Hills-based tion business called Russell price was listed on real es- instead of the second to ac- agency, The visitors per Cranbrook Educational Com- Street Entertainment LLC to tate sites as a $459,000 or a commodate journalists’ Last Word month. munity announced that COO teach young talent the busi- $465,000 short sale. holiday vacations. LLC in Ann “We’re getting Dom DiMarco will become ness side of music. Dearing The listing on The number of home Arbor. She changed her people outside of our net- president July 1 after cur- is CEO; Miller London, a for- Zillow.com, ironically sales in metro Detroit rose headline and outfit each work — local news sites, for mer executive for labels enough, has an aerial photo rent President Rick Nahm in February by 9.6 percent time. For more on “Bern- instance — asking if they can such as Motown and A&M of the property credited to retires June 30. DiMarco over January (3,495 to hardt on Broadway,” which use our news wire to power Records, is president; and Al search engine Bing. has been with Cranbrook 3,829) and by 13 percent is being staged in several their outdoor sections,” said since 2008. Gibson will be vice presi- from February 2011’s 3,389 metro Detroit communities, Hyaat Chaudhary, COO. Out- dent. sales. The median home Nude on YouTube (for art) go to DetroitMakeItHere.com. door Hub, which employs 35, sale price was $58,000 in The iconic French actress now includes writers to gen- COMPANY NEWS February, up 5.7 percent Sarah Bernhardt used what Price of Detroit Tigers erate new content for the MGM Grand Detroit casi- LANSING from $54,850 last year. was then innovative public- wire service, in addition to no reported $53.4 million in The Michigan Depart- The Detroit-based en- ity to fuel a career that fandom: $40.95 an advertising sales team revenue in February, up ment of Transportation said it trepreneurship accelerator spanned 60 years beginning The Detroit Tigers have a spread across the country. 13.9 percent from the same would solicit a request for Bizdom U is searching for in the mid-19th century — team-sanctioned fan club Chaudhary said that in month in 2011; MotorCity qualifications the week of applicants for the April including appearing in par- for the first time since the the next few months, the Casino-Hotel posted revenue March 26 to complete work launch of its three-month tially nude photos when she “Pepsi Tiger Fan Club” in company will launch Out- of $42.9 million, up 11.2 per- on ramps and other parts of boot camp designed to men- was still a teenager. the early ’80s.The franchise door Hub Connect, for users cent over February 2011; the $230 million Ambassador tor and fund innovative So when Carol Dunitz need- unveiled the Official Detroit to create their own wire and Greektown Casino-Hotel Gateway Project, and would technology startups. The ed to get attention for her Tigers Fan Club last week. feed widgets. reported $32.6 million in seek bids for construction application deadline is revenue, up 12.3 percent work the week of April 2. March 23. from February 2011. State Rep. Kurt Heise, More information is at The Birmingham of- R-Plymouth, is sponsoring bizdom.com. fice of McCann Erickson legislation that would pro- Worldwide will continue to tect townships with popula- handle the state’s “Pure tions of 20,000 or more from OBITUARIES BEST FROM THE BLOGS Michigan” travel market- “hostile annexations” by John Browne, founder ing campaign for at least neighboring cities or vil- and president of Bloomfield READ THESE POSTS AND MORE AT WWW.CRAINSDETROIT.COM/BLOGS the next three years, the lages, similar to the one in- Hills-based John F.X. Browne Michigan Economic Develop- volving the former and Associates, a broadcast Medical society has busy night How many strikes for Goodwill? ment Corp. said. Northville Psychiatric Hos- engineering consulting The Nasdaq Stock Ex- pital site in 2008. company, died March 11. The Wayne County The Dearborn change delisted Auburn The Michigan Senate Medical Society He was 76. Planning Commission has approved and sent to approved a resolution “ Hills-based Energy Conver- Tim Bryant, media rela- tabled for a third time on Blue Cross’ sion Devices Inc., which had the House bills aimed at re- tions director for Fox Sports its vote on granting a physician incentive traded under the symbol quiring insurance compa- Detroit in Southfield, died special use request to program and ENER. It was a formality nies to cover some types of Goodwill Industries of March 10. He was 53. condemned female after ECD announced on treatment or therapy for Greater Detroit for an Leslie Erick Ward, long- genital mutilation in upscale thrift store on Feb. 14 that it was filing for autism. time West Bloomfield Southeast Michigan. Michigan Avenue. Chapter 11 bankruptcy. Township photographer, Detroit-based Ally Fi- marathon runner, yoga ” nancial Inc. was one of four SCHOOLS devotee and author of My- Reporter Jay Greene’s blog about health care, Reporter Sherri Begin Welch’s blog of major U.S. banks to fail The University of Michi- Town Miracles, Profiles in insurance and the environment can be found at about Southeast Michigan nonprofits can be found the Federal Reserve Board’s gan board of regents has ap- Possibilities, died March 13. www.crainsdetroit.com/greene at www.crainsdetroit.com/welch so-called stress test, de- proved a $20.5 million pro- He was 60. DBpageAD.qxp 3/8/2012 2:53 PM Page 1

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