20140303-NEWS--0001-NAT-CCI-CD_-- 2/28/2014 7:12 PM Page 1 ® www.crainsdetroit.com Vol. 30, No. 9 MARCH 3 – 9, 2014 $2 a copy; $59 a year ©Entire contents copyright 2014 by Crain Communications Inc. All rights reserved Page 3 Bhargava funds Dynamic Duggan: Help city pricing for company to tickets has its ups and downs invest in water, In Macomb, think lean energy deals First State Bank survives BY TOM HENDERSON Mayor hopes to tap biz expertise CRAIN’S DETROIT BUSINESS the fall Manoj Bhargava is at it again. The billionaire behind 5-Hour to change how government is run Energy garnered headlines in May 2011 BY AMY HAIMERL when Crain’s CRAIN’S DETROIT BUSINESS revealed he ayor Mike Duggan needs was the mys- some help. tery investor who put in LARRY PEPLIN M As Crain’s Newsmaker $100 million of the Year, he spoke to a of his own Gluten-free bakeries rise sold-out crowd of nearly 800 business money to to meet the demand executives last week and asked for their launch Farm- assistance. Specifically, he said he needs leaders ington Hills- Bhargava based Stage 2 who are willing to come in and teach Detroit city Innovations LLC, a private equity This Just In employees lean principles. firm established, according to “If your company has as one of its core skills the its website, “to accelerate the TechTown exec named to ability to tear apart a core process and measure the large-scale commercialization of lead new Invest Michigan outcome, we need your help,” he pleaded. “If you innovative, patentable technolo- gies in the global market.” Charlie Moret, managing would, take one project — that could be part of some- Monday, it will be announced director of technology-based thing big, like police response time, or how we re- that Bhargava is funding anoth- entrepreneurship at De- spond to water main breaks, which makes no sense er private equity company, troit’s TechTown, has been at all — sign up and come in for a month or two Farmington Hills-based Oakland chosen by and work with our employees.” Energy and Water Ventures LLC, the Michigan which will invest up to $100 mil- Economic De- Volunteer cards were left at every lion in individual deals in com- velopment table at the Tuesday event at the Mo- panies around the world that Corp. as torCity Casino Hotel, and more than are focused on energy conser- AARON ECKELS president three dozen people, from the city vation and water treatment. and CEO of and the suburbs, pledged their Oakland Energy has already a new orga- A LOOK AT THE PLAYERS ... AND CITY-RUN CAR INSURANCE signed nondisclosure agree- nization, In- The team: As he seeks help from the business community, Detroit Mayor willingness to help. ments with several Michigan vest Michi- Mike Duggan has stocked his Cabinet with a range of seasoned politicos, “We’re all in,” said Sandy companies about possible in- Moret gan, which business veterans and rising young leaders. See Page 22 for Crain’s guide Baruah, CEO of the Detroit Re- vestments, according to manag- will run the Michigan Pre- to key city executives and department heads. ing director Chris Brower. He D-Insurance? Duggan has raised the idea of a city-led auto insurance gional Chamber. Seed Capital Fund. “Mayor Dave Bing made a similar and the companies’ two other The fund, which typically program that would drive down high rates. Experts weigh in on the pros and cons. See Page 4. invests $250,000 in promising See Duggan, Page 22 See Bhargava, Page 25 startup technology compa- nies, had been managed by Ann Arbor Spark. Moret was recruited to TechTown in December 2012 after spending 13 years at Technology has suppliers using hackers to thwart hackers Rocky Hill, Conn.-based Con- necticut Innovations, a provider BY DUSTIN WALSH The goal is to take the lessons some of the most technologically funded researchers hacked into a of support services for emerg- CRAIN’S DETROIT BUSINESS learned and implement changes advanced, have more than 100 mil- Ford Escape and Toyota Prius, re- ing technology companies. that will thwart cyberattacks and lion lines of code, according to re- motely taking control of the vehi- Moret, who will leave Tech- Hackers are typing away on key- protect the future of automotive ports. cles, in a well-publicized event; Town soon, also ran a $20 mil- boards with the goal of infiltrating technology. The new technology opens new Forbes published the initial story lion seed fund for startups in and tearing apart advanced soft- Why are cars a target? More soft- realms of possibilities for perfor- and video. Connecticut and founded ware systems. Some are motivated ware is being installed on vehicles mance, and passenger usefulness, Much of the work to prevent at- CTech, an incubator at Con- by chaos, others by theft. to perform varying tasks, such as but it also unlocks the door to cyber- tacks remains cloaked for security necticut Innovations affiliat- But in metro Detroit and around allowing cars to communicate attacks, experts say. Hackers can purposes, but experts say the roll- ed with Yale University and the the country, hired hackers, with other vehicles and infrastruc- pursue consumer information, or out of connected vehicle technolo- University of Connecticut. dubbed “white hats,” are disas- ture and access information via directly impact how the car func- gies requires new protocols and — Tom Henderson sembling automotive software to the Internet. tions. expose flaws in supplier programs. Many current luxury models, In July 2013, two Pentagon- See Auto, Page 21 Access regional event dates, locations and contact details all in one place. crainsdetroit.com/executivecalendar NEWSPAPER 20140303-NEWS--0002-NAT-CCI-CD_-- 2/28/2014 4:27 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS March 3, 2014 MICHIGAN BRIEFS Steelcase donates building to known is whether Holland will be a location for any filming. help STEM sprout across state Lansing casino project on hold after court decision Ⅲ Monroe was ranked third on Grand Rapids-based office furni- CNNMoney’s list of the 10 most afford- ture maker Steelcase Inc. plans to About two years after it was first proposed, a trib- ment to have the land taken into trust for gambling able small cities. Bay City was No. 8. donate its pyramid-shaped former al casino in downtown Lansing is officially on hold, — a requirement before a casino can be built. Ⅲ The LaughFest comedy festi- research center near Grand Rapids the Lansing State Journal reported. The state plans to ask the high court to stay the val, with its fourth annual appear- to a foundation for use as an educa- A decision last week by the 6th U.S. Circuit Court of case until after it rules in a case involving the Bay ance set to start Thursday, has a tion hub for the study of so-called Appeals in Cincinnati granted a stay to Michigan At- Mills Indian Community and a casino it opened off its habit of trying to set odd Guinness STEM subjects: science, technolo- torney General Bill Schuette, who had sued to stop reservation in 2010 in the northern Michigan World Records. This year’s at- gy, engineering and mathematics. the Sault Ste. Marie Tribe of Chippewa Indians from community of Vanderbilt. The casino later was shut tempt: the most people wearing Officials said the education hub opening a casino next to the Lansing Center. down. Schuette thinks the case raises similar sunglasses in the dark. The cur- would cater to students in The decision halts any legal proceedings as the questions about the state’s authority to stop off- rent record was set at Wrigley preschool through graduate school, state prepares to petition the U.S. Supreme Court to reservation gambling. Field in Chicago in July 2012 with The Grand Rapids Press reported. take up the case. That also probably prevents the An attorney for the Sault tribe said it doesn’t 1,642 people. Which raises the The nonprofit Pyramid P20 STEM tribe, which wants to build the $245 million Kewadin think the Supreme Court will find merit in the Lans- question: Only 1,642 Cubs fans Education Hub is expected to set the Lansing Casino, from applying to the federal govern- ing case. were hiding their eyes? agenda for the hub, which could Ⅲ The owner of the Showgirls Gal- get $5.5 million in state money. leria in Grand Rapids — home to The seven-story, 664,000-square- nity ... ownership translates into genetics, The Associated Press re- ported the dorms will get new Lady Godiva’s Showgirls, Stud’s Night- foot building is in Kent County’s rates that are 20 percent lower than ported. The institute says epigenet- flooring, lights and paint, and bet- club and Erica’s Erotic Accessories — Gaines Township. if the power plant was owned by an ics has the potential to boost cancer ter wireless Internet service. The wants to sell his real estate for invested-owned utility,” said board research and treatment. work is expected to be done by fall. $6 million. We mention this if for Holland to take on $160M debt member Phil Miller. Ⅲ The board of directors of Bat- Ⅲ David Reid is the new director no other reason than Crain’s sel- tle Creek-based Kellogg Co. has ap- of the Kalamazoo/Battle Creek Inter- dom gets an opportunity to publish to build natural gas power plant proved a plan to buy back up to national Airport, the Grand Rapids colorful business names. MICH-CELLANEOUS Business Journal reported.