Pages 1-28 - Crain`s Detroit Business

Transcription

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CRAIN’S
Readers first for 30 Years
DETROIT BUSINESS
June 8-14, 2015
[CHICKEN SHACK INC.]
Shack copycat?
Trademark filing raises
IP law questions
PAGE 3
Ford to update
research hub
Plan is estimated at $1 billion; RFP calls for
major makeover of Dearborn campus
By Kirk Pinho
kpinho@crain.com
Ford Motor Co. is embarking on a
10-year plan to modernize its research and engineering hub in
Dearborn and consolidate the majority of its 26,000 local employees
there in reconfigured and updated
office and testing space.
Real estate sources who asked to
remain unnamed expect Ford to embark on the estimated $1 billion reinvestment in the complex after selecting an architecture firm.
While a Ford Land Development
Corp. representative said Friday
there were not yet specific plans to
announce, the project outlined in a
request for proposals document suggests building improvements and
new building construction, building
demolition, infrastructure upgrades,
more green spaces and gathering
places, and added parking.
The complex includes engineering offices, testing labs, parking and
ancillary buildings. The automaker
plans to weigh architectural options
on how to best reconfigure the campus.
Brokers and architects say the
space is due for a makeover.
“Based on what I know about that
environment and what they have accomplished since then, anything they
can do to improve that core asset and
development arena would be so positive for the community, for Ford,” said
Mark Woods, COO of Southfield-
based Signature
Associates Inc.
Woods
spent
more than a
decade as vice
president of Ford
Land, the automaker’s real estate subsidiary,
MarkWoods: Any before leaving in
improvement would 2003.
be “so positive”
Ford requested
that bidders submit two master plan concepts: One
that retains the existing dynamometer
building and the Research and Innovation Center, and another without
that requirement.
The five-building research and
engineering campus was developed
in the early 1950s, and additional
buildings were constructed over the
years to meet increasing demand.
Site review
Overall, the Dearborn-based automaker owns 71 buildings totaling
about 13.1 million square feet in
and around the city, according to a
Ford request for fee proposals/qualifications for a new campus facility
and workplace master plan that was
issued in November and obtained
by Crain’s last week.
CoStar Group Inc., a Washington,
D.C.-based real estate information
service, reports the Research and
See FORD, Page 23
[TOM HENDERSON]
Marysville City ManagerRandall Fernandez (left) with Randall Jostes, CEO of Environmental Liability Transfer Inc., which is
responsible for slowly disassembling a former DTE Energy plant to create a prime piece of land along the water (below).
Riverfront renaissance
Demolition of Marysville DTE plant will leave a hole
that city officials, developers are eager to fill
By Tom Henderson
thenderson@crain.com
T
he DTE coal-fired power
plant in Marysville sits
brown and hulking, its 12
stories and 300,000 square feet
dominating the skyline from the
banks of the St. Clair River.
If officials in Marysville, a city of
almost 10,000 just south of Port
Huron, have their way, what will
rise on the site in the coming years
will include a boutique hotel,
condominiums, a fine-dining
restaurant, a day-slip marina and
perhaps a water park.
Built in 1922, the 167-megawatt
plant employed 250 for most of its
productive life, until it went offline
in 2001. That hit to the city’s tax
base has been more than made up
for by the rapid expansion in recent
years by SMR Automotive Systems,
a tier-one auto supplier whose
campus is a mile south of the DTE
Energy Co. site. (See story, Page 24.)
In bits and pieces, the DTE
plant has started to disappear, its
brick façade is being pulled off
and stacked in piles, its tons of
steel being torched into
NEWSPAPER
crainsdetroit.com Vol. 31 No 23
$2 a copy. $59 a year.
See MARYSVILLE, Page 24
Michigan Business
A monthly report on statewide business issues
Grand Rapids planners want to go
the extra mile around Medical Mile,
PAGE 9
© Entire contents copyright 2015
by Crain Communications Inc. All rights reserved.
recyclable chunks.
The demolition crew originally
planned to topple the main body of
the plant on its side later this
month and finish carting off its
pieces over the next six months,
but now it is considering imploding
the building later in the summer.
It is expected to be at least 18
months before environmental
remediation is complete, with
groundbreaking on development
scheduled for late 2016 or early 2017.
The plant sits on 20 acres of prime
riverfront real estate, with a deep
water port and 1,800 feet of river
frontage, built in an era when
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CRAIN’S DETROIT BUSINESS // June 8, 2015
2
MICHIGAN
BRIEFS
GM to invest $119M, add
300 jobs, in plant near GR
General Motors Co. plans to
spend $119 million on tools and
equipment to support production
of future vehicle components in its
Grand Rapids operations plant in
suburban Wyoming, The Associated
Press reported. The investment is
expected to create about 300 jobs.
The plant currently employs
about 500 and produces precisionmachined engine components
used in Chevrolet, Buick, GMC and
Cadillac vehicles. GM expects to release details later.
The investment in the GM Com ponents Holdings LLC plant is part of
the $5.4 billion investment in U.S.
plants that GM announced in April.
Office furniture industry
starts 2015 on a strong note
Shipments of office furniture in
the first quarter grew 9 percent to
$2.39 billion compared to the first
quarter in 2014, and orders increased 8 percent to $2.35 billion,
MiBiz reported, citing a study by the
Grand Rapids-based Business and
Institutional Furniture Manufactur ers Association.
An updated association outlook,
prepared by IHS Global Insight , essentially maintained an earlier projection of 4.4 percent growth in
shipments this year to $10.2 billion
and improved 2016 to a 7.9 percent
increase to $11.0 billion. The prior
association outlook, issued in
March, projected 2016 shipment
growth of 6.4 percent.
State explores commercial
fishing in south Lake Huron
The Michigan Department of Nat ural Resources plans to study the viability of commercial fishing for
whitefish in southern Lake Huron,
The Associated Press reported. This
month, nets will be allowed in experimental fishing grounds several
miles south of Harbor Beach and
north of Port Sanilac.
The DNR said research is planned
over the next three years while the
agency monitors and evaluates the
fish population and looks at the
long-term potential for what it describes as “a sustainable and profitable commercial lake whitefish
fishery.” The Michigan waters of
southern Lake Huron haven’t been
commercially fished in five decades,
but commercial fishing is established in Canadian waters.
MICH-CELLANEOUS
䡲 Perrigo Co. plc, an Irish-based
company with its North American
headquarters in Allegan, plans to
buy over-the-counter medicine
brands from a recently formed joint
venture between GlaxoSmithKline
of the United Kingdom and Novartis
AG of Switzerland, TheStreet.com
reported. The deal came about because GlaxoSmithKline and Novartis needed to divest some lines of
business to appease European regulators.
䡲 Leo’s Coney Island plans to
open its first location in West Michigan this summer: in Cascade Township near Grand Rapids, MLive.com
reported. The Birmingham-based
chain has 54 locations in Michigan.
䡲 New York City-based Alcoa Inc.
will spend $22 million to expand its
manufacturing of advanced titanium, nickel and 3-D printed parts for
the aerospace industry from its
Alcoa Power and Propulsion plant
in Whitehall north of Muskegon,
MiBiz reported.
䡲 Amway Corp. opened the first
phase of an $81 million plant near its
headquarters in the Grand Rapids
suburb of Ada, MiBiz reported. The
plant is one of five scheduled to open
this year as part of a $332 million
manufacturing expansion.
䡲 Midland-based Chemical Fi nancial Corp. closed on its $187.4
million acquisition of Hollandbased Lake Michigan Financial Corp.,
the parent company of The Bank of
Holland and The Bank of Northern
Michigan, MiBiz reported. The Bank
of Holland and Bank of Northern
Michigan will begin operating
under the Chemical Bank name in
the fourth quarter.
䡲 Grand Rapids-based Fox Motor
Group LLC acquired Seif Chevrolet in
suburban Caledonia. Terms were
not disclosed.
䡲 Grand Rapids-based Founders
Brewing Co., with help from distributor Johnson Bros. Liquor Co. , will
distribute its beers in Minnesota,
North Dakota and South Dakota
starting this month, MiBiz reported.
䡲 The board of trustees at Michigan Technological University gave
President Glenn Mroz a two-year
contract extension, The Associated
Press reported. He also got a raise
from $315,000 to $344,000, plus a
housing and car allowance.
䡲 Western Michigan University
trustees approved a 3.2 percent in-
COMPANY INDEX:
SEE PAGE 25
crease in tuition and fees as part of a
$388 million general fund budget
for the coming fiscal year, The Associated Press reported.
䡲 The owners of the Amway
Grand Plaza Hotel will switch reservation
systems
next
year,
MLive.com reported. Next year, the
677-room Grand Rapids hotel will
be known as … well, imagine placing a call and having the person on
the other end say, “Amway Grand
Plaza Hotel, Curio Collection by
Hilton, this is (fill in name) speaking. How may I direct your call?” 䡲
䡲 An item on Page 19 of the May 18 Deals & Details incorrectly
spelled the name of Cornish, Zack, Hill & Associates Inc. Also, the phone
number, (248) 353-5850, had an extra digit.
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BANKRUPTCIES . . . . . . . . . . . . . . . . . . 5
CALENDAR . . . . . . . . . . . . . . . . . . . . . . 20
CAPITOL BRIEFINGS . . . . . . . . . . . . . 10
CLASSIFIED ADS . . . . . . . . . . . . . . . . 21
DEALS & DETAILS . . . . . . . . . . . . . . . 19
MARY KRAMER . . . . . . . . . . . . . . . . . . . 9
OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 6
PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . 20
RUMBLINGS . . . . . . . . . . . . . . . . . . . . 26
STAGE TWO STRATEGIES . . . . . . . . 17
WEEK ON THE WEB . . . . . . . . . . . . . . 26
Correction
Enterprise data doubles every
two years. Are you prepared?
A BETTER PARTNERSHIP ®
INSIDE
THIS ISSUE
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Is it poaching? Chicken Shack not ruffled over trademark filing
By Chad Halcom
chalcom@crain.com
Which came first, the Chicken
Shack or the Chicken Shack sandwich?
That’s a question the U.S. Patent
and Trademark Office will figure out
this summer.
To metro Detroit chicken connoisseurs, the name conjures up the
nearly 60-year history of Chicken
Shack broasted chicken, a chain of
restaurants created by franchisors
Berkley-based Sobeck Enterprises
Inc. The Sobecks own a similar trademark to the trademark name application under review by the patent of-
fice — an application filed by national fast food chain Shake Shack Inc.
New York-based Shake Shack
(NYSE: SHAK), the fast-growing
burger and milkshake chain that
raised $105 million at a January IPO,
intends to identify the new trademark with chicken sandwiches, according to an April 20 application
brought by SSE IP, part of Shake
Shack’s parent company.
The key differences in the trademark claims boil down to this:
Chicken Shack holds a trademark on
specific stylized renditions of its
name, sign fonts and logo design,
said Sobeck attorney Mark Cantor,
president
of
Southfield IP law
firm Brooks Kushman PC. Shake
Shack, meanwhile, is seeking
protection of the
phrase “Chicken
Neil Sobeck: “It’s Shack” itself — a
kind of flattering.”
longshot, Cantor
added, since others have failed to win that in the past.
How concerned is the Berkley
restaurant chain about the competing trademark application? So far,
the issue hasn’t ruffled its feathers
too much.
Said Neil Sobeck, vice president of
the product division at Chicken
Shack Inc.: “It’s kind of flattering, and
definitely not something we’d ever
considered might have happened. It
must be a good name we have.”
Sobeck is the grandson of company founders John and Iola Sobeck.
Chicken Shack has 21 regional locations plus a mobile restaurant trailer
the company uses at major outdoor
events in the area. Two of these, in
Shelby Township and Clinton Township, have opened just since March
2014 and the company is considering
See CHICKEN, Page 25
Sorrell leaves
MEDC; area
VCs worried
Why
Mexico
matters
Since 2012,
automakers have
invested or promised
nearly $23 billion in new
production in Mexico.
Mexican automakers
By Tom Henderson
produced 3.2 million
vehicles in 2014, making
the nation the seventhlargest producer.
Exports from Mexico
this year are projected
to rise to a record 2.9
million vehicles. Up to
seven in 10 are projected
to be headed to the U.S.
[ASSOCIATED PRESS]
An employee at a Honda Motor Co. plant in Celaya, Mexico, one of the plants that’s part of the $23 billion worth of new auto production either operating or
promised since 2012.
Suppliers head to Mexico
Car production boom the ticket to growth for local suppliers
By Dustin Walsh
dwalsh@crain.com
Hollingsworth Logistics Group LLC, a Dearborn-based automotive transportation and
assembly supplier, plans for sales in Mexico
to be a quarter of its business by 2025.
That’s an ambitious target, considering
none of the company’s $400 million in revenue in 2014 came from that nation.
But Hollingsworth isn’t alone, as Southeast Michigan’s lower-tiered supply base is
again heading south — 20 years after the
North American Free Trade Agreement broke
business barriers further open between the
U.S. and Mexico.
[CHICKEN SHACK INC.]
Chicken Shack means chicken in metro
Detroit. But does Shake Shack want it
to mean chicken sandwiches?
In what local experts are calling
The result is a need for a more
the new automotive gold rush, aucohesive supply chain that extends
tomakers such as Nissan Motor Co.
farther down the tiered system, inand Mazda Motor Corp. are produccluding assemblers and distribuing a record number of vehicles in
tors such as Hollingsworth.
Mexico, most of them destined for
“Mexico is booming, and what
export.
we see trending is phenomenal opSince 2012, carmakers have inportunities for us,” said Greg Marvested or promised nearly $23 billion Greg MartinezJr.: tinez Jr., director of international
in new production in Mexico. In “Phenomenal
sales for Hollingsworth. “It’s key for
April, Toyota Motor Corp. announced opportunities”
our sustainability. If we, and others,
it would spend about $1 billion on its
don’t make those business expanfirst car factory in Mexico, with the capacity to sions down there, the marketplace will beassemble about 200,000 Corolla compact cars
See MEXICO, Page 25
annually, Bloomberg News reported.
MUST READS of the week ...
This raises a question ...
No longer if they build it ...
When do you raise pay to not only keep
current employees but also attract new
ones? Read how three companies went
about it in this week’s Second Stage,
Page 13
General Sports & Entertainment will break
ground this month on a $12 million
baseball stadium that will be the home of a
three-team developmental league,
Page 18
Paula Sorrell’s resignation as vice president
of the Michigan Economic Development Corp.
to resume a consulting practice in Ann Arbor
has revived worries among
local venture capitalists
about ongoing support for
state-led entrepreneurship.
For four years, Sorrell
was MEDC’s vice president
for entrepreneurship, venture capital and innovaPaula Sorrell:
tion.
Leaving MEDC to
Her departure May 29
return to consulting comes at a time when the
MEDC is under increasing
scrutiny by some Republicans in the state
House and Senate, who have been pressing to
end funding in venture capital firms to divert
some of its budget to highway repairs.
Sorrell said the timing of her departure has
more to do with wanting to go back to the private sector than it does politics, though the
politics did reinforce her decision that the
time to leave was right.
“It’s time. For someone in the private sector,
going to work for the government is a pay cut,
and a significant one. Just ask Governor Snyder.
I thought I’d do it for two years, and I stayed for
four,” said Sorrell, who was recruited to the
MEDC by Mike Finney after he was recruited to
Lansing from heading up Ann Arbor Spark
when Rick Snyder became governor in 2011.
“This is a huge loss to the MEDC, in my
opinion,” said David Gregorka, who got to
know Sorrell when he was consulting with the
See SORRELL, Page 22
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LOOKING BACK
On June 10, 1985, Crain’s reported on
Mount Clemens’ efforts to bring people downtown at night. Today, the
city embraces its day and night personas. More at crainsdetroit.com/30
Mt. Clemens
embraces
dual roles
Turn your
’
Let s Talk Trash trash to cash
If you pay to have recyclable waste hauled away, such as plastic, paper, or metal
you are missing a great opportunity to increase your net income.
[PHOTOS BY EDWARD MAURER]
Michelle Weiss of the Mount Clemens Downtown Development Authority (left) and the city’s mayor, Barb Dempsey,
in Mount Clemens. Thirty years after trying to wake up downtown, the city is now letting the market decide its course of development.
Office by day, entertainment by night
By Laura Cassar
Special to Crain’s Detroit Business
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Thirty years ago, 31 downtown
Mount Clemens business owners
paid $130 apiece to have their names
printed on coffee mugs that proclaimed “I love Mount Clemens.”
The mugs were part of a campaign to help revitalize their quiet
downtown — to wake things up
after the lawyers in the county seat
locked up their offices for the day.
Michelle Weiss still has her mug
displayed on a shelf in her downtown office.
“This town shut down at 5 p.m.,”
said Weiss, marketing and events
coordinator for the Mount Clemens
Downtown Development Authority.
The year of the mugs, 1985,
Crain’s Detroit Business reported on
the DDA’s efforts to bring people
downtown at night with live entertainment and to focus on recruiting
retail to complement the downtown’s predominantly office tenants.
Weiss, who at the time owned
Natures Accents, a floral shop, recalls today how in 1985 all the businesses on one main strip, Walnut
Street, committed to staying open
until 8 p.m. on Thursdays and Fridays — “for a whole year, no matter
what; no excuses.”
When the year ended, those
business owners kept the extended
hours and others joined them, in
part motivated by the evening entertainment and events that now
number more than 50 annually.
But on the roster of downtown
businesses, retail is still secondary
to office space. And Mount
Clemens is starting to realize that’s
no longer worth worrying about.
Instead, the community is em-
“I love Mount Clemens” coffee mugs were
part of an effort to bring life to downtown.
On the Web. Owners of a used book
store, boutique, bar talk about doing
business downtown,
crainsdetroit.com/mtclemens
bracing its more market-driven role
as a venue for daytime office space
and nighttime entertainment uses.
That includes finding a buyer for the
vacant and bankrupt Emerald Theatre, a landmark building in the city.
“You can’t change what people
want,” said Kent Kukuk, the DDA’s
executive director in the 1990s and
2000s.
“Every town is unique. Mount
Clemens is always going to be
heavy on office space because of
the county seat draw. It’s figuring
out what your demo is asking for,”
said Kukuk, who went on to work
for the Michigan Economic Development Corp. and is now retired. The
DDA now operates without an executive director.
That “figuring it out” has taken
several iterations over the past three
decades. In the late 1980s and early
1990s, openings of nightclubs like
Hayloft and Desperado’s led downtown leaders to realize they were an
event-driven destination, Weiss said.
By the late 1990s, they were putting a focus on physical changes —
adding lights, building brick streets
and increasing parking to help
make downtown more of a social
gathering place.
“People don’t expect a downtown
to compete with a mall — nor do
they want it to,” Kukuk said.
“They were looking for a place to
gather, someplace social to have a
good time, a nice place to walk, so
that’s what we embraced.”
OU campus
Having a place to gather —
specifically “milling around town”
— is something 82-year-old Gebran
“Gabe” Anton wants to see more of.
Anton, a lifelong Mount Clemens
resident and business owner, and
his business partner Stuart Frankel
in 2010 donated space valued at
about $2 million for Oakland University to open a Macomb satellite
campus. Anton wants to see that
campus expand.
“I’m not a college graduate,” said
Anton, who took over his family’s
shoe business at age 17 when his father died. After selling shoes, Anton
went on to operate a chain of clothing stores, Anton’s Gentlemen’s ApSee Next page
Gebran “Gabe” Anton, a lifelong
resident of Mount Clemens, donated
space for Oakland University to open
a Macomb satellite campus.
20150608-NEWS--0004,0005-NAT-CCI-CD_--
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Page 2
Remaking Mt. Clemens
Selected redevelopment sites
The former Greco Title building,
118 Cass Ave.: Purchased last year by
SVS Vision Optical Centers and
now redeveloped into its new
headquarters.
The Macomb Music Theatre,
formerly the Emerald Theatre
building, 31-33 N. Walnut St.:
Currently vacant. The previous owner
went bankrupt, and the property
receiver is searching for a new owner.
The former Turning Point
building, 213-215 S. Main St.:
Purchased by the Macomb County
Rotating Emergency Shelter
Team, or MCREST, in April. It will
become a shelter for abused women
and children who are transitioning
out of abusive situations.
The former Detroit Pub, 76
Macomb Place: Purchased by Scott
Atchison and converted into
Abbibo Dining & Spirits, which
opened in September.
John Barleycorn’s Bar and
Grill, 110-112 Macomb Place: Under
contract to be sold to the owners of
the nearby Bath City Bistro Inc.
and the Orleans Sports Café.
The space will be renovated.
Sources: Crain’s research, Anton
Sowerby & Associates
From Previous page
parel. He is now partner in Anton
Sowerby & Associates, a real estate
brokerage firm downtown.
“Unfortunately, my father died
and I had a family to support, but
I’ve always enjoyed the environment a college town creates — like
Ann Arbor or East Lansing. That’s
not easy to duplicate.
“When we gave OU the building,
we planted a seed for that.”
The satellite campus, inside the
former Towne Square II building at
20 S. Main St., has 50 faculty members, 900 students and offers seven
degree programs.
It’s a commuter school, but the
students have embraced the community, said Julie Dichtel, Oakland
University-Macomb interim executive director. Students participate in
downtown parades and volunteer at
festivals; an alumni event brought
together 350 former students during
a fireworks show last summer.
“There’s a lot of real estate around
there, and I’m hoping OU will buy it
and expand here,” Anton said. “I
would like to see more students.”
BANKRUPTCIES
The following businesses filed for
protection in U.S. Bankruptcy Court
in Detroit May 29-June 4. Under
Chapter 11, a company files for reorganization. Chapter 7 involves total
liquidation.
DRS Services Inc. , 298 S. Old
Woodward, Birmingham, voluntary
Chapter 11. Assets and liabilities not
available.
Green Tech Styles Inc. , 54750
Grand River, New Hudson, voluntary Chapter 11. Assets and liabilities not available.
Natalie Broda
[EDWARD MAURER]
Oakland University’s satellite campus in Mount Clemens.
OU has no specific Mount
Clemens expansion plans in the
works.
Occupancy rate
Filling some of the downtown’s
long-empty buildings is a priority.
Isam Yaldo, president of Yaldo Construction in Farmington Hills, purchased the former Macomb Mews, a
mall shuttered in 2010, for $265,000
in March. Yaldo has plans to turn the
second floor into lofts — tentative
plans call for about 10 units — with
retail and parking on the first floor. It
was his first purchase in the city; he
said the price and the opportunity to
use his creativity to help boost the
city were what attracted him.
Real estate broker Joe Sowerby,
also at Anton Sowerby & Associates,
said that for out-of-town buyers like
Yaldo, Mount Clemens is a bargain.
Sowerby said the price per square
foot in Mount Clemens has not recovered the way other communities
have. What might sell for $60-$80
per square foot in St. Clair Shores or
Clinton Township can still be priced
at $40-$50 in Mount Clemens.
LENDING
|
The overall downtown occupancy rate is about 65 percent: About
38 percent is office space, about 23
percent retail/restaurant, and the
rest is mixed-use.
The vacancies were apparent
after the economic downturn of
2008. “It was a real estate tsunami,”
said Sowerby, who guessed that
about 100,000 square feet of business closed up around that time
and that “the ripple effect could be
felt through all of downtown.”
5
there, the impact on downtown
would be huge,” Sowerby said.
“That’s getting 1,200 people down
here at night. It’s a vital component
to this town.”
The DDA is hosting a property
tour of the theater and more than
15 other properties next month.
Weiss said they are hoping to attract
at least 25 potential investors.
In addition to the DDA efforts,
Macomb County is spending $65
million on a downtown revitalization plan that includes renovations
to the county Circuit Court and ad-
ministration buildings, as well as
replacement of a parking deck.
Steve Cassin, director of the Macomb County Department of Planning
and Economic Development, said
Mount Clemens is one example of the
county’s economy on the upswing.
“With heavy investment from Oakland University in their satellite campus and the county investing in substantial building improvements, there
are lots of reasons to believe that
Mount Clemens will become the vibrant, happening downtown it has
the potential to become,” he said. Theater vital component
Perhaps the most prominent
empty building is the Emerald Theatre, designed and built in 1921 by
C. Howard Crane, who seven years
later went on to design the Fox Theatre in Detroit. In 2012, the building
was purchased and restored by
Wally Mona and Marc Beginin, who
changed its name to Macomb Music
Theatre. But the theater closed last
fall, and the owners filed for Chapter
11 bankruptcy protection in March.
The theater is for sale for $1.295
million.
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Page 1
6
CRAIN’S
DETROIT BUSINESS
OPINION
Gov. should mull
Duggan’s DPS plan
etroit Mayor Mike Duggan made a compelling case
last month that the Detroit Public Schools’ downward spiraling enrollment is partly attributable to efforts to fix its finances through emergency managers.
The problem, Duggan told attendees at the Detroit Regional Chamber’s Mackinac Policy Conference, is that massive school closings, teacher layoffs and other cuts created
enough uncertainty about the system’s future that parents
moved their children elsewhere.
“It was a train wreck you could see coming,” he said, because emergency managers are temporary, but parents are
making long-term decisions for
With the mayor their children.
Duggan’s solution is a riff on a
and the
plan put forward by Gov. Rick
Snyder to house DPS debt of
governor
more than $400 million in the
working
existing school district and cretogether, the
ate a new debt-free district that
would be run by a seven-memnext solution
ber board appointed by the govstands a better ernor and the mayor with a
chance of being gradual transition to an elected
board. The state would assume
the one that
responsibility for the debt.
Duggan proposes a more imworks.
mediate turn to an elected
school board but with a financial
review board that can veto financial decisions — similar to
how the city is currently operating.
He also supported the proposed creation of a citywide Detroit Education Commission that could authorize new
schools and close chronically non-performing charters and
DPS schools, and a centralized transportation system that
would make it easier for kids to get to school.
The mayor also would like it to be harder to open schools,
noting that seven schools opened in Southwest Detroit in
one year, which ended up destabilizing the schools already
there. In the meantime, other areas of the city have virtually
no schools at all.
We believe the governor should consider Duggan’s proposed compromise. A series of emergency managers in DPS
have worked hard and conscientiously to stabilize the district, but it hasn’t worked.
The truth is that too many Detroit children are being poorly served by too large a number of unaccountable public and
charter schools.
What Duggan brings to the table are honed political skills
that encompass knowledge of human behavior and a mindset of marshaling support by producing wins for others.
The mayor and the governor appear to share a deep commitment to produce better results for Detroit families. They
bring different sets of knowledge and skills to the table.
Working together, the next solution stands a better chance
of being the one that works.
D
TOM HENDERSON
Reporter’s Notebook
State’s stance on
morels is too picky
WEB: Crainsdetroit.com/thenderson
TWITTER: @TomHenderson2
une marks the unofficial end of
J morel mushroom season — and
the unofficial end of this year’s
chapter of bureaucracy gone cuckoo.
Call it the Catch-22 season.
Catch-22 is the classic World War
II novel by Joseph Heller, the catch
being that if a pilot wanted to be declared insane and unfit for duty, he
had to apply, but by regulation, the
act of applying meant he was sane.
In Michigan, the catch would be
if a state bureaucrat said you can’t
sell something legally without a certification. And when you asked how
you could get certified, the same
bureaucrat said it was impossible,
there was no certification process.
Catch-22 was fiction. The state
bureaucrat isn’t.
For
well
over
100
years, foragers
in northern
Michigan
have
been
picking
morels and
selling them
at
farmers
markets and
roadside
stands and to
restaurants.
Up
until
two years ago,
if you didn’t
Tom Henderson shows know where to
off some of his find on look
for
a mushroom hunting morels or didtrip to the woods with n’t have the
his dog,
time and energy,
you
could go into, say, the Cherry Street
Market in Kalkaska and buy morels
by the pound, picking them out of
[PHOTOS BY TOM HENDERSON]
Michigan’s woods yield a wide variety of morel mushrooms, from small and dark gray to
large and yellow and all shadings and sizes in between.
big baskets nearly overflowing. Depending on that year’s harvest, you
might get them for $35 a pound. You
might pay $65.
Or you might pay less when, driving down country roads, you’d see a
hand-painted sign out front of a
house offering morels for sale and
decide to pull in.
Foraging is a way of life up north.
The same folks selling morels sell
wild ramps in May, raspberries in
July and blackberries in August.
Great for them, great for area
restaurants, great for diners.
But not so great for the bureaucrats.
For years, the state has had a law
on the books requiring mushroom
sellers to be certified, but it was
never enforced. Until last year, that
is, when the bureaucrats, for whom
leaving well enough alone is anath-
ema, interceded.
They began calling on restaurants and organizers of mushroom
festivals and telling them they could
buy only from certified mushroom
sellers. And the restaurants and festivals began telling their longtime
providers that they needed to get
certified or they couldn’t do business.
OK, said the foragers. What do I
do? Where do I go? How much does
it cost?
Well, there’s the catch.
The state required certification,
but there was no process in place.
There was literally no way to get
certified.
So last year’s annual morel mushroom festival in Mesick, 25 miles or
so south of Traverse City, had to fly
See Next Page
LETTERS
Sports Hall of Fame director’s efforts appreciated
Editor:
I have read your article on the departure of Jim Stark as executive director of the
Michigan Sports
Hall of Fame
(“Sports Hall of
Fame cuts ties
with longtime
director,” June 1,
Page 18). As the
person
who
Jim Stark
hired Jim in 2003
when I was
chairman of the hall, I feel I must
add my comments.
While factually correct, the focus
of the article is on the financial difficulties of the hall and the problems
with the attorney general’s office
Send your letters: Crain’s Detroit
Business will consider for
publication all signed letters to the
editor that do not defame
individuals or organizations. Letters
may be edited for length and clarity.
Email: cgoodaker@crain.com
during Jim’s tenure. What it does not
mention is that Jim labored long
and hard over many years, incurring financial sacrifice by deferring
a good part of his income year after
year in an effort to make the hall
work. He harnessed the financial
support of the major professional
teams and colleges, elevated the
quality of the annual induction dinner and golf tournament and im-
proved the image of the hall.
When I joined the board in 1995,
the hall was in financial difficulties.
It has been a struggle ever since. I
resigned from the board at the time
the plaque sale was contemplated,
partly because I disagreed with the
proposal but also because I despaired that the hall would never be
viable financially. I have not
changed my mind since then, although the current chairman, Scott
Lesher, his board and Jim have
worked hard to steady the ship.
I just wanted to go on record to
say that I appreciated Jim’s efforts in
what has been a very difficult situation.
Roger Faulkner
Bloomfield Hills
20150608-NEWS--0006,0007-NAT-CCI-CD_--
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4:30 PM
Page 2
From Previous Page
in morels from Oregon, which has a
certification process, so the festival
could live up to its name.
The goal of all this is to avoid accidentally poisoning people, but
morels are the easiest mushrooms
to identify, both by pickers and by
commercial buyers.
Yes, in theory, it is possible to pick
a mushroom you think is a morel
and eat it and get sick.
But restaurant owners and managers who have been buying morels
for years aren’t going to be buying
any of those. They know what real
morels look like and so do the people who pick them.
They are easily identifiable, and
there are plenty of websites and
books that point out their characteristics.
There are a wide variety of
morels, some small and dark gray,
some large and yellow, with sizes
and shadings in between. They all
have dimpled caps. And the caps always hang down and are attached
to the stem.
With most morels, the bottom of
the cap attaches to the stem. There
is no space between the bottom of
the cap and its stem. There is a rarer
morel called the half-free. And its
cap attaches to the stem halfway
down, leaving a little skirt. They are
taller and thinner than other
morels, and taste just dandy.
False morels have the dimpled
top, but are shaped like an umbrella. The cap does not hang down and
attach to the stem at all. The real
tell, though, is that if you touch a
false morel, the cap falls off. Caps
don’t fall off real morels.
Also, real morels have hollow
stems. False morels have stems
filled with white filaments.
There is another mushroom
called a beefsteak that is sometimes
called a false morel. But it is much
bigger than a real morel. With its
dimpled head, it looks more like a
brain lying on the ground than it
does a morel.
My wife and I forage for five kinds
of mushrooms in northern Michigan, and none of them have poisonous look-alikes. We get morels and
pheasant-back mushrooms in the
spring, parasols and puff balls in the
summer, and comb tooths in the fall.
After last year’s season of flying
morels in from across the U.S., horticulturalists and mushroom experts approached the state to actually put a certification process in
place.
In April, the first 32 official mushroom experts were certified at a
one-day class put on by an organization called Midwest American
Mycological Information, hardly
enough to stop the importing of
morels to satisfy commercial demand.
In fact, Traverse City’s Trattoria
Stella was using Oregon morels last
month for lack of a certified local
supplier.
Another class was scheduled for
Traverse City at the end of April and
in Marquette in early May.
And of course, being a state test,
it has to be more complicated than
necessary. You can’t just get qualified to pick morels, the easiest
mushroom there is to identify. You
have to become expert in all 20
mushrooms Michigan allows to be
sold, some of them with poisonous
look-alikes that can be very tricky to
distinguish.
Oh, yeah, you have to pay $175,
too.
In the meantime, know that I’m
not selling any of the mushrooms I
pick. What we don’t eat right away is
going in the freezer. The season has
gone well enough that we’ll have
morels until just about the start of
next season.
Unless they start making you get
a license to pick — whether you’re
selling or not.
7
TALK ON THE WEB
Re: Lawmakers propose raising
tipped minimum wage
I guess if their wages go up
enough, prices will go up, and then
we will just quit tipping since they
are paid a full wage. My guess is
they will then make less.
Reader responses to stories and
blogs that appeared on Crain’s
website. Comments may be
edited for length and clarity.
Most civilized states already are
like this. Stop punishing food servers.
think the tax credit for low-income
families should be left alone, but
the rest seems good. I’m even OK
with them increasing registration
on the cars they know will provide
less revenue from fuel.
Steve
256711
MikeInMI
Re: Michigan House committee
approves road funding package
Re: Toys R Us hires ex-Michigan
AD David Brandon as CEO
I think this is mostly better than
the sales tax increase attempted. I
Toys R Us will soon be giving
away free game systems with the
purchase of two diet Cokes.
Bando
You cannot judge this man’s
abilities just from his service at
UM. He did an amazing job at Valassis and Domino’s. I know because
he was my mentor and taught me
how to succeed in my career.
Tamara Nelson
Re: Panel debates killing Earned
Income Tax Credit to fund roads
What a stupid idea : Let’s take
money from the people least likely
to have a car and most in need of
these funds just to eat.
Shaun Nethercott
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Michigan employers awarded
employees average merit raises of 3
percent this year, once again, despite competition for talent, according to a new survey conducted by
the American Society of Employers
for its members.
The 3 percent merit raise was on
par with the average raises local employers reported for 2014 and typical
of the standard
merit increase Raise or not.
for several years How three
prior, ASE said.
companies
This year’s handled the
merit raise “ap- challenge of a
pears to be on good economy:
the low side, When to pay
given the in- more, Page 13.
creasing need to
retain well-performing workers, especially when
considering the corresponding findings that bonuses as a percentage of
salary are up only slightly from last
year,” said ASE President and CEO
Mary Corrado, in a news release.
“While fears of the financial fallout during Michigan’s deep recession remain, employers need to
take an in-depth look not only at
their wage and benefit levels but
their overall menu of reward practices to determine if they are remaining competitive.”
A total of 352 Michigan companies responded to the ASE’s 2015
Compensation Survey, 56 percent
of them were in metro Detroit.
On average, the companies responding to the online survey in
January had 752 employees and a
median of 141 employees, ASE said.
Nearly two-thirds, or 62.3 percent,
were nonautomotive employers.
Among other survey findings:
Companies that reported data
in 2014 and 2015 reported salaries
increased 2.6 percent year over
year and salary increases ranged
from as low as 1.5 percent for
hourly, production and maintenance employees to 3 percent for
supervisory, managerial and professional employees.
The amount of bonus as a percent of base salary has increased
slightly, rising from 9.5 percent in
2014 to 10.35 percent in 2015.
Variable pay as a percent of base
pay has remained stable at each level.
Employees who are eligible for variable compensation could reasonably
expect short-term incentives of approximately 6.1 percent, 7.8 percent,
12.2 percent and 30.6 percent for the
following annual salary levels:
$50,000 to $75,000; $75,000 to
$100,000; $100,000 to $150,000; and
more than $150,000, respectively.
To read the full report, go to
www.aseonline.org. Sherri Welch: (313) 446-1694
Twitter: @SherriWelch
20150608-NEWS--0009-NAT-CCI-CD_--
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11:46 AM
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9
SPECIAL REPORT: MICHIGAN
MARY KRAMER
Publisher’s Notebook
mkramer@crain.com
Facing up to race: It’s a
business issue, too
About 25 years ago, the board of
the W.K. Kellogg Foundation in
Battle Creek was 100 percent white.
Today, it’s 60 percent people of
color. And today’s workforce of 200
employees is 44 percent nonwhite.
“It was a very intentional strategy
to get the perspective you need to
do the work,” says current Kellogg
CEO LaJune Montgomery Tabron.
Since 1930, the foundation has
focused on improving the lives of
children, in the words of its
namesake and cereal pioneer W.K.
Kellogg, “without regard to sex,
race, creed or nationality.”
Today, Tabron believes you can’t
support children without focusing on
racial equity. The foundation released
a report, “The Business Case for Racial
Equity in Michigan,” at the Detroit
Regional Chamber’s Mackinac Policy
Conference last month.
The report echoes what we hear
around Detroit: The old ladders out of
poverty — a solid K-12 education and
a low-skilled factory job — no longer
exist. Schools are broken and the
factory jobs of old have disappeared.
Children born into poverty — 50
percent are black, 32 percent
Hispanic — likely will stay there.
Investing now, the report says —
in early childhood programs and
support for strong neighborhoods
with access to healthy, high-quality
food — will require less investment
later in prisons and other publicly
funded programs.
Tabron, one of 10 children
growing up in Detroit, has the chops
to talk business. She is a CPA with
degrees from the University of
Michigan and the Kellogg Graduate
School of Management at
Northwestern University.
Kellogg Foundation trustee Rod
Gillum, a partner at Jackson Lewis PC,
says the business case for racial
equity is obvious. “First, there are
changes in the demographics of the
customer base,” he said. “Second,
there’s a war for talent.” Having more
and diverse people in the talent pool
will give companies an advantage.
Kellogg has funded “America
Healing” conferences and small
groups that focus on “racial healing.”
“The objective is to let people talk
about a very sensitive subject that
most people don’t want to talk
about,” Gillum said.
Business leaders have stepped up
around “social issues” that have
business implications. Early
childhood programs, for example,
are now embraced as the surest way
to improve educational outcomes.
In the wake of Ferguson and
Baltimore, will business leaders
step up on this issue, too?
BUSINESS
“There is a sense of
expansion on the
corridor ... how do
you coordinate that
expansion?”
Mark Lewis
Neighborhood Ventures
[EXPERIENCE GRAND RAPIDS]
Thousands of cars and people a day travel along Michigan Street among the institutions that make up the Medical Mile. Grand Rapids would like to see more of them stick around.
Going the extra Mile
GR planners want to turn Medical Mile corridor into walkable community filled with shops, lofts
By Rod Kackley
Special to Crain’s Michigan Business
N
early $1 billion in private investment
helped create Grand Rapids’ Medical
Mile — a roughly one-square-mile
area on the northeast side of the city
where 50,000 people work and study every day
in the health care, educational and research
institutions along Michigan Street.
Now city, community and business leaders
want to make it possible for those people to live in
the Michigan Street corridor, whose
neighborhoods to the north and south surround it.
And while they are at it, Grand Rapids would
love to see another billion dollars or so invested
in the corridor, one of the city’s 20 business
districts.
“There is a sense of expansion on the
corridor,” said Mark Lewis, CEO of Neighborhood
Ventures, a Grand Rapids nonprofit,
neighborhood-based community and economic
development organization. “The question is,
how do you coordinate that expansion?”
The Michigan Street Corridor Plan, which has
been approved by the Grand Rapids City
Commission, is a blueprint of economic
development intended to provide that
coordination.
Driving east from downtown Grand Rapids on
Michigan Street, thousands of cars go from the
Medical Mile to an older, less-improved area that
includes small mom-and-pop restaurants, a
coffee shop or two, some national chain
restaurants like Taco Bell, a car wash, substandard
housing and, finally, light industrial facilities.
But outside the Mile, the Michigan Street
corridor is not very attractive and hardly
walkable, with cars and trucks speeding by only
inches away from pedestrians on sidewalks.
The plan for the corridor calls for a more
“vibrant community” built around a mixed-use
center/transit-oriented development theme
that would include a core of retail shops,
services, offices, restaurants, entertainment and
apartment/loft space in new brick buildings.
The corridor would be designed with more of
the urban flavor that developed before
mainstream use of cars and trucks. The emphasis
would be on creating a more comfortable and
efficient environment and experience for people
walking or riding mass transit.
The corridor also would have a public space
where people could play and a connected street
system designed for walkability.
This vision for the corridor is centered on a
transit line. It includes landscape planning and
the development of design standards intended
to draw more people to live and work along the
bus lines of The Rapid transit system, in much
the way that M-1 Rail is envisioned as a magnet
for downtown Detroit.
But for a transit-oriented development to
work, it also needs enough people living in the
area to make the system pay off.
See CORRIDOR, Page 10
20150608-NEWS--0010-NAT-CCI-CD_--
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10
CRAIN’S MICHIGAN BUSINESS
Senate sends a legislative toast to state craft beer makers
Here’s a reason to throw back a
cold one: Craft Beer Month is coming.
To us, every month feels like craft
beer month for Michigan’s strong
and rapidly growing craft beer business; the new official state designation for July is meant to formalize
that support.
The Michigan Senate designated
next month the official month, citing its support of the state’s agriculture industry — plus beer makers’
entrepreneurial spirit and hard
work bringing about “a renaissance
in handcrafted beers.”
Indeed, Michigan’s craft beer industry is increasingly robust. The
LINDSAY
VANHULLE
Capitol Briefings
lvanhulle@crain.com
mitten state ranks sixth in the nation for its number of craft breweries — 159 last year, according to
Boulder, Colorado-based trade
group Brewers Association . That’s
up from 131 in 2013 and includes
several in the five-county metro Detroit region.
Those breweries made more than
825,000 barrels last year, the 10th
best output in the country, the association reported. In 2013, production
reached nearly 583,000 barrels.
Statewide trade group Michigan
Brewers Guild estimates Michigan
supports roughly 5,100 jobs at craft
breweries, wholesalers and retailers,
and roughly $145 million in wages.
The distribution channels for
Michigan-made craft brews also
continue to grow, with Michigan
beers turning up on more menus
around the country. Closer to home,
craft beer tours are frequently a vacation theme. (See Pure Michigan
guide to brewery tours and maps at
michigan.org/breweries.)
Comings and goings
䡲 Ron Bieber has been elected
president of the Michigan AFL-CIO, replacing retiring President Karla Swift.
Bieber previously worked as director of the United Auto Workers ’
Community Action Program and as
assistant director of the union’s General Motors unit. Bieber is the son of
former UAW President Owen Bieber.
Swift was the first female Michigan AFL-CIO president when she
was elected in 2011.
䡲 Heather Therrien has been
named communications director of
the Michigan Democratic Party.
Therrien replaces Josh Pugh, who
will become communication strategy
director for Lansing-based political
advocacy firm Grassroots Midwest in
July. Most recently, Therrien worked
for Washington, D.C.-based nonprofit National Democratic Institute
on communications strategy training.
Before that, she was a vice president for Mitchell Research & Com munications Inc., East lansing. Pugh
previously worked as a communications specialist for Lansing-based
Progress Michigan. 䡲
CORRIDOR,from Page 9: Grand Rapids makes plan to make corridor more of a community
Where to put the people?
If Michigan Street has one thing
now, it is people … and traffic.
䡲 Every year, 1.25 million people
visit the health care and educational
institutions in the Medical Mile.
䡲 More than 28,000 people ride
commuter shuttles on Michigan
Street every month. One thousand
board buses on The Rapid every
day.
䡲 20,000 people live in neighborhoods to the north and south of
Michigan Street.
However, while the Michigan
Street Corridor Plan found that
50,000 researchers, faculty, staff and
students study and work in the
Medical Mile, only 2.6 percent live
in the corridor.
It’s not that they don’t want to live
within walking distance of Spec trum Health System , St. Mary’s
Health , G r a n d V a l l e y S t a t e U n i v e r s i ty, Grand Rapids Community College
or the Van Andel Institute . It’s just
that there is no place to put them
right now.
Although specific rental vacancy
rates for the Michigan Street corridor are unavailable, demand for
rental housing in Grand Rapids has
far outstripped supply. A Zillow
study released in March found that
Grand Rapids, with a vacancy rate
of 1.6 percent, was the toughest city
in the U.S. to find an apartment.
Laurie Volk of Zimmerman/Volk
Associates , a Clinton, N.J.-based
real estate consulting firm, said the
potential for new households in the
corridor is 5,870 units over five
years. That is just under one-third of
the 17,750 new households expected to be created within the entire
city of Grand Rapids.
Close to 72 percent of these new
residents in the corridor are expected to come from West Michigan,
with 45 percent coming from the
city of Grand Rapids.
But nearly three in 10 would
come from elsewhere in the U.S.
The high level of demand has
begun to influence the pricing of
market rate units. Between 2011
and 2013, rents for studio apartments (350 to 600 square feet) rose,
on average, from $695 a month to
Why the Medical Mile matters
Where the Medical Mile
all began: The Van
Andel Institute
State University, Grand Rapids Community College and the Michigan
State University School of Medicine
— are publicly funded.
Mary Eilleen Lyon, Grand Valley’s
associate vice president of university communications, pointed out
that most employer-assisted housing programs are offered by privatesector employers.
With people comes
investment
[EXPERIENCE GRAND RAPIDS]
What has traditionally been known as the Medical Mile is about a mile long. The
Michigan Street corridor, from Division Avenue in downtown Grand Rapids east
to East Beltline Avenue, is 8.1 miles.
The creation of Grand Rapids’ Medical Mile began with the creation of the Van
Andel Institute in 1996. In addition, Spectrum Health System, Grand
Valley State University’s Cook-DeVos Center for Health Sciences
and Grand Rapids Community College’s Calkins Science Center are
considered to be the anchors of the 50-acre campus of life science, health care
and educational institutions.
Spectrum Health’s footprint on the Mile encompasses Butterworth
Hospital, Meijer Heart Center, Helen DeVos Children’s Hospital and
Lemmen-Holton Cancer Pavilion.
More than 50,000 researchers, faculty, staff and students study and work in
the institutions on the Medical Mile.
More than 1.25 million employees, patients, visitors and shoppers travel into the
Medical Mile annually.
Six urban neighborhoods, with nearly 20,000 residents, surround the Medical
Mile and Michigan Street corridor.
$725. People who want a separate
bedroom or two had better be ready
to pay more than $1,000 a month,
and often more than $1,100.
Suzanne Schulz, the planning director for Grand Rapids, acknowledged that these rents price out of
the market many of the people who
work and study in the corridor.
“Even Van Andel Institute will tell
you not every researcher is making
$100,000 a year,” Schulz said. “They
are making $30,000 or $40,000. Or
you have the housekeeping staff at
the hospitals, and restaurant owners are saying their waitstaffs need
someplace to live.”
She said housing developers are
looking for low-income housing tax
credits from the Michigan State
Housing Development Authority to
help pay for the projects. But they
also are looking to create different
sizes of apartments with different
price points.
The corridor plan also calls for
development of employer-assisted
housing programs to encourage
employees to live close enough to
their jobs to walk or ride bikes to
work.
That is more of a long-term goal.
Three of the institutions that anchor
the Medical Mile — Grand Valley
The corridor plan does not just
envision an infusion of population.
City officials would love to come
close to an additional $1 billion in
private investment.
Most of the investment in the corridor has come from the institutions
that have either built new facilities or
expanded existing ones on the Medical Mile, Schulz said, with Spectrum
Health, the Van Andel Institute, MSU
and Grand Valley the primary drivers
of that development.
But that has started to change,
Schulz said. Developers have been
aggressively buying property that
was held by real estate speculators
and mom-and-pop companies, she
said.
“So the patchwork quilt of ownership is starting to fade away,”
Schulz said. “There are still some
holdouts, but we are seeing more
unified ownership than we have in
the past.”
As property in the corridor
moves into the portfolios of businesses interested more in development than simply holding the property, construction cranes and crews
are going to work.
616 Development in Grand
Rapids is investing $16.1 million to
build one of those mixed-used centers that fit into the corridor plan. It
will be a four-story building with 54
apartments in the top three floors
and retail space on the ground floor.
“There is a lot of potential on
Michigan Street,” said Monica
Clark, the director of development
for 616 Development, “because the
goal is to make it a walkable corridor that connects to the downtown
area and other city neighborhoods.”
Third Coast Development has cre-
ated Mid Towne Village , its largest
development on Michigan Street. It
exemplifies what city planners want
the corridor to become.
Mid Towne Village was designed
to be a walkable, campuslike community. It includes a 15,000-squarefoot park and more than 200,000
square feet of building space.
There is also more than 100,000
square feet of medical office space,
60,000 square feet of professional
office and retail, and 40,000 square
feet of Chicago-style brownstone
condominiums.
Third Coast is also building a
hotel on the property.
The corridor lost a restaurant,
bank, grocery store, pharmacy and
a couple of bars to the expansion of
the Medical Mile. That left people
who live in the corridor and its surrounding neighborhoods with only
one option for many of those services: driving to the suburbs.
But with people moving in, there
also should be a demand for new
businesses to serve the new neighbors. Those new businesses are already emerging, store by store.
Third Coast Development renovated a bankrupt lumber yard on
Michigan Street that was vacant for
five years. It includes apartments on
the second floor and a butcher
shop, 24-hour gym, tavern/distillery
and medical office space on the
ground floor.
Lewis of Neighborhood Ventures
said the Michigan Street corridor is
attractive to small-business owners,
if only because of its traffic count.
“To make it even more attractive,
they need to figure out how to slow
the traffic down, get customers to
stop and then give them a good experience,” he said, “and ultimately
get them to the point where they
might want to open their own business.”
Said Brad Rosely, a Third Coast
principal: “The Michigan Street
Corridor is a ‘node’ of downtown
Grand Rapids, much like Brooklyn,
Soho and Tribeca are ‘nodes’ of
New York. If you don’t want to live
downtown downtown, you have
Michigan Street just three or four
blocks away.” 䡲
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CRAIN’S MICHIGAN BUSINESS
Health care costs rise
3% for midsize firms
Survey: Lowest rate rise in more than 10 years
By Jay Greene
Cost containment strategies
jgreene@crain.com
Despite ongoing concerns that the
Affordable Care Act will lead to higher
insurance costs, midsize employers
this year are enjoying historically low
health care cost increases, averaging
3 percent after making plan changes.
That is the lowest rate in more
than 10 years and less than the national average of 4.6 percent, according to a new survey by Troy-based
Marsh & McLennan Agency LLC. The
surveyed companies ranged from
100 to 10,000 employees.
To lower costs, employers are
using high-deductible health insurance plans, wellness programs tied
to incentives, telemedicine programs and aggressive prescription
drug management, according to
more than 450 employers that participated in Marsh & McLennan’s
12th annual Southeast Michigan
Mid-Market Group Benefits Survey.
Shifting costs to employees
through higher deductibles, co-insurance and co-payments appears to
have picked up this year, although not
all companies increased cost shifting to employees,
said
Rebecca
McLaughlan, vice
president with
Marsh & McLennan.
For example,
Rebecca
monthly
emMcLaughlan:
ployee contribuBiggest cost
tions to benefit
changes in HMO,
plans for family
prescription plans PPO coverage increased as a percent of premium to 28 percent this
year from 27 percent last year, and
up to 26 percent from 23 percent for
single PPO coverage, the survey
found.
Family HMO coverage rose slightly higher to 30 percent of premium,
up from 25 percent in 2014. Single
HMO coverage also rose to 23 percent this year from 21 percent.
“HMO and prescription drug plans
saw the greatest change,” McLaughlan said. For example, 68 percent of
HMO plans now include a deductible, up from 59 percent in 2014.
“We saw more changes to pharmacy plans targeted at higher-cost
brand and specialty drugs,” she
said, noting brand drug formulary
copays rose to $40 from $35 and
brand non-formulary copays increased to $70 from $60. Generic
drug copays stayed steady at $10.
Last year, overall employee benefit
costs increased for employers an average of 7 percent, primarily because
Obamacare fees kicked in for the first
time, boosting costs 3 percentage
points, McLaughlan said.
“Those fees are (absorbed into
cost structures now) and we are
back to where we were in 2013” at 3
percent, she said.
One of the main strategies used
by employers to slow costs continues to be consumer-directed health
plans, such as health care savings
accounts, or high deductible plans,
McLaughlin said.
In 2015, 43 percent of employers
are offering high-deductible health
plans, up from 38 percent in 2014.
Nationally, high-deductible plans
jumped to 48 percent of employers
compared to 39 percent last year.
During the early 2000s, Farmington
Hills-based Logicalis Inc. experienced
double-digit rate increases for its fully
insured plans, said Mark Jenkins, vice
president of human resources.
During this period, Logicalis
began offering lower cost high-deductible health plans. It also began
to roll out cost-containment programs, including a wellness program and higher copayments for
prescriptions and emergency care.
Over the past five years, Logicalis
has enjoyed health cost increases of
3 percent or less, Jenkins said. Last
year’s increase was only 1 percent.
McLaughlan said high-deductible health plans are popular
among employees because they
typically are less expensive than
other plans and can feature a taxfree health savings account or
health reimbursement account.
Some 60 percent of Logicalis’ 600
Michigan employees who opt for
company health insurance are in
high-deductible health plans
through Blue Cross Blue Shield of
Michigan, Jenkins said. The company also offers 90 percent and 80 percent coverage plans, which means
the employee is responsible for 10
or 20 percent of remaining costs.
“We have incented people to be
in high-deductible plans with very
low premiums,” Jenkins said. “They
are responsible for 100 percent of
costs up to $3,000 for individuals
and up to $6,000 for families.”
Logicalis charges employees an
extra 30 percent of premium to be in
the 90-10 plan and 20 percent premium surcharge for the 80-20 plan.
Reversing last year’s decline in
use of wellness programs, 80 percent of employers said they offer at
least one wellness program, up
from 78 percent in 2014. And 31
percent of them tie incentives to
achievement of a targeted health
goal, up from 27 percent in 2014.
Another cost containment device
is telemedicine, whose use this year
has exploded to 20 percent from 4
percent last year, McLaughlan said.
An additional 27 percent of employers use health advocacy programs — assistance by phone for
employees with questions on
claims, coordination of care and
navigating the health care system —
up from 14 percent in 2014, the survey found. 䡲
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20150608-NEWS--0012-NAT-CCI-CD_--
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11:25 AM
Page 1
12
Autoliv Inc.
Based: Auburn Hills
Operations: Office, tech center,
manufacturing plant and
engineering centers in Bangalore
and manufacturing plants in
Mysore and Manesar.
Employees: 1,200
Products: Airbags, seatbelts, and
steering wheels
Clients: Suzuki, Hyundai, Tata Group,
Mahindra and Mahindra Ltd., Nissan,
Ford, General Motors, Toyota
Top executive: Suresh Nandagopal,
president for Autoliv India
[ALTAIR ENGINEERING INC.]
The Bangalore office of Altair
Engineering,employs 600 in India.
Altair Engineering Inc.
Based: Troy
Operations: Offices in Delhi, Pune,
Hyderabad, Bangalore and
Chennai
Employees: 600
Products/services: Proprietary
software and services, including
engineering simulation software,
software for on-demand
computing, software for industrial
design, and engineering services
Top executive: Pavan Kumar,
managing director
Clients: Tata Motors, Mahindra,
General Motors, John Deere, General
Electric, Hyundai, Maruti Suzuki,
Larsen & Toubro, Hindustan
Aeronautics Ltd., Tata Consultancy
Services, Hero MotoCorp, TVS Motor
Co., Bajaj Auto, Ashok Leyland,
Bharat Heavy Electricals Ltd.,
Caterpillar, Airbus, United
Technologies, Honeywell, Robert
Bosch, Volvo, and Mercedes Benz
warehousing
Top executive: Hillary Kwan,
director of business development
in South Asia
Clients: General Motors, Bosch,
Stryker
Cooper-Standard
Automotive Inc.
Based: Novi
Operations: Manufacturing
facilities in Bawal, Chennai,
Ghaziabad, Hosur, Mumbai, Pune
and Sanand, and one
manufacturing, design and
engineering facility in Manesar
Employees: 1,958
Products/services: Sealing and trim
systems, fluid transfer systems, fuel
and brake delivery systems and
anti-vibration systems
Top executive: Prashanth
Doreswamy, managing director for
India
Clients: FCA, Ford, General Motors,
Mahindra & Mahindra, Maruti Suzuki,
Renault-Nissan Alliance, Tata
Motors, Toyota, Volkswagen
DataFactZ
Based: Northville
Operations: One offshore services
facility located in Gachibowli
Employees: 150
Products/services: Offshore
delivery of business intelligence,
data warehousing and big data
analytics services.
Top executive: Bala Chivukula, vice
president and COO of India
operations
[DATAFACTZ]
Con-Way Inc.
DataFactz employs 150 in India.
Based: Ann Arbor
Operations: Warehouses in
Ahmedabad, Bangalore, Chennai,
Faridabad, Gurgaon, Kolkata,
Morinda, Mumbai, New Delhi,
Pune and Vadodara. Multi-client
warehouses in Chennai, Mumbai,
Gurgaon and Pune and one supply
chain office in New Delhi
Employees: 743
Products/services: Third party
logistics and supply chain
management, transportation
management, value-added services
and finished vehicle logistics and
Domino’s Pizza Inc.
Based: Ann Arbor
Operations: 887 pizza stores in 196
cities and a master franchise
company based in New Delhi.
Employees: 24,000
Products/services: Pizza and side
items customized to the Indian
palate including many vegetarian
options, paneer and lamb.
Top executive: Ajay Kaul, president
of Domino’s India (part of Jubilant
FoodWorks)
More information: India is Domino’s
INDIA
New
Delhi
Mumbai
Pune
Bangalore
Chennai
With a 2014 GDP of $2.05 trillion, India is the
world’s fourth-largest economy. Its open market
economy includes everything from traditional
village farming and handicrafts to modern
agriculture and
information
NEP
AL
technology
services, according
to the CIA World
BANGLADESH
Factbook.
India’s major exports
are petroleum products,
machinery, iron and steel,
precious stones, chemicals, apparel and
vehicles. Its major export partners are the
United States (12.4 percent), the United Arab
Emirates (10.2 percent), China (4.7 percent) and
Singapore (4.3 percent).
India’s major imports are crude oil, chemicals, iron
and steel, fertilizer, machinery and precious stones.
Crain’s World Watch report showcases companies that are leaders in
global markets and those that are expanding. Each World Watch
features a different country. If you know of a Michigan company that
exports, manufactures abroad or has facilities abroad, email Jennette
Smith, managing editor, at jhsmith@crain.com.
Coming up
July: Turkey 䢇 August: Philippines
largest and fastest-growing market
outside the U.S, opening more than
500 stores in the past four years.
Dow Chemical Co.
Based: Midland
Operations: Headquarters in
Mumbai, a sales office in Noida,
two centers of excellence and four
manufacturing sites located around
Mumbai and Chennai, and three
customer application centers in
Govandi, Kalwa and Taloja
Employees: 900
Products/services: Paints and
coatings, building and
construction, plastics and
packaging, water and health, food
and pharmaceutical, automotive,
electronics, agro-sciences, and
renewable energy verticals
Top executive: Sudhir Shenoy, CEO
of Dow India
More information: Dow India
employees have volunteered for
almost 7,500 hours since 2009.
Federal-Mogul Corp.
Based: Southfield
Powertrain division operations:
Eight manufacturing facilities, one
technical center, one sales office
and one corporate office located
throughout India
Motorparts division operations: One
manufacturing facility, one
distribution assembly center, four
regional sales offices and one
corporate office throughout India
Employees: 7,100
Powertrain division products:
Pistons, piston rings and liners,
engine bearings, sealing and
systems protection products,
ignition products, valve seats and
guides
Motorparts division products:
Pistons, piston rings, engine
bearings, gaskets, brake products
Top executive: Andreas Kolf, vice
president of Federal-Mogul
Powertrain India; Sanjeev Singh,
director aftermarket for India
International Automotive
Components Group
[DOMINO’S PIZZA INC.]
Domino’s Pizza has nearly 900 stores in
196 cities in India.
Based: Southfield
Operations: Two plants and a
technical, engineering and sales
center in Chakan, and two plants in
Manesar
Employees: 700
Products: Components including
instrument panel and cockpit
assemblies, headliners and
overhead systems, glove box
assemblies, front grilles, doors, door
trim, floor consoles, wheel liners,
passenger car and heavy truck
exterior trim and components
Top executive: Gajanan Gandhe,
vice president of South Asia
Inteva Products LLC
Based: Troy
Operations: One manufacturing
facility in Pune and one technical
center in Bangalore
Employees: 480
Products/services: Latches, window
regulators and motors, engineering
support for roofs, closures, motors
and electronics product lines, as
well as local and global purchasing
functions
Top executive: Sanjay Kataria
Clients: Hyundai, Volkswagen, Ford,
Mahindra & Mahindra and Tata
Group
More information: Inteva is
expanding to a new, larger
technical facility in Bangalore in
August 2015.
TI Automotive Ltd.
Based: Auburn Hills
Operations: Manufacturing and
sales facilities in Bangalore,
Vadodara, Manesar, Pune, and two
in Chennai
Employees: 1,000
Products/services: Automotive
fluid systems technology such as
fuel tank systems, fuel delivery
systems and fluid carrying lines
Top executive: T. Ravibabu,
managing director
Clients: Toyota, Mahindra, General
Motors, Hyundai, Nissan, Tata
Group, Maruti Suzuki, Fiat
Visteon Corp.
Based: Van Buren Township
Operations: Two global technical
and services centers in Chennai
and Pune, and one manufacturing
facility in Chennai
Employees: 1,100
Products/services: Instrument
clusters, audio and infotainment,
climate controls for India and
global customers, global and
regional customer support, design
support and development such as
human-machine interaction
graphics, and product
development including
mechanical, electrical, CAD,
software, validation and product
assurance
Top executive: Amit Jain, country
leader of electronics for India and
customer group leader for India
and Southeast Asia
C l i e n t s : Hyundai , M a h i n d r a &
Mahindra, Ford, Honda Motorcycle
& S c o o t e r , T a t a G r o u p , Renault
Nissan Alliance , Volkswagen Group ,
Škoda Auto
20150608-NEWS--0013-NAT-CCI-CD_--
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13
SPECIAL REPORT
SECOND STAGE
AMY HAIMERL
Reporter’s Notebook
Program matches help,
money with small biz
Amy Haimerl’s last day as Crain’s
entrepreneurship editor and city of
Detroit reporter was June 3. Contact
Jennette Smith, managing editor,
with story ideas, jhsmith@crain.com
ISTOCK PHOTO
Applications to participate in the
city of Detroit’s new small-business
development program, Motor City
Match, opened last week.
The program will offer $500,000 in
grants, loans and technical
assistance to a variety of firms, from
those in the idea phase to those
needing help to build out their space.
“Business owners tell us there are
two main problems: finding the
right space and getting all of the
funding together to open,” said
Rodrick Miller, CEO of the Detroit
Economic Growth Corp., which
administers the program.
The effort to help business owners
is just one half of Motor City Match.
It also seeks to work with landlords to
increase the number of properties
ready to build out so small-business
owners can open up in them.
This year, Motor City Match took
applications from property owners
who needed help getting their
buildings ready for tenants or
marketing their properties.
Those accepted into that
“building track” will be matched
with the business owners needing
space who were selected in the
“business track.”
The business track of Motor City
Match has four segments:
䡲 Get Ready: Up to 50 businesses
in the planning stage are eligible for
free business planning courses.
䡲 Make a Match: Up to 25
businesses searching for space will
receive 1-to-1 matchmaking with
the top 25 properties in the
building track.
䡲 Make a Plan: Up to seven
businesses that already have
identified properties will receive
design-and-build assistance,
financial planning assistance and
priority permitting.
䡲 Match Your Cash: Those who
just need access to financing to
open are eligible for up to 10
matching grant awards of up to
$100,000 per project.
There are three challenge rounds of
business tracks, starting with this one.
䡲 Round 1 applications are due
July 1.
䡲 Round 2 applications will be
available Sept. 1 and due Oct. 1.
䡲 Round 3 applications will be
available Dec. 1 and due Jan. 1.
Building owners will have one
more shot at participating. The new
round of applications will open
Aug. 1 and close Sept. 1.
Find all the rules and details at
motorcitymatch.com. 䡲
Raising
the
question
%
70
of U.S. companies expect to increase wages
at least 3 percent in the next 12 months
How 3 companies handled the big challenge
of a good economy: When to pay more
By Gary Anglebrandt
3 companies that paid it forward
W
ith the recession well in the
rearview mirror, many companies
are bracing for problems that
occur when the economy is
healthy, such as the big decision to increase pay.
Duke University’s Fuqua School of Business and
CFO Magazine recently published results of an
outlook survey of 547 U.S. companies, and it
showed that 70 percent as of March expected to
increase wages at least 3 percent in the next 12
months. Tech, services and consulting,
manufacturing and health care led the way.
The reasons given for the upward pressure:
“Difficulty hiring and retaining qualified employees,
improved corporate financial performance, labor
market pressures and pressures from employees
and their representatives.”
In particular, employers are pursuing workers
possessing skills formed from the study of
science, technology, engineering and math, to
the point of many decrying a talent crisis. Pay for
skilled manufacturing workers, to take one
example, has been rising for the past 18 months,
said Todd Palmer, president of Troy-based
Diversified Industrial Staffing Inc. Jobs like CNC
programming and manufacturing equipment
repair have seen wages go up $3 to $5 an hour.
This month, Crain’s looks at three companies
that have increased their payroll, both by
Clarity Communication Advisors Inc.:
When silence followed job postings, the Southfield
company knew it had a problem, Page 14
DWM Holdings Inc.: The Warren manufacturer
knows all about the talent crunch, and its
compensation reflects that, Page 15
Friedman Integrated Real Estate
Solutions: When new hires started leaving after
a month or two for the auto industry, the
Southfield company took action, Page 16
number of employees and by how much they
pay their workers, as they fend off suitors that
might poach their existing talent or soak up
prospective new hires.
One manufacturer with 74 employees, DWM
Holdings Inc., has experienced the tightened
availability of skilled trades workers.
Manufacturers say that trend is worsening as
baby boomers retire while the generations
behind them have been steered toward four-year
degrees and office work.
Similarly, Clarity Communication Advisors Inc.,
an information technology business, has
struggled to find network technicians. Over the
past two years, both companies have increased
pay to attract and retain workers.
It’s not only manufacturers and tech
[JOHN SOBCZAK]
Gary Goerke, CEO of Clarity Communication Advisors, raised pay and improved recruiting strategy to find the talent his company needs.
companies feeling the pinch. Friedman Integrated
Real Estate Solutions in Farmington Hills has had
to bump up pay to keep the auto industry from
sucking up its financial and tech workers.
But increasing pay is a big step. Plenty of
companies resist taking this step when they
need to, said Mary Welsh, a Warren-based
human resources consultant.
They have a mind-set of “I
can get a body to fill a
position,” she said. “You can
have a warm body, but that
warm body is not fully
engaged and won’t have the
same commitment you want.”
Business owners who
MaryWelsh: A
automatically resist
“warm body” not
increasing pay should keep in
always “engaged”
mind that people require
continued investment, just as
equipment, marketing, technology and other
regular business processes do.
“When the economy was crumbling, people
were desperate for jobs,” said Gary Goerke,
president and CEO of Clarity. “Companies could
bring the wage scale really low. Some companies
had to do it, while others capitalized because
they could do it.
“We’re not there anymore. The best
candidates have better choices they didn’t have a
few years ago.” 䡲
20150608-NEWS--0014-NAT-CCI-CD_--
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10:44 AM
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14
SPECIAL REPORT: SECOND STAGE
Silence for job openings telling,
so phone service biz raised pay
By Gary Anglebrandt
GET IN ON THE CONVERSATION
CAPITOL BRIEFINGS WITH LINDSAY VANHULLE
Keep up with Lindsay at crainsdetroit.com/blogs
TWEET @LINDSAYVANHULLE
CHOICE.
ACHIEVEMENT.
RESURGENCE.
Grand Valley State University is developing the talent and
resources to help re-energize Detroit. As the authorizer of 38
charter schools in southeast Michigan, we provide high quality
K-12 options for more than 32,000 students. When we say we’re
committed to academic achievement in our charter schools, we
Clarity Communication Advisors
Inc. in Southfield knew it had a
problem when silence followed
postings for jobs that once triggered
a deluge of resumes.
“Two years ago, we would post on
Craigslist and get a ton of resumes of
very qualified people, and that started
to wane,” said Gary Goerke, president
and CEO of Clarity, which provides
telephone services over the Internet
to small and midsize businesses.
Fewer people were looking, and
those who were expected more pay,
even if they were less qualified.
Clarity then stopped putting pay
ranges in its postings, asking candidates for ranges instead.
The responses were “significantly
higher than what we had been posting,” Goerke said.
Clarity had a sharp need for support staff trained in network technology but also adept at handling
customers. Experienced businessto-business salespeople who understood small and midsize businesses were also hard to come by.
The company gave up trying to
find software developers altogether,
choosing instead to outsource. “We
were burning through people like
you could not believe,” Goerke said.
The message was clear: Pay was
too low.
Since January 2014, Clarity has increased pay across the board by 14
percent, and the cost of benefits has
shot up 81 percent. Tech support
staff wages went up 14 percent; proj-
CEO Gary Goerke
spent weeks with
his CFO taking
stock of Clarity’s
situation and
redesigning its
financial model.
ect managers, 15 percent; administrative support, 8 percent; programmers and network technicians, 14.5
percent; and salespeople, 39 percent.
The change was a matter of recognizing a new economic climate,
Goerke said.
“It’s not 2008 anymore,” he said.
“Even with a 14 percent increase,
we’re not overpaying.”
At the same time, employee count
climbed from 17 at the beginning of
2014 to 28 now.
Besides boosting pay, Clarity also
sharpened its recruiting. “We don’t
just post a job ad and wait for resumes to show up,” Goerke said. The
company looks at people employed,
unemployed and still in school.
Clarity didn’t make the pay decision rashly. Goerke spent weeks with
his CFO taking stock of the company’s situation and redesigning its financial model. When they needed
extra help, they went to a local CPA
and to the Elance (now Upwork)
website, where they hired MBAs willing to work on the one-time project.
“We had to make sure this wasn’t
going to put us upside down,”
Goerke said.
The company invested in new
software to automate some processes and improved its training to make
sure it was getting the most for its
new expenses.
Goerke said he didn’t feel the
need to sit down with employees to
explain that with better pay comes
bigger expectations.
“If I had to have that conversation, it means I probably didn’t have
the right people on the team to
begin with,” he said.
For salary research, Clarity used
U.S. Department of Labor data,
Glassdoor and Salary.com while also
keeping an eye on other companies’
job postings. Customer acquisition
and retention were the areas that
would receive the biggest increases,
and the tweaking never stops.
There was temptation not to do
any of this. Clarity executives knew
competitors were outsourcing technical support or eliminating it altogether, but they thought the investment in people would give them an
edge in support and service.
Goerke was confident an increase
in business would follow, and justify,
the increased costs.
“That mitigated some of the concern of paying people more,” he
said. “We didn’t have to take a defensive position.”
Goerke’s only regret is that he didn’t make the change sooner.
“Either you take the risk that you
give an increase and overpay, or you
take the risk of losing people who
keep the company going,” he said.
“You choose which risk.” 䡲
can prove it: Grand Valley is the first charter school authorizer in
the nation to be recommended for AdvancEd accreditation of our
Pointers on pay
authorizing practice.
Not sure you’re ready to increase compensation?
employees move on. Bonuses happen repeatedly.
Labor costs are among the biggest expenses for companies.
Raising them isn’t something they’re going to do without
good reason. Risks come with doing it too late and also too
early.
䡲 Stick to promises made: Palmer said he has placed
people at companies that promise raises that keep up with
inflation, along with other enticements like lunches, a staff
softball team or air conditioning on manufacturing shop floors.
The employees come back later saying none of the promises
were kept. This turns into a credibility problem for employers,
he said. “Machinists are like doctors: They hang out together,
they talk. You will get poached. That’s the first risk you run.”
Grand Valley’s Detroit Center at 163 Madison Avenue
supports our charter school staff and our small business
support services, which helps new and existing small
businesses to succeed, creating jobs and economic
stability here in Detroit. We also offer seven master’s
degree programs to our charter school teachers in Detroit
as well as over 100 specialized training sessions for
teachers, charter school staff, and school board members.
Some points to consider when making the decision:
䡲 Look at employee surveys — and the employees
themselves — to gauge their dissatisfaction and readiness
to bolt. “If you’re surveying your employees, you’re hearing
it,” said Mary Welsh, who runs Warren-based human
resources consultancy WBHR Consultants Inc. Welsh also
recommends watching employees for signs of
disengagement, such as showing up late and doing the
minimum amount of work necessary.
Visit us online at gvsu.edu/cso or call (616) 331-2240 to learn
more about how Grand Valley State University is helping to shape
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Grand Valley’s Charter Schools Office
located at 163 Madison in downtown Detroit.
䡲 Other obvious signs: Jobs that are unfilled after six
months and prospective employees turning down offers
are pretty clear signs, said Todd Palmer, president of the
Troy staffing firm Diversified Industrial Staffing Inc.
䡲 Do benchmarking: Look at what competitors pay
and weigh that against your current bottom line and the
growth potential of your company. If the numbers don’t
work out just yet, maybe other perks, such as flexible
scheduling, can do the trick in the meantime, Welsh said.
gvsu.edu/cso
®
䡲 Temporarily bump pay with bonuses and
contests: These don’t “absorb the bottom line forever,”
Welsh said. Bonus pay also carries extra psychological
punch. Raises happen one time, get absorbed, and
䡲 Think of the opportunity costs … A lot of small
and midsize manufacturers fret over investing in people
who will leave, Palmer said. But idle machines cost a lot
more. “There’s a $75-per-hour opportunity cost for an
empty machine,” he said. “Any M&A guy will say that.
They’re tripping over dollars to save nickels.”
䡲 ... And the business costs. Outsiders notice
excessive turnover, and it does not instill confidence.
“People may not want to do business with you,” Welsh said.
“If every time they call in they talk to somebody different,
they don’t like that.”
䡲 As for that issue of paying newcomers more than
existing workers, Welsh said, some differentiators should
be identified to justify the difference. Look for people who
bring educational variances, new skill sets or customer lists.
But the best solution is to increase the pay of the loyalists
who’ve been around longer. Otherwise, “it’s really hard to say
to that longer-term employee that they’re valued.”
— Gary Anglebrandt
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For light pole maker,it paid to plan for raises
By Gary Anglebrandt
Warren-based DWM Holdings Inc.
manufactures streetlight poles
under an array of brand names.
It is work manipulating steel and
aluminum. For that, the company
needs machinists and welders —
people who are in short supply
these days.
On DWM’s shop floor are general
laborers, welders, powder-coating
specialists, drivers, quality specialists and people who can run specific pieces of equipment, such as an
automated welding cell or a robotic
plasma cutter.
DWM has increased its staff from
55 at the beginning of 2013 to 74
now. Payroll has increased 25 percent, which reflects the added number of people as well as increases in
pay for individual positions, said
Ryan MacVoy, the second-generation CEO of the company, which is a
union shop.
Pay levels for workers across the
board increased 7 percent to 15 percent, depending on position, during
the last contract negotiations that set
wages for 2014 and 2015. MacVoy expects to increase compensation
again when the next round of negoti-
ations begins at
the end of this
year.
The
talent
crunch is definitely
real,
MacVoy said. But
not everyone has
gotten the hint.
Ryan MacVoy:
Many manuNeed to understand
facturers
carry
what motivates
an
old-school
employees
mindset
and
have the habit of paying low for new
talent, those who work in the industry say. They don’t want to invest in
people who might leave or not show
up, even if those people went to
school to get a certificate.
It’s not hard to find job postings
for welders that demand experience
and certification, yet pay only $12 to
$15 an hour.
“I just don’t think you’re going to
get the talent you need to put out a
quality product at that dollar
amount,” said MacVoy, whose company starts welders at $18.32 an hour.
To find workers, DWM uses a recruiter and also has developed relationships with people at Macomb
Community College ’s applied science department and Michigan
Technical Education Center . For office workers, DWM works with
Walsh College.
Having a strong grip on the business numbers is essential before
making a decision to raise pay,
MacVoy said. Costs and selling
prices — profit margins — were the
main considerations that came with
that decision.
As a union shop, DWM negotiates contracts for two or three years
out. Executives are called on to pre-
dict the future. Increased labor expenses have to be more than offset
by the amount of revenue the company expects it will be able to bring
in by having more workers.
DWM works through productivity numbers with the union to determine levels of pay increases based
on performance and the pipeline of
future business.
“Nobody in the company should
be paid based on longevity,” MacVoy
said. “It’s all about productivity.”
If DWM weren’t a union
shop, it still would pay what
it does now, even using
annual contracts because it
keeps things stable.
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Reviews and open communication help managers stay on top of
what motivates workers. “Having a
psychology degree would be very
useful,” MacVoy said. “You need to
understand the motivating factors
of the people that move your company forward. For some people, the
factor is increasing pay; for others it
isn’t necessarily.”
A leading cause of the shortage in
skilled trades workers is the lack of
young people heading into those
careers. Younger people have
shown a keen interest in career development, so DWM began shouldering the cost for continuing education at Macomb Community
College and part of the cost to attend four-year schools.
In return, the employee is not
obliged to stay at DWM for a set
amount of time.
If DWM weren’t a union shop,
MacVoy still would pay what he
does now, he said, even using annual contracts because it keeps things
efficient and stable.
“We’re going to get higher-skilled
people than our competition,” he
said. “It goes right back to providing
a predictable result for your customer.” 䡲
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Real estate biz compensates to fend off auto firms
By Gary Anglebrandt
You wouldn’t think a real estate
business would compete with automotive companies. But in Southeast Michigan, that’s how things go
sometimes.
Once the economy started getting back to normal, Friedman Inte grated Real Estate Solutions in
Farmington Hills began having a
harder time finding accountants,
information technology employees
and property managers, pulled as
they were by the gravity of the reenergized auto industry.
This put extra human resources
pressure on the real estate business,
which already has a harder time
than many.
“We are not an industry that people necessarily seek out,” COO
Chuck Delaney said.
Friedman had to step up its compensation to not only attract people
but also to keep the ones it had. Toward the end of 2011, the company
would
hire
someone, only
for the worker to
give notice a
month or two
later.
“They were
going off to Ford
and Chrysler ,”
Chuck Delaney:
Delaney
said “At
New hires would
that
time,
the
leave after two
auto
industry
months.
was paying more
for similar positions. … So we started adjusting compensation at that
time to better compete with the
auto industry.
“The key for us was recognizing
that early on and making those adjustments.”
The pressure began in 2012 and
has tightened since. During that
time, Friedman has increased overall compensation about 5 percent a
year, with variations according to
job. “More entry-level positions and
less technical positions, those
Friedman looked
at benchmark
reports from its
industry as well
as the local
economy to
determine how
much of an
increase it
would give.
Delaney said, making the decision
about pay an even weightier one.
There’s a balancing act to perform
in order to identify the right number
of people to support growth without
falling onto the side of unjustified
expense.
One tactic Friedman used was to
make its operations more efficient
through technology upgrades,
which reduced HR costs in one area
and freed money in others.
Before doing anything, the company looked at benchmark reports
from its industry as well as the local
economy to determine how much
of an increase it would give. This allows Friedman to measure competition both within its industry and
outside it.
Then, to gauge the usefulness of
its money, Friedman stepped up its
employee reviews along with compensation. Where it once gave only
annual reviews, it now also does
multiple midyear reviews. Employees know greater pay has to be met
salaries have stayed the same or
haven’t increased at the same rate,”
Delaney said.
That compares with flat pay levels during the recession, when the
company, close to the forefront of
the real-estate-driven crisis, “didn’t
know if we’d be in business in a year
or two,” he said.
Employees, who now total about
300, are the biggest expense in the
property management business,
with performance.
When the big annual review
comes up, there are no surprises.
For greener employees with less
work experience, Friedman ties intermittent pay increases with reviews during the employee’s first
year. More established employees
typically get annual pay bumps.
The accelerated review schedule
lets HR managers catch problems
before all they’re seeing is the backs
of employees walking out the door.
Benefits such as 401(k) matches
and health insurance also have gotten a shot in the arm, and Friedman
runs engagement activities such as
work parties, charitable committees
and recognition programs.
It’s unclear where the company
would be if it hadn’t made these
changes, Delaney said, but it
wouldn’t be as strong.
“If we had not adjusted accordingly,” he said, “we’d still be working and surviving but maybe not
thriving.” 䡲
Nominees sought for
Health Care Heroes
Crain’s Detroit Business is seeking
nominations for Health Care
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the Aug. 17 issue.
The program will honor top-notch
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jgreene@crain.com
The deadline for nominations:
Monday, June 22
20150608-NEWS--0017-NAT-CCI-CD_--
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17
Firm overhauls IT system,avoids logistical nightmare
By Gary Anglebrandt
RPM Freight Systems LLC in Royal
Oak is in the logistics business. But
it doesn’t own any trucks or warehouses.
RPM’s business is built on software systems, people and relationships, CEO Barry Spilman said.
RPM uses software to wring out inefficiencies in shipping by matching
holes in the chain with needed shipments. Customers include both shippers and those with things to ship.
“There’s nothing to this business
except the systems,” Spilman said.
Problem: RPM’s information
technology systems were unable to
keep up as the company grew.
Customers that ship vehicles
wanted the ability to track not just
those shipments but specific vehicles within shipments. They wanted
to use vehicle identification numbers to track individual vehicles
while in transit. RPM’s systems were
such that if staffers wanted to track
one vehicle, they had to track 10.
Spilman and Chief Strategy Officer Al Samouelian knew they needed
a system that would adapt with the
business. RPM is targeting revenue
of $45 million this year, compared
with $16 million last year.
“Our goal is not to hire 1,000 peo-
RPM Freight Systems
Location: Royal Oak
Description: Logistics brokerage
CEO: Barry Spilman
Employees: 50
Revenue: $16 million in 2014
Barry Spilman:
It’s all about the IT
systems
ple,” Spilman said.
But revamping an entire company’s IT system is no small matter.
That’s even more true when that
system is its business. RPM’s backoffice systems are integrated with
the systems it uses to serve customers. This project would be fullblown, “from identifying leads to
collecting cash,” Spilman said.
These overhauls can take two
years, and that’s not even a worstcase timeline, he said. Spilman and
Samouelian wanted to bring that
time down dramatically.
Solution: At this point, many
companies would call on an IT consulting firm or hire an IT officer.
Then they might build the system
Al Samouelian:
Gave vendor a
detailed plan
in-house and employ an army of
programmers to serve as caretakers.
RPM didn’t want to buy an offthe-shelf system but didn’t want to
build one, either. So it hired a vendor to supply one and customize it.
That’s hardly novel, but RPM made
sure to make its expectations clear
— namely, that it wanted this done
fast.
“We gave very specific requirements of how the software needs to
work, what is automated and what
info is displayed,” Samouelian said.
“Most software out of the box doesn’t do what you want it to do. We
provided them a detailed plan.”
RPM knew its executives would
be hands-on with the project, working extra hours to get it done. The
company needed the same level of
commitment from a vendor.
“We set the tone with the partner
firm from Day One,” Samouelian
said.
Compensation was arranged as a
monthly fee rather than up front.
On RPM’s end, its executives took
on some of the work that an IT outsourcing firm would have done.
They also set up training for
staffers while the overhaul was
going on. RPM assigned four people
to be “super users” who learned the
new system and then trained others
to use it, with those training teams
working off-hours and weekends.
Getting the vendor took two
months. The actual overhaul took
six months, with the rollout coming
at the beginning of this year.
Risks and considerations: IT overhauls expose a business to downtime, blown deadlines and unnecessary costs.
But the main concern RPM had
was about employee morale should
the project falter upon rollout. The
point of the new system was to improve the ability of staff members to
get things done faster. A bad rollout
could cause them to lose enthusiasm.
While there have been some
snags and work continues on the
system, it has done the job that
prompted the project — track shipments by a single VIN.
“It has reduced our workload 10
times,” Spilman said.
Expert opinion: Eric Fornasiero, a
Rochester Hills-based consultant to
small and midsize businesses, said
another useful tactic when giving
performance-based contracts is to
provide a bonus at the end for a job
well-done, especially when the vendor is being pushed hard to finish
early.
He also recommended contracting for continuing support
after the project
is completed.
For projects that
are under intense deadline
Eric Fornasiero:
pressure,
it’s
Most important,
smart to have an
“make sure it works” operating plan
for the point at
which the project is 95 percent
done. In the case of a software project, that plan would cover how the
system would be used while the
final kinks are being worked out.
Finally, Fornasiero offered a word
of caution about pushing too hard:
“People will remember a good job,
whether it was done quickly or
slowly. The key at the end is to make
sure it works.” 䡲
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With most details in place, Utica
baseball stadium breaks ground
By Bill Shea
bshea@crain.com
A ceremonial groundbreaking on
a $12 million professional baseball
stadium in Utica is scheduled for 11
a.m. June 23.
The project, announced last August, is led by Rochester sports entrepreneur Andy Appleby and is entirely privately financed through his
General Sports & Entertainment LLC.
The stadium will be home to a
three-team independent developmental baseball league that Appleby
is concurrently organizing for players ages 22-26 who have not yet
made it into Major League Baseball’s
minor leagues.
The groundbreaking will be on
the project site east of Moscone
Drive and north of Auburn Road. It
runs parallel to and north of M-59.
Construction is expected to take
12 months, so the ballpark will be
ready for play in June 2016, Appleby
said.
“I know it sounds ambitious, and
it is,” he said,
adding that he’s
relying on his
past
baseball
ownership experience.
The site is a
former household
waste
AndyAppleby: “It dump, and soil
sounds ambitious, testing last year
and it is.”
revealed the stadium will need
additional reinforcement. That
added about $2 million to the project cost, Appleby said.
To help offset costs, naming
rights for the stadium and the new
league have been sold, Appleby said,
but the buyers’ identities likely won’t
be disclosed until the groundbreaking.
The ballpark will have a 2,000seat grandstand and another 1,500
seating spots in picnic and lawn
areas. Planned are 12 private patio
suites, five dugout-level suites, and
five penthouse suites, Appleby said.
His business plan is to generate
revenue from the baseball games —
ticket, concession, merchandise and
suite sales revenue — and to lease
the ballpark and site for public and
private events such as fireworks,
concerts, graduation ceremonies,
Little League games, youth soccer
games and high school sports.
This isn’t General Sports’ first
baseball project: For several years it
owned a Single-A minor league
team in Fort Wayne that was part of
the San Diego Padres’ farm system. It
was unsuccessful in an effort to
build an independent league baseball stadium in Troy in the mid2000s.
“I fell in love with minor league
baseball,” Appleby said of his time
owning the Fort Wayne Wizards.
Appleby said the Utica project’s
intent is less to make money than to
provide a fun, safe place for families
to enjoy, and to create new baseball
fans — his gift to a community he
said has benefited him for 30 years.
“This is such a wonderful platform to do that,” said Appleby, a former Palace Sports & Entertainment executive who currently is a director
and co-owner of the English professional soccer club Derby County.
Although General Sports has an
artificial turf division, the playing
field in Utica likely will be natural
grass, and there will be grass areas
for events and kids play areas, Appleby said. An additional 6.5 acres
will be used for a 500-space parking
lot that General Sports will share
with the city for public use.
A second phase, which will be
built at a date yet to be determined,
is a retail and condo development
just across the Clinton River on 1.4
acres.
Utica’s Downtown Development Authority, which owns the entire 15.7
acre project site, will lease the land
to General Sports for $1 annually
under a 30-year lease that includes
two 10-year options. General Sports
will own the stadium.
The project’s general contractor is
Rochester-based Frank Rewold & Son
Inc., and Kansas City-based Pendu-
lum is the architect.
Pendulum’s local current Detroit
work is as designer of the proposed
$15.5 million, 20,000-square-foot
Detroit Police Athletic League headquarters and training facility at the
old Tiger Stadium site.
The Utica stadium will have Wi-Fi
throughout the ballpark, and green
aspects such as LED field lighting,
separate trash and recycling receptacles, reusable cups for beverages,
and waterless urinals in restrooms.
Appleby said the project has all of
its required government approvals
and permits. The site has all the
needed utilities.
The team names and geographic
affiliations are still in the works, Appleby said, and the league could expand in the future to include more
teams and locations.
Rosters will be 22 to 25 players per
team, and they’ll play a May-September schedule. Dates could be
added to the end of the 2016 season
because of the ballpark’s expected
June opening, Appleby said.
Each of the three teams will play a
50-game season, which means 75
games at the new stadium. 䡲
Bill Shea: (313) 446-1626
Twitter: @Bill_Shea19
20150608-NEWS--0019-NAT-CCI-CD_--
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ACQUISITIONS &
MERGERS
HR Impact LLC, Royal Oak, a newly
formed subsidiary of HRPro Inc.,
Royal Oak, has acquired the assets
of Management Impact, Grosse
Pointe, a human resources consulting firm. Website: hrpro.biz.
Hazen Final Mile LLC, Taylor, a transportation company and a division of
Hazen Transportation Inc., was acquired by TransForce Inc., Saint-Laurent, Quebec, a transportation and
logistics provider. Hazen Final Mile
will operate as a separate division of
Dynamex U.S., also a TransForce company. Hazen Final Mile will retain its
own brand, employees and headquarters in Taylor. Websites:
hazentransport.com/final-mile;
dynamex.com;
transforcecompany.com.
DEALS
& DETAILS
Submit news to cdbdepartments@crain.com
Livonia, as the supplier for the amphitheater’s audio system for the
2015 concert season. Websites:
freedomhill.com,
thunderaudioinc.com.
Doeren Mayhew Capital Advisors,
Troy, acted as exclusive financial advisers assisting Renaissance Manufacturing Group LLC, Milwaukee, in acquiring the foundry operations of
PurePower Technologies Metalcastings
Group, Waukesha, Wis. The new entity is Renaissance Manufacturing Group
Waukesha Foundry LLC. Websites:
doeren.com,
purepowertechnologies.com.
Michigan Emergency Department
Improvement Collaborative, a collaboration between the University of
Michigan, Ann Arbor, and Blue Cross
Blue Shield of Michigan, Detroit, selected ArborMetrix Inc.’s RegistryMetrix cloud-based analytics to
develop a data infrastructure and
reporting system to improve emergency care for children and adults.
MEDIC plans an initial hospital enrollment of eight to 10 pediatric and
general care emergency departments for a launch in the first quarter of 2016, with more from across
the state to be added in the future.
Websites: arbormetrix.com,
medicqi.org.
Freedom Hill Amphitheatre, Sterling
Heights, selected Thunder Audio Inc.,
Leader Dogs for the Blind, Rochester
Hills, agreed to provide orientation
CONTRACTS
and mobility services for the Pennsylvania Association for the Blind, Mechanicsburg, Pa., a nonprofit that
provides programs and services for
people with visual impairments.
Websites: leaderdog.org,
pablind.org.
iDashboards, Troy, a supplier of
business intelligence dashboard solutions, has contracted with U.S. Department of Veterans Affairs, VA Tennessee Valley Healthcare System, to
create a customized dashboard to
take paper-based information and
share it internally, identifying internal needs. Website:
idashboards.com.
19
Pie Five Pizza Co., a subsidiary of
RAVE Restaurant Group Inc., Dallas,
has opened a franchise at 24532 W.
12 Mile Road, Southfield. Website:
piefivepizza.com.
MOVES
Wright & Filippis Inc., Rochester
Hills, moved its Dearborn office
from 15044 Michigan Ave.to 22850
Michigan Ave. Phone: (313) 5840070. Website: firsttoserve.com.
Tebis America Inc., Troy, a software company specializing in
CAD/CAM systems for the tool, die,
mold, aerospace and automotive
manufacturing industries, is
launching its TEB-110 4.0 software
that features a new visual design,
self-explanatory icons and more
feedback for the operator. Website:
tebis.com.
NAME CHANGE
Harrington Dragich PLLC, has
changed the name of the law firm
to The Dragich Law Firm PLLC. Also,
the office has moved from 21043
Mack Ave., Grosse Pointe Woods, to
17000 Kercheval, Suite 210, Grosse
Pointe. Telephone: (313) 886-4550.
NEW SERVICES
Altair Engineering Inc., Troy, announced that GeonX S.A., Charleroi,
Belgium, has joined the Altair partner alliance bringing access to Virfac, a welding simulation software,
to users of Altair’s HyperWorks platform. Website: altair.com.
NEW PRODUCTS
Burroughs Inc., Plymouth Township, a provider of check scanners
for the financial community, announced the addition of ultraviolet
check fraud security to the SmartSource Professional Elite check
scanner, providing improved UV
image quality and enhanced fraud
detection. Website: burroughs.com.
EXPANSIONS
Lear Corp., Southfield, a global
supplier of automotive seating and
electrical distribution systems,
plans to open a new automotive
plant to produce seat covers in Gostivar, Macedonia, this summer.
Website: lear.com.
cost-effective battery. Website:
bipolarbatterplate.com.
ElectriPlast Corp., Canton Township, a subsidiary of Integral Technologies Inc., announced the company’s invention of a patent
pending, highly conductive plastic
bipolar plate that will be developed
into a lightweight, moldable and
Michigan Business & Professional Association, Warren, is offering Michigan businesses a complimentary
Department of Labor audit guide
that can be downloaded. Website:
michbusiness.org/hcrc/compliance
and click on DOL compliance.
Deals & Details guidelines.
Email cdbdepartments@crain.com.
Use any Deals & Details item as a
model for your release, and look for
the appropriate category. Without
complete information, your item will
not run. Photos are welcome, but we
cannot guarantee they will be used.
AND WE’VE GOT THIS, TOO.
Blue Cross Blue Shield
of Michigan and Blue Care
Network offers the complete
insurance solution for your
small business.
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20150608-NEWS--0020-NAT-CCI-CD_--
20
6/5/2015
10:49 AM
Page 1
PEOPLE
ON THE MOVE
Send news
cdbdepartments@crain.com
Send
newsitems
itemsand
andphotos
photostoto
cdbdepartments@crain.com
SPOTLIGHT
STEFAN SPINDLER,
CEO Industrial,
Schaeffler AG
Stefan Spindler, 53, has been
named CEO industrial and
member of
the board of
managing directors at
Schaeffler AG
in Troy.
Previously,
Spindler was
a member of
Spindler
the executive
board at
Bosch Rexroth and responsible
for the mobile applications business division.
He succeeds Robert Schullan,
who left to pursue other opportunities.
Spindler studied mechanical
engineering at the Technical University of Munich where, in 1992,
he also obtained his doctorate in
internal combustion engine
technology alongside his work as
a research and development engineer at MTU Friedrichshafen.
From 1992 to 1999, he was
chief engineer for MTU in the
U.S. before returning to Germany to assume the position of
after sales department manager.
In 2000, Spindler joined Liebherr Machines, Switzerland, as
head of the company’s engine
product sector and deputy technical manager.
GOVERNMENT
Lyn Roberts to director of fiscal
services, City of Southfield, from
deputy CFO, Wayne County,
Detroit.
SERVICES
Mia Anderson to senior director,
profit analysis, FordDirect, Dearborn, from director of cash management and financial analysis.
Also to senior director from director: Luke Fricker, DealerConnection
platform; David Grandy, dealer operations; Erik Marlin, technology;
Teresa Meehan, digital advertising,
from advertising director; Manu
Misra, architecture; Harish Ram chandani, strategy and Lincoln personalized online experience; Marcia
Sorensen, OEM operations, from
Ford and Lincoln enterprise director; and Keith Spondike, consumer
marketing. To director: Heather
Blunt, select dealer region and
training initiatives, from training
manager; Laquita Carpenter, consumer marketing, from senior
manager, consumer marketing;
Darlene Deeg, accounting, from accounting and finance manager;
Emily Eldridge, consumer marketing, from dealer relations manager,
consumer marketing; Brett Moore,
Lincoln customer engagement,
from advertising manager; and Marina Safroniy, consumer marketing
platform, from manager.
SUPPLIERS
Hunter Coe to president, Coe
Press Equipment
Corp., Sterling
Heights, from
cut-to-length
business manager. Also, Jim Ward
to director of engineering, from
general sales
Coe
manager; Jeff
Grivas to director of sales, from director of sales, Easom Automation
Systems Inc., Madison Heights; and
Dave Boissonneault to CFO, from
CFO and COO, SteriMed Medical
Waste Solutions Inc., Farmington
Hills.
TECHNOLOGY
Joni Jones to
marketing director, iDashboards,
Troy, from freelance marketing,
sales and creative director, J.
Jones Design
LLC, South Lyon.
Matthew
Jones
Carstens to vice
president and general counsel, utility operations, legal, ITC Holdings
Corp., Novi, from senior counsel
and practice group leader, legal department, ITC Midwest LLC, Cedar
Rapids, Iowa.
People on the Move
announcements are limited to
management positions. Email
cdbdepartments@crain.com.
Include person’s name, new title,
company, city in which the person
will work, former title, former
company (if not promoted from
within) and former city in which the
person worked. Photos are
welcome, but we cannot guarantee
they will be used.
CALENDAR
WEDNESDAY
JUNE 10
The Talmer Bank Story: Concept. Acquisitions. Marketing. 8-10:30 a.m.
Marketing and Sales Executives of
Detroit. Talmer Bankcorp Inc. Chairman Gary Torgow will share how purchasing troubled banks in the middle of the recession enabled the
organization to grow nearly 8,000
percent. Management Education
Center, Troy. $35 MSED members,
$50 nonmembers. Website: msedetroit.org.
THURSDAY
JUNE 11
Small Business Unlocked Morning
Mingle 7:30 a.m. Detroit Regional
Chamber. Interact with potential
business clients and strengthen relationships with other chamber professionals. Flagstar Bank, 2050 W. Big
Beaver Road, Troy. Cost: Free for
chamber members, $595 for future
members. Contact: Marianne Alabastro, (313) 596-0479.
Upcoming events
A2 Tech Trek Innovation Open House.
3-7 p.m. June 12. Ann Arbor Spark.
Features open houses at downtown
Crain’s honors 20 in their
20s, Class of 2015
Join Crain’s in honoring its
10th class of 20 in their 20s: the
best and brightest up-and-coming businesspeople in Southeast
Michigan.
The event is 5-9 p.m. June 29 at
HopCat Detroit , 4265 Woodward
Ave., Detroit, and include 2015
honorees, friends, family, past recipients, food and an open bar.
Tickets are $50 individual, $45
each for groups of 10 or more,
$40 for alumni. Preregistration
closes at 9 a.m. June 26 . If available, walk-in registration will be
$60 per person.
For information, contact Kacey
Anderson (313) 446-0300; email:
cdbevents@crain.com; website
crainsdetroit.com/events.
Ann Arbor’s technology companies
and organizations. Start at Menlo Innovations, MLive Media Group or Ann
Arbor Spark. Free. Contact: Jenn Cornell, (734) 765-0174; email jenn@jenncornell.com; annarborusa.org
Trade Fair — Supplier Diversity
Matchmaker. 8 a.m.-noon. June 12.
Michigan Hispanic Chamber of
Commerce. Event brings together
suppliers, corporations and tierone companies with diversity
growth targets. The Henry, Dearborn. $150. Contact: Barbara
Lange (248) 792-2763 ext. 101;
email: blange@mhcc.org; website: www.mhcc.org
Young Leader Conference. Noon5 p.m. June 16. Detroit Economic
Club. Professional development
designed by young leaders for
young leaders. Cobo Center. $90.
Contact: Paige Narins (313) 9638547, ext. 115; email:
pnarins@econclub.org
Calendar guidelines. Visit
crainsdetroit.com and click “Events”
near the top of the home page.
Then, click “Submit Your Events”
from the drop-down menu that will
appear. Fill out the submission form,
then click “Submit event” at the
bottom of the page.
More Calendar items can be
found at crainsdetroit.com/events.
20150608-NEWS--0021-NAT-CCI-CD_--
6/5/2015
4:32 PM
Page 1
Dickinson Wright opens office
in Reno, expands in Las Vegas
Dustin Walsh: (313) 446-6796
Twitter: @dustinpwalsh
By Tom Henderson
Detroit-based Huron Capital
Partners LLC, annually the busiest
private equity firm in the state, has
completed its 11th and 12th acquisitions of the year, which are its
seventh and eighth deals in the
past nine weeks.
Huron has acquired Lexington,
N.C.-based Carolina Drawers as an
add-on for one of its platform
companies, Georgetown, Ontariobased Olon Industries.
And Huron has acquired Nexus
Technical Services Corp. of Oakbrook Terrace, Ill., for another platform company, Jensen Hughes Inc.
of Baltimore.
“We’ve been clicking on all
cylinders. We’ve had a good year,”
said Huron’s managing partner,
Brian Demkowicz. “We’ve got a
number of companies in due diligence that we expect to close on in
the next two months, both new
platform companies and add-ons
for current platform companies.
“We had a goal of 15 acquisitions
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E-Mail: cdbclassif ied@crain.com
701 Middlesex Rd.
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R O S E
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niture and cabinet products, with
facilities in Geneva, Ill.; Jefferson,
Ind.; Lexington, N.C.; and Georgetown, Ontario.
This is the fourth Huron add-on
for Jensen since March 31 and the
eighth overall. Jensen has eight offices in the U.S. and operations in
Europe, the Middle East and Asia.
Nexus will continue to operate
under that name. The acquisition
will give Jensen, a provider of specialty engineering and consulting
services with a focus on the nuclear-energy industry, revenue of
almost $200 million.
Demkowicz said each of the acquired firms has revenue of less
than $20 million. Sale prices won’t
be disclosed, but Demkowicz said
aggregate deal value for transactions this year has been more than
$100 million. The deals were financed from its $500 million
Huron Fund IV LP.
Huron has made 102 acquisitions since being founded in 1999.
REAL ESTATE
B
HEALTH BENEFITS
this year, and we’ll easily exceed
that. But it hasn’t been easy because multiples are so high,” he
said, referring to the ratio, in what
is generally considered an overheated market, of acquisition price
to EBITDA, which is earnings before interest, taxes, depreciation
and amortization.
Private equity firms are often
paying multiples of eight or nine
times
EBIDTA,
multiples
Demkowicz says he tries to limit.
“We’ve had to be very disciplined. We’re finding most of our
deals off the beaten path. Most of
our deals didn’t have a broker on
the other end, which makes them
more cost-effective,” he said.
This is the first add-on for Olon
this year and second overall. Carolina Drawers is a leading manufacturer of solid wood and plywood drawers for the U.S. kitchen and bath
cabinet and furniture industries. It
also sells a line of Baltic birch plywood products and has operations
in Indiana, Illinois and Ontario.
Olon makes a wide range of fur-
B Y
Dickinson Wright PLLC announced Monday that it opened a
new office in Reno, Nev., and expanded its Las Vegas office after hiring Las Vegas gaming attorney Jeffrey Silver last month.
The Detroit-based firm now employs 30 attorneys in Nevada, following the addition of 13 attorneys
who join Dickinson from Silver’s
former Las Vegas firm Gordon & Sil ver Ltd., at offices in Reno, Las Vegas
and Carson City.
The Nevada offices will have a
focus on commercial litigation, intellectual property, sports, media
and entertainment and corporate
law.
Gordon & Silver, known for its
bankruptcy practice, has suffered
tremendous losses this year with
several high-level resignations,
many of which took several of its attorneys with them. Managing Partner Gerald Garmin left the firm to
form Garman Tuner Gordon in May,
according to a May 11 article by
Vegas Inc.
Dickinson Wright opened its first
office in Nevada in 2010.
“This was a chance to exploit an
opportunity to become a significant
legal provider in the state of Nevada,” said Dickinson Wright CEO Bill
Burgess. “Our opportunities are different than when we opened in Las
Vegas in 2010. What started as a
small, focused operation is now
more than a half dozen strong practice areas.”
Dickinson Wright now employs
roughly 400 attorneys in 15 offices
across the U.S., including Troy, Ann
Arbor, Grand Rapids, Saginaw,
Lansing, Columbus, Nashville and
elsewhere.
Burgess said Dickinson Wright’s
expansion efforts are triggered by
client needs as they also expand.
“The motivation for our expansion strategy is that the service of
clients is very much a global opportunity and challenge,” Burgess said.
“For us to be effective competitors
in this industry, we have to have the
breadth to serve our clients across
North America, the U.S. and globally in certain cases.”
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Crain’s Classifieds Gets Results
S
dwalsh@crain.com
Huron Capital chalks up 12
acquisitions so far in 2015
N
By Dustin Walsh
21
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20150608-NEWS--0022-NAT-CCI-CD_--
6/5/2015
5:50 PM
Page 1
22
Rainbow regrowing day care center business
By Chad Halcom
chalcom@crain.com
Sometimes, a $100 million opportunity for one business can
come in the framework of its legal
agreements with another.
When Patrick Fenton sold a previous version of his Rainbow Child
Care Center Inc . to Learning Care
Group Inc . in 2008, the Novi-based
day care giant absorbed his nearly
50 care centers and Fenton became
a regional developer for the new
owners.
As such, he had an agreement to
build new Rainbow centers that
would transfer into Learning Care
Group on completion, as well as a
noncompete agreement barring
him from operating any day care
business of his own.
But about a year later, Learning
Care terminated the development
agreement in a changing market —
but his noncompete clause went
away with it, and the Rainbow
brand name returned to him. The
previously sold locations have all rebranded to Childtime Learning Cen ters, a Learning Care chain with 25
Michigan locations today.
That left Fenton, CEO of Rainbow, with eight to 10 project sites in
various stages of development that
were his to keep, and a chance to rebuild the chain he’d originally
founded in New Jersey in 1986. The
Troy-based day care company now
expects to have 110 locations in 12
states before the end of the year.
Scott Eisenberg, managing part-
ner of the Birmingham-based investment banking firm of Amherst
Partners LLC , said there are several
reasons why the day care industry
can grow in an area like Southeast
Michigan, where population is stagnant.
First, “This is a real estate play,
too, like investing in nursing homes
or assisted living centers. They’re a
business built around real estate,
and that provides a yield,” he said.
Second, he said those who have
left the workforce in recent years
have tended to be older workers,
with a high percentage of younger
families having both parents working and in need of day care.
Third, he said millennials are
waiting until they are older to get
married, and by the time they have
children they are better able to afford child care.
Finally, “There’s a focus now on
giving your kids the best, no matter
what it costs,” he said.
The investor interest in Rainbow
has been strong — and also helped
the company conquer an experience gap in acquisitions.
In 2010, New York private equity
firm Spire Capital Partners LP acquired a stake in Rainbow, and
since then, Fenton said, the company has been growing by a mix of
new construction and acquisitions.
Rainbow expects to gain a certificate of occupancy within the next
month on a new Orion Township
location, and it opened a new center in Murfreesboro, Tenn., a few
“(Spire Capital)
was a good team to
work with because
what we didn’t
know how to do
well yet was
acquisitions. They
pretty much knew
nothing but
acquisitions.”
Patrick Fenton, Rainbow Child Care Center
weeks ago.
“(Spire) was a good team to work
with because what we didn’t know
how to do well yet was acquisitions,” he said. “They pretty much
knew nothing but acquisitions, and
we knew nothing but greenfield
(development). And both were very
important.”
Rainbow stresses a “sense of continuity between home and school”
and exceeding accreditation or
quality standards in the states
where it operates, as well as a focus
on reassurance of a comfortable
routine at its centers. The company
also launched a Montessori method
preschool program at its Troy center
on John R Road over two years ago,
and the company hopes to have
half a dozen similar programs within the year.
Fenton said care centers can
house up to 125 children each,
meaning each site’s yearly revenues
can approach $1 million. Fenton
declined to provide total gross revenue but because all care centers
are corporate-owned and operated,
that means revenue companywide
would likely exceed $100 million
this year.
While Rainbow is still growing,
Fenton said there are no plans to
become a nationwide player in the
day care market, like Learning Care
or Oregon-based KinderCare Learn ing Centers LLC. Instead, he wants to
focus on a localized development
model and quality standards.
The company made a sizable expansion in early 2014 by acquiring
Crescent Springs, Ky.-based Little Red
School House Inc. for about $28 million, adding 13 care centers in Kentucky and southern Ohio into its network. Fenton says the company is in
discussions on three comparably
sized acquisition deals, at least one
of which could close this year.
A day care market research report
published this month by IBISWorld
estimates the U.S. day care market
had an aggregate value of $45 billion,
about flat with its size in 2010 — but
predicted economic recovery will
greatly benefit the industry.
Fenton said each care provider
finds its own niche, but it remains
highly fragmented.
“Even if you figure conservatively
(the size of the) market, the top 10 to
15 companies together wouldn’t hold
much more than 10 percent of it. It’s a
highly fragmented market,” he said.
“And we want to focus more on the
quality of care and our services, and
on our distinguishing factors.”
Rose Alberty, president and coowner of Canton-based Rosey’s
Romper Room LLC, said her company used to have a second location in
South Lyon but shuttered it in 2010
following the bankruptcies of the
U.S. automakers that employed
many of her customer families.
Fortunes changed and the company began growing again around
2013, amid the state’s economic recovery, she said, and now she is
considering growing outside Canton once more.
“We’re looking again at South
Lyon, but not in the city this time.
We’ve just been looking at various
locations, possibly a site near to the
freeway (I-96),” she said. “We’ve just
got to find the perfect location and
something that fits for us.”
Fenton said many of the executives of the former Rainbow chain
have since returned to the company
as it rebuilt, and he considers the
team an asset.
“What we have that we like here
is our culture, and our people.
Everybody here has the same attitude and culture,” he said. “We are
going to succeed, and we just look
at how and what we can each do to
make that work.”
Tom Henderson contributed to
this report.
Chad Halcom: (313) 446-6796
Twitter: @chadhalcom
SORRELL, from Page 3: Venture capitalists worried after MEDC vice president resigns
tech transfer office at the University
of Michigan before he was named
last year to run the Ann Arbor office
of Chicago-based Baird Ventures .
“She understands entrepreneurs.
She’s a very quantitative, very focused person who gets the job
done.”
He said he, like other local venture capitalists, worries what her
departure means in terms of continued support for the VC community by the MEDC.
“It is certainly a concern, but it
hasn’t played out yet. It depends on
what the MEDC does moving forward,” he said.
Leadership changes
Sorrell’s departure also comes at
a time when area
venture capitalists are worried
that Finney’s replacement
as
CEO of the
MEDC, Steve Arwood, wants to
reduce
the
Steve Arwood:
MEDC’s focus on
Pledges support of venture capital
entrepreneurship
through
such
state-funded
programs as the Venture Michigan
funds and the 21st Century Investment Fund.
Arwood pledged his ongoing
support for entrepreneurship in an
e-mail to Crain’s last week. “A vital
and strong entrepreneurial ecosystem is, and must remain, a critical
component of Michigan’s economic
development strategy,” he said.
“Without a robust network of business incubators and a broad set of
entrepreneurial support services,
Michigan will not realize the full
economic potential of its worldclass research, development and
entrepreneurial talent.
“Paula was, and will remain, a
huge asset to that ecosystem in
Michigan. We are sad to see her
leave, and wish her the best of luck
in the private sector. We feel confident that her work at MEDC will
continue to provide the necessary
support for Michigan entrepreneurs for many years to come.”
In March, Arwood told Crain’s he
was open to further financial support by the state for VC firms, but
that his top priority was training
workers to fill the openings for
skilled jobs that established companies have trouble filling.
Sorrell said she left the MEDC on
good terms. “It was a great ride.
They asked me to stay on, but it was
just time.”
Some disappointment
Sorrell did admit to being irked
at lawmakers who question state
funding for early-stage tech companies.
“For every dollar the state invested, we saw a 35-to-1 match,”
said Sorrell. “That’s venture capital investment, angel investment,
large federal SBIR grants, bank
loans and first revenue following
product launch. It wasn’t just a
long-term return, it was shortterm return.”
And she acknowledged disappointment that there seems to be
a reduced focus by the MEDC on
entrepreneurship.
“I carried a card around with
me all the time that had the strategic plan for the MEDC on it, and it
had entrepreneurship at the top of
the list,” said Sorrell. “The most recent plan had entrepreneurship
at, like, number eight.”
When Finney recruited her to
the MEDC, Sorrell had been
teaching
commercialization
courses to would-be entrepreneurs at Spark, TechTown in Detroit and Automation Alley in
Troy.
Sorrell, who has an MBA from
Central Michigan University, began
her marketing career as head of
marketing in 1997 for Polyphasic, a
Michigan State University spinoff
that created mapping software for
the Web.
In 1998, she joined another East
Lansing company, Voyager Net
Inc., as vice president of marketing.
She left the company in 2002, after
it went public, and helped launch
the state’s Small Business and Technology Development Centers.
Sorrell said she already has one
contract in place, to consult with
the technology transfer office at the
University of Miami in Florida. Its
director is James O’Connell, who
used to work with Sorrell when he
was with the tech-transfer office at
the University of Michigan.
She said she is negotiating a
contract with a nonprofit in San
Francisco that supports earlystage tech companies, and has
talked to local venture capitalists
and companies about helping
them with marketing and commercialization strategies.
Response by local venture capitalists to Sorrell’s return to consulting has been effusive.
“I think the world of her. She
has been a strong driver of entrepreneurial efforts in Michigan,”
said Jan Garfinkle, co-founder
and managing director of Ann
Arbor-based Arboretum Ventures
LLC , one of the most successful
VC firms in the state in recent
years.
Garfinkle
particularly
pointed out for
praise the MTRAC program
Sorrell helped
launch in 2012.
Its full name is
Jan Garfinkle:
the Michigan
Praises Sorrell’s
Translational
work on M-TRAC
Research and
Commercialization program and
was funded by the state’s 21st Century Jobs Fund to accelerate technology transfer at state research
universities.
Jim Adox, who manages the
Ann Arbor office of Madison, Wis.based Venture Investors LLC and is
chairman of the Ann Arbor-based
Michigan Venture Capital Associa tion, praised Sorrell for helping the
MVCA fund an entrepreneur-inresidence program and a program
for helping companies recruit Clevel executives.
As for the name of her company, Paula LLC, Sorrell said: “Yes, it’s
pretty informal. I don’t have to
spell it for anyone, and the URL is
pretty easy. My business is typically from referral, and most of my
clients will be past clients.”䡲
20150608-NEWS--0023-NAT-CCI-CD_--
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23
FORD,from Page 1: ‘Substantial changes need to occur’ to research and engineering campus
Engineering Center comprises 1.9
million square feet.
“We regularly evaluate ways to
maintain, upgrade and improve our
campus facilities to meet the needs
of the business,” said Dawn Booker,
communications director for Ford
Land. “At this time, there are no specific improvement plans to discuss or
announce.”
However, the RFP provides insight into what could come to the
center, which is across the street
from Edsel Ford High School in the
triangular area bounded by Rotunda Drive, Village Road and Oakwood Boulevard.
“To accommodate the increased
number of employees at the REC,
substantial changes will need to
occur throughout the campus,” the
RFP states.
Workplace features
The project also would redesign
the space with more modern amenities, ranging from gathering hubs in
the offices to outdoor walking paths.
The center, which currently has
about 13,000 Ford employees working there, would require redesigned
spaces to reflect “the latest workplace
trends and changing technologies in
order to improve employee retention
and the attraction of new talent.”
Ford is not the only Detroit automaker undertaking such a large
overhaul of space.
In May, General Motors Co. announced a $1 billion investment at
its Warren Technical Center that is
expected to create 2,600 jobs as part
of a $5.4 billion investment plan at
U.S. operations.
Work at the 60-year-old campus
— the nerve center for GM’s global
vehicle development that is home to
engineers, designers, information
technology workers and other employees — is expected to be complete by 2018.
It’s not clear from the RFP when
the Ford engineering campus work
would begin, or a final target budget, but it is envisioned as a 10-year
plan.
The Ford RFP also says that the
master plan must make the campus
pedestrian-friendly and include “safe
and attractive gathering places.”
Walking paths, water features
and other green spaces and landscaping are to be incorporated into
[COSTAR GROUP INC.]
The request for proposals for Ford MotorCo.’s research and engineering campus envisions a design that includes walking paths, water
features and other green spaces.
Plans for Ford’s Research and Engineering Center
A Ford Motor Co. RFP summarizes what a redeveloped campus and master
plan for the automaker’s Research and Engineering Center in Dearborn
should look like. It’s envisioned as a 10-year plan, but a specific construction
timeline hasn’t been disclosed. Among the work expected:
Improvements to office and testing space
Building demolitions
Infrastructure improvements, ranging from features that reduce energy use
to walking paths
Construction of new, state-of-the-art buildings
More parking
Consolidation of employees into a more densely occupied campus
A phased redevelopment plan that ensures operations can continue
smoothly for product development and testing during construction
Source: Ford Motor Co. Request For Proposals/Qualifications, November 2014
the design.
Modern work sites
The GM and Ford projects are examples of automakers adapting to
more competition for talent and
other factors, architects said.
Bob Kraemer,
principal of Detroit-based architecture firm
Kraemer Design
Group PLC ., said
employers are
Bob Kraemer:
increasingly
Renovation helps
considering
with recruitment.
workplace design as a key factor in attracting and retaining employees.
“We have, for about 20 years, over
and over heard that when we do ren-
Miller Canfield nets 10 from Chicago rival
Miller, Canfield, Paddock and Stone
PLC announced Friday it is expanding its Chicago office with the hiring
of 10 attorneys from Chicago-based
competitor Kubasiak, Fylstra, Thorpe
& Rotunno PC.
The hiring is part of the Detroitbased firm’s expansion strategy in
the region, Michael McGee, CEO of
Miller Canfield, said in a press release.
“Chicago is a strategic priority
based on client needs and continues to be a key market in our business growth plan as the largest economic and financial center in the
Midwest,” McGee said.
Joining the firm from Kubasiak
Fylstra are partners Gerald Kubasiak, Raymond Fylstra, Steven Rotunno and David Schaffer as well as six
other attorneys.
The new additions join three
other new hires this year in Miller
Canfield’s Chicago office.
Kubasiak will serve as the comanaging partner of the office,
which now employs 32 attorneys.
Todd Holleman and Darryl Davidson are the other co-managing
partners of the office.
Miller Canfield generated $112
million in revenue in 2014, according to The American Lawyer’s 2015
Am Law 200 rankings.
— Dustin Walsh
ovation of office spaces, after the
fact, it helps with recruiting and retention,” Kraemer said. “It wasn’t
done for that purpose, but it was def-
initely a side effect, and today, we actually pitch concepts that way.”
He said automotive companies
are actually “the furthest behind (in
updating their spaces) because of
the legacy thinking.”
Ford’s move to renovate and modernize its space is a shift in the right
direction for the 112-year-old company, said Matt
Rossetti, president of Detroitbased architecture firm Rossetti
Associates Inc. ,
which has done
interior design
for Ford in the
Matt Rossetti:
past.
Ford had been
“Ford, just like
“unbelievably
all the autos, had
boring.”
forgotten about
design and quality,” Rossetti said. “They were so unbe-
lievably boring, French vanilla spaces,
tall cubicles.”
Rossetti said that on one Ford project, with a limited budget, his company came up with a “really inventive
solution that came in on budget.”
But Ford didn’t react well, Rossetti said.
“They said the design was too interesting, that it looks like they
spent money, and they don’t want
their shareholders thinking that
they spent money on themselves,”
Rossetti said.
That’s not the right mentality to
project; an inferior working environment sends a message to workers that they don’t merit the investment, Rossetti said.
“How could you possibly expect
productivity to be anything other
than terrible? I’m being a little dramatic, but frankly, the results are
pretty much the same.”
When Kraemer Design Group
was talking with Covisint Corp. , a
spinoff of Compuware Corp. , about
its new headquarters in the Travelers Towers II building in Southfield,
space that could be used as a recruitment tool was an active selling
point, Kraemer said.
It was the same with the Archdiocese of Detroit, which moved its 200
employees into the former United
Way building at 1212 Griswold St. in
downtown’s Capitol Park this year.
“It was the exact same situation,” he
said. “They were in old space and
they were having trouble recruiting
people.” Kirk Pinho: (313) 446-0412
Twitter: @kirkpinhoCDB
RE
HEALTH CA
UP DATE
Presented by:
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:KDWZHFDQH[SHFWLQ
•
Trends that employers are watching,
based on a recent survey
•
A look forward at impacts of the
Affordable Care Act
•
Ways to stay ahead of health care trends
Powered by
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Webinar
Wednesday, June 17
Noon-1 p.m.
To register go to
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20150608-NEWS--0024-NAT-CCI-CD_--
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5:45 PM
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24
MARYSVILLE, from Page 1: Demolition of DTE plant fuels ideas for riverfront renaissance
riverfront meant industrial, not
recreation, when housing values
increased as you got farther away
from water.
“We’re going to make this a destination-type site. We’ll create a riverfront with a town-square feel,” said
Randall Jostes, CEO of St. Louisbased Environmental Liability Trans fer Inc., which is responsible for turning what is a brownfield today into a
greenfield ready for development.
“This is the future of Marysville,”
said Mayor Daniel Damman.
when it gets going,” Damman said.
Post-industrial vision
A river runs next to it
It’s easy to pass through Marysville
without knowing it. It has no central
business district and seems to be just
a southern district of Port Huron, its
larger neighbor immediately to the
north.
Marysville’s main thoroughfare
— Gratiot Boulevard, the northernmost stretch of the Detroit street of
the same name — runs through
town on its way to Port Huron’s historic downtown and lakefront
beaches farther on.
Until now, there hasn’t been
much reason to stop there.
City officials hope the DTE development will give people in nearby
counties an excuse to drive to
Marysville instead of through it, to
give them a weekend retreat far closer than Traverse City or Mackinac Island, and to give Canadian citizens
coming over the Blue Water Bridge to
shop a reason to head a few miles
south and make a weekend of it.
With I-94 and I-69 both just minutes away, Marysville is an hour’s
drive away or less for millions of
Michigan residents.
David Di Rita, a principal of The
Roxbury Group , the Detroit-based
real estate developer that renovated
the old Globe Building on the Detroit River into the Department of
Natural Resources’ Outdoor Development Center, said that a marina
on the DTE site will be crucial.
He said he is familiar with the
DTE plant because as a kid his family drove past it
on the way to
Lexington in the
summer. He said
the Army Corps
of Engineers built
a break wall in
Lexington in the
1970s that alDavid Di Rita: An lowed for a large
on-site marina
marina,
“and
would be important that put Lexington on the map.”
He added: “Absolutely, the key is
opening up the waterfront. Creating
more opportunities to interface with
that property from the water is necessary.”
Boaters in Lake St. Clair, for example, will have more of an excuse
to pilot up the St. Clair River and
make a weekend of it by having a
place to dock, get a room for a night
and have a nice dinner.
“Water brought DTE to Marysville,
and it can bring people there now. You
create a demand,” he said. “Marysville
is not that far away, and obviously the
water there is beautiful.”
“It takes a lot of vision to trans-
[TOM HENDERSON]
Demolition is underway on a DTE coal-fired power plant in Marysville, which is 12 stories and 300,000 square feet and
dominates the skyline from the banks of the St. Clair River.
Suppliers keep Marysville tax base strong
For a city of fewer than 10,000,
Marysville can boast a strong industrial tax base, even with the
closing of the DTE Energy Co.
power plant and the loss of its 250
jobs in 2001.
In April, SMR Automotive Sys tems, part of U.K.-based Samvardhana Motherson Reflectec Group
Holdings Ltd., a tier-one auto supplier, announced it would create
200 new jobs and invest $18.6 million to buy 4 acres of land and build
an 85,000-square-foot expansion of
its growing complex on Busha
Highway on the south side of the
city.
SMR makes exterior mirrors
and blind-spot detection systems
at the complex. It was the third expansion in Marysville by SMR in
the past two years. When this project is done, the company will have
more than 400,000 square feet at
the site and employ almost 1,000,
making it one of the largest employers, and the largest manufacturer, in St. Clair County.
St. Clair County will administer
a Community Development Block
Grant of $2 million to train new
hires for the expansion, with
Marysville considering a tax
abatement on new construction
as part of the required local match
form an industrial riverfront,” said
Mark Wallace, president and CEO of
the Detroit Riverfront Conservancy.
“It’s usually had so much hard use
you have to remind yourself that it
was once a natural place.
“In Detroit, we took a very blighted area and turned it into one of the
best parks in America. It’s great to
see cities like Marysville taking a
look at their riverfronts, too.”
Wallace formerly was the Detroitbased director of Hines Interests LP
who managed Bayside, a 13-acre residential and commercial-use waterfront development in Toronto and
was project manager of River Point, a
1.3 million-square-foot mixed-use
development on the Chicago River.
Jostes has engaged Sitetech Inc.
of Grafton, Ohio, to tear down the
plant and handle the massive recycling involved. Tons of steel will be
sold as scrap. Some bricks have
gone to DTE to distribute to former
for the block grant.
SMR confirmed that at least 102
of the new jobs will go to low- to
moderate-income applicants, with
the average wage at $11 an hour.
The Michigan Department of
Transportation approved a grant
of $1 million to put in bypass lanes
on the highway that goes past the
complex to ease congestion when
shifts start and end, with construction now underway.
In 2013, SMR announced a $40
million, 30,000-square-foot expansion of its paint building, creating what was projected to be 366
new jobs, and last fall it announced a building expansion of
15,000 square feet.
SMR also bought a 100,000square-foot warehouse in Port
Huron last year.
The expansion of the paint
building was accompanied by an
announcement that a job training
grant of $500,000 by the Michigan
New Jobs Training Program would
fund training by St. Clair Community College for 90 of those new jobs.
German tier-one supplier, ZF
Friedrichshafen AG , employs
about 600 at a 6-year-old axle
plant in the city. A Chrysler Mopar
parts plant employs about 300.
— Tom Henderson
workers as souvenirs. Many of the
bricks now in large mounds on the
site will be ground up and used as
landfill on the site after coal-contaminated soil has been removed.
Environmental Liability shares
ownership and some management
with Commercial Development Co.
Inc. of St. Louis, which began talks
with DTE about buying the site in
December 2012 and which closed
on the deal in December 2013.
CDC was founded in 1985 to buy
vacant industrial properties and either retrofit them into big-box distribution centers or do demolition
and brownfield site reclamation.
CDC has since bought nearly 100
industrial sites in the U.S. with a total
of about 54 million square feet, including a 100-year-old G. Heileman
Brewery in Frankenmuth after the
brewer declared bankruptcy in 1991.
That site is now home to the River
Place Shops, an outdoor German-
PORT HURON
69
MARYSVILLE
53
94
59
LAKE ST. CLAIR
[PIERRETTE DAGG/CDB]
themed mall with 40 shops and attractions.
Jostes said CDC has engaged a
firm that will begin marketing the
DTE site to hotel and restaurant developers after further clean up.
He said that an architectural design firm will be hired soon to do
renderings of possible development
at the site, a mixed-use project that
will include retail, too.
Jostes said his firm will do utility
relocations and handle all the rezoning, turning the site into what he described as a pad-ready greenfield. He
said CDC would prefer to then sell
the land to a developer, although it
could develop the property itself if
necessary.
Fernandez said talks have begun
with firms in Wisconsin that manage water parks about an installation on the DTE site.
More than $5 million in waterfront grants have already gone to
improve the city’s waterfront, funding a new kayak launch south of the
DTE plant, a boardwalk along the
river and a new fish-cleaning station for anglers.
Fernandez said he is working on
a grant for a fishing pier, too.
“A casino is on our wish list, too,
although that might be difficult to
get through the Legislature,” said
Fernandez.
The No. 1 project for the development, though, is the boutique hotel.
According to Daniel Casey, CEO
of the Economic Development Al liance of St. Clair County , the hotel
occupancy rate in the county is 60
percent, compared to 55 percent
statewide, a rate that is expected to
go higher with the opening in April
of a new 43,000-square-foot convention center in Port Huron, under
the Blue Water Bridge that connects
Port Huron to Sarnia, Ontario.
“They just cut the ribbon. We
won’t have enough hotel rooms
Marysville officials credit DTE
with making sure it found a buyer
that would have a 21st century vision for what riverfront property
could be, especially property on
some of the bluest river water in the
world, just a few miles downstream
from Lake Huron.
“We’d been worried,” Damman
said. “There were rumors a scrapmetal recycler would buy the site
and use it to load freighters going to
the Pacific Rim. But DTE was keenly
aware what that site meant for the
region. You can’t overstate what an
exceptional partner DTE has been.
They really worked hard to find the
right suitor for the site.”
“We all knew from the get-go that
we had to do our due diligence and
make sure it was developed right. It
was very critical in doing our due
diligence and in the bidding that we
keep the city involved in every step
of the process,” said Ron Chriss, regional manager for DTE.
DTE continues to be active in
Marysville. The DTE Community
Foundation has donated $25,000 to
start fundraising for the new
Marysville Community Endowment
Fund, which will formally launch
during an event at Marysville High
School at noon on Friday, June 12.
The end of an era
Although the community looks
forward to new development, the
plant evokes nostalgia as an iconic
part of Marysville’s past and its sole
landmark. It will be missed.
“That plant is an icon here. It employed hundreds of people, and it
provided a huge tax base to the city,”
Fernandez said. “People will always
associate that site with Edison.”
Ryan Cooley, the founder of O’Connor Realty Detroit LLC, and his brother, Phil, the owner of Slow’s Bar BQ in
Corktown, grew up in Marysville.
Their grandfather, Francis O’Connor,
worked for Edison as a tree trimmer
before retiring in the early 1970s to
found O’Connor Realty Inc.
Ryan Cooley said some of his
fondest memories are of the plant.
“It’s my first
memory.
My
grandfather had
access to the
plant grounds,
and we’d go fishing there. He always had time to
take us fishing.
Ryan Cooley:
We’d catch perch
Plant a childhood
and
walleye.
fishing spot
They’re special
memories.
“I always thought the plant was a
beautiful building architecturally,
though others may have seen it differently. I look at it the way I look at the
(Michigan Central Depot) across the
street from where we’re at. I’m happy
to just have it sit there and be able to
look at it, and I’d have been happy to
see the DTE plant stay there, too,
though I’m glad to see them developing something like this on the river.” 䡲
20150608-NEWS--0025-NAT-CCI-CD_--
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25
CHICKEN, from Page 3: Trademark office to settle naming issue
future locations in northern Ohio,
Sobeck said.
Patent attorneys also aren’t clear
on whether there is any real meat
yet to Shake Shack’s chicken expansion plans.
At the moment, there may not be
much to worry about, said Cantor.
“The issue is, nothing is happening in real life right now,” he said.
“The only activity we’re seeing is at
the trademark office.”
Food industry chatter
Sobeck said once national stories
began to appear in May about rumors that Shake Shack planned to
launch a line of chicken products or a
spinoff restaurant, customers have
begun asking the Berkley company
about it.
“So many people in our restaurants sent emails or mentioned it to
our family or the employees asking
what we were going to do about
that,” he said. “Our customers are
very loyal, and working at the store
you see a lot of them all the time
and get to know them. So you devel-
[BUCK ENNIS/CRAIN’S NEW YORK
BUSINESS]
A Shake Shack in Manhattan.The chain
has 40 U.S.locations – but none in Michigan.
op a rapport with then, and they’re
brand-loyal.”
But again, Shake Shack has not
started using Chicken Shack as a
brand or even obtained the trademark
it wants — and even if it did there
would only be a potential legal problem if it caused some confusion or “diluted” the market for the local chain’s
customers or suppliers, Cantor said.
Shake Shack did not respond to
voicemail or email requests for
comment on this story last week.
Robin Silverman, an IP attorney for
the company at Golenbock Eiseman
Assor Bell & Peskoe LLP in New York,
deferred comment to her client.
Shake Shack has 40 U.S. locations
(and 27 stores overseas) but none is
in Michigan or Ohio. And currently,
the only chicken menu item at
Shake Shack is the chicken dog, a
hot dog made with chicken, apple
and sage sausage.
If the trademark name battle did
come to Chicken Shack’s own market,
it may not be a question of legal
standing as much as financial stamina, said Kenneth Dalto, owner of
Farmington Hills-based Kenneth J.
Dalto & Associates and a consultant
in several industries including restaurants.
“Shake Shack did an IPO not
even six months ago and they are
sitting on some money right now,”
he said. “It could hire a very powerful New York law firm if it’s intent on
the brand, and Chicken Shack is a
good family company, but maybe it
doesn’t compete on that level.
“If it does get into litigation, right
and wrong is hard to sort out sometimes. You’re still able to get the
other company’s mind off of running its business and even if you
lose it’s still a two-year battle.”
A simple beginning
Sobeck said perhaps the biggest
irony is in how Chicken Shack itself
came by the company name, when
John Sobeck was still building the
first restaurant in Royal Oak and discussing possible names with a friend.
“He was talking about different
names at the time and his friend
pointed out there was a pretty wellknown Army-Navy surplus shack
near there. They were known as the
surplus shack, and the guy said you
should just call your place the
chicken shack. He did, and the
name stuck,” he said.
“It’s interesting when you think
about how much other companies
put into market research and testing out names before they settle on
something like that.”䡲
Chad Halcom: (313) 446-6796
Twitter: @chadhalcom
MEXICO, from Page 3: Small local suppliers heading for the border
come much smaller.”
Rapid expansion
Hollingsworth — minorityowned and controlled by Stephen
Barr, who is of American Indian decent — is bidding on four programs
in Mexico for distribution services
and commodity management for
FCA US LLC , Ford Motor Co. and
Bombardier Inc., Martinez said.
Mike Wall, director of automotive
analysis for Southfield-based IHS
Automotive Inc. , said that the tier
structure in Mexico is “vastly underdeveloped” but that the projected
volume coming out of the country
is forcing automakers and suppliers
to ensure their
chain is more robust.
“The volumes
are there, and as
more automakers go down to
Mexico, an infraMike Wall: “The
structure
is
volumes are there” being created
in Mexico
that can support
more suppliers
down the line,” Wall said. “New
plants are coming on board in the
next few years, and they are already
quoting that business.
“The reality is, if you want that
business, you’ve got to be down
INDEX TO COMPANIES
These companies have significant mention in this week’s Crain’s Detroit Business:
Altair Engineering Inc. .................................... 12
American Society of Employers .................... 8
Anton Sowerby & Associates ........................ 5
Arboretum Ventures LLC .............................. 22
Archdiocese of Detroit .................................. 23
Autoliv Inc. ........................................................ 12
Blue Cross Blue Shield of Michigan ................ 11
Brooks Kushman PC ........................................ 3
Chicken Shack Inc. ............................................ 3
Clarity Communication Advisors Inc. .......... 13
Commercial Development Co. Inc. .............. 24
Compuware Corp. .......................................... 23
Con-Way Inc. .................................................... 12
Cooper-Standard Automotive Inc. .............. 12
CoStar Group Inc. .............................................. 1
Covisint Corp. .................................................. 23
Kenneth J. Dalto & Associates .................... 25
DataFactZ ........................................................ 12
Detroit Economic Growth Corp. .................... 13
Detroit Riverfront Conservancy .................. 24
Dickinson Wright PLLC .................................. 21
Diversified Industrial Staffing Inc. ................ 13
Domino’s Pizza Inc. .......................................... 12
DTE Community Foundations ...................... 24
DTE Energy Co. ............................................ 1, 24
DWM Holdings Inc. .......................................... 13
Econ. Develop. Alliance of St. Clair County 24
Environmental Liability Transfer Inc. .......... 24
Federal-Mogul Corp. ........................................ 12
Ford Land Development Corp. ........................ 1
Ford Motor Co. .................................................... 1
Friedman Integrated Real Estate Solutions 13
General Motors Co. .................................... 2, 23
General Sports & Entertainment LLC .......... 18
Golenbock Eiseman Assor Bell & Peskoe ....25
Gordon & Silver Ltd. ........................................ 21
Hines Interests LP .......................................... 24
Hollingsworth Logistics Group LLC ................ 3
Huron Capital Partners LLC .......................... 21
IHS Automotive Inc. ...................................... 25
Int’l Automotive Components Group .......... 12
Inteva Products LLC ........................................ 12
Kraemer Design Group PLC .......................... 23
Kubasiak, Fylstra, Thorpe & Rotunno PC .... 23
Logicalis Inc. ...................................................... 11
Macomb Community College ........................ 15
Macomb Cty. Plan. and Econ. Develop. .......... 5
Macomb Music Theatre .................................. 5
Marsh & McLennan Agency LLC ......................11
Michigan AFL-CIO ............................................ 10
Michigan Brewers Guild .................................. 10
Mich. Economic Development Corp. .............. 3
Michigan Venture Capital Association ........ 22
Miller, Canfield, Paddock and Stone PLC .... 23
Mt. Clemens Downtown Develop. Auth. ...... 4
Neighborhood Ventures .................................. 9
Nexus Technical Services Corp. .................... 21
O’Connor Realty Detroit LLC ........................ 24
Oakland University .......................................... 5
Olon Industries ................................................ 21
Paula LLC .......................................................... 22
Plante & Moran PLLC ...................................... 25
Polyphasic ...................................................... 22
Rossetti Associates Inc. ................................ 23
The Roxbury Group ........................................ 24
RPM Freight Systems LLC .............................. 17
Shake Shack Inc. .............................................. 3
Signature Associates Inc. ................................ 1
Sitetech Inc. .................................................... 24
SMR Automotive Systems ............................ 24
SSE IP .................................................................. 3
St. Clair Community College ........................ 24
616 Development ............................................ 10
Third Coast Development .............................. 10
TI Automotive Ltd. .......................................... 12
U.S. Patent and Trademark Office .................. 3
Utica Downtown Development Authority .. 18
Venture Investors LLC .................................... 22
Visteon Corp. .................................................. 12
Voyager Net Inc. .............................................. 22
W.K. Kellogg Foundation .................................. 9
Zimmerman/Volk Associates ...................... 10
there because automakers aren’t
looking for parts to be shipped in
anymore.”
Automakers in Mexico produced
3.2 million vehicles in 2014, surpassing Brazil’s 3.1 million to become the seventh-largest producer
of vehicles. China and the U.S. remain the largest producers of cars
in the world.
Production in Mexico is projected to top 4 million in 2017, according to IHS, as it gets closer to the
country’s plans to reach 5 million
units by 2020. This would move
them ahead of India and South
Korea in production.
Labor costs
Low labor costs and favorable
trade agreements with more than
45 countries make Mexico an attractive location for Southeast
Michigan suppliers looking for
global expansion.
An average unskilled laborer in
Mexico costs $8 an hour, including
wages and benefits, according to
data from the Ann Arbor-based
Center for Automotive Research .
Comparatively, similar workers for
General Motors Co. cost $58 an hour.
Although cheap labor is a benefit,
Wall said, labor rates will rise.
“I don’t think the move to Mexico
is just a labor solution; it’s not the
endgame,” he said. “Just as labor
cost is rising in China, the whole
labor cost benefit in Mexico will
turn on its head eventually.”
Alejandro Rodriquez, country
manager for Southfield-based
Plante & Moran PLLC in Monterrey,
Mexico, said constraints on the
labor force will occur as the need for
skilled workers and engineers rises.
“There’s already more demand
than supply for the highly skilled
workers,” Rodriquez said. “It’s a complete misconception that labor is inexpensive overall. … There’s a huge
gap between skilled and unskilled
labor.”
For instance, suppliers and automakers are likely to pay more for a
plant manager in Mexico than in
the U.S., Rodriquez said, because
fewer people are qualified for those
positions in Mexico. That creates
demand that raises pay.
The next labor challenge in Mexico will be retaining talent — a familiar challenge to Southeast Michigan
suppliers, Rodriquez said.
“You can’t manage your operations
in Mexico with just expats; you must
build a culture there,” Rodriquez said.
“Not everything is about money for
Mexicans. They want to feel part of
something larger, just like their American counterparts.”
While issues with labor are
bound to crop up, it’s Mexico’s expansive trade agreements with
more than 40 countries that have
driven the global auto industry into
the country, experts said.
Mexico’s strong agreements allow
exporters duty-free access to markets that contain 60 percent of the
world’s economic output, The Wall
Street Journal reported this year.
Automotive exports from Mexico
this year are projected to rise to a
record 2.9 million vehicles, more
than 87 percent of its projected production, according to the Mexican
Automobile Industry Association. As
much as 70 percent of those exports
are projected to be going to the U.S.
For Hollingsworth, exporting isn’t
one of its options, but the increased
exports from Mexico are a welcome
catalyst to its own growth.
“Customers are looking for suppliers that can deliver their services
on an international level,” Martinez
said. “If we’re not down there as
soon as possible, we’re not going to
be able to compete long term.” 䡲
Dustin Walsh: (313) 446-6042
Twitter: @dustinpwalsh
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20150608-NEWS--0026-NAT-CCI-CD_--
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26
WEEK ON THE WEB/JUNE 1-5
Harvard Drug
Group sells for
$1.12 billion
O
hio-based Cardinal Health
Inc. said it will buy Livonia-based Harvard Drug
Group from Court Square Capital
Partners for $1.12 billion to increase its distribution of generic
drugs, Bloomberg reported.
Cardinal Health will fund the
acquisition with cash and new
debt. The purchase will add more
than 15 cents to earnings per
share from continuing operations
in fiscal year 2016, it said. Harvard
Drug Group, a distributor of
generic drugs and over-thecounter remedies, had revenue of
about $450 million last year, according to a statement.
The purchase will also bolster
Cardinal Health’s telesales capabilities and add specialized packaging options for hospitals.
ON THE MOVE
䡲 Sports agent Arn Tellem is
joining Palace Sports & Entertainment as vice chairman. Telem will
be responsible for business strategy, public affairs, planning and development, and strengthening the
connection between the Pistons
and Palace Sports and the community. The hiring was announced last week by Tom Gores,
who owns the Detroit Pistons and
the Palace.
䡲 Curtis Farmer , 52, has been
named president of Dallas-based
Comerica Inc. and Comerica Bank.
He replaces Ralph Babb , 66, who
retains the titles of chairman and
CEO of both organizations.
Farmer will continue to manage
Comerica’s retail bank and wealth
management. He adds oversight
of the business banks.
䡲 Rofin-Sinar Technologies Inc. ,
a maker of high-performance
lasers and laser components that
is co-headquartered in Plymouth
and Hamburg, Germany, announced that Thomas Merk will
succeed Gunther Braun as president and CEO, effective July 1.
Merk is COO of the company’s
Laser Micro and Marking Group
since 2005 and will succeed Braun
as director of the company.
COMPANY NEWS
䡲 Google Inc. is leasing about
90,000 square feet in the 696 Cen tre building on Farmington Road
in Farmington Hills. The Internet
giant is expected to move an unknown number of employees into
the 264,000-square-foot building
just north of I-696 in the fourth
quarter, according to a real estate
source. The building is owned by
Bloomfield Hills-based Alrig USA.
The lease comes one month
after Google announced it will be
moving into about 140,000 square
feet of space outside of downtown
Detroit Digits
A numbers-focused look at the
week’s headlines:
140
The number of employees
Southfield-based Federal-Mogul
Holdings Corp. is consolidating
into its Plymouth Township
technical center from operations
in Cleveland, Ann Arbor and
Southfield. The supplier plans to
invest $9 million to expand the
center.
$150
million
The planned investment by
Redico LLC to redevelop the 57acre former women’s Robert
Scott Correctional Facility at
Five Mile and Beck Road in
Northville. The firm plans a hotel,
150 residences and retail space on
the property.
covered by the supplier’s recall of
nearly 34 million U.S. vehicles,
Automotive News reported.
䡲 As part of a digital strategy
shift to more short-form videos online instead of text stories, Southfield-based Fox Sports Detroit is
among the Fox network’s regional
sports outlets that will lay off its online reporters as of June 30. The
network’s
website,
FoxSports.com/Detroit, provides
coverage of Detroit Tigers, Red Wings
and Pistons games, along with stories about other sporting events.
䡲 Alidade Capital LLC, a Bloomfield Hills private equity firm, has
bought the Madison Office Building
at 1900 St. Antoine St. downtown.
Alidade purchased the mortgage
note, $11.84 million, on the building, which was previously owned
by Southfield-based Etkin LLC , in
January.
䡲 Livonia-based A123 Systems
LLC plans to double battery cell
capacity at its three manufacturing plants, including its plants in
Livonia and Romulus, in a $200
million investment.
OTHER NEWS
441
The address on West Canfield in
Midtown that will be home to a
Third Man Records store. Third
Man owner and White Stripes
frontman Jack White partnered
with Detroit-based Shinola to buy
the 52,000-square-foot building.
White’s other record store and
label is in Nashville.
Ann Arbor in the third or fourth
quarter next year.
䡲 Chicago-based Baker Tilly Virchow Krause
LLP has signed
an agreement
to buy the Detroit-based accounting and
consulting
firm of Wolins k i & C o . CPA
Marina
Marina Houghton: PC .
Will join Baker Tilly. Houghton,
Wolinski’s
founder and president, will join
Baker Tilly as managing partner of
Baker Tilly’s Michigan practice,
which is based in Southfield.
Baker Tilly will retain Wolinski’s office downtown and about 20 employees. Terms were not disclosed.
䡲 The U.S. Army Tacom Life
Cycle Management Command in
Warren awarded $57 million in
new contracts to General Dynam ics Land Systems ($28.3 million)
and BAE Systems Inc. ($28.9 million) for research, development,
testing, modeling and simulation
and concept development in Sterling Heights on the Future Fighting Vehicle.
䡲 Takata Corp. has committed
to stop producing the “bat wing”
style of driver-side inflators, one of
multiple types of airbag inflators
䡲 Detroit-based Compuware
Corp. is appealing a Wayne County
judge’s ruling
in a $16.5 million award to
former Chairman-CEO
Peter
Kar manos ,
but
could not obtain a stay on
PeterKarmanos the ruling last
week while the
dispute is pending. Circuit Judge
Daniel Ryan denied the company’s request for a stay while it asks
the Michigan Court of Appeals to
review the court case.
䡲 Michigan lawmakers approved a $54.5 billion state budget
Wednesday, passing modest funding increases for roads ($400 million total) and education (a $70 to
$140 in traditional per-pupil funding for K-12 schools) along with
new initiatives designed to boost
early literacy and training for jobs
in the trades.
䡲 Detroit native and Groupon
co-founder Brad Keywell , 45, and
his wife, Kim, of Chicago, have
taken the Giving Pledge, made famous by billionaires Warren Buf fett and Bill Gates, agreeing to give
away at least half their wealth.
䡲 Dennis Archer Jr. will chair the
2016 Mackinac Policy Conference, said
Sandy Baruah, Detroit Regional Chamber’s president and CEO. Archer is
founding principal and president of
Archer Corporate Services and CEO of
Ignition Media Group.
RUMBLINGS
IPO prep? Toys R Us
acts like public co.
avid Brandon ’s new job as
chairman and CEO of Toys
R Us is to take the chain
public at some point in the future,
but the company is already providing financial disclosure.
Last week, it was announced that
Brandon would take the helm of the
toy retailer in July. Brandon has two
successful IPOs already under his
belt, which came before his 5-year
tenure as the University of Michi gan’s athletic director.
Wayne, N.J.-based Toys R Us continues to file public financial reports
with the Securities and Exchange
Commission despite being taken
private in July 2005 by Bain Capital,
KKR & Co. LP and Vornado Realty
Trust.
That’s because it has publicly
traded high-yield debt, which
means Toys R Us must file financial
reports with the SEC.
Those filings show a $292 million
loss last year, which was an improvement over the $1 billion loss
for the year ended Feb. 1, 2014.
On the bright side, the fourth
quarter ending Jan. 31 saw $265
million in net income, the first
profitable quarter in at least two
years.
The earnings statements mean
Brandon’s work as top executive will
be available for public scrutiny before the company goes public again,
likely in the next year to 18 months.
Financial information can be found
at toysrusinc.com.
Bain and its two co-investors
paid $6.6 billion for the company in
2005, and its final share price was
$26.74. Its peak was $45 per share in
1993.
Brandon managed his first IPO
when he was CEO of Valassis Communications Inc. in March 1992,
raising nearly $376 million at $17
per share. Its shares stood at $34
when it went private again last year.
Brandon’s second IPO was with
Domino’s Pizza Inc. in 2004, which
went public at $14 a share and
raised about $337 million. Bain
D
owned the pizza chain at the time.
Michigan native to
help lead SBA effort
Michigan native Mike Muse , cofounder of independent record
label Muse Recordings LLC , will
serve as the Small Business Administration ’s My Brother’s Keeper Millennial Entrepreneurial
Champion, a
White Houseled initiative.
Muse,
34,
who grew up in
Lansing
and
graduated from
Mike Muse
the University of
Michigan with
an engineering degree, is now a hiphop, radio and TV personality. He
plans to speak to millennials about
translating entrepreneurial dreams
into viable businesses.
Muse said he wants young people to walk away from his talks
“equipped to launch ventures on
their own terms.”
Take your cocktails
to/from new Tigers bar
Detroit Tigers fans have taken a
liking to the latest eatery at Comeri ca Park, stadium officials say.
The 171-seat The Corner Tap
Room had a soft opening May 8, and
fans have been filling it on game
days, said Robert Thormeier, general
manager of Buffalo-based Delaware
North Sportservice, the team’s stadium concessionaire.
Part of the reason is that fans can
bring beer or cocktail to or from the
bistro, which replaced a Leo’s Coney
Island on the ballpark’s Witherell
Street side.
A sampling of food offerings:
cayenne dusted pork rinds; grilled
PB&J; sirloin steak; and a baconwrapped foot-long hot dog.
OBITUARIES
䡲 Kathleen Antonini, wife of former Kmart Corp. chairman and
CEO Joseph Antonini , died Monday at her Bloomfield Hills home.
She was 66.
[BILL SHEA]
The Corner Tap Room at Comerica Park replaced Leo’s Coney Island on the
ballpark’s Witherell Street side.
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DO YOU KNOW A
HEALTH CARE HERO?
Crain’s Detroit Business
is seeking nominations
for Health Care
Heroes, a special
report in the
Aug. 17 issue.
The program will honor top-notch
medical innovators and patient
advocates dedicated to saving lives
or improving access to care.
CATEGORIES INCLUDE:
Corporate achievement in health care: Honors a company that has
created an innovative health benefits plan or solved a problem in
health care administration.
Advancements in health care: Honors a company or individual
responsible for a discovery or for developing a procedure, device or
service that can save lives or improve quality of life.
Physician: Honors a physician whose performance is considered
exemplary.
Allied health: Honors an individual from nursing or allied health
fields who is deemed exemplary by patients and peers.
Trustee: Honors leadership and distinguished service on a health
care board.
Statewide nominations accepted.
For details, visit CrainsDetroit.com/nominate • NOMINATION DEADLINE: JUNE 22
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