CD_20120813page1BASIC.qxp 8/10/2012 5:29 PM Page 1 ® www.crainsdetroit.com Vol. 28, No. 33 AUGUST 13 – 19, 2012 $2 a copy; $59 a year ©Entire contents copyright 2012 by Crain Communications Inc. All rights reserved Page 3 Marijuana faces climate McLaren to appeal state’s change – the political kind CRAIN’S MICHIGAN BUSINESS rejection of bed transfer Tool and die BY JAY GREENE to downsize its Pontiac hospital to 108 med- shops come CRAIN’S DETROIT BUSINESS ical-surgical beds, plus 27 psychiatric beds with emergency care and surgical services. back to life, Flint-based McLaren Health Care says it But on June 25, the Michigan Department of Page 8 will appeal the state’s denial of its certifi- Community Health denied McLaren’s applica- cate-of-need application to transfer 200 beds tion, saying it failed to comply with the “re- from its Pontiac hospital for a new hospital placement zone” requirement, which allows World Watch: McLaren wants to build in Oakland Coun- bed transfers only within two miles of the Redico LLC refinanced One Kennedy ty’s Independence Township. existing hospital. The proposed hospital is Square in downtown Detroit for Spotlight on In February, McLaren filed a CON to re- 7.6 miles from Pontiac, McLaren said. $27.3 million or $112 per square foot. Michigan biz locate 200 of the 335 hospital beds at In a statement to Crain’s last week, Incarnati McLaren Oakland to the proposed hospital in in Mexico, Page 15 Independence Township. McLaren planned See McLaren, Page 26 Sky-high refi: Health Care Extra Tackling One Kennedy hospital More the merrier at cruise readmissions, deal milestone Page 16 Companies open the party doors to employees, public Numbers back up Crain’s List BY SHERRI WELCH increasingly opening their tional event for Friday night Largest outstate private AND RYAN KELLY events to employees and the at Pasquale’s in Royal Oak. downtown revival CRAIN’S DETROIT BUSINESS public. The company’s 2011 par- BY NANCY KAFFER companies, Page 12 Auburn Hills-based Plex ty, held in a tented area in While many companies CRAIN’S DETROIT BUSINESS Systems Inc. once again have private par- , for example, the restaurant’s parking lot This Just In has expanded on the client- on the day of the cruise, was Two years ago, the deal couldn’t ties planned during Satur- have been done. The market was appreciation event it hosted for customers and prospects, day’s Woodward Dream Cruise too weak, lenders too wary. Plastipak sells minority and run-up to it, others are last year by adding an addi- said Tim Burke, director of But downtown Detroit has stake, gains growth room See Cruise, Page 23 changed. And two weeks ago, One Kennedy Square was refinanced for Plymouth-based Plastipak $27.3 million, making the value of Holdings Inc. closed Thursday the loan $112 per square foot. Be- on the sale of a minority cause the loan was financed at 65 stake to GS Capital Partners — percent of the building’s value, a group of funds in the mer- that places the price of the office chant-banking division of building at a whopping $170 a Goldman Sachs Group Inc. square foot. The amount of the previous- “That’s a big ly announced transaction was fricking num- undisclosed, but the deal will ber,” said Den- provide Plastipak new capital nis Bernard, for “substantial growth oppor- president of tunities across its global busi- Southfield-based ness platform,” GS Capital Bernard Financial said in a press release. Group, which Plastipak, a global maker of handled the refi- rigid plastic containers for nancing for consumer products, did not Bernard disclose how much of a stake Southfield-based GS Capital acquired, except to Redico LLC, owner of One Kennedy. say that the family of founder “I’ll close $500 million in loans this and CEO Bill Young will contin- year, but this is huge.” ue to hold a majority stake. Plex Systems Inc. plans to rev The deal is far from the rock bot- The company last year sup- up its Woodward Dream Cruise tom sales of recent history such as plied bottles and pre-form event, says Tim Burke, director the $5 million sale of the Penobscot containers to more than 450 of global automotive. Building representing a price of $5 customers and reported 2011 per square foot. revenue of $2.3 billion. And the One Kennedy Square — Dustin Walsh See Kennedy, Page 25 NATHAN SKID/CRAIN’S DETROIT BUSINESS FREE to Crain’s Readers (/343!&2%% 30/.3/2%$WEBINAR: Register at: 02%3%.4%$"9 www.crainsdetroit.com/events SMALLSMAALLL BUSINESSB Beyond The Politics: AssociationA of MICHIGAN !UGUSTs.OON PM Focusing the power of small business. What small businesses need to know NEWSPAPER 20120813-NEWS--0002-NAT-CCI-CD_-- 8/10/2012 4:57 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS August 13, 2012 MICHIGAN BRIEFS First try at local government Hiring and tooling expenditures are also up. consolidation comes up short Slow EV demand jolts W. Mich. battery makers “Both manufacturers and sup- Gov. Rick Snyder’s ambition to pliers seem to be increasing their get more of the state’s 1,800 munic- When Johnson Controls Inc. opened its advanced ion battery assemblies. But the plant is going payrolls and production sched- ipalities to consolidate may have battery plant in Holland in 2011, the company knew through changes as the company reacts to recent ules,” said Dunlap, who is based in sounded good in theory. But in the plant probably would serve a small niche for market forces — including the bankruptcy filing by Holland. His survey also found practice, it remains a work in electric and hybrid vehicles. a major client, Oak Park-based Azure Dynamics Corp., that some office furniture compa- progress. It turns out the company was right. The West and the buyout of its joint venture partner, the nies had modest reductions in In last week’s elections, voters Michigan companies continue to face overcapacity French battery company Saft. The company also work hours, capital expenditures in Onekama and Onekama Town- troubles as well as other turmoil as the electric-vehi- halted expansion plans. and product development . ship turned down a proposal to cle market develops. Industry observers and company officials say the He expects the industry to be flat merge into a single unit of govern- Contrary to previous announcements, the Ger- more than $1.1 billion committed to the industry in for the rest of the year, followed by ment. A two-thirds majority was man company Fortu PowerCell is not building a plant West Michigan positions the region well when the a slight increase in 2013. needed to approve the plan, and in Muskegon anytime soon. Work continues at the market does take off, even if that is a decade away. the total was 340 in favor and 305 LG Chem Michigan Inc. plant in Holland, but the com- Many experts think the market eventually will re- MICH-CELLANEOUS opposed. The village and township pany has not scheduled a date to begin production of act favorably to electric vehicles. But it requires nu- are about 40 miles southwest of lithium-ion batteries. merous factors to fall into place, including high Ⅲ Whirlpool Corp. said last week Traverse City. The first operating advanced battery plant in gasoline prices, government subsidies on EVs and that it plans to shut down the last Snyder championed legislation West Michigan, at Johnson Controls’ Meadowbrook an available charging infrastructure. of its operations in Evansville, to make mergers easier. This was campus in Holland, continues to produce lithium- — Joe Boomgaard, MiBiz Ind., by the end of 2014 and consoli- the first attempt at a merger since date the work at operations near the governor took office. the company’s Benton Harbor less certain than it did just a few bankruptcy court in Detroit, listed verted into common stock repre- headquarters. Whirlpool expects months ago,” Long said. Auto sup- total assets of $112.2 million and senting 53 percent control of the to spend about $18 million on reno- Grand Rapids manufacturing slips pliers, in particular “are not sail- debt of $195.6 million. company after it emerges from vations and equipment there. ing as high as they were a few Chapter 11. Capitol said it’s also For the first time since April The company also reported a net Ⅲ A bit of ominous news on the months ago.” The local economy seeking as much as $115 million in 2009, Grand Rapids’ manufactur- loss of $10.3 million in the quarter state of Europe’s economy: Dow could “dance back and forth across equity financing, which would ing sector declined last month, that ended June 30, compared with Chemical Co. CEO Andrew Liveris give potential investors 47 percent said Brian Long, director of supply the zero growth line” for several a loss of $16.4 million a year earli- said last week that the world’s of the company. management research at the Seid- quarters before resuming a slow er. The loss was due to “continued biggest producer of chlorine has man College of Business at Grand recovery, Long said. costs associated with problem as- seen a decline in demand that goes Valley State University. set resolution.” Survey: Office furniture rebounds beyond normal summer slow- A slight majority of the compa- Capitol Bancorp files Chapter 11 Capitol Bancorp announced in downs. The Midland-based compa- nies he surveys reported a decline June a voluntary restructuring The industry that is practically ny’s factories in Europe are run- in new orders and production in Lansing-based Capitol Bancorp plan in which debtholders were synonymous with West Michigan ning at about 81 percent capacity.