Pages 1-24 - Crain`s Detroit Business

Transcription

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®
www.crainsdetroit.com Vol. 30, No. 33
AUGUST 18 – 24, 2014
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©Entire contents copyright 2014 by Crain Communications Inc. All rights reserved
Page 3
A FLOOD OF QUESTIONS FROM A REGION SUBMERGED
IN DEEP
Macomb County’s first
exhibition center?
F
ive inches of rapid-fire
rain over a few hours
— it resulted in the unprecedented flooding of
metro Detroit businesses, homes, cars, streets and
even freeways. New vehicles
parked on some dealer lots were
submerged in muddy water, trucking deliveries were delayed or damaged, and commuters faced treks
hours longer than usual until the
floodwater drained. A week later,
the region is still waterlogged in
parts, and rattled, with the storm
raising questions about infrastructure planning, insurance rules, and
even regional cooperation.
Display Group finds new
home at Packard site
Automation Alley re-ups
with U.S. Army fix-it pact
Health Care
The potential healing power
of electronic data, Page 9
INSIDE
This Just In
Troy Transit Center
could open in fall
NEWSPAPER
The city of Troy again has
the title to 2.7 acres on which
the Troy Transit Center sits
and will pay Grand/Sakwa Properties LLC $1.05 million for it
following an order issued Friday by Oakland County Circuit Court Judge Leo Bowman.
The center, which was
completed last fall off Maple
Road west of Coolidge Highway, now is expected to open
this fall.
In April, the City Council
authorized the offer to Farmington Hills-based Grand/
Sakwa, which can still request
a jury determination on the
price and ask for more money,
City Attorney Lori Grigg
Bluhm said.
Grigg Bluhm said city officials
will
meet
with
Grand/Sakwa in the next 30
days “in an effort to try to resolve any remaining issues”
over the longtime legal dispute.
Kirk Pinho
COURTESY OF UNITED PHOTO WORKS
Pat Presutti, new car sales manager at Jim Riehl’s Friendly Chrysler
Jeep in Warren, surveys the water damage to vehicles parked in an
out lot; more than 80 are expected to be deemed a total loss.
■ Auto dealers grapple with flooddamaged cars, Page 21
■ Insurers could pay more than
$200 million in claims, Page 20
■ Trucking and logistics firms reroute, Page 22
■ Storms bring regional infrastructure woes to surface, Page 22
PHOTOS BY LARRY PEPLIN
Investor pool plans $40M Pontiac redevelopment
BY KIRK PINHO
CRAIN’S DETROIT BUSINESS
Sometimes it actually does take
a village to raise a child.
In this case, the child is downtown Pontiac, and the village is a
group of more than 50 private investors, entrepreneurs and Pontiac supporters who are forming an
investment pool to spend between
$40 million and $50 million on a series of redevelopment projects for
the historic but underused area being rebranded as Indian Hill.
The redevelopment — expected
to take about three years and involve more than a dozen historic
buildings owned or controlled by
the investors — would be the latest
in a spate of new projects for a city
that just a year ago emerged from
under four years of emergency
manager control after swimming
in tens of millions in debt.
But it would be among the first
large investments downtown,
which is only about one square
mile in size.
“This is a grass-roots plan the
likes we have never seen,” said
project investor Matt Farrell, executive principal of Birminghambased Core Partners Associates LLC.
“With millennials’ desire to live,
work and play in downtown setSee Pontiac, Page 18
KENNY CORBIN
Developer Bob Waun inside his 1. N. Saginaw Building in downtown Pontiac,
where wall covering has been removed, exposing the worn brick underneath.
TITLE SPONSOR
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August 18, 2014
MICHIGAN BRIEFS
Some thought for food: Kellogg
wants suppliers to go green
Battle Creek-based Kellogg Co.
wants its suppliers to cool it with
the planet-warming emissions.
The food manufacturing giant
wants the farms and mills that
feed it to measure and publicly disclose greenhouse gas outputs and
targets for reducing them, The Associated Press reported.
Kellogg said it also will strengthen cutback requirements for its
plants, building on a 2008 pledge to
reduce emissions 15 percent to 20
percent, said Diane Holdorf, the
company’s chief sustainability officer.
The cereal and snacks maker
also announced green performance goals by 2020 that include a
50 percent increase in the use of
low-carbon energy and establishing water-reuse projects in 25 percent of its plants.
Kellogg will boost to 30 percent the
number of plants sending no waste
to landfills and use more efficient
packaging, with all timber-based
packaging materials being recycled
or coming from sources certified as
sustainable, Holdorf said.
Study: Lifting gay marriage ban
would add $53.2M to economy
A study conducted by the
Williams Institute at the University of
Traverse City train: A locomotive for development?
The nonprofit Michigan Land Use Institute thinks
that an 11-mile rail line connecting Traverse City
and the nearby community of Williamsburg could
help revive train travel in the northwest Lower
Peninsula and increase tourism and development in
the area, The Associated Press reported.
“It’s a low-cost way to add capacity to our existing
transportation network while supporting development along the track at the same time,” said James
Bruckbauer, a transportation policy specialist with
the institute and author of a report laying out the idea.
The passenger rail line could help connect Traverse
City to the rest of the state by rail, Bruckbauer said.
It would cost much less to upgrade the track than
reconstruct a 1.5-mile section of U.S. 31, the highway
California, Los Angeles School of Law
contends that legalizing gay marriage in Michigan would add $53.2
million to the state economy over
three years. Using census data and
the experiences in other states, researchers estimated that about
7,300 same-sex couples would get
married in the first three years after the ban was lifted.
Researchers said that spending
could support 152-457 full- and
part-time jobs and generate an estimated $3.2 million in sales tax
revenue for state and local governments. The study did not consider
the immediate state budget impact
of same-sex couples filing joint tax
returns.
linking Traverse City and Williamsburg, according
to the report, which the National Association of Realtors helped fund.
“While year-round daily commuter trains might
be too expensive for now, a seasonal tourist shuttle
could be a low-cost, achievable first step,” the institute said in a statement.
“We’ve got plenty of evidence that rail projects
can have a very positive impact on neighborhood
development,” Kim Pontius, executive director of
the Traverse Area Association of Realtors, said in a
statement.
“We need to think of transportation solutions other than the automobile. This project, if realized,
may prove to be a great way to test the thesis.”
Michigan is one of 21 states that
would see income tax revenue decline if same-sex marriage were legalized, costing about $482,000 a
year, according to a study in the
Journal of Policy Analysis and
Management.
Crowdfunding campaign raises
$10,000 to raze house in Flint
What happens when you apply
the modern fundraising technique
known as crowdfunding to one of
the most nettlesome challenges of
urban America — blight? In Flint,
you get $10,000 to tear down a
house, MLive.com reported.
The campaign was launched by
Gordon Young, author of Teardown:
Memoir of a Vanishing City. He
chose the house, on the north side of
his hometown, because it was on an
otherwise well-kept street.
In the campaign, 149 donors gave
amounts ranging from $5 to $1,000.
MICH-CELLANEOUS
䡲 Gov. Rick Snyder agreed with a
financial review team’s conclusion
that a financial emergency exists in
the Benton Harbor Area Schools, The
Associated Press reported. The appointment of an emergency manager is one of several options if the
state confirms a financial emer-
gency. The city of Benton Harbor
had an emergency manager for four
years until last spring.
䡲 Midland-based Dow Chemical
Co. ranks No. 49 on CNBC’s list of the
top 50 innovation companies. San
Francisco health care services company McKesson Corp. was No. 1.
䡲 The Michigan Court of Appeals
upheld a 2007 decision by the Michigan Department of Environmental
Quality to allow Kennecott Eagle Minerals Co. to operate a nickel and
copper mine in Marquette County,
The Associated Press reported.
䡲 The Grand Rapids area is
ranked the fifth-best market in the
U.S. for homebuyers ages 25-34 —
also known as millennials — according to a study released last
month by the National Association of
Realtors. The association analyzed
job creation, population and housing conditions in 100 metro areas.
Austin, Texas, topped the list.
䡲 The Thomas M. Cooley Law
School — with locations in Auburn
Hills, Ann Arbor, Grand Rapids and
Lansing — is now officially the
Western Michigan University Cooley
Law School. Which would make it
WMUCLS, for those of you planning
to buy a T-shirt. Any objections?
Find business news from
around the state at crainsdetroit
.com/crainsmichiganbusiness.
Sign up for the Crain’s Michigan Morning e-newsletter at
crainsdetroit.com/emailsignup.
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August 18, 2014
Page 3
Display Group
expands into
large space at
Packard Plant
Inside
Q&A: Aisin
exec on
supplier’s
plans for
North America, Page 4
BY KIRK PINHO
What was once part of the shuttered 3.5 million-square-foot Packard
Plant on Detroit’s east side has a new
owner: The Display Group Ltd., which
is currently in 200,000 square feet of
space at 1700 W. Fort St.
As President Rick Portwood’s
business expanded in the last 18
months, he began looking for
more space in
the city. He
found it in the
255,000-squarefoot
former
Packard Building No. 22 —
which is separate from the
Portwood
part of the plant
purchased by Peruvian developer
Fernando Palazuelo last year —
that was built in 1941.
“We have been looking at some
different areas of expansion, and
this will allows us to go pretty
crazy,” Portwood said, adding that
the building is “in better condition
than any other building I walked
through.”
The company, which makes
event props, rental office furniture
and other products, expects to keep
its showroom in the Fort Street
building while moving company inventory, offices and manufacturing
to the Packard building starting by
the beginning of October.
Display Group had about $4 million in revenue last year and expects
a 10 percent to 15 percent increase
this year, along with additional hiring.
Portwood, who founded Display
Group in 1991 and has 25 full-time
and 12-15 part-time employees,
would not disclose how much his
company paid to buy the space
from the Detroit-based Kirlin Co.
See Packard, Page 19
Company index
COURTESY OF ROSSETTI ASSOCIATES INC.
A new exhibition center planned for Chesterfield Township would draw Canadian traffic from southern Ontario and state
associations and visitors from mid-Michigan and the Thumb, developers say.
These companies have significant mention in this
week’s Crain’s Detroit Business:
AAA Michigan . . . . . . . . . . . . . . . . . . . . . . . . . 20, 21
Aisin World Corp. of America . . . . . . . . . . . . . . . . . . 4
Macomb’s first exhibition
center may be in works
Ashley Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Automation Alley . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Center Management . . . . . . . . . . . . . . . . . . . . . . . . 3
Con-way Freight . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Core Partners Associates . . . . . . . . . . . . . . . . . . . . 1
Detroit Metro Convention & Visitors Bureau . . . . . . 22
Display Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Elite Motor Sales & Service . . . . . . . . . . . . . . . . . . 21
Galeana’s Van Dyke Dodge . . . . . . . . . . . . . . . . . . 21
Go Comedy! Improv Theater . . . . . . . . . . . . . . . . . 20
Grand Traverse Behavioral Medicine . . . . . . . . . . . 11
Great Lakes Health Connect . . . . . . . . . . . . . . . . . . 9
Insurance Institute of Michigan . . . . . . . . . . . . . . 20
Developers also plan hotel on outlet site
Jim Riehl’s Friendly Chrysler Jeep . . . . . . . . . . . . . 21
Just Baked . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Liddle & Dubin . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
BY SHERRI WELCH
The developers vying to bring an outlet center to
Chesterfield Township plan to build a conference
center and hotel on the same site.
The 120,000-square-foot center, planned near M-59
and I-94, would be Macomb County’s first exhibition
center.
The idea is that it would attract people to the outlet center, and the outlet center, in turn, would help
bring people to the new exhibition center, said
Thomas Guastello, owner and president of Center
Management, a local developer that co-owns the
Chesterfield Township site with Cincinnati-based
Jeffrey R. Anderson Real Estate Inc.
Retailers considering a presence in the outlet center
like the idea of having an exhibition center nearby,
Guastello said. But the plan for the new conference
center isn’t contingent on securing the outlet center.
“We would like to think we’ll do both, but the exhibition center can stand alone. ... We have a positive study that’s been done on it by the convention
bureau,” Guastello said.
The developers are also planning restaurants for the site and
in the future plan to sell parcels of
land to other developers for additional hotels, he said.
“We think … that site with the
outlet center and exhibition hall
would conservatively (support)
five to six hotels.”
The Comfort Inn-Utica on M-59 at
Guastello
M-53 (Van Dyke Freeway), which
Guastello owns, is recording good numbers, as are
the other hotels in the area, he said, “because there’s
a lot of things for guests to do there and a lot of
things that generate guests.”
Guastello has had preliminary conversations
with Blair Bowman, owner of the Suburban Collection
Showplace, Diamond Center and Hyatt Place Detroit,
about including him in the conference center. It’s
too early to say exactly what shape Bowman’s par-
Lou LaRiche Chevrolet . . . . . . . . . . . . . . . . . . . . . 21
Michigan Health and Hospital Association . . . . . . 11
Michigan Health Information Network . . . . . . . . . . 11
Mich. Health Information Network Shared Services . 9
Michigan Municipal League . . . . . . . . . . . . . . . . . 22
Original Equipment Suppliers Association . . . . . . . . 5
Plante Moran . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Plunkett Cooney . . . . . . . . . . . . . . . . . . . . . . . . . . 20
R&E Development . . . . . . . . . . . . . . . . . . . . . . . . . 17
RE Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
RPM Freight Systems . . . . . . . . . . . . . . . . . . . . . . 20
Rush Trucking . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Ryan Family Practice . . . . . . . . . . . . . . . . . . . . . . 11
St. Johns Internal Medicine . . . . . . . . . . . . . . . . . 11
Southeast Michigan Council of Governments . . . . . 22
Sterling Insurance Group . . . . . . . . . . . . . . . . . . . 20
United Road Services . . . . . . . . . . . . . . . . . . . . . . 20
University of Michigan Health System . . . . . . . . . . 10
Waltonen Engineering . . . . . . . . . . . . . . . . . . . . . . 17
Wayne State University . . . . . . . . . . . . . . . . . . . . . 20
West Construction Services . . . . . . . . . . . . . . . . . . 18
See Macomb, Page 22
Department index
Automation Alley renews Army pact to revive old equipment
BY CHAD HALCOM
A new era of tighter federal budgets for defense actually could
mean a business boost for local design and prototyping companies,
under a new U.S. Army contract
with Troy-based Automation Alley to
sustain aging equipment.
The Army last week signed a
three-year contract renewal of up to
$10 million for the Alley to study
military equipment for which com-
ponents or materials are limited or
unavailable, as well as to reverseengineer and create technical specifications for manufacturers to build
replacements.
The Army Tank-Automotive Research, Development and Engineering
Center in Warren, which helped
the Alley secure the new contract,
also will coordinate with the local
technology business association
on some task orders. The Army
awarded a three-year contract to
THIS WEEK @
WWW.CRAINSDETROIT.COM
Automation Alley in 2009 but
later extended it
through March
of this year and
spent nearly $5.5
million on various projects.
Dan
Raubinger, director
Raubinger
of defense and
manufacturing for Automation Alley in Sterling Heights, said the
spending is likely to exceed that
amount under the renewed contract because the Army has scaled
back on new production contracts
and new equipment orders. That
will mean greater repair and maintenance costs to keep current, aging equipment in working order.
“We think there’s an enormous
market for what we’re doing in the
next few years, especially since so
See Alley, Page 17
Social spot packs ’em in at Comerica Park
Visit this season’s addition to the ballpark’s lineup: the
New Amsterdam 416 Bar, which is – yes – 416 feet
from home plate, crainsdetroit.com/video.
BUSINESS DIARY . . . . . . . . . . . . . . . . 16
CALENDAR . . . . . . . . . . . . . . . . . . . . 13
CLASSIFIED ADS . . . . . . . . . . . . . . . . 17
KEITH CRAIN . . . . . . . . . . . . . . . . . . . . 6
MARY KRAMER . . . . . . . . . . . . . . . . . . 7
OPINION . . . . . . . . . . . . . . . . . . . . . . . 7
PEOPLE . . . . . . . . . . . . . . . . . . . . . . 16
RUMBLINGS . . . . . . . . . . . . . . . . . . . 23
WEEK ON THE WEB . . . . . . . . . . . . . . 23
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Aisin World opens new N.A. HQ
in Northville, aims to expand
Aisin World Corp. of Ameriwell as proximity to maca opened a new North
jor universities.
American headquarters in
Northville Township in
What automotive technolJuly as part of the foreign
ogy is most exciting to you
subsidiary’s growth stateand Aisin?
side.
Through Aisin’s sysAisin bought and renotems solutions, we’re able
vated the 200,000-squareto help our customers satfoot building at 15300 Cenisfy many of their objectennial Drive, a $13 million
tives, including (vehicle)
development to house its
weight reduction, fuel efU.S. headquarters and
ficiency, safety, and comAisin Technical Center of
fort and convenience.
John Koenig,
America after outgrowing
its offices in Plymouth Aisin World Corp.
How has the influx of reTownship.
calls changed or affected
The subsidiary of Japanese con- business at Aisin?
glomerate Aisin Seiki Co. Ltd. has inThe attention that recent revested a total of $3 billion in North calls has brought to the industry
America and more than $250 million reminds us of the importance of
in Michigan since 1984 as it contin- examining and re-examining
ues to win new contracts with do- everything we do. Our company is
mestic and foreign automakers.
based on the fundamental princiAisin employs more than 700 at ples of “quality first,” which
its five sites in Northville Town- means we consider safety as a priship, Ann Arbor, Plymouth Township and Fowlerville.
Crain’s manufacturing reporter
Dustin Walsh spoke with Aisin
World Corp.’s top local executive,
John Koenig, president of sales and
marketing, about foreign investment and the transmission and engine parts supplier’s growth in the
region.
Q&A
KING AIR B200
Carl J. Grassi, President
August 18, 2014
Why invest in a new technical center and headquarters?
The expanded Aisin Technical
Center of America enables us to
add equipment, i.e., the first inhouse engine dynamometer for
Aisin in the U.S. — and engineering resources. This will help us
grow our regional capabilities,
lead local product development,
bring new technology to the industry and handle a larger share of design duties for the North American market, all under one roof. We
plan to continue to grow by adding
new facilities and investing in current plants in order to provide ongoing support to our customers.
What customers do you support
from those offices?
Chrysler, General Motors, Honda, Nissan, Subaru, Toyota and others.
Do you see potential for M&A activity?
In order to stay competitive in a
market that is constantly evolving,
we explore all opportunities for
growth of our business capabilities.
Why has the region seen so much
foreign investment?
Michigan is home to 63 of the top
100 suppliers in North America,
and ranks first in the country in
concentration of engineers, designers, R&D professionals and
skill-trade workers. We’re here because our customers are here —
hence the location of our sales and
marketing headquarters, our technical center and our proving
ground in Fowlerville. Being near
our customers enables us to take
advantage of the great automotive
human resources in the area, as
Aisin World’s North American
headquarters, in a renovated building
in Northville Township, opened in July.
mary aspect of quality.
Is government regulation playing to
Aisin’s benefit?
We have ongoing development in
(intelligent transportation systems),
such as distracted driving technology, sensors, navigation systems,
camera systems, as well as technologies for fuel efficiency, light weightSee Next Page
20140818-NEWS--0004,0005-NAT-CCI-CD_--
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Page 5
From Previous Page
ing efforts and improved transmission capabilities. We believe we
have a huge advantage in the fuel efficiency arena because of our engine
components, heat management systems, body components designs, etc.
This product leadership will continue to help our customers reach their
objectives.
Are the domestic automakers improving relationships with suppliers?
Yes, we see that trend via (automakers), whether it’s town hall
meetings or simply improved communications. Aisin is confident
that the trend will continue because the more we know about
each other’s needs and requirements, the better opportunity we’ll
all have to make good decisions.
Has pricing pressure changed in recent years?
Cost competition pressure is always increasing, and even though
pricing pressure has taken different
forms over the years, it hasn’t really changed. There’s always pressure.
What keeps you up at night?
Retaining and developing our
most important assets. Human resources and rising health care costs.
Survey: Confident
parts makers plan
to expand, hire
CRAIN NEWS SERVICE
Flush with cash and fat order
books, North American suppliers
are increasing capital expenditures, hiring workers and raising
funds for possible acquisitions.
According to a survey last month
by the Troy-based Original Equipment
Suppliers Association, 47 percent of
suppliers are more optimistic about
their prospects for the next year,
and 6 percent are more pessimistic.
“The optimism is driven by
greater confidence in North American production forecasts, particularly with the rebound in vehicle
sales after the first quarter,” the report noted.
Suppliers expect bigger budgets
for the next fiscal year:
䡲 Seventy-four percent of suppliers will increase capital investments; 8 percent will reduce them.
䡲 Sixty-seven percent will spend
more on product innovation; 1 percent will spend less.
䡲 Eighty percent will hire more
hourly workers; 7 percent will reduce their payroll.
The association drew its results
from a July survey of 93 suppliers.
Suppliers are optimistic because
automakers are telling them to
gear up for more production.
In May, IHS Automotive predicted
that North American light-vehicle
production would exceed 16.8 million units this year, rising to a
record 17.5 million vehicles in 2016.
With prospects for record production looming, fewer suppliers
are trying to hedge their bets. Survey respondents listed plant expansions as their fourth-highest
priority, edging out the hiring of
temporary employees.
From Automotive News
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20140818-NEWS--0006-NAT-CCI-CD_--
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August 18, 2014
OPINION
Storm could be
catalyst for fixes
I
n Michigan, we generally count ourselves lucky because the
Great Lakes don’t have hurricanes.
But who knew how much damage a few hours of rain
could do? Tens of millions of gallons of water and raw sewage
later, it’s a hard lesson learned.
Damage is still being assessed, but as Crain’s reports on
Pages 20-22, very few in the affected areas were spared. And in
many, many cases, the losses aren’t covered in full or are
sometimes not covered at all.
That’s why Gov. Rick Snyder’s declaration of emergency
on Wednesday was important. It opens up the possibility, although no guarantee, of federal aid.
(Snyder was criticized for being slow to issue the declaration. His office said Friday it was waiting for Macomb and
Oakland counties to submit their list of requests to add to the
list already submitted by Wayne County.)
But here’s a larger question:
What needs to be done to prepare an already aging infrastructure for future major storms and how will that be paid for?
We don’t have a definitive answer for that, but one thing
that can support that is redevelopment around existing infrastructure rather than continuing to add infrastructure beyond
our population’s needs. Michigan’s spider web of autonomous
local government units doesn’t lend itself to coordinated planning, but incentives that help support redevelopment can help.
Maybe this can be a catalyst for reinvestment in other
ways. Bonding to separate storm and sewer systems and correct problems that create sewer backups could also cover public investment in the affected roads beyond quick fixes.
Leaner Pontiac reaps benefits
Getting your financial house in order can pay dividends.
That’s a verity being demonstrated in the city of Pontiac,
where emergency managers, notably Louis Schimmel, reduced the overall size of government while improving essential services, such as police and fire.
That has made the city attractive to investors, who, as Kirk
Pinho reports on Page 1, are putting together an investment
pool of $40 million to $50 million to rehabilitate historic buildings downtown. The plans have the support of the city’s mayor, Deirdre Waterman.
Pontiac struggles with high unemployment and poverty,
which has made private investment sometimes hard to come
by, despite its long ties to GM. But the city also has assets, one
of which is a true downtown and historic buildings that can’t
be replicated in newer communities.
It’s now in a better position to maximize those.
TALK ON THE WEB
From www.crainsdetroit.com
Re: State officials: Removing water
doesn’t remove trouble
Poor planning and engineering just
came back and bit Michigan. What
wise guy thought that building
“below grade” highways was a
good idea? Look at other states
with highways at grade and you’ll
see no flooding. So we blame Mother Nature. Guess again.
Historian
I have never seen Third World
countries with flooded highways or
even highways, for that matter. If
anything, the images we are seeing
are the result of 70 years of poor urban planning. Between the covering of natural drainage ditches and
paving acres of roads, highways
and parking lots, the water runoff
is excessive and has nowhere to go.
This event and the resulting
conditions should be a warning to us
about how delicate our urban
lifestyle really is.
BloggerDave
Reader responses to stories and
blogs that appeared on Crain’s
website. Comments may be
edited for length and clarity.
How (are we) supposed to plan
for unusual, unexpected flooding
if we have no history of it? It would
be like telling us we should have
built earthquake-resistant buildings like California, even though
we aren’t prone to them.
Stephanie Morales
Do you want to pay significantly
higher taxes to support infrastructure for this type of rain, which
(has) occurred twice in the last 89
years?
GFD
Re: Tuition up, support down: Has
college finally broken the bank?
Maybe it’s time for more students to pursue a vocational or
trade school instead of a four-year
degree that nets them a job at Starbucks instead of one of those highpaying jobs that are being
promised if you go to school. What
about working while you are going
to school so you don’t end up in
such a big hole at the end of four
years? Too much play time while
in school and not enough thought
going into the end result after you
graduate.
I know, kids don’t want to be
bricklayers, plumbers or electricians. That’s just not a cool job.
G. Briggs
This article deals with just one
half of the equation — income to
the schools. Maybe the real story
is on the other side of the ledger.
What are the dollars funding, how
much time are the tenured professors spending in the classrooms
compared to the business world,
how do salaries, benefits, etc., line
See Talk, Page 7
KEITH CRAIN: Woodward Dream Cruise: It is what we are
Last Saturday ended what has
become a weeklong celebration of
the Motor City. Long before the official Saturday Dream Cruise,
which likely saw a million spectators line Woodward Avenue for the
16-mile loop, people were camping
out with their lawn chairs to enjoy
and participate in the world’s
largest automotive celebration.
It seems fitting that this celebration is in the Motor City on famed
Woodward Avenue.
With thousands of cars cruising
back and forth at lightning speeds
of 5 mph, everyone knows that this
is the national event for
people who love cars.
Many would like to
include the city of Detroit in the loop, but
that would make more
sense if the purpose
were to create a new
event rather than recreate a historic event.
Back in the ’50s and ’60s,
cruising
Woodward
meant traveling up to
Square Lake Road and down to
Eight Mile — that was the track
for the muscle cars of those
decades.
Many people have
tried to include the
state fairgrounds for
many years, but without a lot of success.
For the time being,
the Dream Cruise remains the original
route. Even the Great
Flood of 2014 hasn’t
dampened people’s enthusiasm.
Cruising Woodward was a timehonored event back in those early
years, with hot-rodders right next to
automotive engineers from the Big
Three. With drivers strutting their
stuff, it was a time with lots of drag
racing with Detroit’s latest and
greatest muscle cars of the era. Engineers were out testing their latest
creations, usually flaunting their
lawlessness right in front of police.
That doesn’t happen anymore.
If anyone in the world wants to
challenge this as the largest motoring event, they will have a very
long way to go to try to snatch
away that title.
People come from around the
world to watch and enjoy this
event. Car enthusiasts bring their
cars from every state in the continental U.S.
It is certainly a big part of Detroit’s history. Even if it doesn’t
take place within the boundaries
of Detroit, the city can lay claim to
this event with justifiable pride.
Detroit is a lot more than just a
city with boundaries. During the
Dream Cruise, it is simply a celebration of what the community
was all about. And for many what
it still is all about.
The Woodward Dream Cruise is
what we are.
20140818-NEWS--0007-NAT-CCI-CD_--
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Page 7
MARY KRAMER: Biz volunteer cleanup helps remodel lives
Last week, more than 10,000 volunteers descended on 65 blocks on
Detroit’s west side that straddle
the Southfield Freeway between
Joy and Plymouth roads.
The full tally — number of
homes demolished, boarded up or
remodeled and tonnage of urban
forests of junk trees and other
trash removed from lots and public sidewalks — was to be released
Sunday afternoon.
But the before/after is remarkable. And the best stuff is at the
schools — a medical simulation
lab and other labs at Cody High
School and a new football field for
a school that hasn’t played a home
game in years.
Kudos to the volunteers and the
companies that supplied them —
LETTERS CONTINUED
like General Motors,
with more than 3,000.
Also to companies that
supplied labor, expertise and materials, such
as Barton Malow, Cunningham-Limp, ABB,
Michigan CAT and
many more.
The nonprofit Life
Remodeled began in
2010 by building homes
in suburban communities for people who had
never been homeowners.
The shift to Detroit and schoolbased neighborhoods came when
founder Chris Lambert said he re-
alized that one new
house didn’t excite a
neighborhood. “Why
would people get excited to see one home that
someone else gets for
free?” he said.
Lambert credited Detroit Public Schools
Emergency Manager
Jack Martin for embracing the concept.
“Within two weeks of
our first call, we were
in his office, planning,” Lambert
said. The project then engaged students and neighborhood residents
in the planning — and the post-
makeover activities.
I was part of a team from the
Skillman Foundation and First
Merit Bank that created one safe
pathway for students walking to
Henderson Elementary School on
West Chicago Street. It was remarkable to see what a lot of weed
wackers, lawn mowers, pruning
shears and other tools — with a
small army — could do in five
hours. (Pass the Epsom salts,
please.)
Lambert started down a path to
law school before a religious experience led him with his business
degree from Indiana University to
Fuller Theological Seminary in
California, ministry in Africa and
pastoral roles in metro Detroit.
Life Remodeled is a sectarian
nonprofit, but Lambert is affiliated
with Oak Pointe Church in Novi —
popularly known as the place that
former TV weather forecaster
Chuck Gaidica joined as a minister. That was another “life remodeled.”
Mary Kramer is publisher of
Crain's Detroit Business. Catch her
take on business news at 6:10 a.m.
Mondays on the Paul W. Smith show
on WJR AM 760 and in her blog at
www.crainsdetroit.com/kramer.
E-mail her at mkramer@crain.com.
TOP FIVE SIGNS YOUR EMPLOYEES MIGHT HAVE INFERIOR DENTAL COVERAGE:
■ From Page 6
up? Is there an income problem or
a spending problem?
ScottLyon
Re: IRS put lien on ex-state housing
chief’s house
Just politics as usual. This is just
another reason why citizens
should be seeking to reduce the
ever-expanding size of government
and their regulations. The people
running them are either unethical
or at best incompetent.
Either way, time to reduce the
controls these bureaucrats are
placing on our freedom.
No Spin; Facts Please
THEY ONLY GET ONE CLEANING PER DECADE, PER HOUSEHOLD.
THE DENTAL PLAN’S CUSTOMER SERVICE IS A 900 NUMBER.
THEIR DENTIST THINKS ROOT CANAL IS LOCATED IN VENICE.
Re: Slap in face of Chrysler suppliers?
Marchionne gripe could chill relations
Mr. Marchionne has had his path
smoothed for him every step of the
way until now.
He may learn that extracting
concessions isn’t as easy when it
isn’t his good, good friends in the
U.S. or Italian government on the
other side of the bargaining table.
BrendaKilgour
MOLARS ARE CLASSIFIED AS “OPTIONAL.”
Re: OU plan: Help autistic find work
This is great news, and as a parent of a child with autism, I applaud any efforts to help build employment opportunities for adults
with autism.
However, it would be great to
see more emphasis being put on higher education and development of
more employable skills, such as in
trades or technical applications,
for our sons and daughters to overcome the problem of underemployment.
272069
Re: How Jason Hall pedaled
across the iPad
Detroit is full of energy and creativity. Our wealth of talent has been
ego-bruised over the decades, but
it’s fighting back and making
things happen.
When we get fully engaged and
the rest of our doubters start espousing the greatness of this city,
we will start to see even more positive expansion of our city.
Tarrbot
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contracted dentists and award-winning customer service.
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DBpageAD_DBpageAD.qxd 8/5/2014 1:11 PM Page 1
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20140818-NEWS--0009-NAT-CCI-CD_--
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August 18, 2014
Page 9
People
䡲 Tom Lauzon,
executive vice
president and CIO of
Meridian Health Plan
of Michigan, has
joined Michigan
Health Information
Network Shared
Services as a
member of the board
of directors.
Lauzon
䡲 Beaumont
Health System has announced: Perry
Altman, M.D., orthopedic physician,
received the 2014 Young Investigator
Grant from the American Orthopaedic
Society for Sports Medicine for a study
on new treatment options for knee
injuries and conditions. Beaumont
surgical residents received four awards
for presentations at the American College
of Surgeons Resident Research
Competition, Michigan Chapter: Andrew
Bayci, M.D., education; Mohsen
Bannazadeh, M.D., Szilagyi Vascular
Award; Christina Jenkins, M.D., Alexander
Walt Second Place
Overall Award; and
Ankur Aggarwal,
M.D., the Frederick A.
Coller Best Paper
Award. David Haines,
M.D., director of the
heart rhythm center,
Beaumont Royal Oak,
was appointed to the
American Board of
Internal Medicine’s
Haines
Cardiology Board
Clinical Cardiac
Electrophysiology
Exam Committee.
Subra Sripada,
executive vice
president and chief
administrative and
information officer,
was elected a board
member of the
Michigan Health and
Sripada
Hospital Association.
Marie Doherty, R.N.,
director of care
management,
Beaumont Royal Oak,
was appointed to a
two-year term as
secretary of the
American Case
Management
Association, Great
Lakes Chapter. Alicia
Voorhees, R.N.,
Doherty
received the National
Annual Patricia Hansen Memorial Award
from the American Society of PeriAnesthesia Nurses.
䡲 Nancy
Schlichting, CEO of
Henry Ford Health
System, received
the American
College of
Healthcare
Executives SeniorLevel Healthcare
Executive Regent’s
Award for significant
contributions to the
Schlichting
advancement of
health care management excellence.
䡲 John Thorhauer, president and
CEO of United Methodist Retirement
Communities Inc., has been appointed
chairman of the LeadingAge Michigan
board of directors.
CARTER SHERLINE
Andrew Rosenberg, M.D., chief medical information officer at the University of Michigan Health System, says some hospitals participating in health
information exchanges don’t send all potential medical data because of security concerns or worries that rivals will use the information against them.
The exchange factor
Electronic data system
points to a future of
managing health, reducing
costs, improving quality
BY JAY GREENE
T
he health care and business
communities in Michigan
may be on the cusp of realizing the ultimate benefit of the
free flow of online medical
electronic data: Managing the health of
patients as they move through the
health care delivery system across the
state and multiple care providers.
As Michigan’s six health information exchanges continue to tailor their
individual business plans for customers
— typically, hospitals, physicians and
health insurers — HIEs are moving closer to using clinical patient data to analyze population health, improve care coordination and more effectively identify
patient risks for readmissions.
Meeting these goals is important to
providers because
they ultimately
can help reduce inWhat do doctors desire
from information
dividual premiums
exchanges, electronic
and cut employer
records? Page 11
health benefit
costs, said Tim
Pletcher, executive director of Lansingbased Michigan Health Information Net-
SECOND OPINIONS
work Shared Services.
“Before, people didn’t have incentives to share information. As they have gone
from fee-for-service,
paid for volume, to be
paid financial incentives for quality and
outcomes, there is a desire to look across their
borders” and work toPletcher
gether to exchange clinical and cost data, Pletcher said.
“Historically, doctors have only
known 27 percent of the time when their
patients have been in the hospital,”
Pletcher said. “How do you do care coordination when you don’t know your patient has been sent home?”
Pletcher said the use of electronic
health records and health information exchanges by hospitals and doctors is radi-
cally changing how medicine is delivered.
At the Connecting Michigan for
Health 2014 conference in Lansing in
June, more than 40 electronic data exchange experts from Texas, Rhode Island, Maine, Indiana, Illinois and Michigan described the evolutionary ups and
downs in creating a national electronic
health data highway.
Doug Dietzman, executive director of
the newly merged Great Lakes Health Connect, said HIEs will
reach their full potential
when providers, including hospitals and physicians, start accepting financial risk for taking
care of patients.
Great Lakes was
formed through the
Dietzman
merger of Grand
Rapids-based Michigan Health Connect,
the state’s largest HIE, and Great Lakes
HIE, or GLHIE, based in East Lansing. It
is one of the largest in the nation, accounting for 80 percent of the state’s total licensed beds with 120 member hospitals, 20,000 physicians, 3,000 clinics
and offices and consolidated revenue of
$8 million, Dietzman said.
See Exchanges, Page 10
20140818-NEWS--0010,0011-NAT-CCI-CD_--
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August 18, 2014
Health Care
Exchanges: More info, better quality?
■ From Page 9
7KHURDGWRWKHFRUQHURIÀFH
STARTS HERE.
A business degree from
Wayne State University
does more than
provide an academic
foundation for success
— it helps open doors.
Our graduates join a
strong network of more
than 31,000 successful
alumni across Metro
Detroit and worldwide.
Whether you’re landing
that first job or making
your way to the
executive suite, there’s
likely a Wayne State
alum nearby, ready
to help.
“This is an opportunity for me to
offer you services to help you meet
that need,” Dietzman said to representatives of hospitals, physicians
and other providers at the recent
HIE conference. “(HIEs) exchanging data will help you reduce risks,
manage capitation risks and conduct population health management for out-of-network” patients.
But Andrew Rosenberg, M.D.,
chief medical information officer at
the University of Michigan Health System in Ann Arbor, said technical
barriers and incentives to participating in health information exchanges first need to be overcome.
“The technical barriers are reducing rapidly, not only for the big
health systems but also for the
smaller provider organizations and
individual provider offices that are
on certified electronic medical
records,” Rosenberg said. “Once we
do this (and hospitals, doctors and
other providers share patient data),
the clinical and cost containment
benefits of managing population
health can be achieved.”
Rosenberg said some hospitals
participating in HIEs are not sending all potential medical data because of data security concerns or
worries that competitors will use
the information against them.
“We send huge amounts of data to
Great Lakes Health Connect,”
Rosenberg said. “Some providers
don’t have sufficient incentives” to
fully participate.
Over time, however, as financial
incentives align between providers
to jointly improve quality and manage costs under shared managed
care contracts, Rosenberg said, the
ability for physicians and hospitals
to monitor population health will
improve.
Pletcher said hospitals are realizing now that they have incentives to share data because of hospital readmission penalties if
patients are readmitted anywhere
within 30 days.
“HIEs will help stop that patient
from being readmitted, and that
helps” hospitals financially, Pletcher said. “This is one of the early benefits of data exchange. The longerterm effort will be on population
health.”
What is population
health management?
Anthony Frabotta, BA ’73
Chairman and CEO,
UHY Advisors MI, Inc.
Co-CEO, UHY Advisors, Inc.
School of Business Administration
business.wayne.edu
AIM HIGHER
Many definitions exist, but population health management has
two key components: First is the
ability to coordinate and track patient care to improve clinical quality and health outcomes. Second is
managing that care to lower costs
by reducing duplication of services and diagnostic testing and
avoiding medical errors.
But population health, by description, also means managing
large groups of patients — 10,000,
20,000, 50,000 or more — through
some risk-based contracting mechanism.
“One-third of our patients (at the
University of Michigan Health System) are taken care of by providers
outside of our health system,”
Rosenberg said. “If we are to manage their health in risk contracts,
we need to have exquisite informa-
HEALTH INFORMATION EXCHANGES IN MICHIGAN
A health information exchange is a nonprofit organization intended to help
hospitals and physicians exchange patient information in a secure
electronic format. Data include electronic messages, laboratory, pharmacy
and imaging data along with documentation of care and admission
discharge and transfer information, or ADT.
Michigan’s foray into health information exchanges began in 2006 under
Gov. Jennifer Granholm and with several million dollars of federal funding.
Initially, nine health information exchanges were created in Michigan to
allow competing medical providers to share patient information instantly in
a secure format and to encourage the exchanges to experiment and grow
within their regions.
Over time, some exchanges closed and others have merged, leaving six
operational HIEs in Michigan.
Last month, two of the state’s largest HIEs merged. Michigan Health
Connect and the Great Lakes Health Information Exchange formed Great
Lakes Health Connect, one of the largest HIEs in the nation, with 120
hospitals, 20,000 physicians, 3,000 clinics and 80 percent of the state’s
licensed beds.
During the next two to three years, the goal is for the HIEs to be
interconnected with each other and health insurance companies through
the Michigan Health Information Network, formed in 2007 through the
Michigan Department of Community Health with the help of $15 million in
federal funds.
Nationally, there are more than 250 health information exchanges,
including 160 private exchanges. Eventually, all state exchanges are
expected to interconnect to form a national health information exchange.
Michigan’s health information exchanges
䡲 Great Lakes Health Connect, Grand Rapids and East Lansing. Members
include Beaumont Health System, Ascension Health Michigan, St. John
Providence Health System, Henry Ford Health System, Oakwood Healthcare
Inc., University of Michigan Health System, Sparrow Health System,
Michigan State University, McLaren Health Care, CHE Trinity Health and
Botsford Hospital. Data exchanged include radiology and lab results,
admission, discharge and transfer data in real-time.
䡲 Ingenium, Bingham Farms, a physician-led HIE founded by United
Physicians that encompasses 1,327 participating physicians and 1.4
million patients in Southeast Michigan. About 180,000 admission
discharge and transfer messages are exchanged every month and
3.5 million laboratory results each year to assist with care coordination.
䡲 Southeast Michigan Health Information Exchange, Detroit. SEMHIE is a
consortium that since 2010 has focused on a contract with the Social
Security Administration to develop an electronic disability claims system.
Members include Oakwood, St. John Providence, Henry Ford, Beaumont,
CHE Trinity Health, Detroit Medical Center and several health insurers,
provider groups and employers.
䡲 Jackson Community Medical Records, a joint venture between Allegiance
Health and the Jackson Physicians Alliance that also connects more than
1,000 users, or half the providers in the region, including a federally
qualified health center and the Jackson County Health Department. It
operates an integrated patient chart that includes medication lists, lab
results, radiology, disease registry and physician notes.
䡲 Upper Peninsula Health Care Network includes the Dickinson County
Healthcare System. The HIE is piloting various projects, including sharing
information with participating providers on Medicaid and Medicare patients,
working with Blue Cross Blue Shield of Michigan on claims data and
working on a community electronic health record project.
䡲 Southeast Michigan Beacon Community is one of 17 similar
organizations funded by the federal government to experiment with EHRs
to improve the health of various populations. SEMBC focuses on improving
care of patients with diabetes by increasing the number of patients who
receive the recommended standards of care, reducing costs of care and
decreasing nonurgent use of hospital emergency departments.
— Jay Greene
MORE INFO
Visit mihin.org/exchanges
tion on them outside of our health
system.”
For example, what if a Detroit
Tigers fan from Petoskey gets injured in a car accident after a
game and is rushed to the emergency department at Detroit Medical Center?
Data exchange on that patient
through an HIE could enable the
DMC to have immediate access to
the patient’s health care history.
This information could reduce
costs and avoid potential medical
errors, Pletcher said.
Then, two days later, that fan is
discharged from the hospital and
goes home. But what happens to
his or her medical record at the
DMC? If the DMC is able to send
that patient’s ATD (admission,
transfer and discharge) document
to an HIE, then it would be possible for that information to be
shared with providers in Petoskey
for follow-up care, Rosenberg said.
Sharing patient data like this
will help hospitals and physicians
lower costs, coordinate care, improve quality and reduce service
duplication, Pletcher said.
“They are trying to make a decision (about care), and the safest
route is to admit the patient to make
sure nothing is wrong,” Pletcher
said. “If I have access to what is going on with patient, I can do something to stabilize patient and then
tomorrow have patient go to cardiologist. I don’t have to admit.”
A recent University of Michigan
See Next Page
20140818-NEWS--0010,0011-NAT-CCI-CD_--
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Page 11
Health Care
NEW YORK YANKEES
Info exchanges, electronic
records: What do docs desire?
BY JAY GREENE
Some physicians want to converse directly with their electronic
health records, and others just
want to be sure patients’ privacy is
protected when electronic data is
exchanged between providers
through health information exchanges.
A recent panel discussion by five
practicing physicians in June at
the Michigan Health Information Network’s annual meeting in Lansing
illustrated a range of feelings —
from praise to frustration — about
health information exchanges and
electronic health records.
Christopher Beal, D.O., an internist and chief medical informatics officer with St. Johns Internal
Medicine PC and chief of staff at
Sparrow Clinton Hospital in St.
Johns, said he wants to talk with
his EHR just as the two astronauts
did with HAL in the Stanley
Kubrick movie “2001: A Space
Odyssey.”
Like the Kubrick movie, Beal
said, he wants to have a conversation first thing in the morning
while he is in the shower with his
From Previous Page
study found that patients who visited the emergency departments of
two hospitals participating in
HIEs within 30-day periods reduced repeat imaging for computed tomography (8.7 percent), ultrasound (9.1 percent) and chest
X-rays (13 percent).
About 20,000 patient visits at 37
hospital emergency departments
were studied in the report, “Does
Health Information Exchange Reduce Redundant Imaging?” in the
March issue of the journal Medical
Care.
own “HAL” computer to discuss patients he will see later in the day.
Beal also said administrators
and vendors need to listen to doctors about design. “We want technology that helps us make improvements in our practices,” he
said. “Go low-tech first.”
On the other hand, James Ryan,
D.O., a family physician and solo
practitioner at Ryan Family Practice
in Ludington, said most EHRs on
the market do not make physicians’
lives easier.
“It is depressing when you have
to log in to” an inferior system,
Ryan said. “Most systems are
garbage. There are too many systems that are throwaways, and
everyone knows they are. E-prescribing and scheduling are logical. You want to be able to chart.”
Gregg Stefanek, a family practice
doctor in Gratiot County, said
physicians wish they could have
single log-ins for all the various systems they have: electronic health
records, disease registries and electronic prescribing.
Scott Monteith, M.D., a psychiatrist at Grand Traverse Behavioral
Medicine PC in Traverse City, said
doctors want HIEs and EHRs to
help them support the Triple Aim
— improving patient care experience, improving population health
and reducing costs.
“They want to leverage health
information technology toward
that end,” said Monteith, who described himself as a big supporter
of EHRs.
But Monteith said health care
will be unable to achieve that goal
until EHRs and HIEs are working
together seamlessly.
“We have way too many forms.
We need insurers to standardize
consent forms,” he said.
Monteith also said doctors and
hospital administrators also want
better support from EHR vendors.
“One health system CEO told me
he was 30 percent less efficient
some 4½ years after implementation,” he said. “I would have
thought maybe six months.”
Finally, doctors also want more
assurances that privacy will be
protected within HIEs and EHRs.
“One patient told me she wouldn’t
answer my questions if they went
into a computer,” Monteith said.
Jay Greene: (313) 446-0325,
jgreene@crain.com.
Twitter:
@jaybgreene
“You need access to (clinical
and
claims
data),”
said
Tony Colarossi,
a partner at
Southfield-based
Plante
Moran
PLLC, who leads
the firm’s acute
health care conColarossi
sulting services
practice. “The information itself is
not population health. It is how
you use the data.”
Shaun Alfreds, COO of HealthInfoNet, Maine’s HIE, said 34 of the
state’s 37 hospitals, 34 federally
qualified health centers and 400
other outpatient clinics contribute
data to the state’s all-claims payer
database.
“Hospitals want to look at population health. We are crunching
the data now to get the information into care management workflow. The goal is to know the risk
of readmission before a patient is
discharged,” said Alfreds, adding
that early studies show the readmission predictions have been
fairly accurate.
Like a growing number of HIEs,
HealthInfoNet’s data include patients’ encounter history, laboratory
and microbiology results, radiology
reports, adverse reactions and allergies, prescription medication history, diagnosis, conditions and problems, immunizations, vital signs,
dictated/transcribed documents and
continuity-of-care documents.
Jim Lee, vice president for data
policy at the Michigan Health and
Hospital Association, said the ultimate use of patient care data is
to
coordinate
care and manage
patients wherever they go.
Maine’s allpayer
claims
database is imLee
portant to help
hospitals analyze risk, Lee said.
“We (hospitals) don’t have that
data. The insurers have it,” he
said. “Sometimes the past is a predictor of the future to know what
your potential needs are.”
Jay Greene: (313) 446-0325,
jgreene@crain.com.
Twitter:
@jaybgreene
VS
DETROIT TIGERS
Don’t miss your chance to see
Derek Jeter and the Yankees
TUESDAY
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WEDNESDAY
AUGUST 27 • 7:08 PM
THURSDAY
AUGUST 28 • I:08 PM
Detroit Tigers All-Star Poster
to first I0,000 fans 18+
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20140818-NEWS--0012-NAT-CCI-CD_--
8/15/2014
12:02 PM
Page 1
Page 12
August 18, 2014
Health Care
CON Report
The following are selected filings for a certificate of need submitted to the state June 9-Aug. 14:
er connected to main hospital; $145
million.
Letters of intent
䡲 Children’s Hospital of Michigan,
Detroit: Replace 48 existing hospital beds, 45 NICU beds and four operating rooms and move them into
a newly constructed six-floor tow-
䡲 Providence Hospital and Medical
Applications received
Center, Southfield: Expand cardiac
catheterization services by adding
one lab in space that would be renovated on the first floor of the hospital; $5.8 million.
ADVISOR SPOTLIGHT
LAURA EAMES
Vice President of Employee Benefits
Laura’s group health and welfare benefits experience spans
12 years, serving a broad range of employers. Her clients
value her outstanding service and understanding of critical
business factors that impact their benefits strategy. She takes
a personal and thoughtful approach to her work that makes
her an integral part of every employer team she advises.
535 Griswold Street, Suite 1600 • Detroit, MI 48226 • www.lovascogroup.com • 313.394.1700
A Member Firm of M Financial Group.
LoVasco Consulting Group is Independently Owned and Operated.
䡲 Surgical Center of Southfield LLC:
Begin operating a freestanding
surgical outpatient facility with
two operating rooms; $2.6 million.
Decisions
Fountainbleu LLC, Sterling
Heights: Begin operating a nursing home with 100 beds in a newly
constructed leased building in Macomb Township; $7.5 million. Disapproved.
䡲 Romeo Nursing Center: Acquisition and replacement of the existing 35-bed nursing home with newly constructed leased space within
the replacement zone by Trilogy
Health Services LLC, Romeo; $2.9
million. Approved.
䡲 University of Michigan Health System, Ann Arbor: Renovate existing
clinical space at the university hospital emergency department, university hospital operating room
suite and the fifth floor of the building formerly named Mott Hospital;
$36.4 million. Approved.
䡲 St. Francis Nursing Center, Detroit: Acquisition of the 81-bed
nursing home by Mission Point of
Detroit LLC; $2.8 million. Approved.
䡲 Havenwyck Hospital, Auburn
Hills: Add 44 adult psychiatric
beds under the high-occupancy
provision; $2.5 million. Approved.
䡲 Henry Ford Medical Center, Dearborn: Replace two operating rooms
within the licensed site and renovate one operating room; $1.5 million. Approved.
— Natalie Broda
䡲
NOMINATIONS SOUGHT
FOR NONPROFIT CONTEST
Health Care Experience
In Your Corner.
®
■ Focused on health care law for systems,
physicians and payors in all market segments.
■ Third party reimbursement, public and
private health care provider financing,
and commercialization of physician
inventions and ideas.
First Tier Ranking
in Health Care Law
■
Metro Detroit
■
Grand Rapids
■
Kalamazoo
■
Grand Haven
■
Lansing
Contact Scott Alfree at sdalfree@varnumlaw.com
This year’s Crain’s Best-Managed
Nonprofit Contest is focused on
good management practices of
nonprofits.
Applicants are
asked to give
examples of
how they deploy
their mission
and resources,
among other information.
Applications are due Aug. 25.
Finalists will be interviewed by
judges the morning of Nov. 11.
Applicants for the award must be a
501(c)(3) with headquarters in
Wayne, Washtenaw, Oakland,
Macomb or Livingston counties.
Applications must include an entry
form, a copy of the organization’s
code of ethics, a copy of the most
recent audited financial statement
and a copy of the most recent IRS
990 form.
Previous first-place winners are not
eligible; neither are hospitals,
HMOs, medical clinics, business
and professional organizations,
schools, churches or foundations.
The winners will be profiled in the
Dec. 1 issue, receive a “bestmanaged” logo from Crain’s for
use in promotional material and
will be recognized at Crain’s
Newsmaker of the Year lunch early
next year.
For an application form, please
email YahNica Crawford at
ycrawford@crain.com or visit
www.crainsdetroit.com/nonprofit
contest. For information about the
contest itself, email Executive
Editor Cindy Goodaker at
cgoodaker@crain.com or call
(313) 446-0460.
20140818-NEWS--0013-NAT-CCI-CD_--
8/15/2014
10:44 AM
Page 1
August 18, 2014
Page 13
CALENDAR
TUESDAY
AUG. 19
Government Marketing Strategies. 9
a.m.-noon. Procurement Technical
Assistance Center of Schoolcraft College. Course targeting business owners interested in learning how best to
market to the government customer.
Attendees should have a basic understanding of government contracting
with federal, state or local government agencies. Schoolcraft CollegeVisTaTech Center, Livonia. $45. Contact: Carrie Vroman, (734) 462-4438;
email:
cvroman@schoolcraft.edu;
website: schoolcraft.edu.
THURSDAY
AUG. 21
Open Office Hours — Tech-Based. 9 a.m.1 p.m. TechTown Detroit. For entrepreneurs working on technology-based or
enabled businesses, including advanced automotive, advanced computing, biotech, clean energy, engineering
and medical devices. Seek an expert’s
opinion on an idea or seek direction on
how to secure funding, line up resources or make connections. TechTown Detroit, Detroit. Free. Contact:
Diane Love-Suvada, (313) 879-5250;
email:
diane@techtowndetroit.org;
website: techtowndetroit.org.
UPCOMING EVENTS
Leadership Oakland Breakfast — The
Road to Reinvention. 7:30-9 a.m. Aug.
26. With Josh Linkner, CEO, Detroit
Venture Partners, on his latest book,
The Road to Reinvention, MSU Management Education Center, Troy. $36.
Contact: Susan Williams, (248) 9526880, ext. 3; email: swilliams@leader
shipoakland.com; website: leader
shipoakland.com.
Toast + Tech Talk Session 2: Surefire
Ways to Attract, Retain and Motivate
Talent. 7:30-10 a.m. Aug. 26. Plante
Moran LLC, Automation Alley. Second
in a four-part series on topics related to
the technology industry, focused on
helping growing companies develop the
framework and tools to continue to
compete. Free. Detroit Athletic Club,
Detroit. Contact: Dan Artman, (248) 2233469;
email:
dan.artman@plantemoran.com; website: plantemoran.com.
Networking Reception with Mayor
Mike Duggan. 5:30-p.m. Aug. 26. Detroit Regional Chamber. After Detroit
Mayor Mike Duggan issues brief remarks, network with him and key
staff members. Max M. Fisher Music
Center, Detroit. $10 chamber members, $590 nonmembers (the cost of
a membership). Contact: Marianne
Alabastro, (313) 596-0479; email:
malabast@detroitchamber.com; website: detroitregionalchamber.com.
Detroit Economic Club 18th Annual
Detroit Lions Kickoff Luncheon. 11:30
a.m.-1:30 p.m. Aug. 27. Detroit Economic Club. Join the DEC as it welcomes new Detroit Lions head coach
Jim Caldwell. Ford Field, Detroit. $45
DEC members, $55 guests of DEC
CALENDAR GUIDELINES
If you want to ensure listing online
and be considered for print
publication in Crain’s Detroit
Business, please use the online
calendar listings section of
www.crainsdetroit.com. Here’s
how to submit your events:
From the Crain’s home page, click
“Detroit Events” in the red bar near
the top of the page. Then, click
“Submit Your Entries” from the dropdown menu that will appear and
you’ll be taken to our online
submission form. Fill out the form as
instructed, and then click the
“Submit event” button at the bottom
of the page. That’s all there is to it.
More Calendar items can be found
on the Web at
www.crainsdetroit.com.
Chrysler Day. 11:30 a.m.-1:30 p.m. Sept. 9.
JOIN LEADERS TO DISCUSS
WESTERN WAYNE COUNTY
Join chief elected officials and
business leaders from 18 western
Wayne County communities for an
evening of networking and insights
into the region in the second
annual Western Wayne Business
Leadership Banquet, 5-8 p.m.
Sept. 25 at the Ford Motor Co.
Conference & Event Center,
Dearborn.
Sponsors include Bank of
America Merrill Lynch, Comcast
Corp. and Fausone Bohn LLP.
Crain’s Detroit Business Publisher
Mary Kramer is the emcee, and the
keynote speaker is David Sowerby,
portfolio manager for Loomis,
Sayles & Co. LP, Bloomfield Hills.
Sowerby will address economic and
business trends for western Wayne
County and metro Detroit.
Tickets are $100 individual,
$1,500 corporate sponsorship for
a table of eight. For ticket
information, call Dan West,
president, Livonia Chamber of
Commerce, (734) 427-2122, or
email him at dwest@livonia.org.
members, $75 others. Contact: (313)
963-8547; email: info@econclub.org;
website: econclub.org.
Detroit Economic Club Presents: Lowell
McAdam. 11:30 a.m.-1:30 p.m. Sept. 8.
Detroit Economic Club. Lowell McAdam, chairman and CEO, Verizon
Communications Inc., will address the
lunch meeting. MotorCity Casino Hotel,
Detroit. $45 DEC members, $55 guests of
members, $75 others. Contact: (313) 9638547; email: info@econclub.org; website: econclub.org.
Adcraft Club of Detroit. Luncheon presentation with Ralph Gilles, senior vice
president, product design, and CEO,
motorsports, Chrysler Group LLC. San
Marino Club, Troy. $25 junior and student members, $35 members, $45 nonmembers. Contact: Melanie Davis, (313)
872-7850; email: mdavis@adcraft.org;
website: adcraft.org.
Cracking the Gender Code at Work.
11:30 a.m.-1:30 p.m. Sept. 9. Inforum.
With Connie Glaser, corporate consultant and author of GenderTalk Works,
More Power to You! and Swim With the
Dolphins. Townsend Hotel, Birmingham. $25 students, $40 Inforum members, $55 nonmembers, $700 preferred
seating for 10, with recognition in event
presentation and signs, access to VIP
reception. Contact: Deb Roy, (313) 2258244; email: droy@bcbsm.com; or
Melissa Countryman, (313) 225-7223;
email:
mcountryman@bcbsm.com;
website: inforummichigan.org.
5th Summit on the Future of the Connected Vehicle. 7:30 a.m.-6 p.m. Sept. 11.
Connected Vehicle Trade Association,
Michigan Department of Transportation. Participants will include automakers; suppliers; hardware, software, services and communications companies;
insurers; and state and federal government officials. Cobo Center, Detroit.
$300 government representatives, $400
speakers and CVTA members, $500 nonmembers; all prices increase $100 after
Aug. 28; $100 extra to attend Intelligent
Transport System World Congress
Expo and Demos, Sept. 10. Contact:
Scott McCormick, (734) 730-8665; email:
sjm@connectedvehicle.org; website:
connectedvehicle.org.
How the Destruction of the Dollar
Threatens the Global Economy and
What We Can Do About It. 11:30 a.m.-
Sept. 15. Detroit Economic Club.
With Steve Forbes, chairman and editor-in-chief, Forbes Media, presenting
a controversial argument about why a
return to a sound dollar and a new
gold standard are vital to the future of
the global economy. Forbes and Elizabeth Ames are the co-authors of How
the Destruction of the Dollar Threatens
the Global Economy and What We Can
Do About It. Westin Book Cadillac, Detroit. $45 DEC members, $55 guests of
members, $75 others. Contact: (313)
963-8547; email: info@econclub.org;
website: econclub.org.
Estate Women Detroit. Recognizing
three commercial real estate developments that significantly affect surrounding communities, focusing on
renovation or adaptive reuse, new
construction and special impact.
Westin Book Cadillac, Detroit. $65
CREW members, $90 nonmembers,
$130 members and a guest, $800 table
for 10. Registration deadline: Sept. 8;
table reservation deadline: Sept. 1.
Contact: Nicole Franzen, (248) 2330107; email: nrfranzen@hedev.com;
website: crewdetroit.org.
Let the Giant Buy Your
IT A$$ET$
E-waste recycling/data destruction/computer liquidation
Call: 248-891-7330 or Email: info@R2Giant.com
1:30 p.m. (plus 1:35 p.m. book signing)
Take care
of your career.
If you currently work
in health care, or aspire
to, Western Michigan University offers
multiple health care degree options at our Metro
Detroit location. We are preparing today’s professionals to
transform health care and human services tomorrow.
Contact WMU-MetroDetroit at (248) 485-4500 for more
information about the following programs:
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- Many health-related
concentrations available
wmich.edu/metrodetroit
CREW Detroit Impact Awards. 11 a.m.1:30 p.m. Sept. 17. Commercial Real
20140818-NEWS--0015-NAT-CCI-CD_--
8/15/2014
10:44 AM
Page 1
August 18, 2014
Page 15
CRAIN'S LIST: LARGEST AUTO DEALERS Ranked by 2013 revenue
Company
Address
Rank Phone; website
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Top executive(s)
Revenue
($000,000)
2013
Revenue
($000,000)
2012
Percent
change
Number of
dealerships
Number of new
vehicles sold/leased
2013/2012
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vehicles sold
2013/2012
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20140818-NEWS--0016-NAT-CCI-CD_--
8/15/2014
10:49 AM
Page 1
Page 16
August 18, 2014
THE MILLER LAW FIRM
PEOPLE
Changing the Odds in our Clients’ Favor
ARCHITECTURE
Dennis McGowan to associate vice
president, Hobbs + Black Associates
Inc., Ann Arbor, from senior associate. Also, Tom Dillenbeck to associate
vice president, from senior associate.
CONSULTING
Brittany Guerriero to executive vice
president, Right Management Inc.,
Southfield, from director of corporate
relations, United Way for Southeastern Michigan, Detroit.
The Miller Law Firm is Recognized
as a Leader in Complex Business Litigation
Q
Automotive supplier counseling
Q
Commercial and business lawsuits
Q
Employment litigation
Q
Shareholder and partnership disputes
EDUCATION
Polly Fisher to director of early childhood program, The Academy of the Sacred Heart, Bloomfield Hills, from director, Our Shepherd Lutheran Child
Care, Our Shepherd Lutheran School,
Birmingham.
Referral fees honored on contingency fee cases
950 West University Drive, Suite 300
Rochester, Michigan 48307
248-841-2200
FINANCE
millerlawpc.com
IN THE SPOTLIGHT
Gongos Inc., Auburn Hills, has
appointed Katherine Ephlin COO.
She will be
responsible for
overseeing
day-to-day
operations for
the parent
company and
its business
units, Gongos
Research and
O2 Integrated.
Ephlin replaces
Ephlin
Camille Nicita,
who became CEO in 2012 upon
the death of John Gongos, the
company’s founder and CEO.
Ephlin, 45, had been Gongos’ vice
president of operations after
serving as director of the financial
and diversified team at Gongos
Research. Before joining the
company, she was an independent
consultant and marketing manager
at General Motors Co.
Ephlin earned a bachelor’s degree
in psychology from the University of
Vermont, Burlington, Vt., and an
MBA in marketing management
from Michigan State University.
Gongos provides primary research
and market intelligence services to
the consumer product, retail,
financial service, transportation
and technology industries.
Team USA, Domino’s Pizza Inc., Ann Arbor, from vice president, Americas region.
cations LLC, Farmington Hills, from
NONPROFITS
INSURANCE
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Czarnota
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dale, from director of philanthropyOakland County, Evangelical Homes
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LAW
SERVICES
Fenton
Steven Bender to partner, The Health
Law Partners PC, Southfield, from
R. Michael Czarnota to senior
managing counsel,
Health, Livonia.
CHE
HOSPITALITY
Stan Gage to executive vice president,
Holly Nieuwendijk
to project manager and performance
consultant, Innovative
Trinity
MARKETING
Learning Group
Inc., Royal Oak,
Nieuwendijk
Guaranteed Rate
Inc., Birmingham.
She will take on the new role in addition to her previous title of vice president of mortgage lending, Troy.
Larry Stawiarski to vice president and senior counsel, Pinnacle Wealth Management, Brighton, from senior manager,
Insulgard Security Products, Brighton.
Marina Glagolev to executive director,
Ferndale Area Chamber/Oak Park Alliance Chamber of Commerce, Fern-
Betsy Reich to director, premier insurance solutions, Colburn Group,
Troy, from assistant vice president,
premier personal lines, Huntington
Insurance Inc., Birmingham.
vice
president
and chief tax
officer, Flagstar
Bank, Troy, from
director, PricewaterhouseCoopers
LLP, Detroit.
Bonnie Fenton to
branch manager,
School of Business
account coordinator.
from independent
consultant, Illumination Communications
LLC,
Bloomfield Hills.
PEOPLE GUIDELINES
Scarlet
Sisco
Susan Scarlet to vice president,
strategic branding, Gongos Inc. ,
Auburn Hills, from senior director,
strategic branding.
Maggie Sisco to account manager,
Tanner Friedman Strategic Communi-
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BUSINESS DIARY
CALL FOR NOMINATIONS
The Association of Fundraising Professionals Greater Detroit Chapter is
calling on local nonprofits to submit
their organizations’ volunteers to be
recognized at the National Philanthropy Day Dinner, Nov. 12 at Cobo
Center, Detroit. The event is presented by Crain’s Detroit Business. Deadline for recognition forms is Sept. 8 at
afpdet.org. For more information, call
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try, Mooresville, N.C.; and Ritron Inc.,
Carmel, Ind. Also, during the first half
of 2014, 25 customers went live on the
Plex Manufacturing Cloud. Website:
plex.com.
EXPANSIONS
Rate Inc., Chicago,
opened a mortgage lending location at
33477 Woodward Ave., Suite 1000,
Birmingham. Telephone: (248) 8354440. Website: guaranteedrate.com.
ing for new business ventures, globalization through mergers and acquisitions, and international tax consulting to U.S. and Canadian companies
and organizations looking to invest
and expand in cross-border initiatives.
Websites:
bakertilly.com;
collinsbarrow.com.
Guaranteed
STARTUPS
Onyx Modern Steakhouse & Whiskey
Bar opened at 208 W. Fifth St., Royal
Oak. Telephone: (248) 543-6911. Website: onyxroyaloak.com.
CONTRACTS
NEW PRODUCTS
Shelving Inc., Auburn Hills, complet-
Burroughs Inc., Plymouth, a provider
ed a multilevel shelving and pushback
racking warehouse project at the new
branch in Toledo, Ohio, for Zatkoff
Seals & Packings, Farmington Hills.
Websites: shelving.com, zatkoff.com.
MiPro Consulting LLC, Milford, was retained by the Susan G. Komen Breast
Care Foundation, Dallas, to upgrade
its PeopleSoft Financial application to
PeopleSoft 9.2. Website: miproconsult
ing.com.
Plex Systems Inc., Troy, a software
supplier, added new Plex Manufacturing Cloud customers including Irwin
Seating Co., Walker; Queen City Pas-
of technology services, launched the
Quantum DS next-generation desktop
sorter for processing payments. Website: burroughs.com.
NEW SERVICES
Baker Tilly Virchow Krause LLP, Southfield, and Collins Barrow Windsor LLP,
Windsor, accounting firms and independent members of Baker Tilly International, created service desks at both
locations to provide expertise in areas
including assurance and related compliance services, cross-border financ-
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20140818-NEWS--0017-NAT-CCI-CD_--
8/15/2014
6:55 PM
Page 1
August 18, 2014
Page 17
Cupcake retailer Just Baked whips up new niche with kiosks
BY COURTNEY BALESTIER
SPECIAL TO CRAIN’S DETROIT BUSINESS
Sometimes it’s all about sticking
with the original recipe.
When cupcake retailer Just Baked
attempted to transition from consumer retail sales to a wholesale
distribution network that included
grocery stores, the company discovered selling gourmet cupcakes
wholesale was a big-effort, low-profit proposition.
So into the batter last year came
a new group of investors and a
more targeted plan to sell cupcakes through mall kiosks. At $3 a
pop for specialty treats, the company says it is on track for $3.2 million in revenue through 19 locations this year.
Bakers and backers
Just Baked started with a bang
in 2009.
One day, after baking too many
treats, owner and founder Pam
Turkin opened her bakery doors to
sell an overflow of 120 treats. It
worked: That month, Just Baked did
$1,700 worth of business. The next
month, it did
$17,000.
“It’s just had a
life of its own,”
Turkin
said
from the Livonia headquarters of Just
Baked, which
now includes 19
locations
in
Turkin
Michigan and
Ohio.
Food trends have natural arcs,
though; as the cupcake trend moves
through its arc, Just Baked adjusted its business plan with a new lower-cost retail strategy: mall kiosks.
Initially, Just Baked was focused on
COURTESY OF JGA
Just Baked, which operates in mall kiosks like the one in this rendering, sells
intricately decorated cupcakes offered in flavors ranging from funfetti to tiramisu.
opening standalone stores and taking on franchises (the first now has
three stores with the company).
“We were totally self-funded, so
we grew it as organically as we
could,” Turkin said.
Then, in 2011 — in need of capital
and a newer, bigger space — Just
Baked drew the interest of executives from Garden Fresh Gourmet, the
Ferndale-based salsa company. Garden Fresh provided capital and expertise through equity ownership
to help Just Baked grow a program
in grocery stores. But the Garden
Fresh partners sold their stake to a
new investor group, Ryan and Eric
Goodman, of Royal Oak-based R&E
Development, last year.
“(Garden Fresh’s) focus was really on wholesale, grocery stores, and
it took us six or seven months to realize that probably wasn’t our spot
in the world,” Turkin said.
Thinking big by thinking small
The Goodman brothers, who met
Turkin through a mutual friend,
were attracted to Just Baked’s established branding.
“I was already trying to invest in
other franchisee concepts,” Ryan
Goodman said, “and trying to bring
something that’s not already here,
it’s pretty difficult.”
Since joining Just Baked, he’s
focused on real estate negotiations, while Eric Goodman has
jumped into daily operations, even
baking and working in stores.
It’s been a natural collaboration.
“We definitely have the same vision of where we want to go,” Ryan
Goodman said. “We’re on the same
letter on the same word on the
same page.”
That vision involves the nimble
little spaces and flexibility that
mall kiosks have to offer.
Each Just Baked location offers
30-45 different flavors a day — from
best-sellers like Grumpy Cake and
seasonal favorites like key lime —
but they’re all baked in Livonia
(also home to Just Baked’s customcake arm, which reports revenue of
Alley: Army renews equipment pact
■ From Page 3
many (defense) programs are transferring from production to sustainment,” Raubinger said. “Most of
the vehicle industry in particular
will be in sustainment mode.
“There are officials on some of
these vehicle and other programs
who haven’t yet managed a program in sustainment mode, and we
can actually help them do that.”
The first directive under the
new contract will be to complete a
sustainment engineering risk assessment for the Army’s fleet of
Bradley Fighting Vehicles, an assessment that Raubinger estimates will cost about $300,000.
The assessments tell the Army
which components or materials
were built by companies that are
out of business or were made with
materials that no longer are available on the market or for which no
current design specifications or
blueprints can be found.
Automation Alley also can, with
help from various companies, reverse-engineer and re-create those
technical specifications using material analysis, 3D image scanning and
computer-aided design modules.
The organization then submits a
complete data technical package,
and sometimes a replacement prototype for those components or
systems, that the U.S. Department of
Defense can use to seek replacement-part production bids from
manufacturers.
“In this region (of Michigan),
you can get virtually anything
made, if you can just tell people
here what specifically you want,”
Raubinger said. “It’s just amazing
the manufacturing capacity you
have right here.”
Among the local companies that
take part is Warren-based Waltonen Engineering Inc., which provides 3D scanning and CAD engineering services to the Alley for
military equipment.
Tom Laboda, director of business development for Waltonen,
said the Army design work was a
steady piece of Waltonen’s business under the previous Alley contract, and the company has the capacity to do more if demand grows.
“It’s definitely a very strong
part of our business,” Laboda said.
“I wouldn’t say that it’s accelerating for us just yet, but we do know
the military is going into a reset
and recap mode, and a lot of replacement parts have to be made.”
Other local companies that assist the Alley with technical specifications and pre-production development for the Army include
Lanzen Fabricating Inc. and RCO Engineering Inc., both of Roseville; Top
Craft Tool Inc. of Clinton Township;
Elmhirst Industries Inc. of Sterling
Heights; Detroit Flexible Metal Products Co. of Troy; and Detroit Radiator Corp. of Romulus.
Under the contract, Automation
Alley also expects to recommend
alternative sources or parts for the
Army using its VisCom database
tool, which lists tens of thousands
of manufacturers and suppliers
and their capabilities nationwide.
The organization also will design
and engineer specific hardware and
software as needed and sometimes
complete limited production runs
for crucial parts on an emergencyresponse basis. Army production
awards generally will go out for
bids through FedBizOpps.com and
other channels under the government’s Diminishing Manufacturing
Sources and Material Shortages acquisition procedures.
Chad Halcom: (313) 446-6796,
chalcom@crain.com.
Twitter:
@chadhalcom
about $1 million a year).
With no need for a commissary
area for baking, a mall kiosk is the
perfect footprint. Just Baked’s first
mall site was at Fairlane Town Center.
It now has kiosks at Twelve Oaks,
and Great Lakes Crossing Outlets, and
has just opened its first location outside the state, in Toledo’s Franklin
Park Mall. It is currently scoping locations in Cleveland.
“We’re in 200 square feet in
Franklin, and it’s doing double what
any of our stores were doing,”
Turkin said. That location also has a
Just Baked first: full-service coffee,
a partnership with Chicago’s Intelligentsia Coffee that Turkin hopes to
include into future expansions.
Darren Tristano, executive vice
president of food-market research
firm Technomic, says cupcake business growth will be in lower-cost,
scaled-down spaces, not the large
cupcake destinations of the craze’s
early days. “We’ve seen the peak
and flattening of the cupcake
trend,” he said.
For Just Baked, thinking smaller
with real estate seems to be working: This is the first year of steady
improvement, after a couple years
of growing pains, Turkin said.
Now, Turkin and the Goodmans
are focusing on what works — like
kiosks — and pruning what doesn’t. For instance, while current
franchisees will retain their
stores, the company is backing off
new franchise agreements.
The team is assembling an executive team and mulling more
kiosk site expansions.
The company also has just introduced a new flavor, Brownie Brittle, as well as muffins, and a new
chocolate line is in the works.
The custom-cake business is expanding, too. Growth will also
bring new discussions about operations, like whether to open commissary locations to serve fartherflung locations.
“We know now the economics of
our footprints work,” Turkin said.
“So the real question, at the point
we’re at, is ‘How do you get from 19
to 100 or 19 to 500?’ ”
REAL ESTATE
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INTERNET:
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See
Crainsdetroit.com/Section/Classifieds
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POSITIONS AVAILABLE
COMMERCIAL REAL ESTATE
LEASING OPPORTUNITY
Transwestern,
an
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20140818-NEWS--0018,0019-NAT-CCI-CD_--
8/15/2014
7:09 PM
Page 1
Page 18
WBEC-Great Lakes 14th Annual Women’s
Business Conference
Join the Center for Empowerment and Economic
Development (CEED) at the largest women’s business
conference in Michigan! Achieve six months of
sales prospecting at Meet the Buyers and Women’s
Business Showcase and Reception, where special
contract opportunities and supplier matchmakers
are available for WBENC certified women business
enterprises. Over 60 corporate procurement and
supplier diversity professionals and government
representatives are confirmed to attend.
September 29-30
Suburban Collection Showplace,
46100 Grand River Ave., Novi
Registration: miceed.org
For more local events, visit Crain’s Executive Calendar at
crainsdetroit.com/executivecalendar
3
ce
wren
W. La
Much to develop
2
Woodward
10th Annual Taste of SouthÀeld
The Annual Taste of Southfield celebrates what’s
right about business and commerce in Southfield.
The event includes a reception with a strolling buffet
and live entertainment. Join us to promote our area
businesses and restaurants while building a strong
business/community relationship.
October 7 • 5-8 p.m.
Southfield Town Center Atrium, 2000 Town Center,
Southfield
Registration: southfieldchamber.com
8
1. 1 N. Saginaw
2. 28 N. Saginaw
3. 31-33 N.
Saginaw
4. 87 N. Saginaw
5. 10-12 W Pike
6. 40 Pike
7. 31-35 Huron
8. 50 Wayne
Mill
Mardi Gras Sales for Salespeople and Entrepreneurs
Taking the originality of Mardi Gras and applying it to
sales, Michelle Bracali will share how to better stand
out in a crowded marketplace, differentiate from the
competition and build a stronger personal brand.
September 25 • 5:30-7:30 p.m.
Chamber Office, 24300 Southfield Rd., Suite 101,
Southfield
Members: Free • Non-Members: $10
Registration: southfieldchamber.com
n
Clinto
Huron
Perry
Coming Up from the Southfield Chamber
SouthÀeld Food Truck Rally
Six food trucks, live entertainment and beer and wine
tent.
August 27 • 4-9 p.m.
Arbor Lofts, 20300 Civic Center Dr., Southfield
7
rsity
Unive
d
Stran re
t
Thea
In The Public Eye
From Feared to Welcomed: How Public Relations Can
Help Expand Your Business
Topics will include the power of branding, telling your
story through the media, social media as a PR tool
and a media panel comprised of industry leaders from
Crain’s Detroit Business, WWJ News Radio 950, WJBK
Fox 2 and MLive. Sponsored by Delphi Foundation and
Oakland University
October 23 • 8 a.m.-Noon
Altair, 1820 East Big Beaver Rd., Troy
Members: $45; Non-Members: $75
Registration: (248) 641-8151,
theteam@troychamber.com
or troychamber.com/events
4
ard
odw
Wo
Coming Up from the Troy Chamber of Commerce
Troy’s Night on the Town (TNT)
Experience some of Troy’s finest restaurants, all in
one evening–Morton’s The Steakhouse, Ruth’s Chris
Steak House and The Melting Pot. Restaurants will
provide a sampling of hors d’oeuvres and a cash bar.
Attendees will be assigned a starting restaurant, then
be on their own to experience them all. Clear Rate
Communications will host a special VIP Reception.
Presented by the Boulevard Health Center, Cherrywood
Nursing & Living Center
September 18 • 5:30-8 p.m.
Registration: 248-641-8151,
theteam@troychamber.com
or troychamber.com/events
tings, many people are expressing
support in the rebirth of Pontiac to
be the bookend on the other side of
the Woodward corridor.
“Detroit and Midtown have
done an amazing job of repositioning themselves, and coupled with
the continued success of Royal
Oak and Birmingham, it seems
only logical that Pontiac is poised
for a new start.”
e
Wayn
PARTNER EVENTS
■ From Page 1
aw
Sagin
UPCOMING
Pontiac: Three-year project launches
Pine
2014
August 18, 2014
Looking north on Saginaw Street
6
1
last week, fellow project investor
5
Bob Waun, vice president of busiPike
ness development for Core Partners,
counts off about a half-dozen buildner with exist- foot Strand Theatre, at 12 N. Saginaw.
ings and three parking lots that he
ing
property Kyle Westberg, president and CEO
owns.
owners and keep of Pontiac-based West ConstrucThose buildings and a handful
them in the rede- tion, said Strand investors still seek
more are expected to be the inabout $4 million in financing for the
COSTAR GROUP INC. velopment plan
vestors’ playgrounds, becoming
the sites of a combination of multi- 1 N. Saginaw St. if they want to project.
He expects the Strand project,
be there and be
family residential, office and retail
which will also
part of the improvements.”
space — and possibly even a hotel.
include
new
All told, the investment group
All told, investors envision 175restaurant
225 residential units, between 50,000 owns or has under contract about
space, to be comand 75,000 square feet of loft and tra- 450,000 square feet of space and
pleted by the
ditional office space, boutique and more than 400 parking spaces downend of next year.
destination retail, and restaurants town.
Although
The redevelopment follows the
and entertainment space.
those were imThe largest of the projects would work of a lot of good foot soldiers
portant to downbe a $15.6 million renovation of the in the city, Waun and Farrell said.
town, the area
“We aren’t the knights coming
135,000-square-foot Oakland Towne
outside of it has
Center at 28 N. Saginaw St., a 15-sto- in to save Pontiac,” Waun said. Westberg
been much more
“There has already been
ry building that would be
so much good work by so active.
converted into nearly 100
Last year, General Motors Co. anmany good people that, beloft apartments and 40,000
cause of their good work, nounced a $200 million investment
square feet of Class A office
we see a real opportunity to shift about 400 jobs from Warren,
space, plus retail and
here to build upon the Wixom, Indiana and California to
restaurant space.
great foundation that’s al- Pontiac through a 138,000-squareThe investors are under
ready been laid by so foot expansion of its powertrain encontract to buy that buildgineering headquarters at 777
many people before us.”
ing, which was long
However, too often the Joslyn Ave. north of Montcalm,
known as the Pontiac State
efforts to improve down- bringing it to 588,000 square feet.
Bank Building.
There is also the M1 Concourse
town have been too limitThe 61,000-square-foot
LLC project, a $40 million-plus effort
ed in scope, Farrell said.
Riker Building, at 31-35
COSTAR GROUP INC.
“Many great people have to redevelop a former GM plant at
Huron St., would be turned 28 N. Saginaw
tried to enhance and give Woodward Avenue and South
into a boutique hotel or St.: Also known
downtown Pontiac an op- Boulevard into a 1.5-mile recremixed-use development as the Pontiac
portunity to turn around ational test track, automotive event
with a $2.5 million to $4.8 State Bank
in the past,” he said. “Un- complex and more than 250 car conmillion price tag. The in- Building
fortunately, most of the dos for owners of classic and highvestors are under contract
previous efforts have been end cars to store vehicles in a clito buy that, too. The vacant
‘silo’ projects and did not mate-controlled environment.
31,000-square-foot building
M1 Concourse closed on the purprovide balance and susat 50 Wayne St., owned by
chase of the 87-acre RACER Trust
tainability to the area.”
Waun’s RE Fund LLC, would
Farrell said downtown site this month. The first phase of
be turned from office space
Pontiac needs more day- condos will go up for sale next
into 16 apartments, plus
time foot traffic, a strong month; the first phase is expected
6,000 square feet of retail
housing market and night- to open next summer.
and office space, for $3.7
Then there is the $129 million palife.
million. At Waun’s build“This is huge,” Mayor tient tower at St. Joseph Mercy Oaking at 40 Pike St., the forDeirdre Waterman said of land, a 301,000-square-foot, eightmer
22,500-square-foot
story building featuring 136 private
COSTAR GROUP INC. the plans. “These are the
failed Sevin Nightclub buildthings we are trying to rooms and 72 additional patient
ing would be turned into of- 31-35 Huron St.:
fice or creative flex space The Riker Building make the ground fertile beds at 44405 Woodward. That was
completed this year.
for.”
with a $1.25 million renovaThere is the $1.5 million Wessen
tion, investors said. SmallLawn Tennis Club Inc. project, a develer renovations to add loft
opment with 24 grass and two hard
office space, loft apartThe investors’ plan courts that opened this summer and
ments and creative workwould be another large in- also will feature an Olympic-size
space are planned for other
vestment in the city, but swimming pool at 235 Wessen St.
buildings, including the
12,000-square-foot building
one of just a handful downAnd then there was the $16.7
COSTAR GROUP INC.
at 1 N. Saginaw, where the 50 Wayne St.
town in recent years.
million Ultimate Soccer Arena proformer JD’s Key Club and
The largest was the $20 ject in 2010.
Coyote Club were located,
million redevelopment of
Recent development plans outand the 3,800-square-foot
the 80,000-square-foot for- side downtown are “kind of a surbuilding at 9-11 W. Pike St.
mer Sears, Roebuck & Co. round sound and will help create
Waun owns those, too.
department store by West that connection to the downtown
Waun said the investConstruction Services into area, which is so viable,” said Brad
ment group wants to work
Oleshansky, co-owner and CEO of
COSTAR GROUP INC. Lafayette Place — featurwith current property 40 Pike St.
ing 46 high-end loft apart- M1 Concourse.
owners for the betterment
ments, the Lafayette MarWaun said those projects will be
of downtown Pontiac.
ket and Anytime Fitness at 154 N. a boon to the downtown redevelop“We are not taking over and run- Saginaw. It opened in 2012.
ment plan.
ning people out,” he said. “This is
There is also the planned $20 milnot gentrification. We want to part- lion renovation of the 38,000-squareSee Next Page
Not just downtown
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Page 2
August 18, 2014
From Previous Page
“Wessen, M1 Concourse, Ultimate Soccer, the new (municipal)
golf course owner (The Links at Crystal Lake) all create rich amenities
for loft apartment residents and
maybe even an opportunity for a
boutique hotel,” he said.
With all that development, Pontiac could become a new hip spot in
the region, along the lines of Royal
Oak, Ferndale and Birmingham.
Downtown Pontiac is “the
biggest untapped opportunity in
southeastern Michigan,” Oleshansky said.
‘A collaborative effort’
While many among the investment group’s roster have significant
real estate backgrounds, others are
relative newcomers to the field.
“This is a collaborative effort of
a lot of good people coming together to help the downtown be all it
can be,” Waun said.
For example, Lauren Rakolta —
the daughter of John Rakolta Jr.,
CEO of the Detroit-based construction company Walbridge Aldinger Co.
— is an investor. She is finance
consultant for David Trott’s congressional campaign and Gov. Rick
Snyder’s re-election bid and the
Michigan finance consultant for
the Republican National Committee.
And then there’s Anthony Garth,
a director for Royal Oak-based Avalon Films. There’s professional Royal
Oak photographer Alan Davidson
and John Hamaty, president of Vibra-Tite Adhesives, a division of
Clawson-based ND Industries Inc.
Hamaty — who invested with
Waun in residential real estate
renovation projects in Ferndale,
Hazel Park and Pontiac following
the market crash — sees this new
investment as sound.
“The upside potential for a fairly modest investment, to me, is
fairly significant,” said Hamaty,
who is also a board member at the
Bank of Birmingham.
“It’s in the center of Oakland
County, one of the wealthiest
counties in the U.S. It’s fairly attractive when you can buy real estate at subpar, Detroit-type pricing
but in the middle of Oakland.”
Factoring in
A combination of factors in Pontiac attracted the investors, who expect to finance their project in part
with historic and brownfield tax
credits.
First, former Emergency Manager Louis Schimmel and other
EMs dramatically reduced the size
of government, eliminated nearly
$90 million in debt and streamlined city processes.
A PARTIAL LIST OF INVESTORS:
䡲 Matt Farrell, executive principal,
partner, board member, Core
Partners Associates LLC,
Birmingham
䡲 Larry Goss, executive vice
president, Core Partners and
Burton-Katzman LLC
䡲 Bob Waun, vice president of
business development, Core
Partners
䡲 Adam Duke, associate partner,
Core Partners
䡲 Loren Guzik, senior director of
brokerage, Cushman & Wakefield,
Chicago
䡲 Rick Herbert, managing partner,
Herbert & Associates PC, Pontiac
䡲 John Hamaty, president, VibraTite Adhesives, Clawson
䡲 Gary Speet, retired
manufacturing executive
䡲 Alan Davidson, photographer
and real estate redeveloper
䡲 Andrew Basile Jr., shareholder,
Young Basile, Troy
䡲 Don Kegley, president,
Cunningham-Limp Co., Farmington
Hills
䡲 Lauren Rakolta, finance
consultant, Bloomfield Hills
䡲 Anthony Garth, director, Avalon
Films, Royal Oak
Additionally, the city contracted
with the Oakland County Sheriff’s Department for police patrols and the
Waterford Township Fire Department
for fire services, greatly improving public safety in the community
of about 60,000, said investor Don
Kegley, president of Farmington
Hills-based Cunningham-Limp Co., a
design and construction firm.
“I’m not going to take my wife
there or let my kids go there if it’s
not safe,” Kegley said. “Without
that safety and what the Oakland
County Sheriff’s Department has
done, we wouldn’t be here.”
Finally, Schimmel disbanded a
slew of business organizations with
a potpourri of visions to put the
city’s eggs in one basket: the Pontiac
Downtown Business Association,
headed by Glen Konopaskie.
Another sign the region is ready
for the project: Markets like
Auburn Hills and Troy along the
I-75 corridor are filling up, leaving
fewer parcels of appropriately
zoned land, Kegley said.
Fixing the Loop
Crucial to the project’s success is
the reconfiguration of the Woodward Loop, the investors said.
Long considered a detriment to
foot traffic because its configuration
around downtown discourages people from visiting, city and county officials have been considering a plan
to turn the roadway from one-way to
two-way, add bike lanes and change
traffic signals.
“It’s such a critical element to
give the downtown a pulse and a
heartbeat. The opportunity is
there to turn Pontiac back on,”
Farrell said.
The project would be relatively
inexpensive — about $6 million —
because the concrete infrastructure is in place and little right-ofway acquisition is needed.
This year, the Pontiac City Council
voted to include the Downtown Pontiac Traffic Assessment, which includes the Woodward Loop reconfiguration, in its draft master plan, a
document pending council approval
and now in the public comment period, said Charlotte Burckhardt,
principal planner for the Oakland
County Economic Development and
Community Affairs Department.
Burckhardt said that in the next
month, city and council officials
will meet with the Michigan Department of Transportation, which maintains the road and would be largely
responsible for funding the improvements.
Planning stage
Farrell said preliminary project
plans have been presented to city officials such as Waterman and City
Administrator Joe Sobota as well as
Oakland County Executive L.
Brooks Patterson and Deputy County Executive Matthew Gibb.
Core Partners is expected be responsible for leasing the renovated
downtown spaces to tenants; Cunningham-Limp is expected to do
the construction and design work.
By the end of the month, the
group plans to form Indian Hill Co.
LLC as the umbrella entity of the
buildings in the project area.
Waun said it’s too early in the
process to start pulling construction permits or submitting formal
site plans to the city.
Yet work is expected to start
soon, with “some real progress” on
the project expected by the holiday
season this year and renovated office space opening this winter.
When the bureaucratic process
starts, Waterman foresees a relatively smooth ride.
“I’m not anticipating hurdles,
but with a project this size, they
could be there,” she said.
Even without the official organization formed, work went on at
Waun’s 1 N. Saginaw building, the
former JD’s Key Club and Coyote
Club on Friday, the day before the
start of the Woodward Dream
Cruise.
Wall covering had been removed, exposing some of the worn
brick underneath the walls.
“This,” Waterman said of the
downtown redevelopment, “is exactly what Pontiac needs.”
Packard: Display Group’s new home
■ From Page 3
He expects the first phase of renovations to cost about $500,000.
The purchase of the building, at
6235-6299 Concord St., closed on
July 24, according to Washington,
D.C.-based real estate information
service CoStar Group Inc.
Finding the right space was difficult for Portwood in a tight industrial market. After a bid on a building in Corktown fell through, he
contacted his broker and reviewed
a list of available properties.
“It was slim pickings,” he said.
“I looked at a few and didn’t see
anything that really excited me.”
Kevin Hegg, vice president of
the Canton Township office of Ashley Capital LLC, said finding quality
space the size that Display Group
was looking for is tough.
“There have been some recent
(industrial) requirements of 200,000
to 500,000 square feet wanting to be
in the city, but they were having difficulty finding it,” he said.
Palazuelo, who closed on his
Packard Plant deal in December,
purchased the property in a
Wayne County tax foreclosure auction for $405,000. He plans a mixeduse development for the site.
Troy-based L. Mason Capitani represented the Display Group. Southfield-based Signature Associates represented Kirlin.
Kirk Pinho: (313) 446-0412, kpinho@crain.com. Twitter: @kirkpinhoCDB
Page 19
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August 18, 2014
IN DEEP: THE BUSINESS OF CLEANING UP
Insurers expect claims deluge, may ask cities to pay
BY CHAD HALCOM
Insurers for businesses and
homeowners in Southeast Michigan who suffered flooding and sewer backup damage could pay more
than $200 million in combined
claims — a sum those carriers
could in turn seek to recoup from
insurers for local governments.
AAA Michigan reports that as of
Friday, its insurance services division had received more than 4,000
homeowner claims and expects
more than 5,000 soon, a result of the
storm that dropped about 6 inches
of rain on Southeast Michigan in a
matter of hours late Monday.
The insurer expects to pay on its
water and sewer backup claims
even if property owners also have a
claim against a local government
agency for the same damage.
Sewage-backup insurance for
homes and businesses is fairly common and can run from about $50 a
year for a $25,000 policy to $150 or
more for greater coverage, insurance agents told Crain’s.
“We will cover the claims for
those insureds who purchased the
coverage,” Susan Hiltz, public affairs director for Dearborn-based
AAA Michigan, wrote in an email.
And “if there are subrogation opportunities, we will pursue those.”
Subrogation is a substitution of
legal rights to claims against a third
party — i.e., if an insurer pays a
claim on damage to a business that
is the fault of a city government or
another property owner, it could
sue in the insured owner’s place.
That could be an uphill battle. Insurance experts said affected cities
and townships may not accept responsibility at first. But business
owners with damage may need to
determine first whether they suffered actual flooding versus water
damage from a drain or sewer system backup.
Flooding or backup?
Tommy LeRoy, co-owner of
Ferndale-based Go Comedy! Improv
Theater LLC, said he thinks the
flood damage to a training center
building the company operates on
Nine Mile Road came from sidewalks and flower beds outside the
building. The theater itself was unaffected, he said. But its training
center, which hosts introductory
and advanced improvisational
classes and workshops, had to
close for repairs. LeRoy had hoped
to have it reopened by Monday.
“We actually had a class going on
while the flooding began that night
and had to get people out of there to
go find higher ground,” he said.
“Everyone keeps talking about the
difference between flooding versus
sewer backup as opposed to a drain
backup, but we are still in the
process of figuring that out.”
But don’t assume that because
water came onto the property
through doors or windows instead
of the toilets or floor drains that it
isn’t covered under a policy that includes sewer backups, said Joe
Haney, owner of Sterling Insurance
Group in Sterling Heights.
“If your commercial building has
water flowing through the front
door into the building because the
street’s flooded outside, that seems
like flooding. But that could be a
case where it’s flooded because a
pump malfunctioned or a pipe broke
or a drain in the street needed to be
unplugged,” he said. “And that
could be a water-sewer backup.”
Flood insurance generally only
covers water that seeps onto property from the top floors or ground water saturating into a property, said
Lori Conarton, director of communications for the Insurance Institute
of Michigan. Flood insurance can be
purchased from private insurance
companies, but most policies are
bought from the federally funded
National Flood Insurance Program.
Haney said his company has administered hundreds of claims for
carriers from Monday’s floods, but
most are water and sewer backup
claims rather than flood insurance
claims. While flood insurance is
mandatory for mortgages inside a
flood plain, few carry it outside
those areas because of cost, he said.
NFIP coverage also can cover
sewer backups, but only if the backup is a direct result of the flooding,
according to an NFIP website.
Standard business property insurance policies also include a “pollution exclusion,” which can carve
out sewer backups unless the business owner purchased the additional coverage, said Charles Browning,
co-chair of the Insurance Coverage
Practice Group at Plunkett Cooney PC
in Bloomfield Hills.
Act of God?
Some companies also include
business interruption coverage in
their insurance, which can reimburse lost profits for the time a business is closed or inoperative. But
Browning and Haney both said interruption coverage generally mirrors the rest of a company’s coverage — if it doesn’t have flood or
sewer backup insurance, it wouldn’t
have business interruption insurance for floods or backups, either.
And most business interruption
insurance has a deductible that
equates to a 48- or 24-hour period of
operation, which probably wasn’t
triggered by the floods last week,
Haney said.
“We’re probably talking around
12 hours in most places,” he said.
“And most of the flooding was starting in the late afternoon but really
accelerated in the evening when a
lot of offices were already closed.”
That may mean turning to Public
Act 222, the state law that allows for
economic and some noneconomic
damages if a local government allows a structural or operational
“defect” to create sewer backflows
onto businesses and homes.
The act generally allows a property owner to seek economic damages
45 days after suffering flood damage
if he or she has contacted the “appropriate” local government within
45 days of the event first. The local
government agency has a right to
visit and inspect the damage on the
property before litigation.
PA 222 could cover sewer damage
that isn’t insured or exceeds the
property owner’s coverage limits,
Haney said. But the business owner
or insurer probably will have to
prove the sanitary sewers had a defect that the local government knew
about and could have corrected.
Detroit Mayor Mike Duggan, who
officially assumed oversight of the
Detroit Water and Sewerage Department
from Emergency Manager Kevyn
Orr late last month, said in a statement Tuesday that the DWSD “suffered no failures, and by design excess water was discharged into the
Detroit River as rapidly as possible.”
Without proof of a system defect,
city and suburban governments
could claim the system suffered an
“act of God” — a once-in-a-lifetime
level of rainfall its designers could
not have foreseen, attorneys said.
Damage claims
Litigation from sewer backflows
in severe weather generally brings
in damages of between $10,000 and
$15,000 per homeowner in communities with finished basements,
said Steven Liddle, managing partner of Detroit-based Liddle & Dubin
PC, which specializes in class action lawsuits for property owners
damaged by environmental contamination and sewer backflows.
The law firm just settled a case
this month against the city of Warren before Judge Jennifer Faunce of
Macomb County Circuit Court for $1.75
million, covering 100-200 homeowners affected by two storms in 2011.
That’s a fairly typical result, Liddle
said, and more widespread flood
claims could lead to damages several times that amount.
That could mean that if last
week’s rainfall triggers 5,000 to
10,000 claims among all insurance
carriers in the region, the damage
could well exceed $100 million.
Oakland County on Friday submitted a preliminary damage estimate to the state of $337 million in total property damage from the
flooding, based on reports it received
for both public and private property
in Royal Oak, Ferndale, Madison
Heights, Oak Park, Hazel Park,
Berkley, Huntington Woods, Troy,
Pleasant Ridge and Southfield.
Warren, in neighboring Macomb County, estimates more than
18,000 homes were damaged after
the storms.
Chad Halcom: (313) 446-6796,
chalcom@crain.com.
Twitter:
@chadhalcom
Staff writer Sherri Welch and intern Natalie Broda contributed to
this report.
Technology comes through in the clutch for trucking firms
BY BILL SHEA
Last week’s flash flooding
across metro Detroit snarled traffic and made life difficult for logistics companies that rely on the region’s highway system to move
goods.
Haulers say technology aided
their effects to avoid trouble spots,
which minimized the financial impact of the weather.
Ann Arbor-based Con-way Freight
Inc., the large regional and national
less-than-truckload subsidiary of
$5.5 billion logistics giant Con-way
Inc., relied on its computer routing
technology to avoid flooding.
“The only service center that
was significantly impacted was
Pontiac. The flooding and closures, particularly I-696, created
some operational issues and delays,” said Gary Frantz, Con-way’s
director of communications.
The freight unit also has local
service centers in Ann Arbor, Romulus, and Warren.
Some trucks returning from
Canada were rerouted, Frantz said.
“Between the technology we
have in the trucks (on-board computers and GPS) and the local
knowledge and experience of our
drivers, we were able to navigate
around the problem areas to ensure pickups and deliveries were
made, with a few having minor delays due to traffic congestion,” he
said.
Con-way drivers witnessed how
the flooding affected traffic, but didn’t get snarled or stuck themselves.
“Some of our drivers witnessed
vehicles floating away as they
tried to go through flooded roads,”
Frantz said. “We didn’t lose any
vehicles; drivers are making it
back safe to their service centers.
All in all our teams are handling
the situation pretty well.”
Kathleen McCann, president
and CEO of Romulus-based newand used-vehicle transporter United Road Services Inc., said her firm
was minimally affected.
“Our Warren terminal shut
down as the employees couldn’t
get there, but they were able to do
their work virtually,” she said.
“Our drivers were diverted and
were lucky enough to have not
been caught in traffic as the water
swelled in. We took a big hit with
Hurricane Sandy flooding in the
Northeast in 2012, so I feel for
those who felt it this time.”
United Road, whose client list of
more than 10,000 is led by General
Motors Co., will move more than 3
million vehicles in the U.S. and
Canada this year, so flooding in
Detroit is less impactful on the
company’s overall operations.
The company’s corporate and
independent-driver fleet has more
than 1,500 tractors operating out of
75 locations.
Royal Oak-based RPM Freight Systems LLC, a third-party logistics brokerage firm, hasn’t been directly hit
in the pocketbook, but its clients
may be, said CEO and founder Barry Spilman.
The company arranges trucking
for companies that have supply
chain needs.
“Fortunately, we have not seen
any financial impact as the impact
has been merely delayed pickups,
transits and deliveries, but not
canceled loads so,” he said. “However, there might be a financial
backlash to our clients due to delay costs on their operations.”
Spilman said the flooding resulted in “short-term supply chain disruptions” in both the full- and lessthan-truckload logistics segments,
with some fleets and terminals
shut down or their operations
were curtailed.
“Many major highways and city
roads were impassable,” he said.
Scott Reed, CEO of Wayne-based
Rush Trucking, said dealing with the
recent winter’s series of snowstorms provided valuable experience for his firm and its clients in
dealing with road issues.
That, and real-time communications and mapping technology unavailable in the past, cushioned the
business impact of the flooding, he
said.
“It would have been a crazy day
15 years ago,” he said.
Rush had a few missed deliveries and a few drivers on overtime,
but the financial impact was negligible for the $104 million carrier.
“It really turned out to not be
that big of a deal,” Reed said.
One logistics industry observer
said the flooding, while fairly minor for shipping companies, highlighted the region’s infrastructure
weaknesses.
“The condition and readiness of
underpass pumps is not high,”
said John Taylor, chairman of the
department of marketing and supply chain management at Wayne
State University’s business school.
Worse, the local highway system’s chromic bottlenecks, bad
rush-hour situation, and lack of
transportation investment “cause
planners to have to assume longer
cycle times and deploy more
trucks,” he said.
Bill Shea: (313) 446-1626,
bshea@crain.com.
Twitter:
@bill_shea19
20140818-NEWS--0020,0021-NAT-CCI-CD_--
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August 18, 2014
Page 21
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REPORTERS
LARRY PEPLIN
No, the doors and liftgates of these cars on the lot of Jim Riehl’s Friendly Chrysler Jeep aren’t being aired out. Once the water from Monday’s flood reached the
vehicles’ electronic control modules, trunks began to open, windows began to go up and down, and airbags deployed on their own.
Car lots soak in damage
Flood-submerged autos, trapped customers kept metro Detroit dealers busy
BY SHERRI WELCH
As the rain fell the afternoon of
Aug. 11, Pat Presutti, new-car sales
manager at Jim Riehl’s Friendly
Chrysler Jeep in Warren, sent a porter
out to check the water level in the
back lot where nearly 100 cars were
parked.
It was only about a half inch
deep.
But after “all hell broke loose,”
during the early evening commute, it only took 15 minutes for
the pooling rainwater to reach the
rocker panel below the vehicle
doors.
“Once it gets over that, your carpet is soaked and it goes into the
bottom of the motor,” Presutti said.
By 8 p.m., dumpsters were floating around in the car lot.
And as the water reached the
carpet below the vehicle seats
where electronic control modules
are housed, trunks began to open,
windows began to go up and down
and airbags deployed, as if a mean
spirit were playing pranks.
But it was no prank. Nothing
could be done to save the new vehicles.
“By the time you pull 80 keys
and try to move 80 cars, you’re not
going to make it,” Presutti said.
On Tuesday morning, mud lines
on windshields told the story of the
flood’s rise and fall, as did vehicle
interiors with mud-encrusted steering wheels and dashboards.
“I’ve never been in a flood situation,” Presutti said. “We’ve had
theft and damage, but never a flood
situation.”
As a general policy, dealerships
carry insurance on their inventory, and so does Jim Riehl’s Friendly Chrysler Jeep, he said.
Of 85 new vehicles submerged in
the dealership’s parking lot, Presutti expects 83 will be a total loss
resulting in an insurance claim of
about $2.5 million.
But the dealership will only
break even with the claim, he said.
When the flood waters receded,
they took with them any chance of
making a profit on the vehicles and
dampened sales for the near term.
“What you’re going to sell the
most of for August and September
is 2014 (models); customers want
the deal,” he said.
The majority of the new vehicles
lost on the lot were 2014 models.
Seeking higher ground
A couple of miles south, Galeana’s
Van Dyke Dodge also watched as the
water rose to about 3 feet on the
heavily traveled Van Dyke Avenue,
bringing it about halfway up the
dealership lot.
Fortunately, Galeana’s is on
higher ground, and employees
were able to move cars from the
front end of the dealership farther
back so they were not affected,
sales manager John Caldwell said.
But he cringed, he said, every
time a truck pushed through the
flood waters on VanDyke, creating
a tidal wave that pushed farther
into the lot.
The dealership stayed open until 1 a.m. when the last trapped
customer left. And Caldwell said
he let many of the salespeople
who’d stayed drive a new truck
home so they could navigate their
way with higher clearance from
the ground.
As of late last week, 35 vehicles
had been towed or brought in to be
assessed for water damage. Caldwell believes that number will at
least double, given that local impound yards are still crowded with
cars salvaged as the water receded.
“Once the water hits the computers, electrical systems and interior,
I don’t think the insurance compa-
ny is looking at them,” he said. “I
believe that most of these cars are
going to end up being totaled.”
A repair estimated to cost $2,000
can morph into a $10,000 or $15,000
repair very quickly once the car has
been taken apart, Caldwell said.
Rather than run the risk of losing the majority of a vehicle’s value, insurance companies can sell a
$20,000 car, for example, for half
that amount at an auction as a salvage vehicle “and they know exactly what they’re dealing with in
terms of a loss,” he said.
Dearborn-based AAA Michigan
has received “over 1,000 vehicle
claims,” said Public Affairs Director Susan Hiltz. “We expect to total
60-70 percent of them, and repair
the rest, she said.
Some people believe dealers will
sell a lot of cars because of the number being declared a total loss, Caldwell said. “And from the ones that
are totaled out, we will have instant
sales.”
But the forced new-car sales
likely will be a wash on the bottom
line, since people whose homes
were flooded are likely to defer
their planned purchases of new vehicles, he said.
Caldwell said he doesn’t plan to
order additional inventory in anticipation of a flood-induced sales
surge because he think sales will
just remain steady.
“I don’t think this will hurt us,
but I don’t think there’s going to be
a huge lift,” he said.
When a dealership’s inventory
is depleted by acts of nature, you
have vehicles you can’t move until
insurance companies come in and
repair or total the vehicles, said
Scott LaRiche, co-owner of Lou
LaRiche Chevrolet in Plymouth
Township.
Though the Plymouth Township
dealership was unaffected by flood
water, its Findlay, Ohio, dealer-
ship suffered significant losses in
the past from hail damage.
“You’re scrambling trying to do
dealer trades and buy products
from other dealers,” he said.
“Most dealers are extremely generous with other dealers who get
hit. We do compete, but what goes
around comes around. ... We know
some day it may happen to us.”
A pizza surprise
Another east side dealer, Elite Motor Sales & Service on Frazho Road
near Groesbeck Highway in Warren, also watched as the water
surged halfway up its parking lot.
Fortunately, none of its 60 used vehicles — mostly trucks and SUVs —
were affected, said manager Mark
Maniaci.
He was able to put one of the
trucks on the lot to good use, helping to rescue a pregnant woman
and her two young children, all of
whom climbed from their submerged vehicle on Groesbeck and
through the truck’s windows.
Stranded customers and others
who sought refuge on the dealership’s higher ground made the
best of it, including a pizza delivery guy who shared with everyone
the pizza that never made it to its
scheduled destination.
Maniaci expects Elite’s repair
business for vehicles affected by
the flood to surge for the next week
of so, then taper off. He’s projecting it may rise as much as 10-15
percent for the month or 2-4 percent year over year for the dealership which does $2 million to $2.5
million in annual sales.
“I’m fortunate to have a place
here that didn’t get affected, and
generated business because of it,”
Maniaci said.
Sherri Welch: (313) 446-1694,
swelch@crain.com.
Twitter:
@sherriwelch
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20140818-NEWS--0022-NAT-CCI-CD_--
8/15/2014
6:33 PM
Page 1
Page 22
August 18, 2014
Macomb: Expo center?
■ From Page 3
ticipation would take, Guastello
said.
“We’re defining the concept
now. ... We’ll probably do what
Blair did: Put one hotel connected to the exhibition center that
we own, and then we’ll sell property for other hotels to other
brands or developers.”
Guastello said that he expects
to start building the exhibition
center in 2015 and that it should
go up quickly because such centers “are pretty simple buildings
to put up” and the current zoning
for planned unit development
would support the project.
“Tom has some very creative
and interesting plans for the
whole project site,” Bowman said.
“If there’s a mutually beneficial way to get involved and we
can play a role and bring some
value to the table, then I’m certainly interested in exploring
that. That’s the early stage we’re
at.”
A feasibility study commissioned by the Detroit Metro Convention & Visitors Bureau in 2011 —
when Guastello, a longtime member of the bureau’s board, and
Anderson first came up with the
exhibition center concept —
showed demand would be strong
for an expo center on the
Chesterfield Township site, said
the bureau’s executive vice president
and
COO,
Michael
O’Callaghan.
The study is one of several that
have been completed for various
sites around the region, he said.
According to the study, completed by Plano, Texas-based Conventions, Sports & Leisure International, a Chesterfield Township
exhibition center would draw
Canadian traffic from southern
Ontario and state association
business and visitors from midMichigan and the Thumb who traditionally aren’t interested in going into a large central business
district like Detroit or traveling as
far as Novi, O’Callaghan said.
“And if the (center) is sized
properly, they would also be able
to attract meetings from associations that meet within a five- or
six-state region,” he said.
An exhibition center in Macomb County probably would be
competition for the Suburban
Collection Showplace and for the
Lansing and Grand Rapids markets, O’Callaghan said. But the
market for conferences and
events in Southeast Michigan is
growing.
“The perception of metro Detroit
is
getting
better,”
O’Callaghan said. “There’s more
potential to attract more association business, ... which will benefit both the Suburban Collection
Showplace along and the facility
they’re talking about building on
the east side.”
Sherri Welch: (313) 446-1694,
swelch@crain.com.
Twitter:
@sherriwelch
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Officials study ways to lessen
burden on storm systems
BY CHRIS GAUTZ
CAPITOL CORRESPONDENT
Last week’s historic and severe
rainstorm that caused massive
flooding in metro Detroit is causing local officials to think more
about how they can prepare for future bouts with Mother Nature.
One problem is that the storm
water systems in place are up to
state standards, but just aren’t designed to handle the amount of water that fell — as much as 6 inches
in three hours in some parts of
metro Detroit.
“The investment required and infrastructure required to withstand
what happened on Monday would
have been cost prohibitive to
build,” said Craig Covey, the community liaison for Oakland County
Water Resources Commissioner
Jim Nash.
So what can be done?
Finding ways to lessen the burden on those systems, which in
many cases rely on aging infrastructure, is something more communities are looking at, said Karen
Kabbes, president of the environmental and water resources institute at the Washington, D.C.-based
American Society of Civil Engineers.
“When you have an extreme rainfall event, new pipes may not be the
answer,” she said. “It’s stepping
back and looking at the whole system.”
One of the easiest and cost effective ways to do that, Kabbes said,
is using green infrastructure.
Some of the more common examples include rain gardens, green
roofs and installing pervious concrete in parking lots that allow water runoff to be absorbed into the
ground rather than flow into
storm drains. That water can then
be recycled by property owners for
sprinkler systems or other uses.
Madison Heights City Manager
Ben Myers and Ferndale City Manager April Lynch said their communities require new construction
projects to retain their own
stormwater, rather than send it
into the city system.
The current system is a legacy of
a time when less ground was covered by parking lots and other development.
“All the rainwater that hits
them needs to go somewhere, and
it can end up people’s basements,”
Covey said.
He said a combination of increased investment and encouraging policies that result in less
stormwater flowing into sewer systems will help because the likelihood is that we will see more, not
fewer of these kind of storms.
“These unusual rain events are
not unusual anymore. This is our
little piece of the climate change,”
he said.
Luke Forrest, program manager
at the Michigan Municipal League,
said the use of green systems
varies, but is most common in
Grand Rapids and Ann Arbor right
now.
“This type of runoff highlights
the standards aren’t widespread
enough,” he said. “For the most
part, the green approach is still seen
as experimental in a lot of places.”
Forrest said these changes can
help lighten the load on the local
water and sewer infrastructure, but
does not lessen the need for replacing aging pipes and drains.
“We have a lot of ancient infrastructure doing the job,” Forrest
said.
A 2001 report from the Southeast
Michigan Council of Governments found
that between $14 billion and $26 billion was needed by 2030 to maintain
and improve Southeast Michigan’s
sewer infrastructure. Much of that
cost comes from maintaining and
fixing the existing system as well as
overflow and capacity issues.
At the time of the report, it
found that about 60 percent to 70
percent of the region’s sewerage
system was more than 30 years old.
Now, most of that infrastructure
is more than 40 years old because
not much has been fixed, said Amy
Mangus, leader of plan implementation at SEMCOG. County and local officials agreed that while work
is done each year to replace or fix
older pipes, there is still plenty that
they can just not afford to do.
“We’ve been keeping up,” Lynch
said of Ferndale’s storm water system. “But the cities are old so all of
us along the corridor have an older
system.”
The concern many local officials
have is that the next time such a
large storm hits, the flooding and
damage done to homes and businesses could be much worse if
pipes crack or the systems in place
break down because of their age.
The stormwater systems in place
in the region are typically meant to
handle a 10-year storm event, meaning they can handle a storm that has
a 10 percent chance of occurring
each year. Last week’s storm was
considered a 300-year storm event,
meaning it has a 0.333 percent
chance of occurring annually.
“You don’t design sewer systems
for 6 inches of rain” in such a short
amount of time, Mangus said.
How the system works
In a typical rainstorm, water
travels into storm drains in the
streets, through a pipe and toward
a water treatment plant where it is
treated. In the case of larger
storms, there are 22 retention
treatment basins in the region that
are used to house excess stormwater and sewage that the treatment
plant cannot process because it is
at capacity.
With typical large storms, the
retention basins hold water until
the treatment plant has capacity
again. But with the kind of severe
storms the region saw last week,
the basins treat the water on-site
and then release it into nearby
rivers and streams.
The largest retention basin in
metro Detroit is the George W.
Kuhn basin near I-75 and 12 Mile
Road in Madison Heights. Completed in 2006, it was designed to state
standards for a 10-year storm event
and can hold 124 million gallons.
“It performed as it was designed,
but it was overwhelmed,” Covey
said. “There is no man-made structure than can hold up to whatever
Mother Nature decides to throw at
you.”
At the height of Monday’s rain
event, the basin facility was treating 6,700 cubic feet of stormwater
per second with a chemical called
sodium hypochlorite, similar to
what is used in swimming pools.
In a typical large storm, all of
the water is treated before it is released into the Red Run Drain, an
open stream that eventually flows
into the Clinton River. But there
was so much water Monday that
not all of it was completely treated,
though all of it was at least partially treated, Covey said.
Warren Mayor Jim Fouts said
the Red Run crested so much it
was coming up to people’s front
porches.
“This was unlike any weather
disaster I’ve experienced,” Fouts
said. “I’ve never had a storm where
our main streets are like rivers.”
He said the system in place was
not to blame. “We just had a monumental, catastrophic, Biblical-type
of storm.”
But he does blame politics in part.
For several years, there has
been haggling between Warren
and Macomb and Oakland counties about the cost of connecting
the city to the Oakland-Macomb
interceptor drainage district. That
turned into a lawsuit in June 2013
that has not been resolved.
Fouts and Macomb Public
Works Commissioner Anthony
Marrocco said they believe if Warren were connected to the system,
residents would not have had so
many flooded basements.
Covey declined to comment on
the case because of the litigation,
but noted many homes across the
region had flooded basements.
Once storm recovery efforts
have settled down, Fouts said he
plans to talk with his staff about
what can be done to prepare for future storms.
Meyers said Madison Heights
has a neighborhood road millage
and whenever it uses those funds
to replace or fix local streets, it
also fixes the sewer and stormwater systems in those areas while it
has the roadway open.
Last week, there was not a defect
in the system, he said.
“(The stormwater) just completely exceeded the design capacity of the system,” Myers said.
Chris Gautz: (517) 403-4403,
cgautz@crain.com.
Twitter:
@chrisgautz
20140818-NEWS--0023-NAT-CCI-CD_--
8/15/2014
6:56 PM
August 18, 2014
RUMBLINGS
M-1 Rail
ready to lay
down rails
he rail for M-1 Rail is
here.
The $140 million
public-private streetcar project under construction on
Woodward Avenue in downtown Detroit took delivery
of the first mile of steel rail
last week from Pittsburghbased rail products manufacturer L.B. Foster Co.
It is being manufactured
at an L.B. Foster plant in
Columbia City, Ind., and
sent to Detroit on flatbed
trucks. More rail is scheduled to arrive this week.
Each piece of rail is 80
feet long and weighs more
than 3,000 pounds, project
officials said.
Detroit-based construction
firm Farrow Group Inc., a contractor on the streetcar pro-
T
Page 1
ject hired by Alameda, Calif.based project construction
manager Stacy and Witbeck
Inc., is handling the rail.
During the first phase of
M-1 construction, Woodward Avenue from Adams
Street south to Campus Martius has been closed since
July 28 for about 120 days of
streetcar work that will include installation of the
tracks.
The 12-stop loop is scheduled to be operational by
late 2016, and will stretch
3.3 miles between Larned
Street and West Grand
Boulevard.
M-1 said it has discovered
track under Woodward
from the old streetcar systems, which ended service
in 1956.
WEEK ON THE WEB
FROM WWW.CRAINSDETROIT.COM, WEEK OF AUG. 9-15
Flood was first local crisis
in AAA’s post-Cain era
For the first time in many
years, metro Detroiters didn’t hear the voice of AAA
Michigan’s longtime public
relations director, Nancy
Cain, on local news broadcasts following last week’s
historic flooding.
Cain retired in March after more than 30 years.
She was succeeded by Susan Hiltz, a 30-year public affairs veteran who most recently was regional managing director of the Ad
Council, working in Michigan and seven other states
on traffic safety advocacy
and other public service
campaigns.
Bureau surprises with Super
Bowl ad choir performance
As the 2014 American Society of Association Executives
convention wrapped up in
Nashville, Tenn., on Aug.
12, the Detroit Metro Convention & Visitors Bureau teed up
for attendees a promo video
highlighting “America’s
comeback city.”
Detroit is the site of the
2015 conference.
The video featured lively
scenes of metro Detroit set
to a pulsing cover version of
rapper Eminem’s “Lose
Yourself” sung by Larry
Callahan & Selected of God
choir — the choir made famous when it was featured
in a Chrysler commercial
during the 2011 Super Bowl.
As the video ended, the
lights came up to reveal the
choir singing the same song
live on stage.
A video of the choir performance is expected to be
available on the DMCVB’s
website, visitdetroit.com,
this week.
NATALIE BRODA/CRAIN’S DETROIT BUSINESS
Don Kegley, a principal at Cunningham-Limp of Farmington
Hills, paints the outside of Cody HIgh School during the Life
Remodeled volunteer cleanup effort. He said his entire office
was on site Friday.
Cleanup effort: 10,000 volunteers; changed lives
What do you get when you mix 10,000 volunteers,
more than 200 corporate sponsors and three Detroit
schools? Renovations, smiles and changed lives for students.
Last week, Life Remodeled, a Detroit-based nonprofit
focused on rehabilitating Detroit schools and neighborhoods, took on Cody High School and its surrounding
neighborhoods, including two elementary schools.The
$5.5 million project involved thousands of volunteers,
including 3,000 from General Motors Co. and 1,700 from
Quicken Loans Inc.
During the weeklong project, Cody received more
than just new paint and revamped landscaping. ABB Robotics Inc. in Auburn Hills donated an assembly line robot, along with software for robotics and programming
classes at the school. Farmington Hills-based Cunningham-Limp funded a medical simulation classroom,
which will include dental chairs and operating tables.
Life Remodeled founder Chris Lambert said that although the volunteer effort at Cody has ended, the nonprofit will stay involved in the school, working to develop relationships with local companies who could
eventually employ Cody graduates. (Read more in Mary
Kramer’s column, Page 7.)
Page 23
Bloomfield Hills toxicologist
to give TedMed talk
Steve Goldner, chairman
and CEO of Bloomfield
Hills-based CureLauncher
Inc., will be a speaker at the
TedMed conference in Washington, D.C., next month.
He said his address will
be about his company,
CureLauncher, which pairs
people with clinical trials in
the U.S. and has matched
more than 1,000 since its
founding last year.
Goldner, 66, is a forensic
toxicologist and attorney
who worked for pharmaceutical and medical device
companies getting U.S. Food
and Drug Administration approvals.
The conference runs Sept.
10-12 in San Francisco as
well as Washington, D.C.;
Goldner will speak Sept. 11.
TedMed is a licensed offspring of the popular TED:
Ideas Worth Spreading program.
Restaurants,
bakery, music
shop among
Hatch finalists
estaurants Cockadoodle and Gabriel Hall,
bakery Sister Pie, and
music shop Third Wave Music
were named finalists in the
Hatch Detroit business competition. The winning business pitch will receive a
$50,000 grant from Comerica
Bank and legal, marketing,
accounting and IT support
from Hatch Detroit.
Round two of public
voting has begun at
hatchdetroit.com. Voting
ends at noon Wednesday;
the winner will be announced Wednesday night.
R
ON THE MOVE
䡲 The Bingham Farms-
based Michigan Humane Society named Matthew Pepper
president
and CEO,
effective
Sept. 8. Pepper, a
Michigan
native, has
been director of
Bernalillo
Pepper
County Animal Care Services in Albuquerque, N.M., since 2011.
He succeeds Cal Morgan, who
left in January to lead the
Atlanta Humane Society and
Georgia Society for the Prevention of Cruelty to Animals.
䡲 The Engineering Society
of Detroit named Robert
Magee interim executive
vice president, replacing
Darlene Trudell, who left the
Southfield-based organization after 12 years to pursue other opportunities,
ESD said. Magee joins ESD
from AT&T Advertising Solutions, where he served in
various roles.
COMPANY NEWS
䡲 Detroit Red Wings Executive Vice President and
General Manager Ken Holland signed a four-year contract that will keep him
with the National Hockey
League team through the
2017-18 season. Financial
terms were not disclosed.
䡲 Brooklyn-based Fellow
Barber plans to set up shop
in Detroit’s Midtown neighborhood this fall. The highend barber shop will locate
at 441 W. Canfield St. to join
five locations in New York
City and San Francisco.
䡲 Thomas M. Cooley Law
School is cutting faculty and
staff positions at its Michigan campuses, The Associ-
ated Press reported. A
school official said Cooley
is making the cuts to “rightsize the organization” to
match enrollment but didn’t say how many positions
were affected. Earlier, Cooley announced it is formally
adding to its name an affiliation with Western Michigan
University. Campuses in
Lansing, Ann Arbor,
Auburn Hills and Grand
Rapids are being branded
with the WMU name.
䡲 Ford Motor Co. and DTE
Energy Co. plan to build a
large solar array at the automaker’s world headquarters in Dearborn, The Associated Press reported. The
project, funded by Detroitbased DTE, will provide
Ford employees with 360
covered parking spaces and
30 charging stations for
plug-in electric vehicles.
Construction is to begin in
September, with completion in early 2015.
䡲 General Motors Co. is
investing $174 million in a
new stamping line at its
Grand River assembly
plant in Lansing, Automotive News reported. The operation, to open in 2016,
will produce Cadillac components and employ about
145 full-time workers, the
Detroit automaker said.
䡲 General Motors Co.’s
Chevrolet brand signed another three-year contract
as presenting sponsor for
the 20th annual Woodward
Dream Cruise. The value
was not disclosed, but a
Woodward Dream Cruise Inc.
official said the continued
sponsorship will help the
nonprofit to offset cleanup
and security costs.
䡲 Farmington Hills marketing agency Duffey Petrosky plans to add 120 jobs after being awarded a $1
million performance-based
grant by the Michigan Strategic Fund. The company,
which employs 114, will renovate its existing operation
to handle expected growth in
advertising and marketing.
䡲 The U.S. Department of
Treasury said it will cut its
stake in Detroit auto lender
Ally Financial Inc. by selling
stock on the open market in
its first divestiture since an
initial public offering in
April, Bloomberg News reported. The U.S. holds 75.1
million shares, a stake of
about 16 percent, in Ally.
䡲 Southfield-based Sun
Communities Inc. is acquiring a 59-property manufactured housing portfolio
with properties in 11 states
for $1.32 billion. Included
are three Michigan properties: Egelcraft, in Muskegon,
and Frenchtown Villa and Elizabeth Woods, both in Newport. The deal is expected to
close by early 2015.
䡲 ZF Friedrichshafen AG’s
ambitions to become the
world’s No. 2 automotive
supplier are being held up
by negotiations to exit a
joint venture with Robert
Bosch GmbH, the biggest carparts maker, Bloomberg reported. Germany-based ZF
is trying to reach an agreement with Bosch on the sale
of its stake in their 50-50
steering-systems joint venture before it can complete a
deal to acquire Livoniabased TRW Automotive Holdings Corp., sources said.
䡲 Warren-based MSX International Inc. acquired the
managed service provider
division of Denver-based IQNavigator for an undisclosed
amount and created a wholly owned subsidiary, Geometric Results Inc.
䡲 Ann Arbor-based NSF
International acquired the
laboratory operations of
Aurora, Ontario-based Jana
Laboratories Inc. for an
undisclosed amount.
OTHER NEWS
䡲 U.S. Bankruptcy Court
Judge Steven Rhodes postponed the start of the trial
on Detroit’s bankruptcy
plan by eight days to Aug.
29. Creditors asked for more
time to gauge the impact of
the city’s debt exchange offer to water and sewer bondholders and for city officials
to submit a revised debt restructuring plan.
䡲 State Superintendent
Mike Flanagan placed 11
charter school authorizers
on notice for possible suspension. Five are in Southeast Michigan: Detroit City
Public Schools, the Educational Achievement Authority,
Eastern Michigan University,
Highland Park Public Schools
and the Macomb Intermediate
School District. They have
until Oct. 22 to fix deficiencies or risk suspension,
which would keep them
from opening new schools.
䡲 Operators of Las Vegas-style charitable gambling events claimed victory after a Michigan Court of
Claims judge barred the
state from enforcing rules
significantly restricting the
activities, The Associated
Press reported. The Michigan Charitable Gaming Association and several charities
had sued to keep a state
board from enforcing the
rules, which they say would
cost millions in revenue.
䡲 Michigan’s seasonally
adjusted unemployment
rate rose 0.2 percentage
points to 7.7 percent in July
from the previous month,
said the state Department of
Technology, Management &
Budget. The July 2013 jobless rate was 9 percent.
䡲 The Detroit Lions’ 13-12
victory over the Cleveland
Browns at Ford Field Aug. 9
averaged a 14.6 household
rating, WXYZ-Channel 7’s best
preseason football numbers
in a decade.
“To attract the best people,
offer them the best.”
Rob Farr, President and CEO, Bank of Birmingham
One of the things that persuades a job candidate is our benefits program with HAP.
Almost every one of our employees has a positive story about HAP – including me.
I was traveling with my family out west, when my son had to be rushed to a
hospital via ambulance. Everything turned out fine, but shortly after we got home,
the bills started pouring in from the hospital and the ambulance company.
Rather than dealing with them, I called my HAP personal service coordinator.
And that was the last I ever heard about those bills again.
We review our health plan provider every year. Renewing with HAP is a no-brainer.
chooseHAP.org/group

Pages 1-24 - Crain`s Detroit Business

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Crain`s Detroit Business, July 9, 2012, Pages 1-32