20130204-NEWS--0001-NAT-CCI-CD_-- 2/1/2013 6:42 PM Page 1 ® www.crainsdetroit.com Vol. 29, No. 5 FEBRUARY 4 – 10, 2013 $2 a copy; $59 a year ©Entire contents copyright 2013 by Crain Communications Inc. All rights reserved Page 3 State wants in on games for charities 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 “mil- lionaire 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 pur- chased 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 Honorees will be recognized for excellence in financial or other corporate operational management and their contributions to the community. Deadline: March 1 | www.crainsdetroit.com/nominate NEWSPAPER 20130204-NEWS--0002-NAT-CCI-CD_-- 2/1/2013 4:17 PM Page 1 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 Ⅲ 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 Ⅲ 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. Ⅲ Best Michigan Brewery: Ⅲ 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 Ⅲ 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 Ⅲ 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. Ⅲ 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.