As Supplier Empire Falls, a Money Puzzle Unravels

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www.crainsdetroit.com Vol. 29, No. 5 FEBRUARY 4 – 10, 2013 $2 a copy; $59 a year

Company has new approach JEFF JOHNSTON/CDB Parties face to medical pot transactions closer scrutiny Business Education BY SHERRI WELCH Colleges add lures to fish CRAIN’S DETROIT BUSINESS

smaller student pool, Page 11 Charities hosting fundraising “millionaire parties” will soon face new As supplier empire falls, state regulations — and could see new Crain’s Lists fees on casino-style games — as the Largest Washtenaw state seeks to capture a portion of the money coursing through crowded and Livingston County charity poker rooms. employers, Pages 18, 19 Millionaire parties generated more a money puzzle unravels than $184 million in cash activity in fiscal 2012. That’s up from $3.4 million This Just In in 2003 but down from the reported Revstone chief faces scrutiny from feds, creditors $194 million generated by charity WSU mulls $12 million games in 2011, according to the Michi- gan Bureau of State Lottery’s Charitable tech ed center in Warren BY DUSTIN WALSH tor, Clearwater, Fla.-based Boston ernment over allegedly raiding Gaming Division. CRAIN’S DETROIT BUSINESS Finance Group LLC. employee pension funds of $34.6 Last year, charities that hosted mil- Wayne State University could Revstone million to keep Revstone afloat lionaire parties collectively raised build a new $12 million, Revstone Industries LLC founder and Boston Fi- and fund his expensive lifestyle, more than $15.6 million. 40,000-square-foot Advanced and Chairman George Hofmeis- nance had including a 2,000-acre, $40-million Charity suppliers or game opera- Technology Education Cen- ter is watching his automotive been em- mansion and horse farm near tors made the same amount as the ter in Warren near Macomb supplier em- broiled in a Paris, Ky., northeast of Lexing- charities, since the two split the 10 Community College during the pire crumble CLOSER LOOK lending dis- ton. percent-or-so rake-off of the money next academic year, using as Revstone pute in the The government and Boston funds from a bond sale under Follow the battles bank- court for near- Finance allege Hofmeister has See Gaming, Page 22 review this week. acquisition ruptcy. ly a year, and played a shell game with assets trail, Page 24 A committee of the univer- The South- Hofmeister for years in attempts not to pay sity board of governors will field-based op- and his compa- creditors. Hundreds of pages of Hofmeister consider on Wednesday a 32- eration that once had $600 million nies have been current and past court docu- year, $92 million bond sale to in revenue filed Chapter 11 bank- shrouded in controversy over al- ments reviewed by Crain’s un- fund various projects, in- ruptcy protection Dec. 3 after a legations of fraud and finan- veil a complex web of companies cluding $31 million toward Grand Traverse County 13th cial mismanagement from controlled by irrevocable trusts its $93 million Multidiscipli- Circuit Court judge or- the U.S. Department of Labor. and internal Revstone finance nary Biomedical Research dered the company to Hofmeister is under a staff unaware of the flow and dis- Building in Detroit and $9 pay nearly $27 million civil and criminal investi- million toward the $12 mil- owed to its largest credi- gation by the federal gov- See Revstone, Page 24 lion cost of a Macomb exten- ISTOCKPHOTO.COM sion center project. The Macomb center, on the grounds of a former Farmer Jack store the university purchased in 2011, would be the Ilitch consultant: Wings arena could break ground by fall third phase of a Macomb County expansion the univer- BY BILL SHEA Mark Rosentraub, a professor of sports cember, so he doesn’t know if plans have sity began in 2007, according CRAIN’S DETROIT BUSINESS management at the University of Michigan. changed. to a report by Richard Nork, “A lot of that depends on the infrastruc- Sandra van Meek, a spokeswoman for WSU vice president of finance Construction is expected begin no lat- ture.” Ilitch-owned Olympia Development Co. and business operations. er than autumn on a new downtown are- He’s worked for the Ilitch family, that’s overseeing the project, declined to The Warren building, along na for the Detroit Red Wings, according to which owns the Red Wings, as a consul- comment. 12 Mile Road across from the a sports economist who has done work tant to create economic impact, jobs and Driving the project’s timeline and cost MCC south campus, could be for the team’s owners and is familiar tax estimates and models for the $650 mil- will be infrastructure needs, Rosentraub renovated or replaced. with their plans. lion arena district project, he said. said. — Chad Halcom “I would hope that they would be able Rosentraub cautioned that he’s had no Rosentraub to get it in the ground by the fall,” said contact with the Ilitches since early De- See Wings, Page 25

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Page 2 CRAIN’S DETROIT BUSINESS February 4, 2013 MICHIGAN BRIEFS How does W. Mich. beer rate? Read on, and prepare for thirst CORRECTIONS PSC goes with flow, OKs replacement of oil pipeline No. 17 on the list of largest 2012 Well, of course there would be a mergers and acquisitions on Page website that rates beer. And the The Michigan Public Service Commission last week Oakland, Macomb and St. Clair. gave the final OK for Calgary, Alberta-based En- Enbridge said the line replacement is part of a 15 of the Jan. 28 edition should aptly named RateBeer.com has have said Southfield-based Sey- doled out some of its “best of” desig- bridge Inc. to finish replacing the underground plan to boost the flow of oil to refineries in the east- pipeline that ruptured and spilled more than 800,000 ern U.S. and Canada. When completed, the burn, Kahn, Ginn, Bess and Serlin PC nations to the West Michigan beer was sole adviser to Plastipak Hold- industry, the Grand Rapids Busi- gallons of oil into the Kalamazoo River in 2010, The pipeline’s capacity will be 500,000 barrels a day, Associated Press reported. The $1.6 billion project more than double the current maximum. ings Inc. in a minority stake acqui- ness Journal reported last week. sition by Goldman Sachs Capital Top brewpub in U.S.: HopCat in will replace a 286-mile pipeline from Griffith, Ind., to In April 2012, Crain’s reported that Enbridge esti- Sarnia, Ontario. mated that the so-called Line 6B project would gen- Partners. Cohn & Kelakos was not Grand Rapids, which also was a Plastipak adviser. named the No. 3 beer bar in the In a news release, the PSC said the line “will serve erate 528 construction jobs and $108 million in eco- A story on Page 11 in the Jan. world by BeerAdvocate and the No. a public need, is designed and routed in a reason- nomic impact in 2013 and indirectly create up to 28 issue misstated the number of 2 beer bar in the U.S. by able manner and meets or exceeds current safety 1,537 jobs through 2021. Line 6B transports predomi- local mergers and acquisitions CraftBeer.com. and engineering standards.” The project will extend nantly heavy crude oil from tar sands deposits in in 2012 on which Honigman Miller Best beer market: Siciliano’s through 10 Michigan counties: Berrien, Cass, St. western Canada to eight refineries, including the Schwartz and Cohn LLP was an ad- Market in Grand Rapids. Joseph, Kalamazoo, Calhoun, Jackson, Ingham, Marathon site in Detroit. viser. The correct number is 14. Best Michigan Brewery: A Business Diary item on Founders Brewing Co. in Grand U.S. Department of Agriculture, downtown Grand Rapids — Tenants include the Grand Rapids Page 22 in the Jan. 28 issue Rapids. (Detect a pattern here?) Michigan Radio reported last week Bridgewater Place — is being sold Area Chamber of Commerce and The should have said Medical Network Best beer in Michigan: Founders’ that last year was officially the to California-based Hertz Invest- Right Place Inc. economic develop- One in Oakland Township is Kentucky Breakfast Stout. worst growing year on record ment Group, MLive.com reported. ment organization. changing its name to MedNetOne Among RateBeer’s top 10 beers since tracking began in 1925. GMAC bought the 17-story building Health Solutions. in the world, Kentucky Breakfast For example, only 11.6 million for $34 million two years ago after A People item on Page 24 in Stout is No. 4. Hopslam, a product pounds of tart cherries were pro- the previous owners defaulted on a MICH-CELLANEOUS the Jan. 28 issue should have of Kalamazoo-based Bells Brewery duced, down 92 percent from 157.5 $36 million mortgage. Officials at Gerald R. Ford Inter- listed Eric Davies’ new position as Inc., is No. 6, while Bells’ Black million pounds in 2011. The largest tenant is the Varnum national Airport in Grand Rapids senior director of sales for Out- Note rounds out the top 10. “For some of the fruits like LLP law firm, whose sign appears said last week that 2.13 million cast Media’s Detroit office. peaches, pears, plums and cher- on the building. The sale, expected passengers used the airport in ries, … the majority of the growers to close in a month, was an- 2012, down about 6 percent from It’s official: 2012 was a rotten rates, academic and career sup- had essentially zero crops, so there nounced last month. 2011, MLive.com reported. port services offered to students year to grow fruit in Michigan was essentially zero income,” Mar- Another large building in down- The online graduate program ty Saffell, a USDA statistician, told and admissions selectivity. Now that we’ve started a new town Grand Rapids — the Waters for nursing at Ferris State University Michigan Radio. growing season, perhaps we Building — has a new manager: in Big Rapids was named the top Find business news from should review the one that just Farmington Hills-based Friedman program of its kind in the nation around the state at crainsdetroit passed. Talk about ugly. Calif. investors buy largest office Integrated Real Estate Solutions Inc., by U.S. News & World Report. The .com/crainsmichiganbusiness. As you may recall from this MiBiz reported. Ann Arbor-based No. 3 program was at the University Sign up for Crain's Michigan space, 2012 was bad for the state’s building in downtown Gr. Rapids Three Oaks Group LLC placed the of Michigan-Flint. The ranking con- Business e-newsletter at crains fruit growers. Citing data from the The largest office building in building into receivership last fall. sidered factors such as graduation detroit.com/emailsignup.

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February 4, 2013 CRAIN’S DETROIT BUSINESS Page 3

Inside Q&A: ‘We want to lend,’ says Unions bargain to beat the clock Bank of America Michigan

co-founder of Detroit-based Nemeth market chief, Page 4 Impending right-to-work drives contract talks Burwell PC, which repre- Michigan Chamber aims BY CHAD HALCOM nonmembers a condition of em- union security. Unions are also sents manage- at tax cuts, road revenue. CRAIN’S DETROIT BUSINESS ployment in collective bargaining turning to litigation, prompting ment in several agreements after March 28. Snyder’s administration to seek a collective bar- Capitol Briefings, Page 6 Labor and management teams Many unions are eager to get ruling from the Michigan Supreme gaining agree- are back at the bargaining table in new or extended labor pacts final- Court. ment talks. Senior wellness center looks growing numbers, with some of ized in time to be grandfathered in “We’ve certainly had an uptick “But we are them trying out new strategies be- to franchise, Page 9 before the new law takes effect, in calls from client (companies) also seeing fore Michigan’s new right-to-work and many employers realize they telling us their union is approach- unions being law takes effect. have a bargaining chip. ing them, saying they want the much more Public Act 349 of 2012, which So recent bargaining proposals union security clause in place. amenable to em- Nemeth Gov. Rick Snyder signed in Decem- have ranged from long-term exten- Some are very friendly with the ployer suggestions, particularly in Company index ber, prohibits making union mem- sions of current contracts to sepa- union, and they like the peaceable this climate, just to get deals done bership dues or the alternative col- rate management concession pack- labor relations the unions bring,” These companies have significant mention in this lection of agency fees from ages employers can barter for said Patricia Nemeth, partner and See Unions, Page 21 week’s Crain’s Detroit Business: ActiveRx Aging Center ...... 9 Alpena Community College ...... 17 Amherst Partners ...... 25 ArtServe Michigan ...... 6 Bank of America ...... 4 Blue Water Bioproducts ...... 10 Is Gilbert stacking Bodman ...... 21 ISTOCKPHOTO.COM Business Leaders for Michigan ...... 14 Center for Michigan ...... 14 Chrysler Group ...... 25 ‘chips’ to bring in Consumers Energy ...... 17 Contech Castings ...... 25 Cooper-Standard Holdings ...... 21 Detroit Downtown Development Authority ...... 23 Detroit Economic Growth ...... 25 large retailers? Detroit Red Wings ...... 1 Eastern Michigan University ...... 11, 13 Entrepreneurs’ Association ...... 6 Block buying provides Exo Dynamics ...... 10 Foley & Lardner ...... 25 Four Aces Club ...... 22 leverage, experts say Greektown Superholdings ...... 9 Lake Michigan College ...... 17 Changing the medical Lawrence Technological University ...... 11, 14 BY KIRK PINHO McKnight, McClow, Canzano, Smith & Radtke . . . . 21 CRAIN’S DETROIT BUSINESS MediSwipe ...... 3 Metavation ...... 24 Could two more additions to Dan Gilbert’s real Michigan Chamber of Commerce ...... 6 estate portfolio — and possibly an entire city Michigan Charitable Gaming Association ...... 22 block — give him even more leverage in bringing Michigan Colleges Foundation ...... 11 pot buy Michigan Community College Association ...... 17 large national retailers to downtown Detroit as part of his retail strategy? Michigan Economic Development ...... 6 Michigan Infrastructure & Transportation Assn. . . . 21 Some say “yes.” Miller Cohen ...... 21 “If you can secure contiguous parcels, whether Monarch Antenna ...... 10 they are in a downtown or suburban location, MPI ...... 25 then you have a lot of the chips Nemeth Burwell ...... 3 that matter” to retailers, said Northwestern Michigan College ...... 16 Robin Boyle, chairman of the Oakland University ...... 14 Department of Urban Studies Olympia Development ...... 1 and Planning at Wayne State Phoenix Medical Group ...... 10 University. Pitt, McGehee, Palmer, Rivers & Golden ...... 21 Presidents Council, State Universities Michigan 11, 17 James Van Dyke, vice presi- Providence Hospital ...... 10 dent of development for the De- Pulse Lounge ...... 23 troit-based Roxbury Group, Revstone Industries ...... 1 agreed. The Roasting Plant ...... 26 “If someone, or one group, Roxbury Group ...... 3 Boyle can control a large amount of Schoolcraft College ...... 13, 16 first-floor space downtown, they can organize the Thrun Law Firm ...... 21 Birmingham company tests kiosks leases all at once,” he said. University of Detroit Mercy ...... 15 But purchasing a city block from a series of University of Michigan ...... 1 University of Michigan-Dearborn ...... 11, 13 owners has its challenges, Van Dyke said. Walsh College ...... 15 “If (a property owner) catches wind that you’re to increase safety, convenience Wayne State University ...... 1, 3, 11, 15, 21 buying land around a parcel that you own, some- Western Michigan University ...... 11, 21 times you get folks that hold out and their asking BY MATTHEW GRYCZAN system tested in Detroit may be price goes up.” CRAIN’S DETROIT BUSINESS rolled out to California, Arizona, Crain’s Detroit Business first reported that Department index New Jersey and other states that have Gilbert, founder and chairman of Quicken Loans An enterprising Birmingham com- Inc., acquired two Sachs Waldman PC buildings at legalized the use of marijuana for BUSINESS DIARY ...... 20 pany hopes users of medical marijua- 1000 Farmer St. and 815 Bates St., and on rumors CALENDAR ...... 19 medicinal purposes, said B. Michael that he has purchased through a straw buyer the na in the Detroit area may not want CAPITOL BRIEFINGS...... 6 Freidman, CEO of MediSwipe Inc. entire city block on which those buildings are lo- to leave home without them: digital CLASSIFIED ADS ...... 21 (OTCQB: MWIP) a small publicly cated — the area bounded by Monroe, Farmer, identification cards that can be used Randolph and Bates streets. JOB FRONT ...... 20 at pay-as-you-go kiosks to pay for traded company that recently moved Boyle called the block an “incredibly impor- KEITH CRAIN...... 8 transactions at marijuana dispen- to Birmingham from Florida. tant site that has been weak for a very long time. LETTERS...... 8 “It makes all the sense in the world” to pur- The interest in the MediSwipe sys- MARY KRAMER ...... 8 saries. chase it, Boyle said. If all goes according to plan, the tem stems from its ability to provide The total square footage of the Sachs Waldman OPINION ...... 8 PEOPLE ...... 20 MediPay kiosk and identification See Pot, Page 23 buildings purchased is approximately 36,000, and See Gilbert, Page 23 RUMBLINGS ...... 26 WEEK ON THE WEB ...... 26

Getting to work Crain’s Michigan Business THIS WEEK @ People on the move, job postings and other Sign up for the roundup of statewide news career information can be found at Crain’s delivered to e-mail inboxes every Wednesday: WWW.CRAINSDETROIT.COM Job Front at crainsdetroit.com/jobfront. crainsdetroit.com/getemail. 20130204-NEWS--0004-NAT-CCI-CD_-- 2/1/2013 4:23 PM Page 1

Page 4 CRAIN’S DETROIT BUSINESS February 4, 2013 BOA’s Michigan market chief: ‘We are going to grow; we want to lend’

Matthew Elliott plans to When I write stories about always preferred having its headquar- reverse a trend that has BOA’s declining market ters in the tallest buildings in city cen- seen Bank of America Corp. share, they say, “See, we ters and would pursue moving BOA’s lose market share in told you.” headquarters from Troy to downtown Michigan every year When I took the job, I Detroit. Is that on your to-do list? since it bought Troy- heard it all, too. But It’s not something I’ve had a con- based LaSalle Bank Michigan is one of our versation about, but we are a Midwest NA in 2007. biggest markets. We have strong supporter of a strong down- In October, Elliott, 45, 3,300 employees here. We town. We have a beautiful banking was named president of have more than 12,000 center in the Guardian Building. We the Michigan market for business relationships. were the only private lender in the the nation’s second- We touch one in two David Whitney deal that was just an- largest bank — it had Q&A households in the state. nounced. We helped structure and $2.2 trillion in assets as of And we want to deepen lend to that deal. We helped assem- June 30, just behind J.P. Matthew Elliott, that. The fact is: This is ble the financing for the David Brod- Morgan Chase’s $2.3 bil- Bank of America an important place for us erick Tower. That had been like a re- Corp. lion — and has a to-do list to be, we’re going to con- ligious quest, but it finally got that includes boosting the tinue to grow and to do a done. When they opened their bank’s market share, increasing better job for our clients. We’re not doors in November, they were al- its commercial lending and going to grow share for share’s ready at 97 percent occupancy. correcting what he says are mis- sake, but we are going to grow. They got their certificate of occupancy at noon and the first resi- conceptions about the bank’s com- One of the themes of our Jan. 28 Big dent was moving in at 5. It’s a fan- mitment to the state and Southeast Deals (M&A report) issue was that in- tastic story. We’re proud of that. Michigan. vestment bankers and private equity When BOA bought LaSalle Bank managers all say that banks are seri- Cockrell said he’d need to sell the Midwest, as part of a $21 billion ously back in the game and are eager current headquarters on Big Beaver deal with Netherlands-based ABN to provide capital to get deals done. Road before he could move the head- Amro NV that also included Chica- It’s not just the private equity quarters, and that selling a building go-based LaSalle Bank NA, it bought guys. It’s the strategic buyers, too. that has been referred to as the Taj a market leader in Michigan. Everyone has access to unprece- Mahal since it was opened in 1990 as LaSalle was then No. 1 in deposit dented levels of liq- the headquarters for market share in the state, accord- uidity. Everyone Standard Federal ing to the Federal Deposit Insurance has a lot of ammuni- Bank was going to be Corp., with $23.3 billion in assets tion. Because we Because we a tough sell in a down and a market share of 15.1 percent, cover everyone, “ market. Do you know with Comerica Bank second with from the small cover everyone ... if the building has ever $22.9 billion and a share of 14.8 per- moms-and-pops to been on the market? cent. the multibillion dol- we’ll be one of I don’t know. I LaSalle was No. 2 in the five lar companies, we’ll those active don’t think so. This counties of Southeast Michigan, be one of those ac- building serves us The firm worth with $20.1 billion and a market tive lenders. We lenders. ... Our very well. share of 22.1 percent, with Comeri- have the most capi- You worked in the ca No. 1 at $21.1 billion and a share tal of any bank in listening to balance sheet is building in the 1990s, of $23.2 percent. the country. Our so you’re well aware According to the most recent balance sheet is in is the firm that FDIC data, as of last June 30, BOA in great shape. of the strict rules SM great shape. We ” Thomas Ricketts listens to you. had fallen to fourth in the state, its want to lend. market share plummeting to 8.2 (Standard Federal’s president and percent, with deposits of $13.7 bil- BOA paid $21 billion for LaSalle. It CEO) had in place. Employees couldn’t Talk to Foley. We’re listening.SM lion. And it had fallen to No. 3 in wasn’t quite top of market, but the put up personal photos. Nobody could metro Detroit, with a market share bottom had not yet fallen out. That eat lunch or drink coffee at their of 11.4 percent and deposits of was a lot of money given what was desks. They had to leave the building $11.5 billion. about to happen in the world of bank- and walk across the parking lot to the For 170 years, Foley has made it our mission to find Elliott was a former managing ing. cafeteria if they wanted some coffee. director of loan syndications for We made four major acquisi- That must have been great for produc- out exactly what our clients want and deliver it. So LaSalle Bank Midwest who left the tions in a short period of time. We tivity. when our Detroit clients asked for local access to bank after it was sold to BOA to be- bought U.S. Trust, one of the largest I’ll tell you a funny story. Mark come senior vice president of cor- wealth management companies on Hoppe (who came from Chicago to the strength of a national law firm, Foley recruited porate finance at a Boston-based earth. We bought Countrywide, the be president and CEO when the city’s top talent to establish our Detroit office and marketing agency. He was recruit- largest mortgage lender. We LaSalle bought First Federal) provide trusted local advisors who could leverage ed back by BOA in October 2010 to bought LaSalle. And we bought loved to start his day with a big head its middle market lending in Merrill Lynch, the world’s largest cup of coffee. His first day here, he our national resources. It’s one more reason Foley Michigan, Indiana and Ohio be- brokerage. Doing all that in the buys a cup in the cafeteria and he’s has been recognized as one of the elite BTI Client fore being named president, and context of a financial collapse was walking out the door, and the secu- he retains that role. a pretty tall order. rity guard stops him and tells him Service 30 for nine of the past 10 years in a survey* he can’t leave with the coffee. Elliott talked last week with Bank of America has a strong repu- Fortune Mark says: “Oh, I’m pretty sure I of 1000 corporate counsel. Crain’s reporter Tom Henderson tation for philanthropy and civic in- can.” about the bank’s plans in Michi- volvement. In fact, your role in head- gan. Learn more about how Foley can add value to your business. Contact ing that up is the first thing mentioned Mark told me that he was intimidat- Detroit Office Managing Partner Daljit S. Doogal at [email protected]. You left LaSalle after the sale to on your corporate bio. What are your ed, though, about changing culture Bank of America. What brought you areas of focus? too quickly. He said he worked here a Foley.com back? We take that very seriously. We few weeks, then one weekend snuck a The opportunity to grow this made $3 million in charitable gifts mini-fridge into his office so he could business by fulfilling the promise last year and our employees gave offer visitors a bottled water or orange of the organization and the plat- some 30,000 hours of their time to juice. He said he waited a few more form we offer. charitable activities. (A partial list weeks and then announced a change of recipients included Gleaners in policy: People could start drinking I realize by the nature of its size, Community Food Bank, the Greening Bank of America was an easy and ob- coffee in the building. #5*$MJFOU4FSWJDF"5FBN 5IF#5*$POTVMUJOH(SPVQ 8FMMFTMFZ ." of Detroit, Habitat for Humanity, Fo- vious target for local bankers when it Ricketts envisioned the building cus: HOPE and the Detroit Riverfront as a combination of art museum bought LaSalle in 2007. I remember Conservancy.) #0450/t#3644&-4t$)*$"(0t%&530*5t+"$,40/7*--&t-04"/(&-&4 them telling me that BOA only bought and bank headquarters, and he ."%*40/t.*".*t.*-8"6,&&t/&8:03,t03-"/%0t4"$3".&/50 the Michigan bank because it had to Speaking of civic involvement, didn’t want anything to interfere 4"/%*&(0t4"/%*&(0%&-."3t4"/'3"/$*4$0t4)"/()"*t4*-*$0/7"--&: in order to get what it really wanted: when Kieth Cockrell was named with that vision. Mark changed 5"--")"44&&t5".1"t50,:0t8"4)*/(50/ %$ the Chicago market. That Michigan Michigan market president after BOA the culture. I’ve changed it, too. I ª'PMFZ-BSEOFS--1t"UUPSOFZ"EWFSUJTFNFOUt1SJPSSFTVMUTEPOPUHVBSBOUFFBTJNJMBSPVUDPNF /$MBSL4USFFU 4VJUF $IJDBHP *-tt was going to be the poor step-child. bought LaSalle, he said the bank had brought in Starbucks. (Laughs.) DBpageAD_DBpageAD.qxd 1/25/2013 8:55 AM Page 1

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Page 6 CRAIN’S DETROIT BUSINESS February 4, 2013 Chamber aims at tax cuts, road revenue Report: Arts

Further cuts to busi- the Legislature to en- “While Michigan lawmakers provement of customer service at ness taxes and regula- act its revenue in- have been talking about this issue, the department and encourage groups added tions, as well as a major Capitol crease plan first before during the past few years every more involvement with stakehold- push for transportation Briefings there is talk of a ballot surrounding state has enacted ers. infrastructure invest- proposal to give voters comprehensive, statewide trans- Tricia Kinley, senior director of $553M to state ment, are chief among the the option of raising portation improvement plans,” he tax and regulatory reform for the goals the Michigan Cham- the sales tax instead. said. chamber, said they will also be ber of Commerce has set After six ballot pro- Other priorities for the cham- looking to accelerate the repeal of for the new legislative posals failed in last ber during the next two years are the PPT, and expand it more, economy in ’10 session. year’s election, Stud- repealing the state’s prevailing eventually to all taxpayers. The chamber saw ma- ley noted that a wage law (to help reduce costs of Kinley said the hope is to even- BY RYAN KELLY jor successes in the previ- statewide public infor- construction projects around the tually expand the elimination of SPECIAL TO CRAIN’S DETROIT BUSINESS ous session, such as the mation campaign state), supporting reform of the the PPT to midsize commercial Chris Gautz A new report funded by Wixom- reduction of business tax- could cost anywhere state’s auto no-fault law, and taxpayers and utility providers. based cultural advocacy group Art- es with the elimination of the from $1 million to $3 million, with backing a law to prohibit state “(They) have a very heavy Per- Serve Michigan says cultural Michigan Business Tax and the the chance it may not be success- agencies from promulgating rules sonal Property Tax burden,” she groups in Michigan contributed creation of the Corporate Income ful. tougher than federal standards. said. more than $550 million in annual Tax and the likely elimination of And that cost is In the last session, She also said any cleanup legis- spending to the state’s economy in the Personal Property Tax follow- without any major or- Snyder lation or further bills should come fiscal year 2010. ing a future statewide vote on the ganized opposition. If Our vetoed a within the next six months to give The analysis, done by Data Dri- issue. Another accomplishment there is, he said, “ bill relat- businesses and others time to pre- ven Detroit on behalf of ArtServe, was the government push to elim- count on doubling or lawmakers ing to pare for them. found that cultural groups spent inate more than 800 state regula- tripling that price state These priorities were devel- $553 million on expenditures like tions in the past two years. tag. are paid to rules be- oped by the chamber’s policy salaries, rent, product purchases Rich Studley, president and “Our lawmakers ing committee after hearing from and exhibits. CEO of the Michigan Chamber, are paid to tackle tackle these tougher more than 500 business leaders, The report is based on informa- said he and his staff see a window these issues,” Studley than fed- and were approved unanimously tion from 346 nonprofit arts and of opportunity in the next six said. issues. eral stan- by the chamber’s 84-member cultural organizations. months of this non-election year Road improve- ” dards, be- board. Tacked to the report was a sepa- to aggressively push their agenda. ments are a priority Rich Studley, Michigan cause he felt it was too rate study from the Michigan Eco- One of their priorities also is Gov. because roads benefit Chamber of Commerce broad. Short takes nomic Development Corp.’s Pure Rick Snyder’s top priority: in- the state’s three main Jason Geer, director of Michigan, which found more than creasing revenue for transporta- industries: tourism, manufactur- energy and environmental policy Ⅲ Snyder appointed Steve Ar- $2 billion in tourism revenue was tion projects. ing and agribusiness, he said. at the chamber, said the chamber wood as director of the Department generated in fiscal 2011 for the state The chamber would like to see “It is a critical part of our eco- will continue to work with the ad- of Licensing and Regulatory Affairs. by arts and cultural destinations. at least $1.6 billion in additional nomic competitiveness,” he said. ministration to help tailor a more- Arwood had been the acting direc- The data “shows the growing in- revenue raised annually, and it is Studley said it doesn’t make focused law. That focus will largely tor since Steve Hilfinger left to be- vestment in arts and culture in the largely leaving the structure up to sense to fly in executives to first- be on rules issued by the Depart- come COO at the Michigan Econom- state and impact it has,” said Mike the Legislature. But the chamber class airports in Detroit and ment of Environmental Quality, he ic Development Corp. Latvis, ArtServe’s director of pub- has made it clear it supports a Grand Rapids and then take them said. Chris Gautz: (517) 403-4403, lic policy. user fee-based system. to sites on second-class roads and Another priority relating to the [email protected]. Twitter: It says that out of the $710 mil- Studley said the chamber wants ask them to invest in Michigan. DEQ for the chamber is to see im- @chrisgautz lion in funding for arts groups in Michigan, $501 million was earned income and 30 percent came from outside contributions like government, corporations and individuals. It also says the number of arts- related jobs in the state increased by 15 percent from 2006 to 2011, bringing the total number to 85,656, and that the number of arts- related businesses rose by 65 percent to 28,072. The raw data used in the Data PROUDTO BE IN Driven Detroit report was collected from multiple sources, including the Michigan Cultural Data Project, Americans for the Arts’ Creative Indus- tries Reports and the MEDC.

Area entrepreneurs say they’re upbeat, as are peers worldwide More than half of Detroit-area DETROIT entrepreneurs expect to hire more full-time workers, and two-thirds expect to hire more part-timers in When you’re serious about intellectual property law … the coming six months, according to a survey by the Entrepreneurs’ Or- ganization. Use Brinks, now in Detroit. Brinks is a recognized national leader in Those surveyed also say the intellectual property law. With its new Detroit Office located in the same economy is moving in a positive direction, with 80 percent report- building as a U.S. Patent and Trademark Office, domestic ing positive feelings about start- and international clients can participate in on-site patent ing a business in the next six months. examination and administrative trial proceedings. The Detroit-area numbers are comparable to global numbers, which indicate that 56 percent of Serving innovators in Michigan and beyond: entrepreneurs plan to hire more Detroit Ofﬁ ce Ann Arbor Ofﬁ ce full-time workers, 62 percent plan U.S. Patent Suite 1775 Suite 200 to hire part-time workers and 77 No. 129,843 300 River Place Drive 524 South Main Street percent hope to start ventures in Steam engine the next six months. lubricator by Detroit, MI 48207 Ann Arbor, MI 48104 The survey included 141 Detroit- Detroit inventor 313.393.5400 734.302.6000 Elijah J. McCoy, area companies with at least $1 granted in 1872. Chicago | Ann Arbor | Detroit | Indianapolis | Research Triangle Park Area | Salt Lake City | Washington, DC | www.usebrinks.com million in annual revenue. — Ryan Kelly DBpageAD_DBpageAD.qxd 1/29/2013 12:58 PM Page 1

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Page 8 CRAIN’S DETROIT BUSINESS February 4, 2013 OPINION MARY KRAMER As right-to-work Pontiac EM’s impact noteworthy Last week, General a private contractor. Construction, also put 46 lofts into Motors announced it Oakland County plows a former Sears store built in 1929. was investing $200 mil- and maintains roads. The project opened late last year lion in Pontiac, adding Schimmel is also talk- with a retail market and fitness nears, so could deals jobs to and expanding ing to the county about center. its global powertrain collecting taxes. That investment, as Ryan Felton ublic sector unions working under contract extensions engineering headquar- Perhaps Schimmel’s reported on crainsdetroit.com last are now trying to lock in long-term contracts that would ters. sweetest deal was sell- November, attracted brothers P skirt the terms of Michigan’s new right-to-work law. That was big news. ing excess capacity in Rick and David Derbyshire to buy As Chad Halcom reports on Page 3, unions are launching le- But the bigger story its sewage treatment and develop a 20,000-square-foot just might be how Pon- plant to Oakland Coun- gal challenges. And faculty unions at Wayne State and Western building across the street for their tiac has fared in the 14 ty for $55 million. engineering design software com- Michigan universities are seeking new long-term contracts — months since Louis Schimmel is using the pany, DASI Solutions. as long as 10 years — before March 28, when the right-to-work Schimmel was appoint- money to pay off the Schimmel says investment is law takes effect. Other universities and K-12 school districts ed its emergency manager. city’s debt and eliminate its coming because people have confi- are seeking similar pacts or separate agreements that preserve The state appointed Louis deficit. Wastewater from 13 sub- dence in the city. mandatory collection of union dues from employees covered by Schimmel as Pontiac’s emergency urbs that would have been going “Some think, ‘This might be the manager in November 2011. He to Detroit’s system will now go to the contracts. The new law allows workers to opt out. new Royal Oak,’ ” he says. “This used Public Act 4 quickly — before Pontiac. The city may save $5 mil- may sound corny, but people don’t How will all these strategies work? it was suspended in August pend- lion a year that can now go for re- want to come to a town that’s a fi- For starters, Republican lawmakers may treat public insti- ing the November election, when tiree health care and pensions. nancial disaster. A city is not in a tutions that acquiesce to their union demands a little harshly voters ultimately nixed it — to Remind me again why Public good position when it goes out and on appropriation requests. contract out for many city services Act 4 was so bad? begs for money to continue to pay or launch deals for combined ser- And there could be a legal challenge on a 10-year contract “There are those who are just for a broken process that causes the vices. livid about what I’ve done,” that basically exceeds the term of any of the elected or appoint- financial problem in the first place.” “I ran hard with it,” he says. “In Schimmel says. “(But) I cleaned up Perhaps Detroit’s elected offi- ed officials serving on those university or K-12 boards. cities like Pontiac that are in trou- this mismanagement and created cials might take note. Unions should let the legal challenges take their course ble, you have 80 percent of your better services.” rather than try to force 10-year pacts. budget spent on police and fire.” He also sold property and build- Mary Kramer is publisher of On the other hand, management may be in a driver’s seat Today, Oakland County Sher- ings in the city that were aban- Crain's Detroit Business. Catch her iff’s deputies patrol Pontiac streets to get other changes they’ve long coveted. This may be a good doned or blighted. West Construc- take on business news at 6:10 a.m. (many new deputies are former tion Services bought the Strand Mondays on the Paul W. Smith show time to strike new deals. We suspect a lot of pencil-sharpening Pontiac police officers). Waterford Theatre and plans to reopen it in on WJR AM 760 and in her blog at will be going on between now and March 28. Township and Pontiac combined 2014 as an entertainment destina- www.crainsdetroit.com/kramer. fire services. Trash is picked up by tion. Kyle Westberg, CEO of West E-mail her at [email protected]. Not much for Bing to tout Last week, Detroit Mayor Dave Bing announced 50 of the city’s 107 parks will close because of the soured deal to lease LETTERS Belle Isle as a state park. On Feb. 13, the mayor will deliver his State of the City address. Some big solutions for Detroit After 45 months in office, what might he say? What can he say? Editor: ing, transportation, etc. Crain’s Detroit Business The mayor can point to a handful of “wins” in his tenure, OK, you want big solutions for 4. Have a plan for destruction of, welcomes letters to the editor. Detroit’s big problems (“If you or rebuilding of, neighborhoods — among them an end to a “pay to play” culture and the conver- All letters will be considered for sion to regional authorities to manage Cobo Center, the city’s can’t rent Belle Isle, then sell it,” publication, provided they are again those “receivers” can be put water department and the newest, regional transportation. Keith Crain, Jan. 28)? Let’s start signed and do not defame to work. Some of Detroit’s areas here: look worse than some war zones. But the core issues are still intractable. And with such poor individuals or organizations. 1. Get that financial manager. Letters may be edited for length 5. Get a City Council that is will- relations between his office and City Council, the tools used by 2. Give him/her the authority to and clarity. ing to make the city more impor- Pontiac’s emergency manager are tempting. (See Mary step on toes because that is the Write: Editor, Crain’s Detroit tant than their fiefdom positions. Kramer’s column on this page.) only way to accomplish the big so- Business, 1155 Gratiot Ave., Make a plan and go for it! Doing Detroit’s downtown is awash with investment, but the rest lutions. Detroit, MI 48207-2997. nothing will accomplish nothing. of the city is failing, from broken streetlights to closed parks 3. Anyone receiving governmen- Email: [email protected] Try something; it just might work. tal assistance will be required to and vacant lots and homes. Begin with Belle Isle so the city’s take a urine test, do some sort of people can enjoy it this coming Given the political realities the mayor knows all too well, state work to earn that assistance those assistance receivers would summer. it’s hard to see how Detroit can thrive without a powerful check, set up education centers — help in many ways, such as with Marilyn Henry emergency manager — or a bankruptcy judge. too lengthy to explain here, but on-site child care, tutoring, teach- Canton Township KEITH CRAIN: Council changes can’t come too soon Last week, I was in Washington, Gray is a longtime ad- I am not sure who natives are quite likely before the er than later. We desperately need D.C., to present Edsel Ford with vocate of council mem- will survive an election elections this fall. Plus we’ll have representation from Detroit neigh- the Automotive News Lifetime bers representing dis- by district, but it cer- some primaries, and let us not for- borhoods, and to have seven of nine Achievement Award. The award is tricts of a community, tainly isn’t going to be get a mayoral race as well. council members representing spe- presented during the Washington and we have discussed the gang that is on to- Just when we thought it was cific districts will give citizens a Auto Show. it at length during pre- day’s City Council un- time to breathe a sigh of relief that voice they don’t have today. While I was there, I had a chance vious visits. less there is a lot of the political season was over, it It is going to be a very rocky to once again chat with Mayor The system of gover- moving going on in the bounces from federal to local. road until these next municipal Vincent Gray, who is a very im- nance in our city is bro- next couple of months. And even this early, our out- elections. We don’t really know yet pressive individual. ken. Just about every- Some have already standing governor is already start- who will be running and where. I reminded him that this fall De- body on the Detroit City said that they are not ing to fund-raise for his unan- But the folks in Detroit are go- troit will be switching from a city Council has an individ- running for election, so nounced re-election campaign. ing to get a voice that they haven’t council in which all members ual agenda, and with the exception it’s going to be a new look for local There seems to be no offseason for had, and the council members are were elected at large to a city coun- of a couple of competent members, governance assuming that the city political activity. going to have to have a different cil, just like Washington, where the whole system is not working, to will be able to get through new elec- But we must hope that this signif- mindset than before. seven members are elected by dis- the frustration of those members tions without either an emergency icant change in the governance of And it couldn’t come a moment tricts and two are elected at large. and Mayor Dave Bing. manager or bankruptcy. Both alter- Detroit will pay big dividends soon- too soon. 20130204-NEWS--0009-NAT-CCI-CD_-- 1/31/2013 4:59 PM Page 1

February 4, 2013 CRAIN’S DETROIT BUSINESS Page 9 Wellness center targets people 60 and up, looks to sell franchises

BY JAY GREENE ranges from $139,500 to $239,000, two to three one-hour sessions reimbursement is declining.” “Physicians are at the forefront CRAIN’S DETROIT BUSINESS including a $49,000 franchise fee, each week, Essex said. Wayne said people who have in- of assessments of medical condi- according to the ActiveRx fran- Most ActiveRx services are cov- jured their back or neck should tions, diseases either acute or Seeking to capitalize on the de- chise disclosure. ered by Medicare or commercial seek clinics that can demonstrate chronic, but not a lot on the func- sire by a growing number of peo- “There are 15,000 seniors in the insurance plans, Essex said. Out- their effectiveness through out- tional side,” Essex said. “We focus ple ages 60 or older in Southeast West Bloomfield area. There are of-pocket costs also are covered by comes data or clinical research. on assessing your body, function Michigan to stay healthy or reha- lots of good wellness and physical medical savings or flexible savings ActiveRx’s care program in- and strength in an objective man- bilitate injuries, Mark Lines, a for- therapy centers around, but no- accounts, he said. cludes using wellness services, ner. We find a lot of problems mer medical device executive with body has put programs together Jeff Wayne, president of Troy- preventive care, education and when the body loses strength.” Abbott Vascular Inc., has opened a like we have,” Lines said. “An old- based Dynamic Rehabilitation, a 20- strength maintenance to keep se- For example, the loss of strength strength and rehabilitation center er person wants to be more physi- year-old company that operates niors fit and healthy, said Essex, and physical function leads to in- in West Bloomfield. cally active, or they have a nag- seven centers in Southeast Michi- who has worked in the rehabilita- juries by falls, a problem that af- Lines purchased the Michigan ging shoulder injury, (and) we can gan, said the wellness and rehab tion industry for 15 years. fects one in three seniors over age franchise for the wellness center take that patient a rehab (of) the business is very competitive. Essex said multiple research 65, said the Centers for Disease Con- last year for $50,000 from ActiveRx injury to build up their strength.” “This is a tough market to jump studies have shown that older trol and Prevention. Development Co., a Chandler, Lines said ActiveRx’s patented into, given all the uncertainty in adults lose 30 percent of their Jay Greene: (313) 446-0325, Ariz.-based company founded in “Strengtherapy” sessions average Medicare reimbursement,” Wayne strength by age 65, and another 30 [email protected]. Twitter: 2008. The company has seven cen- $8 per visit. ActiveRx recommends said. “The only uncertainty is that percent by the time they turn 75. @jaybgreene ters operating in four states, with five more pending deals in Chica- go, Rhode Island, Connecticut, Massachusetts and South Caroli- na, said Matt Essex, CEO of Ac- tiveRx. “I plan on recruiting people who want to own their own centers in Michigan,” said Lines, ActiveRx’s regional developer. “I will run a minimum of five and hope to sell another (25) individual franchises over the next three to five years.” The 2,160-square-foot ActiveRx Aging Center is in the Maple Park Medical Office Complex in West Bloomfield. Lines said he is looking at Livonia and Birmingham as his next two locations. Lines said his experience in medical device sales gives him knowledge of how to approach physicians to generate referrals. “I wanted to buy into a franchise, but I didn’t want to get into restaurants. My background is health care, and since I know how to build referrals, I thought I could teach other people to do it,” said Lines, who was born in Jackson. For his first clinic, Lines said, it cost him about $109,000, which includes $60,000 to build out the center and a $49,000 franchise fee. To- tal investment necessary to begin operation of an ActiveRx Center

Greektown hires advisers to review Gilbert offer Greektown Superholdings Inc., the owner and operator of Greektown Casino-Hotel, said last week it had retained financial and legal advisers to assist in its review of an acquisition offer by Rock Gaming LLC’s Athens Acquisition LLC. New York-based Lazard Freres & Co. LLC was hired as financial adviser, and Washington, D.C., law firm Sullivan & Cromwell LLP was YOUR BUSINESS ISN’T JUST A JOB — IT’S A PASSION. You get to know your hired as special counsel. Greektown formed a three-per- customers, treat them fairly, and build relationships. Don’t you deserve that same kind son committee of its board of direc- of treatment from your bank? With Citizens Bank, you’ll get the right solutions and tors, on Jan. 17 to assist the Greek- town board of directors in products from people with the experience to know what’s right. After all, we’ve been reviewing the offer. around over 140 years, helping businesses just like yours grow. So if you want a bank The committee is evaluating the Athens offer and other strategic al- that shares your passion, call us. BECAUSE WITH US, IT’S PERSONAL. ternatives for shareholders. Dan Gilbert, who is chairman of Rock Gaming, and President and $)&$,*/( 4"7*/(4 r -0"/4 -*/&4 0' $3&%*5 r .&3$)"/5 4&37*$&4 COO Matt Cullen have applied 53&"463: ."/"(&.&/5 r 41&$*"-5: '*/"/$*/( r 8&"-5) ."/"(&.&/5 with the Michigan Gaming Control Board for gambling licenses. With those approvals in hand, Athens plans to exercise its Dec. 20 1-800-946-2264 agreement to buy a block of shares CITIZENSBANKING.COM/BUSINESS that will give it majority control of Greektown Casino. — Sherri Welch 20130204-NEWS--0010-NAT-CCI-CD_-- 1/31/2013 4:54 PM Page 1

Page 10 CRAIN’S DETROIT BUSINESS February 4, 2013

Shareholder problems? Changing the Odds in Our Clients’ Favor Ann Arbor company wins top prize Brian E. Etzel Jayson E. Blake Marc L. Newman Kevin O’Shea in Michigan biz plan competition

BY TOM HENDERSON was presented to Ann Arbor-based ical devices and life sciences. CRAIN’S DETROIT BUSINESS AdAdapted LLC, which is developing The challenge, held Thursday at a mobile advertising network for Burton Manor in Livonia, is spon- Ann Arbor-based Monarch Anten- product placement in mobile sored by GLEQ, the Michigan Eco- na Inc. last week won the $5,000 top games and apps. nomic Development Corp. and Michi- prize in the emerging-company The runner-up winner of $1,500 gan Corps, a Detroit-based category at the 13th Michigan was Plymouth-based Beet LLC, nonprofit. business plan competition put on which does business as Beet Analyt- Beginning today, applications by the Great Lakes Entrepreneur’s ics Technology and is developing can be filled out at gleq.org. Quest. software to monitor factory-floor More than 200 Michigan-based E. Powell Milller Richard “Tony”Braun Monarch, a 2007 spinoff from performance and management. entrepreneurial ventures regis- Delphi Technologies Inc., is develop- tered for the competition in such Shareholder and partnership disputes Corporate governance litigation Ann Arbor-based Kymeira, which ing a better antenna for smart- makes a new, stronger ceramic fields as alternative energy, infor- Minority oppression litigation Corporate control contests phones, tablets and laptops. material, won the third-place mation technology and software, Breach of fiduciary duty Securities fraud and derivative claims The second-place winner of award of $1,000. advanced manufacturing, food Blue Water Bioproducts $3,000 was It was also announced at the safety, green chemistry, medical LLC of Port Huron, which makes devices and life sciences. 248-841-2200 GLEQ event that the next competi- high-performance polyurethane The competition’s twice-annual millerlawpc.com tion in June will include a new resins from a byproduct of the program accommodates both idea- event, the Pure Michigan Social pulp and paper industry instead of stage ventures and companies from petroleum, the traditional Entrepreneurship Challenge. It with up to $3 million in revenue. STATEWIDE NOMINATIONS ACCEPTED source. will offer more than $50,000 to indi- Ann Arbor-based GLEQ is a Exo Dynamics LLC, an Ann Arbor viduals or teams submitting the nonprofit designed to accelerate Nominate Michigan’s best in-house company that hopes to market bet- best plans for an entrepreneurial the formation of high-growth com- attorneys and general counsels ter spinal orthotics, received the idea that can create sustainable so- panies. DEADLINE: FEB. 6 third-place award of $2,500. cial change in areas such as urban Tom Henderson: (313) 446-0337, revitalization, the environment, www.crainsdetroit.com/nominate In the new-business-ideas cate- [email protected]. Twitter: gory, the first-place award of $2,000 food safety, green chemistry, med- @tomhenderson2

Phoenix Med Group to lease space in Providence building under renovation

BY JAY GREENE dent of Providence Hospital, said CRAIN’S DETROIT BUSINESS the addition of Phoenix and its physicians, many of whom are new Phoenix Medical Group PC, a 24- to Providence and are applying for physician multi-specialty group, medical staff privileges, will help has signed a long-term lease to accommodate increased patient de- move into a medical office build- mand under health care reform. ing at Providence Hospital in South- “This addresses a need in South- field that is undergoing a $5.9 mil- field for high-quality physicians. lion renovation. There is a prediction of shortages Lonnie Joe Jr., M.D., Phoenix’s of primary care physicians under president, said leasing the 52,000- reform, and we know we will be square-foot space will enable the getting additional patients in our practice to open a diagnostic and service area. We want to be testing facility that will feature a ready,” Wiemann said. $1.1 million fixed-unit computed Because many of Phoenix’s tomography, or CT, scanner. The physicians are new to Providence, project is expected to be completed Wiemann said, he did not think by July. the hospital would lose outpatient “We will have 16 of our 24 physi- diagnostic revenue to the private cians in the pavilion, and we will physicians. be able to do everything except “What we wanted to do is create MRI,” said Joe, a pulmonary dis- a situation where their patients ease specialist and former presi- have an opportunity to have all dent of the Detroit Medical Society. their care in one location as much Phoenix will occupy space at the as possible,” Wiemann said. “By 120,000-square-foot Providence allowing these things (diagnostic Pavilion building on the campus of center), this creates an ideal care Providence Hospital, one of five situation.” acute-care facilities owned by Providence Hospital is complet- Warren-based St. John Providence ing a $5 million renovation and ex- Health System. pansion of its emergency depart- Three-year-old Phoenix, which ment. It also is renovating and also has several physician offices expanding its cancer center in a $5 in the Southfield area, is expected million project, including addi- to add another 12 or more physi- tional space for medical, social cians this year. The medical group workers and radiation oncology, includes physicians in internal that is expected to be completed in medicine, family medicine, oto- June. It recently completed reno- laryngology (or ENT, short for ear, vation and expansion of two nurs- nose and throat), vascular surgery ing units at total cost of $8 million, and urology. Wiemann said. “We are looking at 50,000 patient Construction manager on the visits to the physician offices and medical office building project is diagnostic center,” said Joe, not- Pontiac-based Facilities and Man- ing that he expects physicians also agement Co. LLC. will admit more patients to Provi- Jay Greene: (313) 446-0325, dence Hospital. [email protected]. Twitter: @jay- Michael Wiemann, M.D., presi- bgreene 20130204-NEWS--0011,0013,0014-NAT-CCI-CD_-- 1/31/2013 4:34 PM Page 1

February 4, 2013 CRAIN’S DETROIT BUSINESS Page 11

REPORTER’S NOTEBOOK

Chad Halcom covers CHANGING BY DEGREES litigation, higher education, defense Community colleges weigh and Oakland and new bachelor’s programs, Macomb counties. Page 16 Call (313) 446-6796 or write chalcom @crain.com. business education Chad Halcom Gifts to colleges grow in 2012

It was a year for big gifts and bigger fundraising goals at Michigan’s largest public universities, but many smaller institutions also saw philanthropy grow with the local economy in 2012. Last year was easily the strongest in the five-year capital campaign that We are the last of closed at Eastern Michigan University, accounting for about $15 million in “ total cash and planned giving of the 15 public universities $55 million-plus in commitments since 2007. in Michigan that A new capital campaign is in the planning stages this fiscal year, but the university could set its sights on raising doesn’t have any more than $75 million after feasibility studies are completed next year, said student housing Tom Stevick, university vice president of advancement and executive director available. of the EMU Foundation. The foundation expects giving to continue to rebound ” with Michigan’s economy, he said. Stanley Henderson, Across the state, Western Michigan University of Michigan-Dearborn University also saw its best fundraising year ever with more than $20 million in donations to various programs. That’s compared with $9 million the preceding fiscal year, and does not include a separate $21 million in new supplemental donations, as of this month, to the new WMU School of Medicine, which gained preliminary accreditation in October and opens in GLENN TRIEST fall 2014, said university President John By August, more than 500 University of Michigan-Dearborn students are expected to take up residence in The Union at Dearborn, a $30 million redevelopment of a former Ford Motor Co. diagnostic center. Dunn and Jim Thomas, vice president of development and alumni relations. That program originally received a $100 million anonymous seed gift in 2011 and will occupy the W.E. Upjohn Campus Building that used to house Pfizer Inc. employees in Kalamazoo. Dennis Howie, associate vice president of advancement and chief development officer at Lawrence Retooling schooling Technological University in Southfield, said that as of this month the university has raised $72.5 million in its $75 million capital campaign goal and should exceed the fundraising goal well Colleges add lures as they fish a smaller student pool before the fiscal year ends in June — and four years ahead of schedule. BY GARY ANGLEBRANDT “We know we’ve had a declining K-12 “There is enough capacity for us to As a result, Howie said, his SPECIAL TO CRAIN’S DETROIT BUSINESS population” for some time, Boulus said. stay busy,” Ezzeddine said. “We have to department will likely submit a proposal That means universities have to be look at it systematically, not just one within the next several weeks to the igher education institutions always more competitive as they go after the portion of the economy.” university board of trustees for a are under pressure to attract stu- same students, Boulus said. Ezzeddine said there are mismatches “significant expansion” in the campaign H dents. This is why they advertise, in- Universities are stepping up recruit- between the skills businesses need and goals. In March, the university also vest in their campuses, run popular ing at high schools and investing to what schools are providing. Engineers expects to announce a project architect sports programs and launch fundraising make their campuses more attractive. are in high demand nationally, so and a construction timetable for the campaigns. They also are putting more effort into Wayne State has started working more planned A. Alfred Taubman Engineering, For Michigan schools, there is an getting students other than those com- closely with businesses such as Quicken Life Sciences and Architecture Complex. added pressure. The state’s K-12 enroll- ing out of high school, such as those at Loans to fill gaps and is training 260 stu- The planned $55 million complex ment count has fallen 11 percent since community colleges or in later stages of dents in advanced energy storage includes more than $20 million in 2002, reducing the pool of students from their careers. through a Department of Labor grant, donor funding commitments to date, which colleges and The need for education isn’t slowing he said. To address a growing shortage including $11 million in seed funding from Taubman. The first of three universities tradition- down, so schools can’t either, said Ah- of people who know how to work on phases of construction begins in ally draw their en- mad Ezzeddine, vice president of educa- mainframes, Compuware last year sent 2014, Howie said. rollees. tional outreach and international pro- employees to train 60 WSU computer Aware of the trend, grams at Wayne State University. science students in mainframe software Last year the nonprofit Michigan Colleges Foundation raised about colleges and universi- “We know the number of high school development. $1.95 million in donations toward ties are under pres- graduates is declining because of popu- scholarships, career services and sure to offset the di- lation trends. It’s something we’re cer- Ties with community colleges other programs that benefit the minished pool of tainly cognizant of, (but) we don’t want foundation’s 14 private college potential students to focus just on the decline. We still have Wayne State, like many state universi- members with a combined 35,000 coming out of high a very large part of the population that ties, has stepped up relations with com- Boulus students statewide. That was the school, said Michael still needs advanced degrees” as well as munity colleges to make up the difference organization’s best fundraising year in Boulus, executive director of the Lans- people who are changing careers or try- in the decline in K-12 enrollment. the past decade, said Foundation ing-based Presidents Council, State Univer- ing to meet new education requirements President Robert Bartlett. sities of Michigan. for their jobs. See Student pool, Page 13 DBpageAD_DBpageAD.qxd 1/28/2013 2:42 PM Page 1

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February 4, 2013 CRAIN’S DETROIT BUSINESS Page 13 Focus: Business Education Student pool: Colleges seek growth amid smaller K-12 numbers ■ From Page 11 Wayne State has new “reverse transfer” agreements with Henry Ford Community College, Macomb No turnaround seen in pupil count Community College and Oakland Com- munity College, and is in talks with The state’s fall pupil count, ac- 153,080 live births in 1990, com- several more, Ezzeddine said. cording to a table from the Michi- pared to 114,159 in 2011. These agreements allow stu- gan Department of Education, was “Our K-12 schools were built to dents to continue earning credits just above 2 million for the 1977- hold 153,000 students,” Summers toward an associate’s degree at a 78 school year, the first year in said. community college even after the table. The number dropped Enrollment transferring to a university to throughout the 1980s, hit a low of at Michigan’s work toward a bachelor’s degree. 1.64 million in 1989-90, and then 15 public uni- If the student drops out of the uni- crept up to eventually reach 1.75 versities versity, the student can still get million in 2002-03. For the 2011-12 dropped slight- an associate’s if enough universi- school year, the most recent ly this past fall ty credits were taken, or the stu- year’s figures available, the num- to 302,504 from dent can work toward earning ber was 1.55 million. 303,090 the year both an associate’s and a bache- “We don’t expect this to turn before, accord- around anytime soon,” said ing to the Presi- lor’s in related areas. Summers “Most of our students accumu- GLENN TRIEST Kathryn Summers, associate di- dents Council, late credits and transfer without Ahmad Ezzeddine, vice president of educational outreach and international rector of the Senate Fiscal Agency State Universities of Michigan. Gen- earning their associate’s degree,” programs, says Wayne State University is collaborating with community in Lansing, which tracks student erally, the number has increased colleges and looking beyond high school graduates to people in need of enrollment data. every year for the past 10 as job said Marty Heator, associate dean retraining or advanced degrees. of enrollment management at The drop in student enrollment pressure to gain secondary edu- Schoolcraft College in Livonia, and all 28 community colleges in dergraduates last fall, with 5,076 follows a decline in the state’s cation grows. But the increase is which signed a reverse transfer Michigan have agreed to work to- new students, 41 percent of whom birth rate, Summers said. That fairly flat from year to year. The agreement with the University of ward these agreements, said were transfer students. The 5,076 rate has fallen to 11.6 live births number was 287,743 in 2003, Michigan-Dearborn last June. “If Mike Hansen, president of the includes first-time freshmen and per 1,000 people, according to data meaning there’s been a gain of they can apply our credits toward Michigan Community College Associ- students pursuing a second de- from the Michigan Department of just 5 percent over the past 10 a university bachelor’s degree, ation. gree. Total enrollment was 23,502. Community Health. In 1990, the rate years. there’s no reason why they can’t As of mid-January, 51 reverse EMU has 122 articulation was 16.4. That translates to — Gary Anglebrandt apply university credit toward transfer agreements had been agreements by academic program our degree.” signed, said Chris Baldwin, execu- with community colleges in Community College last year, said muter students,” Kraft said. Michigan in 2011 passed Public tive director of the association’s Michigan, Ohio and Canada, and Walter Kraft, vice president for “These have grown in recent Act 62 that directed schools to put Michigan Center for Student Success. announced reverse transfer communications. years considerably.” reverse transfer agreements in Eastern Michigan University had a agreements with Monroe County “We’ve always had a signifi- place. All 15 state universities record number of incoming un- Community College and Washtenaw cant transfer population and com- See Student pool, Page 14 20130204-NEWS--0011,0013,0014-NAT-CCI-CD_-- 1/31/2013 4:35 PM Page 3

Page 14 CRAIN’S DETROIT BUSINESS February 4, 2013 Focus: Business Education State policy groups call for Student pool: Colleges face challenge ■ From Page 13 increase in education funding Focus on campus life tomation Alley to train and place 75 automotive engineers for jobs in There’s also more pressure to the defense industry. Two Michigan policy organiza- funds it, 58 percent of employers invest in campuses. tions have separately issued re- who responded to the polls and But a larger boost came from Since 2009, EMU has invested the addition of athletics. ports calling for more public edu- 51 percent who took part in the nearly $23 million in residence cation funding. community meetings called for Lawrence Tech joined the Nation- hall improvements. This past fall, al Association of Intercollegiate Ath- The Ann Arbor-based Center more K-12 investment. the school saw an increase of 19 for Michigan, which bills itself as a Nine out of 10 meeting partici- letics, an association geared for percent in students living in resi- small athletic programs, in 2011 af- nonpartisan provider of public pants also said businesses and dence halls and apartments. policy information, recently pub- community organizations could ter not being part of a formal na- Other schools are investing to tional athletics program since the lished the results of what it do more to provide jobs, intern- Reynolds Kujawa give students a more traditional 1950s, Kujawa said. The school learned last year through more ships and other real-world expe- campus experience. than 250 community meetings riences to students. transfer agreement with Macomb now has nine sports programs and The $30 million Union at Dear- Community College last year and plans to add more. and two telephone polls. Separately, Business Leaders for born project under way at the More than 7,500 residents par- Michigan, in its 2012 Economic has shifted its marketing to focus The school’s number of “FITIAC” University of Michigan-Dearborn more on digital media, advertis- students — First Time In Any Col- ticipated in the meetings and Competitiveness Benchmarking is transforming a former Ford Mo- polls regarding the state’s educa- Report, called for refocusing ating on outlets such as the Internet lege — jumped nearly 50 percent tor Co. diagnostic center into a radio site Pandora.com. UM-Dear- this school year, and Kujawa said tion system, and a majority of tention on education funding and student apartment complex. them gave the state a grade of “C” reform. The group supports Gov. born also has shifted to more digi- the addition of athletics played a Bloomfield Hills-based Urban Cam- tal marketing, Henderson said. huge role in that as more students or lower. Rick Snyder’s call for more pus Communities LLC is construct- The report said four priorities preschool and early education The private Lawrence Technolog- want a more traditional campus ing the building and will own it, ical University will break ground lifestyle. The move brought in 135 emerged from study participants: funding, and higher education and the school will be able to increasing access to early child- appropriations for state universi- on a new residence hall this student athletes and was a factor for highlight it in its marketing and spring, adding a capacity of 200 others who want a team to cheer. hood education, improving hir- ties that are tied to performance. hold events and student life pro- ing standards, providing more One target for freeing up state students to the school’s current “This is the largest incumbent grams in it, Henderson said. on-campus population of 600. The freshman class in six years,” Ku- job support to teachers after resources is reducing correc- “We are the last of 15 public uni- they’re hired and holding educa- tions spending, Business Leaders school also is working with a jawa said. versities in Michigan that doesn’t nearby apartment building to The overall undergraduate pop- tors more accountable. suggests, citing statistics that the have any student housing avail- The center reported 70 percent state spends about $2 billion, or house nearly 100 students. ulation was up 6 percent at 3,245, able,” said Stanley Henderson, Lawrence Tech has beefed up and retention rates have im- of people polled or in the meet- $4,600 per public university stu- vice chancellor for enrollment ings supported more investments dent, about one-tenth the spend- its out-of-state recruiting efforts, proved, she said. management and student life. hiring regional recruiters in Despite all that colleges are do- in preschool programs, increased ing per prisoner. The Union’s first phase, to be teacher pay, and more elective On March 11, Business Leaders states such as New York, New ing to nab students, it looks like finished by August, will hold 504 Jersey, Minnesota and Ohio. That pressure to do more will only get and vocational courses. will hold a New Michigan Summit residents, and a second phase, to While most employers in the in Lansing that includes a discus- led to a 3 percent increase in out- more intense. Estimates from the be completed a year or two later, of-state students this school year, state budget office show the num- study said the education system sion on Michigan’s higher educa- will have another 300. does not provide a good return tion marketplace. See www.busi- said Assistant Provost Lisa Ku- ber of K-12 pupils in the state will “It’s very much part of our strat- jawa. It also has worked with Au- keep falling for three years. on investment for the $19 billion nessleadersformichigan.com. egy as we look at the demograph- in state and local taxes that — Gary Anglebrandt ics, the declining high school population,” Henderson said. Residential housing will give WEBCAST students a more traditional college LIVE experience and allow the school to COLLEGE go after new pools of students in BUSINESS areas beyond metro Detroit, such ® OF as St. Clair County and the I-96 cor- DEARBORN ridor toward Lansing, he said. The school, which now has about 9,000 t’s all students, estimates that the addi- I abo r! tion of housing will attract 1,000 Water challenges u te students over five years who oth- in t wa erwise would not consider attend- o the il an ing UM-Dearborn. d g ry. “There’s a large number of stu- as indust dents graduating high school who would never consider UM-Dear- born because there’s no housing available. ... It gives us incredible Wednesday, flexibility amid declining high school student numbers,” Hen- derson said. February 13, 2013 Schools are investing more in their student housing and campus Noon to 1:30 p.m. EST life experiences, Boulus said, with residential units looking more like apartments and less like dorms. RSVP: mcdonaldhopkins.com “You don’t just have two bunk U.S. News & World Report already ranks our MBA programs: or call: 800.847.6424 beds stacked on top of each other,” he said. LQ0LFKLJDQRYHUDOO to register. Oakland University in Rochester LQWKH86IRUDGPLVVLRQVVHOHFWLYLW\ Hills plans to open a $30 million, LQWKH86IRUIDFXOW\FUHGHQWLDOVDQGH[SHUWLVH 550-student housing center in the fall of 2014. Its total enrollment grew 1.86 percent to 19,740 this past Now we also offer master’s programs in three fall from 19,379 the year before, ac- cutting-edge career areas: cording to the Presidents Council. THE “Over the past few years, we’ve %XVLQHVV$QDO\WLFV LEADERS had more students than we’ve had AND room,” said Eleanor Reynolds, as- ,QIRUPDWLRQ6\VWHPV BEST sistant vice president and director 6XSSO\&KDLQ0DQDJHPHQW of undergraduate admissions. JUST GOT EVEN McDonald Hopkins PLC Oakland sends alumni to ele- BETTER 39533 Woodward Ave., Suite 318, Bloomfield Hills, MI 48304 • 248.646.5070 mentary schools and middle Apply now for summer or fall classes Stephen M. Gross schools in Oakland and Macomb cob.umd.umich.edu Detroit Managing Member counties and works directly with JUDGEXVLQHVV#XPGXPLFKHGX counselors at high schools as part Chicago • Cleveland • Columbus • Detroit • Miami • West Palm Beach SDUWWLPH0%ASURJUDPV of its recruiting efforts, Reynolds RQOLQH0%ASURJUDPV said. mcdonaldhopkins.com Carl J. Grassi, President The school signed a reverse 20130204-NEWS--0015-NAT-CCI-CD_-- 1/31/2013 4:36 PM Page 1

February 4, 2013 CRAIN’S DETROIT BUSINESS Page 15 Focus: Business Education Law students looking to biz as alternative in tight market

BY MIKE SCOTT That was 5 percent higher than graduated from law school and SPECIAL TO CRAIN’S DETROIT BUSINESS the percentage of graduating stu- have achieved a high level of suc- We want to plant ideas in our dents working in the business sec- cess in nontraditional legal ca- Lawyers graduating since the re- “ tor in 2010, said Carol Baldwin, di- reers, such as being a business cession have found that a law degree students’ heads that there are rector of marketing and owner or executive director of a is no guarantee of a job as a practic- communications at the law school. nonprofit, Benson said. The speaking attorney. Now, some legal indus- many paths to a successful Wayne Law’s program, Benson ers are expected to build mentoring try experts are seeing evidence that said, is to prepare students so that relationships with the students. a growing number of students are career. they can use their law degrees in Four such speakers have been entering law school with a different ” any high-level position that will scheduled through April 2013. goal — entering the business world. Jocelyn Benson, Wayne State University Law School benefit their career. “We want to plant ideas in our The job market has been so “dis- In fact, Wayne State Law is start- students’ heads that there are ruptive” in the legal field the past can remember,” Miner said. “Other UDM Law who is a former Ford Mo- ing a speaker’s series this semester many paths to a successful ca- five years that the number of pri- students may start out wanting to tor Co. vice president, general coun- that features professionals who reer,” Benson said. vate practice opportunities has practice law, but after a year or two sel and secretary of Ford of Europe. eroded for new graduates, said in school, they see more opportuni- In general, a law degree is in- James Leipold, executive director ties or a greater level of interest in creasingly becoming a useful tool in of the National Association for Law pursuing a different career.” any number of fields outside of law, Placement, which Since the economic crisis of 2008, Saybolt said. For example, most tracks law there has been a notable change in Fortune 500 companies now have school gradua- the number of law school students on staff a chief compliance officer tion data, among who are not only willing to consider whose job is to set up compliance other functions. “alternative” career paths, but work programs consisting of employee Part of that as a solo practitioner, Miner said. training, monitoring and auditing. erosion is the In- “Some of that is based on necessi- “These jobs were practically ternet, global- ty, but I think other students see nonexistent 15 years ago or so and ization and off- the value of being a sole practition- came into vogue following the shore work er in determining your own path, adoption of the white-collar crime making some le- work schedule and more,” she said. sentencing guidelines by the (U.S. Leipold gal services Another reason for law school Department of Justice) and the in- more readily available and inex- graduates going into the business creased compliance responsibili- pensive, Leipold said. sector, Hoops said, is what some ties imposed on companies follow- As a result, law school gradu- consider an undesirable lifestyle for ing Sarbanes-Oxley and other ates looking for the best-paying new attorneys in private practice. laws,” Saybolt said. jobs available often are turning to “You have a situation where law Jocelyn Benson, interim dean at the business sector, essentially us- schools are graduating far too Wayne State University Law School, ing their JD as a substitute for an many law students with not enough agrees that the job market has likely MBA or graduate management de- jobs, and you might have a more affected the decisions of many stu- gree, Leipold said. family-oriented lifestyle available dents to pursue a business career. “We have seen over the last working in the business sector any- The law school had nearly 53 per- three years that there has been a way,” Hoops said. “The first sever- cent of its students employed in pri- decreasing number of jobs avail- al years of working in private prac- vate practice, and nearly 23 percent able in the legal sector, and more tice aren’t necessarily fun.” employed in the business, non-legal than half the jobs available in pri- Many of the jobs available to law sector in 2011, according to Wayne vate practice have been with firms school graduates in the business Law’s data as reported to NALP. of 50 people or less,” Leipold said. world can range from high-end “Those are lower-paying jobs any- professional opportunities at in- way, and there may be better op- vestment banking to consulting portunities in the business sector.” firms. The opportunities for these “I think many of these graduates jobs are growing faster than those find out quickly that a JD can in private practice, Leipold said. translate into an asset for many Yet there is no guarantee that businesses, and with those expen- those jobs are more accessible for sive law school debts needing to be JD holders, he said. paid back, many students take the Leipold said that most pre-law chance to jump into business,” students or first-year students do said Daniel Hoops, an associate intend to practice law, even professor and chairman of the ac- though about 60 percent nationally counting and taxation department actually do. at Walsh College in Troy. “I don’t like to tell people they Markeisha Miner, assistant dean should go to law school if they don’t of career ser- want to be a lawyer,” Leipold said. vices and out- Many large law firms before the reach for the Uni- recession were unsatisfied with versity of Detroit the quality of the graduates they Mercy School of were getting, Leipold said, so Law, has wit- many law schools have been mov- nessed the ing toward teaching more “non-le- change. For ex- gal” skills that will help students ample, 31 stu- in the business world, such as fi- dents who grad- nancial literacy, business courses, Possible is everything. uated from the case work, group projects and even Miner UDM School of networking. Today, more than ever, global competition and corporate streamlining require innovative Law in 2009 earned jobs in the busi- There is a natural relationship thinking and leadership abilities. Continuing your education can be key to ensuring your success. From global ness world, not as practicing between course work for an MBA leadership to health information technology management, Lawrence Technological University offers innovative lawyers. By 2011, that number had and for a JD that would make grown to 44, Miner said. UDM Law sense on both sides, Leipold said. business degrees and fast-track certificate programs to prepare you for the jobs of the future. had a graduating class of 216 in 2009 But he feels a joint degree might 2013 2013 2013 and 209 in 2011, according to data make more sense for a student in- Explore over 100 undergraduate, master’s, and doctoral AMERICA’S BEST BEST COLLEGES NATION’S BEST programs in Colleges of Architecture and Design, in the Midwest UNDERGRAD ONLINE submitted to NALP. terested in business than just a JD. UNIVERSITIES STUDENT ENGAGEMENT Arts and Sciences, Engineering, and Management. U.S. News & Princeton U.S.1 News & Miner, who meets with law stu- “They are two degrees that logi- World Report® Review® World Report® dents throughout their time at cally fit together and complement UDM Law, said more first-year each other well,” he said. Waive your application fee at www.LTU.edu/applyfree students share a goal following UDM Law School not only offers graduation of working in business a joint JD/MBA, but it also offers and not as practicing attorneys. several courses that focus on oper- Architecture and Design | Arts and Sciences | Engineering | Management “More students are planning for ating a small business and develop Lawrence Technological University | 21000 West Ten Mile Road, Southfield, MI 48075-1058 an alternative career outside of law students’ business skills, said Tom 800.225.5588 | [email protected] | www.LTU.edu when they enter law school than I Saybolt, a professor of practice for 20130204-NEWS--0016,0017-NAT-CCI-CD_-- 1/31/2013 5:04 PM Page 1

Page 16 CRAIN’S DETROIT BUSINESS February 4, 2013 A NEW SEASON TO CELEBRATE Focus: Business Education 20I3 SEASON TICKETS ON SALE NOW! Changing by degrees Law allowing some new bachelor’s programs has community colleges eyeing possibilities

BY AMY LANE SPECIAL TO CRAIN’S DETROIT BUSINESS

When Michigan lawmakers passed House Bill 4496 in mid- December, Christmas came early for Schoolcraft College President Conway Jeffress and some other community college leaders. That’s because the legislation gave the colleges at least part of what they had long sought: the ability to offer bachelor’s degrees GREAT BENEFITS* INCLUDINGCLLUDING: in select fields. Now colleges are evaluating • Season Ticketholder discountunt whether and how to build bachelor’s degree programs off of associ- • OpeningOpening Day tickets with planlann ate’s degree programs in areas such as culinary arts and mar- • PostseasonPostsea ticket priority itime technology. Some are beginning to seek a • ComplimentaryComplim food vouchersers change in accreditation from the Higher Learning Commission of the *Some*Some restrestrictionsr apply North Central Association of Colleges and Schools. The Chicago-based commission evaluates degree- TICKET PACKAGES granting post-secondary institu- AS LOW AS $374 tions in terms of their mission, teaching, resources and other 313.471.BALL31313.473.471.BALL71.BALLALL (2255) standards of quality. “Much of what they will require, we’re already prepared to do,” Jef- fress said. “But it’s going to be a long process from here. I would say a good two years before we can start cranking out baccalaureate WHAT’S people.” The change in accreditation to offer a four-year degree can entail, among other things, a rewrite of YOUR FANCY? curriculum, faculty with higher GLENN TRIEST credentials, a site visit by the com- Schoolcraft College President Conway Jeffress (wearing tie) talks with culinary mission and a broad examination arts students. The community college in Livonia is considering expanding its of operations, Jeffress said. culinary curriculum into a bachelor’s degree program. Schoolcraft is interested in pursuing a bachelor’s degree in culi- He said the college will redesign degree. nary arts, building off the Livonia curriculum that must be approved The college also is looking at of- college’s 47-year-old culinary pro- by the U.S. Coast Guard and then ap- fering bachelor’s degrees in culi- gram. Jeffress said Schoolcraft ply for a change in accreditation. It nary arts and power generation. looks to concentrate on food sci- could be a year and a half before ence — an area that can incorpo- NMC is ready to start offering the See Degrees, Page 17 rate food chemistry, nutrition, preparation and packaging, human health and safety and other aspects. Beyond culinary arts, the legis- 60$//2)),&(Ř+20(2)),&( lation allows colleges to grant Michigan’s Best Selection bachelor’s degrees in cement tech- For Small Professional Ofﬁce or Home Ofﬁce nology, energy production technology and maritime technology.  Maritime education has long Free Design Assistance been of interest to Northwestern  Customization - Sizes & Finishes Michigan College in Traverse City,  Professional Installation which operates one of the coun-  Contemporary or Traditional try’s six federally authorized maritime academies. Currently, under an arrangement with Ferris State University in Big Rapids, students who earn an associate of applied science degree at the maritime academy also can earn a bachelor’s degree in business administration from Ferris. NMC President Tim Nelson said

the college could offer a technical FEATURING baccalaureate degree focused on the maritime industry that would require fewer credit hours than under the arrangement with Fer- 6287+),(/'ō752< 129,ō/$.(6,'( ou dream it. We make it happen in concrete. it happen in concrete. make We it. ou dream ris, saving students money and *5$1'5$3,'6 Y [4 Charter Schools in 2012. Precast is the perfect alternative for a fast, durable and aesthetically pleasing school.] [4 Charterdurable is the perfect for a fast, Schools in 2012. Precast alternative www.kerkstra.com www.gormans.com time. jesper_C 20130204-NEWS--0016,0017-NAT-CCI-CD_-- 1/31/2013 4:39 PM Page 2

February 4, 2013 CRAIN’S DETROIT BUSINESS Page 17 Focus: Business Education Degrees: Change in law has colleges considering new programs ■ From Page 16 Like other colleges, NMC does- management. move up into and beyond manage- portunities rather than move n’t yet know specific staffing needs Cook plant officials worked with ment positions, he said. away. He is on the advisory coun- or other operational changes it We’ll build a Lake Michigan College to develop Staton, concrete operations and cil for the college’s concrete tech- might need to make to offer “ elements of its two-year associate’s materials engineer in the con- nology program. bachelor’s degrees. business program, as did Jackson-based struction field services division of “Quite often,” Staton said, “they “We’ll build a business mod- Consumers Energy Co. the Michigan Department of Trans- have a limited opportunity to el for it, as we do everything model for Rick Legleitner, principal em- portation, said an Alpena bache- move up in an organization in we offer,” Nelson said. ployee development consultant for lor’s program would help students northeastern Michigan unless With the Dec. 27 signing of (bachelor’s Consumers, said the potential from the region access local job op- they have a four-year degree.” the law, Michigan joined 21 bachelor’s degree should incorpo- other states that allow commu- programs), rate the focus of the associate’s de- nity colleges to offer bache- gree on technical aspects of power lor’s degrees. as we do generation, along with communi- Michigan’s four-year uni- everything cation, problem-solving and deci- versities have resisted these sion-making skills. moves, citing collaborations and we offer. He said the four-year degree agreements that already exist with ” could help Consumers find candi- two-year schools, and unneeded Tim Nelson, dates for first-level managerial po- competition. Northern Michigan College sitions “that require both the un- “It has the potential to damage derstanding of the business the extraordinary collaboration to pursue offering bachelor’s technically … and the ability to between our two-year and four- degrees than if nursing had been communicate and make critical year institutions that’s grown up included. But Hansen said the decisions.” over the years,” said Mike Boulus, legislation nonetheless helps make Lake Michigan College Presi- executive director of the Presidents four-year degrees more affordable dent Bob Harrison said the college Council, State Universities of Michi- and attainable for students in is looking at an gan. “We’re serving, on the cam- some fields where workers are energy-focused puses of the 28 community col- needed. degree that is leges, over 15,000 students in “All of these programs are in still in the plan- bachelor degree completion pro- direct response to local workforce ning phase. grams offered by the universities.” and industry demands,” he said. “All of this is Additional agreements help stu- For example, operators of the driven by our in- dents who want to transfer to a Donald C. Cook Nuclear Plant near dustry partners, university or earn credits there to- Bridgman in southwest Michigan so it would be us ward their associate’s degree, hope that a bachelor’s degree be- sitting down Boulus said. ing explored by Lake Michigan Col- with the power Harrison The Presidents Council will lege in Benton Township could plants, energy watch how the bachelor’s pro- help the plant fill vacancies creat- providers, saying, ‘What lines up grams unfold, he said. ed by retiring workers in the next best with your needs?’ and that Particularly controversial was several years. will drive the final curriculum the previous inclusion of nursing Bill Schalk, communications work,” he said. in the list of bachelor’s degrees manager at the plant, owned by Harrison said the degree could that two-year schools could offer Columbus, Ohio-based American not only train those entering ener- — an element Electric Power Co. Inc., said the gy fields but also retrain current ultimately nuclear industry faces the chal- workers. dropped to gain lenge of an aging workforce and “We recognize this is a big passage of the fewer people pursuing a career in change for the college,” Harrison legislation. the nuclear industry than when said, “and that’s why we’ll go The change plants were being built more than through a very deliberate process was unfortu- three decades ago. to make sure we do it right.” nate, but “the He said the two-year degree in Alpena Community College offers politics just energy production technology cur- an associate’s degree in concrete weren’t right to rently offered by Lake Michigan technology and is home to the get nursing in- College can give students the expo- World Center for Concrete Technology cluded,” said Hansen sure and understanding of the pro- — a training, education, research Mike Hansen, president of the cedures, standards and needs spe- and testing operation for concrete- Michigan Community College Associa- cific to a nuclear plant. But a related industries. The college had tion. four-year degree would help them been discussing a bachelor’s He said fewer colleges are likely advance into positions including degree arrangement with Ferris but now will evaluate whether to pursue that bachelor’s in concrete industry management or offer its own concrete technology degree, President Olin Joynton said. Other potential interests are energy production and maritime technology, the latter building off an associate’s degree in marine technology that the college began offering this year in conjunction with nearby Thunder Bay National Marine Sanctuary. The degree focuses on underwater robots that can explore, photograph and perform tasks. John Staton is a 1978 graduate of the Alpena concrete technology program who went on to earn a bachelor’s degree in civil engineering from Michigan State University. He said concrete technology “will teach you how to be a technician” who understands concrete and related materials and is proficient in, for example, testing and control- ling the quality of concrete in the field or laboratory. But “the culture is (that it takes) at least a bachelor’s degree” to 20130204-NEWS--0018-NAT-CCI-CD_-- 1/31/2013 5:09 PM Page 1

Page 18 CRAIN’S DETROIT BUSINESS February 4, 2013 Focus: Business Education CRAIN'S LIST: WASHTENAW COUNTY'S LARGEST StudentsFirst founder: EMPLOYERS Ranked by full-time employees Full-time Full-time Company employees employees Address Washtenaw County Washtenaw County Michigan needs to elevate Rank Phone; website Top local executive Jan. 2013 Jan. 2012 University of Michigan Mary Sue Coleman 28,777 27,766 1. president Ann Arbor 48109 teaching, empower parents (734) 764-1817; www.umich.edu Trinity Health Joseph Swedish 5,484 5,456 2. 20555 Victor Parkway, Livonia 48152 president and CEO Education reform pro- en a lot of time to talk about (734) 343-1000; www.trinity-health.org ponent Michelle Rhee, the nitty-gritty and the poli- Ann Arbor Public Schools Patricia Green 3,000 3,200 CEO and founder of cies. But I thought it was 3. 2555 S. State St., Ann Arbor 48104 superintendent Washington, D.C.-based important to really sort of (734) 994-2200; www.aaps.k12.mi.us lobby organization lay out what the vision is, U.S. government NA 2,911 B 2,797 StudentsFirst, will deliver what public schools can 4. 477 Michigan Ave., Detroit 48226 a keynote address at the look like, what we want (313) 226-4910; www.usa.gov Detroit Regional Cham- from the kid’s point of Eastern Michigan University Susan Martin 1,936 1,951 ber’s 2013 Mackinac Poli- view, from the teacher’s 5. 140 McKenny Hall, Ypsilanti 48197 president cy Conference in May. point of view, from the par- (734) 487-1849; www.emich.edu Rhee founded Stu- ent’s point of view. … Faurecia North America Michael Heneka 1,600 0 dentsFirst in 2010 after There’s a lot of misinforma- 6. 2500 Executive Hills Blvd., Auburn Hills 48326 president, North America (248) 409-3500; www.faurecia.com serving as school chan- Q&A tion out there. Part of the cellor of Washington, reason (for the book) is to State of Michigan Richard Snyder 1,458 1,399 governor D.C.’s public schools. Michelle Rhee, address issues head on, to 7. 3042 W. Grand Blvd., Cadillac Place, Suite 4-400, Detroit 48202 She’ll deliver a keynote StudentsFirst make it clear about what I (313) 456-4400; www.michigan.gov on the second day of the and StudentsFirst stand for Washtenaw County Verna McDaniel 1,329 1,314 May 29-31 conference, followed by a and why. 8. 220 N. Main St., Ann Arbor 48107-8645 county administrator question-and-answer session. What are your views on charter (734) 222-6850; www.ewashtenaw.org Rhee spoke with Crain’s about schools, alternative schools and Thomson Reuters Jon Baron 1,100 C 1,816 education, StudentsFirst and her school choice? 9. 7322 Newman Blvd., Dexter 48130 senior vice president and (734) 426-5920; www.thomsonreuters.com general manager, tax and views on Michigan’s public school I’m a big believer in choice; I accounting systems. think that families should always William Fileti 815 627 What do you plan to speak about at have choice. I feel that no family Integrated Health Associates Inc. 10. 24 Frank Lloyd Wright Drive, Lobby J2000, president and CEO the Mackinac conference? should ever feel like they’re Ann Arbor 48106-0446 I am going to talk about a few trapped in a failing school. And (734) 747-6766; www.ihacares.com things: One, about education re- every kid should have the option Ford Motor Co. Alan Mulally 789 805 form specifically in Michigan — to attend a high-performing 11. 1 American Road, Dearborn 48126 president and CEO what has been done, what needs to school. (313) 322-3000; www.ford.com be done … and why. I’m going to With that said, I also think that Truven Health Analytics Jonathan Newpol 730 715 talk a little bit about education re- the vast majority of parents in this 12. 777 E. Eisenhower Parkway, Ann Arbor 48108 executive vice president (734) 913-3000; truvenhealth.com form and the movement nationally, country, if you ask them what and put Michigan in that context. their ideal is, they’d say, “My ideal City of Ann Arbor Steve Powers 667 663 city administrator And I do think one of the most im- is to send my kids to a neighbor- 13. P.O. Box 8647, Ann Arbor 48107 (734) 794-6000; www.a2gov.org portant things is tying education hood, traditional public school more broadly to the economy and that is high-performing.” If you Edwards Brothers Malloy Inc. D John Edwards 630 425 14. 2500 S. State St., Ann Arbor 48104 president and CEO why we’ve got to care about educa- sort of look at it from that way, it’s (734) 769-1000; www.edwardsbrothersmalloy.com tion. Not in just terms of the impact not about creating a system of all that schools are having on kids to- charter schools or voucher-izing DTE Energy Co. Gerard Anderson 601 605 15. 1 Energy Plaza, Detroit 48226 chairman, president and CEO day, but what impact the quality of the entire system. (800) 477-4747; www.dteenergy.com our schools are going to have more I feel like that’s generally where Charles Howe 596 596 broadly on the economy and the people fall, and I think that’s not U.S. Postal Service 16. 1401 W. Fort St., Detroit 48233-9651 district manager, customer state. surprising to me that’s not what (313) 226-8678; www.usps.gov service and sales In terms of where the state people want to focus on. I think that Washtenaw Community College Rose Bellanca 560 561 needs to improve, we feel the need you can do both. You can focus on 17. 4800 E. Huron River Drive, Ann Arbor 48105-4800 president to focus a little bit more on our improving the traditional public (734) 973-3300; www.wccnet.edu first two pillars, one which is ele- school system, and at the same time Domino's Pizza Inc. Patrick Doyle 550 E 550 E vating the teacher profession. make sure that choices are available 18. 30 Frank Lloyd Wright Drive, Ann Arbor president and CEO There are a number of things with- for the families who want them, be- 48106 in that realm that still need to get cause one size is not always going to (734) 930-3030; www.dominos.com done. And the second pillar is em- fit all. We should be focused on not Ypsilanti Public Schools Dedrick Martin 540 640 superintendent powering parents. what type of school your kid is in, 19. 1885 Packard Road, Ypsilanti 48197 (734) 714-1210; www.ypsd.org How do you feel the Education but the fact your kid is in a high- Achievement Authority of Michigan performing school, of any kind. Lincoln Consolidated Schools Ellen Bonter 468 F 473 F 20. 8970 Whittaker Road, Ypsilanti 48197 superintendent plan is working out for the state? What’s the outlook for Students- (734) 484-7000; lincoln.k12.mi.us It’s far too early to tell. We think First in the coming year? that the legislation that has been We are working in 17 states Chrysler Group LLC Sergio Marchionne 454 393 21. 1000 Chrysler Drive, Auburn Hills 48326-2766 chairman and CEO passed is very strong. Part of what across the country right now; work- (248) 576-5741; www.chryslergroupllc.com we’re going to do in our 50-state re- ing aggressively on a number of Howdy Holmes 306 301 port card, and what we will do mov- bills across the country that focus Chelsea Milling Co. 22. 201 W. North St., Chelsea 48118 chairman, president and CEO ing forward is, once we’ll rate the on our three areas. And we’ll con- (734) 475-1361; www.jiffymix.com legislation and the quality of it. But tinue to really mobilize and orga- Con-Way Inc. Douglas Stotlar 302 297 in future years, we will also rate the nize our membership. We think 23. 2211 Old Earhart Road, No. 100, Ann Arbor 48105 president and CEO state on how it is doing on imple- that the power of StudentsFirst in (734) 757-1444; www.con-way.com mentation — whether the laws that the movement is on our numbers. Black & Veatch James Coyle 256 242 are being passed are having the de- And it’s about getting everyday peo- 24. 3550 Green Court, Ann Arbor 48105 senior vice president sired impact because they are being ple to engage in this dialogue about (734) 665-1000; www.bv.com implemented well. reform and what needs to happen. Chelsea School District Andrew Ingall 230 NA What about your new book, Radical: So we’re very excited about that. 25. 500 Washington St., Chelsea 48118 superintendent Fighting to Put Students First? What’s In Michigan, in particular, we (734) 433-2200; chelsea.k12.mi.us the main focus and what are some of will work with legislators to kind This list of Washtenaw County employers encompasses companies headquartered in Washtenaw, Oakland, Wayne, Macomb or Livingston counties. the things you hope people take away of figure out how to move that C- Number of full-time employees may include full-time equivalents. It is not a complete listing but the most comprehensive available. Crain's estimates from reading it? minus up. … We think that given are based on industry analysis and benchmarks, news reports and a wide range of other sources. Unless otherwise noted, information was provided by Well, the book has two parts. The the momentum in the state, given the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. Actual revenue first is autobiographical and it’s the commitment by both the gover- figures may vary. NA = not available. sort of about my experiences in ed- nor and legislative leaders, that it B As of Sept. 30, 2012. ucation reform, and kind of to walk is, in our opinion, a state to watch C Thomson Reuters sold its health care division in June 2012 to Veritas Capital. It is now called Truven Health Analytics. D people through why I have the and one of the states that could Edwards Brothers Malloy was formed when Edwards Brothers Inc. and Malloy Inc. merged on Feb. 6, 2012. E Corporate only. views that I have. … The second quite easily sort of become what F Figures are FTE counts from the Center for Performance and Information. part is really about what things we think is the model state for the can look like moving forward. In rest of the nation. LIST RESEARCHED BY BRIANNA REILLY education reform today, we’ve tak- — Ryan Felton 20130204-NEWS--0019-NAT-CCI-CD_-- 1/31/2013 4:41 PM Page 1

February 4, 2013 CRAIN’S DETROIT BUSINESS Page 19

CRAIN'S LIST: LIVINGSTON COUNTY'S LARGEST EMPLOYERS Ranked by full-time employees January 2013

Company Full-time employees Full-time employees Michigan Worldwide Address Livingston County Livingston County employees employees Rank Phone; website Top local executive Jan. 2013 Jan. 2012 Jan. 2013 Jan. 2013 Type of business Citizens Insurance Co. of America Paul Mueller 850 850 850 NA Property and casualty insurance 1. 645 W. Grand River Ave., Howell 48843 regional president (517) 546-2160; www.hanover.com

Livingston Educational Service Agency Dave Campbell 639 639 639 639 Educational service agency 2. 1425 W. Grand River Ave., Howell 48843 superintendent (517) 546-5550; www.livingstonesa.org

Brighton Area Schools Greg Gray 600 550 600 NA Public school system 3. 125 S. Church St., Brighton 48116 superintendent (810) 299-4000; brightonk12.com

Trinity Health Joseph Swedish 593 610 25,231 58,014 Health care system 4. 20555 Victor Parkway, Livonia 48152 president and CEO (734) 343-1000; www.trinity-health.org

State of Michigan Richard Snyder 590 543 45,236 NA State government 5. 3042 W. Grand Blvd., Cadillac Place, Suite 4-400, Detroit 48202 governor (313) 456-4400; www.michigan.gov

Howell Public School District Ronald Wilson 533 534 533 533 Public school system 6. 411 N. Highlander Way, Howell 48843 superintendent (517) 548-6200; www.howellschools.com

Livingston County Belinda Peters 483 478 483 NA County government 7. 304 E. Grand River, Suite 202, Howell 48843 county administrator (517) 546-3669; co.livingston.mi.us

Hartland Consolidated Schools Janet Sifferman 463 457 463 463 Public school system 8. 9525 Highland Road, Howell 48843 superintendent (810) 626-2100; hartlandschools.us

Pinckney Community Schools Dan Danosky 346 352 346 NA Public school system 9. 2130 E. M-36, Pinckney 48169 superintendent (810) 225-3900; www.pinckneyschools.org

Medilodge of Howell Inc. Shelly Petoskey 293 310 293 293 Nursing home 10. 1333 W. Grand River Ave., Howell 48843 administrator (517) 548-1900; www.medilodgeofhowell.com

This list of Livingston County employers encompasses companies headquartered in Washtenaw, Oakland, Wayne, Macomb or Livingston counties. Number of full-time employees may include full-time equivalents. Crain's estimates are based on industry analysis and benchmarks, news reports and a wide range of other sources. Unless otherwise noted, information was provided by the companies. Companies with headquarters elsewhere are listed with the address and top executive of their main Detroit-area office. Actual revenue figures may vary. NA = not available.

LIST RESEARCHED BY BRIANNA REILLY ■ An expanded version of this list can be purchased at crainsdetroit.com/lists.

CALENDAR TUESDAY $270 Michigan Chamber members, How Can Your Personal Brand Serve creasingly used in asset dispositions WOMEN’S FOUNDATION $295 nonmembers. Contact: Jennifer You? 3-5 p.m. Feb. 21. Commercial over Chapter 11 bankruptcy plans. FEB. 5 Goodin, (517) 371-7650; email: jgood- Real Estate Women Detroit. Learn to With Phillip Shefferly, bankruptcy [email protected]; website: develop or enhance your personal Small Business: Unlocked — Inside the FOCUSES ON ENTREPRENEURS judge, state of www.michamber.com. brand by leveraging your strengths Michigan; David CEO Mind. 8-10 a.m. Detroit Regional Join the Michigan Women’s Detroit Economic Club Luncheon. Chamber. With Foundation for a conference and experiences and aligning your Sherbin, senior 11:30 a.m.-1:30 p.m. With Peter Lösch- Carla Bailo, se- focused on brand with that of your company. vice president, er, president and CEO, Siemens AG. With Jill Jordan, general counsel, nior vice presi- encouraging Westin Book Cadillac, Detroit. $45 dent, research women to think founder, Get secretary and members, $55 guests of members, $75 Ahead by Getting and development- bigger about nonmembers. Contact: (313) 963-8547; chief compliance Nissan Americas. their email: [email protected]; web- Known. CREW officer, Delphi Au- Followed by tour businesses site: www.econclub.org. Detroit members tomotive PLC; of host location, and become will receive a John Bonadonna, Nissan Technical successful signed copy of director, business Center North entrepreneurs. GPS (Goals and Sherbin development, America, Farm- Entrepreneur – UPCOMING EVENTS Proven Strate- Chrysler Group LLC; and others. Glen ington Hills. $20 gies) for Success, Bailo You: A Day of Lunch with Gov. Rick Snyder. 11 a.m.-1 Oaks Country Club, Farmington Hills. chamber mem- published by talk Education and p.m. Feb. 11. Detroit Regional Cham- $25 ACG/TMA members, $45 non- bers, $50 nonmembers. Contact: Mari- Blaker Resources for Jordan show host and life ber. Includes a moderated question- members. Contact: anne Alabastro, (313) 596-0479; email: Women Entrepreneurs takes place coach Sallie Felton and others. Books [email protected]; web- www.acgdetroit.org. 8:30 a.m.-2:30 p.m. Feb. 13 at the and-answer session. MGM Grand De- will be available for sale to guests. $40 site: www.detroitchamber.org. Walsh College Troy Campus. troit. $45. Detroit Regional Chamber CREW members, $60 nonmembers. Capital Raise Meetup. 9:30-11 a.m. The keynote speaker is Lori Blaker, members only. Contact: Beverly Mad- Baldwin Public Library, Birming- CALENDAR GUIDELINES Macomb-Oakland University INCu- president and CEO, TTi Global, dox, (313) 596-0343; email: ham. Register by Feb. 15 or pay addi- bator. With Mike Brennan, business Rochester Hills. [email protected]; web- tional $5. Contact: www.crewde- If you want to ensure listing online commercialization and capital in- site: www.detroitchamber.com. troit.org. and be considered for print vestment adviser, Macomb-OU INCu- Tickets are $40. Economic Update. 7-9 a.m. Feb. 12. As- publication in Crain’s Detroit bator. Learn how to position your For more information, call 2013 Detroit Policy Conference. 8 sociation for Corporate Growth De- Business, please use the online early-stage company to qualify for Jacqueline Northrop at (313) 962- a.m.-4 p.m. Feb. 28. Detroit Regional troit, RMA Michigan. With Douglas calendar listings section of private funding. Velocity Collabora- 1920 ext. 204; email Chamber. With Dave Bing, mayor of Coté, U.S. chief market strategist, ING www.crainsdetroit.com. Here’s tion Center, Sterling Heights. Free. [email protected]; or visit Detroit; and Richard Florida, director, Investment Management. Glen Oaks how to submit your events: Contact: Joan Carleton, (586) 884-9324; www.miwf.org. Martin Prosperity Institute, University Country Club, Farmington Hills. $30 From the Crain’s home page, click email: [email protected]; web- of Toronto. MotorCity Casino Hotel. ACG members, $30 RMA members, “Detroit Events” in the red bar site: www.oakland.edu/macom- $75 DRC members, $125 nonmembers. members, $10 nonmembers. Contact: $50 nonmembers. near the top of the page. Then, bouinc. Contact: Contact: Beverly Maddox, click “Submit Your Entries” from (248) 557-6661; website: www.south- Detroit Economic Club Luncheon. (313) 596-0343; email: bmaddox@de- the drop-down menu that will fieldchamber.com. 11:30 a.m.-1:30 p.m. Feb. 13. With Jay troitchamber.com; website: www.de- appear and you’ll be taken to our Reduce Your Business Property Taxes Timmons, president and CEO, Nation- troitchamber.com. online submission form. Fill out and Maximize Incentives. 9 a.m.-2 p.m. al Association of Manufacturing. Dis- WEDNESDAY the form as instructed, and then Michigan Chamber Services. Learn cussion will focus on the role of manu- To Sell or Not to Sell? That’s the $363 click the “Submit event” button at FEB. 6 how to save taxes on personal proper- facturing in revitalizing the economy. Million (Section 363) Bankruptcy Question. 7-9:15 a.m. March 12. Asso- the bottom of the page. That’s all How to Ask for Referrals. 7:30-9 a.m. ty reporting, avoid property tax litiga- MotorCity Casino Hotel. $45 members, ciation for Corporate Growth Detroit, there is to it. Southfield Area Chamber of Com- tion, and navigate the appeal process. $55 guests of members, $75 nonmem- More Calendar items can be found merce. With Greg Peters, author of With Jeff Ammon, attorney, Miller, bers. Contact: (313) 963-8547; email: Turnaround Management Associa- the blog “The Reluctant Networker.” Johnson, Snell & Cummiskey PLC. [email protected]; website: tion, Detroit chapter. Panel discus- on the Web at IBM Building, Southfield. $5 chamber Walsh College – Novi Campus, Novi. www.econclub.org. sion of why the 363 sale process is in- www.crainsdetroit.com. 20130204-NEWS--0020-NAT-CCI-CD_-- 1/31/2013 4:46 PM Page 1

Page 20 CRAIN’S DETROIT BUSINESS February 4, 2013

Crain’s Job Front, College Top Talent Visit crainsdetroit.com/jobfront and crainsdetroit.com/toptalent to search for jobs, post a résumé or find talent. Job Front BUSINESS DIARY PEOPLE

ACQUISITIONS many, to acquire all assets and the related business of RTI Technologies Painters Supply & Equipment Co., Tay- N THE SPOTLIGHT Inc., York, Pa. I lor, acquired Potter Color and Supply, Alta Equipment Co., Wixom, was cho- International Bancard Corp., Cambridge City, Ind., a supplier of au- Clawson, has appointed Joseph tomotive refinish and industrial coat- sen by Hyster Co., Greenville, N.C., as ings. authorized dealer of Hyster lift trucks Valentic to the new position of The Eriksen Group Inc., a Birmingham in the Eastern Michigan market. A.E. Mourad Agency Inc., Madison CFO. Valentic retirement consulting firm, was ac- most recently quired by Arthur J. Gallagher & Co., an Heights, a group employee benefit in- insurance brokerage and risk man- surance agency, entered into a mar- had been a agement services firm in Itasca, Ill. keting agreement with Human Capital senior adviser with several Pillar Financial LLC, Waterford Town- LLC, Rochester Hills, which offers pay- Need growth When businesses face the organic demands national ship, acquired St. James Capital LLC, roll processing, human resource man- of growth, purchasing goods, or even to agement and support, and workers consulting capital? make payroll, Crestmark’s service and Bloomfield Hills, for an undisclosed amount. compensation insurance. firms providing innovative working capital solutions can be services for the answer. MOVES commercial CALL FOR NOMINATIONS Valentic banks Providing accounts receivable financing and The Engineering Society of Detroit, DMC Worldwide Advertising Inc. worldwide, after serving as vice asset-based lending to small- and mid-sized Southfield, is accepting nominations moved its marketing and sales office president in commercial lending for from 380 N. Old Woodward, Suite 175, businesses nationwide for over 16 years. for the ESD Alpha Awards for Innova- Citizens Bank, Troy. tion in Engineering and Technology. to 280 N. Old Woodward, Suite 105, Deadline: Feb. 28. Contact: Leslie Birmingham. Telephone: (313) 962- Valentic, 46, earned a bachelor’s Contact us today! Smith, (248) 353-0735, ext. 152; 2600. Website: www.dmcworldwidead- degree in accounting from Wayne email: [email protected]; website: vertising.com. State University and a master’s in Matt Dekutoski www.esd.org. financial economics from the www.crestmark.com University of Detroit Mercy. 888.999.8050 Anntreal Hemmingway-Smith STARTUPS CONTRACTS Step-Up Transportation, a bus service Forum Real Estate Group, Bloomfield for elementary and middle school stu- FINANCE dents, with an emphasis on preventing Township, was awarded the market- Bradley Kirkland ing assignment for 40700 Woodward bullying, 400 River Place, Unit 4112, De- to vice president, Do you know a local rising star? Ave., Bloomfield Hills, an office build- troit. Telephone: (313) 989-6273. business banking Crain’s ing owned by Woodhills Properties 20 in their 20s recognition program seeks Pure Decontamination LLC, 8405 As- division, Fifth young professionals who are making their marks in the region. LLC, Bloomfield Hills. bury Park, Detroit, offering crime Third Bank East- Nomination Deadline: Mahle Industries Inc., Farmington scene and cleaning services to busi- ern Michigan, February 4 Hills, entered into an agreement with nesses and the public. Website: Southfield, from NOMINATE NOW: crainsdetroit.com/nominate Robert Bosch GmbH, Stuttgart, Ger- www.puredecontamination.com. vice president, business banking, KeyBank, Ann Arbor.

Kirkland GAMING James Krygowski to director of security, MotorCity Casino Hotel, De- Kristen Veresh, now troit, from security manager. ® HEALTH CARE In Your Corner. Scott Nordlund to executive vice president for en- Krygowski terprise strategy Varnum is pleased to welcome and innovation development, Trinity Health, Livonia, Kristen Veresh to the fi rm. from senior vice president for strate- I gic growth, network and new venture Financing matters including asset-based development, Dignity Health, San and real estate loans Francisco. Letty Azar to vice president, corporate I Mergers & acquisitions transactions, development, Residential Home business and general corporate work Health and Residential Hospice, Madi- son Heights, from regional director, I In Your Corner. operations, Ciena Healthcare Manage- ment Inc., Southfield. Also, Barbara Green-McKissack to senior sales associate from marketing executive, Mo- bilexUSA Diagnostic Services, South- field, and Judi Rothschild to director, facility operations, from In-House Hospice & Palliative Care, Bingham Farms. MARKETING Eric Rossbach to creative director, The Quell Group, Troy, from design studio director, Big Communica- tions, Ferndale. SERVICES Mandy Schultz to operations manager, HireTEC, South- Rossbach field, from branch manager, Select Kristen Veresh Staffing, Warren. [email protected] I Metro Detroit I Grand Rapids I Kalamazoo I Grand Haven I Lansing Rebecca Bray to chief sales officer, Epitec Inc., Southfield, from executive vice president, sales and delivery. 20130204-NEWS--0021-NAT-CCI-CD_-- 2/1/2013 6:09 PM Page 1

February 4, 2013 CRAIN’S DETROIT BUSINESS Page 21 Unions: Change in law drives talks Cooper-Standard CEO looks ■ From Page 3 before the right-to-work laws be- to expire by May or June, are so “And our lawsuit is not actually before leap into new markets come effective.” far pretty routine. The association about what the law says. You could Nemeth estimates that since the handles management-side labor feasibly be in favor of right-to- law was signed, inquiries about contract negotiations for about 150 work and support the nature of BY ALLISON STROUSE “We will expand in Russia this opening or reopening contract talks of its nearly 600 member road con- our legal claims, about the right to CRAIN NEWS SERVICE year in a significant way,” Ed- are about double their usual volume struction companies statewide. be able to petition the government wards said. The site for Cooper- Jeffrey Edwards, Cooper-Stan- Standard’s first manufacturing from among the firm’s unionized “We’re going through those nego- and address the public body.” dard Holdings Inc.’s new CEO, clients, to 10 or so at any given time. tiations much as we would regard- Snyder’s office, meanwhile, has operation in that nation is still knows the value of plans. He being studied. Steven Fishman, partner and less of what happened in the (De- asked the state Supreme Court to made, and is pursuing, a 120-day chairman of the Workplace Law cember) lame-duck session (of the rule on the constitutionality of the Russia is just one of several plan after taking the top job at markets where the company is Group at De- Legislature),” he said. “There’s al- right-to-work law and to bypass the automotive troit-based Bod- ways an interest in getting contracts any action at the lower court level, looking to do business. products mak- “If we’re going to continue to man PLC, said done early, because even without arguing that a protracted court er last October, he, too, sees a RTW an early contract allows for case could be “very divisive and be successful and grow our busi- succeeding ness with the Korean OEMs, the surge in labor long-term financial planning. Once would not serve the interests of ju- James McElya, contract talks you get a deal done, you’re able to of- dicial economy.” Chinese OEMs, with the Japan- who retired. ese OEMs, then we need infra- among the fer a lot more clarity.” But attorney Kevin Carlson of Part one of firm’s private- Matt Lockwood, director of com- Royal Oak-based Pitt, McGehee, structure within those mar- that plan: kets.” and public-sec- munications at Wayne State, con- Palmer, Rivers & Golden PC said the Spend 45 days tor clients confirmed that union talks are ongo- unions’ open access claims, which Having a manufacturing pres- listening and ence in key countries is part of nected to right ing but would not discuss specifics arise largely from the Capitol be- learning. The Fishman to work, com- such as the union’s 10-year con- ing locked and closed to the public Edwards what Edwards sees as a three- former vice pronged approach to being a pared with his usual volume of ne- tract proposal. Parrish said the while right-to-work was under leg- president and general manager gotiations at this time of year. most recent negotiations last week islative consideration, is separate leader in the company’s field. of Johnson Controls Inc.’s Asia “It’s products, geography and The uptick, he said, includes re- were focused elsewhere. enough from the governor’s query business visited Novi-based newed interest in extending closed “We’ve been really busy dis- to proceed as its own case. customers,” he said. Cooper-Standard operations and It comes down to finding out shop arrangements, sometimes in cussing a number of details, like a customers throughout the contracts that don’t expire for a health care proposal we put for- what each region’s customers Two-track bargaining? world. need, he said. year or more. ward, and to be fair I think the ad- “That resulted with me going “Most of these different kinds of ministration is still digesting all of MEA President Steven Cook and “You look at the opportunities to nine countries, meeting with in Russia, you look at the oppor- contract talks are not meeting the that,” Parrish said last week. “(But) Kevin Harty — partner at the 12 customers and hundreds of light of day, though, because the we put it on the table a 10-year Lansing-based Thrun Law Firm PC, tunities in other Eastern Euro- Cooper-Standard employees and pean countries that are about unions don’t necessarily want to agreement that would basically par- which represents more than 500 lo- our largest shareholder,” said publicize that they are championing allel what we’ve been requesting.” cal school districts — both said dis- growth,” he said. “You look at the veteran of 28 years in the au- the different European cus- changes to their current contracts They still differ on compensa- cussions are cropping up tomotive industry. in order to (make sure) that their tion, with the administration seek- statewide about adopting new se- tomers that we do business with “You can’t run the place if you today, and it isn’t the same for union agency or security clause re- ing a 1 percent across-the-board curity clause contracts that exist don’t know what the products are mains contracted,” he said. annual increase plus “selective” or outside of standard collective bar- each.” and what the capital require- The firm has to start taking an merit pay increases of up to 1.5 gaining agreements. ments are,” he said. “The reason percent, while the faculty is hold- Cook said many have either individual approach with each Strategies you need to understand (this) is market, not assuming the prob- ing out for 2 percent annual in- reached the bargaining table with because you are responsible for Some contract proposals have creases plus the merit pay, he said. such proposals or plan to put them lems in North America are the setting the groundwork, the same as in Asia, he said. become public, however. The pay increase proposals cov- forward soon. strategy and changes to the strat- The American Association of Uni- er only the four years that were “These contract proposals for 10 “If you’re the leader in tech- egy.” nology, if you’re the leader in versity Professors chapter at Wayne previously under negotiations, years (for full collective bargaining Edwards and Cooper-Standard State University, which has been ne- Parrish said — nothing is yet pro- agreements are) an approach we’d your market, then why can’t you now are in the second part of the be a leader for each and every gotiating with the university since posed on pay over the remainder see as bad bargaining strategy. planning campaign: digesting last spring, asked last month to ex- of its 10-year contract proposal. That’s several lifetimes in financ- customer in each and every re- what he learned, developing gion?” he asked. “It isn’t going to tend its next contract to 10 years ing education,” he said. “But there strategies. One outgrowth of that from the previously requested are discussions among our locals to work to be the leader in two mar- The courts effort already is clear: Cooper- kets out of the world. You’re go- four. Its most recent three-year add one year, two years, or even Standard is going to Russia and pact expired July 31, and the uni- The Michigan Education Associa- five years, or to focus on a side con- ing to have to be able to produce intends to increase its business in five or seven different mar- versity has extended it to Feb. 17. tion is taking a different tack, call- tract that would require the ratifi- with automotive original equip- The AAUP-American Federation of ing on its local members to pro- cation by the school board.” kets if you’re going to be the ment manufacturers in several leader.” Teachers Local 6075, which repre- pose contract extensions or But Harty said the firm is general- other nations as well. sents more than 1,600 academic fac- introduce separate agreements ly advising its management clients From Rubber & Plastics News ulty and staff who work more than that preserve union security claus- to take a look at budget projections half-time at Wayne State, has not es if the union and local school or other management concerns, and yet received a response from the board can’t agree on other terms either barter those concerns for se- Call Us For Personalized university administration to its 10- for a broader contract. curity or steer clear of such talks. MARKET Service: (313) 446-6068 year contract length proposal, said The educators’ union also told “We represent districts all union President Charles Parrish. locals in December it was weigh- around the state, where opinions FAX: (313) 446-1757 The AAUP chapter at Western ing three possible litigation strate- and attitudes differ widely, and I PLACE Michigan University is also going for gies, including the one that several wouldn’t try to argue that one ap- E-MAIL: [email protected] length. At a special meeting Fri- union coalitions and councils proach is good for all of them,” he BUSINESS SERVICES INTERNET: day, it expects to discuss its union adopted last week by joining in the said. “But we do advise, generally, if www.crainsdetroit.com/section/classifieds security agreement proposal, American Civil Liberties Union of you’re going to take a look at those WANTED! drafted Jan. 23, which would ex- Michigan lawsuit against the state, agreements, then also look at your See tend the security clause past the its House of Representatives and own budget concerns (as a district) SUCCESS-MINDED INDIVIDUALS! Learn how! Crainsdetroit.com/Section/Classifieds end of its current labor contract in several public officials. and see if you can reach some kind To get your FREE " Success Secrets Revealed" CD, 2014 to September 2023. The Michigan State AFL-CIO, the of understanding with the union.” for more classified advertisements Please call 248-254-6405 Matthew Mingus, president of Building & Construction Trades Coun- Nemeth and Fishman also said that union chapter, could not be cil AFL-CIO and the union coalition management teams are considering reached for comment late last week. Change to Win all became addition- what needs of their own to bring to Cheryl Roland, executive director of al plaintiffs in a lawsuit the MEA the bargaining table in return for university relations, said the univer- and a few Democratic legislators security. But Robert Fetter, partner The Crain’s reader: sity had not received the proposal. brought in December in a new at Detroit-based Miller Cohen PLC The Michigan Infrastructure and complaint asking Ingham County which represents various local bar- 29.2% are with companies Transportation Association last month Circuit Judge William Collette to gaining units of the American Federa- signed a new pact with the Lansing- declare the law void based on vio- tion of State, County and Municipal Em- contemplating moving/ based Michigan Laborers’ District lations of the Michigan Open Meet- ployees, said bargaining for security Council on behalf of several private- ings Act, the First Amendment only goes to a point. expanding. Help them sector road construction contrac- and the Michigan Constitution. “The unions have been a lot tors that runs for 10 years instead of “Everyone wanted to file law- more interested right now in hav- ﬁnd you by advertising in the association’s standard five. suits over this, and all the unions ing longer labor contracts wherev- Mike Nystrom, MITA executive that are part of these federations er they can get them, but they’re Crain’s Real Estate section. vice president, said despite the re- were affected by this secretive also setting limits on just how cent new contract, he is not seeing process,” said John Canzano, part- much they will give away in order a surge of new talks with unions ner at Southfield-based McKnight, to get that,” he said. 313.446.6068 • FAX: 313.446.1757 hoping to beat the right-to-work McClow, Canzano, Smith & Radtke Chad Halcom: (313) 446-6796, E-Mail: [email protected] law. His negotiations on seven oth- PC, who represents the building [email protected]. Twitter: er pending labor contracts, all due and construction trades council. @chadhalcom 20130204-NEWS--0022-NAT-CCI-CD_-- 2/1/2013 6:59 PM Page 1

Page 22 CRAIN’S DETROIT BUSINESS February 4, 2013 Gaming: Charity parties face closer scrutiny as state wants in ■ From Page 1 wagered, with the remainder go- about finding a way to raise the their jurisdiction each month. ing to players. revenue the state derives from McMillin said complaints from Permanent charity poker rooms charitable gaming,” Brown said, cities in his district about the grow- — which numbered about 74 at last but the state gets licensing fees ing number of parties hosted in State suspends licenses count — aren’t licensed by the tied to the games, which go to cov- their neighborhoods prompted him gaming board unless they are also er regulation. to introduce the legislation. the gaming operator. To host a poker fundraiser, “It’s really just kind of unregu- Over the past year, state investi- charities must apply for a million- lated gambling, mini-casinos,” that at several poker rooms gations have led to suspension of aire party license with the gaming invites crime given the amount of charity licenses to host games at lo- board. The license is good for up to money changing hands, McMillin cations that are either breaking the four consecutive days, and non- said. He will likely reintroduce his The state has suspended li- Those include a recent owner- law or have fallen out of compliance profits can receive up to four li- bills again this session. censed millionaire parties at sev- ship change at Hamlin’s Pub with current regulations, namely a censes per calendar year at a fee of “I think something needs to be eral local poker rooms over the Rochester and a physical location moratorium imposed two years ago $50 per day. Approved suppliers done; what’s going on now is not past year in response to noncom- change by Rounders Charitable on new millionaire party locations who help operate the games pay a what was intended,” McMillin said. pliance with regulations or for Poker Room in Saginaw, the gam- and licensed suppliers or game op- $300 annual licensing fee. other unlawful activities. ing board said. erators. (See story, this page.) “If the way it finally comes down The Michigan Gaming Control Subsequent to the suspension But the popularity of charity is that they end up taxing the mon- Order from the top Board, which officially took over of licenses for charity games at gaming continues to grow, with ey the charities make, I think that’s New taxes/fees and legislated regulation of charity gaming in their venues, some of the poker about 2,400 Kiwanis, Rotary Clubs, wrong. These charities are doing regulation on millionaire parties October, suspended licenses for rooms have shut down. The clo- veterans associations, religious or- good works in these communities.” may not yet be a certainty, but new charity games at Snookers’ Poker sures and increased gaming ganizations, school foundations, The meetings between the gover- regulations on the games, the char- Room in Utica in late December, board scrutiny are making some booster groups and other nonprof- nor’s office and the Charitable Gam- ities they benefit and the operators following acknowledgement by charity poker room owners and its in Michigan actively hosting ing Association were not just to talk are. Last April, Snyder issued an the owner and some of the chari- operators nervous. millionaire parties or in the about raising fees, but also to dis- executive order to move regulation ties hosting games there that they “Any type of rules I can follow, pipeline to do so, according to the cuss how to eliminate “some of the of millionaire parties to the Michi- had exceeded the 15,000-chip per I try to follow them,” said George Michigan Gaming Control Board. unlawful actions that occur at these gan Gaming Control Board from day, per charity limit and kept Bozin, owner of the Big Beaver parties,” Snyder’s spokesman Kurt the Michigan Bureau of State Lot- those transactions off the books. Tavern Poker Room, which has op- Weiss said in an email to Crain’s .“It tery’s Charitable Gaming Division According to other poker room erated in the Troy tavern’s base- Taxes or fees? never got far enough to talk about effective in October. owners, Snookers’ had operated ment for nearly four years. Gov. Rick Snyder’s office in the where the additional revenue would The state lottery continues to charity games for as many as sev- “I’m not against regulation. ... fall told the gaming association it go, but that would have involved leg- regulate other forms of charitable en or eight nonprofits at a time, I’m all for making things better is contemplating new taxes or in- islative action anyway.” gaming such as bingo and raffles. making it one of the larger rooms for the players and the state ... creased fees on charities and/or State legislators introduced sev- It was “challenging” for the Lot- in the region. but we’re not casinos; we can’t poker rooms benefiting from the eral bills last year that would in- tery Bureau to ensure proper man- The move followed the Michi- spend thousands and thousands millionaire parties, said David crease regulations on millionaire agement and regulation of million- gan Lottery’s suspension earlier of dollars.” Brown, president of the Michigan parties, but none gained traction. aire games, given the proliferation last year of charity gaming at two “It is stressful,” Bozin said. Charitable Gaming Association, They included bills introduced of them, Weiss said. other locations: The Flying Aces “Every day you’re wondering if which represents nearly 400 chari- by Rep. Tom McMillin, R-Rochester “Transferring regulatory au- Casino next to the topless Flight you’re going to be open. I’ve got ties and a handful of charity poker Hills, that would allow municipali- thority to the Gaming Control Club in Inkster and the Shark Club people counting on me to follow room owners. ties to limit the number of million- Board, which is a quasi-law en- in Waterford Township, which is the rules and stay open.” “The governor’s office is talking aire parties that take place within forcement regulatory agency, re- now closed, said Rick Kalm, execu- Business for Four Aces Club LLC, sults in more effective oversight tive director of the gaming board. which operates inside Continental that protects the nonprofit or char- Most locations hosting charity Lanes in Roseville, has increased ity group,” he said. poker games are operating with- since Snookers’ closed, said own- The state gaming board plans in the law, Kalm said, but a few er Guy Hickey. within the next few weeks to begin are not. The gaming board does- The club has had visits from issuing new rules and directives for n’t license poker rooms, but it the gaming board, just as the Big charity gaming that will help pro- can weigh their actions against Beaver Tavern has, and hasn’t tect the charities intending to bene- the Traxler-McCauley-Law-Bow- had any issues so far, other than fit from the games and players, man Bingo Act, Liquor Control charity representatives needing while assisting the board in regulat- Commission regulations and crim- to have name tags so they’re easi- ing the games, said gaming board inal laws, and share information ly identified, he said. Executive Director Rick Kalm. with law enforcement through “I have no fear of them taking Those may imply changes from the criminal justice sub-unit cre- over, like I was doing something how they’ve operated in the past, ated within the board last year by wrong and they’re going to find he said. executive order, Kalm said. out,” said Hickey, who was man- The board is looking at how Suspensions of charity games ager of operations for Madison charity gaming is going to be con- at other neighborhood poker Heights-based automotive suppli- ducted and how it interprets the rooms have come as a result of er J.S. McNamara for 24 years until games, Kalm said. noncompliance with current reg- its closure in 2008. “We’re probably going to look ulations, Kalm said. — Sherri Welch at, are all those games necessary and what’s best for the charity?” munication from the Michigan least the past three years, said Presi- One area of concern is blackjack Gaming Control Board with our dent Scott Alan Miller, who is own- games, he said. group or the room operators. ... (The er/operator of www.detpokerz.com, “That’s where the charities real- board) is changing the rules with- which promotes poker events in ly lose money. ... I see issues with out advance warning or comment.” Michigan, in an email. IOUs from charities to the ap- Brown said the association is The association last year held proved locations in the thousands.” suspending charity gaming at events at the Big Beaver Tavern’s The gaming board has been vis- some venues with little notice to poker room in Troy and the Heidel- iting the permanent poker rooms charities, and more recently limit- berg Poker Room in Ann Arbor, around the state to ensure the 74 or ed to three the number of charities Miller said. so identified by the lottery bureau that can host games concurrently The association raised $11,500 in last year are still active. Kalm said at one location. 2012 through four poker tournament it’s also investigating tips on ille- Those actions compound the events between July and November gal activities at charitable gaming shortage of available locations 2012, representing about 7.5 percent events, which come through its brought on by the two-year morato- of its annual budget, Miller said. anonymous tip line, (888) 314-2682. rium on new locations, Brown said. “We would love to continue Flagrant violations of law at hosting events but have been most- some charity poker rooms may ly on waiting lists the last couple Charities’ concern call for suspension of charity gam- of years,” he said. The new regulations and discus- ing at those locations, Brown said. “We rush to get a license if an- sion of new fees come amid chari- “But there is some middle other charity fails to get theirs or ties’ frustration over increased ground here that is hurting the backs out of the agreement. ... regulatory efforts they say are charities,” he said. There are not enough rooms to thwarting their ability to raise “There is not a defined set of sanc- support the demand.” money. tions for a given set of violations, Sherri Welch: (313) 446-1694, “From our point of view, there’s (and) that would be good to have.” [email protected]. Twitter: a fair amount of regulatory uncer- The Band Boosters Association of @sherriwelch tainty,” Brown said. West Bloomfield has hosted charity Lansing correspondent Chris “There hasn’t been a lot of com- poker games to raise money for at Gautz contributed to this story. 20130204-NEWS--0023-NAT-CCI-CD_-- 2/1/2013 6:34 PM Page 1

February 4, 2013 CRAIN’S DETROIT BUSINESS Page 23 Pot: Company tests kiosks for medical marijuana purchases ■ From Page 3 transaction options besides cash, greatly reduce the need for cash for fiscal year ended Dec. 31, 2011, and secure record-keeping systems. transactions when patients reim- indicated that the company pro- “There were many questions Dispensaries are really having a tough burse expenses of caregivers who vides merchant services to approx- why we chose Michigan as a home “ provide medical marijuana. imately 40 medical dispensaries base rather than Colorado, Wash- time right now handling customer Patients who use MediSwipe’s and wellness centers throughout ington state or even California,” MediPay kiosks will identify them- California and Colorado through Friedman said in a news release. transactions because banks pretty much selves with their digital cards, its sponsor bank EMS. The compa- “Michigan was the perfect prov- then insert cash or other form of ny intends to grow “its merchant ing ground for our state-of-the-art won’t deal with them. payment into the machine to re- processing network of indepen- product lines for this industry and ” ceive a coupon voucher or pay- dent medical dispensaries and provided all the right elements for Chris Walsh, Medical Marijuana Business Daily ment card that can then be used wellness centers by continuing to success, including new and favor- for reimbursing expenses. provide credit card and cash ad- able laws as they relate to medicinal brings challenges with “security, MediSwipe said in a news release MediSwipe intends to charge fees vance services” in 19 states that marijuana operations and urban at- taking cash and storing it, trans- that it reached agreement with the of $1.50 to $3 per transaction, similar have existing or pending medical mosphere with high volume of pa- porting it to the bank.” first of several medical marijuana to ATMs, Friedman said. Armored marijuana laws. tients seeking alternative cash solu- Walsh said the industry badly dispensaries in the Detroit area to car services will collect the money, MediSwipe said in a news re- tions for payment of medications.” needs new methods and solutions offer in March a system that stores making it easier for merchants who lease that it provided more than MediSwipe did not return voice- to handle transactions. And ser- medical records of patients on have been hamstrung since July $500,000 in “elective medical con- mail and email messages from vices that aid with record-keeping servers housed in U.S. data centers. when payment associations and sumer financing” in December. It Crain’s Detroit Business asking for also have a market, he said. The record-keeping is compliant large credit card processors said reported 2011 total revenue of further comment or details on the “If you can do it in a legal way, with the Health Insurance Portabil- they would not accept transactions $60,818 with a net loss of $896,510, pilot sites in Michigan. you are probably going to have a big ity and Accountability Act, which regarding medical marijuana. compared with 2010 revenue of While he wouldn’t comment on market,” he said. Other companies protects confidential nature of med- The system is designed to pre- $31,717 with a net loss of $104,499. the effectiveness of MediSwipe’s in the United States have begun to ical information, the company said. vent fraudulent transactions, cut At the end of 2011, the company products and services specifically, offer kiosk services, but it appears Patients have their medical down on employee and potential reported approximately 375 mil- the editor of trade publication that MediSwipe’s system is the first records scanned and encrypted, theft, generate receipts for insur- lion common shares outstanding. Medical Marijuana Business Daily in Michigan for medical marijuana. then stored on cloud-based soft- ance companies and “begin to set MediSwipe formerly was named in Denver said MediSwipe certain- “The key will be whether pa- ware for $20 annually. MediS- up a proper infrastructure for the Cannabis Medical Solutions Inc., a ly has taken aim at the challenges tients will want all this informa- wipe’s system makes it convenient states to receive revenue from small publicly traded company faced by dispensaries. tion tracked. This system sounds for existing and potential patients these operations,” MediSwipe said. based in Ashland, Ore. “These kinds of services are def- like it has a lot of safeguards in of medical marijuana to access the The company said it expects sev- The company news release stat- initely needed,” said Chris Walsh, place that will help ease a concern information for themselves or per- eral thousand patients in the De- ed that Friedman, key executives who oversees content of the finan- from patients about their privacy.” mit authorized entities to access troit area to sign up for its digital and major shareholders will be cial news site for the medical mari- In a conference call with share- the records. Friedman said the sys- health management system by the based in Michigan. The annual re- juana industry. “Dispensaries are holders on Thursday, Friedman tem also protects dispensaries end of June, considering it reached port said the company’s manage- really having a tough time right said his company expects two busi- from the threat of law enforcement an agreement with a dispensary of ment team has three employees: now handling customer transac- ness opportunities that will be agencies seizing hard drives or at least a 1,000 patients and the Friedman, President Erick Ro- tions because banks pretty much tested in the Detroit area to be- physical files containing patients’ prospect of “at least 20 more dis- driquez and CFO Barry Hollan- won’t deal with them and credit come primary revenue producers records if their operations were pensaries in the general area each der. card companies have shut out the for MediSwipe: digital identifica- raided for violating the Michigan with 500 to several thousand pa- Matthew Gryczan: (616) 916-8158, industry, so what you really have tion cards for medical marijuana Medical Marihuana Act. tients each.” [email protected]. Twitter: a lot of times is an all-cash busi- users and kiosks made by Payteller MediSwipe also intends to in- MediSwipe’s annual report filed @mattgryczan ness model.” LLC in Boca Raton, Fla., for trans- stall Payteller-built kiosks modi- The all-cash model, in turn, actions at dispensaries. fied specifically for dispensaries to

Gilbert: Do purchases give leverage? ■ From Page 3

the asking price for the buildings has been leasing space from the they’ve been getting all the busi- was $2.25 million, according to real DDA. nesses to relocate, and they’ve estate information service CoStar Piraino reached a deal with the been buying them out. City Slick- Inc. The actual sales price of the DDA to terminate his lease early, er, for example, moved to the oth- two 18,000-square-foot-plus build- and closed the bar in December, er corner. Others closed. For a ings sold in October to 1000 Farmer with plans to move it to a nearby while, I was the last of the Mohi- Street LLC was unknown. site soon. cans.” The sale has a paper trail that “The DDA told me that the plan Also on the block is the National leads to Gilbert because 1000 is to knock the structure down,” he Theater, a historic structure Farmer Street LLC is registered said. owned by Phoenix Group LLC, a com- to Jim Ketai, who heads up real Bob Rossbach, a public relations pany controlled by developer estate purchases for Gilbert consultant working for the DDA, Melvin Washington. through Bedrock Management Inc., said the DDA did approve spend- A message was left for Washing- the entity that Ketai and Gilbert ing money on an environmental ton Friday afternoon by Crain’s. co-own. assessment on the parking struc- Gilbert’s two Sachs Waldman “We have nothing to report at ture on Monroe Street that has building acquisitions add to his this time,” Paula Silver, vice presi- been closed since the DDA took ever-growing portfolio of build- dent of communications for Quick- over its ownership. ings. At the end of 2012, the Rock en Loans, wrote in an email short- “The DDA is contemplating a de- Ventures’ downtown Detroit real ly before this story first appeared molition” of the parking structure, estate investments included 15 on a Crain’s blog Thursday. Rossbach said Friday. “The envi- buildings totaling 2.6 million George Fishback, treasurer and ronmental assessment would be a square feet of commercial space, member of the board of directors step toward demolition.” and three parking structures for a for Sachs Waldman, declined to Piraino opened Pulse in 2005 combined 3,500 parking spaces. comment for this story. when the Greektown Casino-Hotel Gilbert has shown his real estate The Sachs Waldman buildings owned the structure, and then con- plan on multiple occasions at pub- are not the only purchases on the tinued to lease space in the struc- lic appearances. block, sources have told Crain’s. ture after the Detroit-based Sterling That plan includes bringing in Other deals are closed or pend- Group owned the building. Piraino national retailers like Apple as well ing on a parking structure on Mon- signed a new lease with the DDA as others, such as a walk-up gro- roe Street owned by the Detroit roughly three years ago when the cery store. Gilbert’s plan also in- Downtown Development Authority quasi-governmental group bought cludes using alleyways behind the and also the National Theater at the structure. buildings in his portfolio on Wood- 128 Monroe. The DDA struck a settlement in ward Avenue. The Downtown Development December with Piraino in which it Kirk Pinho: (313) 446-0412, kpin- Authority has been striking deals paid him to terminate his lease [email protected]. Twitter: with tenants in the street-level re- early; he declined to give the @kirkpinhoCDB. Deputy Manag- tail space, said Tony Piraino, amount. ing Editor Daniel Duggan con- owner of the Pulse Lounge, which “Since the DDA owned it, tributed to this story. 20130204-NEWS--0024,0025-NAT-CCI-CD_-- 2/1/2013 5:46 PM Page 1

Page 24 CRAIN’S DETROIT BUSINESS February 4, 2013

Revstone unravels Revstone: Supplier chief faces federal probes, eager creditors ■ From Page 1 bursement of company money. The accountant turned industri- LARGEST CREDITORS alist and horse breeder remains Acquisition trail led many to bankruptcy, court Revstone Industries LLC’s largest chairman of what’s left of his Revs- creditors in its Chapter 11 filing: tone companies — a small portion Years before Revstone Industries which the company said would cuit Court and U.S. District Court in the of the transportation division is not Boston Finance Group LLC, in bankruptcy, according to the LLC existed, George Hofmeister post $75 million in revenue in 1998. Eastern District of Michigan between Clearwater, Fla.: $33.3 million company — as the bankruptcy and left his position as a corporate tax The company was a patchwork Hofmeister on one side and Gruits Schoeller Arca Systems Inc., government investigation play out. specialist at PricewaterhouseCoop- of several acquisitions, including and Fuhrman on the other. Skokie, Ill.: $10 million Hofmeister declined to be inter- ers LLC to buy distressed assets. Carron & Co. in Inkster, two stamp- Hofmeister accused Gruits and GE CF Mexico SA de CV, viewed, as did Myra Moreland, But, as with Revstone, many of ing businesses from MascoTech Inc. Fuhrman of using Trans-Indus- Mexico City: $8.8 million president of Revstone. the acquisitions ended in bank- and another from ITT Automotive. tries as their personal piggybank, SPC Supply Inc., Warwick, R.I.: In an emailed statement, Revs- ruptcy and litigation. Hofmeister also was the princi- according to media reports. $8.52 million tone as a company declined to dis- Hofmeister acquired his first pal of ACI’s parent company, Lex- Hofmeister appeared again on JMP Industries Inc., Cleveland: cuss the allegations against companies, Ohio-based Alliance Ma- ington, Ky.-based American Com- the Detroit buyout scene when he $8 million Hofmeister but said several of its chine Inc. and T & W Stamping, in mercial Holdings Inc. The holding acquired auto parts maker AEC Jeffrey Owen & Palm Marketing business units have near-term via- 1987. company was expected to post Holding Corp. out of bankruptcy Ltd., Morenci: $3.3 million bility tied to automaker contracts In 1991, he founded EWI Inc. in revenue of $400 million in 1998, with a $12 million bid in 2004. Comvest Capital II LP, West unrelated to the bankruptcy. suburban Cleveland. Through a se- according to media reports. Revstone was created in 2008, af- Palm Beach, Fla.: $2.6 million ries of acquisitions, it grew to post In 2002, American Commercial ter Hofmeister merged existing die Dexter Foundry Inc., Fairfield, Asset distresses revenue of $109 million in 1994. filed Chapter 7 bankruptcy. cast businesses with new acquisi- Iowa: $1.85 million During that time, the company In 2003, Hofmeister joined Dan tions, including Texas Die Cast Inc., Since the early 2000s, Hofmeister Patrick O’Mara, Ionia: $1.4 million has attempted to turn around sev- acquired Hogan Group in Fraser Fuhrman, a former vice president Scott Products and Metavation LLC. eral distressed companies he ac- for $40 million and a commercial of strategic planning at Mas- The company acquired MPI LLC, Thule Holding Inc. and Thule quired to form Revstone. truck cab stamping operation in coTech, and William Gruits, who Aarkel Tool & Die Inc., Contech Cast- Towing Systems LLC, Seymour, Conn.: $1 million But many suffered from bad sup- Orrville, Ohio. But by 1996 EWI held a position similar to ings LLC, 4Slides, Burlington, ChML ply contracts that made it difficult was seeking Chapter 11 in U.S. Fuhrman at GE Capital LLC, to and another Metavation plant in Nexteer Automotive Corp., Saginaw: $841,359 to generate a profit, two unnamed Bankruptcy Court for the North- form FGH Capital LLC, a private eq- 2009. The streak continued into sources confirmed to Crain’s in ern District of Ohio. uity firm in Rochester. 2010 with the buyouts of Fairfield Kerry Capital Advisors Inc., previous interviews. Separate deals overseen by The firm completed a few deals, Castings and Contech Forging (later Boston: $722,600 Beginning in March 2010, Rev- Hofmeister from 1995 to 1997 led to buying Soberay Machine & Equipment named Greenwood Forgings LLC). Phare Capital, New York City: stone and some of its holdings en- his recognition as a finalist in Ernst Inc. in Akron, Ohio, and Trans-Indus- Revstone became 29 plants and $710,000 tered into six loans with Boston Fi- & Young LLP’s Entrepreneur of the tries of Indiana Inc. in Marion, Ind. offices in the U.S., Canada, Mexi- Cabot Properties Inc., Boston: nance. The loans included Year awards in 1997 for his work as But FGH disbanded in 2004. The co and Costa Rica. It projected $669,123 $4 million to Revstone companies chairman and CEO of Troy-based end of FGH resulted in a series of revenue of $600 million for 2011. General Motors Co., Detroit: U.S. Tool and Engineering LLC and American Commercial Industries Inc., civil lawsuits in Oakland County Cir- — From Crain archives $618,183 $6 million to Spara LLC, among others. All the loans carried a 20 per- porate controller for Revstone In- cent interest rate. dustries, was deposed in Traverse By January of last year, Revs- City and verified the complex cor- tone couldn’t, or didn’t, make its Hofmeister took a side trail breeding race horses porate structure. payments and was sued by Boston The structure looks like this, ac- in Grand Traverse County Circuit In the midst of a career buying property that year. cording to various court docu- Court for failure to pay on $23.2 mil- distressed assets, George He put the property for sale in ments by Revstone and Boston Fi- lion in loans, plus late fees. Hofmeister entered the world of 2001 for $60 million — which at the nance: At the top are three After entering into default on horse breeding. time made it one of the most ex- irrevocable trusts under the some of those loans, Revstone Hofmeister bought a 2,000-acre pensive properties in the U.S., ac- names of Hofmeister’s children, faced even higher interest rates of horse farm, complete with a cording to Forbes. The home later Megan, Scott and Jamie. In the 25 percent to 226 percent. During 35,000-square-foot mansion, 19 went on the market for $40 million, corporate structure, the trusts the case, Revstone failed to meet other homes and 30 barns in but it wasn’t sold and Hofmeister own Lexington, Ky.-based Ascalon court-ordered payment deadlines, Paris, Ky., for an undisclosed COURTESY OF HOFFMAN still owns the property. Enterprises LLC, which in turn owns according to Boston Finance mo- price in 1997. INTERNATIONAL PROPERTIES INC, In the 2003 book Horse of a Dif- the Revstone Industries holding tions, and objected to fees associat- In 1998, he acquired a majority George Hofmeister’s Highland Farms ferent Color: A Tale of Breeding company and the various plants ed with the loans from Boston. interest in the Lexington, Ky.- in Paris, Ky. Geniuses, Dominant Females, and and businesses under the parent. Revstone said it was the victim based Vinery Ltd. horse farm. In trainer, claiming he unnecessari- the Fastest Derby Winner Since of predatory lending, and last April March of that year, he bought the ly made an additional payment to Secretariat, author Jim Squires Trust transfers 2 Revstone attorney Nicole Graf, breeding rights to a colt named the horse’s owner to retire it early characterized Hofmeister as an partner at Traverse City-based Real Quiet for $1.1 million and for stud because the trainer had industrialist looking to score Some of the details of Hofmeis- Brandt Fisher Alward and Pezzetti PC, five stallions, according to horse not disclosed that the horse al- riches in the “money-devouring” ter’s intertwining of assets were de- filed a claim against “outrageous” racing website bloodhorse.com. ready had a career-ending injury. industry of race horses. tailed over the course of a 2001 con- interest rates, according to a usury Months later, Real Quiet won Eastern Kentucky District Court “Having made his fortune buy- tract dispute — which is ongoing. defense filed with the courts. the Kentucky Derby and the Judge Joseph Hood dismissed the ing up troubled manufacturing In that dispute, Limbright v. The motion got a denial and Preakness Stakes. He lost the 1998 firms and setting them straight, Hofmeister, Judge Karl Forester of scant sympathy one week later case in 2002, according to blood- Belmont Stakes by a nose — win- horse.com. Hofmeister started at the factory the U.S. District Court, Eastern Dis- from Grand Traverse Circuit Judge trict of Michigan concluded that Philip Rodgers Jr., who noted that ning would have made him the Real Quiet sired 15 stakes win- end of the horse business — land first Triple Crown winner since ners that earned $18.1 million and breeding,” Squires wrote. Hofmeister had drained assets Revstone had the benefit of negoti- from the trusts to avoid paying a ating the loans with “the benefit of 1978. over their careers, according to “Still short of fifty (years old) and Hofmeister charged a $25,000 the horse racing site. flush with assets, the buyer of sec- $1.2 million judgment. However, counsel” before he ordered the Hofmeister’s lawyers continue to company to pay all loans and fees stud fee for the horse after it re- It’s unclear whether Hofmeis- ond-rate companies had decided file appeals to the decision. totaling $26.7 million. tired in December 2000, according ter owned any of Real Quiet’s off- he wanted to be a seller of first- The case stemmed from the sale “Was your client unable to do to bloodhorse.com. As many as 201 spring. rate horses, which to him seemed of Ypsilanti-based Performance the math at the time that your horses were bred from Real Quiet He sold his stake in the Vinery to come only from massive, metic- Plastics Inc. to a Hofmeister hold- client signed the loan? Or like a — which could have netted horse farm in 2000, according to ulously manicured horse farms heroin addict, your client was so Hofmeister up to $5 million in fees. bloodhorse.com, and opened heavy with overhead.” ing, Innovating Coating Technologies desperate for money he just agreed Hofmeister sued Real Quiet’s Highland Farms on the Paris, Ky., — Dustin Walsh Inc., in 2000 for $900,000. Hofmeis- to this, even though the math was ter and his wife, Kay, personally done?” Rodgers said in court, later filed suit against Hofmeister and expense payments between the scrutiny on Revstone Industries guaranteed the promissory notes adding, “or, your client suffers, Revstone subsidiary Metavation LLC pension funds. The suit alleges the from Boston Finance, which after for the purchase. Innovating Coat- perhaps, from an excess of opti- alleging $34.6 million in prohibited defendants engaged in prohibited months of unsatisfactory payment ing filed bankruptcy in 2001 and mism and went into a ridiculous loans Hofmeister made from em- use of approximately $12.1 million on the Grand Traverse County the Hofmeisters stopped paying loan transaction — which people ployee pension funds to companies from the Hillsdale Salaried Pen- Court ruling, began deposing vari- Performance Plastics owners like Boston Finance like.” within the Revstone organization. sion Plan and approximately $22.5 ous members of the Revstone orga- James and Henry Limbright. Revstone Industries immediate- According to the suit, filed Aug. million from the Hillsdale Hourly nization, unraveling a complex The court found that Hofmeister ly filed a motion for reconsidera- 9 in U.S. District Court, Eastern Dis- Pension Plan. ownership structure. Boston Fi- removed 84 percent of the trusts’ as- tion, but it was denied. trict of Kentucky, Hofmeister, on be- A criminal investigation was nance also sought to garnish pay- sets, including the transfer of three half of the plans, also used pension also launched by the U.S. govern- ments from Revstone customers, companies worth $54.9 million from More time in court assets to buy and lease property, ment into Hofmeister’s role, ac- including Volkswagen Group, Ford the trusts during mediation of the Last year got worse for Hofmeis- buy customer notes and pay advis- cording to court records. Motor Co. and Chrysler Group LLC. case between 2004 and 2007. ter, as the U.S. Department of Labor er fees, and allocate income and The new allegations put extra On Aug. 29, Jan Owczarzak, cor- See Next Page 20130204-NEWS--0024,0025-NAT-CCI-CD_-- 2/1/2013 5:47 PM Page 2

February 4, 2013 CRAIN’S DETROIT BUSINESS Page 25 Wings: New arena site www.crainsdetroit.com From Previous Page ■ EDITOR-IN-CHIEF Keith E. Crain the division. From Page 1 GROUP PUBLISHER Mary Kramer, (313) 446-0399 That court found that the trusts “A creditors’ committee is going to or [email protected] “Most of the infrastructure is magazine said. were used for “lavish personal ex- be appointed, and they’ll look to see if ASSOCIATE PUBLISHER Marla Wise, (313) 446- already there. You don’t need Rosentraub, who said he’s 6032 or [email protected] penses,” including the Hofmeister es- it was a fraudulent transfer,” he said. EXECUTIVE EDITOR Cindy Goodaker, (313) 446- new access to the freeways or viewed some preliminary inte- 0460 or [email protected] tate in Kentucky, according to a 2007 “They’ll make sure it wasn’t an at- widening the street,” he said. rior designs, said the building MANAGING EDITOR Jennette Smith, (313) 446- judgment. Hofmeister also used $4.5 tempt to take valuable assets out of 1622 or [email protected] Until site testing is done, the will be designed for basketball million from the trusts to purchase the bankruptcy process.” MANAGER, DIGITAL CONTENT STRATEGY Nancy real project cost won’t be in addition to hockey. He said Hanus, (313) 446-1621 or [email protected] two loan agreements, two notes and The unsecured creditors commit- DEPUTY MANAGING EDITOR Daniel Duggan, (313) known. the intent would be for college 446-0414 or [email protected] two mortgages, the court found. tee includes Boston Finance, “They’ll be putting up a very games and tournaments rather SENIOR EDITOR Bob Allen, (313) 446-0344 or Hofmeister also created several Schoeller Arca Systems Inc., lender [email protected] heavy building,” Rosentraub than luring the Detroit Pistons to other entities used as holding com- and Arabian horse breeder Patrick WEST MICHIGAN EDITOR Matt Gryczan, (616) 916- said, noting that arenas tend to the city from Auburn Hills. 8158 or [email protected] panies for other interests and assets O’Mara, Thule Holdings Inc. and the SENIOR EDITOR Gary Piatek, (313) 446-0357 or have more runoff from rain and The Ilitches’ disclosure of the [email protected] under the trusts. Hofmeister used Pension Benefit Guaranty Corp. melted snow than office or resi- arena district plan was done to SENIOR DESIGNER Jeff Johnston, (313) 446-1608 these entities to pay for “all of their In a statement to Crain’s, Revs- or [email protected] dential buildings, which makes support legislation to repur- living expenses,” including dona- tone said none of the allegations DATA EDITOR Brianna Reilly, (313) 446-0418, drainage infrastructure a key pose certain economic develop- [email protected] tions to a church and trips for Kay against Revstone Industries or WEB PRODUCER Norman Witte III, (313) 446- priority. ment funds in the city to pay off Hofmeister to Florida, China and Hofmeister affect the transportation 6059, [email protected] “All of that is very dependent potential bond debt on the pro- EDITORIAL SUPPORT (313) 446-0419; YahNica Iceland, the court found. division or its customers. Crawford, (313) 446-0329 on the environmental engineer- Chuck Tatelbaum, a partner at Revstone customers General Mo- ject. NEWSROOM (313) 446-0329, FAX (313) 446- ing. You don’t get the final price 1687 TIP LINE (313) 446-6766 Hinshaw & Culbertson LLP in Fort tors Co. and Chrysler Group LLC filed That law, approved in De- until you get into it,” he said. REPORTERS Lauderdale, Fla., and bankruptcy at- motions to be included in litigation cember, provides up to $12.8 Rosentraub said the “best million annually from the city’s Jay Greene, senior reporter: Covers health care, torney representing Detroit-based updates in the Boston Finance case insurance, energy utilities and the environment. Ally Financial in the bankruptcy cases and in the bankruptcy. case” construction timeline is Downtown Development Au- (313) 446-0325 or [email protected] 20-22 months. That schedule thority to retire bond debt. The Chad Halcom: Covers litigation, higher education, of Saab and American Suzuki, said Mike Palese, head of legal commu- non-automotive manufacturing, defense trusts can serve as roadblocks for nications for Chrysler, said in an would mean the Wings would cash was money the DDA col- contracting and Oakland and Macomb counties. play at Joe Louis Arena for two lected within its special taxing (313) 446-6796 or [email protected] investigators, but forensic accoun- email that the automaker is involved Tom Henderson: Covers banking, finance, tants usually find any wrongdoing. only to keep abreast of the proceed- or three more seasons. district to pay down Detroit Pub- technology and biotechnology. (313) 446-0337 or Helping keep the cost low is [email protected] “If you are using a trust to alleged- ings as a Revstone customer. lic Schools debt, which has since Kirk Pinho: Covers real estate and the city of ly manipulate business operations, GM declined to comment. that the Ilitches already own been retired. Detroit. (313) 446-0412 or [email protected] most of the land at the likely Bill Shea, enterprise editor: Covers media, the trust becomes just as vulnerable Revstone said contracts with the If $12.8 million is used annu- advertising and marketing, the business of sports, automakers are intact. arena sites, he said. ally to pay off 30-year tax-ex- and transportation. (313) 446-1626 or to investigation as a corporation or [email protected] individual,” Tatelbaum said. “You “No contracts have been pulled,” Rosentraub also said the are- empt municipal bonds — that’s Nathan Skid, multimedia editor. Also covers the Revstone said in the statement. “In na itself — a building he terms the repayment schedule on the food industry and entertainment. (313) 446-1654, can’t hide behind a trust if the courts [email protected] uncover fraudulent transfers.” fact, we continue to quote new busi- a “box” — likely will only be bonds used to finance some of Dustin Walsh: Covers the business of law, auto about half the project’s estimat- Comerica Park for the Ilitch- suppliers and steel. (313) 446-6042 or On Oct. 13, Boston Finance filed a ness and are currently launching ma- [email protected] motion with the Grand Traverse jor programs at Chrysler and GM and ed $650 million cost. owned Detroit Tigers — that’s Sherri Welch: Covers nonprofits, services, retail “You can get a box built, with theoretically $384 million in and hospitality. (313) 446-1694 or County Court for a receiver over continue to supply critical parts on [email protected] Revstone’s finances in fear that the highest volume vehicles at pretty impressive architecture, public aid for the project. How- LANSING BUREAU Chrysler, GM and Ford.” for just over $300 million,” he ever, that number likely would Chris Gautz: Covers business issues at the Capitol Hofmeister may shuffle assets to and utilities. (517) 403-4403 or [email protected]. avoid paying the judgment. The company also defends the via- said. be less as the principal and in- After several objections by Revs- bility of its automotive holdings not That would leave the remain- terest decreases over time. ADVERTISING tone lawyers, Judge Philips entered tied to the bankruptcy. der of the money to be spent on The $12.8 million could go up SALES INQUIRIES: (313) 446-6052; FAX (313) “These businesses were in bank- infrastructure, offices, hous- or down somewhat because of 393-0997 judgment in favor of a receiver Dec. 3. SALES MANAGER: Tammy Rokowski Hofmeister and his lawyers filed ruptcy/distress when purchased,” it ing, etc., that’s been pitched to the uncertain nature of as- SENIOR ACCOUNT EXECUTIVE: Matthew J. Chapter 11 bankruptcy protection said in the emailed statement. “Turn- make the area a district. sessed values, said Art Papa- Langan for Revstone Industries LLC in U.S. arounds are never simple or easy, but The Ilitches, who for years panos, vice president of board ADVERTISING SALES Christine Galasso, Dale have said they want a new Smolinski, Sarah Stachowicz Bankruptcy Court in Delaware imme- the technologies at companies like administration at the Detroit CLASSIFIED SALES (313)-446-0351 diately following the ruling. Contech and Metavation are worth venue for the Red Wings to re- Economic Growth Corp., which EVENTS DIRECTOR Nicole LaPointe the fight for our employees, suppli- place the aging city-owned Joe staffs the DDA for the city. DIRECTOR, INTEGRATED MARKETING Eric Cedo ers, customers and for the industry.” Louis Arena, announced plans in The $12.8 million is how SALES PROMOTION MANAGER Karin Pitrone Creditors line up Meanwhile, Revstone Transporta- December for a $650 million of- much the tax used to capture ASSISTANT EVENTS MANAGER Kacey Anderson SENIOR PRODUCER FOR DIGITAL/ONLINE A week before its Chapter 11 filing, tion is in talks to sell Metavation fice, residential and entertain- annually, he said. The DDA PRODUCTS Pierrette Dagg Revstone sold Southfield-based stam- LLC and a Contech plant, the comment district anchored by a stopped collecting it after 2010. MARKETING ARTIST Sylvia Kolaski per MPI LLC to New York equity firm pany confirmed. multi-use venue that would be As first reported by Crain’s SALES SUPPORT Suzanne Janik, YahNica Crawford Monomy Capital Partners for $90 mil- Metavation is a sole supplier of cer- the team’s new home. last month, the Ilitches have PRODUCTION MANAGER Wendy Kobylarz lion, according to a Grand Traverse tain engine and brake assemblies for They did not disclose any de- floated the idea of state owner- PRODUCTION SUPERVISOR Larry Williams CUSTOMER SERVICE County Court filing. unnamed GM vehicles, the company tails about a location or how ship of the arena via the Michi- MAIN NUMBER: Call (877) 824-9374 or write Revstone and Hofmeister used $7 said in an Oct. 22 filing in Grand Tra- the district would be financed, gan Strategic Fund, a proposal [email protected] million of the funds to pay off debts verse County Circuit Court. other than to say the Ilitch or- that neither the family nor the SUBSCRIPTIONS $59 one year, $98 two years. Out of state, $79 one year, $138 for two years. owed by its transportation division Revstone confirmed the Metava- ganization will make a “sub- state have been willing to dis- Outside U.S.A., add $48 per year to out-of-state holdings to Boston Finance, the com- tion sales are roughly $100 million. stantial investment” in the pro- cuss. rate for surface mail. Call (313) 446-0450 or (877) 824-9374. pany said in a statement to Crain’s. The company said Contech is Rev- ject. MSF ownership doesn’t nec- SINGLE COPIES: (877) 824-9374 It’s unclear what Revstone did stone’s focus moving forward and The Ilitches are thought to essarily mean taxpayer invest- REPRINTS: (800) 290-5460, ext. 125; expected to generated revenue of (717) 505-9701, ext. 125; or lindsay.wilson with the other $83 million. be looking to build on land they ment in the project. The fund, a @theygsgroup.com But with Revstone Transporta- $122 million in 2012. own in one of three locations: unit of the Michigan Economic TO FIND A DATE A STORY WAS PUBLISHED: tion not tied to Boston Finance, The creditors’ committee is ob- the area near the Ilitch-owned Development Corp., was used to (313) 446-0406 or e-mail [email protected] Hofmeister kept it out of bankrupt- jecting to both proposed sales. Fox Theatre, between Grand pay for $50 million in infra- CRAIN’S DETROIT BUSINESS IS PUBLISHED BY Meanwhile, Hofmeister and Revs- CRAIN COMMUNICATIONS INC. cy — for now. River and Cass avenues south structure site work for Comeri- CHAIRMAN Keith E. Crain Revstone’s non-bankrupt assets, tone Industries have been ordered of I-75, or west of Woodward Av- ca Park and Ford Field in the late PRESIDENT Rance Crain part of the transportation group, in- by the Delaware court to produce all enue north of I-75. The last loca- TREASURER Mary Kay Crain 1990s. Executive Vice President/Operations clude Southfield-based Contech Cast- documents that tie Hofmeister to tion, largely vacant land that The DEGC/DDA funding leg- William A. Morrow ings LLC; Southfield-based Metava- the trusts and Ascalon, and any Group Vice President/Technology, has been bought up in parcels islation (HB 5463) also includes Manufacturing, Circulation tion LLC; Gladewater, Texas-based compensation paid to Hofmeister in recent years, is the most language that gives the MSF Robert C. Adams from any Revstone company or affil- Vice President/Production & Manufacturing Texas Die Casting; and San Luis Poto- widely suspected site for the some oversight of the project. Dave Kamis si, Mexico-based Eptec. They employ iate. The court is also calling for district. Once the arena district, known Chief Information Officer more than 1,000. documentation of any loans or Paul Dalpiaz Rosentraub has said the dis- under the law as a “catalyst de- Chief Human Resources Officer Revstone Industries’ Greenwood transfers or assets from Hofmeister trict will be 35 acres, which velopment project,” has its ap- Margee Kaczmarek Forgings and U.S. Tool and Engineering or Revstone Industries. strongly suggests the I- provals, any amendments to it G.D. Crain Jr. Founder (1885-1973) also stayed out of its parent’s bank- A motion has been filed for the de- Mrs. G.D. Crain Jr. Chairman (1911-1996) 75/Woodward site, and his com- will require approval from the EDITORIAL & BUSINESS OFFICES: ruptcy but filed separate Chapter 11 position of Hofmeister, but a date ments about infrastructure Strategic Fund board. 1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000 bankruptcy earlier this month. The has not been set. were in the context of that loca- The quasi-public, nonprofit Cable address: TWX 248-221-5122 AUTNEW DET creditors’ committee filed a motion to Scott Eisenberg, managing part- tion. DEGC is the city’s umbrella CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 ner at Birmingham-based turn- is published weekly, except for a special issue the consolidate these bankruptcies in The Red Wings’ ownership economic development agency third week of August, and no issue the third week with Revstone Industries. around firm Amherst Partners LLC, last May selected Dallas-based of December by Crain Communications Inc. at providing staff, financing and 1155 Gratiot Ave., Detroit MI 48207-2732. However, Revstone Transporta- said Revstone was always in danger HKS Inc. as the arena architect, incentives for the various au- Periodicals postage paid at Detroit, MI and tion assets aren’t out of the reach of of struggling. additional mailing offices. POSTMASTER: Send according to Sports Business thorities, including the DDA, address changes to CRAIN’S DETROIT BUSINESS, creditors yet, said Daljit Doogal, part- “They’ve built the business by buy- Journal. The team and firm de- that do specific tasks, such as Circulation Department, P.O. Box 07925, Detroit, ner at Foley & Lardner LLP in Detroit. ing troubled assets, and they’ve al- MI 48207-9732. GST # 136760444. Printed in clined to confirm or deny the neighborhood, commercial and U.S.A. Doogal said the unsecured credi- ways been highly leveraged, and report. industrial redevelopment and Entire contents copyright 2013 by Crain tors’ committee in the bankruptcy that’s a challenging formula,” he said. Communications Inc. All rights reserved. HKS will design the venue investment. Reproduction or use of editorial content in any proceedings will look to make sure Dustin Walsh: (313) 446-6042, with Cambridge, Mass.-based Bill Shea: (313) 446-1626, manner without permission is strictly prohibited. Revstone didn’t take valuable assets [email protected]. Twitter: architectural firm Chan Krieger [email protected]. Twitter: out of the case with the separation of @dustinpwalsh NBBJ, the sports industry trade @bill_shea19 20130204-NEWS--0026-NAT-CCI-CD_-- 2/1/2013 6:22 PM Page 1

Page 26 CRAIN’S DETROIT BUSINESS February 4, 2013 RUMBLINGS WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF JAN. 26-FEB. 1

ization, the environment, percent increase in rev- Chairman Tim Manganello food safety and life sci- Bing: No Belle enue from home sales for and the company’s non- N.Y. java shop ences. the fourth quarter, which profit BorgWarner Founda- The challenge is co-spon- ended Dec. 31. The builder tion are donating $2 mil- sored by the GLEG and Isle lease, 50 reported $1.48 billion in lion to the University of Michigan Corps. home sale revenue, up from Michigan College of Engi- Starting today, applica- $1.17 billion in fourth-quar- neering for an endowment finds the right tions can be filled out at parks to close ter 2011. to fund research and gleq.org. Applicants will Ann Arbor-based food teaching in mechanical en- then have access to GLEQ early half of De- and water testing nonprofit gineering. coaches to help prepare troit’s city parks NSF International Inc. ac- The College for Creative brew in Detroit them for the submission of N will close in the quired Lima, Peru testing Studies dedicated the Da- their business plans. The spring as a result of the De- company INASSA Group LLC nialle and Peter Karmanos winners will be announced troit City Council’s inaction for an undisclosed amount. Graphic Design Studios in iz Rose, the co-owner 22 fundraising dinner fea- June 18 at an event in Lans- on a state lease of Belle Isle, Ypsilanti-based air recognition of a $1 million of downtown Detroit’s turing former Republican ing. Detroit Mayor Dave Bing cargo company National Air- gift from the Compuware L newest coffee shop, presidential hopeful Rick announced. lines is completing its move Corp. chairman and his the Roasting Plant, said she Santorum. Santorum will Fifty of the city’s 107 to Orlando, Fla. National wife. had no plans to bring the speak at the Troy Marriott Middle-schoolers’ big ideas parks will close, Bing said will relocate 44 of its 79 em- The General Motors New York City-based coffee to help raise money for the Tasked with creating a Friday. He said the council ployees. Foundation announced a $1 shop to Detroit. But interest Oakdale Academy, a Christ- city 150 years in the future, “looked a gift horse in the Marriott International million grant to Habitat for Humanity International from Dan Gilbert’s real estate ian school in Waterford a group of sixth-, seventh- mouth” when it didn’t vote Inc. ended its operation of for Detroit, Lansing and 10 unit, Bedrock Management, Township. and eighth-grade students on the proposed lease the Courtyard Detroit Farm- other American cities. persuaded her. Dohanyos said his wife presented some forward- agreement with the state. ington Hills. Marriott de- The Warren-based “We came here because a works at the school, so he is Gov. Rick Snyder then with- clined to comment, citing thinking ideas last week as Michigan Business and Pro- mutual acquaintance helping on promotion. But drew the lease proposal pending litigation involv- part of the 20th annual fessional Association has showed Dan Gilbert (a mar- when he contacted people in that would have allowed ing Marriott and the fran- Michigan Regional Future created a Small Business keting) video from the Man- print and broadcast media the state to operate Belle chisee for Courtyard De- City Competition, spon- Health Care Reform Guide hattan store,” said Rose, a trying to get some coverage, sored and organized by The Isle as a state park. troit Farmington Hills. A Detroit native. That view- he was rebuffed. “Either it and made it available at Engineering Society of Detroit. new operator has not been michbusiness.org ing was followed by a call was ‘he is a has-been’ or ‘I . Winning the top spot in announced. The Michigan Senate from Dan Mullen from Rock can’t stand that guy,’ ” Do- ON THE MOVE Monday’s competition was Vanguard Health Sys- approved legislation con- Ventures that was followed hanyos said. a team from St. John’s Luther- Marjorie Loeb was tems Inc., the Nashville- verting Blue Cross Blue by Rose traveling to Detroit. Tickets are $125; reserva- an School in Rochester Hills, named general counsel, se- based parent of the Detroit Shield of Michigan into a “We thought our next tions are due Friday. A spe- with the idea of a city based nior vice president and Medical Center, reported nonprofit mutual insur- concept was going to be in cial VIP reception for high- near a volcano, using steam secretary for Auburn shareholder net income of ance company. The bills Manhattan, but I was so er donors begins at 6 p.m. from the magma to power Hills-based Chrysler Group $12.2 million or 14 cents per will go to the House, where taken by what is going on in Ticket and sponsor infor- the city. Coming in second LLC. She replaces Holly share for the second quar- they await an uncertain fu- Detroit, with the invest- mation can be found at Leese, who intends to re- ter of its 2013 fiscal year, a ture. ment and enthusiasm Dan www.oakdaleacademy.com. place: Jain Temple of Farm- ington Hills; third place, Bir- tire, the company said. 22 percent drop from $15.7 Jury selection began Gilbert has created.” million or 20 cents for the ney K-8 Middle School in The University of Michi- in the fraud trial of invest- Rose said her coffee shop same period for fiscal 2012. ment manager John Brava- A Pure challenge Southfield; in fourth place, gan named Martha Pollack is known for its microroast- ta in Detroit federal court. St. Joseph School in Lake provost and executive vice ing and single-batch pours. Looking to combine so- president for academic af- Bravata is accused of mis- Orion; and in fifth place, St. The Roasting Plant cial good with the profits of fairs. Pollack, who had OTHER NEWS leading investors at Valentine School in Redford signed a seven-year lease capitalism, the Michigan Eco- been vice provost, replaces Southfield-based BBC Equi- Township. Detroit City Council Pres- with Bedrock at the First nomic Development Corp. has Phil Hanlon, now president ties. Crain’s Detroit Business ident Charles Pugh said he National Building. Rose announced the Pure Michi- of Dartmouth College. James Henley, a former was a media sponsor for the will not run for mayor and said Bedrock is not an in- gan Social Entrepreneur- plans to return to broadcast contractor with the Detroit event, and of the Future Public Library, was indicted vestor. ship Challenge. journalism. Pugh, a former City essay contest. on federal charges he She said the Detroit loca- The news came Thursday COMPANY NEWS reporter with WJBK TV 2, tion is already outperform- night at the 13th annual bribed a library official in Dan Gilbert’s Athens Ac- was elected in 2009 for a ing the New York stores. business plan competition 2007 and 2008 in an effort to quisition LLC withdrew its four-year term. For more on Rose and the put on by the Great Lakes En- BITS AND PIECES win a $1.5 million contract. offer to the board of Greek- The former Hotel Roasting Plant, see Nathan trepreneur’s Quest at the Bur- The Mary and Charles A. The University of Michi- town Superholdings Inc. to Pontchartrain is expected to Skid’s blog at ton Manor in Livonia. (For Parkhill Foundation for Spinal gan’s Stephen M. Ross acquire all remaining reopen this spring as a crainsdetroit.com. winners of the business plan Cord Rehabilitation will hosts School of Business and shares of the company. It Crowne Plaza outlet, The De- competition, see Page 10.) its annual Bocce Palooza Michigan State University’s now plans to negotiate di- troit News reported. The challenge will award fundraiser from 7-11 p.m. Eli Broad College of Business rectly with shareholders to Connection Point, a pro- What? Media bias? more than $50,000 to indi- Feb. 16 at Palazzo di Bocce, ranked Nos. 30 and 62, re- obtain the rest of the com- gram to help state compa- Publicist Franklin Do- viduals or teams that sub- Orion Township. Tickets spectively, among MBA de- pany. nies land contracts with hanyos says he ran into a mit the best plans for busi- are $120 and RSVPs are due gree programs worldwide General Motors Co. an- out-of-state and interna- buzz saw of indifference at nesses that combine by Friday. Contact: (734) in Financial Times’ Global nounced it will break tional customers, has be- best or media bias at worst sustainable social change in 953-1745; www.parkhill MBA Ranking 2013 survey. ground on a 138,000-square- come part of the Michigan in trying to publicize a Feb. such areas as urban revital- foundation.com. UM was 29th and MSU foot addition to its 450,000- Economic Development 77th in 2012. square-foot Global Power- Corp., under its Pure Michi- Gov. Rick Snyder train Engineering gan Business Connect port- asked the state Supreme Headquarters in Pontiac, the folio. Court to rule on the consti- Detroit Free Press reported. The Michigan Area tutionality of the right-to- As part of the $200 million Health Education Center, a work law he signed last investment, GM will shift Wayne State University pro- year and to bypass any ac- BEST FROM THE BLOGS about 400 jobs to Pontiac gram, selected the Greater tion at the lower court lev- from a lab at its Warren Detroit Area Health Council el. READ THESE POSTS AND MORE AT WWW.CRAINSDETROIT.COM/BLOGS Technical Center and leased to manage its Southeast Former Michigan offices in Wixom; Castle- Regional Center. Supreme Court Justice Di- UM: We’re not ‘catfishing’ Belle Isle? Give it up, Detroit ton, Ind.; and Torrance, The Southfield City ane Hathaway pleaded Calif. Council rejected a proposal guilty to bank fraud. Hath- The University of With Mayor Dave China’s Wanxiang for a Walmart outlet on away, who resigned last Michigan's“ athletic Bing's“ announcement Group Corp. won U.S. gov- Southfield Road. Many res- month from the court, department says it is Friday that the city of ernment approval to ac- idents objected to the plan could face up to 18 months not "catfishing" its Detroit is closing 50 quire the assets of A123 because of traffic concerns in prison. athletes. (The practice parks, that brings the Systems Inc., including its at the already-busy inter- of creating a fake social total to 57 that will plants in Livonia and Ro- section. Another objection media account to lure remain open in a city OBITUARIES someone into a false that once boasted 308. mulus. Wanxiang’s $256.6 was that the site plan called relationship.) Let's make it 56. million bid beat out a joint for the back of the store and Michael Novak, an en- bid from Milwaukee-based loading docks to face 12 tertainment attorney who ” ” Johnson Controls Inc. and Mile Road instead of away worked with many of De- Reporter Bill Shea’s “Shea’s Stadium” blog on the Reporter Tom Henderson’s blog about accounting, Tokyo-based NEC Corp. from public view. troit’s top radio and music business of sports can be found banking, venture capital and high tech can be found Bloomfield Hills-based Auburn Hills-based stars, died Jan. 27 after a at www.crainsdetroit.com/sheasstadium at www.crainsdetroit.com/henderson PulteGroup Inc. reported a 27 BorgWarner Inc. board heart attack. He was 57. DBpageAD_DBpageAD.qxd 1/25/2013 9:02 AM Page 1

congratulates the winners of Accelerate Michigan Innovation Competition, a $1 million business competition

With more than 300 Michigan companies vying for funding in 2012, 15 companies captured cash prizes. Top award winners were:

Grand Prize $500,000 Algal Scientifi c Corporation is a Plymouth, Michigan bio-technology fi rm pioneering high value sterile production of animal and human health and nutrition ingredients from algae. A complementary technology uses algae to recycle water and recover valuable nutrients and co-products from food industry process streams that currently incur high treatment costs. Second $100,000 nanoMAG LLC is developing bioabsorbable magnesium alloy (BioMg™) orthopedic implants that support the bone during healing and provide nutrients to promote bone regrowth, while degrading over time. By using an alloy of elements that are naturally found in the body, the BioMg™ implant can supply the temporary structural reinforcement needed while avoiding the complications associated with permanent metal alloy implants. Third $50,000 InPore Technologies Inc., a Michigan State University spinoff, is bringing to market its patent-protected mesoporous ceramic particle technology. A multi-function platform technology, its initial foci are on the application of Mezzopore™ additives for improving the performance of water purifi cation membranes as well as the application of Silapore™ additives that reduce the need for costly (and environmentally unfriendly) fl ame retardants.

The 2013 Accelerate Michigan Innovation Competition will be held Nov. 13 and 14 at The Westin Book Cadillac in Detroit. Go to www.acceleratemichigan.org for more information.

Read about these and dozens of other investment-worthy companies in Michigan through The New Michigan Deal, a special report on early-stage and high-growth companies across the state and the private equity and venture capital funds investing in them. Publishing March 11, 2013. For advertising information, contact Marla Wise at 313.446.6032 or [email protected]. To order your FREE copy, email [email protected] or call 313.446.6083.

PROUD SPONSORS: DBpageAD_DBpageAD.qxd 1/25/2013 9:34 AM Page 1

LEGAL NOTICE LEGAL NOTICE LEGAL NOTICE To merchants who have accepted Visa and MasterCard at any time since January 1, 2004: Notice of a 6+ billion dollar class action settlement. Si desea leer este aviso en español, llámenos o visite nuestro sitio web.

Notice of a class action settlement authorized by the U.S. &#'Wâa^dc#I]ZkVajZd[ZVX]XaV^b!l]ZgZedhh^WaZ!lâaWZ and taxpayer identification number, (3) the merchant that District Court, Eastern District of New York. WVhZYdcVcZhi^bViZd[dcZ"iZci]d[&d[i]ZbZgX]Vci¼h wishes to be excluded from the Cash Settlement Class This notice is authorized by the Court to inform you about Visa and MasterCard credit card dollar sales volume during (Rule 23(b)(3) Settlement Class), and what position or an agreement to settle a class action lawsuit that may affect i]VieZg^dY#EVnbZcihidbZgX]Vcihl]dÄaZkVa^YXaV^bh[dg authority you have to exclude the merchant, and (4) the you. The lawsuit claims that Visa and MasterCard, separately, Vedgi^dcd[i]Z>ciZgX]Vc\Z;jcYlâaWZWVhZYdc/ business names, brand names, and addresses of any stores and together with banks, violated antitrust laws and caused The money available to pay all claims, or sales locations whose sales the merchant desires to be excluded. merchants to pay excessive fees for accepting Visa and The total dollar value of all valid claims filed, and MasterCard credit and debit cards, including by: Note: OekYWddejX[[nYbkZ[Z\hecj^[Hkb[9^Wd][i The cost of settlement administration and notice, and any I[jjb[c[dj9bWii (Rule 23(b)(2) Settlement Class). Agreeing to set, apply, and enforce rules about merchant attorneys’ fees and expenses that may be approved by the fees (called default interchange fees); Court. EX`[Yj je j^[ i[jjb[c[dj# I]Z YZVYa^cZ id dW_ZXi Limiting what merchants could do to encourage their is: CWo (." (&')# Id aZVgc ]dl id dW_ZXi! hZZ/ Attorneys’ fees and expenses and money awarded to the class lll#EVnbZci8VgYHZiiaZbZci#XdbdgXVaa&"-%%"+'*"+))%# customers to use other forms of payment through, for representatives /;dgldg`YdcZi]gdj\]ÄcVaVeegdkVad[i]Z CdiZ/ >[ ndj ZmXajYZ ndjghZa[ [gdb i]Z 8Vh] HZiiaZbZci example, charging customers an extra fee or offering settlement by the district court, Class Counsel will ask the 8aVhhndjXVccdidW_ZXiidi]ZiZgbhd[i]Viedgi^dcd[i]Z discounts; and Court for attorneys’ fees in an amount that is a reasonable settlement. Continuing that conduct after Visa and MasterCard egdedgi^dcd[i]Z8Vh]HZiiaZbZci;jcY!cdiidZmXZZY&&#* changed their corporate structures. d[i]Z8Vh]HZiiaZbZci;jcYd[+#%*Wâa^dcVcY&&#*d[i]Z ;dgbdgZ^c[dgbVi^dcVWdjii]ZhZg^\]ihVcYdei^dch!k^hî/ lll#EVnbZci8VgYHZiiaZbZci#Xdb# The defendants say they have done nothing wrong. They >ciZgX]Vc\Z;jcYZhi^bViZYidWZ&#'Wâa^dcidXdbeZchViZ all of the lawyers and their law firms that have worked on the say that their business practices are legal and the result of XaVhhXVhZ#;dgVYYî^dcValdgìdVYb^c^hiZgi]ZhZiiaZbZci! competition, and have benefitted merchants and consumers. IF THE COURT APPROVES THE distribute both funds, and through any appeals, Class Counsel The Court has not decided who is right because the parties FINAL SETTLEMENT may seek reimbursement at their normal hourly rates, not agreed to a settlement. On November 27, 2012, the Court id ZmXZZY Vc VYYî^dcVa & d[ i]Z 8Vh] HZiiaZbZci ;jcY gave preliminary approval to this settlement. Members of the Rule Changes Settlement Class are bound d[ +#%* Wâa^dc VcY Vc VYYî^dcVa & d[ i]Z >ciZgX]Vc\Z by the terms of this settlement. Members of the Cash ;jcYZhi^bViZYidWZ&#'Wâa^dc#8aVhh8djchZalâaVahd THE SETTLEMENT Settlement Class, who do not exclude themselves by the request reimbursement of their expenses (not including the deadline, are bound by the terms of this settlement whether administrative costs of settlement or notice), not to exceed Under the settlement, Visa, MasterCard, and the bank or not they file a claim for payment. Members of both )%bâa^dcVcYjeid'%%!%%%eZg8aVhhEaV^ci^[[^chZgk^XZ defendants have agreed to make payments to two settlement classes release all claims against all released parties listed in awards for their efforts on behalf of the classes. funds: the Settlement Agreement. The settlement will resolve and release any claims by merchants against Visa, MasterCard I]Z Äghi ^h V ¹8Vh] ;jcYº · V +#%* Wâa^dc [jcY i]Vi HOW TO ASK FOR PAYMENT will pay valid claims of merchants that accepted Visa or other defendants that were or could have been alleged or MasterCard credit or debit cards at any time between To receive payment, merchants must fill out a claim form. in the lawsuit, including any claims based on interchange January 1, 2004 and November 28, 2012. >[i]Z8djgiÄcVaanVeegdkZhi]ZhZiiaZbZci!VcYndjYdcdi or other fees, no-surcharge rules, no-discounting rules, honor-all-cards rules and other rules. The settlement will also I]Z hZXdcY ^h Vc ¹>ciZgX]Vc\Z ;jcYº · Zhi^bViZY id WZ exclude yourself from the Cash Settlement Class, you will resolve any merchant claims based upon the future effect of Veegdm^bViZan&#'Wâa^dc·i]VilâaWZWVhZYdcVedgi^dc receive a claim form in the mail or by email. Or you may any Visa or MasterCard rules, as of November 27, 2012 and of the interchange fees attributable to certain merchants Vh` [dg dcZ Vi/ lll#EVnbZci8VgYHZiiaZbZci#Xdb! dg XVaa/ not to be modified pursuant to the settlement, the modified that accept Visa or MasterCard credit cards for an &"-%%"+'*"+))%# rules provided for in the settlement, or any other rules Z^\]i"bdci]¹>ciZgX]Vc\ZEZg^dY#º OTHER BENEFITS FOR MERCHANTS substantially similar to any such rules. The releases will not Additionally, the settlement changes some of the Visa and bar claims involving certain specified standard commercial MasterCard rules applicable to merchants who accept their Merchants will benefit from changes to certain MasterCard disputes arising in the ordinary course of business. cards. and Visa rules, which will allow merchants to, among other ;dg bdgZ ^c[dgbVi^dc dc i]Z gZaZVhZ! hZZ i]Z hZiiaZbZci This settlement creates two classes: things: V\gZZbZciVi/lll#EVnbZci8VgYHZiiaZbZci#Xdb# A Cash Settlement Class (Rule 23(b)(3) Settlement Class), Charge customers an extra fee if they pay with Visa or which includes all persons, businesses, and other entities MasterCard credit cards, THE COURT HEARING ABOUT that accepted any Visa or MasterCard cards in the U.S. at Offer discounts to customers who do not pay with Visa or THIS SETTLEMENT any time from January 1, 2004 to November 28, 2012, and MasterCard credit or debit cards, and A Rule Changes Settlement Class (Rule 23(b)(2) Settlement ;dgbWjn^c\\gdjehi]VibZZiXZgiV^cXgîZg^VidcZ\di^ViZ On September 12, 2013, there will be a Court hearing to Class), which includes all persons, businesses, and entities with Visa and MasterCard. decide whether to approve the proposed settlement, class that as of November 28, 2012 or in the future accept any counsels’ requests for attorneys’ fees and expenses, and Visa or MasterCard cards in the U.S. Merchants that operate multiple businesses under different trade names or banners will also be able to accept Visa or awards for the class representatives. The hearing will take MasterCard at fewer than all of the merchant’s trade names place at: WHAT MERCHANTS WILL GET and banners. United States District Court for the FROM THE SETTLEMENT Eastern District of New York LEGAL RIGHTS AND OPTIONS ''*8VYbVcEaVoV Every merchant in the Cash Settlement Class that files a valid 7gddànc!CN&&'%& XaV^blâa\ZibdcZn[gdbi]Z+#%*Wâa^dc8Vh];jcY!hjW_ZXi Merchants who are included in this lawsuit have the legal You do not have to go to the court hearing or hire an attorney. idVYZYjXi^dccdiidZmXZZY'*d[i]Z[jcYidVXXdjci[dg rights and options explained below. You may: 7jindjXVc^[ndjlVciid!VindjgdlcXdhi#I]Z8djgi]Vh merchants who exclude themselves from the Cash Settlement <_b[ W YbW_c je Wia \eh fWoc[dj$ You will receive Class. The value of each claim, where possible, will be based appointed the law firms of Robins, Kaplan, Miller & Ciresi a claim form in the mail or email or file online at: AAE!7Zg\ZgBdciV\jZ!E8!VcYGdWW^ch[ ndj ZmXajYZ ndjghZa[! ndj QUESTIONS? ;jcYlâaWZWVhZYdc/ can sue the Defendants for damages based on alleged conduct occurring on or before November 27, 2012 on ;dgbdgZ^c[dgbVi^dcVWdjii]^hXVhZIn re Payment Card The money available to pay all claims, ndjg dlc Vi ndjg dlc ZmeZchZ! ^[ ndj lVci id# >[ ndj Interchange Fee and Merchant Discount Antitrust Litigation, The total dollar value of all valid claims filed, exclude yourself, you will not get any money from this MDL 1720), you may: I]Z YZYjXi^dc YZhXg^WZY VWdkZ cdi id ZmXZZY '* d[ i]Z hZiiaZbZci# >[ ndj VgZ V bZgX]Vci VcY l^h] id ZmXajYZ 8Vaaidaa"[gZZ/&"-%%"+'*"+))% yourself, you must make a written request, place it in an 8Vh]HZiiaZbZci;jcY!VcY K^hî/lll#EVnbZci8VgYHZiiaZbZci#Xdb envelope, and mail it with postage prepaid and postmarked Write to the Class Administrator: The cost of settlement administration and notice, money no later than CWo (." (&') to Class Administrator, EVnbZci8VgY>ciZgX]Vc\Z;ZZHZiiaZbZci awarded to the class representatives, and attorneys’ fees and EVnbZci8VgY>ciZgX]Vc\Z;ZZHZiiaZbZci!E#D#7dm'*(%! expenses all as approved by the Court. EdgiaVcY! DG .,'%-"'*(%# I]Z lgîiZc gZfjZhi bjhi WZ E#D#7dm'*(% >c VYYî^dc! bZgX]Vcih ^c i]Z 8Vh] HZiiaZbZci 8aVhh signed by a person authorized to do so and provide all of EdgiaVcY!DG.,'%-"'*(% that accept Visa and MasterCard during the eight-month i]Z[daadl^c\^c[dgbVi^dc/&i]ZldgYh¹>cgZEVnbZci :bVâ/^c[d5EVnbZci8VgYHZiiaZbZci#Xdb >ciZgX]Vc\ZEZg^dYVcYÄaZVkVa^YXaV^blâa\ZibdcZn[gdb 8VgY >ciZgX]Vc\Z ;ZZ VcY BZgX]Vci 9^hXdjci 6ciîgjhi EaZVhZX]ZX`lll#EVnbZci8VgYHZiiaZbZci#Xdb[dgVcnjeYViZh i]ZhZeVgViZ>ciZgX]Vc\Z;jcY!Zhi^bViZYidWZVeegdm^bViZan Aî^\Vi^dc!º'ndjg[jaacVbZ!VYYgZhh!iZaZe]dcZcjbWZg! relating to the settlement or the settlement approval process.

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