American Axle’s Denise Ilitch’s big buy, big risk juggling act Deal dilutes New role as chair Dauch family’s of Horizon Global control of adds to portfolio, company, Page 3 Page 3

NOVEMBER 7 - 13, 2016 Pistons move to Detroit may be mixed bag for investors By Bill Shea and Kirk Pinho But sports teams don’t always [email protected] Red Wings tickets provide the revitalization boost one Moving the Detroit Pistons down- Season ticket transition to new might expect — especially for people town seems like a magnet for eco- arena halfway done, Page 24. hoping for a Target or Meijer, accord- nomic development, bringing more ing to Robert Gibbs, a retail and ur- people and businesses into the family’s Olympia Entertainment an- ban planning expert who is manag- planned entertainment district. nounced plans for the 50-block The ing principal of Birmingham-based And it should be — but only for District Detroit residential develop- Gibbs Planning Group Inc. certain kinds of businesses. ment anchored by the new Little “Restaurants and bars will do e Pistons’ move, expected to be Caesars Arena. Little outside invest- much better,” said Gibbs, who also formally announced this month, is ment beyond the Ilitches’ own prom- teaches in the Harvard University OLYMPIA DEVELOPMENT OF MICHIGAN expected to help lure some of the in- ised $1.2 billion investment in the Graduate School of Design. “But the Adding 41 Detroit Pistons games and their accompanying foot tra c might not vestment promised when the Ilitch district has been announced so far. SEE PISTONS , PAGE 24 be the lure for additional District Detroit development some think it is.

Election 2016 5 races that matter The presidential election and its twists and turns have made it easy to miss issues and elections that are important closer to home. Here’s a look at ve regional races that will a£ ect businesses in metro Detroit:

OAKLAND COUNTY: MACOMB COUNTY: WAYNE, OAKLAND, DETROIT: Proposal A DETROIT: Detroit Public County executive race Public works MACOMB AND and B community Schools Community 1 2 commissioner race 3 WASHTENAW 4 bene ts ordinances 5 District board What it is: Longtime Republican What it is: Another longtime COUNTIES: Regional Transit What they are: This is a Detroit-speci c What it is: The new board for the Executive L. Brooks Patterson faces incumbent, Democrat Anthony Authority millage ballot issue. Proposal A would require school district, which will leave opposition from Democratic former Marrocco, is facing major-league What it is: A 20-year, $3 billion tax projects worth $15 million or more that emergency management at the end state Rep. and Farmington Hills Mayor opposition from Republican U.S. Rep. proposal primarily aimed at creating receive $300,000 or more in tax of the year, will be selected by voters Vicki Barnett, who is selling an Candice Miller. new and better bus service in Wayne, abatements or incentives to make a from a 63-candidate eld that economic message focused on transit Oakland, Macomb and Washtenaw binding “community bene ts” agreement includes most of the previous board Why it matters: Marrocco, who has with a group of residents, businesses and members, as well as various slates and redevelopment rather than been dogged by whispers of pay-to- counties. It would also add commuter nonpro ts in the surrounding area. The that represent labor or business expressways and sprawl (a word play politics, has held the o ce for 24 rail service between Detroit and Ann developer would have to provide the interests. Patterson embraces). years. Big money – ows through that Arbor and pick up the annual operating costs of the M-1 Rail agreed-upon bene ts to the community. Why it matters: Patterson, who has o ce: There have been $285 Why it matters: The board will hire a Proposal B would make similar require- consistently sailed to victory over 24 million in drainage projects streetcar line in Detroit. permanent superintendent and set ments, but would apply to projects of $75 years in o ce, could face a funded through bonds Why it matters: Supporters say the the tone as the district returns to million or more receiving more than $1 challenge in an increasingly issued by the county millage will help provide modern local control from state supervision, in million in incentives, and the bene ts Democratic county and during the past 10 transit options available in most major a city where the quality of the school would be negotiated by the city. in an election years alone. cities and improve workforce district seems a central economic where voters problems by helping potential workers Why they matter: Developers oppose issue and impediment to the city’s say they want get to available jobs reliably. both proposals as impediments to rebirth. (Full story below.) a change. Opponents say the extra tax isn’t development, but reserve their greater needed and commits the region to an concern for Proposal A, which would outdated model of transit that could apply to more projects. They argue that Results change with new technology. they will be stumbling blocks to Crain’s will cover the redevelopment and that most major results live; follow projects already include such agreements. @crainsdetroit on Twitter or visit crainsdetroit.com/ elections DPS election  lls with names, uncertainty Endorsements By Chad Halcom sults, has emerged as one of the dates with skeletons in their clos- Views on local issues and races: [email protected] most critical economic issues fac- ets, and a group of challengers that crainsdetroit.com/endorse ere may never be a better op- ing the city as it tries to lure people have amassed some business back- portunity to reform the Detroit to move back. ing. And that’s before you look at

© Entire contents copyright 2016 public schools. e ballot to elect a Local business leaders who the slates the candidates them- by Crain Communications Inc. All rights reserved new school board features turn- spoke to Crain’s agreed on little selves have organized into. crainsdetroit.com Vol. 32 No 46 $2 a copy. $59 a year. around experts and strong  nan- about  lling the seven board seats “ e fact there are three di erent cial stewards, but they face long on the newly created Detroit Public reform slates becomes an issue itself, odds in a sea of 63 names on the Schools Community District — other right there. Who are those people? ballot. than that they shouldn’t go back in ey are apparently not overlap- Fixing the district, which has time to previous o ceholders. ping,” said Bill Ballenger, publisher long struggled with declining en- Sorting through the ballot isn’t of the online Ballenger Report and rollment,  nancial woes and cor- easy, but there’s clearly an old longtime political observer.

NEWSPAPER ruption, and poor educational re- guard, a sizable group of candi- SEE DPS , PAGE 22 2 CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016

INSIDE MICHIGAN BRIEFS BANKRUPTCIES 24 CALENDAR 20 Meijer to drop plus-size MICH-CELLANEOUS $50,000 that will oset the cost of CLASSIFIED ADS 21 clothing racks, prices J Byron Center-based SpartanNash buying equipment. Up to $100,000 in Co. is expanding its capacity in pro- funding is available via the U.S. De- DEALS & DETAILS 19 Meijer Inc. is getting rid of its plus- duce distribution and fresh-pre- partment of Energy. Applications are KEITH CRAIN 8 size department — and its plus-size pared foods with the acquisition of due Dec. 12. More details are in the MARY KRAMER 9 prices for such apparel. Indianapolis-based Caito Foods Ser- request at www.michigan.gov/docu- e Walker-based retailer an- vice Inc. and its Blue Ribbon Transport ments/energy/MEO_Retooling_ OPINION 8 CRAIN’S DETROIT BUSINESS nounced last week its plans to put all business, MiBiz reported. e deal, RFP_V2_538738_7.pdf. OTHER VOICES 8 women’s clothing, regardless of size, Meijer Inc. plans to change its in-store for about $217.5 million in cash, is J KION, the new owner of Dematic PEOPLE 20 on the same rack in its stores, MLive. location and pricing of plus-size expected to close in early 2017. North America, intends to take advan- com reported. e clothing, sizes XS clothing by early next year. J More Michigan hospitals this year, tage of Dematic’s engineering and RUMBLINGS 26 to 3X, will also be at the same price, e letters are part of MSU’s ef- 29, received top ratings for patient research and development site in WEEK ON THE WEB 26 even if it means Meijer pays higher forts to protect its 30 trademarks reg- safety by The Leapfrog Group than West Michigan, MLive.com reported. production costs for the larger sizes. istered with federal and state agen- 2015, when 19 received “A” grades. Dematic designs and builds automat- COMPANY INDEX: e new policy is for Meijer cies, including its mascot’s image, its Leapfrog’s Hospital Safety Scores re- ed systems for warehouses, distribu- SEE PAGE 25 brands as well as major label brands signature block “S” and the phrase ect how well hospitals avoid medi- tion centers and other sites with ma- carried by the retailer and its com- “Go Green, Go White.” e universi- cal errors and patient harm. Nation- terial-moving needs. Wiesbaden, wants more scrutiny. petitors. Meijer began experiment- ty’s licensing oce also sent more ally, Michigan ranked 19th this year Germany-based KION, which makes J Star Line Mackinac Island Ferry said ing with the new approach in June at than 1,300 takedown requests last for patient safety, with 36.7 percent forklift trucks and automated materi- it plans to purchase several Arnold 15 stores, and will roll it out to all of year for material that infringed on its of state hospitals earning an “A.” al handling equipment, reportedly is Transit Co. ferries after the latter its 230 Midwest stores by early 2017. trademarks on Facebook. Since the 2012 inception of the buying Atlanta-based Dematic North company ceases operation in a few e decision comes as the average Dan Kelly, one of those who re- grade, four hospitals have gained America for $2.1 billion. weeks. Financial details of the pur- American woman now wears a size ceived a letter from the university, straight A’s: Dickinson County Health- J Swiss giant Nestle plans to signi- chase were not disclosed, but Star 16 to 18, motivating retailers to im- displayed an image of the Spartan care System in Iron Mountain, DMC cantly increase the amount of Line said included will be ve classic prove plus-size clothing options, e helmet and wore a shirt bearing the Huron Valley-Sinai in Commerce groundwater it pumps from under ferries, one freight boat, four docks Wall Street Journal has reported. same logo on the social media page Township, Henry Ford Allegiance the state in conjunction with a $36 including the main dock on Macki- for his MSU board of trustees cam- Health in Jackson and University of million expansion of its Ice Moun- nac Island, one boatyard, along with MSU sends letters paign. Since receiving notice of the Michigan Health System in Ann Arbor. tain bottling plant near Evart, MLive. parking lots and ticket booths in to protect trademarks letter, he has taken down all of uni- J Small manufacturers in Michigan com reported. Nestle Waters North Mackinaw City and St. Ignace. versity logos from his page. e of- can now apply for grants to improve America is asking the Michigan De- J Allen Park-based Belle Tire Distrib- Michigan State University sent 10 ce’s director, Samantha Stevens, their energy eciency, the Michigan partment of Environmental Quality for utors Inc. acquired its lone franchise cease-and-desist letters to businesses said the university didn’t take issue Agency for Energy said. e energy of- permission to increase allowed location in Traverse City. Terms and individuals between March and with Kelly’s shirt, but rather the use ce has issued a request for propos- pumping from 150 to 400 gallons per were not released. e northern September, records obtained by the of the logos, which she said created als from companies with no more minute at one of its production wells. Michigan store had operated as a Lansing State Journal through a Free- the appearance that Kelly was en- than 500 employees, who can apply A citizens group that previously franchise of Belle Tire since 1996, dom of Information Act request show. dorsed by the university. for grants ranging from $25,000 to fought Nestle over groundwater but its former owner is retiring.

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“I’ve been on public and private boards much of my life...”Denise Ilitch, Horizon Global Corp. Experience puts Denise Ilitch in co-chairman’s seat

By Chad Halcom to review strategies for the coming en, especially Michigan women, in the strategy and the chance to work [email protected] year. corporate governance at the new with others within a collaborative Denise Ilitch is going to have a Horizon (NYSE: HZN), a manu- post. Less than 2 percent of the company,” she said. busy week. And it’s only partly relat- facturer of various towing and traile- 2,000-plus public companies listed ed to Election Day. ring equipment brands, tapped Il- on the New York Stock Exchange have Leadership milestone e former president of Ilitch En- itch in July to co-chair the board a woman as chairman or co-chair- terprises LLC and co-owner of 220 along with company President-CEO man of their boards, she and her pre- If Horizon meets its revenue pro- Merrill Restaurant Hospitality in Bir- Mark Ze ro. Previously chairman of decessor as co-chairman, Sam Val- jections for the coming year, it will mingham will learn Tuesday wheth- the board’s compensation commit- enti III, noted. actually be the largest Southeast er she’ll be re-elected to a second tee, she succeeds Samuel Valenti III “Business principles (in board Michigan public company with a eight-year term on the University of in the co-chairman’s seat and said governance) are largely the same. woman in that role other than Gener- Michigan Board of Regents. she enjoyed the challenge of learn- Yes, there are business products that al Motors Co. (NYSE:GM), where But the next big challenge follows ing a new product market and the have unique features that one has to Mary Barra serves as both chairman LARRY PEPLIN immediately on Wednesday, when entrepreneurial spirit of the new learn. But I’ve been on public and and CEO. Denise Ilitch serves on the University the board of directors at Troy-based company. private boards much of my life, and “I love that — for the example that of Michigan Board of Regents and is Horizon Global Corp. holds a meeting Ilitch joins an elite group of wom- it’s a role I thoroughly enjoy. I enjoy SEE ILITCH , PAGE 23 co-chair of the Horizon Global board. American Axle to face new risks a­ er Metaldyne grab Tap brakes By Dustin Walsh sume $1.7 billion in MPG debt. [email protected] American Axle is paying a 50 per- American Axle & Manufacturing cent premium for MPG, far higher Holdings Inc.’s bold move to acquire than 30 percent average premium in on car gains? Metaldyne Performance Group Inc. in other recent auto supplier deals, ac- a $3.3 billion deal is an operational cording to data compiled by win. Bloomberg. Analysts: Projected sales lag, election fallout e merged companies e tansaction will push could worry automakers, suppliers next year will generate nearly $7 bil- American Axle’s net debt lion in revenue and reduce from 1.6 times earnings be- Between an unhappy electorate, American Axle’s reliance fore interest, tax, deprecia- By Dustin Walsh [email protected] indecisiveness from the Federal Re- on its largest customer, tion and amortization to serve over interest rates and anemic General Motors Co. But at 3.5 times. economic growth, automotive ana- what cost? e deal announce- lysts are stretching to remain posi- Local experts say the ment occurred only a day tive as uncertainty grows over deal was expensive and after U.S. automakers re- whether car sales have peaked. carries new  nancial risk, ported weak October sales Metro Detroit’s cyclical economy along with the addition of David Dauch: even after o ering deeply still depends on the auto industry, as new, potentially challeng- “Multiple discounted prices. And the region has learned from decades ing board room dynamics customers in analysts are projecting a of experience both bullish and grim. Mike Jackson: Je‘ Schuster: for the company led by the multiple regions.”  at year in car sales, yet e industry may start to plateau or Need right car, U.S. growth late Richard E. Dauch and still above levels seen be- decline next year from record levels SUV, truck mix. leveling o‡ . then his son David since the compa- fore the Great Recession. However, because pent-up demand from the ny’s inception in 1994. the automotive industry is cyclical Great Recession is gone — those teau means the industry will have to Under terms of the deal, which is and American Axle bought at the waiting to buy have now bought. focus on e ciencies or stealing mar- expected to close in the  rst half of peak, with another recession loom- Experts predict U.S. car sales will ket share to boost pro ts. next year, American Axle will pay ing in the years to come, said David contract slightly in 2017 — South- And with a plateau on the hori- $13.50 per share for MPG, with $1.6  eld-based IHS Automotive Inc. is zon, local auto companies could face billion in cash and stock, and as- SEE AXLE , PAGE 25 projecting sales of 17.4 million, and a hiring slowdown as well. Troy-based LMC Automotive US Inc. Crain’s Senior Reporter Dustin projects 17.5 million — but the im- Walsh chatted with two of the re- pact will be as clear as an iced-over gion’s top analysts — Mike Jackson, windshield. senior manager of North Ameri- MUST READ Last year, automakers sold the can vehicle production forecasting OF THE WEEK most cars in history at 17.5 million for IHS, and Jeff Schuster, senior units in the U.S., outpacing the vice president of forecasting at How a 60-story pre-recession record of 17.4 million LMC — about what 2017 holds for skyscraper stacks up in 2005. But 2016 and 2017 are ex- the local economy and its largest Dan Gilbert could propose a 60-story high-rise for pected to be  at, though near or industry. the former Hudson’s site — which would make it meeting that historic high. at pla- SEE AUTOS , PAGE 23 the second-tallest in Detroit, Page 26 4 CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 Proposed legislation claries insurance rules for Uber, Ly LANSING — Bills in the Michigan “e di erence in the insurance is Legislature that would impose new li- that the taxis have it in place all the censing regulations on ride-hailing time,” Oddy said, compared to drivers companies like Uber and Ly also for Uber or Lyft, who only would be would satisfy insurance industry con- required to carry the $1 million poli- cerns about coverage for drivers who cies when they have a passenger in o er rides for hire in their personal the car. vehicles. LINDSAY Under the bill, a transportation Among the requirements would be VANHULLE network company would have to dis- tiered minimum liability coverage CAPITOL BRIEFINGS close to prospective drivers the cover- amounts for drivers who work for San age that the company provides and [email protected] Francisco-based Uber Technologies that their personal auto policies might Twitter: @LindsayVanHulle Inc. or Lyft Inc., depending on whether not cover them while driving for hire. the driver has logged into the compa- nies’ smartphone apps or accepted apps turned on but haven’t yet picked Covering the gaps rides. e proposed language at- up a passenger. e Property Casualty tempts to clarify what’s required from Insurers Association of America, In addition, insurance providers both insurance carriers and drivers, which helped negotiate the national wouldn’t be required to o er coverage since many personal auto insurance compromise with transportation net- for transportation network company policies don’t cover rides o ered for work companies, contends state laws drivers, Van Koevering said. pay. with more specic guidelines about “If you’re a personal auto policy Many insurance carriers have start- when coverage applies to ride sharing writer (and) you have no commercial ed to o er riders or specialized auto would prevent transportation network exposure or experience, you don’t policies that include coverage for companies from contesting insurers’ have to completely alter your model,” Uber or Lyft drivers, though not nec- coverage determinations and delayed he said. essarily yet in Michigan. benets for crash victims. In August, Farmers Insurance intro- Transportation network compa- Under Michigan’s legislation, driv- duced ride-sharing coverage in Mich- nies like Uber and Lyft have agreed to ers would need coverage of at least igan, following its initial rollout in Col- the provisions, as have state and na- $50,000 per person and $100,000 for orado in February 2015. It’s now tional trade groups representing in- accident for bodily injury or death if o ered in more than 30 states, said surance carriers. Bills pending in a they were logged onto the ride-hailing Mariel Devesa, the Los Angeles-based state Senate committee are adapted company’s app but not yet driving a company’s head of product innova- from model language that was ap- customer, and at least $1 million while tion. proved in 2015 by the Manasquan, a driver has a for-hire passenger in the Farmers o ers minimum coverage N.J.-based National Conference of In- car. e language would be exible limits of $50,000 per person and surance Legislators, a group of state enough that either Uber or Lyft, or in- $100,000 per accident, she said, @V\YKYLHTZ@V\YKL[V\YZ lawmakers who focus on insurance dividual drivers, could provide the re- though customers can choose to buy policy, after ride-hailing companies quired coverage. If drivers don’t pur- coverage with higher liability limits. )V[OTH[[LY[V\Z and the insurance industry estab- chase additional coverage, the Ride-sharing coverage also is less lished the framework as part of a na- ride-hailing company must provide it expensive than commercial policies, tional compromise. for them. Devesa said, with rates that reect in- at language since has been ad- Limo carriers also would need dividual markets and the fact that :H·UHKHUHWRKHOS,I\RXUEXVLQHVVLVVHDUFKLQJIRUÁH[LEOH opted in 40 states, with Michigan in minimum liability coverage of $1 mil- drivers for ride-hailing companies ÀQDQFLQJVROXWLRQVWDONWRXVDERXWDVVHWEDVHGOHQGLQJ line, said Bob Passmore, assistant vice lion under the bill terms, while taxi typically drive less than commercial president of personal lines policy for operators would be required to have drivers. Farmers would not disclose Chicago-based Property Casualty In- minimum liability coverage of the number of ride-sharing policies   surers Association of America. $300,000. Currently, state law does purchased to date, but said the com- KLWDFKLEXVLQHVVÀQDQFHFRP Taxi companies aren’t opposing the not require taxis to carry any insur- pany is happy with the number. legislation in its current form, since ance coverage; instead, those deci- Lyft, for instance, says it o ers cov- they believe requiring a state license of sions are left to municipal ordinances. erage for drivers from the time they all transportation carriers — whether e city of Detroit, for instance, re- turn on the app until a passenger is taxis, limousines or ride sharing — quires minimum liability coverage of dropped o at his or her destination. creates a level playing eld. e bills $100,000 for bodily injury or death per Drivers are covered by their personal would require limos and taxicabs also person per accident and $300,000 for auto policies when they are not using to carry insurance, though the mini- two or more people per accident. the company’s app. mum liability limit for taxis would be Matt Oddy, operations manager of Lyft o ers contingent coverage of lower than for limos and transporta- Checker cab company in Detroit, said up to $50,000 per person and up to tion network companies. he believes the legislation simply cod- $100,000 per accident for bodily inju- Requirements for ride-hailing ies existing practice into state law. ry coverage while the app is on but a companies have been the most con- He added that a $1 million policy for driver has not picked up a passenger tentious, in part because insurers taxis, especially in Detroit, is either — the levels can vary based on state have to adapt to new technology. not o ered or would come with pre- thresholds, Lyft said — and up to “With a commercial use comes a miums so high that they would cost $1 million when a driver has accepted much higher risk prole,” said Dyck too much to purchase. a ride and is carrying a passenger. Ly- Van Koevering, general counsel for ft’s coverage is provided on top of a the Lansing-based Insurance Institute driver’s individual coverage if he or of Michigan, which represents the she has elected insurance riders on state’s property and casualty insurers. their personal auto policies. HIGHLY CREDENTIALED EXPERTS PROVIDING “Our concern has been that you have A spokeswoman for Lyft said the LITIGATION SUPPORT SERVICES a personal insurance policy on a per- company supports Michigan’s legisla- sonal vehicle that’s being used for a tion. Bankruptcy Litigation: Commercial Litigation: commercial purpose, and it’s not be- “e intent and the way it is drafted • Plan of reorganization disputes • Forensic accounting ing properly priced.” is not to leave any gaps,” Brian Balow, • Complex avoidance actions • Economic damage computations a member with Bloomeld Hills law • Valuation and feasibility challenges • Quantification of lost profits What covers who rm Dawda, Mann, Mulcahy & Sadler PLC, who represents clients in the au- One of the main items to be re- tomotive industry and on such issues solved was whether personal auto pol- BLOOMBERG as information technology. “From my icies would cover drivers for Uber or Uber and other ride-sharing companies reading of it, I think it does what it’s calderonelight.com Lyft when they have the ride-hailing have agreed to insurance provisions. intended to do.” CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 5 South€eld hotel may reopen a er owner’s deal with city By Sherri Welch tion, along with the city’s attorney, With the shift from the current 410 to escrow $2.1 million to ensure it [email protected] Doug Bernstein, partner in charge of rooms, the renovated hotel would of- would make infrastructure improve- A plan is in place to open the the creditors’ rights group at Bloom- fer large suites of about 700 square ments to the hotel — with no more long-shuttered Plaza Hotel & Conven- eld Hills-based Plunkett Cooney PC. feet, Elhadad said. than $100,000 going to “soft costs,” in- tion Center in South eld as an extend- Shefa “knew there was very little “We’re talking about a three- to cluding architectural, environmental ed-stay hotel. good faith left, and they wanted the four-star hotel,” he said. and/or engineering fees — and But after six years of attempting to city’s consideration of economic in- Renovations would begin within 18 $84,000 to cover the estimated water collect millions in back taxes and wa- centives,” Meisner said. months, per the site plan. Shefa has and taxes due on the property the rst COSTAR GROUP INC. ter charges while the 410-room, high- Also as required under the reorga- not approached the city for any sort of year post-bankruptcy. The former Plaza Hotel is located on rise hotel sat empty, the city of South- JL Hudson Drive in Southeld, o of nization plan, Shefa submitted a site tax incentive, Elhadad said. Power of attorney to transfer the eld isn’t breathing easy yet. Northwestern Highway and across from plan for the redevelopment of the Pla- But after six years of what Meisner deed to the property and the deed it- e taxes and water bill on the prop- za to the city in August, just before the characterized as “delay tactics” to pay self are also being held in escrow by a the Northland Center site. erty have been less than half of the $4.1 six-month deadline to do so. taxes and water and make any invest- title company, a “fairly unique” provi- million owed the city and Oakland “ey want(ed) ... the city of South- e plan lays out Shefa’s intent to ment in the hotel, the city and county sion in the context of a bankruptcy County through the 2014 tax year, per a eld to deal with them to put together reopen the property as a 220-room ex- insisted on assurances being included case, Bernstein said. settlement reached with owner Shefa an economic package,” said Meisner, tended-stay hotel under a yet-to-be- in Shefa’s plan of reorganization. Sherri Welch: (313) 446-1694 LLC through a Chapter 11 case in U.S. who said he played a role in media- announced national brand name. e city and county required Shefa Twitter: @Sherri Welch Bankruptcy Court in Detroit. But the reopening of the once-prominent hotel, across from the empty Northland Center and next to Providence Park Hospital, could still be at least a couple of years o. Per the site plan Shefa submitted to the city in August, the ownership group has 18 months to begin a mini- mum of $2.1 million in infrastructure improvements on the property. But the actual investment planned will be in the range of $12 million to $15 million, said Sidney Elhadad, a shareholder ocer of Shefa. We are pleased to announce that Plans to reopen the hotel come six years after the city shut the hotel down, saying it was unsafe. Consumers Energy had cut o natural gas to the property Marc J. Beshany because of unpaid bills, and the city turned o the water because of $113,560 in delinquent water bills. Has been named Managing Director - Market Manager Since then, millions of dollars in unpaid property taxes and water and to lead the Great Lakes Market, which includes sewer bills have piled up. As of March 30, the total owed to the city and coun- the following oces: ty was $4.1 million, Oakland County Treasurer Andy Meisner said. e county sought to foreclose, but Ann Arbor Grosse Pointe Port Huron actions taken by Shefa held up that 2723 S. State St. 718 Notre Dame St. 522 Huron Ave. process, he said. e ownership group challenged the property tax assessments before Bay City Grosse Pointe Farms Saginaw the Michigan Tax Tribunal and took out an additional mortgage on the proper- 101 First St. 77 Kercheval Ave. 4300 Fashion Square Blvd. ty with an Israel-based lender, which presented logistical challenges for the county to give notice of foreclosure, he Birmingham Grosse Pointe Woods Troy said. In 2014, the South eld-based 255 E. Brown St. 19770 Mack Ave. 2401 W. Big Beaver Rd. company led for Chapter 11 in U.S. Bankruptcy Court in Detroit. “It was about delay and buying Farmington Hills Midland more time to speculate for the values to go up,” Meisner said. 31440 Northwestern Hwy. 409 Ashman St. ere were liens and lawsuits led against the hotel. “It was very much a quagmire to gure it out,” said Al Flint Northville Aceves, executive director of the 2401 South Linden 22260 Haggerty Rd. South€eld Downtown Development Au- thority. Shefa bought the hotel in Novem- ber 2009 through a mortgage foreclo- sure on the property. Elhadad said the Marc J. Beshany ownership group and hotel were vic- Managing Director - Market Manager tims of the downturn. “When we took over in 2009-10, we 255 East Brown Street, Suite 400 took over at the worst possible time. Birmingham, MI 48009 We didn’t have a choice to close it down,” he said. 248-645-6450 / 800-521-9463 is year, following court approval [email protected] of Shefa’s plan of reorganization in February and mediation, Shefa paid wellsfargoadvisors.com the city $69,004 in 2015 taxes and wa- Wells Fargo Advisors, LLC, Member SIPC, is a registered broker-dealer and a separate non-bank aliate of Wells Fargo & Company. ter. And it paid more than $1.87 mil- ©2016 Wells Fargo Advisors, LLC. All rights reserved. 1016-04403 lion to the county to cover delinquent taxes and water and fees from 2006- 2014, Meisner said. 6 CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 Carpool app maker SPLT top winner in Accelerate Michigan competition

By Marti Benedetti pitals, which use its app to nd car- e pitch competition included a [email protected] pools to work. Among its goals is to broad range of information technol- SPLT, the carpooling app maker help keep 4.5 million Americans ogy, life science, health care and that moved from New York City to from missing consumer product companies in Detroit last year, won the top prize of medical ap- various stages of their business lives. $500,000 at last week’s Accelerate pointments. e one-day event involved a Michigan Innovation Competition at “ere’s a real larger role for Ann Arbor-based Cobo Center. need for this Michigan Venture Capital Association, Coming in second in the seventh product for the whose members served as judges in edition of the competition was Troy- underserved, es- the preliminary pitches. irty-six based payment and accounting soft- pecially in De- companies were narrowed to 10 - ware maker Autobooks, which will troit where peo- nalists. receive $100,000. Ann Arbor-based ple with a Invest Detroit managed the event. mobile health engagement compa- Anya Babbitt: medical ap- David Egner founded the entrepre- ny JOOL Health won $50,000. Wants to help pointment call a neurial pitch competition in 2010 “We want to change the way peo- underserved with taxi that never when he was with the New Economy ple commute,” said Anya Babbitt, transportation. comes,” Babbitt, Initiative, which has been a major - founder and CEO of SPLT. SPLT’s a Crain’s 2016 40 nancial supporter along with the customers include organizations, under 40 honoree, said during the Michigan Economic Development corporations, universities and hos- company’s pitch. Corp., Invest Detroit and others.

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By Kirk Pinho partners are Richard Hosey and Kev- Housing Development Authority's [email protected] in Prater, on the Farwell Building at Governor's Award for historic pres- A boutique hotel, Robert Kraemer 1249 Griswold St., the Detroit Savings ervation, the state chapter of the In- says, is a lot like a craft beer: a unique Bank Building project at 1212 Gris- ternational Design Association's an- experience. wold and the Capitol Park Lo s proj- nual design award and the Michigan e co-founder and principal of ect at 1145 Griswold. Historic Preservation Network's Tax Detroit-based Kraemer Design Group “ ey have excellent skill set at Credit Project Award. PLC understands this fully as his multifamily rental, laying out apart- e Shinola hotel was announced company designs two new boutique ments,” Karp said. “ ey have a lot of in September and is slated for a 2018 hotels in Detroit, slated for Shinola/ experience with hotel architecture, opening with 130 rooms in the Detroit LLC on Woodward Avenue, Robert and Maureen Kraemer founded but for us, it is their historic preser- eight-story building at 1400 Wood- and West Elm, the contemporary fur- their design company two decades ago. vation and multifamily experience, ward, while the West Elm hotel by the niture retailer, in Midtown. and they denitely excel in those ar- contemporary furniture retailer is e designs of the hotels, with 130 oper Richard Karp, principal of Lan- e a s .” planned to have more than 135 rooms and more than 135 rooms, respec- sing-based Karp + Associates. Among the awards Kraemer De- plus a retail store on Cass Avenue. PHOTO BY KYLE EVANS DESIGN tively, have not yet been fully eshed Kraemer Design Group has done sign received for the David Whitney Kirk Pinho: (313) 446-0412 Kraemer Design Group will design the out, but Kraemer promises one-of-a- work for Karp, whose development project were the Michigan State Twitter: @kirkpinhoCDB Shinola/Detroit hotel on Woodward. kind designs and experiences with both. "It’s very exciting, because you’re at the very, very early impetus of this," said Kraemer, who founded the company two decades ago with his wife, Maureen. "Both projects are in full design mode; both are going through the process of doing draw- ings." “HOW DOES DTE ENERGY ose are two of the most high-prole projects Kraemer De- sign is currently working on, but they KEEP NATURAL GAS SAFE?” are more notches in the belt for the company as architecture work has picked up in the past ve or six years. e company had $3.2 million in Customer safety is our highest priority. That is why we take many precautions when revenue in 2015, while this year it is on pace for $4.8 million, a 50 percent delivering natural gas to over 1.2 million homes and businesses across the state. We inspect increase, Kraemer said. e compa- nearly 10,000 miles of pipeline each year using advanced technologies, and modernize about ny's payroll also has increased by 28 percent just this year, growing 100 miles of pipeline annually. We also add an ingredient that makes natural gas smell like from 25 to 32 employees, only two of rotten eggs, making it easily identifiable in the case of a leak. whom are administrative. As developers around downtown If you smell natural gas or suspect a leak, do not use electronic devices or open flames, plan a spate of new projects to bring more apartments and oce space, leave the area immediately, and call DTE Energy at 800.947.5000 24 hours a day. the once-sleepy downtown and Midtown real estate markets have been as active as Robert Kraemer has seen in two decades. Brian Rebain was also recently promoted to principal to help head up the company. “Our goal would be to kind of match this year or better,” Robert Kraemer said. “We tend to try to grow (revenue) between 5 or 10 per- cent, and our growth probably mea- surably started about 5 years ago.” In addition to its hotel work, which buoyed the business when multifamily projects were sparse, the company also has a reputation for its historic preservation and adaptive reuse projects, including the $94.5 million David Whitney Building on Grand Circus Park and the $53 million Broderick Tower redevel- opments. And it was the company Dan Gilbert’s Bedrock Real Estate Services LLC tapped when it designed its 218-unit 28 Grand micro-apart- ment development — the rst such project in the city — in Capitol Park, which is expected to take in its rst residents in June. at’s one of the more exciting projects Robert Kraemer said his team is working on because it's the rst new multifamily building con- struction in the downtown core, at 28 W. Grand River Ave. “ ey have demonstrated a supe- rior aptitude at historic preservation architecture, which is something that our rm focuses on,” said devel- 8 CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 Community benets ordinance benets business, politics Detroit faces a number of unique abatements are at best a very mixed economic challenges that will re- bag. Communities that are econom- OPINION quire new strategies, new values and ically prosperous do not use tax new economic approaches. “Busi- abatements. When tax abatements ness as usual” — isolated develop- are provided, they benet the busi- ment projects predicated largely on ness receiving the subsidy, but there A reprimand for public subsidies and tax abatements is no guarantee that they will benet — is part of what got us into this the broader community. Wayne mess. Business as usual will not get OTHER VOICES State Professor Emeritus Gary Sands Mayor Duggan us out of it. A city cannot give away Peter Hammer aptly titled his study of property tax millions in money, land and other abatements in Michigan “Money for re-bankruptcy Detroit had more than its share of ques- resources, demand virtually nothing Professor, Wayne State University nothing.” Eggs laid by tax abatement tionable — even criminal — transactions linked to in return and expect to have a vi- School of Law geese are not that golden. is is elected and appointed o cials in City Hall and in the brant economic future. e type of what “business as usual” produces. Ppublic schools. (ough Macomb County communities may be “community benets ordinance” council for an exemption if good- e greatest benet of Proposal A giving the city some competition.) outlined in Proposal A points in a faith negotiations fail to produce an is seldom mentioned. Proposal A not new and more promising direction. agreement or if the community fails only changes business as usual, it So in post-bankruptcy Detroit, transparency and ethical prac- Proposal A establishes the frame- to get to the bargaining table within changes politics as usual. ere are tices are critical to maintaining the trust of both citizens and in- work where large-scale develop- a certain time frame. is and other political market failures as well as vestors. at’s why xing problems at the city’s land bank is so ments seeking public subsidies for parts of the ordinance ensure exi- economic market failures. Political important. private enterprise will work with bility in reaching agreements. markets are likely to fail when deci- When a recent audit found that someone at the land bank au- community members to ensure that Opponents of the community sions benet a small elite while the public dollars produce real public benets ordinance need to be more thorized shifting money to camouage the fact that the program costs or burdens are borne by many. benets. It also provides the type of forthcoming about the problems of is is precisely the equation in most had exceeded federal guidelines that capped demolition costs at certainty businesses crave. Proposal development projects that need tax publicly subsidized development $25,000 per home, the federal government suspended the pro- A allows a developer to petition city abatements in the rst place. Tax CONTINUED NEXT PAGE gram. Fix your mess, Washington told Detroit. Using text messages obtained through Freedom of Informa- LETTERS tion Act requests, Crain’s reported Mayor Mike last week that Mayor Mike Duggan Motor City ready to shi from neutral to ‘Mobility City’ Duggan has a learned of the suspension in Au- Editor: vate-sector partnerships, and common vision. MichAuto’s mobil- responsibility gust. But City Council learned of the To many, Michigan is deemed the created a soon-to-be announced ity coalition, made up of 18 organi- to the people of suspension only in October. global center for mobility. We al- “chief of mobility innovation” posi- zations including NextEnergy, has e federal hand-s lapping ready own auto R&D, autonomous tion, poising Detroit to become Mo- plans to do that. e group will Detroit, not vehicles, manufacturing, electric ve- bility City. bring together public-private focus should never have been kept secret hicles and advanced batteries, and Alongside federal funding, we and collaboration to enable eco- bureaucrats in — not from the public or the City we are one of the largest software de- need a combination of more pub- nomic growth and identify oppor- Lansing. Council. velopment and cybersecurity cen- lic-private partnerships and regional tunities that can be solved through e land bank chairman claimed ters in the world. State and local planning and collaboration. mobility projects and technology in that state o cials ordered the city to keep the suspension a se- partners are “all in” to position Both the “Grand Bargain” and the city. cret, but the state says that’s not true. ere is no excuse. Duggan Michigan as “Planet M,” and the city M-1 Rail are examples proving we Finally, we need time. It takes of Detroit is poised to play a critical can develop innovative public-pri- time to turn around a city and to has a responsibility to the people of Detroit, not bureaucrats in role by providing a real-world test vate partnerships. Now we need build regional relationships. Detroit Lansing. bed for game-changing mobility more corporate partners and philan- has rightly been focused on critical Demolitions are critical to reduce blight and strengthen De- solutions. Dustin Walsh’s Oct. 23 thropic support coming together to city services, and now it’s time to troit's neighborhoods. But the land bank has been plagued by Page 1 story (“City mobility stuck in provide seed money, matching look, and move, ahead. Big changes turnover at the top and questions about how the original demoli- neutral”) suggested that we are funds and nancing options. Co- require new leadership styles, and “stuck” in neutral. I say we are ready lumbus, Ohio, didn’t win the $40 the collective wisdom to know there tion contracts were awarded. Now the rules have changed to lim- to shift into gear. But how? million USDOT Smart City Chal- is not a single simple solution, but it the jobs any one contract can cover. First, we need funding to stimu- lenge just because it had an “impres- rather a portfolio of “ands” that need e millions of dollars spent so far make the land bank demo- late the pilots and deployments sive team” and a “comprehensive to be collectively supported and litions a target for pressure to play favorites in the contracting pro- imagined for “Mobility City.” While plan.” It also included more than built over time. cess. disappointing that the city of Detroit $100 million in funding from indus- It’s now time to shift from neutral e mayor needs to erase any actual or perceived questions didn’t win any of the $65 million in try and philanthropic partners! to drive to create Mobility City. If we mobility-related federal grants that it As for regional planning and col- don’t do it now, or soon, we risk los- about land bank operations. He needs to be more accountable recently competed for, the eort did laboration, we’ve made great strides ing the critical mass of talent and and transparent. His reputation, and the future of the city, is rid- create the building blocks for a re- with several groups leading the way leadership to pull it o. ing on it. gional mobility plan, developed doz- for mobility, but now it’s time for us Jean Redeld ens of new critical public and pri- to come together and work toward a President and CEO, NextEnergy It ain’t over till it’s over Whatever your political persua- sions that will aect the ability for sions, just about everybody is going elected o cials to govern. to breathe a sigh of relief Tuesday is perhaps has been the tough- night when the presidential election est political cycle we have ever seen. is nally over and we can all go back Sadly, there is no chance everyone to our lives. will put their arms around each oth- But pundits and talking heads er on Wednesday, kiss and make up. will likely be telling us how Tues- ese divisions could last quite a day’s results will impact the presi- KEITH CRAIN while. dential election in 2020. at’s Editor in chief If you thought the cable networks when I probably will throw some- would go back to telling us news thing at the television. Surely six months. Yes, it aects free about something besides politics, enough is enough. speech. But I, for one, would like a you will be sadly mistaken. So I have a modest proposal: respite. is is the end of one political sea- Let’s enact a law that forbids any- Unfortunately, I fear that regard- son. And by week’s end, it will be the one from writing or talking about less of the election results, we’ll con- start of another. the next election cycle for at least tinue to have strong, partisan divi- May we all survive. CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 9 For 25 years, orientation program has informed city newcomers For years, in the 1970s and 1980s, marking the occasion. recall, we called one session about sions are held in the spring and usu- Detroit boosters blamed the media ough intended initially for me- downtown: “Where are all the ally fall; the next one-day “Detroit for the city’s poor image. e media dia types, DOI quickly expanded to stores?” We tried to answer that 101” will be held Dec. 7. often responded: We just hold the include new executives moving to question with insights from retail an- Even longtime residents of the mirror and reect reality. key roles in the region. Detroit has alysts who recounted the demise of metro area would nd new insights One recommendation coming been a tough sell for many employ- the Hudson’s store and how retail in “Detroit 101.” Downtown today is out of the massive “Detroit Strategic ers. Helping a new executive under- location decisions are made. dramatically vibrant compared to Plan” created in 1987-88 by Detroit stand our history and that the city at was then — a downtown those early days of the institute. (P.S.: Renaissance (the forerunner of Busi- had more going for it than its head- MARY KRAMER with vacant and low-rent storefronts e wig shops are gone.) ness Leaders for Michigan) was a lines suggest was important. Publisher (ex-Detroit Economic Growth Corp. program to help reporters and edi- Alumni include Nancy Schlicht- chief George Jackson was quoted as Mary Kramer is publisher of Crain’s tors new to Southeast Michigan un- ing, soon-to-retire CEO of Henry ers and editors, including Charles calling it the “bad wig shop capital of Detroit Business. Catch her take on derstand the city’s history and its Ford Health System, who moved to Blow, who went from e Detroit America”), no trendy restaurants, no business news at 6:10 a.m. Mondays problems in a larger context. Detroit from Ohio; Paul Hillegonds, News to e New York Times. Campus Martius Park. on the Paul W. Smith show on WJR Wayne State University took up a former state lawmaker from Hol- Early on, then-director of the pro- Today, it’s a dierent story, and AM 760 and in her blog at that challenge, and the Detroit Ori- land who took the top job at Detroit gram Elaine Driker asked me to help it’s still being told by Jeri Stroupe, www.crainsdetroit.com. entation Institute was born in 1991. Renaissance; and dozens of report- shape a segment on business. As I who leads DOI for Wayne State. Ses- e institute is celebrating its 25th anniversary on Nov. 16, and it hopes some of the more than 3,000 alumni will show up for a reunion event

FROM PREVIOUS PAGE deals. ose with political connec- tions get special deals, while the public is left holding the bag. Pro- posal A would ensure that develop- ment deals receive the careful public scrutiny they deserve. It should be remembered that strong, economically viable devel- opment projects do not need tax abatements. Public subsidies of business are not a right. When eco- nomic development is being subsi- dized by public dollars, the public should be assured that there will be real public benets. Businesses that embrace a simi- lar positive vision of Detroit’s future will come and will be happy to ne- gotiate community benets agree- ments. is will be a useful sorting mechanism. Backward-looking companies that need to be bribed to invest in Detroit are not the types of companies that we should be in- vesting our future in. e real shakedown racket is embedded in the traditional model of tax abate- ment-driven development. Proposal A presents us with a stark choice. Sadly, we know what Helping bring progress and promise business as usual will mean for the future of Detroit. e divide de- ned by the emerging Tale of Two Cities will grow and deepen, as will to communities since 1866. the economic and geographic gap 150 years ago, we opened our fi rst branch. There were no debit cards or mobile apps. between the 7.2 square miles of downtown, Midtown and New Heck, there wasn’t even electricity. All we had were our bankers, their pens and a Center and the rest of the city. promise. A promise that we’d help build the community. A promise to communicate ere is a further danger that devel- opment strategies premised on honestly with our customers. And a promise to do the right thing. Keeping this promise desperation will condemn Detroit’s has led to some extraordinary things over the last century and a half, but none greater distressed neighborhoods to “in- vestments” that simply invite the than the privilege of helping transform the lives of people right in our own backyard. expansion of polluters in already heavily polluted zip codes or attract businesses that trade in the pro- cessing of toxic wastes, because that is the best that those in charge think we deserve. To listen to all the expensive dark money ads against Proposal A or to read the glossy iers being distrib- uted in otherwise neglected neigh- borhoods, one would think that the Member FDIC. ¥® and Huntington® are federally registered service marks of Huntington Bancshares Incorporated. sky was falling. We should remem- Huntington® Welcome.TM and Welcome. Our story for generations.SM are service marks of Huntington Bancshares Incorporated. ber that Chicken Little was wrong ©2016 Huntington Bancshares Incorporated. and that fear and desperation never built a great city. 10 CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 DMC Restructuring Experience health plan In Your Corner.® fetches Ŷ Co-Chair of the Restructuring Practice Group. $16M Ŷ National restructuring and insolvency By Jay Greene practice, representing lenders, investors, [email protected] owners, customers, and suppliers in distressed Detroit Medical Center's Harbor situations both in and out of court. Health Plan has been sold to Trusted Health Plans Inc., a Washington, D.C.-based Medicaid HMO, for $16 million, according to a ling with the Michigan Department of In- surance and Financial Services. Vanguard Health, the previous owner of DMC, acquired the plan, formerly called ProCare Health Plan Inc., in 2012 for $6 million. ProCare was renamed Harbor Health in 2014 after Dallas-based Tenet Healthcare Corp. acquired Vanguard. Detroit-based Harbor Health is a pro table Medicaid HMO, record- ing $4.3 million in net income on total revenue of $36.6 million in 2015. For the rst six months of 2016, Harbor earned net income of $2.6 million, up from $1.8 million during the same period in 2015, said DIFS. Total revenue also rose from $17.8 million to $28.1 million during the same periods. Ŷ Detroit Ŷ Novi Ŷ Grand Rapids Ŷ Kalamazoo Ŷ Grand Haven Ŷ Lansing Ŷ Ann Arbor Ŷ Hastings Contact Brendan Best at [email protected] For years, DMC was rumored to be in the market to purchase a Med- icaid HMO in anticipation of an ex- pansion in Medicaid in Michigan. Since 2014, some 600,000 people have joined Healthy Michigan Med- icaid. One in four Michigan residents are served by Medicaid. But Harbor Health never achieved the membership that executives once hoped. Projections called for Harbor to increase its membership to 18,000 or more by 2015. However, DIFS data shows Med- icaid membership totaled only 7,973 by June 30, up from 6,515 on Dec. 31, 2015, and 3,300 in 2014. Harbor entered the individual health insur- ance market this year, garnering only 2,978 members. Harbor also sells a Medicare Advantage product with about 636 members, up from 126 last year. Trusted Health, which also oper- ates in West Virginia and Virginia, is chaired by omas Scully, former administrator of the Centers for Medicare and Medicaid Services un- der former President George W. Bush from 2001 to 2003. From 1995 to 2001, Scully was CEO of the Feder- ation of American Hospitals, the asso- ciation of investor-owned hospi- tals. Scully, who owns 1.6 percent of Trusted, is also senior counsel at Alston & Bird LLP and is a general partner at Welsh, Carson, Anderson & Stowe, a private equipment in- CONNECTING YOUR DETROIT BUSINESS TO THE WORLD vestment rm focusing on health Locally based facilities, fleet and full-time professional team allow us to provide our Southeast care. Michigan members best-in-class personalized services, flight availability and cost efficiencies. Jay Greene: (313) 446-0325 Connecting Detroit to the rest of the world, one way or round trip. Now scheduling private tours. Twitter: @jaybgreene corporateeagle.com | 248.461.9001 CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 11 SPECIAL REPORT: LAW

Mentorship muscle SBA sees strong early response to its newly expanded protégé program

By Chad Halcom advantaged minorities or other “And we’ve been doing this all as a a qualifying small business and an- But in the mentor-protégé pro- [email protected] groups, became more widely avail- soft launch; there have not been any other, usually larger and more expe- gram, a larger company can own up Small business may be in the mid- able to all qualifying small business- announcements or blogs and tweets rienced mentor rm that can assist to 40 percent of the protégé busi- dle of a teachable moment, as Octo- es under a new SBA regulation that promoting this,” Schick said. “We are in lling its "development gaps" with ness, or form joint venture compa- ber demand ramped up to partici- took eect Aug. 24. still in a period of testing the (online managerial experience, past perfor- nies with the protégé for the purpos- pate in an expanded federal And demand has been healthy so application) process and xing mance qualications and federal es of contract bids, without being mentor-protégé contracting pro- far, said Holly Schick, director of the glitches. We are hoping in November project implementation skills. aliated — so long as they comply gram, based on new rules from the newly formed all-small men- or December to be looking at some ose kinds of collaborations with the other program guidelines U.S. Small Business Administration. tor-protégé program at SBA. About more formal and active marketing. sometimes run afoul of SBA rules on for contract bids. e SBA on Oct. 1 launched a web 450 of the 5,000 disadvantaged busi- “We anticipate once we do that, “aliation,” or a larger business hav- e original SBA program for portal for small businesses to team nesses in the SBA's “8(a) program” these organically generated applica- ing too much ownership or control qualifying disadvantaged compa- up with other companies on federal had active mentor-protégé agree- tion numbers will start to go up. So over a smaller one when vying for a nies remains intact, while the new contracts for which they may have ments at the time of the rule change, we really don’t know yet what level set-aside federal contract. If SBA and separate “all small” men- the right skills but lack the capital, but 300 more have requested appli- of pent-up demand for this there nds two companies are aliated, tor-protégé program is available for sta or prociency with government cations for the program online, and might be.” or have a joint venture in some cas- all categories of small businesses practices to fulll on their own. e 20 have been approved for it, Schick e small-business men- es, they are combined via revenue or and is structured to be as consistent small-business mentor-protégé pro- said, just since it became accessible tor-protégé program is a three-year headcount to determine whether with the original as possible, said gram, traditionally available only to to other small businesses a month collaboration (that can be renewed the applicant is still a small business Schick and Bret Wacker, attorney companies majority-owned by dis- ago. once for three more years) between by SBA standards for its industry. SEE MENTOR, PAGE 12

Jimmy John’s case sets new order in noncompetes Backlash to the ultra-restrictive agreement has some lawyers being more careful in writing such pacts, Page 13 12 CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016

SPECIAL REPORT: LAW

new rule essentially states that other MENTOR small businesses qualifying for the FROM PAGE 11 federal contract do not count toward the subcontractor limit. and government contracting prac- Both new SBA rules are applying tice leader at Clark Hill PLC. language of the 2013 National De- “ e mentor doesn’t necessarily fense Authorization Act, and both have to be a large business, it just has rules also eased restrictions on joint to be a company that can add value ventures bidding on small-business to the protégé business and its con- contracts. Erin Toomey: Bret Wacker: tract bid standing,” Wacker said. New rules aim to Mentor should add e June 30 rule allows joint ven- CONGRATULATIONS TO “Typically it’s not a long approval enhance small-biz value to protégé ture companies to count as a small process, it’s (a matter of) weeks. e development. business. business for government procure- program wouldn’t have much bene- ment purposes so long as each com- THE WINNING IDEAS t if it takes too long to process an pany within the venture qualies application, because contracting op- SBA program must demonstrate it under the industry category of the portunities come and go. at’s what will provide sucient assistance for bid solicitation — even if collectively IN THE KNIGHT ARTS will motivate people to consider the the protégé to make real develop- they exceed the SBA size threshold. program — because at the time you mental business gains during the pe- “It’s hoping to get small business- CHALLENGE DETROIT! submit the contract bid you’d need riod of the agreement. es to team together, and SBA essen- to be already approved (for a men- She also said mentor-protégé is tially said if you have small-business tor).” just one of several new rules that joint venture partners, their num- e online portal calls for the SBA nalized this year to make gov- bers don’t aect your bid,” Toomey protégé to apply, while the mentor ernment contracting more accessi- said. “If they’re individually small, provides supporting documents. Ap- ble to small business. Among them: then as a team they remain small.” plicants must select their own men- a new small-business subcontract- Toomey also said the new rules all tor before applying, and Schick said ing rule that took eect June 30 gives seek to court greater small-business the SBA is hoping to produce new a small-business contractor an ex- participation and development via materials within 30-60 days to help emption to the federal limit on sub- contracting. She said she was not companies nd their own mentor. contracting for business given to certain how much business interest e SBA is hoping for completed ap- “similarly situated entities.” in the new mentor-protégé agree- plications to be viewed within four In other words, a small business ment program would emerge, but hours after they’re submitted, she that qualies for special set-aside added it’s still “not carte blanche” to said. federal contracts through various pursue set-aside contracts and farm Erin Toomey, partner and head of SBA programs had to previously the work to a large company. See their projects that will engage the government procurement prac- agree not to subcontract more than e Small Business Administra- tice for the Detroit oce of Foley & 50 percent of the value of the con- tion mentor-protégé application and enrich the city through the arts Lardner LLP, said the mentor in the tract to other companies. But the portal is at https://certify.sba.gov/. at knightarts.org

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KNIGHTARTS.ORG @knightfdn crainsdetroit.com/custom/giving CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 13 SPECIAL REPORT: LAW Navigating noncompetes Backlash to Jimmy John’s case has some lawyers being more careful in craing pacts

By Paul Vachon the Jimmy John’s story,” said Kath- Special to Crain’s Detroit Business leen Gatti, senior attorney at Nemeth Knowledge is power, and necessi- Law PC, a Detroit-based law rm ty requires any business that pro- specializing in labor and employ- duces a product or renders a service ment cases. to entrust certain employees with “We’re seeing a backlash, at least that information. for certain types of workers.” Whether it’s a software algorithm, Gatti noted the call-to-action doc- a recipe for a new sugar substitute, or ument released Oct. 25 by the White a highly accurate method for con- House under Vice President Joe ducting a public opinion poll, intel- Biden’s name, warning of possible lectual property and/or trade secrets criminal prosecution for employers long have been considered among a that exceed the true spirit of non- company’s most valuable assets. competes and “collude to hold down To protect a company’s secrets, wages.” It also sta members with access to propri- admonishes etary data are often required to sign state govern- “post-employment restrictive cove- ments to pro- nants,” designed to prevent them mote greater from leaving the company and using transparency for their knowledge to benet a compet- companies that itor, typically forbidding the employ- use noncom- ee to work within the same industry. petes and that Traditionally, noncompetes were they ban them somewhat rare and required only of Peter Lucido: entirely for low- high-ranking executives or employ- Wants rules for wage workers. ees working in development labora- noncompetes. Last year an tories. attempt was Recently, however, the tide has made in Michi- shifted to require midlevel and even gan to do precisely that. Rep. Peter low-wage employees to sign them — Lucido, R-Shelby Township, pro- a trend that has generated contro- posed legislation that would allow versy. e breaking point came in only “fair and reasonable” noncom- 2014 when Jimmy John’s locations in pete agreements in Michigan. New York began to require new hires “We said for low-wage employees, to sign agreements prohibiting them have them instead sign a condenti- from working for another sandwich ality agreement that would prohibit shop within 2 miles for two years af- them from disclosing any propri- ter leaving, based on the thought etary information,” said Lucido. is that Jimmy John’s sandwich-making less restrictive covenant would pro- techniques were unique. tect the former employer while not e extreme nature of the case ap- preventing the worker from nding pears to have prompted a backlash. employment. “I think we’re at a crossroads right “We even included a provision for now. Noncompetes were becoming recovering liquidated damages, more commonplace, but then came SEE NONCOMPETE, PAGE 14

Recent court cases relating to noncompetes

Jason Shinn, an attorney at Shinn ment at Samsung, and that Delphi Legal PLC based in Keego Harbor with would su er irreparable harm. experience in noncompete agree- Edwards Publications Inc. v. Kasdorf ments, points out that Michigan law (2009): e Michigan Court of Ap- RESTAURANT & BANQUET CENTER allows for their enforcement if they peals enforced a noncompete agree- are viewed as reasonable. He o ers a ment by the publication company Downtown Detroit few recent examples, each of which when the defendant employee had, illustrates specic circumstances as during a 13-year period, “developed to when noncompetes are legal. and nurtured close and personal rela- Delphi Automotive PLC v. Absmeier tionships with numerous business MULTIPLE EVENT SPACES AVAILABLE (2016): e U.S. District Court for the customers …, learning much about Eastern District of Michigan, en- their operations, tendencies, and lean- FOR PARTIES UP TO 325 PEOPLE joined a former Delphi Automotive ings,” and had left Edwards Publica- employee from working in the eld tions to work for a direct competitor. of autonomous vehicle technology St. Clair Medical PC v. Borgiel and from disclosing Delphi’s con- (2006): e Michigan Court of Ap- 1218 Randolph Street dential information for 12 months peals enforced a noncompete re- from his termination. In so doing, striction against a local doctor who Detroit, MI 48226 the court concluded, among other signed an employment contract that 313.961.9453 things, that Delphi Automotive “the employee shall agree not to em- would likely prevail on merits of its bark on medical practice within 7 [email protected] claims that its former employee miles of either oce for at least one breached the noncompete agree- year after the employer-employee ment when he accepted employ- relationship has ended.” 14 CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016

SPECIAL REPORT: LAW

cious approach, however, may be NONCOMPETE the more the exception than the FROM PAGE 13 norm. (but) the deal still would not pass,” “e use of noncompetes in he said. Michigan has gotten completely out Lucido’s opinion is that the strict of hand,” said Raymond Sterling, of enforcement of noncompetes on Sterling Attorneys at Law PC, Bloom- workers earning less than $35,000 is eld Hills, which represents employ- punitive and unnecessary, and ulti- ers and employees. mately destructive of Michigan’s “Companies sneak these things Maureen Raymond economy as it forces willing workers into a job application or their em- Rouse-Ayoub: Sterling: State to leave the state to nd work. ployee handbook, where noncom- Noncompetes hurting because of While the appropriateness of petes should be negotiated,” he said. protect assets. noncompetes. noncompetes for low-wage employ- “It’s come to the point where jobs ees is questionable, the situation be- company’s especially valuable as- are being driven out of the state, and comes murkier when higher catego- sets — con dential and proprietary Michigan is hurting economically ries of employment are thrown into information, as well as trade se- because of it.” the mix. crets. Going forward, attorneys will Sterling, who monitors how court Maureen Rouse-Ayoub, co-chair be more careful in crafting these rulings related to noncompetes are of the workplace law practice group documents on the speci c industry trending nationally, said his obser- at Detroit based Bodman PLC, points and on the speci c employee.” vation is that while courts in most out that extremes like the Jimmy Rouse-Ayoub said that in her states are becoming increasingly John’s case should not result in the practice she advises clients to re- skeptical of their increased use, elimination of noncompetes. quire only employees with access Michigan is bucking the trend, and “e purpose of noncompete to truly sensitive information to continues to take a pro-noncompete agreements is to protect all of a sign noncompetes. is more judi- stance.

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For a free quote, call 844-387-7876 or visit everstream.net. CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 15 Adient envisions driver’s seats that pivot By Lindsay Chappell ing wheel or the infotainment and [email protected] other controls, more of the vehicle Now free of its large parent com- controls will have to become part of pany, newly independent seat mak- the seat,” he said. er Adient is ready to being pouring Adient plans to unveil a new vi- more cash into future seat research sion in seating in January at the 2017 and technology. North American International Auto Adient — formerly the seat busi- Show in Detroit. Adient is the new ness of diversi ed Johnson Controls “We’ve always been a good and name for the seating Inc. — believes it can accentuate its pro table company that generated a business of Milwau- segment leadership by refocusing lot of cash,” Stafeil said, referring to kee-based Johnson more of its revenue on next-genera- Adient’s history as a part of JCI. Controls Inc., and it tion seats, especially those for au- “We’re going to use more of that cash plans to move its tonomous vehicles, said Je Stafeil, to grow now. operational headquar- Adient CFO. “We’ll be pushing the technology ters from Wisconsin “When it comes to capital expen- envelope as our customers migrate to a new location in ditures, the cash necessary to grow toward new vehicle developments.” Southeast Michigan. in this business is around 3 percent ADIENT to 3.1 percent of your sales,” Stafeil said in an interview with Crain's sis- ter publication Automotive News on Oct. 31, the rst day of business as Adient. “But for the past few years, we’ve been spending less than that. “We’re now going to invest at that level again to support cus- tomer programs everywhere in the world. at Je Stafeil: “We’ll will include the be pushing the technologies, fa- tech envelope.” cilities and capi- tal equipment to support what we do — which is pro- duce about a third of the world’s auto seats.” Before it broke away from JCI, the seating business was investing about 2 percent of sales in future develop- ment. A small percentage increase translates to a huge amount of spending on a single vehicle compo- nent. Adient does about $17 billion in global automotive original-equip- ment revenues. At that volume, the dierence between 2 percent and 3 percent would mean an additional $170 million a year in development When your business grows, funding. A key area for the additional in- vestment will be seats for future gen- your expectations should, too. erations of autonomous vehicles, the CFO said. “e seat is going to be an incred- ibly important part of that journey to Experience a higher level of cash management autonomous, and we’ll be there to play in it,” Stafeil said. “Not just fully with the leading bank for business.* autonomous vehicles but vehicles Your business is growing, but so is the complexity. At your stage of growth, you need a that have more autonomous fea- financial partner who can help you streamline your systems and maximize your opportunities. tures.” Stafeil painted a picture of up- Comerica Bank’s dedicated Business Advisors and comprehensive cash management tools coming vehicles in which seats have go beyond payables and receivables to help you manage and grow your business. the exibility to sit farther away from the steering wheel. For more info, visit Comerica.com/cash today or call 888.341.6490, and “Maybe you don’t need to be po- Raise Your Expectations of what business banking can be. sitioned directly in front of the steer- ing wheel at all times. Your seat could move back. It could pivot to- ward other passengers and maybe even fully turn around to allow you to talk to the people behind you,” Stafeil said. at will require new solutions in ® seat tracks and new crash testing to MEMBER FDIC. EQUAL OPPORTUNITY LENDER. RAISE YOUR EXPECTATIONS. make sure such exible seats are up *Comerica ranks first nationally among the top 25 U.S. financial holding companies, based on commercial and to safety expectations. industrial loans outstanding as a percentage of assets, as of December 31, 2015. Data provided by SNL Financial. CBP-6105-04 06/16 “If your seat has moved and your hands aren’t right there on the steer- 16 CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 Hospitals cutting admission time of psychiatric patients By Jay Greene early April to gain hospitalization tri-county, and we have reduced [email protected] “An ER is the worst clinical authorization approval from Wayne (wait times) just by having the mind- Emergency room physicians at place to have a behavioral County was “pitiful.” fulness about timeliness.” Henry Ford Hospital in Detroit strug- health patient, with the However, after six months of us- McIntyre said that so far Detroit gle daily with the high number of pa- ing the medical clearance policy, Wayne has seen a slight uptick in the tients — averaging seven per day — stimulation and noise.” McIntyre said, her data showed the number of patients being hospital- arriving in the department with Stephanie Brady, average time for authorization was ized by using the new policy. psychiatric issues. St. John Providence Health System cut to about three hours. But, she said, “we are seeing a de- Half of those patients require in- “If it is not a clear-cut decision, we crease in (readmissions). e right patient admission, but Henry Ford, can send out behavioral health pro- people are getting in and are not like all hospitals in Southeast Michi- issues wait in the ER has doubled, authorities in Wayne, Oakland and fessionals to do an assessment” at bouncing right back.’ gan, including Beaumont Health, St. sometimes creating patient safety is- Macomb counties, Brady said. the hospital, McIntyre said. “ e six e project also led to a greater John Providence Health System and sues, said Jennifer Peltzer-Jones, e meeting led to the formation basic questions solved a lot of it.” understanding of the need to in- Detroit Medical Center hospitals, has R.N., senior sta psychologist at earlier this year of the Tri-County But Peltzer-Jones said hospitals crease crisis center residential beds problems getting psychiatric evalua- Henry Ford's ER. Mental Health Group, said Brady, who also need to do a better job at reduc- in Southeast Michigan, she said. De- tions completed and then timely ap- “Every time you hear something was appointed the group’s facilitator. ing the time for an internal psychiat- troit Wayne is preparing a request for proval from mental health payers. about ER psychiatric boarding, all After studying ER patient ow, the ric consultation at the hospital that proposal, she said. All the while, the patients and you hear is we (hospitals) need more amount of requested medical testing ER nurses and physicians request as “We are admitting 100 people per their families wait. And wait. psych beds,” said Peltzer-Jones, not- by mental health payers and the part of the evaluation process. month into hospitals who could be “An ER is the worst clinical place ing that isn’t always the case. “We amount of time to gain reimburse- So far, Henry Ford has cut down in residential beds in the tri-county to have a behavioral health patient, admit them. But they have twice (the ment approval for admission, the the time it takes ER sta to call for a area,” McIntyre said. with the stimulation and noise,” said length of) stay in the ER” than medi- group came up with a six-step stan- psychiatric consultation to about Stephanie Brady, St. John’s vice pres- cal patients. dardized medical clearance policy three hours from ve. Next steps ident of care transition. “ ey wait Last fall, top executives at the that is beginning to be implemented, As a result, Peltzer-Jones said, the and wait, and it doesn't improve health systems decided they needed said Brady. amount of time it takes a hospital Despite having an agreed-upon care. Patients, visitors and families to do something about extended ER e policy works like this: For ex- like Henry Ford to evaluate a patient medical clearance policy between get agitated.” stays for psychiatric patients and re- ample, if the patient answers “no” to for possible psych admission all three counties, Peltzer-Jones said Over the past several years and for quested a meeting between hospital all questions, there is no need for ad- dropped from about an average of 12 full implementation is required be- a variety of reasons, the number of ER ocials, medical directors and ditional testing and payer pre-au- hours to seven hours. cause of the uidity of patient ow hours that patients with psychiatric administrators for the mental health thorization for admission can be “(Hospitals) improved internal across Southeast Michigan. sought, the group decided. time, and the medical clearance pol- “We had a patient on Monday that e questions are: icy helped with eciency,” she said. we waited eight hours for one of the J Is this a new psychiatric issue? Detroit Wayne has started using counties to tell us it wasn’t their pa- J Will any additional medical treat- the medical clearance policy and is tient,’ she said. “We did the medical ment be needed at the next step? working with hospitals in Wayne checklist, and we found no reason to J Are vital signs abnormal? County, McIntyre said. e other do labs. But the insurer asked for J Is there abnormal physical or neu- two counties, Macomb and Oakland, labs anyway.” rological exam? are both in the discussion and im- Besides full implementation in A Fee-Only Wealth Management Group J Is there also a medical complaint? plementation process. Southeast Michigan, Brady said, the J Is the patient pregnant? Oakland County Community Mental group would like to see the stan- Peltzer-Jones said the medical Health Authority is working on a pilot dardized medical clearance taken clearance form is a checklist that program in which Common Ground into all of Michigan's counties, work helps ER sta determine whether a and St. Joseph Mercy Hospital in Pon- with hospitals, mental health au- Michigan’s #1 Financial Advisor patient with behavioral health issues tiac start using the policy by early thorities and include the freestand- could be admitted or whether more next year, said Matthew Owens, Oak- ing psychiatric hospitals, group testing is required. land's chief of network operations. homes and crisis centers. She said it also streamlines the Owens said each county has a dif- “We are still in the beginning, and process by eliminating the need for ferent process to authorize mental we need to implement standardized time-consuming laboratory or other health admissions. For example, medical clearance for every payer,” &KDUOHV&=KDQJ tests that mental health payers Oakland uses Common Ground to Brady said. “We still need to reduce &)3Š0%$06)6&K)&&/8 sometimes require before they ap- evaluate a psychiatric admission at the wait time for patients in the ER 0DQDJLQJ3DUWQHU prove an admission, she said. its oces, which has lowered its rate for developmentally disabled pa- Carmen McIntyre, M.D., chief to about 23 percent. tients or pediatric patients. We still 2QHRIWKH1DWLRQ熎V7RS1$3)$5HJLVWHUHG medical ocer with the Detroit “ ere (are) extensive ER board- have challenges.” )HH2QO\)LQDQFLDO$GYLVRUV Wayne Mental Health Authority, said ing and wait times,” he said. “We are Jay Greene: (313) 446-0325 the average 21 hours it took ERs in trying to create uniformity in the Twitter: @jaybgreene

Lawrence Tech, St. John Providence We Uphold a Fiduciary Standard get approval for nursing school in 2017 By Chad Halcom Lawrence Tech’s College of Arts and and a nurse practitioner in cardio- 犇犆犇:HVW%LJ%HDYHU5RDG [email protected] Sciences, as a major in the Depart- vascular services at St. John Ma- 犇犊WK)ORRU Lawrence Technological University ment of Natural Sciences. comb-Oakland Hospital, Warren, as will launch a nursing degree pro- “Michigan and the nation as a program director and a professor of 7UR\0,犊犎犆犎犊 gram in fall 2017 at its Southeld whole are in the midst of a continu- nursing. Jamison holds a doctorate 犈犊犎 犌犎犍犇犈犋犎RU 犎犎犎 犍犍犍犆犇犈犌 campus, after the private university ing shortage of qualied, well- of nursing practice degree from Van- and St. John Providence Health Sys- trained nurses,” Lawrence Tech Pres- derbilt University and a post-master’s tem cleared a nal state regulatory ident Virinder Moudgil said in a certicate as an acute care nurse approval ursday. statement. practitioner from the University of e Michigan Board of Nursing ap- “We aim to help solve that problem Michigan. www.zhang nancial.com proved an application for the new with a nursing education program “ is partnership is part of our program, which will admit 32 stu- that will take full advantage of our 85- ongoing commitment to providing dents per year for classroom instruc- year history as a technologically ad- the training our future nurses need $VVHWVXQGHUFXVWRG\RI/3/)LQDQFLDODQG7'$PHULWUDGH tion at the university plus clinical vanced university. Our founding mot- so they can deliver the high quality $VUHSRUWHGLQ%DUURQ犑V0DUFK犋犈犆犇犌5DQNLQJVEDVHGRQDVVHWVXQGHUPDQDJHPHQWUHYHQXH and laboratory instruction across to, ‘ eory and Practice,’ is a perfect and compassionate care that pa- JHQHUDWHGIRUWKHDGYLVRUV犑ILUPVTXDOLW\RISUDFWLFHVDQGRWKHUIDFWRUV $VUHSRUWHGLQ %DUURQ犑V$XJXVW犈犊犈犆犇犋7KHUDQNLQJUHIOHFWVWKHYROXPHRIDVVHWVRYHUVHHQE\WKHDGYLVRUV the six metro Detroit locations of St. description of the kind of nursing ed- tients expect and deserve,” said St. DQGWKHLUWHDPVUHYHQXHVJHQHUDWHGIRUWKHILUPVDQGWKHTXDOLW\RIWKHDGYLVRUV犑SUDFWLFHV John, a division of St. Louis-based ucation we will deliver with our part- John Providence President and CEO 1$3)$5HJLVWHUHGVWDWXVUHSRUWHGDVRI6HSWHPEHU犇犎犈犆犇犋RQZZZQDSIDRUJ Ascension Health. ners at Providence.” Jean Meyer. 0LQLPXPLQYHVWPHQWUHTXLUHPHQW犇犆犆犆犆犆犆 e Bachelor of Science in nurs- e university has named erese Chad Halcom: (313) 446-6796 ing will be a degree program within Jamison, a veteran nursing specialist Twitter: @chadhalcom CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 17

DETROIT’S BUSINESS SCHOOL

Mike Ilitch GRADUATE PROGRAMS School of Business LOWEST 13 MBA CITY OF AUBURN HILLS TUITION CONCENTRATIONS Construction of a three-story, 96-room Hilton Garden Inn is expected to begin in the spring and wrap up a year from this fall, of Michigan’s top three research universities according to a plan led with the city of Auburn Hills. Future home in the heart of Hilton Garden Inn in the works THE DISTRICT DETROIT with flexible options online for Great Lakes Crossing Outlets and at suburban satellite campuses Accredited by By Sherri Welch Bacall’s Truss Hospitality Develop- request are expected to go before the [email protected] ment and Management LLC. City Council for nal approvals be- GRADUATE AACSB Basil Bacall, the developer of Ann Arbor-based Bowers and As- fore the end of the month. PROGRAMS International three hotels already operating at sociates Inc. is the architect on the Bacall also owns and operates the Great Lakes Crossing Outlets in Au- project, which also includes the ad- Hampton Inn and Holiday Inn Express 5 burn Hills, has a fourth hotel in the dition of 184 parking spaces, includ- at Great Lakes Crossing Outlets, WSU offers more than works for the outlet center. ing 22 spaces within the shopping north of TownePlace Suites, along Construction of a three-story, 96- center’s parking lot. the mall’s ring road near I-75. $ GMAT WAIVED room Hilton Garden Inn is expected to e project is set to go before the And about six miles to the south, 350M for qualified applicants begin in the spring and wrap up a Auburn Hills Planning Comission he and his brother Mike are also de- in financial aid and scholarships year from this fall, according to a Nov. 16. veloping two hotels as part of anoth- plan led with the city of Auburn Concurrent with plans for the ho- er $14 million investment through Hills. tel, the commission will review a re- Opdyke Hospitality Investments LLC. If approved, the 67,740-square- quest to allow for a division of owner- e four-story hotels under con- foot hotel will be built on excess land ship between the two hotels, should struction at 907 N. Opdyke Road, be- 800 31,000 employers partnered with adjacent to Bacall’s Marriott Towne- Bacall choose to sell one or both of tween Featherstone and Center PROUD BUSINESS Place Suites, a three-story extend- them, said Stephanie Carroll, man- roads, include a 90-room Staybridge Career Planning & Placement ALUMNI ed-stay hotel with 80 rooms that ager of business development and Suites extended stay hotel and a 92- opened in April 2015. community relations for the city. If room Holiday Inn Express & Suites. e $8.2 million project at 3900 approved by the Planning Commis- ey’re expected to be completed More at ilitchbusiness.wayne.edu Baldwin Road is being developed by sion, the hotel plan and land division some time next summer. Vista Maria takes over foster care services from Holy Cross By Sherri Welch duce administrative expense,” Auf- [email protected] demberge said. Holy Cross Services is exiting foster So, too, does the state, which care in four counties and shifting awards many of the contracts that those placements and clients to support child welfare services. Dearborn Heights-based Vista Ma- Over the past year, the Michigan ria, which does nearly three times as Department of Health and Human Ser- many foster care placements in vices has begun shifting foster care those counties. services to performance-based con- rough the agreement, which tracting that requires providers be came together over the past six or sev- able to meet a multitude of needs for en months following about ve years their young clients, said Holy Cross of conversations, Vista Maria will be- COO Sharon Berkobien. come one of the largest providers of “Generally, in order to do that, you foster care services in Wayne County. have to be either partnered with other Vista Maria will refer its clients in organizations or be large enough on need of detoxi cation treatment to your own,” she said. Holy Cross, which provides sub- It made more sense to combine stance abuse treatment as one of its Holy Cross’ eorts with Vista Maria’s core programs. since the Dearborn Heights nonpro t Child welfare agencies, especially already had a number of homes and those in Wayne County, do exactly other options for children, Berkobien the same things and are highly re- said. dundant, said Angela Aufdemberge, Vista Maria, which employs about president and CEO of Vista Maria. 275 people, provides care, support, Eliminating those redundancies treatment and education for at-risk by specializing in certain service ar- children and their families. eas and then collaborating with oth- It will take on 13 employees from er providers for services they spe- Holy Cross as it assumes oversight for cialize in creates a better system for 48 clients and 29 foster homes in clients, she said. Wayne, Oakland, Macomb and Washt- “Foundations and corporations enaw counties as they shift over the expect nonpro ts to look for ways to next month. Funding comes through a collaborate and improve dollars go- contract with the Michigan Depart- ing directly to programs and to re- ment of Health and Human Services. 18 CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 Developers Birmingham investor quietly buys buy Brush Park another property in Detroit property By Kirk Pinho [email protected] at auction A Birmingham investor quietly purchased another property — at By Kirk Pinho least his eighth in the past 18 months [email protected] — in Detroit, this one the Detroit Fire A New York City-based develop- COSTAR GROUP INC. and Marine Insurance Co. building in ment company has purchased about This building at 435 Division St. in the nancial district. a half-acre of property in Detroit’s Detroit’s Brush Park neighborhood was Hany Boutros, co-owner of Bir- Brush Park for redevelopment. part of a four-property auction in mingham-based Mills Pharmacy + Farmington Hills-based Friedman September that resulted in New York Apothecary, is tied to an entity that Integrated Real Estate Solutions LLC, City-based developer Astral Weeks purchased the 12,000-square-foot which coordinated the online Sep- Development as the new owner. building at 625 Shelby St. in June. tember auction of the property at Di- at entity, HB Hospitality Detroit vision and Beaubien streets to Astral LLC, is registered to Kelly Allen, a Weeks Development, said the sale in- to CoStar Group Inc., a Washington, partner in the Adkison, Need, Allen & cluded four properties, two of which D.C.-based real estate information Rentrop PLLC law rm in Bloom eld have buildings on them totaling service. Hills. e deed for the June sale lists about 29,000 square feet. e high bid at the auction was the address for HB Hospitality De- Astral Weeks’ website says a proj- $1.4 million, Crain’s reported at the troit as a Birmingham address ect is currently in the pre-develop- time. It is not known if that is the owned by Boutros. ment phases and that it is the inves- price Astral Weeks paid. e purchase price for the build- tor, developer and manager of the Several hundred million dollars of ing, built in 1912, is not known. COSTAR GROUP INC. The 104-year-old building at 625 Shelby is 12,000 square feet. property. redevelopment projects are planned Plans for the building or his other e company has some ties to the or underway in Brush Park, which is properties are also not known. A area. Adam Schlo, its director of de- more than 100 acres. message left with Boutros last week chased at least eight properties near 249 Chene; 1949 E. Jeerson Ave.; velopment and design, is a 2007 Uni- A message was left with Rich Dep- was not returned. the east Detroit riverfront, in Brush 2100 Guoin St.; 211 Jos. Campau St.; versity of Michigan graduate, accord- tula, Friedman's national director of e previous owner was an entity Park and now in the nancial dis- and 625 Shelby. ing to his LinkedIn page. investment advisory services, who called Sherlock Enterprises LLC, trict, which have all seen ramped-up Mills Pharmacy is expected to e minimum bid at auction was represented the buyer and seller in which is registered to Paul Huxley, real estate investment in the past open a Midtown location on Cass $500,000. e properties were the auction. An email was sent to As- CFO of Detroit-based Strategic Sta‚- several years. Avenue this month. owned by Brush Lo‡s LLC, an entity tral Weeks seeking more details on ing Solutions. ey are: 2952-2954 Woodward Kirk Pinho: (313) 446-0412 controlled by Jason Dean, according what is planned for the property. Since May 2015, Boutros has pur- Ave.; 2130 Franklin St; 241 Chene St.; Twitter: @kirkpinhoCDB

AFTER THE ELECTION, CHANGES IN STORE FOR DETROIT-AREA HEALTH CARE COMPANIES TITLE SPONSOR A MUST SEE PANEL DISCUSSION

THURSDAY

NOV. 17 MODERATOR: Jared Bernstein, Naomi Lopez Bauman, Marianne Udow-Phillips, Former Economic Director of TROY MARRIOTT Executive Director, Adviser to President Healthcare Policy, Center for Healthcare Barack Obama Goldwater Institute 7:30 A.M.- 1 P.M. Research and Transformation

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warehousing facility at its Farming- SolidThinking Inc., Troy, a subsidi- ton Hills headquarters. Website: ary of Altair Engineering Inc., has mdiworldwide.com. launched the metal and polymer DEALS & DETAILS Click2Extrude suites of soft- ACQUISITIONS EXPANSIONS and simulation center. Website: NEW PRODUCTS ware to manufacturers. Website: & MERGERS 3-Dimensional Services Group, stjoesoakland.com. Altair Engineering Inc., Troy, added solidthinking.com. Virginia Tile Co. LLC, Livonia, a ce- Rochester Hills, a prototype fabrica- SimData Manager software from PD- ramic tile and natural stone prod- tor and manufacturing company, 4Men, Harper Woods, a men’s Tec AG, Karlsruhe, Germany, to the Al- Mahle Industries Inc., Farmington ucts distributor, has acquired RBC plans to expand its 100,000-square- clothing retailer, has opened a store tair Partner Alliance online software Hills, an automotive engine compo- Tile & Stone, Plymouth, Minn., a foot Lapeer aliate company Urgent with Joe Faris Motor City Design Co, portal. It also announced the addition nents supplier, has developed a wholesale distributor of tile and Design and Manufacturing facility Auburn Hills, a men’s clothing de- of ProteusDS and ShipMo3D software lead-free bearing system for stone. Website: virginiatile.com. by 65,000 square feet. Website: sign rm, at Twelve Oaks Mall, 27500 from Dynamic Systems Analysis Ltd., heavy-duty truck engines. Website: 3dimensional.com. Novi Road, Novi. Telephone: (248) Halifax, Nova Scotia. ProteusDS is mahle.com. CONTRACTS 513-4769. Websites: 4menusa.com, used to test virtual prototypes of sys- ManagedWay, Troy, a cloud ser- St. Joseph Mercy Oakland, Pontiac, joe-faris.com. tems that are exposed to extreme NEW SERVICES vices provider, announced it will a part of St. Joseph Mercy Health Sys- wind, current and waves, and Ship- Ziebart International Corp., Troy, use Windstream, Little Rock, Ark., a tem, has opened a new cafeteria and MDI Worldwide, Farmington Hills, Mo3D models the interactions of ships has introduced iBart, software that it provider of advanced network com- education center within the south a designer and manufacturer of pro- and oshore structures with waves says allows franchises to capture munications, to provide optical wave patient tower, including seven con- motional signs and displays, is ex- and marine environment. Websites: large amounts of data eciently and services to connect select data ference rooms, an auditorium panding its manufacturing and altair.com, pdtec.de, dsa-ltd.ca. accurately. Website: ziebart.com. centers in the metro Detroit market. Websites: managedway.com, windstream.com.

Fourmidable Group Inc., Bingham Farms, has been appointed as new management agent for Country Meadows, a 267-unit apartment community in Ypsilanti; Providence Tower, a 241-unit midrise building in South eld; Water’s Edge Apartments, 192 units in South Lyon; and Wood- land Heights, 187 high-rise units and 21 scattered homes in Pontiac. Web-

Siren PR LLC, a public relations rm, has been retained by Cranbrook Insti- :LQQHURIWKH tute of Science, Bloom eld Hills, for 7UDLOEOD]HU,03$&7$ZDUGé communication strategy, media rela- tions, advertising and collateral sup- 3ODQQLQJ$OWHUQDWLYHV port; and retained by LIPR Financial %ORRP÷HOG+LOOV0, Advisors, Troy, for media relations, social media and website manage- 3ODQQLQJ$OWHUQDWLYHVLVUHFRJQL]HG ment. Website: siren-pr.com. IRUIRUJLQJQHZJURXQGRQEHKDOIRI Sanders Fine Chocolatiers, a divi- WKHFRPPXQLWLHVWKH\VHUYHDQGWKH sion of Morley Candy Makers Inc., LQGHSHQGHQWDGYLVRU\LQGXVWU\ Clinton Township, has retained Plante Moran Cresa, South eld, a commercial real estate consulting rm, to assist in determining the fu- ture direction of its real estate. Web- sites: sanderscandy.com, pmcresa. com.

Danlaw Inc., Novi, an automotive electronics and embedded engi- neering services supplier, has con- tracted with HiRain Technologies Co. Ltd. Inc., Farmington Hills, a devel- opment tool provider and automo- tive electronics products supplier for (DFK\HDUWKH7UDLOEOD]HU,03$&7$ZDUGKRQRUVD÷UPWKDWLVKHOSLQJDGYDQFHWKH÷QDQFLDODGYLVRU\LQGXVWU\ the Chinese auto industry, to pro- WKURXJKVSHFLDOLQLWLDWLYHVDQGDSDVVLRQIRUWKHLUEXVLQHVV vide its Mx-Suite embedded soft- ware test tools to Chinese OEMs and 7KHVHDUHWKHTXDOLWLHVRXULQGXVWU\KDVDOZD\VYDOXHG:HWDNHJUHDWSULGHLQFKDPSLRQLQJWKHLQGHSHQGHQFH suppliers. Websites: danlawinc.com, RIWKHVHOHDGHUVDQGVXSSRUWLQJWKHLUFRPPLWPHQWWRWKHFOLHQWVWKH\VHUYHVRZHOO hirain.com. /HDUQPRUHDWLPSDFWVFKZDEFRPDZDUGV General Motors Co., Detroit, has contracted with IBM Corp., North Castle, N.Y., to create OnStar Go, which will oer personalized con- tent through the dashboard and dig- ital channels supported by OnStar. Websites: gm.com, ibm.com.

Email Deals & Details guidelines. 3ODQQLQJ$OWHUQDWLYHV Ü$GYLVRUéÝ LVQRWRZQHGE\RUDI÷ OLDWHGZLWK&KDUOHV6FKZDE &R,QF Ü6FKZDEÝ DQGLWVSHUVRQQHODUHQRWHPSOR\HHVRUDJHQWVRI6FKZDE [email protected]. Use 7REHHOLJLEOHIRUDQ,03$&7$ZDUGDQDGYLVRU÷ UPPXVWXVH6FKZDERUDQDI÷ OLDWHWRFXVWRG\FOLHQWDVVHWV$GYLVRUUHFRPPHQGVUHTXLUHVWKDWLWVFOLHQWVFXVWRG\WKHLU any Deals & Details item as a model DFFRXQWVPDQDJHGE\$GYLVRUZLWK6FKZDE7KH,03$&7$ZDUGDQGWKLVDQQRXQFHPHQWDUHQRWDUHIHUUDOWRHQGRUVHPHQWRUUHFRPPHQGDWLRQRIRUWHVWLPRQLDOIRU for your release, and look for the $GYLVRUZLWKUHVSHFWWRLWVLQYHVWPHQWDGYLVRU\RURWKHUVHUYLFHV(DFKLQYHVWRUPXVWGHFLGHZKHWKHUWRKLUHDQ\LQYHVWPHQWDGYLVRUDQGZKDWDXWKRULW\WRJLYHLW appropriate category. Without 6FKZDEGRHVQRWVXSHUYLVHLQYHVWPHQWDGYLVRUVDQGWDNHVQRUHVSRQVLELOLW\WRPRQLWRUWKHVHUYLFHVWKH\SURYLGH6FKZDE$GYLVRU6HUYLFHVéLQFOXGHVWKHFXVWRG\ complete information, your item will WUDGLQJDQGVXSSRUWVHUYLFHVRI6FKZDE not run. Photos are welcome, but we k&KDUOHV6FKZDE &R,QF Ü6FKZDEÝ $OOULJKWVUHVHUYHG0HPEHU6,3&75* 1+8 $'3  cannot guarantee they will be used. 20 CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 Boulder, Colo. Previously, he was a managing director at Mobius Venture Capital, a lawyer at PEOPLE: Cooley LLP and a software engineer at Accen- ture. He also co-founded Shareholder Represen- SPOTLIGHT CALENDAR tative Services. He has co-written the book Ven- ITC Holdings names WEDNESDAY Business Leaders for Michigan. Discussion on how ture Deals, Be Smarter an Your Lawyer and Blair president, CEO NOV. 9 industries are being disrupted here at home and Venture Capitalist and is an adjunct professor APACC Women’s Leadership Conference. 11 a.m.- across the globe. Speakers include Patrick Doyle, at the University of Colorado Law School, where Linda Blair has become presi- 3:30 p.m. Asian Paci c American Chamber of Com- president and CEO of Domino’s, and William Taylor, he teaches a course on venture capital. Ann Ar- dent and CEO of ITC Holdings merce. Topic: “Leading With Purpose.” Greektown co-founder and founding editor of Fast Company. bor Spark. Free. Email: phillip.coleman@ Corp. follow- Casino-Hotel, Detroit. $35 members; $45 nonmem- Westin Book Cadillac Detroit. $125. Contact: annarborusa.org. ing the com- bers; $10 students. Contact: Van Nguyen, email: businessleadersformichigan.com/event/ pletion of the [email protected]. 2016-michigan-ceo-summit. UPCOMING EVENTS Novi-based November Economic Development Forum. company’s THURSDAY Ask Me Anything with Jason Mendelson. 3-5 p.m. 8-9:30 a.m. Nov. 16. Troy Chamber of Com- $11.3 billion NOV. 10 Ann Arbor Spark. Mendelson is co-founder of merce. Hear from local industry experts as they sale last 5th Annual Michigan CEO Summit. 8 a.m.-2 p.m. Foundry Group, an early stage venture capital rm in recap the past year and discuss opportunities month to Ca- and challenges they will face in the coming nadian utili- year. Speakers: , vice president ty company Lindsey Williams Linda Blair of government a airs, Delphi Corp.; Thomas Fortis Inc. ADVERTISEMENT SECTION Shafer, president and COO, Talmer Bank & Blair, 46, Trust; Chuck Ruiz, executive vice president, Bas- succeeds Joseph Welch, who re- so Design Group; Stephanie Bergeron, president, tired. Welch, 68, will remain ACCOUNTING Walsh College. Rehmann, Troy. Free for mem- chairman of ITC’s board. bers; $10 nonmembers. An additional $5 will A 2007 Crain’s 40 under 40 be charged to those registering the day of the honoree, Blair most recently event. Website: troychamber.com. served as executive vice presi- Alastair Morrison dent and chief business unit of- Senior Associate The National Conversation on Board Diversity. cer for ITC Holdings. The Siegfried Group 7:30-9:30 a.m. Nov. 17. Inforum. On the same Alastair Morrison, CPA, CA, day in cities across the nation and throughout Former DIA COO new joins Siegfried’s Detroit the world, business leaders will discuss one Henry Ford Health VP Market as a Senior strategic question: “How can we harness inves- ENGINEERING Associate. He takes great pride in his work tor in uence, legislation, targeted publicity Henry Ford Health System & CONSULTING and has an analytic ability that enables him to and other means to accelerate progress for named former Detroit Institute adapt quickly to new situations. He earned women on boards?” Speaker Nancy Gioia, for- of Arts COO Annmarie Erickson his Bachelor of Business Science degree in merly Ford Motor Co.’s director of global con- as its new vice president of gov- accounting and  nance from the University of nectivity, electrical and user experience, serves ernance. She will join the health Cape Town in South Africa. Most recently, he on two corporate boards: Exelon Corp., where system Nov. 28, succeeding the was the Director of Accounting and Finance she serves on the Finance and Risk Committee retiring Edie Eisenmann. at the Job Shoppe. and the Generation Committee; and Brady Erickson left as executive vice Corp., where she is on the Compensation and president and COO of the DIA in Management Development Committee and June after 17 years with the mu- Carl Pfadt chairs the Technology Committee. Michigan seum, but remains a consultant Associate Manager First Credit Union, Lathrup Village. $35 Info- there through December. The Siegfried Group rum members; $45 nonmembers. Website: Carl Pfadt, CPA, joins inforummichigan.org. Ex-Free Press publisher John Vidican Siegfried’s Detroit Market becomes Inforum VP as an Associate Manager. 20162016 Crain’s Crain’s Health Health Care Care Leadership Leadership Summit Sum- . Survey Project Manager He has a passion for motivating the people 7:30mit a.m.-1. 7:30 a.m.-1 p.m. Nov. p.m. 17Nov.. Crain’s 17. Crain’s Detroit Detroit Busi- Carole Leigh Hutton, former Spalding DeDecker around him and uses his mental agility to nessBusiness. Learn. aboutLearn the about ever-changing the ever-changing landscape editor and publisher of the De- of landscapethe health ofcare the industry, health care plus industry, make the plus pro- troit Free Press, is returning to With 14 years of experience in the surveying connect disparate ideas into cohesive fessionalmake thecontacts professional to help contacts navigate to helpthese the city as vice president of busi- industry and an additional 5 years in solutions. He earned his Bachelor of Business changes.navigate  these e program changes. includes  e program a keynote in- ness development and market- construction, he will help grow SD’s survey Administration and his Master of Business speaker,cludes breakout a keynote sessions speaker, and breakout the Health ses- Care ing for Inforum, a Detroit-based operations. Mr. Vidican holds surveying Administration in accounting from St. Heroessions andawards. the HealthTroy Marriott. Care Heroes $125. awards. Price in- professional women’s alliance. licenses in Michigan and Ohio. John’s Bonaventure University. Most recently, he was creasesTroy Marriott.after Nov. $125. 14. Contact:Price increases Kacey Ander-after Hutton, who led the Free primary focus will be client development in the Lead Corporate Auditor at General son,Nov. email: 14. Contact: [email protected]; Kacey Anderson, email:phone: Press for 15 years, had served as the energy sector. Prior to joining Spalding Motors Company. (313)[email protected]; 446-0300. phone: (313) 446- president and CEO of United DeDecker, John was project manager for 0300. Way Silicon Valley in San Jose, Atwell, LLC. John’s experience includes Calif., for the past eight years. pipeline projects, topographic and CFA Annual Forecast Luncheon. Noon-1:30 Inforum named Cindy Gooda- boundary surveys, construction layout, well p.m. Nov. 18. CFA Society of Detroit. Kevin ker, former executive editor of plats, safety standards, and quality control. O’Leary of ABC’s “Shark Tank” will share his out- Crain’s and interim COO for In- PEOPLE look for 2017. MotorCity Casino Hotel, Detroit. forum since May, as vice presi- ON THE MOVE $45 members; $65 nonmembers. Website: dent of signature programs and provides an opportunity cfasociety.org. communications.  e COO po- HEALTH CARE sition was eliminated. to announce the selection, If America Doesn’t Stand for Free Trade, Who Inforum also named Kristen promotion, appointment, Does? 11:30 a.m.-1:30 p.m. Nov. 21. Detroit Eco- Linegar Mercer, who has been di- Steven J. Zawisa nomic Club. Australian Ambassador Joe Hockey rector of strategic initiatives, as Director of Financial leadership or role responsibility will argue that the United States’ global eco- senior director of operations, Planning and Analytics expansion of an employee, nomic and strategic strength has been built on and promoted Tember Shea to Oakland County colleague or team member trading freely with other nations, and that free director of inGage from manag- Community Mental trade must continue if America is to continue as er of that program. Health Authority across industries a global and regional leader. Westin Book Cadil- lac. $45 members; $55 guests; $75 nonmem- Zawisa joined OCCMHA in 2013 as a  scal and sectors. Destaco names Paul bers. Website: econclub.org. analyst for the Adults with Mental Illness (MI) Destaco, an Auburn Hills- Service Network Team. He provided  scal and For more information based automation and work- data decision support for MI programs, Calendar guidelines. Visit crainsdetroit.com holding company, named Byron including Access, Crisis, State Facilities, and or questions regarding advertising and click “Events” near the top of the home Paul president, replacing Mats Community Hospitals. As Director, Zawisa’s page. Then, click “Submit Your Events” from the in this section, please call Ceder, president since June 2014. duties will also include all of OCCMHA’s drop-down menu that will appear. Fill out the Lynn Calcaterra at (313) 446-6086 or Paul’s previous positions in- business operations and service delivery submission form, then click “Submit event” at clude managing director for systems for people with a developmental email: [email protected] the bottom of the page. Asia Paci™ c and vice president of disability, mental illness, substance use can be found at More Calendar items global strategy at John Crane. disorder, or children with serious emotion crainsdetroit.com/events. disturbance. CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 21 November 7, 2016 CRAIN’S DETROIT BUSINESS Page 21 JOB FRONT POSITIONS AVAILABLE POSITIONS AVAILABLE POSITIONS AVAILABLE

€ APPLICATION € Principal Engineer/Job Code PE-01 DEVELOPMENT MANAGER ARCHITECT Work cross-func Cust & Harman dev team in analyz req & designing Android App/Svs for Automotive Infotainment proj ontime & high qual deliver to mult cust. Work with global SW Ally Financial seeks App. Dev. Mgr: A national real estate development company seeks a highly motivated dev team to dev new features debug issues& write test case for unit test. Lead/parti in Req BS in CS or IT & 5 yrs. exp in and organized individual to join their team as their architect in meet’s b/w the Customer and Harman for design review & clarifi in specific doc. Integrate software app. dev., architecture design & Dev customize & bug fix in Android Telephony fw and app’s. Lead comm on Android Fw & syst design for enterprise apps. Bloomeld Hills, Michigan. App S/W issue b/w Cust & Harman, incl reporting & investigating the issue identify prior Position in Detroit, MI. Mail resumes to: update tracking & root cause doc. 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people who were perfectly responsi- Archdiocese of Detroit. there is a political calculus there.” DPS ble people, or if a few were being dis- DPS board slates e Freedom Team campaigns in FROM PAGE 1 honest in their dealings with others.” part on freedom or autonomy for Ready for acrimony? The old guard teachers, school administrators and “It becomes a total crapshoot, and The A+ Team Members of the board of the students in district governance. Another panel of business, non- you could have a group serving on the previous Detroit Public Schools pro t, education and labor leaders, board who isn’t necessarily the best e Detroit Regional Chamber’s po- district who are on the ballot this The Duggan vacuum the Coalition for the Future of Detroit informed or quali ed. Not only do the litical action committee endorsed year: Schoolchildren, is taking no positions legacy candidates have a leg up, but it Bailer and six other newcomer candi- Herman Davis Detroit Mayor Mike Duggan has on any candidates in the election, becomes a classic name (recognition) dates from three dierent leadership taken no public position on school even though the Coalition was an ear- LaMar Lemmons game.” slates, and the local business commu- board candidates, although some ly advocate for ending emergency nity, to make up the new board that Ida Short candidates said he has personally management and returning the De- The Old Guard convenes in January. Patricia Johnson Singleton voiced support to a few people, and troit school district to elected leader- At least 13 candidates have orga- Reverend David Murray observers believe he is watching the ship in a March 2015 report. Among the 63 candidates are 10 of nized into three slates touting their race closely. Neither is the Business Leaders for Tawanna Simpson the 11 incumbents on the legacy De- leadership experience and endorse- Demas said Duggan’s silence Michigan roundtable of business lead- troit Public Schools Board of Educa- ments; the A+ Team collects four of Elena Herrada leaves a “vacuum” in the race consid- ers, said marketing Vice President tion, which has sometimes called it- those candidates and campaigns for Annie Carter ering his past interest in strong over- Kelly Chesney. self the “Board in Exile” as the district transparency and accountability. sight for the new district. But that John Rakolta, co-chair of the Coali- Wanda Redmond has gone through four state-appoint- e Chamber PAC endorsed all might be a political calculation. tion and CEO of Walbridge Aldinger ed emergency managers and a transi- four members of the “A+ Team” board Juvette Hawkins-Williams “He might be doing some things Co., also said he has not heard whom tion manager since 2009. Only Judy candidate slate — Bailer, CEO Sonya A+ Team quietly for candidates, through back- the mayor supports and declined to Summers is not on the Nov. 8 ballot. Mays of housing development com- channels. He’s certainly a highly take any position himself on candi- A self-declared slate that touts its Yet only seven seats are available on pany , curriculum spe- skilled politician in that respect,” she dates. Develop Detroit business background: the new DPSCD board, created by a cialist Mary Kovari of the Henry Ford said. “But it really could be an issue if But he said the new board should $617 million restructuring package Learning Institute, and the Rev. Kevin Penny Bailer he decided to take a strong stance by be ready to make dicult and unpop- passed by the state Legislature in June. Turman of Second Baptist Church on Mary Kovari backing a slate, and then be unsuc- ular decisions that past school boards Members of the board have said Monroe Street — and three from two Sonya Mays cessful, and then already have a poor and appointed leaders have con- previously the state resumed control other slates. relationship with the rst new (dis- sciously avoided. Rev. Kevin Turman of the district after the board elected Brad Williams, vice president of trict) board.” ose could include right-sizing in 2006 had not managed by late 2008 government relations for the cham- 5 For the Future Duggan himself told a Crain’s edi- building capacity — the district has to eliminate a de cit that began ber, said the organization tried to look A labor-backed slate touting torial board last month that he learned seat capacity for more than 80,000 stu- during a previous turn of state-ap- at candidate viability as well as an progressive change, nancial several political lessons, after advo- dents even though only about 45,300 pointed oversight, from 2000 to 2005. openness to looking at chamber pri- integrity and local control: cating intensely for a separate version are enrolled — or quality assurance Susan Demas, publisher of Lansing orities — like greater oversight of indi- of the school restructuring legislation reviews of individual schools, to make Misha Stallworth political newsletter Inside Michigan vidual school quality. that included a Detroit Education sure that a larger share of per-pupil Politics, said the incumbents are “not “ere wasn’t a cognitive decision Iris Taylor Commission, which could decide state funding in the new district’s a lock” to take all seven seats, but en- not to pick any incumbents, but we Angelique Peterson-Mayberry where and whether schools can locate 2016-17 operating budget actually joy a recognition advantage among so were so involved in the conversation Deborah Hunter-Harvill or expand in Detroit and set the crite- goes toward classroom instruction. many unfamiliar names. in Lansing about bringing the DPS ria for closing schools that underper- “I hope there’s a parent or two that Rev. Keith Whitney CEO Dan Varner of Excellent back to nancial health. And while we form. at version of the restructuring gets on the new board. It should be a Schools Detroit, a coalition of business didn’t get the perfect solution we Freedom Team bills ultimately failed in Lansing. diverse board of Detroiters with vari- and nonpro t leaders and local school wanted, we thought it was important Educators and others advocating “I sat personally with (a majority) ous backgrounds, and that the ethics administrators that advocates to im- (for candidates) to be involved in that freedom to teach and lead for of the representatives. ey over- policy of the new board is a strong one, prove school performance and choice conversation and interested in teachers and administrators: whelmingly told me we were trying to and there are not any special interests in the city, said the organization takes achieving that,” he said. do the right thing, and then we still (district suppliers, consultants or oth- no position on any candidates and he “And integrity was certainly im- Leslie Andrews didn’t get the vote,” he said, adding ers) represented on the board. Whoev- wouldn’t personally support any indi- portant — we didn’t want to put our Ryan Mack that he might have overestimated er sits on the board has to be putting viduals either. But he wouldn’t mind good name behind anyone that ap- Karen White Gov. Rick Snyder’s pull among Re- children rst in decisions,” he said. some degree of change. peared to have any ethical concerns. publicans in the House, who passed “And we have never closed a school Theresa Mattison “ere are individuals in the cur- We’re not going to have 100 percent the version of the rescue package for bad performance. We’ve closed rent leadership that I think could agreement on every issue, maybe with without an Education Commission. schools for economic reasons, and make the change and serve students any candidate. But an openness, or and Angelique Peterson-Mayberry, a “Next time we’ll come back and have held o on performance clos- well. But as a composite, I’ve not been eagerness to hear the perspective of UAW Ford community relations spe- make sure we collect plenty of allies, ings, so now the board gets to deal a fan of that board of education,” Var- the business community, and our cialist. on both sides of the political aisle,” with that issue — whose special inter- ner said. ideas and concerns for the communi- Varner said he personally sees via- Duggan said. ests will be aected by having to close “I would instead encourage folks to ty, was very important.” ble candidates from both the A+ and But he added that a comeback for badly performing schools.” dig deeply and nd information on Mays said the A+ Team members Future slates that could get recogni- the city cannot be complete without A September report from the state everyone they can on the ballot.” have been busy meeting residents tion, but did not elaborate. Williams true school district reform. School Reform Oce listed more and building personal name recogni- said the Chamber support sometimes “We have heard for a long time that than 45 school buildings within the Skeleton crew? tion more than garnering high-pro le overlaps with labor backing. people were leaving the city over district among the lowest-achieving 5 endorsements — although its mem- All ve of the Future candidate schools and crime — and lately it’s percent of public schools statewide, A local media collaboration among bers do have several. slate, incidentally, come recommend- more about schools than crime,” he accounting for more than one-third of Bridge Magazine, WDET-FM, the De- “We’ve tried to take our message ed by the local council aliate of the said. all Michigan schools in the report. troit Free Press and others found in directly to voters,” she said. American Federation of Teachers-Michi- Ballenger said Detroiters may be A new board will also be overseen October that 36 of the candidates, in- Mays also said she and the three gan, along with Detroit Market Presi- skeptical that their votes will be all for at least three years by the Detroit cluding eight of the 10 incumbents, other A+ Team members have orga- dent Ryan Mack of Operation Hope Inc. that meaningful, since the board has Financial Review Commission, had led for bankruptcy, faced a fore- nized around three issues: secure and Markita Meeks, a medical tech- taken several turns under state man- which also monitors the city’s closure or an eviction, or lost civil suits school environments for students and nologist for the John D. Dingell Veterans agement and still has budget over- post-bankruptcy nances, until it in court over unpaid bills. educators, retaining and supporting A airs Medical Center. sight from the Detroit Financial Review shows consistent balanced budgets. Two other candidates were tied to teachers, and public accountability. Commission. But the new board will hire the new more than a half-dozen lost properties The Freedom Team He also thinks the mayor is tracking district’s rst superintendent, mean- each, while 12 candidates had led for 5 for the Future the board race, but his lack of public ing it could have to take a focus on bankruptcy, the investigation found. Mack, endorsed by the AFT ali- support for anyone is conspicuous. academic improvements before - But Penny Bailer, former executive A second candidate slate has gar- ate, is also a member of the Freedom “You would think that Mike Dug- nancial stability. director of City Year Detroit and the nered teacher and labor union sup- Team slate, a third group mixing ca- gan, if he’s the leader he purports to “But academics are going to have Michigan Metro Girl Scout Council and a port and advocates new “wrap- reer educators with leaders in non- be, might step up and enter this elec- to change. We are trying to prepare school board candidate with some around” services to promote child pro t and philanthropy programs. tion when he was so immersed in the these kids for a 21st century jobs mar- business-group backing, said she tries well-being. With him are Leslie Andrews, di- details of the legislation that created it. ket with a 20th century curriculum not to read too much into other candi- ey include former Detroit Receiv- rector of community relations and He seemed to think then that the dis- and a 19th century process. e way dates’ failings. ing Hospital President Iris Taylor and corporate giving at Rock Ventures LLC, trict was really an impairment for we teach was invented over 100 years “Our hearts should go out to those Advocacy Coordinator Misha Stall- who also has a Chamber endorse- him,” Ballenger said. ago, and these kids are learning more who were maybe in that report only worth of the Detroit Agency on Aging ment. Rounding out the foursome are “But he could be embarrassed by on their iPhones after school through because in the 2008 crisis they lost a (who each got Chamber endorse- eresa Mattison, a retired DPS prin- being defeated, and for the mayor to the internet than they learn in class,” job or a home. ey shouldn’t be seen ments), plus church pastor Keith cipal and teacher, and Karen White, a put his prestige behind candidates Rakolta said. now as a deadbeat,” she said. “I don’t Whitney; education consulting rm former district school principal and who lose becomes a statement itself Chad Halcom: (313) 446-6796 know personally if that happened to president Deborah Hunter-Harvill; now associate superintendent for the on the importance of the mayor. So Twitter: @chadhalcom CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 23

in action for several months. law partner and chairman of the au- ILITCH “It was not my intent to ever stay tomotive industry team at Bodman FROM PAGE 3 in the (co-chairman) role, but watch- PLC in Detroit, against eight chal- it sets for other women, and for other ing Denise work and interact up lengers on the Nov. 8 ballot. (corporate) boards, to try to be as di- close with the other board members, She has campaigned on a record verse as they can,” said Ilitch, who I could see there was another layer of of tuition cost containment, and said turns 61 on Tuesday. “But I’m really professionalism I hadn’t seen be- the university should convene a excited about the people at Horizon. fore,” Valenti said. “And I thought, commission to study alternative rev- We have a talented group of people ‘What a terric addition and a place enue sources to shore up the general here that I think can take the compa- to turn for leadership.’” fund budget without needing tuition ny to the next level. It’s very high en- hikes. A 2015 pricing trends report ergy, and I think we’ve just been Entrepreneurial roots from the nonprot College Board phenomenal in our focus on new ranked Michigan sixth in the nation technology. I’m excited to see how e eldest daughter of Mike and for average in-state public university that technology aects future Marian Ilitch, Denise Ilitch was for- tuition and fees, at just over $12,000, growth.” mer vice chairman of Little Caesar and second in the nation for out-of- “Since Mary Barra became chair- Enterprises Inc. and president of state tuition. man at GM, we’ve seen that (GM) Olympia Development before depart- “I’d like to see a model where board makeup shift to 50 percent ing from the family company in when some of the research by a uni- women, and that’s a great change,” 2004. She went on to launch Ambas- versity has a for-prot component to said Susy Avery, recently retired ex- sador Magazine in 2006 and join the it, or has (successful commercial ecutive director of the Michigan UM regents board in 2008. spinouts of university intellectual Women’s Commission. “Denise also An attorney of about 35 years, Il- property), then some dollars go into brings a lot of experience in both the itch was of counsel to Detroit-based the general fund and help put edu- private and public sectors to that Clark Hill PLC until about three years cation rst for the students,” she role, and I think it’s a great choice for ago, serving in a business develop- said. Horizon.” ment and entrepreneurial assistance “ ese are the types of things I’d Although the board still has to dis- role at the rm. like to see the university lead, be- cuss strategy, Ilitch expects future e State Bar of Michigan reports cause this is not just a university growth at Horizon will come from a that Ilitch’s law license lapsed, but problem, it’s a national problem.” mix of small and large acquisitions, she and Clark Hill both called that a She also said the 220 Merrill some organic sales growth as a fairly paperwork oversight and said she building has oce tenants along strong U.S. economy supports recre- was current on dues as of last week. with the restaurant, owned with ational vehicle accessory demand, e magazine, a product of Ham- Zaid Elia, after completing a two- and some expansion into new geo- ilton Woodlynne Publishing LLC, year renovation. She declined to graphic and product markets. Ilitch which she co-owns with Dennis Ar- discuss in any detail her 2004 de- said she is also excited about the cher Jr. and two other partners, was parture from the Ilitch family com- company commitment to innovate originally a quarterly publication panies except to say she was “hap- and adopt new technology, into that grew to become bimonthly. It py I was part of building our what might seem like an old econo- has not had a print or digital issue family’s businesses that have made my manufacturing product. LARRY PEPLIN since spring and its website and such a dierence in our communi- Horizon Global’s Draw-Tite hitch Denise Ilitch says she doesn’t consider success a given. “I come from a sports Twitter prole have both been in- ty” and the experience has helped business planned to unveil a car- background, and I don’t feel the game is over until it’s played,” she said. “I don’t take active since July. But Ilitch said she her grow other companies in the bon-forged design and other fea- anything for granted at all in it.” hasn’t given up on Ambassador; in- years since. tures during the Specialty Equip- stead she is working to adapt it to a “I love what I do now, and I love ment Market Association show in in late August and a low ebb of un- recent months, and she sees the new, hybrid digital format that will being independent and being able to Las Vegas over the weekend. Valenti der $8.25 last November. e com- company reaching its sales growth publish at least some dedicated on- innovate and be part of other excit- also said the company has devel- pany last week reported net income goal on a combination of sales line content. ing companies,” she said. “I already oped special sensors that can alert of $9.9 million, or 55 cents per growth, new product lines and cor- “ e world has changed, and feel very much a part of our family drivers to a hitch connection prob- share, on revenue of $465.6 million porate acquisitions both large and we’re in the process of digitalizing businesses.” lem while on the road. for the rst three quarters of the small. the magazine,” she said. “It’s a work Ilitch also said she doesn’t con- Horizon Global last month an- year, compared with about $10 mil- Valenti, who maintains a director in progress, but we want to be able to sider success a foregone conclusion. nounced it had completed the lion, or 55 cents per share, on seat on the Horizon board, said he write and share stories online, and For example, this week she is still roughly $190 million acquisition of $454.2 million for the year-ago pe- knew Ilitch mainly through her in- do proles and some features more keenly focused on winning a second the Westfalia-Automotive Holding riod — excluding Westfalia, which volvement in charities like the Love- that way, through the website and UM board term and fostering growth GmbH and TeIJs Holding BV towing is expected to make Horizon Global Light Foundation that she co-founded other platforms. But we’re still in the in her executive roles. companies from a German investor about an $850 million annual busi- in 1992 before asking her to join the middle of that.” “I come from a sports back- consortium, led by DPE Deutsche Pri- ness worldwide. board when Horizon was spinning ground, and I don’t feel the game is vate Equity. at puts it well on the way to Val- out from Bloomeld Hills-based Tri- Academic leadership over until it’s played,” she said. “I Shares of Horizon Global were enti’s goal of growing the trailer tow- Mas Corp. (NASDAQ: TRS) in 2015. don’t take anything for granted at all trading around $19.80 last week, up bar company to $1 billion in annual He said the decision to make Il- Ilitch seeks a new term on the UM in it.” from about $15.70 in the days be- revenue. Ilitch said Westfalia seems itch co-chairman was only a recent board along with fellow Democrat Chad Halcom: (313) 446-6796 fore the Westfalia announcement to have boosted investor interest in one, after observing the new board and incumbent Laurence Deitch, Twitter: @chadhalcom

Crain’s: How will the U.S. presiden- risk. Our view is that if Clinton wins, the negative aspect of the market Crain’s: What part of the business AUTOS tial election aect the auto industry’s it will be status quo, and we will not leveling o is overblown, but it is a should Southeast Michigan auto in- FROM PAGE 3 performance and overall economic likely see a signicant departure risk as competitive pressure intensi- dustry players be watchful for next Crain’s: You’re predicting a at or slight growth? from spending or plans. If Trump es. at said, there remains a short- year? contraction in auto sales in 2017. What Jackson: First and foremost, the wins, there is more uncertainty age of talent, so I do not expect to see Jackson: Watch your exposure. are the root causes? election will be over soon, providing around his scal and trade policies hiring slow in the next year, especial- e same market conditions pro- Schuster: e main cause of the better direction for policy to shape that could cause jitters in the nan- ly in the engineering space. duce very dierent realities for auto- slowing of growth and expected the economic outlook. Our econom- cial markets and with economy Crain’s: What is the one major land makers and the supply chain. Auto- contraction in the U.S. market is re- ics team has evaluated stated policy growth. mine to watch out for in 2017? makers can choose to drive lated to the cycle itself. We are see- positions, and while campaign Crain’s: Will there be a contraction Jackson: We’re long past the re- throughout or constrain volume to ing the U.S. leveling o at a high rate promises are not guarantees, under of spending from the supply base? A covery where a rising tide was lifting bolster protability. Automakers of demand after strong, progressive a (Hillary) Clinton presidency, we slowdown in hiring? all boats. Now what is crucial is hav- have a vested interest in ensuring growth over the last six years. e largely expect a status quo continua- Jackson: We see suppliers looking ing the right car, SUV, truck mix (and prot by constraining supply to align overall economy is growing, and we tion of current policy. Under (Don- to optimize, hiring only as needed related supplier contracts) relative to with demand where suppliers bene- don’t expect a contraction in the ald) Trump, there is less clarity, yet based on new programs and invest- market demand. t directly from volume. next 12-18 months, but growth has tax cuts have been promised even as ments. Output for next year grows Schuster: I think the (outcome of Schuster: Southeast Michigan been tempered. Wild cards include spending is expected to rise. is marginally and still faces additional the) election is a big risk right now. should be well positioned in the pace of interest rate increase (low may prime the economy in the short pressure. In addition, the pace of the economy coming year. I think talent is a key is- risk), credit tightening and in- term, yet thereafter it would be ex- Schuster: I do think spending will and even the outcome of Brexit sue ... and the availability of it. It is a creased interplay with the used car pected to slow more quickly. be on watch in the near term, given weighs on the global economy, spill- job seekers’ market, and that likely market. Schuster: e election is another the uncertainty in the market. I think ing into North America. won’t change in 2017. 24 CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 Red Wings halfway through transitioning season tickets to new arena

Bill Shea ly” at the new arena, the team said. [email protected] A year ago, the team said all 52 e Detroit Red Wings say they are corporate suites (and another eight about halfway done with re-seating that are for hockey only instead of for their season tickets holders from Joe all arena events) and all 22 mini Louis Arena to the new Little Caesars suites at the new arena have been Arena in downtown Detroit. leased under multiyear deals. e e hockey team is oering its corporate suites lease for more than 3,500 full-season season ticket hold- $300,000 a year, and the leases are ers the chance to buy tickets by se- for 7-10 years. ey seat 30-40 peo- niority at the new $627.5 million are- ple. na, a process that began in May and Cocktail napkin math shows that is expected to be nished by early assuming 52 suites leased at next year. e new arena is to open $300,000 a year over seven years in September. translates into $109.2 million in rev- Season ticket holders have been enue (which typically is money paid individually brought to a over time rather than in a lump 10,000-square-foot arena preview sum). center that’s set up inside Comerica e mini suites are actually loge Park. ere, they’re shown sample boxes for four-six people and lease seats, videos, a mock suite, models of OLYMPIA DEVELOPMENT OF MICHIGAN for about $100,000 a season. at’s the new 20,000-seat arena and sur- The Detroit Red Wings say they are about halfway done with re-seating their season tickets holders from Joe Louis Arena to about $2 million a year in revenue. rounding The District Detroit devel- the new Little Caesars Arena in downtown Detroit. Joe Louis Arena, the hockey opment, and given the chance to buy team’s home since it opened in tickets at equivalent sight lines to the team said in a statement. ers now can opt to use a “Virtual e re-seating isn’t an ap- 1979, has 66 suites that are about their current seats, the team said. So far, about 1,400 season ticket Venue” tool at RedWingsSeason- ples-to-apples arrangement because half the size of the new arena’s Fans are assigned a seat by the holders from Joe Louis Arena’s 100 Tickets.com to buy season tickets at the two arenas have dierent cong- suites. ey also lease for about half Red Wings. level have been re-seated, the team the new arena. urations. For example, Joe Louis has the cost. “Our goal was to provide everyone said, and the 1,900 fans with tickets e team also has about 1,400 6,500 lower-level seats while Little All of the current Joe Louis suite with comparable sight-line seats to on the mezzanine and 200 level be- fans who have partial-season ticket Caesars will have 9,000. contracts were for one year, meaning the best of our ability, and fans have gan the process Tuesday. packages rather than the full 41 reg- Season ticket prices weren’t dis- there were no transfers to the new been very pleased with their seats,” Additionally, season ticket hold- ular season home games. closed, but will increase “moderate- arena.

increased vehicular trac and more to shop, work, and even live is anoth- ing the soccer project, said at the Chris Ilitch, who oversees the PISTONS unseemly aspects of sporting events, er matter. Parachuting in for just the time of the announcement. family business holdings for his bil- FROM PAGE 1 such as broken beer bottles in the game puts money in the team own- lionaire parents, said in an Oct. 2 in- impact on retailers will probably be streets and other litter, he said. er’s pockets. If they have reasons to Where are the investors? terview with CNBC that Olympia has more negative than positive.” “All in all, these entertainment spend time downtown around the 52 projects “on the board” that e logic goes like this: A sports and sports centers only benet food arena, or they want to live in the sta- Olympia, which declined to com- brings the total $2.2 billion. He also fan is oriented toward grabbing food and beverage,” he said. dium district, then Detroit sees a - ment for this story, launched e said 22 developers responded to an and drink before or after a game, or But there are upsides. nancial benet — but at the expense District Detroit and the arena RFP on housing developments. maybe a souvenir T-shirt. Less likely Little Caesars Arena would have of other places where fans aren’t ground-breaking with fanfare in July Olympia has pointed to that RFP is piggybacking a grocery shopping fewer “nights where the center is spending money or paying taxes. 2014, with assurances that an- response and insisted there is over- trip or a boutique visit. dark,” he said. “Just like when Co- While there are risks, Gibbs said, nouncements of business invest- whelming demand for things like Shoppers actually tend to avoid merica Park and Ford Field are some companies are eager to get in- ment by outside companies were apartments, oce and retail space. It areas around sports arenas when closed, it’s a large, dark hole, so it will volved in The District Detroit because just over the horizon. In January, expects at least 10 residential proj- games are taking place and those go- be lively on a much more regular ba- it will host two pro sports teams. Olympia ocials said such an- ects to happen in e District. ing to games tend not to go shopping sis, which is positive.” “ e Pistons moving downtown nouncements would come in six “We are out in the marketplace before or after games, said Gibbs. So Having a second pro sports team will be attractive to new real estate months for e District, which is and we are reacting to this incredible attracting new retail to the area in the arena means about 100 developers and investors who will forecasted to be a $2.2 billion overall feedback,” Steve Marquardt, vice might be actually hindered rather nights, or more, are guaranteed to want to locate near the arena or project. Hints were that a grocery president of Olympia Development, than boosted by a Pistons move. bring people downtown. e proj- along the M-1 Rail (streetcar). In store — possibly a Meijer — and a ho- told Crain’s in January. Retail attraction has long been a ect developer, the Ilitch-owned fact, I hosted a New York developer tel would be announced. But no names have been unveiled, problem for downtown Detroit be- Olympia Development of Michigan, yesterday that is seeking to invest in Eleven months later, no an- no investments disclosed. It’s un- cause the nearby household in- has estimated that the 20,000-seat housing in Midtown, and he was at- nouncements have been forthcom- known whether deals are in place comes make such investment eco- venue will host about 140 events a tracted by the Pistons move,” he ing. e Pistons (and a separate and simply haven’t been announced, nomically risky. year, including major concerts. said. practice facility in the District) would or if developers have been reluctant e total population in the one- at estimate doesn’t include the be the rst, although the nancial for some reason to sign on with nal mile radius around the arena site, a Pistons. The competition details of that relationship won’t be contracts with the Ilitches. key gure for retailers, is 16,894 and e Red Wings, a playo team for known until a deal is disclosed. Perhaps it’s a case of trepidation projected to decline slightly by 0.5 25 straight years, drew 821,107 fans Olympia’s eort to recruit invest- Sources have told Crain’s that the in- by investors until they see someone percent to 16,852 by 2021, according for 41 regular-season games at Joe ment in the District also faces com- tense talks to lure the Pistons from besides the Ilitch family willing to to data from ESRI Inc. provided by Louis Arena in 2015-16. A run to the petition from Dan Gilbert, the Quick- Oakland County have monopolized spend money on the project. Gibbs Planning Group. e median Stanley Cup nals can drive that to- en Loans Inc. founder who has bought much of Olympia’s attention. Olympia is using CBRE Inc., the household income in that radius is tal to more than a million. more than 95 properties in and Also, Wayne State University is Los Angeles-based real estate bro- $18,342, projected to grow to $19,283 e young and rebuilding Pis- around downtown Detroit totaling building the 120,000-square-foot, kerage with a local oce in South- in 2021. tons last season totaled 677,138 more than 15 million square feet, four-story Mike Ilitch School of Busi- eld, to handle the retail leasing. It doesn’t improve much the far- fans for 41 regular-season games. with an investment of more than ness next to the new arena — but Bill Shea: 313 (446-1626) ther out you go from the site, with a When they win, they lead the NBA $2.2 billion. He’s also seeking com- that’s thanks to $40 million from the Twitter: @Bill_Shea19 projected 0.75 percent population in attendance, as they did for years mercial tenants for his buildings. Ilitches. dip by 2021 from 234,781 to 226,146 in the 2000s, attracting more than Another factor: Pistons owner Certainly, the Ilitch investment in within ve miles, according to the 800,000 fans during the regular sea- Tom Gores and Gilbert in April joint- e District has been formidable. ESRI data. e median household son at The Palace of Auburn Hills. ly announced a plan to billion-dollar Beyond the $627.5 million arena, BANKRUPTCIES income in that radius is projected to Add in preseason and playo pro soccer stadium and mixed-used Olympia has said it will spend $196 grow from $23,779 to $24,280. games, and the Pistons also could project downtown, possibly on the million immediately around the are- e following business led for Yet when it comes to the arena bring more than a million more unnished Wayne County jail site. na on oce and retail space, restau- protection in U.S. Bankruptcy Court site, those numbers are only part of people downtown. While the status of that project re- rants, the Via concourse around the in Detroit Oct. 28-Nov. 3. Chapter 7 the story because thousands of peo- e Palace also attracted an addi- mains unknown, it certainly would building, and a parking garage. Oth- bankruptcy involves liquidation. ple might travel well over ve miles tional 213,599 patrons for non-Pis- compete for investment dollars. er spending includes $150 million Three Brothers Construction Co., 2 for games, Gibbs said. tons touring events last year, down “Sports and entertainment dis- for the Ilitches’ nine-story Little Cae- Crocker Blvd., Mt. Clemens, volun- e impact of the sports arena on from 279,098 in 2014 and 460,835 in tricts are the way of the future,” Matt sars pizza chain headquarters, and tary Chapter 7. Assets and liabilities nearby residential and oce users 2013, according to Pollstar data. Rossetti, president of Detroit-based some parking garages near Comeri- not available. would also be negative because of Keeping those visitors downtown Rossetti Associates Inc. that’s design- ca Park. Chris Ehrmann CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 25 Tech innovators honored at Michigan www.crainsdetroit.com Editor-in-Chief Keith E. Crain Venture Capital Association awards dinner Group Publisher Mary Kramer, (313) 446-0399 or [email protected] By Marti Benedetti sion to those with a retinal degenera- She said Michigan, and particularly sharing his knowledge of the venture Associate Publisher Ron Fournier, (313) 446-1674 or [email protected] [email protected] tive condition, won Exit of the Year Detroit and Ann Arbor, are well posi- capital industry and connecting in- Editor Jennette Smith, (313) 446-1622 Millendo Therapeutics, Fontinalis because it was acquired for $60 mil- tioned to collaborate on mobility with vestors with entrepreneurs. or [email protected] Partners and RetroSense Therapeu- lion by pharmaceutical giant Allergan. companies in and outside the state. Evan Ufer, partner in Ann Ar- Director, Digital Strategy, Audience Development Nancy Hanus, (313) 446-1621 or [email protected] tics were the top honorees last week is is the rst time in the awards’ Retired General Motors Co. Vice bor-based Plymouth Ventures, was Managing Editor Michael Lee, (313) 446-1630 at the Michigan Venture Capital Asso- 12 years that the event took place in Chairman Bob Lutz oered his take given the Up and Coming Award as a or [email protected] ciation’s 2016 Awards Dinner at the Detroit. on the future of mobility. “We can no young professional who is making a Managing Editor/Custom and Special Projects Daniel Duggan, (313) 446-0414 or [email protected] Rattlesnake Club in Detroit. In addition to giving out the longer serve transportation needs by mark on the investment community Assistant Managing Editor Kristin Bull, Ann Arbor-based Millendo era- awards, the event kicked o the part- putting more cars on crowded high- in Michigan. He moved to Michigan (313) 446-1608 or [email protected] peutics, which works on nding nership between MVCA and the ways,” he said during the program, from New York 2 1/2 years ago. Digital Editor Carlos Portocarrero (313) 446-6056 or [email protected] drugs to improve the quality of life North American International Auto adding that he sees the changing ve- “I’m proud to be part of the Mich- News Editor Beth Reeber Valone, (313) 446-5875 for patients with endocrine diseases, Show in Detroit that could last a year hicle landscape happening in four igan venture capital ecosystem," he or [email protected] won the Capital Event of the Year or longer, said Maureen Miller Bros- stages. e last one — where people said. Senior Editor Gary Piatek, (313) 446-0357 or [email protected] Award as the state’s largest health nan, MVCA executive director. travel in modules — is 15 to 25 years According to the MVCA 2016 An- Research and Data Editor Sonya Hill, (313) 446-0402 care deal in 2016 and largest venture “is year we were compelled to out, he said. nual Research Report, more high-tech or [email protected] capital nancing round in the state. come to Detroit for our awards as it is “Stage one is now and cruise con- startups have received venture back- Newsroom (313) 446-0329, FAX (313) 446-1687, Detroit-based Fontinalis took the breaking out mobility as an area to trol and lane control are the start,” ing in Michigan than ever before. In TIP LINE (313) 446-6766 100 Award as it closed on a $100 mil- study,” Brosnan said. “e North Lutz said. 2015, 74 companies received $282 mil- REPORTERS Marti Benedetti General assignment (313) 446-0416 or lion capital fund, the largest raised in American International Auto Show University of Michigan Professor lion from Michigan venture capital [email protected] the state this year. Ann Arbor-based is partnering with us to drive the David Brophy received the Above rms, representing a 48 percent in- Jay Greene, senior reporter Covers health care, RetroSense, which aims to restore vi- message home.” and Beyond Award for his 35 years of crease in the last ve years. insurance, energy, utilities and the environment. (313) 446-0325 or [email protected] Chad Halcom Covers litigation, the defense industry, education, Macomb and Oakland counties. (313) 446-6796 or [email protected] duce the rest in-house. good balance of other customers.” American Securities rolled two of Tom Henderson Covers banking, šnance, technology AXLE e MPG acquisition will take Dauch said American Axle is lin- its other suppliers, HHI Group Hold- and biotechnology. (313) 446-0337 or FROM PAGE 3 some of the sting out of GM’s deci- ing up new contracts with other cus- ings and Grede Holdings LLC, into [email protected] Kirk Pinho Covers real estate, city of Detroit. (313) Sowerby, vice president and portfo- sion, which was made before the tomers to replace 90 percent of its Metaldyne to form MPG in 2014, 446-0412 or [email protected] lio manager at the Bloom eld Hills deal was announced. Nevertheless, lost GM axle revenue by 2020. then launched a $150 million initial Bill Shea, enterprise editor Covers media, advertising oce of Loomis, Sayles & Co. LP. GM’s axle business is a big-ticket American Axle is expanding out of public oering later that year. and marketing, the business of sports, and transportation. (313) 446-1626 or [email protected] “e debt load is going to put contract. its truck niche to It reported net income of Lindsay VanHulle, Lansing reporter. (517) 657-2204 pressure on the rm,” Sowerby said. Last year, produce compo- $125.3 million on revenue of $3 bil- or [email protected] “While Axle has been a great opera- GM’s truck ax- “The debt load is nents for cross- lion last year. Dustin Walsh, senior reporter Covers the business of law, auto suppliers, manufacturing and economics. tor, they are adding debt in the bot- les generated going to put overs. Dauch says American Securities, now a (313) 446-6042 or [email protected] tom of the seventh inning of the au- $1.91 billion, pressure on the he has signed up 76 percent shareholder in MPG, will Sherri Welch, senior reporter Covers nonprošts, tomotive cycle. We’re going to see a 49 percent of new customers see a payout of more than $693 mil- services, food and hospitality. (313) 446-1694 or [email protected] downturn in the cycle, and it will test American Ax- rm. ... We’re going for American Ax- lion, coupled with 25.6 million in ADVERTISING their operating abilities.” le’s EcoTrac all- shares, or 23 percent, of the new le’s total sales to see a downturn Sales Inquiries (313) 446-6032; FAX (313) 393-0997 But the transaction does solve one of $3.90 billion, wheel-drive sys- company, under the deal with Amer- Advertising Director Matthew Langan of American Axle’s biggest long- according to in the cycle, and it tem, which ican Axle. Senior Account Manager Katie Sullivan Advertising Sales Christine Galasso, Gerry Golinske, standing issues: its reliance on its the company’s will test their debuted on the American Securities also gets to Diane Owen, Sarah Stachowicz former parent, GM. presentation to Jeep Cherokee. pick three new members to the ClassiŠed Sales Manager Angela Schutte, GM now accounts for roughly investors last operating abilities.” “We’ve got American Axle board, which will ex- (313) 446-6051 ClassiŠed Sales Lynn Calcaterra, (313) 446-6086 66 percent of the company’s reve- week. David Sowerby, Loomis, Sayles multiple custom- pand to 12 with the addition of MPG Marketing/Events Director Kim Winkler nue. e integration of MPG will re- Ever since it ers in multiple CEO George anopolis. Events Manager Kacey Anderson duce GM to 41 percent of sales with was spun o by GM in 1993, American regions,” Dauch said. “We’ll be Dauch, and before that his late fa- Senior Art Director Sylvia Kolaski plans to reduce that further to 32 Axle has sought to diversify its custom- launching programs in 2018 through ther, has enjoyed a favorable board. Marketing Manager Marilyn Banes Special Projects Coordinator Keenan Covington percent by 2020. er portfolio — with mixed success. 2020.” e current board includes Dauch; Sales Support Suzanne Janik Some of that reduction comes As of last year, GM’s share of Dauch added that the MPG ac- Beth Chappell, president and CEO of Production Manager Wendy Kobylarz Andrew Spanos from a loss of business with GM. American Axle sales totaled $2.57 quisition will allow American Axle to the Detroit Economic Club; Bill Production Supervisor CUSTOMER SERVICE On Nov. 3, the company con- billion. expand in Europe, add powertrain Kozyra, chairman and CEO of Au- Main Number: Call (877) 824-9374 rmed it will no longer be the sole Ford Motor Co., which previously components to its product portfolio, burn Hills-based TI Automotive Ltd.; or [email protected] supplier of axles and driveshafts for had done little business with Ameri- and establish a niche in the foundry Peter Lyons, partner at Freshelds Subscriptions $59 one year, $98 two years. Out of state, $79 one year, $138 for two years. Outside U.S.A., add $48 GM’s next-generation full-sized can Axle, will become its third-big- industry. Bruckhaus Deringer US LLP in New per year to out-of-state rate for surface mail. Call (313) pickups and SUVs. gest customer after GM and FCA US Steve Wybo, senior managing di- York; James McCaslin, former COO 446-0450 or (877) 824-9374. When GM redesigns those trucks LLC, thanks to the MPG acquisition. rector of Birmingham-based adviso- of Harley-Davidson Inc.; William Mill- Single Copies (877) 824-9374 Reprints (212) 210-0750; or Krista Bora at in 2018, American Axle will supply “We’ll have tremendous business ry rm Conway MacKenzie Inc., said er II, head of asset allocation for the [email protected] 65 percent of the axles. A GM spokes- with Ford,” CEO David Dauch told the combined company should soft- Saudi Arabian Investment Co.; John To Šnd a date a story was published (313) 446-0406 man declined to comment on ru- Automotive News in a Nov. 3 phone en the blow of the impending auto Smith, principal at Bloom eld Hills- or e-mail [email protected] mors that the automaker will pro- interview, “and we’ll start getting a sales downturn. based Eagle Advisors LLC; and Sam Crain’s Detroit Business is published by Crain Communications Inc. “When the softening (of the mar- Valenti III, chairman and CEO at Chairman Keith E. Crain INDEX TO COMPANIES ket) comes, they’re both better posi- Bloom eld Hills-based Valenti Capi- President Rance Crain tioned,” Wybo said. “ere will likely tal LLC. Treasurer Mary Kay Crain These companies have signicant mention in this week’s Crain’s Detroit Business: Senior Executive Vice President William A. Morrow be large-scale cuts to create cost sav- Wybo said Dauch and his team Executive Vice President/Director of Strategic Adient ...... 15 Lawrence Technological University ...... 16 ings and improve their bottom line, will face a more challenging board in Operations Chris Crain Executive Vice President/Director of Corporate American Axle & Manufacturing Holdings ...... 3 LMC Automotive US ...... 3 which should allow it to weather any dicult times with the addition of Operations KC Crain Bodman LLC ...... 14 Metaldyne Performance Group ...... 3 storms together.” the new members. Vice President/Production & Manufacturing Clark Hill PLC ...... 12 Michigan Venture Capital Association ...... 25 Dauch said the combined compa- “Certainly, when a company is Dave Kamis Chief Financial O“cer Bob Recchia Detroit Medical Center ...... 10 Millendo Therapeutics...... 25 ny should create $100 million to run more like a family company, its Chief Information O“cer Anthony DiPonio Detroit Pistons ...... 1 Mills Pharmacy + Apothecary ...... 18 $120 million in cost reductions by management will be under more G.D. Crain Jr. Founder (1885-1973) Detroit Public Schools Community District ..... 1 Nemeth Law PC ...... 13 2018. scrutiny,” Wybo said. “But if you’re a Mrs. G.D. Crain Jr. Chairman (1911-1996) Detroit Red Wings ...... 1, 24 Oakland Co. Comm. Mental Health Authority .16 e transaction is a clear win for good operator and you’re con dent, Editorial & Business O“ces 1155 Gratiot Ave., Detroit MI 48207-2732; Detroit Wayne Mental Health Authority ...... 16 Olympia Development of Michigan ...... 24 MPG and its shareholders, who will you welcome not having a bunch of (313) 446-6000 Foley & Lardner LLP ...... 12 Plaza Hotel & Convention Center ...... 5 also receive 0.5 share of the newly friendlies on the board.” Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly, Fontinalis Partners ...... 25 RetroSense Therapeutics ...... 25 combined company. Dauch said he and American’s except for a special issue the third week of November, and no issue Harbor Health Plan ...... 10 St. John Providence Health System ...... 16 New York private equity rm Axle’s board and management are the third week of December by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Hilton Garden Inn ...... 17 Shinn Legal ...... 13 American Securities Inc. hit a home “committed to our future with” Detroit, MI and additional mailing o¦ces. POSTMASTER: Send Holy Cross Services ...... 17 SPLT ...... 6 run. e rm acquired Metaldyne American Securities. address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, MI 48207-9732. GST # Horizon Global ...... 3 Sterling Attorneys at Law PC ...... 14 LLC in 2012 for $820 million, three Automotive News contributed to 136760444. Printed in U.S.A. IHS Automotive ...... 3 University of Michigan ...... 3 years after high debt and the slump- this report. Contents copyright 2016 by Crain Communications Inc. All rights reserved. Reproduction or use of editorial content in any manner Kraemer Design Group PLC ...... 7 Vista Maria ...... 17 ing sales forced it into Chapter 11 Dustin Walsh: (313) 446-6042 without permission is prohibited. bankruptcy. Twitter: @dustinpwalsh 26 CRAIN’S DETROIT BUSINESS // NOVEMBER 7, 2016 THE WEEK ON THE WEB RUMBLINGS OCT. 29-NOV. 4 DeVos family has a piece of ing to do with the departure of chief tional Park Service. historic Cubs championship Chrysler fundraiser Nick Karmanos last month.  A $20,000 grant from the Detroit  With two months left in the year, Auto Dealers Association Charitable ichigan’s wealthy DeVos the team, and are really committed the Detroit Zoo set a new yearly at- Foundation Fund will go to the Down- Mfamily is among those cele- to frankly making history,” Dick museum to tendance record. Bolstered by the town Boxing Gym Youth Program to brating the Chicago Cubs’  r s t DeVos said in a March 2015 radio April opening of the Polk Penguin launch an after-school computer World Series championship in interview with Michael Patrick close Dec. 18 Conservation Center, it has attracted coding program for students in sev- more than a century. Shiels on “Michigan’s Big Show.” he Walter P. Chrysler Museum more than 1,478,760 visitors in 2016. enth through 12th grades. It emerged in 2015 that the fam-  e DeVoses were among six in Auburn Hills will close on   e Michigan Agency for Energy   e federal government is recom- ily, owners of Ada-based multilevel minority owners who bought into Dec. 18 and be converted awarded St. Vincent de Paul-Detroit a mending that former Detroit Mayor marketing company Amway and the team, initially anonymously. Tinto o ce space for Fiat Chrysler Au- $5 million energy assistance pro- Kwame Kilpatrick’s restitution in his the NBA’s Orlando Magic, became a ESPN con rmed their involvement. tomobiles, the automaker said Fri- gram grant to continue assisting corruption case be reduced from $4.5 Cubs minority owner.  ey have a  e entire minority ownership day.  e 55,000-square-foot muse- families in danger of having electric million to $1.6 million, AP reported. noncontrolling stake in the team, group holds less than 10 percent of um, which opened in 1999, houses and heat utilities disconnected.  Charles Busse, a Birmingham at- whose controlling owners, the the franchise and has no voting 65 classic and historic vehicles. torney and former member of the Ricketts family, had sold minority rights but serves in an advisory role OTHER NEWS Warren City Council, pleaded guilty interests in Cubs business entity to the Ricketts family. COMPANY NEWS  Forty- ve ideas will share more to bribery in a case involving a feder- Chicago Baseball Holdings to help  e DeVos family’s wealth stems  Farmington Hills-based Friedman than $2.24 million in the 2016 Knight al agent. Busse is accused of paying  nance the $375 million renova- from Dick DeVos’ 90-year-old fa- Integrated Real Estate Solutions LLC Arts Challenge. A full list of the bribes to get deferrals of deportation tion of Wrigley Field, Crain’s Chica- ther, Richard DeVos, who in 1959 about a month ago purchased out of grantees, announced by the Mi- and other bene ts for his clients. go Business reported. co-founded Amway, which last foreclosure the Raleigh O centre, a ami-based John S. and James L. Knight  Clinton Township trustee Dean  e size of the DeVos stake year reported $9.5 billion in sales. 297,000-square-foot pair of inter- Foundation at an awards event in De- Reynolds was indicted on eight brib- wasn’t disclosed. He broke into major sports owner- connected six-story buildings, the troit, is at knightfoundation.org. ery charges as part of a corruption “We are pleased to have a very ship in 1991 when, for $85 million, company said.  e center had been  Jacoby’s German Biergarten, the investigation, AP reported. small piece of the Cubs and to be in he bought the Magic, a franchise owned by an entity called 25300 downtown Detroit watering hole  Mary Engelman, former executive partnership with the Ricketts, who now worth $900 million, according Telegraph Road Holdings LLC.  e pur- and restaurant, has a new owner . It director of the Greater Farmington have done a remarkable job with to Forbes. chase price was not disclosed. sold in September for $790,000 to Area Chamber of Commerce, was  Basil Bacall, the developer of three LVT Properties LLC. named executive director of the hotels operating at Great Lakes Cross-   e new 28 Grand micro apart- Michigan Women’s Commission. She This new stadium isn’t a keeper ing Outlets in Auburn Hills, has a ment building in Detroit’s Capitol has been government a airs and fourth in the works for the outlet Park is expected to start getting its public relations director for Troy pro- Detroit is getting a new stadium, she wouldn’t say who. center. Construction of a 96-room  rst residents in June, developers fessional services Crain’s has learned. But it’s not  e mock-up will be about 12 Hilton Garden Inn is set to begin in the said.  e development is by Bedrock  r m OpTech LLC. what you think. feet long, 12 feet wide and about 15 spring and wrap up in late 2017, said Real Estate Services LLC.  Fox 2 Detroit an- 160 A building permit issued last feet high, Drach said. a plan  led with the city.  e $8.2  Horse racing fans will be able to chor Anqunette week for Detroit-based Rossetti As- A review of the permit and asso- million project is being developed watch 39 weeks of live racing next year Jamison Sarfoh an- sociates Inc., the architecture  rm ciated plans Friday said it will take 150 by Bacall’s Truss Hospitality Develop- at two Detroit-area tracks.  e 2017 nounced plans to for Dan Gilbert and Tom Gores’ plan about a month building, reviewing ment and Management LLC. schedule, issued by the Michigan Gam- retire from TV. Sar- to build a new Major League Soccer and making adjustments to the   e Barbara Ann Karmanos Cancer ing Control Board, includes 54 days of foh, who has multi- 140 stadium downtown, allows the mock-up, then taking it apart and Institute in Detroit raised more than standardbred racing at Northville ple sclerosis, said company to build “a temporary storing it in place until the spring, $750,000 this year at its various 23rd Downs and 36 days of thoroughbred she is taking a stadium mock-up on the roof” of and then reconstructing for a client annual Partners fundraising events, racing at Hazel Park Raceway. leadership role 130 the former Federal Reserve Building presentation and then removing it slightly lower than last year and in   e Edsel & Eleanor Ford House in with MILegalize to at 160 W. Fort St., where Rossetti from the property. some previous years. Karmanos ex- Grosse Pointe Shores was designat- help legalize mari- has its o ces. It will be the  rst time the compa- ecutives said the decline had noth- ed as a historic landmark by the Na- juana in Michigan. 120 But it’s not in any way tied to the ny, renowned for its stadium and $1 billion Gilbert-Gores plan, said arena work, has done anything like Denise Drach, director of business it, Drach said. Rossetti designed the 110 development and marketing. It’s Palace of Auburn Hills, among other The lowdown on Detroit’s high-rises for an out-of-state client, although places. Dan Gilbert’s team has two months to submit its plans for a new high-rise building on the former J.L. Hudson’s department store site in Detroit. Last week, Crain’s reporter Kirk Pinho 100 learned from his sources that it’s possible the building, which would sit on the vacant 2-acre Program helps Detroit high school site on Woodward, could come in at 60 stories. 90 Here, we put that in perspective with the tallest buildings in the city — and beyond. journalists š nd their voices Student journalists at 11 Detroit Note: Buildings here are measured by number of stories, though some buildings’ stories are 80 high schools are once again taking taller than others. For instance, Ally Detroit Center has 43 stories, but is about 55 feet taller notes and tracking down sources than the Penobscot Building, which has 47 stories. for a collaborative news publica- Sources: Jones Lang Lasalle Detroit Skyline Summer 2016 report; 70 tion that aims to be, as its Page One Crain’s research tagline describes, “the student voice of Detroit’s high schools.” 60 Dialogue is produced by Crain Communications Inc. and Michigan 50 State University to highlight the work of student journalists in the city.  is The “ rst issue of Dialogue, a student is the second year of the Crain MSU newspaper in Detroit. 40 Detroit High School Journalism Program. Crain employees mentor   e success of a 1-year-old paid the students, brainstorming story internship program with Ilitch Hold- 30 ideas and editing  nal copy; MSU ings Inc.,which placed 24 Cass Tech- faculty members and students pro- nical High School students in posi- duce the print edition and website. tions with the Detroit Tigers, Little 20  e  rst issue, published Oct. Caesars pizza chain and other areas. 26, features stories about mock  A partnership between the Wayne elections at the schools, updates County Prosecutor’s O ce and Com- 10 on sports teams and these stories: munication & Media Arts High School  An interview by Martin Luther that simulates a juvenile courtroom King Jr. Senior High School students in the school’s Basic Law class. Guardian Ally Detroit Penobscot Potential Renaissance Center One World Burj of Alycia Meriweather, Detroit Public Dialogue will be published four Building Center Building Hudson’s Trade Center, Khalifa, Schools Community District interim times this school year. It’s online at site project New York City Dubai superintendent. DetroitDialogue.com. DBpageAD_DBpageAD.qxd 10/4/2016 1:30 PM Page 1 DBpageAD_DBpageAD.qxd 10/31/2016 11:56 AM Page 1