DVP pushes aside rumors of trouble



DVP pushes aside rumors of trouble
7:00 PM
Page 1
Readers first for 30 Years
May 4-10, 2015
Sakthi sees
the pros of
hiring ex-cons
‘Golden corridor’ – but slow as molasses
Brighton firm’s
coating clearly
has potential
Why Kroger had Hiller’s Markets on its shopping list,
Page 3
DVP pushes aside
rumors of trouble
Hermelin: ‘Early-stage investing is messy. … We’re here for the long haul’
By Tom Henderson
the long haul,” he added.
[email protected]
Drivers inch their way along Hall Road.The amount of traffic is both a blessing
and a curse for merchants along the corridor that some call Hell Road.
M-59 gridlock drives
traffic talk in Macomb
Officials see no quick cure to the curse of the Hall crawl
By Doug Henze
Special to Crain’s Detroit Business
Slogging through stop-and-go
traffic on northern Macomb
County’s main east-west thoroughfare — four lanes deep in exhaust and exhaustion — it’s easy
to understand why some locals
have dubbed it “Hell Road.”
For the business district along
the stretch of M-59 officially
known as Hall Road, that gridlock has become both blessing
and curse. The area has seen a
major development push in recent decades, but the traffic
backups can also be a deterrent
to visitors.
“I refer to M-59 as Macomb
County’s Golden Corridor,” said
Joe Sowerby, president of com-
Special Report: Macomb
County’s economy is revving up
from the last recession, with tech
jobs helping drive a resurgence in
manufacturing, Page 11
mercial real estate brokerage
Anton, Sowerby & Associates in
Mount Clemens. “Everybody
wants to be on M-59. That traffic
is the lifeblood of businesses in
the busy commercial district.”
Borrowing a line made famous
by Yogi Berra, parts of M-59 have
become so crowded “nobody
goes there anymore.”
“There have been a number of
restaurants that have come and
See GRIDLOCK, Page 19
© Entire contents copyright 2015
by Crain Communications Inc. All rights reserved.
$2 a copy. $59 a year.
Trying to build something
When the trio founded DVP, there were no early stage
investors in Detroit. It was a barren landscape for venture capital, and Gilbert was ready to try and build
“We’d been losing our best and
brightest for years,” Hermelin said.
“They’d been starting companies, but
they’d been starting them in San Francisco.”
They raised their first fund, which
has $55 million under management
and of which $30 million has been
committed to portfolio companies.
Brian Hermelin:
And, critically, the only institutional
“Relax. DVP is
money in the fund is $2.25 million
doing fine.”
from the Pure Michigan Venture De velopment Fund . That means not
having to answer to foundations or pension funds that
See DVP, Page 21
A. Alfred Taubman left a
legacy in education,
health care, galleries and
research into diseases. His
philanthropy is expected to
live on through his children
and the Taubman
Page 7
crainsdetroit.com Vol. 31 No 18
Rumors have been swirling in the local venture-capital
community that Detroit Venture Partners is in trouble.
Five years after being founded by Dan Gilbert, Josh
Linkner and Brian Hermelin as a way to invest in earlystage technology companies, DVP is yet to have any big
wins. Meanwhile leadership has been in flux, there have
been layoffs at several portfolio companies, and some
founders abandoning Detroit for the fertile grounds of
San Francisco.
“Confidence in DVP by the venture community has
been lacking,” said one area venture capitalist who
asked not to be named. “Rumors have been swirling.”
Hermelin, who is DVP’s managing partner, has a
message to those who doubt: Relax. DVP is doing fine.
“Early-stage investing is messy,” he said. “It’s hard. It’s
hand-to-hand combat. We’re about where we should be
four-and-a-half years in. We’ve got some really promising companies we like a lot. We’ve got some companies
we hope can get some wind behind them. And we have
some that are tough.
“We didn’t get in this for a quick return. We’re here for
5:47 PM
Page 1
Walbridge to manage Bell’s
Brewery bottling expansion
Bell’s Brewery Inc. selected Detroit-based construction firm Wal bridge Aldinger Co. to expand its
Comstock bottling operation.
As part of a multiyear $35 million
expansion, Walbridge will be construction manager for the build-out
of a new bottling hall, keg storage
building and warehouse. The expansion will increase Bell’s annual
production capacity to 1 million
barrels of craft beer.
Bell’s, based in Galesburg east of
Kalamazoo, plans to produce 410,000
barrels of beer in 2015, founder Larry
Bell told Crain’s this year.
The bottling hall and warehouse
are expected to be completed in
November and December, respectively. The entire project is expected
to be completed by February 2016.
— Dustin Walsh
Flint ends 4 years under
emergency management
Calling it a “new day” for the
long-troubled city, Gov. Rick Snyder
declared an end to Flint’s financial
emergency after the state approved
a $7 million loan to eliminate a
budget deficit. Flint has been run by
emergency managers since 2011.
The city is returning to local control, although a five-member transition board will review major contracts and budgets. A budget that
starts July 1 will have no deficit for
the first time in a decade, The Flint
Journal reported. The state says
long-term liabilities have been reduced to $240 million from $850
In other good news for Flint, Kettering University is getting $4 million
from General Motors to build an automotive proving ground and powertrain test lab, The Journal reported. GM owned the Flint school,
previously known as the General
Motors Institute, until the 1980s.
䡲 Refusing to take “no” for an answer, Mylan N.V. raised its offer to acquire Perrigo Co. plc to nearly $32.7
billion, MiBiz reported. The unsolicited offer is the third that the English company has made for Perrigo,
Macomb County is a hub of
economic growth and we are proud
to be an integral part of the area’s
dynamic business environment.
We are the largest Michigan law firm
with a presence in Macomb County. Our
attorneys are deeply involved in the
community: they support important
causes and serve on the boards of
hospitals, colleges, chambers of
commerce and other civic organizations.
By helping companies and individuals
thrive in one of Michigan’s most
economically vibrant regions,
we provide a better partnership.
By providing discerning and proactive legal
counsel, we build a better partnership with clients.
F=9R^\~'%%$""" '
which is domiciled in Dublin, Ireland, to benefit from lower taxes but
retains its headquarters in Allegan.
䡲 Midland-based Dow Chemical
Co. will sell its Agrofresh food-packaging business to Boulevard Acquisition Corp. for $810 million,
Bloomberg News reported. Agrofresh will become a stand-alone
company that trades on the Nasdaq
system. Dow still will own about 40
percent of Agrofresh.
䡲 The quarterly office furniture
index compiled by Michael A. Dunlap
& Associates was the third-best
recorded since July 2007, MiBiz reported. “We reaffirm our prediction
that the industry remains on course
to achieve its best year in more than
a decade,” said Michael Dunlap,
who heads the Holland consultancy.
䡲 The commercial fishing industry’s total catch last year in Michigan
was slightly lower than 2013’s at
about 3.4 million pounds, The Associated Press reported. But the Michigan Department of Natural Resources
said the estimated wholesale dockside value was more than $5.8 million before processing, marketing
and retail sales, up $300,000.
䡲 Marysville-based SMR Auto motive Systems plans to add 200
jobs as part of an $18.6 million expansion, The Times Herald in Port
Huron reported. The Michigan Eco nomic Development Corp. approved
a $2 million grant to St. Clair County
for job training. The plant currently
employs 796.
䡲 A recent report by Grand Valley
State University estimated the
school’s annual economic impact in
Kent, Ottawa and Muskegon counties at $730 million during the 201314 fiscal year. Grand Valley determines the amount using the
number of its employees (more than
3,200) along with spending and
taxes paid by its 25,000 students.
䡲 Byron Center-based Spartan Nash Co. plans to buy the six-store
Dan’s Supermarket chain in Bismarck-Mandan, N.D., The Associated
Press reported. Terms of the deal
haven’t been disclosed. Dan’s sold
its two Dickinson, N.D., stores to
SpartanNash in December 2013.
䡲 Joel Wilson, 32, was sentenced
to up to 10 years in prison and must
pay $6.5 million in restitution for
defrauding investors of millions of
dollars in what prosecutors de-
BANKRUPTCIES . . . . . . . . . . . . . . . . . . 6
BUSINESS DIARY . . . . . . . . . . . . . . . . 16
CALENDAR . . . . . . . . . . . . . . . . . . . . . . . 15
CLASSIFIED ADS . . . . . . . . . . . . . . . . 17
KEITH CRAIN . . . . . . . . . . . . . . . . . . . . . 8
MARY KRAMER . . . . . . . . . . . . . . . . . . . 8
OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . 8
OTHER VOICES . . . . . . . . . . . . . . . . . . . 9
PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . 15
RUMBLINGS . . . . . . . . . . . . . . . . . . . . 22
WEEK ON THE WEB . . . . . . . . . . . . . . 22
scribed as a Ponzi scheme, the Bay
City Times reported. Wilson formerly owned The Diversified Group Advisory Fund LLC. 䡲
䡲 An editorial on Page 8 of the April 27 issue should not have included Oakland County Executive L. Brooks Patterson as a supporter of the
Proposal 1 road funding initiative. Patterson does not support the ballot proposal.
䡲 In the General and In-House Counsel Awards section in the April
27 issue, a profile of Michelle Busuito, assistant general counsel for the
Suburban Mobility Authority for Regional Transportation , should have
said it costs $490, not $49, to test each of the DNA rape kits that were
found in 2009 in an abandoned Detroit police storage unit.
䡲 Because of incorrect information supplied to Crain’s, an item in the
April 27 People on the Move incorrectly listed Nicole Sokloski’s job title
as event manager at the Display Group , Detroit. She is actually an account executive.
䡲 An item in the Michigan Briefs on Page 2 of the April 27 edition
should have said a proposed fine against Grand Rapids Plastics for safety
violations would be the largest issued by the Michigan Occupational Safety and Health Administration for a fatality case in more than a decade.
6:48 PM
Page 1
Sakthi builds up company, parolees
Supplier hires ex-offenders for major expansion project in Detroit
By Dustin Walsh
[email protected]
Sakthi Automotive Group USA Inc.
is in the nascent stages of a massive
expansion project on the Southwest
Detroit waterfront — one that could
bring an investment of more than
$60 million.
But to steadily hire the workers it
needs to ramp up castings production, it is betting big on a nontraditional sort of workforce: convicted
The subsidiary of India conglomerate Sakthi Group is hiring many of
metro Detroit’s recently paroled
convicted felons. Sakthi’s expansion
plans include the hiring of nearly
400 workers over the next two years.
Sakthi is projecting revenue of $58
million in 2015, up to $150 million
in 2016 and $450 million by 2020.
As part of that growth, Sakthi
committed to hire two recently
paroled Michiganders per month
over the next two years, said CEO
Lalit Verma. That’s at least 48 ex-offenders.
Sakthi hired four parolees earlier
this month, and they were outperforming their peers, so it returned to
hire four more last week, Verma said.
“We’re seeing they (hired parolees)
are more motivated and productive
because they know this is their second chance,” Verma said. “I’ve met
with each of
them personally
and have told
them they need
to go the extra
mile to show the
community they
are worth this
Lalit Verma: “They chance.”
know this is their
The parolees
second chance.”
are hired under
the same conditions as regular employees, Verma
said, including pay and benefits.
The parolees have been hired as
CNC operators, assembly machine
operators and general laborers.
The workers make $11 per hour to
$13.50 per hour to start, Verma said.
U.S. Labor Secretary Thomas
Perez toured Sakthi’s Detroit plant
last month and met with Gov. Rick
Snyder about the state’s parolee
jobs training programs, which were
signed into law last December.
That law required the Michigan
See SAKTHI, Page 18
Kroger: Deal
for Hiller’s
stores adds
niche foods
By Sherri Welch
[email protected]
See KROGER, Page 18
Nanovere Technologies founderTom Choate (above) sprays a layer of Nano-Clear,which he says preserves surface gloss and resists scratches and oxidation. Compare the side on the left without coating to the side on the right with it (inset,above).
Chemist’s coating defies the elements
Brighton firm doubles revenue as formula attracts cruise lines, other clients
By Bill Shea
[email protected]
homas Choate loves research and
development. He loves to experiment,
tinker, invent. He’s at home in the
As founder and chief technology officer of a
small Brighton-based protective industrial
surface coating maker called Nanovere
Technologies, he’d love to get back to
full-time R&D as a polymer chemist.
There’s just one problem: He used
nanotechnology to create a long-lasting anticorrosion coating that protects new surfaces
and restores those already damaged by
exposure to sun and air — a development that
has caught the interest of major global clients,
and Choate must instead run a business that’s
annually doubling its revenue.
What customers are buying is Choate’s
Nano-Clear coating, which comes with a 10year warranty to preserve surface gloss while
being heavily resistant to scratches and
oxidation from ultraviolet light and chemicals.
Such a guarantee cuts down on the
expensive lifecycle maintenance costs for
companies that have products exposed to the
elements — vehicles, ships, boats, bridges —
almost anything.
Nanovere and its vendors now have orders to
See NANOVERE, Page 20
MUST READS of the week ...
Why they call it a ‘liquid asset’
LOOKING BACK: Bay Harbor’s captain
It’s a $10 billion-plus commercial waterway. Heck, it’s
why Detroit is where it is. And what the Detroit River is
now is alive. Dustin Walsh dropped a line, and look what
he came up with? Read his fish tale, with photos,
Crain’s weekly look back on 30 years of Detroit stories
catches up with David Johnson, who developed Victor
Center and Victor Corporate Park — then turned an old
cement plant into the Village at Bay Harbor (right).
Page 4
The Kroger Co. of Michigan’s acquisition of Hiller’s Markets will not only
bring Kroger more market share, it
will provide entrée to the specialty
and ethnic food products the smaller
chain is known for, the company and
industry watchers say.
Kroger said Friday that it had
reached an agreement to acquire
Hiller’s Markets and its seven metro
Detroit stores. Terms of the deal, set
to close in July, were not disclosed.
Hiller’s, President
said. The chain
has a great reputation in the market and shares
similar values
Jim Hiller: Grocery around things
biz future is for big such as supportcompanies.
ing the community. Hiller’s is
also a great fit, given Kroger’s goal to
move into providing more ethnic
foods, she said.
The regional chain is sharing its
suppliers for all of its product lines,
she said. “We’ll be able to utilize
that and learn from them and serve
that diverse customer.”
“We’re fortunate to have been of-
2:26 PM
Page 1
Crain’s May 6, 1985, issue reported on
developer David Johnson’s new
Victor Center in Southfield. Johnson’s passion remains finding the
right piece of land. More at crainsdetroit.com/30
Accident hasn’t kept developer
from building his lifelong dream
By Kirk Pinho
[email protected]
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The diagnosis: A sixth cervical
vertebra shattered into 13 pieces.
But in the weeks, months and
years that followed David Johnson
hearing that news after a 1978
swimming pool diving accident, he
didn’t become bitter about his life,
or “green” —
that is, envious
of people who
same ordeal.
Johnson, now
65, just became
David Johnson:
Instead of deTrue to the “heart veloping large
flutter” method
swaths of pristine land as
densely as possible to maximize
profit and propagate cookie-cutter
subdivisions, he said, he builds less
than what he is allowed “to maximize the physical beauty” of his
“I’m notorious for saying that I
buy land by what I call the ‘heart
flutter’ method,” he said. “It has to
be emotionally compelling land,
physically beautiful.”
And over the years, his company,
which developed the Victor Center
in Southfield 30 years ago and
spearheaded the Victor Corporate
Park mixed-use complex in Livonia,
has made a lot of green, as well.
Victor International Corp. had
$112.4 million in revenue in 2014,
down slightly by 1.8 percent from
the previous year’s $114.4 million,
according to company-provided
figures. Through March, it had $42.7
million in revenue.
Johnson, chairman of the Clarkston-based company known for developing luxury residential and resort communities, spends about 10
months out of the year in the Oil Nut
Bay resort community he developed on Virgin Gorda in the British
Virgin Islands.
That’s because, due to his injury,
he doesn’t “handle the cold very
well,” he said.
“I love the water, so I am able to
spend the winters in the warm climate and with a sense of adventure,” said Johnson, adding that it
took about six months for him to
become mobile again.
“I didn’t want to go play golf in
Johnson, speaking last month
from his office in the 88-residence
community on 300 acres, said he
very quickly recalibrated his thinking 37 years ago immediately after
the accident.
“When you’re told you’re never
Before it became a resort community,Bay Harbor was the site of an abandoned
cement plant (inset).Now,it features a nautical center,dining and lodging facilities,boutiques and an equestrian center.
How a cement plant became
a Lake Michigan community
When David Johnson was planning the Village at Bay Harbor , he
knew it was going to be big.
“There was five miles of Lake
Michigan shoreline,” he said. “The
only problem was that it had the
largest abandoned cement plant
in the world on it.”
But Johnson said he could see
the potential for a large, multifaceted community.
It was planned for 800 units,
and 724 are currently completed.
It also features a nautical center
with 227 completed docks and
another 150 planned, plus six
miles of non-motorized trails
Petoskey. Bay Harbor also includes a downtown area with dining, boutiques, lodging, golfing
and an equestrian center.
The development began to tan-
going to walk again and you’re laid
up there — God, money and friends
get put into perspective very quickly,” he said.
gibly materialize in 1994 with
then-Gov. John Engler on hand
when the cement plant smokestacks were demolished in front of
thousands of people.
Bay Harbor also is the site of
what is currently Johnson’s most
pressing work: Construction of the
Great Lakes Center for the Performing Arts, a $50 million performing
arts center expected to begin next
year. It will be 25,000 square feet
and include a 400-seat sloped floor
theater and private box areas.
“It will be a game-changer for
performing arts centers for the
greater northern Michigan area,
the Midwest and the United
States,” Johnson said. “It will be
comparable to Interlochen (Center
for the Arts) and many great facilities that are around.”
— Kirk Pinho
“My goal was to do 10 percent of
the housing in the U.S. per year, and
See Next Page
2:26 PM
Page 2
From Previous Page
it was then to do one-of-a-kind
Johnson has accomplished
that, not only in the Caribbean,
but also in Southeast Michigan
and across the rest of the state.
There is the $400 million Turtle
Lake development in Bloomfield
Township featuring 112 estate
home sites on 256 acres off
Square Lake Road west of Telegraph Road.
Victor International’s Heron
communities — Heron Bay, Heron
Point and Heron Woods — in
Bloomfield Township sit on about
150 acres and have about 100
homes. Heron Bay was the first residential community where individual lots — not homes — sold for
more than $1 million.
The $50 million Copperwood
community in South Lyon Township has 110 units sitting on about
100 acres, while the $100 million
Parks at Stonewood community
in Clarkston has 217 homes out of
300 units in the master plan sitting
on about 100 acres.
And what the company bills as
what was then the largest land
reclamation project in American
history was its $1 billion development of the Village at Bay Harbor
on the Lake Michigan shoreline,
consisting of 1,200 acres that was
once the site of a sprawling cement plant and mining operations. (See related story, Page 4.)
But in 1985, it was another development of his that was attracting his attention and that of
Crain’s Detroit Business: The
125,000-square-foot Victor Center
at 27400 Northwestern Highway
east of Telegraph, construction on
which was completed that year.
Named after Johnson’s father,
Victor Center is owned by Plante
Moran Cresa LLC, the real estate
arm of Southfield-based Plante
Moran PLLC.
Victor International also assembled 11 different parcels of land totaling 95 acres for the Victor Corporate Park at Seven Mile Road and
“Victor Corporate Park pioneered the I-275 corridor in the
1980s,” said Johnson, a Michigan
State University graduate. “I used
to fly potential tenants up in a helicopter, sit at 144 feet (12 stories)
and say, ‘This is your view from
the top of your building.’ ”
But still he ended up on Virgin
Gorda not only because of how it
keeps far away from the harsh
Michigan winters, but also because
it was part of a life-long dream.
“My long-term goal was to do a
development in the Caribbean,
and I spent 10 years looking for
the ideal location,” he said. “I
bought it to make it the Nantucket
of the west.”
Dominic J. Moceri, who has
known Johnson for 25 years and is
partner of Auburn Hills-based residential developer Moceri Cos., called
Johnson a “highly imaginative developer who puts exceptional curb
appeal in everything he does.”
“He is forward-thinking with
deed restrictions he places on his
developments, which grant protection to those that invest in his communities,” said Moceri, whose
company has developed 55,000 residential units in southeast Michigan, including the $137 million luxury Pinnacle subdivision in Oakland
“Someone that purchases a
home there, or a builder who buys
lots, they are going to be protected
on what goes on, saying that next
door to them will be of the same
or greater quality.”
“We don’t allow one-upmanship,” said Johnson, who employs
about 200 people worldwide. “We
don’t want people showing off
how rich they are.”
Moceri, who also called Johnson “gregarious” and “genuine,”
said the spinal cord injury “only
sped him up, not slowed him
“When you have bolts go in your
head and you’re paralyzed from the
shoulders down,” it changes your
perspective on life, Johnson said. “I
do yoga. I ride horses for freedom
of movement. I have residual damage on my left side, but every day is
the best day of my life.
“And I work every day because I
love what I do.” 䡲
Kirk Pinho: (313) 446-0412
Twitter: @kirkpinhoCDB
Wayne works to control
‘rogue spend,’ save $10M
By Kirk Pinho
[email protected]
Wayne County hopes to save
$10 million per year by overhauling
its procurement process.
To do that, the Wayne County
Commission would contract with a
vendor to create a platform that staff
would use to find the suppliers with
which the county negotiated the
best prices, terms and conditions,
said Lloyd Jackson, director of communications for County Executive
Warren Evans.
Jackson said the system will control what the administration refers
to as “rogue spend” — which is
spending with suppliers whose rates
have not been negotiated. It would
take effect within 90 days of the
commission awarding the contract.
Hugo De Campos, an assistant
professor of supply chain management at the Wayne State University
School of Business who spent a
decade in supply chain management
at General Motors Co., said Wayne
County is going to a model the private sector has been adopting for
“We (at GM) achieved over 20
percent cost improvements by
globalizing or ‘commonizing’ the
horns” in GM vehicles in different
countries, he said. “Everyone was
buying their own horns, so we
picked the best supplier globally.
The overhaul is part of Evans’
plan to address the county’s structural deficit, which has averaged
$52 million in the past four years.
Last week, he also proposed eliminating health care benefits for future retirees; a 5 percent pay cut for
all employees except for police officers, prosecutors and nurses; and a
change in health care options for retirees who retired before 2007.
Wayne County’s pension system
is just 45 percent funded and needs
$910 million to become fully funded.
If the county does nothing, in five
years the accumulated deficit is expected to balloon to $171 million
and the county could run out of
cash by August 2016, according to
With full implementation of
Evans’ plan, he said, surpluses are
expected at $78.5 million in 2015
(due to a transfer from the county’s
Delinquent Tax Revolving Fund);
$17.1 million in 2016; $5.5 million in
2017; $4.5 million in 2018; and $9.6
million in 2019. 䡲
Kirk Pinho: (313) 446-0412
Twitter: @kirkpinhoCDB
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2:28 PM
Page 1
Analysts look to future moves
after aborted Comcast-TW deal
By Chad Halcom
[email protected]
Increase your cash flow and pursue
bigger opportunities with our customized,
flexible lending solutions.
(248) 658-1100
Sherri covers nonprofits, services, retail and hospitality.
Keep up with Sherri at crainsdetroit.com/blogs
It may not be a GreatLand, but it
could still become a different one
for metro Detroit cable and Internet
subscribers, even after market
leader Comcast Corp. backed off on
a $45 billion deal to acquire Time
Warner Cable Inc.
Analysts are wondering what
other acquisitions are in the offing for
the cable industry — including for St.
Louis-based Charter Communications,
which was to co-own and operate
GreatLand Connections Inc. and inherit
Comcast customers in this region
under a side deal to the Comcast buy.
Thomas Rutledge, president and
CEO of Charter, told analysts in an
earnings conference call Friday that
Advance/Newhouse, parent company of fellow cable operator Bright
House Networks LLC . Charter had
previously offered to buy Bright
House for $10.4 billion, but it was
another of the industry side deals
that were contingent on a Comcast
purchase closing.
“Obviously we’re disappointed
that our transaction did not
close…,” Rutledge said.
Advance/Newhouse requires that we
(continue to) negotiate in good faith
upon a termination of the Comcast
transaction, and we’re doing that.”
Rutledge declined to elaborate.
Syracuse, N.Y.-based Bright
House operates in Farmington,
Farmington Hills, Livonia, Novi and
Redford Township, according to its
website. Charter operates in the Detroit, Flint, Grand Rapids, Marquette, Saginaw and Traverse City
markets, according to its website.
But for most local communities,
Philadelphia-based Comcast is here
to stay, even if the deal raised questions about how committed the
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company is to a community it has
already tried to leave.
“Community commitment has always been a big and well-known part
of the values and culture of Comcast,
especially here, and it was unknown
what culture the new spinoff company might have. So the fact they’re
going to stay for the foreseeable future is a good thing ,” said Matt Friedman, a TV industry veteran and cofounder of public relations firm
Tanner Friedman in Farmington Hills.
Michelle Gilbert, vice president of
public relations for the Heartland region at Comcast, said the company
continued investing in its local network and its community relations programs while the deal was pending.
In March the company awarded
more than $120,000 in scholarships
to 118 Michigan high school students
under its annual Leaders and Achievers Scholarship Program.
“From a community relations position, we operated from a businessas-usual perspective,” Gilbert said.
“We’ve continued to collaborate with
nonprofit organizations, and when
we started event planning we were
operating from the assumption that
the deal was going through. Yet we’ve
continued to make that community
The proposed Comcast acquisition had called for the industry
giant to shed more than 3 million
subscribers nationwide, including
most of southern Michigan.
Customers in metro Detroit,
Minneapolis and elsewhere were to
belong to GreatLand Connections,
which Charter would have managed and partly owned in a separate
deal contingent on the purchase.
But Comcast withdrew from the
deal after government officials
raised concerns on the effects for
broadband Internet customers.
Andy Winnie, owner of eBuy
Media Inc. in Plymouth, said he followed reports of the Comcast offer
and its withdrawal, but he never expected the deal to affect his company or other local media buyers.
“The only thing that would have
changed is the names, although
maybe some upper management
might have changed with it. But we
would be working with more or less
the same people,” he said. 䡲
123. NET
The following businesses filed for
protection in U.S. Bankruptcy Court
in Detroit April 25-30. Under Chapter 11, a company files for reorganization. Chapter 7 involves total liquidation.
䡲 F&W Holdings LLC, 77 S. Main
St., Mt. Clemens, voluntary Chapter
7. Assets and liabilities not available.
䡲 Kay Bee Kay Properties LLC,
1487 Hubbard St., Detroit, voluntary Chapter 11. Assets and liabilities not available.
— Dustin Walsh
5:29 PM
Page 1
Taubman family to continue legacy of giving
By Sherri Welch
[email protected]
There’s no question Al Taubman’s
philanthropic legacy will live on.
And some of the details on just how
that will happen are starting to
Educational and health care
buildings and art museum galleries
and wings across the campuses of
several institutions, including the
University of Michigan , College for
Creative Studies , Lawrence Techno logical
University’s Kennedy School of Government and the Detroit Institute of
Arts, bear his name.
Other legacies include an impact
on medical research and literacy.
The gifts Taubman made may one
day lead researchers at the A. Alfred
Taubman Medical Research Institute at
UM to a cure for deadly diseases —
or spur architectural students influenced by his curriculum input to
create magnificent designs.
Then there’s his work to support
Reading Works , a Detroit-based
nonprofit working to improve adult
literacy in Metro Detroit.
The philanthropy of Taubman,
the real estate developer who died
April 17 at 91, will be carried on
through his children and the
Bloomfield Hills-based Taubman
A “substantial amount of funds”
is expected to move from Taubman’s estate into the foundation
as affairs are settled, said Chris
Tennyson, a spokesman for the
family and Taubman Cos. for more
than 30 years.
Taubman gifts
Selected gifts to local institutions:
2014: $12.5 million to the
University of Michigan for
renovations to architectural college
For fiscal 2014 ended Jan. 31, the
foundation disbursed a reported
$850,079 in contributions and a few
dollars more, leaving it with $157 in
net assets/fund balances at year’s
end after expenses.
Taubman’s children — Gayle
Taubman Kalisman, Robert Taubman and William Taubman — will
serve as the foundation’s trustees,
with his daughter as president.
“He brought his children along
with him in his philanthropy not
just to get the benefit of their talents
while (he) was alive, but to ensure
there was continuity beyond that,”
Tennyson said.
“This next generation ... I think
they have their own ideas ... desires
and vehicle for ways they’ll give,” he
said. “(Taubman) wanted it that
“He believed very strongly that
along with monetary support come
dedication, creativity and commitment that his children can bring to
the table as they go forward with
their own loves and interests.”
Taubman graduated from Pontiac
High School and entered UM, but his
freshman year was cut short by a call
to serve in the Army during World
War II. He returned to UM on the GI
Bill to study art and architecture but
transferred to night school at
Lawrence Tech closer to home after
proposing to his college sweetheart.
He didn’t finish at Lawrence Tech
either, though he was awarded an
honorary doctorate in architecture
from the Southfield-based university in 1985.
“But he had great love and appreciation for both institutions and
credited both with changing his life,
giving him all sorts of tools to be
successful,” Tennyson said of
Lawrence Tech and UM.
In 2010, Taubman organized a
graduate-level course at LTU, “Real
Estate Practice: Land Development.” He was the lead lecturer and
also brought in guest lecturers with
international reputations, among
them Michael Graves.
During his lifetime, Taubman’s
largest gifts went to UM.
Taubman was present just days
before his death at the UM ribboncutting ceremony for the renovation and expansion of the Alfred
Taubman College of Architecture
and Urban Planning facilities.
He made a lead gift of $12.5 million
to the project last year, following his
$30 million gift 15 years earlier to the
college — the single largest gift ever
made to an architecture program in
the U.S. at that time, UM said.
Taubman also made gifts to the
University of Michigan Museum of
Art and UM health care institutions.
But his largest gift to the university
was a $100 million pledge in 2007 to
fund the A. Alfred Taubman
Research Institute,
the largest donation in the history of the Univer sity of Michigan
Health System at
Mary Sue
the time. He had
Coleman: “I so
made gifts toadmired ... his
ward that pledge
in 2007, 2008
and 2011, said
Judy Malcolm,
senior director executive communications in UM’s Office of University
In all, with his gift to fund renovations of the architecture buildings
last year, Taubman donated $154.7
million to UM for medical research,
health care and the arts.
At the time of his death, Taubman
had been serving as vice chairman of
UM’s $4 billion Victors for Michigan
campaign and co-chairing the campaign council for the health system’s
portion of the campaign. He was
also co-chairman of the Taubman
Institute’s leadership advisory board
with his daughter, who will continue
in that role, Tennyson said.
“One of the things I so admired
about Alfred was the degree of his
intentional engagement in every
single project he got involved with,”
said former UM President Mary Sue
Coleman, who stepped down last
July after 12 years.
He talked with UM scientists all
the time about what they were working on, Coleman said, with a particular interest in research around neurodegenerative diseases.
“He was a pretty demanding task
master, but he made us better,”
Coleman said.
In the early 1980s, he became a
major proponent of UM’s Replacement Hospital Project, serving on
the building committee. His business savvy saved UM millions of
dollars when he urged the administration to buy steel while prices
were down.
Taubman’s children already have
many civic leadership roles.
Robert, who is chairman, president and CEO of Taubman Centers
Inc. , serves on the boards of Beau mont Health System and Cranbrook
Educational Community, the South eastern Michigan Council of Govern ments and on the University of
Michigan Investment Committee.
William Taubman, COO of Taubman Centers, has served as chairman of New Detroit for several years,
Tennyson said, noting the city of
Detroit was one of Al Taubman’s
first loves. 䡲
Sherri Welch: (313) 446-1694
Twitter: @SherriWelch
Detroit, we’re In Your Corner.
2013: $11 million to Lawrence
Technological University for the
Taubman Complex and Marburger
STEM Center.
2009: $15 million to the College for
Creative Studies for the A. Alfred
Taubman Center for Design
2007: $100 million to the
University of Michigan Health
System to establish the A. Alfred
Taubman Medical Research
2006: $3 million to Wayne State
University toward planning and
construction of the Damon J. Keith
Center for Civil Rights.
2004: $4 million to Lawrence
Technological University for the
construction of the A. Alfred
Taubman Student Services Center.
2001: $50 million to the Detroit
Institute of Arts, a gift made jointly
with the late Josephine Ford and
Richard Manoogian, chairman
emeritus of Masco Corp.
1999: $30 million to UM for the
A. Alfred Taubman College of
Architecture and Urban Planning.
Summer 2015
Grand Rapids
Grand Haven
5:30 PM
Page 1
These cuts needed
f Wayne County can avoid a trip to bankruptcy court to
repair its broken balance sheet, it’s a win for residents
and taxpayers.
Last week, Wayne County Executive Warren Evans unveiled
his “recovery plan” with proposed cuts not terribly draconian: A 5 percent wage reduction for most county employees,
elimination of health care benefits for future retirees, and a
new graduated pension eligibility scale for early retirement.
Yes, these are tough cuts for those affected, but the savings
improve the county’s ability to invest in things like roads and
new technology because higher bond ratings translate into
cheaper borrowing costs.
Restructuring is a tall order; the county’s pension fund is
only 45 percent funded, the unfinished jail on Gratiot Avenue
is a liability with a $200 million bond to repay. The accumulated deficit has surged to more than $157 million. These financial facts should be clear to county commissioners and to
labor unions that represent county employees.
This isn’t easy work, but if it means the county can avoid state
intervention and bankruptcy, it is work that must be done.
Kudos for convention
When the American Society of Association Executives
agreed in 2009 to hold its high-profile annual meeting in Detroit, it was more than a small leap of faith. The win was
based on the promise that Cobo Center improvements
would be complete and the city’s local restaurant and hotel
scene would improve.
As it turns out, Detroit has over-delivered. About the only
thing the city still needs to do to attract more big-time conferences, according to ASAE CEO John Graham, is add more hotel
rooms. And with occupancy rates climbing and a handful of
boutique hotels in the works, more rooms may be on the way.
The ASAE meeting coming to Detroit in August is a big deal.
It’s considered the “Super Bowl” of association conferences.
About 6,000 executives will be in town, and the conference has a
long-standing history of leading to follow-up conferences held
by the individual association heads who use the conference as a
way to “test-drive” locations for future meetings.
So the impact of this one event could be an immediate $10
million in spending this summer and could easily top $500 million over the next 10 years with future conferences that result.
Kudos to Larry Alexander, CEO of the Detroit Metro Convention and Visitors Bureau, for bagging this win.
[email protected]
ast-moving — and fast-chang-
F ing — bills that allegedly would
reform Michigan’s no-fault insurance laws pit insurance companies
against health care providers.
But hospitals and rehab programs battling for dollars to support
long-term care of people injured in
automobile accidents have tapped
their most powerful advocates —
their patients. People with brain
and spinal injuries, in wheelchairs
and on ventilators, have been lobbying fiercely for Michigan’s gold
standard of coverage. In other
states, whether some things are
covered depends on whether an injured motorist was at fault — or if he
or she has a good lawyer.
If passed, the bills would set price
controls on services, including residential programs that offer many
services Medicare wouldn’t pay for.
And it would shift responsibility ultimately for long-term care from the
Money seems to be the
driver for no-fault change
auto insurer to a new state catastrophic care fund.
The existing Michigan Catastrophic Claims Association fund
has a piggy bank balance north of
$18 billion to cover all current and
future claims.
That seems like a huge sum, but
consider that the costs of caring for
severely injured people who are
“ventilator dependent,” could cost
up to $1,000 a day, says Bill Buccalo,
president of Livonia-based Rainbow Rehabilitation Centers. The organization operates residential,
outpatient and home care services
across Southeast Michigan. For
people with brain injuries that lead
to neurological and behavioral issues, care costs can be $500 to $700
a day.
That’s eye-popping, even for
some of us who have had relatives
in intensive care units for non-auto
related emergencies — or who have
helped parents consider their longterm retirement options that could
eventually include assisted living
and nursing home care.
Lawmakers who favor change
say hospitals have milked the system for years by charging triple their
normal fees to patients covered by
auto insurance. And certainly, the
fees vary wildly.
Oakland County Executive L.
Brooks Patterson, who was injured
in an auto accident in 2013, thinks
lawmakers are rushing things. He
also told Detroit Free Press columnist Mitch Albom that the key to the
speed is insurance companies
wanting to tap the $18 billion
Michigan Catastrophic Claims Association fund, which was built on
premiums all motorists pay.
There’s a rule of thumb in journalism: When you’re trying to figure
out the “why” of something, follow
the money. That seems to be the
case here.
Catch Mary Kramer’s 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
Re: Kroger to acquire Hiller’s
Markets in metro Detroit
Reader responses to stories and
blogs that appeared on Crain’s
website. Comments may be edited
for length and clarity.
Glad to hear my two favorite
stores are merging . I hope that
Kroger is committed to upholding
Hiller’s commitment to customer
service and Michigan products.
fixed incomes. Got income? Got
I am so disappointed to hear this.
I am an avid Hiller’s shopper and
appreciated their quality meats,
produce and all the unique specialty goods. Kroger may have some
lower prices, but they definitely
don’t have the quality and selection.
Good intentions, but a recipe for
disaster . Just accept the fact that
many of these loans will never be
Jeanette Schneider
Re: New mortgage program will
help homebuyers fix city homes
This is awesome . A disabled veteran such as myself could move to
Detroit and buy a house in a nice
neighborhood and fix it up. This
program is great for people with
John md
With this new program now I am
seriously considering moving back
into the city.
Re: Moroun, city to swap
parkland for second span effort
Wow, this is quite a different pic ture than a few years back with all
the legal disputes. Duggan seems to
get things done.
Re: No-fault bill: $1 billion to be
pulled from health care?
The proposed bill does not provide
any long-term benefit. Further, it does
not provide an answer to where the
funds will come from after the
$545,000 claims fund is exhausted.
The system in place is not broken. People
are getting services necessary for
quality of life after a catastrophic injury. If this passes, we don’t have a
vote, and people with catastrophic injuries will not have the options that
exist today. In addition, state and federal financial resources already beleaguered will dwindle further. We will
end up paying the shortfall through
taxes. We pay premiums and hope to
never use the benefits. When we do,
shouldn’t the carrier and the MCCA
be there for us?
Scott Silver
Tough decisions have to be made in Wayne County
I am not sure that Warren Evans
knew what he was getting into as far
as the financial situation for Wayne
County. His predecessors, from all
outward appearances, left the
county in near bankruptcy.
Last week, the county executive
announced some measures that are
sure to get him lots of disgruntled
employees in the county but ap-
plause from the residents there.
Desperate measures require
tough, stern measures to try and
counteract the financial neglect of
the past few decades. These problems facing the county didn’t appear overnight but have been accumulating for years.
Rather than try to continue to
cover up the financial mess, Evans
has chosen to try and address the
chaos before we, the residents of
Southeast Michigan, would be
forced to face another bankruptcy.
It’s not pretty, and it’s going to be
painful to a lot of employees of
Wayne County who have benefited
from lax financial controls and now
must pay the piper.
These are the kind of issues that
should have been addressed over
decades. Simply giving benefits to
employees that Wayne County cannot afford — and doesn’t have the
money to pay for — has brought the
it to the brink of financial disaster.
We are lucky to have elected an
official who is willing to take the
very unpopular task of putting the
county’s financial house in order.
It’s simply too soon to bring back
Kevyn Orr for another round of
It is becoming far too common in
America for municipalities to promise benefits that the communities
simply can’t afford and letting someone in the future worry about how
they’re ever going to pay for them.
It is a lot easier to make promises
to employees and unions that might
not be anything but a liability on the
financial books for a couple of
decades than the alternative — facing the unpopular decision that the
municipal government simply can’t
afford to accept those liabilities that
will eventually bankrupt the government.
Wayne County is by no means
alone in the United States. But on
the heels of the Detroit bankruptcy,
it’s obvious that something had to
be done, popular or not.
Evans didn’t create this financial
mess, but he is left with the unpopular task of cleaning it up.
The county is doing what has to
be done. It’s not easy, but it sure is
necessary. 䡲
11:01 AM
Page 2
Public-private partnerships a needed path to project funding
Joe Neussendorfer
Joe Neussendorfer is an affiliate member of
the American Society of Civil Engineers, a
member of the Engineering Society of
Detroit and a member of the American Bar
Association’s forum on construction law.
he National Governors Associa-
Ttion Center for Best Practices, in
partnership with the National Conference of State Legislatures and the
Center for Excellence in Project Finance at the American Association
of State Highways and Transportation, recently held a workshop to assist state teams exploring how public-private partnerships, often called
P3s, might be used to improve transportation infrastructure at a time
when taxes alone will not provide all
of the money needed for such a
daunting task ahead.
What is a P3? A definition is a single
private-sector or a group of privatesector partners who provide upfront
financing for a capital project, and designs and builds the project based on
criteria from a public entity, such as a
state highway department, then operates and maintains the project for a
specified time in exchange for a combination of user fees or other government transfer payments.
There have been many discussions and some movement regarding the use of P3s in Michigan, primarily in the governor’s office and
the Michigan Department of Transportation. But so far the average
Michigan citizen does not have
background information about the
concept. This needs to change.
There have to be discussions by
all legislative and taxpayer stakeholders so there is an understanding
that P3s offer a great alternative to
just raising taxes. There are not
enough tax dollars to go around. Not
just transportation infrastructure,
but all state capital projects, will
have to be a combination of tax dollars and private resources. Everyone
has to contribute to the effort.
Moving forward
At least two states, Arizona and
Pennsylvania, are moving forward
with major initiatives.
The Arizona Department of
Transportation has established an
Office of P3 Initiatives, using best
practices and lessons from other
states as the basis of building a
strong P3 program. The Pennsylvania Department of Public Transportation has established an Office
of Public-Private Partnerships.
In Michigan, Gov. Rick Snyder
has appointed Joseph Pavona as a
special adviser for P3s.
In an email to me, Pavona wrote,
“Michigan has a statewide P3 vision
that fosters economic development
by addressing our state’s infrastructure deficit and leveraging public
and private assets.”
He went on to write that P3 efforts are coordinated through the
executive office and, in turn, coordi-
nated through state agencies that
have experts on various subjects.
When I asked if there are any legislative structures or state statutes
in place regarding P3s, he said: “Our
current efforts have not required
any sort of legislative action. We
may reach a point where we will
need to work with our partners in
the Legislature to expand opportunities for the state’s residents to
benefit from P3 initiatives.”
MDOT Director Kirk Steudle told
me: “We actually have quite a bit of P3
work going on currently. We also have
some older projects that are close to a
P3. We have a partnership with Meijer
for carpool lots; we did two design,
build, finance projects, which helped
us really move into other innovative
contracting options. …
“One is currently on the street for a
15-year contract for freeway lighting
in Southeast Michigan, all 14,000
lights for design, build, finance, maintain and operate. There also is the Detroit Intermodal Freight Terminal,
where we have over half the funds
provided by the railroads and the rest
by the state.”
Clear on concept
The Council of the Great Lakes
Region has an exciting P3 initiative
underway. It recently announced
it will perform an in-depth study
of policies and laws governing P3s
in other regions of the United
States and Canada to identify best
practices for the private sector to
design, build, finance, operate and
maintain public infrastructure.
CEO Mark Fisher said that the
hope is “to create a blueprint for the
region” to follow.
I believe the public and the
Legislature should get involved
with this concept. Perhaps there is
a forward-thinking state senator or
representative who would like to
get the ball rolling with legislation
that would create a P3 authority to
look at alternatives to financing
not just transportation infrastructure but all state capital projects.
In addition, Snyder should consider sponsoring a statewide P3
conference with Business Leaders
for Michigan and other private-sector stakeholders to discuss ways
that the private sector can assist
Michigan and its limited resources
in addressing future funding needs.
As the insightful Crain’s Detroit
Business editorial on Feb. 23 stated:
“The good news: The spotlight on
the P3 model may lead to its use in
other projects.” 䡲
Eric W. Dietz
Shari Krasinski, CTP, CPCP
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10:34 AM
Page 1
Presbyterian Villages, Homestead form JV
By Sherri Welch
[email protected]
A nonprofit senior housing developer has teamed up with an athome care provider to provide
those services to seniors throughout the state.
Presbyterian Villages of Michigan
and Homestead Home Health Care
Inc. have formed a joint venture.
The new limited liability company,
yet to be named, will enable
Southfield-based PVM to expand
further into in-home and senior
community-based care and services. Meanwhile, the venture allows
Northville-based Homestead to
expand statewide.
The joint venture company will
serve an eight-county area that includes Southeast Michigan, Genesee County, and the Saginaw and
Petoskey areas.
For-profit Homestead will serve
as the general manager, and a representative of the nonprofit PVM
will chair its governing board, the
companies said.
“We see this as an area of
tremendous unmet needs,” said
PVM President and CEO Roger
“We know seniors by and large
want to remain in their homes. ...
We think through this joint venture we can meet part of that demand.”
Southfield-based PVM is oper-
Menu of services
Homestead Home Care Inc.
and Presbyterian Villages of
Michigan expect to offer the
following services:
Private duty home health and
personal care services, such as
medical assistance.
Coordination of skilled care, endof-life care, physician and pharmacy
services, care transition programs
and telehealth programs.
Meal preparation and
nutritional/dietary monitoring.
Personal shopping and services
such as errands, housekeeping,
laundry, home repairs, maintenance,
lawn care and snow removal.
Outings,wellness and other
ating on a budget of about $65 million for 2015, Myers said.
Carl Simcox, owner of Homestead, said the projection is the
joint venture will have $500,000 to
$1 million in new business the first
year and continue to grow substantially after that.
“We expect that we will be hiring quite a few people,” Simcox
said, with nurses and others providing direct in-home care for private pay customers and those approved
The joint venture expands on
a contractual relationship between the two
agencies. For
RogerMyers: ”We Homestead has
see this as an area been providing
of unmet needs.”
services to residents of PVM’s
Village of Westland senior community, Myers said, adding that inspired a strong sense of trust in the
quality of Homestead’s services.
The joint venture will serve not
only PVM senior living communities, but the broader community
as well, Myers said.
PVM serves more than 4,300
seniors and operates 25 senior living communities across the state.
It also provides community-based
health care and other services for
seniors living near its two PACE
(Program of All-Inclusive Care for
the Elderly) Southeast Michigan
centers in Detroit, operated with
Henry Ford Health System.
The centers provide a nationally
recognized comprehensive adult
day care and health services program for seniors living in surrounding communities.
Homestead and its affiliates
provide services for more than
2,000 clients, including home care,
facility management of independent and assisted living communities, care coordination and client
The joint venture is the latest
example of a senior living community organization expanding into
in-home and community-based
As Crain’s reported in January,
Chelsea-based United Methodist Retirement Communities paid $1.3
million to acquire a 50 percent
stake in Glacier Hills Home Care Inc.,
gaining entry into home health
care. The deal created a new company, Caring Partners Home Health
Through the deal, Glacier Hills
was able to expand its Ann Arbor
home health care subsidiary outside of Washtenaw County, its
president and CEO, Ray Rabidoux,
said at the time.
The plan is to expand Caring
Partners’ services — such as
chores — to support seniors staying in their homes, he said,
spurred by changes in Medicaid
policies to expand reimbursements of in-home senior services.
Like PVM, United Methodist operated PACE centers for the elderly
in Jackson, Ypsilanti and Lansing
before the acquisition. Sherri Welch: (313) 446-1694
Twitter: @SherriWelch
Changing the Odds in our Clients’ Favor
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Rochester, Michigan 48307
Oakland County
predicted to add
48,500 jobs in
next three years
By Kirk Pinho
[email protected]
Oakland County will add
48,500 jobs in the next three
years, University of Michigan
economists project, 38 percent of
which will be high-wage professional and business services.
Testing lab (5,700 jobs) and engineering services (4,800 jobs) will
make up the bulk of the knowledge-economy jobs, according to
George Fulton and Don Grimes,
both of the UM Institute for Research on Labor, Employment, and
the Economy.
“Along with company management, which adds more than
1,000 jobs over the next three
years, these industries form the
core of the white-collar auto industry,” Fulton said.
Here’s how the rest of the job
gain projections for Oakland add
up by industry:
Health care, 12 percent
Leisure and hospitality,
11 percent
Manufacturing, 7 percent
Construction, 6 percent
Financial activities, particularly real estate, 5 percent
Wholesale trade, 5 percent
“On the whole, Oakland’s recovery continues to be supported
by a U.S. economy that expands
through 2017 and by increasing
Detroit 3 vehicle sales, as well as
by the county’s strong economic
fundamentals,” Fulton said.
Fulton and Grimes said last
week at the Oakland County Economic Outlook luncheon that the
county has added close to 80,000
jobs in the past four years and
that 87 percent of the jobs lost
from mid-2000 to the summer of
2009 have been replaced.
This year, the county’s unemployment rate
will match the
national average of 5.3 percent and fall
to 5 percent in
next year and
4.6 percent in
2017, according to the re- L.Brooks
port. In addi- Patterson: “When
the you get below 5
average real percent unemploywage is ex- ment, you’ve
to reached full emgrow 4.6 per- ployment.”
2014-17 to an annual average of
Said County Executive L.
Brooks Patterson: “When you get
below 5 percent unemployment,
you’ve reached full employment,
and we’re not that far off.”
This year’s report was unveiled at the Detroit Troy Marriott
in Troy.
Kirk Pinho: (313) 446-0412
10:35 AM
Page 1
Reporter’s Notebook
WEB: crainsdetroit.com/walsh
TWITTER: @dustinpwalsh
County eyes ways
to boost shorelines
In 2012, Macomb County
Executive Mark Hackel and local
governments committed to boost
the county economy by
addressing obstacles to waterfront
redevelopment on Lake St. Clair
and the Clinton River.
Called the Blue Economy
Initiative, the coalition set forth a
plan to redevelop abandoned
marinas, improve and grow local
beaches and develop a marketing
strategy for the county’s shorelines.
The goal is to increase
accessibility that has been long
cut off by private fishing and
boating groups.
“We have a tremendous
freshwater advantage,” Hackel
said. “Over the years, our
waterfronts, Lake St. Clair and the
Clinton River, had developments
that blocked public access. We’re
now starting to see that change.”
The 430 square miles of
freshwater in Lake St. Clair alone
has a $1.7 billion economic
impact to the region, but
increased public access could
bring many more dollars.
Fishing and recreational
boating and paddling, provide the
greatest opportunity, said Gerrard
Santoro, program manager of
land and water resources for
Macomb County.
“Many people don’t know that
Lake St. Clair happens to be one
of the national’s best fishing
lakes,” Santoro said. “None of its
19 species are stocked by the
Department of Natural Resources.
and it’s really putting us on the
map across the nation.”
Lake St. Clair was named the
best bass fishing lake in the U.S.
by Bassmaster Magazine in 2013.
To increase access to boaters
and anglers, communities in
Macomb County are acquiring
former marinas. New Baltimore is
assessing the purchase of Schmid
Marina to transition the property
into a public dock rental and a
possible recreation facility to give
boaters access to its downtown
restaurants and other attractions.
Harrison Township and St. Clair
Shores are assessing similar
opportunities, Santoro said.
The initiative, with the Clinton
River Watershed Council, is publishing
a guide to paddling sports on the
Clinton River called the Blue Water
Trail in late May.
“A lot of local governments are
refocusing their attention to the
river as a resource instead of a
dumping ground, like it was in the
past,” Santoro said.
One majorMacomb County employer, General Motors Co.,plans to create up to 2,600 jobs as part ofan expansion ofits Tech Centerin Warren (above).Defense contractors
such as BAE Systems (above,inset) remain one ofthe top county employers.And with a growing population,residential building permits have surged (belowleft).
Macomb makeover
Old drivers (manufacturing) join new (tech) to restart county’s economy
By Dustin Walsh
[email protected]
hen the Warren City
Council last month
approved a 12-year tax
abatement for a major
expansion and renovation of General
Motors Co.’s Tech Center, it marked an
economic development win for the
A big one.
The $419 million expansion could
create up to 2,600 jobs. GM is already the
city’s largest taxpayer. If the company
invests as big as expected at the Tech
Center, that helps move ahead a trend of
manufacturing and research and
development investment in the county.
Manufacturing investments in the
county totaled $561 million between
2011 and 2014, according to an
economic forecast released this year by
Macomb Community College President
Jim Jacobs.
While parts of
Macomb County remain
bedroom communities
for a blue-collar
workforce, its tech and
services sectors — like
Jim Jacobs: Found those GM Tech Center
$561 million in
jobs — continue to grow.
Meanwhile, Macomb’s
workforce and
population base are changing as well.
For one thing, its population is
But challenges to the county’s
economic evolution include a skills gap
between available jobs and workers
trained to fill them, and the ebb and flow
of contract wins and sales for big
employers — such as automakers and
their suppliers, defense contractors,
health care providers and professional
service firms.
A unified force
One of the drivers of an improved
regional perception of Macomb County
is a realignment at the top, with a new
county governance structure, plus more
cohesion in the business community.
Reducing the amount of
commissioners to 13 from 26 and
electing a single county
executive in 2011
allowed Macomb to
construct a single
economic development
strategy and streamline
efforts, county and
Mark Hackel: “We business leaders say.
“People and businhave something
special here.”
esses are starting to
realize we have something special here,” Macomb County
Executive Mark Hackel said.
See MACOMB, Page 12
10:36 AM
Page 1
MACOMB, from Page 11: It’s not the ’90s, but county’s economy is good to grow
“We’ve improved our image.
We’ve seen major investments, and
the county is really now setting itself
up for future opportunities we
weren’t getting before.”
Recent investments led to a nearly 45 percent reduction of unemployed residents since 2010, lowering the unemployment rate from
12.4 percent in November 2010 to
6.8 percent in November 2014.
But the jobs figures don’t tell the
whole story, Jacobs said. Although
there has been a pickup of more
than 17,000 manufacturing jobs,
with the 2014 tally at 68,656, that’s
still 35.5 percent below 2000.
“None of this means the jobs
growth is going to be anywhere near
where it was in the height of the
1990s,” Jacobs said. “We’re not going
to re-create those jobs, but the jobs
(created) are better jobs with better
pay and requiring more education.”
Craig Sherman, CEO of the Clinton Township-based staffing and recruiting firm Omega Talent LLC, said
the hiring equation has flipped.
“Where there used to be more
candidates than
jobs, we now
have far more job
orders than qualified candidates
to fill them,”
Sherman said.
“The good candiCraig Sherman:
dates are workNow more jobs than ing, so we have to
job candidates
candidates and
sell them on the opportunity.”
To handle the influx of new orders, Omega Talent, which employs
12, is setting up a program to help
recruit new graduates through
higher education or skilled trades
programs, Sherman said.
“Right now, we spend a lot of
time with lateral hires,” he said. “But
as the demand keeps growing, we
see ourselves going in the direction
of finding fresh employees.”
The defense industry, another
Macomb County staple, also foresees a steady demand for talent.
Despite a steep reduction in orders because of the winding down of
wars in Iraq and Afghanistan, the U.S.
Army Tacom Life Cycle Management
Command in Warren remains one of
the top employers in the county.
Tacom employs 7,500 and supplies as much as 65 percent of the
systems, soldier support and
ground vehicles to brigade units
stationed across
the globe, said
Maj. Gen. Gwen
Bingham, who
assumed command of Tacom
last year.
Tacom, a division of the U.S.
Army Material
Gwen Bingham:
Tacom “busy with Command , contributes $2.6 bila capital ‘B’ ”
lion locally, including expenditures on payroll,
taxes and contracting.
In 2014, Tacom executed $5 billion
in contracts, with $1.6 billion going to
Michigan companies. For the 2015
fiscal year, Tacom projects $6.2 billion
in contracts, Bingham said.
Those figures are down sharply
“None of this
means the jobs
growth is going to
be anywhere near
where it was in
the height of the
1990s. ... But the
jobs (created) are
better jobs with
better pay and
requiring more
Jim Jacobs,
Macomb Community College
from 2008, when the unit executed
$30 billion in contracts.
“If a soldier eats it, wears it,
drives it or shoots it, we oversee
that,” Bingham said. “While our
numbers have gone down with
workload, we are busy with a capital ‘B,’ underscored, bold. There’s
not a single thing that happens inside our gates without our partners
outside the gates, and that means a
great economic impact to the region.”
Bingham also said new orders are
on the horizon, which translates
into more business to the Macomb
County and regional economies.
Population gains
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w w w. p l u n k e t t c o o n e y. c o m
The promise of new jobs and a
county on the rise has contributed
to some small gains in the number
of residents. Population grew
2.3 percent, to 860,112, from April 1,
2010, through July 1, 2014, according to the U.S. Census Bureau.
That’s higher than the population
change in Wayne County, which
shrank 3.1 percent during that time,
but lower than Oakland County’s
3 percent growth.
However, Macomb County outpaced its peers in residential building permits in 2014, according to
data from the Southeast Michigan
Council of Governments.
Macomb issued 1,680 new residential building permits — single
family, apartments and condominiums — in 2014, up from 1,205 in
2012. Oakland County issued 1,405
permits in 2014, according to
At First State Bank , home purchase transactions are up significantly year over year, said Eugene
Lovell, president
and CEO of the
11-branch community
based in St. Clair
“We anticipate 2015 to be
our best year for
Eugene Lovell:
mortgage activiFirst State expects ty since the fia big mortgage year. nancial crisis,”
Lovell said. “Also,
reflecting continued improvement
in housing values, we have seen
strong growth in home equity lend-
Mortgage work is up across the region, Lovell said, with many in Macomb moving northward within the
county. Plus, newcomers to the
county are settling in southern Macomb.
First State Bank’s loan portfolio increased 9.5 percent in 2014, to $374
million from $344 million. Most of
the increase came from commercial
and industrial lending, Lovell said.
The flood of new residents in the
county is raising all ships, said Terry
Hamilton, president of St. John Ma comb-Oakland Hospital in Warren
and Madison Heights.
“There’s no question that Macomb County is a great place to be
right now,” Hamilton said. “More
people have insurance, people are
moving back and investment activity
is good. The general effect is: Let’s
move ahead.”
St. John Macomb-Oakland employs more than 4,000 in the county
with an annual payroll of $150 million. The hospital spends $100 million annually on equipment, technology and services and serves 30
percent of the county’s residents,
Hamilton said.
That doesn’t mean St. John hasn’t
consolidated some Macomb operations. The former St. John North
Shores Hospital in Harrison Township closed in 2010 after outpatient
services were transferred.
Frank Henke, executive partner in
the Clinton Township office of Grand
Rapids-based Warner Norcross &
Judd LLP, said the rapid rate of expansion and investment in Macomb
County has led to an increased need
for sophisticated business services.
Warner Norcross plans to expand
from 12 attorneys to as many as 30
in the coming months in Clinton
Township to take advantage of new
opportunities, Henke said.
The same goes for UHY Advisors
Inc. in Sterling Heights. The accounting firm hired an additional
20 people in 2014 and expects to increase headcount as much as 15
percent in the next 12 months, said
Tony Frabotta, chairman and CEO.
“Businesses in the county are demanding a lot more professional
services of a more technical nature,”
Frabotta said.
David Girodat, president and CEO
of Fifth Third Bank Eastern Michigan,
said the increased affluence of the
region is presenting the bank its own
opportunity for growth.
Fifth Third expects to grow from
6 percent market share in metro
Detroit to 10 percent in the next
few years and expects to reach that
goal in Macomb County before the
neighboring counties, Girodat
“We’re no longer slicing the pie
into smaller pieces in Macomb
County,” he said. “There’s enough
growth to allow all of us to grow.”
Disparity across
But Macomb County is not withSee Next Page
11:03 AM
Page 2
From Previous Page
out its challenges. That’s because the
uptick in jobs and income isn’t uniform across the county, Jacobs said.
“Clearly, there is a considerable
difference, economically, between
the northern end and the southern
end of the county,” Jacobs said.
“While younger families are moving into the southern communities,
those incomes tend to be lower than
those previously living there, and
their needs are different. How do we
integrate the interests of both
Communities such as Eastpointe, Roseville and St. Clair
Shores haven’t seen as quick of a recovery as communities farther
north, Jacobs said.
Household income in Macomb County
sharply since before the Great
Recession, surpassed only by
Wayne County.
David Girodat:
Median houseFifth Third expects to hold
add market share.
$52,978 in 2013
from $71,979 in 1999, a decrease of
26.2 percent, according to the U.S.
Census. During the same period,
household income dropped 23.9
percent in Oakland County and 28.5
percent in Wayne County.
County Executive Hackel doesn’t
see the gap as a problem.
“A lot of our growth in population
in the southern communities is
from the city of Detroit,” he said.
“They are backfilling our residents
as they migrate north, and there’s
nothing wrong with that.
“These residents are finding affordable homes, and we’re happy to
provide opportunities for everyone
at every economic level. In fact, it’s
critical we supply it because all of
our futures are linked.”
Another source of population
growth is from immigrants. Those
from Iraq and from India account
for the largest increase, according
to data from the U.S. Department of
Homeland Security.
Between 2003 and 2011, 18,260
Iraqis and 16,372 Indians came to
Macomb County.
That immigrant population could
become a boon for the county, Jacobs said.
“Most of the new Americans are
coming with skills which will be
important for the future growth of
the county — in particular, entrepreneurial skills,” he said. “Most of
the (immigrant population) are
part of families with young children, so there is a future generation growing up in Macomb
County.” 䡲
Dustin Walsh: (313) 446-6042
Twitter: @dustinpwalsh
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10:37 AM
Page 1
Kosch Hospitality takes over
operation of Blossom Heath Inn
By Sherri Welch
[email protected]
Rochester-based Kosch Hospitality LLC has assumed management of
Blossom Heath Inn , a city-owned
banquet and events center in St.
Clair Shores, under a new 10-year
contract. The revamped venue is
part of the company’s overall
growth strategy for this year.
Kosch took over operation of the
center from Oak Management ,
which had managed the venue for
more than 30 years until Kosch won
the contract in January.
During the first quarter, Kosch secured the liquor license for the property and invested nearly $200,000 in
interior renovations to the historic
banquet center on Jefferson Avenue
between Nine Mile and 10 Mile along
the city’s Nautical Mile.
Blossom Heath Inn opened in
1911 as a roadhouse. During prohibition, it was an “infamous
speakeasy,” Kosch says on its website. Evidence of basement bars and
hidden walls still exist.
Interior renovations were aimed
at taking the building back to its
roots, but with modern conveniences, said Gordie Kosch, who coowns Kosch Hospitality with his
brother Gary.
“Little to no resources had been
put into the facility for decades, and
it showed,” he said, noting that his
wife, Julie, and sister-in-law led the
The restoration included new
carpeting and paint, lighting upgrades, original hardwood restoration, ballroom dome restoration,
new high-tech audiovisual equipment, a new bar and bar room,
restoration of the patio, new furniture and, in the bar area, a wall
mural by local artist Dan Melendez,
said Kosch, 56.
Exterior renovations and landscaping are also underway.
A May 8 grand opening fundraiser, including automobiles from the
1920s and ’30s, is sold out.
Kosch, which began as a tavern
and restaurant operator in Sterling
Heights in the early 1980s, today
manages onsite dining operations
for several area companies and
parks, ranging from the Huron-Clin ton Metroparks to Troy Community
Center, Walsh College, Monroe County Community College and private
and public golf and country clubs.
It also caters events and operates
restaurants in northern Michigan,
including Alpine Tavern & Eatery in
Gaylord, Trout Town Tavern &
Eatery in Kalkaska, and The
Boathouse near Traverse City.
The company employs 400 and
posted $12 million in revenue last
year, its owner said.
“We were up last year about 15
percent, and we’re projecting about
the same (increase) for this year,”
Kosch said, noting the northern
Michigan operations have done
particularly well.
At Blossom Heath, Kosch Hospitality hosted a handful of events as
the renovations were progressing,
he said. And it’s booked about two
dozen weddings and an equal number of other events.
He projects the new venue will
gross about $300,000 this year from
events, but that’s less than half of
what he is projecting for 2016 from
the venue: $800,000
Both event catering and contract
dining are up, said Ryan Angott,
corporate marketing director at
Troy-based Continental Services. As
employers bring on more people,
food sales are rising and corporations are hosting more events. The
number of private events and
amount spent on them are also
picking up as the economy improves, he said.
The cost of the average wedding
in Michigan has increased in the
past three years from about $27,000
to about $31,000, Angott said.
Like Kosch, Continental is projecting the market will increase
again this year.
“People are loosening their belt a
little bit; it’s nice to see and definitely a trend,” Angott said. 䡲
Photo by Christopher Lark
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10:37 AM
Page 1
Send news items and photos to [email protected]
Jerry Attia to principal, Rossetti Associates Inc., Detroit, from director of
marketing development and project
SORG Architects,
Washington, D.C.
Also, Kirk Phillips
to architectural
design lead, from
director of hospitality design,
Hamilton AnderAttia
son Associates
Inc., Detroit, and
Mike Shea to senior project manager,
from senior project manager, Hamilton Anderson Associates Inc.
David Kauppila to principal, Fulcrum
Edge Inc., Bloomfield Hills, from globPeople on the Move
announcements are limited to
management positions.Email
[email protected]
person’s name,newtitle,company,city
in which the person will work,former
title,formercompany(ifnot promoted
from within) and formercitywhere the
person worked.Photos are welcome; we
cannot guarantee theiruse.
al manufacturing engineering director, Thermal Systems Division, Delphi Automotive plc, Troy.
Jim Jahnke to
director, Blue River
Financial Group Inc.,
Bloomfield Hills,
from managing
director, Palisade
Capital Management LLC, Fort
Lee, N.J.
Vince Callaghan
to manager, Blue River Financial Group
Inc., Bloomfield Hills, from CEO,
Business Problem Solvers, Berkley.
Also, Scott Sharp to manager,
acquisition support group, from CEO,
S. Lawrence & Co. LLC, Flint; and
George Petrulis to managing director,
acquisition support group, from
managing director, McLean Group
LLC, Chicago.
Paul DiLisio to senior vice president
of automotive and industrial original
equipmentsales, Dayco LLC, Troy, from
director of sales and marketing, automotive division, SKF USA, Northville.
Director, Huron-Clinton
George Phifer has been named
director of the Huron-Clinton
Metroparks. As director, he serves
as CEO and is
for day-to-day
operations of
the Huron-Clinton Metropolitan Authority.
Phifer had
been deputy
director and
COO of the
Huron-Clinton Metroparks.
In 2010, Phifer was appointed
executive secretary to the Board
of Commissioners, serving as a
staff officer of the agency while
maintaining his responsibilities
with the Metroparks Police Department as police chief, a position he has held since 2008.
Phifer, 51, worked for nearly
20 years at the Pontiac Police Department. He retired from the
department as a captain in 2004.
He earned his master’s degree
from Eastern Michigan University, a
bachelor of business leadership
from Baker College and an associate of applied science degree in
criminal justice from Oakland
Community College. He is also a
graduate of EMU’s Police School
of Staff and Command.
Population Healthcare Management: Strategies That Work. 7:309:30 a.m. Modern Healthcare.
Speakers include Joe Mullany, CEO,
Detroit Medical Center; Bruce Muma,
chief medical officer, Henry Ford
Physician Network; and Thomas Simmer, senior vice president and
chief medical officer, Blue Cross
Blue Shield of Michigan. Maureen
McKinney, editorial programs manager, Modern Healthcare, moderates. MGM Grand, Detroit. $95.
Contact: Jenna Trautman, (312)
649-5238; email: [email protected]
modernhealthcare.com; website:
Collaboration for Power and Profit
Breakfast and Symposium II. 8:30-11
a.m. The Black Advantage III Business Conference Biz To Biz Match.
Scheduled panelists: Eric C. Williams,
program director, Entrepreneurship
and Business Law at Wayne State
University; Brian Ellison, principal of
Intersection Consulting Group LLC.; the
Rev. Elreta Dodds, author and publisher; Paul K. Rozier, “serial entrepreneur,” re-engineering strategist, and
business educator. Greater Grace
Temple, Detroit. Tickets: $25, collaborationforpower.eventbrite.com.
CEO Business Roundtable Luncheon.
Noon-2 p.m. Michigan Association
for Female Entrepreneurs. A discussion with Camille Jayne, president of
Crain’s 2015 M&A Awards
the GEM’s garage.
Join Crain’s Detroit Business,
in partnership with the Association for Corporate Growth - Detroit
Chapter, to meet the M&A Awards
winners and finalists and hear
the stories behind the top transactions of 2014 from the dealmakers themselves.
The event takes place 5-9 p.m.
May 12 at the Troy Marriott. Tickets
are $100 in advance, or $95 for
current ACG members. Groups of
10 or more are $95 each. Preregistration closes May 11 at 9 a.m.
If available, walk-in registration will be $120 per person.
For information, contact Kacey
Anderson, (313) 446-0300,
[email protected]
The 2015 Tigers. 11:30 a.m.-1:35
p.m. May 13. Detroit Economic Club.
Speakers are David Dombrowski, president, CEO and general manager; and
Brad Ausmus, manager, Detroit Tigers.
MotorCity Casino Hotel, Detroit. $45
DEC members, $55 guests of members, $75 nonmembers. Ticket sales
end at noon May 12. Contact: (313)
963-8547; email: [email protected];
website: econclub.org.
The Jayne Group, on personal and
corporate branding and marketing
strategies. Bastone Brewery, Royal
Oak. $35. Contact: Tonya McNealWeary, (866) 490-6233, email:
[email protected]
APACC 14th Annual Dinner Celebration. 5:15 p.m.-midnight May 16. Asian
Pacific American Chamber of Commerce. Keynote speaker is Bill Imada,
chairman and chief collaborative officer, IW Group . MGM Grand Detroit.
Tickets $200 members, dinner only
($350/couple); $350, dinner and VIP
reception ($650/couple); $250 dinner
only for nonmembers ($400/
couple); or $400 dinner and reception for nonmembers ($700/couple).
Registration ends May 8. Contact:
Erin Mclin, (248) 430-5855; email:
[email protected]; website: apacc.net.
Learn About High-Profile Redevelopments. 11:30 a.m.-2 p.m. May 12. Commercial Real Estate Women, Detroit.
Program features a panel discussion
about the Detroit Packard Plant,
Michigan State Fairgrounds, Village of
Bloomfield and M-1 Rail. Gem Theatre, Detroit. $45 for CREW members
and $65 for nonmembers. Lunch is
included; parking will be available in
Calendarguidelines. Visit
crainsdetroit.com and click “Events”
near the top of the home page.Then,
click “Submit Your Events” from the
drop-down menu.Fill out the
submission form,then click “Submit
event” at the bottom of the page.
More Calendar items can be
found at crainsdetroit.com/events.
11:03 AM
Page 1
InfuSystem Holdings Inc., Madison Heights, a provider of infusion
pumps and related services for the
heath care industry, announced it
has closed the acquisition by its
subsidiary of substantially all of the
assets of Ciscura Holding Company
Inc., Alpharetta, Ga., and its subsidiaries. Website: infusystem.com.
Great Expressions Dental Centers
PC, Bloomfield Hills, has acquired a
dental practice at 30260 Cherry Hill
Road, Suite B, Garden City. Website:
Rubicon Genomics Inc., Ann
Arbor, a provider of kits to improve
the performance of genomic analytical platforms, has extended to
three years its clinical supply agreement with Agendia, Amsterdam, for
use of its TransPlex whole genome
RNA amplification technology.
Websites: rubicongenomics.com,.
ZipLogix, Fraser, a real estate
technology company, announced
contract expansions and extensions
with three East Coast associations:
Greater Capital Area Association of
Realtors, Rockville, Md., and Washington, D.C.; Greater Hartford Association of Realtors, Hartford, Conn.;
and Roanoke Valley Association of
Realtors, Roanoke, Va. Website:
offices in Birmingham and Naples,
Fla. Website: ckcagency.com.
Ally Financial Inc., Detroit, and Mitsubishi Motors North America Inc., Cypress, Calif., announced that Ally
will become the preferred financing
source for Mitsubishi Motors in the
U.S., replacing the brand’s captive
finance company, Mitsubishi Motors
Credit of America Inc. Websites:
ally.com, misubishicars.com.
Submit news to [email protected]
Nederlander Detroit, part of Nederlander Organization Inc., New York
City, has renewed its relationship
with Fiat Chrysler Automobiles (FCA
US LLC), Auburn Hills, and its
Chrysler brand to sponsor the
2015-16 Broadway in Detroit season. This the fifth consecutive theater season the automaker has
sponsored. As part of the sponsorship, the latest Chrysler vehicles will
be on display at the Fisher Theatre,
Detroit. Website: broadwayin
Talmer Bancorp Inc., Troy, has retained Assets International LLC,
Southfield, as its asset recovery
firm. Websites: talmerbank.com,
Robert Dresner, owner of Focus
Realty Inc., Southfield, and
Lawrence Quick, owner of Reliable
Realty Group LLC, Royal Oak, have
agreed to collaborate to provide
services to the multifamily sector of
investment real estate. Telephone:
Dresner, (248) 877-9033, or Quick,
(248) 200-6181.
AVL Powertrain Engineering, Inc.,
Plymouth Township, has been
awarded a $17 million project by
the National Advanced Mobility Consortium to collaborate research and
development work with the U.S.
Army Tank Automotive Research,
Development and Engineering Center, Warren, for an opposed piston,
two-stroke single cylinder advanced combat engine technology
demonstrator. The work will be performed at AVL’s Plymouth Township facility. Website: avl.com.
CKC Agency, Farmington Hills, a
full-service public relations and
media services firm, has added five
new accounts to its client roster:
National Kidney Foundation of Michi gan, Ann Arbor; City of Auburn Hills;
KLA Laboratories Inc., Dearborn;
Motor City Comic Con 2015 in Novi
presented by Motor City Conventions, Farmington Hills; and Beth
Rose Real Estate & Auctions, headquartered in Maumee, Ohio, with
Altair Engineering Inc., Troy, a
provider of computer-aided engineering and computing software
and services announced that Airbus
Defense and Space, a division of Airbus Group NV, has joined the Altair
Partner Alliance, bringing
Strength2000, for performing
strength and stability analyses to
meet aerospace standards. Websites: altairalliance.com,
American Society of Employers,
Livonia, a trade association that
provides people-management information and services to Michigan
employers, has contracted with
McLean & Co., London, Ontario, a
division of Info-Tech Research
Group Inc., to provide human resources services to member organizations. Websites: aseonline.org,
PolyFlex Products Inc., Farmington
Hills, a provider of custom reusable
trays, returnable containers and
other packaging products, an-
nounced it has established PolyFlex
Products UG, Dusseldorf, Germany.
The new firm will provide sales, engineering, technical support and
manufacturing capabilities to customers in Germany and the European Union and U.S. companies
with German affiliations. Website:
Con-Way Freight, Ann Arbor, a
less-than-truckload carrier and subsidiary of Con-Way Inc., announced
the opening of its newest service
center in Joliet, Ill. The $12 million,
41,600-square-foot freight facility
will serve as a local hub from which
the company will provide daily
commercial freight pickup and delivery services throughout the
greater Joliet region. Website:
Attorneys Title Agency LLC, Farmington Hills, a real estate title insurance company, has opened an office at 125 Ottawa Ave. NW, Suite
350, Grand Rapids. Telephone: (616)
965-3330. Website: atatitle.com.
Display Group, an event management company, has moved from
1700 W. Fort St., Detroit, to 6235
Concord Ave., Detroit. Website:
Dr. Gary Burnstein Health Clinic has
moved from 90 W. University Drive,
Pontiac, to 45580 Woodward Ave.,
Pontiac. Telephone: (248) 309-3752.
Website: garyburnsteinclinic.org.
The Magic Stick, Detroit, part of the
Majestic Entertainment Complex,
owned by Dave Zania, has been renovated and opened as Populux Detroit, an electronic music venue, coowned by Zania and Amir Daiza.
Website: populuxdetroit.com.
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Gravity Software LLC, Southfield,
an online cloud business management software company, has
launched Gravity Software. Website:
Autism Alliance of Michigan, Southfield, has launched MiNavigator, a
personalized resource and case
management program specific to
Michigan and provides up-to-date
information for services, support
and resources. Website:
ManagedWay, Southfield, a
provider of cloud services and collocation, has launched the Noction
IRP (Intelligent Routing Platform)
software, an Internet optimization
system engineered by Noction Inc.,
Sunnyvale, Calif. The new technology is designed to direct customer
traffic to the best performing route.
Websites: managedway.com,
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Email [email protected]
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the appropriate category. Without
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2:30 PM
Page 1
New bike shops in paceline for Detroit openings
By Gary Anglebrandt
Special to Crain’s Detroit Business
Welcome to Detroit Bike City.
This spring, five new bike shops
are slated to open within greater
downtown Detroit, starting this
week with Detroit Bikes 1216 and its
grand opening inside The Albert
building in Capitol Park. It will be
the first retail location for Detroitbased bike manufacturer Detroit
Bikes LLC.
“We can’t wait for people to see
it,” said Detroit Bikes President and
founder Zak Pashak. “Detroit Bikes
1216 is beautiful and evokes the
city’s rich cycling history.”
When the 1,200-square-foot
store opens on May 8, it will carry
only Detroit Bikes’ two lines of bicycles, both of which sell for $699, as
well as a line of accessories.
Meanwhile, in Corktown, Shayne
O’Keefe is struggling against construction delays to Metropolis Cycles
LLC before prime cycling weather.
The 2,300-square-foot store, located
across Michigan Avenue from Slows
Bar BQ , will carry new bikes in the
range of $200 to $2,000, from
brands such as Bianchi and Raleigh,
but no used bikes. It will also feature
accessories and parts as well as full
repair services.
Downtown Ferndale Bike Shop,
which has been open for six years,
plans to open a Downtown Detroit
Bike Shop in Midtown as soon as ongoing construction is finished. An
opening planned for April 1 was
postponed, and owner Jon Hughes
Detroit Bikes founder Zak Pashak: “Detroit Bikes 1216 is beautiful and evokes
the city’s rich cycling history.”
now hopes to open June 1.
This will be Hughes’ second go at
downtown Detroit. His first attempt,
a shop in Eastern Market, lasted the
summer of 2013, but the long winter,
nonfunctioning heat and bathrooms
— and a landlord who wanted to
raise rents amid such conditions —
led to a short stay, he said.
His 1,400-square-foot shop will be
at Cass Avenue and Peterboro Street
in the same building where The Peterboro, a planned Chinese restaurant, is scheduled to open this fall, as
well as a tattoo shop and craft beer
business. Bike prices will range from
$300 to $10,000. New and used bikes
will be in stock, along with accessories, parts and clothing. Full repair
services will be offered as well.
Hughes is upbeat about the
downtown market, despite the
Eastern Market episode. “It’s growing so fast, if I could have been
down there last summer I would
have been there,” he said.
In fact, he signed a 10-year lease.
Other plans are underway for
Eastern Market to get some bike retailers. Wheelhouse Detroit LLC ,
which runs a bike rental and retail
spot on the RiverWalk, plans to
open a location in the Market after
the extension of the Dequindre Cut
walkway is finished. And Motorless
City LLC is planning a custom bicycle retail and repair store this spring
on the East Fisher Freeway service
drive, behind the building that
houses Zef’s Coney Island Restau rant and Supino Pizzeria.
Motorless City will offer retail and
repair in the front of its 1,500-squarefoot store and do custom metalwork,
visible through windows to shoppers, in the back. Bikes will retail
from $300 to $1,200. It also will do a
pickup and delivery repair service.
Business partners Chris Kiesling
and Al Schlutow planned to open a
year ago, but their first real estate
deal fell apart. Kiesling couldn’t help
but laugh at how a year later he
finds himself with so much company.
“It’s hilarious. ... Fast forward,
and now everyone is opening,” he
While bicycles are undoubtedly
more popular now than they have
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de Troit, that draw in visitors, as potential sources of business.
O’Keefe, the Metropolis Cycles
owner, previously managed The
Hub of Detroit, a nonprofit bike repair business on Cass Avenue on
the southern edge of Midtown.
Based on his experience there, he
believes greater downtown Detroit
has enough sales capacity to absorb
the new retailers.
“Bikes are a versatile product.
When times are good, people buy
them to enjoy life. When times are
tough, everybody buys a bike to get
around and go to work,” said
O’Keefe, who got into bikes 10 years
when his car was stolen and he
needed cheap transportation.
The winters are tough, but scaling back on staff hours helps muddle through it. At the Hub, it was especially tough for about two
months, he said.
Not that he thinks it will be easy.
O’Keefe left his job as general manager at The Hub last year to work on
this project. He is funding the new
business with credit cards and
parental financing, he said. Ted Sliwinski, also a former Hub employee, will oversee the business and
staff of four people with O’Keefe.
It’s a myth, he said, that Detroit is
a land of free real estate where anyone can open a shop with very little
money, despite suggestions to the
“We’re paying market rates for
my rent, and it’s my friend who
owns the building,” O’Keefe said.
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been in decades, it’s an open question as to whether downtown Detroit has the capacity to support
several new shops.
“If a ton of shops open up, the
other guys are going to have to figure
what their niche is going to be. We’re
pretty well established,” said Hughes,
who also warns would-be bike retailers not to underestimate the Michigan winter. “You have five or six
months of the year to make money.”
Kelli Kavanaugh, owner of
Wheelhouse Detroit, opened her
store in 2008, which is enough to
make it a veteran of the scene. She’s
said she’s had trouble getting the
message out that her shop does retail and service, in addition to the
rentals and tours it’s known for.
But she said the downtown bicycle market is healthy, and winters
are manageable if the business
plans ahead and builds a financial
cushion to get through it.
“We’ve been growing our customer base for eight years,” Kavanaugh said.
Wheelhouse plans to open another location in greater downtown
Detroit (separate from the Eastern
Market one) by fall. The business is
trying to get into a 2,000-squarefoot space — a big step up compared to its 500-square-foot spot on
the river. Further details are on hold
until a lease is signed.
Kiesling points to the increasing
population downtown and the
many large group bike events and
groups, such as Slow Roll and Tour
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6:56 PM
Page 1
KROGER, from Page 3: ‘No way a small grocer like Hiller’s would be able to compete’
fered this opportunity,” Homco
said. “We’re working closely, hand in
hand with Jim Hiller.”
CEO Jim Hiller said that as he
looks to the future of the supermarket business, it belongs more to
companies like Kroger than it does
to companies like his.
“There’s no way a small grocer
like Hiller’s would be able to compete pricewise on national brands
and private labels,” he said.
Kroger has succeeded in doing
what virtually no other grocery has,
Hiller said. “While they bring the
pricing advantages of a national
grocery store, they are intimately involved and supportive of local
growers,” just as Hiller’s is.
“What do I say to my customers?
I’ve got a Kroger (Plus) card, and so
should you.”
The decision to sell was one his
family as a whole made, he said.
In striking the deal, “we had in
mind the future and security of our
employees, and as a family, the
ability to kind of untie ourselves
from our business which has been
so integral for our family for 75
Sid Hiller opened the downtown
Detroit butcher shop that started it
all in 1941. Ten years later, he opened
the family’s first grocery store in
Berkley, Jim Hiller said. Fast forward
a few decades, and the company reported 2013 revenue of $168 million,
ranking No. 100 on Crain’s 2014 list of
the largest 200 privately held companies in metro Detroit.
The Hiller’s stores in West Bloomfield, Ann Arbor, Northville, Plymouth, South Lyon and two in
Commerce Township will become
part of Kroger’s Michigan division in
July when the deal is finalized.
Kroger said it will assume the
lease for the Hiller’s store at 3010
Union Lake Road in Commerce
Township, but it will close the store
there, given that its own recently
built store and fuel center is across
the street.
Kroger had been looking to enter
the Commerce Township area even
prior to the deal with Hiller’s, said
Communications Manager Ken
McClure, who was a COO of Hiller’s
before joining Kroger in January
It had already submitted a site
plan for a marketplace format location near the second Commerce
Township Hiller’s location, prior to
the Hiller’s deal, he said, noting, “the
plan at this point is to maintain that
Hiller’s location.”
The Hiller’s locations will be rebranded as Kroger stores and merge
into Kroger’s Michigan division,
adding to its current 123 stores and
64 fuel centers in the state.
The stores, which range from
30,000 to 70,000 square feet, will fit
nicely with Kroger’s format, given
that its average Michigan division
store is 55,000 square feet, Homco
Staffing situation
Kroger plans to interview and
hire as many of Hiller’s 800 employees as possible, Homco said.
There are 900 job openings right
now across the company’s Novibased Michigan division, “and there
will be more because of our
growth,” she said.
The Hiller’s acquisition enables
Kroger to obtain locations in popular,
dense markets at grandfathered lease
rates, said Emily Todebush, client
strategist at Southfield-based retail
consulting firm JGA Inc. in an email.
“I think Hiller’s was an interesting
choice for Kroger to acquire, in that
it fits nicely into the Kroger model,
but helps them expand into some
specialty and ethnic food markets
that Kroger hasn’t seemingly been
too successful in penetrating.”
Hiller’s has been a leader in the
“upscale” grocery market specializing in their meats, seafood and specialty food items such as organic,
healthy products, said retail consultant Cindy Ciura, principal of
CC Consulting LLC in Bloomfield
Many customers shopped
Hiller’s specifically for those items
and did general shopping at stores
like Kroger, Meijer and Wal-Mart, she
“As Kroger has been expanding
and inching into Hiller’s upscale
markets — Commerce, for example
— there is a huge emphasis on the
healthy section of the store called
Simple Truth.”
With the rising popularity of this
Kroger brand, the chain’s continued
emphasis on meat and seafood special pricing and new, expanded organic areas in the produce departments, “it became harder and
harder for Hiller’s to compete as a
smaller grocer without the huge
buying power that Kroger has.”
Retaining customers
How does Kroger plan to retain
the customers who were loyal to
Hiller’s as Kroger customers? After
Crain’s posted news of the acquisi-
tion plans online Friday, some readers weighed in with concerns about
whether the quality of specialty
goods and produce could be maintained under the Kroger flag.
But Kroger has a very fresh reputation and also sells many local
products, like Hiller’s, Homco said.
“The ethnic piece is something we
hope to learn from Hiller’s.
“Hopefully, we’ll do a good job of
transitioning those stores.”
Kroger plans to do some minor
updates to the Hiller’s stores, largely
on the front-end systems since it
uses more technology, Homco said.
The Northville store may need a little more remodeling, she said, and
may take a little longer to reopen
after ownership transfers.
Kroger will spend $150 million on
new stores, remodels and expansion
in the Michigan division this year,
the most it’s ever spent in a single
year, Homco said, noting it sees opportunity in the Michigan market to
fill those “pockets of void.”
Aside from the site plan it submitted in Commerce Township,
Kroger has site plans pending for a
store in Royal Oak at 12 Mile Road
and Stephenson Highway, and another in the Grosse Pointe-to-Roseville shopping area, McClure
said. 䡲
Sherri Welch: (313) 446-1694
Twitter: @SherriWelch
SAKTHI, from Page 3: Supplier hires ex-offenders
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Department of Corrections to provide parolees with certificates of
employability, detailing which educational programs they completed,
conduct history and work record.
The law also established legal
protections for employers who hire
The corrections department
spends, on average, $30 million annually on re-entry services for
parolees, which include a mandatory GED program if they did receive a
high school diploma as well as training services, said Chris Gautz, the department’s public information officer.
“As a department, we have been
designing programs that encourage
the input of specific employers who
have specific needs for skills their
future employees need to have,”
Gautz said.
“We also work with local and regional partners to identify emerging sectors so that we can position
our parolees for jobs in those fields
by training them for those types of
jobs while they are incarcerated.”
Gautz previously worked as
Crain’s Lansing correspondent.
The corrections program offers
classes in business education, auto
tech, building trades, custodial
maintenance, food tech, horticulture, optical, welding and machine
Julie Fream, president of the
Troy-based Original Equipment Sup pliers Association , said the organization isn’t aware of other suppliers
making a formal commitment to
hire parolees, but does see this as
part of the growing social progressiveness of
the industry.
“This is part of
the changing demographics of
Julie Fream: A
trend toward “social Fream said. “As
more millennials
— which see social commitment as instrumental in
choosing a company — come into
the workforce, we’re going to see this
more and more.”
Sakthi’s desire to hire ex-offenders stems from its rapid growth in
Southeast Michigan, as well as
supporting the community, Verma
The auto supplier received a
$1.5 million grant in 2012 to establish the Detroit location, a former
ArvinMeritor plant. The state will
make the final payout for that grant
in June, the Michigan Economic De velopment Corp. said.
Sakthi entered the North American market in 2012 after acquiring
the former ArvinMeritor plant on
West Fort Street. The supplier acquired the plant for $7.6 million, according to real estate information
database CoStar Group.
The Michigan Strategic Fund
awarded Sakthi with a $1.5 million
grant toward the plant.
Now, Sakthi is doubling down in
Detroit with the planned $31.9 million expansion.
The project, supported by a $3.5
million performance-based grant
from the MSF, is expected to create
350 new jobs, the MEDC said last
Sakthi is expanding to produce
its aluminum castings,which it will
supply to North American and
transplant tier-one suppliers and
automakers. Sakthi plans to shift
90 percent of its aluminum castings
work, which is currently done oversees, to its Detroit plant.
The city of Detroit is also planning
to recommend a Renaissance Zone
tax exemption for the expansion, as
well as a property tax abatement.
Sakthi is also planning to redevelop the abandoned former Southwestern High School through a
newly created joint venture.
Verma said the plans are not solidified, but the project will include
retrofitting the school to include office space, an educational aspect
tied to the community and warehousing space.
Verma said $10 million will be
spent on the redevelopment, but that
figure could shoot up to
$30 million if Sakthi sees opportunity
for warehousing products tied to the
construction of the New International
Trade Crossing Bridge near its site.
Preparation work for the $2.1 billion publicly owned bridge project,
funded by the Canadian government, has already begun.
“We see so much opportunity in
Detroit,” Verma said. “We have good
support, are finding good people
and are finding the success to help
rewrite this city’s history.” 䡲
Dustin Walsh: (313) 446-6042
Twitter: @dustinpwalsh
5:48 PM
Page 1
GRIDLOCK, from Page 1: Congestion tarnishes Macomb County’s ‘Golden Corridor’
gone” on Hall Road, Sowerby said.
“Some of that is because of the intense competition, and some of
that is because if you want to go out
for a casual dinner, not everyone
wants to fight the traffic. M-59 is optional if you’re going out (to eat).
“It’s the yin and yang of being on
a powerful corridor. Merchants
don’t like the traffic, but they love
the people.”
The average daily traffic count on
M-59 near M-53 — the busiest section of the road, according to the
Michigan Department of Transporta tion — is 102,700 vehicles. While
that falls short of the 128,300 vehicles that travel I-696, about nine
miles due south, M-59 offers many
more entrance and exit points than
its controlled-access cousin. And
that means one thing: slow traffic.
In terms of moving traffic smoothly, sometimes Hall Road works and
sometimes it doesn’t, said Robert
Hoepfner, director of the Macomb
County Department of Roads.
“It probably carries more traffic
at rush hour than it was designed
for,” said Hoepfner, whose agency
does not have authority over the
state road. “I would prefer not to
travel it on rush hour. If you’re not in
rush hour, it’s a great road.”
The most sluggish section seems
to be from Garfield Road to just east
of Romeo Plank Road, Hoepfner said.
“The cause of this, in my opinion,
(is) there are a lot of traffic signals
there,” he said. “When you build
large traffic generators, this is what
you get.”
Solutions are limited, since there’s
little room for widening, he said.
Road improvements?
Get in line
MDOT, which does traffic light
timing studies every couple of
years, recognizes the issues and is
readying to take a stab at improving
traffic flow. But businesses and drivers are in for a wait before they get
any major relief.
While road crews have been
patching pavement since the beginning of April, the next major reconstruction project in the congested
corridor won’t begin until 2017.
That’s when MDOT expects to
begin a $30 million effort to rebuild
the two-mile stretch of Hall from
Delco Boulevard, just east of M-53,
to Hayes Road in both directions.
MDOT expects to finish the design
phase of the project, which will
begin in June, in December 2016.
It’s too early to determine
whether rebuilding that part of the
road, which is four lanes in each direction, will take one or two years,
said Colin Forbes, the MDOT projects and contracts administration
engineer who oversees work in that
Development continues on east edge Hall corridor
The Macomb County portion of the M-59 corridor extends all the way from
Dequindre Road to just east of I-94, with the bulk of the development and
congestion concentrated between Van Dyke Avenue and Romeo Plank Road.
Communities along that stretch include Utica, Sterling Heights and Shelby,
Macomb and Clinton townships.
While much of the Hall Road corridor is fully developed, areas on the eastern
edge are still filling in.
For example, development continues at Chesterfield Corners, a shopping
center north of Hall and east of Gratiot Avenue. Kicking off in 2001 with
construction of Wal-Mart, the development now includes Menards, Bob
Evans, Hampton Inn, Holiday Inn and other businesses.
Colin Forbes, the Michigan Department of Transportation projects and
contracts administration engineer who oversees work in that section of Macomb
County, recalls that just a few decades ago Hall Road was mostly farmland.
“It’s just amazing, the last 25 years, how it has built up,” he said.
section of Macomb County. When
it’s done, it should improve traffic
flow, he said.
“Reconstruction is going to help
with mobility,” Forbes said. “We’re
going to look at pretty much everything. If we can improve right turn
lanes, median lanes — we’re going
to look at all of that.”
MDOT decided to tackle that
stretch of Hall as part of its regular
evaluation of roads it maintains. The
agency determined patchwork fixes
would no longer be cost-effective.
“Every year, we review our road
conditions, countywide and regionwide,” Forbes said. “The road is showing some significant deterioration
over the last five years. There comes a
point when it doesn’t make sense to
spend significant dollars on repairs.”
The reconstruction of Hall from
M-53 to Hayes could lead into a future phase of road improvement,
but MDOT hasn’t made any definite
plans, Forbes said. That $36 million
phase would involve the two-mile
stretch from Hayes to Romeo Plank.
“We’re going to be reviewing the
need to increase capacity,” Forbes
said of the span, which carries
60,000 vehicles a day.
At Garfield Road, headed east,
Hall decreases from four lanes to
three. MDOT is considering adding
a fourth lane there.
The agency also would look at
improving traffic signal timing.
MDOT will design the expansion
at the same time as the M-53 to
Hayes project, Forbes said. But the
second project will have to overcome
several hurdles — including completion of an environmental impact assessment and getting input from
business owners who would be affected by a major reconstruction
The project’s biggest challenge,
though, will be MDOT’s ability to
secure funds. With a crumbling infrastructure and a Tuesday ballot
measure to increase road funding
uncertain to get voter approval, the
state is in a cash crunch.
“Hayes to Romeo Plank is not in
our five-year plan now,” Forbes said.
Alternate routes?
In the near term, MDOT is focusing on its night and weekend pavement repair program, which is expected to end in mid-July. Crews are
working on both sides of Hall between Elizabeth Road and I-94.
MDOT is conducting the work
from Friday evenings to 5 a.m. on
Mondays to minimize the impact on
traffic, Forbes said. Because the section of road is east of Hall’s restaurant district, business owners are less
impacted by construction, he said.
Bottom line, there is no easy way
to make a major fix to gridlock, said
Mike Labadie, a transportation engineer and group manager in the
Farmington Hills office of Fleis and
VandenBrink . The Grand Rapidsbased company is a consultant for
MDOT, township government, developers and others.
Creating a northern I-696, a
below-ground freeway using service
drives to reach businesses, would be
prohibitively expensive, he said.
“(And) think of the impact on the
businesses that rely on passerby
traffic,” he said.
Other solutions could be to create limited-access lanes near the
median for express traffic or to create higher-capacity, alternate routes
north or south of M-59.
With limited funds and serious
road safety problems, though, the
state’s first priority won’t be improving traffic flow, he said.
“When you’ve got bridges falling
down, maybe you better fix those
first,” he said.
A mature market
The corridor has been taxed by
decades of population growth, and
the resulting development boom of
the 1990s and early 2000s. The county’s population increased from about
788,000 in 2000 to an estimated
860,000 in 2014 — a 9.1 percent increase, according to U.S. Census figures.
Sowerby, the broker, has helped
move that growth along.
In the past year, he has done
three major deals on Hall:
䡲 Crest Automotive Group’s sale
of its dealership between Groesbeck
Highway and Gratiot Avenue to
Causley Automotive Group LLC ,
which now operates Causley
Hyundai Mazda.
䡲 Scottsdale, Ariz.-based Stonegate Properties’ sale of 6.5 acres of
land between Card Road and Elizabeth Road in Clinton Township to All
Pro Motors LLC, of New Jersey, for the
planned All Pro Nissan dealership.
䡲 Sale of the closed Stu Evans Lincoln Mercury dealership near
Romeo Plank in Clinton Township
to Scottsdale, Ariz.-based Spirit Capital LLC. The site now is home to an
LA Fitness gym.
Because the M-59 corridor is
largely mature, much of the development going forward will be repurposing tired properties.
“What you’re seeing now is what I
just did with LA Fitness,” Sowerby
said. “You don’t see any big bang
going on, but you see a lot of stuff
getting recreated.”
Only about three or four large
parcels remain undeveloped in the
corridor — including a 9.2-acre site
east of the Causley dealership.
Sowerby has the site listed. That
means further development isn’t
likely to ratchet up the gridlock
much more, Sowerby said.
“The good news is, I don’t think
the traffic is going to get any worse.” 䡲
The average daily traffic count on M-59 nearM-53 – the busiest section ofthe road – is 102,700 vehicles.Furthercomplicating traffic: There are many exit and entrance points.
5:28 PM
Page 1
NANOVERE, from Page 3: Chemist’s coating defies elements, doubles company revenue
apply Nano-Clear to passenger ship
lifeboats from the world’s major
cruise lines, such as Cunard , Royal
Caribbean, P&O Cruises and Holland
America , Choate said. More cruise
lines are interested.
Additionally, Southport, Conn.based industrial shipper Principal
Maritime Management LLC will use
Nano-Clear on its fleet of Princemar
crude oil tankers, he said.
On land, Chicago-based GATX
Corp. is among the rail car companies using Nano-Clear to preserve
thousands of tanker cars crossing
the country.
“The environment on a train,
with all the
they’re carrying,
is pretty harsh,”
Choate, 49, said.
Japanese elecThomas Choate: tronics
“It’s not magic pixie Toshiba Corp. has
dust or snake oil. It used Nano-Clear
is real science.”
for factory safety
applications, according to Nanovere’s client list.
Off the shelf: $269 a gallon
Such clients are fueling the small
company’s growth: Nanovere’s revenue in 2014 was $1.3 million,
Choate said, and he’s estimating $2
million for this year and $4 million
for 2016. He predicts it will keep
doubling annually as the company
expands its production space and
adds more clients.
Some revenue is derived from
the licensing of polymers for coatings produced by other companies
such as Nippon Paint , Choate said,
but most comes from the sale of
Nano-Clear. It retails for $269 a gallon but is sold to distributors in bulk
at wholesale prices.
For the cruise line industry, it
takes 1 to 2 gallons of Nano-Clear to
coat a standard commercial
lifeboat, Choate said. Lifeboats can
be coated in 24 hours and air-dried,
he said, meaning they can do a
ship’s inventory of boats in about a
week. (Two lifeboats at a time is typical while a vessel is in dry dock.)
Today’s typical cruise ship, with
several thousand passengers and
crew aboard, has anywhere from 18
to 26 lifeboats. They usually seat 150
people (and for anyone doing the
math, the ships have dozens of large
inflatable life rafts to complement
the traditional lifeboats).
Marine paints and finishes were
a $430 million business domestically in 2010, according to the most recent data available from a U.S. Cen sus Bureau’s industrial report via the
Washington, D.C.-based American
Coatings Association.
The products are a niche in the
$5.3 billion coatings industry, the
association said.
The vendors using Nano-Clear
sing its praises.
“Look at any cruise ship lifeboat,
and its orange is badly oxidized. It’s
the same problem for any gel coat
surface,” said Dave Ashley, director
of Nanotech Marine Services, based
in the English port of Southampton.
The British office of cruise giant
How Nano-Clear works
of dollars. There are far more oxidized surfaces than new products.”
Nano-Clear is an anti-oxidant
industrial top coat that fights the
corrosive effects of long-term
exposure to air, sunlight and
chemicals. The application also is
extremely hard, helping resist
chipping and abrasion.
From lifeboats to oil rigs
The material is very dense, has low
viscosity, deeply penetrates the
surface, and exceeds automotive
OEM standards.
Without revealing his scientific trade
secrets, founder Thomas Choate
said the key to Nano-Clear’s
protective and restorative properties
comes from his lab work reducing
the size of the polymers within the
coating’s molecular makeup, along
with its ability to react to the
surface to which it adheres.
“We start with the architecture of
the polymer,” Choate said.
What sets the product apart from
similar coatings is that it can be
applied directly to already oxidized
surfaces, not just new ones. Since
most surfaces in need of protection
already are out in the world, that’s a
huge potential market.
Carnival Corp. & plc hired Ashley’s
company last year to solve the
lifeboat oxidation issue for the company’s vessels based in the United
Nanotech Marine specializes in
high-end finishes for yachts and
boats, but a conversation between
Ashley’s son and a Carnival executive whose boat was being refinished eventually led to a successful
test of the Nano-Clear coating on
the liner Queen Elizabeth’s lifeboats
during Mediterranean cruising.
searched for a product that would
provide long-lasting oxidation resistance, and eventually settled on
Nano-Clear after experimented
with it, Ashley said.
“We were quite skeptical at first.
It’s not an easy product to apply,”
Ashley said. “Many boat yards don’t
allow spray finishes.”
Instead, they had to perfect a
method of applying the coating
with rollers.
Nanotech opted to use NanoClear for the test on the Queen Elizabeth, a Carnival vessel operated by
its upscale Cunard Line.
“We applied a patch on one of
the boats they suggested, and we
left it with them. After four months,
they observed the Nano-Clear coating working, while the surface
around the test patch was already
starting to fail and show oxidation,”
Ashley said.
Everyone involved was pleased,
and the market opened for Nanotech and Nano-Clear.
“They’ve indicated they want all of
the lifeboats done. They want Queen
Mary 2 done early next year,” Ashley
said. “Once we got those guys on
board, we found it would be much
easier to penetrate the market.”
Dental roots
One of Nanovere’s major selling
Dave Ashley,director of Southampton,England-based Nanotech Marine Services,
inspects a lifeboat from the cruise ship Queen Victoria after it was coated with
Nano-Clear from Brighton-based Nanovere Technologies.
points for refinishing products like
lifeboats is gloss protection. In the
case of lifeboats, keeping the finish
bright and shiny is a safety necessity.
The gloss loss for Nano-Clearcoated surfaces over 10 years is just
4 percent to 5 percent, Choate said,
while other coatings result is a 30
percent to 40 percent loss of shine
over that time.
“It’s not magic pixie dust or snake
oil. It is real science, real chemistry,
validating by companies around the
world,” Choate said.
It’s also science that Choate started
learning about early in his career —
very early. As a teenager, Choate got
his start in R&D by creating dental
materials such as crowns and dentures, and eventually created a dental
supply and manufacturing firm.
“I saw gaps in the dental industry
from a materials standpoint,” he
said, adding that as a teenager he
was creating teeth for the Detroit Pistons and then for professors while a
student at the University of Michigan.
He later sold his dental company
to Pennsylvania-based American
Dental Supply and used undisclosed
the proceeds — along with his own
assets, but no borrowing — to launch
Nanovere in 2003.
“I took everything that I could
and didn’t borrow from anyone, and
changed my lifestyle to reduce expenses, and I put everything into focusing full time on the research and
development,” he said.
He used more than cash from the
dental business to create Nanovere;
he said his experience in creating
distribution channels and creating
relationships gave him a road map
for the new company. He also used
his knowledge of surface protections from dentistry and applied
them to industrial surfaces.
“I took from the concepts of the
dental industry, including high abrasion resistance, and developed the
materials (for the coatings company),” he said.
After launching Nanovere and
spending years experimenting with
polymers, he eventually developed
a series of industrial coatings in
conjunction with BASF, Bayer MaterialSciences and Alcoa.
Choate said he spent Nanovere’s
first decade mostly concentrating
on research and design before moving into selling the products.
“In the last three years, we focused on taking our own intellectual property and presenting it to the
marketplace,” he said.
Including Choate and his wife
(Katie, vice president of operations),
the company had eight employees.
Choate said he’s the primary
chemist, and the manufacturing
processes are kept secret.
Nanovere has a handful of investors who own 20 percent of the
company after buying in for about
$1 million, Choate said. He owns
the remaining 80 percent, and said
he’s tried to buy out his investors,
but they refuse because of the rapidly improving financial success of
the company.
Some of Nanovere’s other industrial coatings are manufactured
under license in China for the Asian
market, but Nano-Clear is solely
produced in Brighton at the firm’s
3,000-square-foot facility. It can
make about 1,000 gallons a day.
The plan is to find a 6,000- to
10,000-square-foot building in 2016
because of increased production
needs, Choate said.
Because the company is small,
and demand is growing, the business plan is to eventually find a
global company that needs to fill a
gap in its product line, he said.
“As we scale, we’ll partner with
leading paint formulators,” Choate
As revenue increases, he intends
to add a CEO to handle the business
aspect of Nanovere, he said, because he knows running the company isn’t what he does.
“For now, I’m focusing on being
the CEO, running the company,
building out the revenue,” he said.
“But at the end of the day, my core
competency is in the laboratory. I
know I’m not the guy long term. I
have a family. I want work-life balance. I’m not the guy to bring this to
a billion dollars.”
Choate said he’s open to a sale,
but it’s premature now. He would
sell once revenue has increased significantly.
“It’ll take far more revenue,” he
said. “The value of this tech in the
global marketplace is in the billions
What broke the market open for
Nanovere was getting into that
cruise ship market.
Lifeboats on cruise ships typically are re-polished or repainted every
four months, Choate said, but the
vessel owners are paying to shine a
material that’s not designed to last
in the sun — increasing maintenance lifecycle costs.
“The problem was that the polish
only lasts a few months. The material is not designed to have long-term
UV resistance,” Choate said.
Oxidation is the enemy.
In simple terms, oxidation is the
when a surface is exposed to oxygen
and over time the interaction causes
a loss of electrons — causing rust,
spoiled fruit, or the dulled surface of a
lifeboat hull. Sunlight hastens the reaction.
Ship and boat hulls are exposed
not only to salty sea air, but relentless sunshine, especially cruise
ships in the bright Caribbean.
Hence, the glossy orange (or yellow) and white hulls of lifeboats —
intended to be sharp colors that contrast against the darker sea water to
visually aid rescue — soon fade.
And that’s a costly problem for
ship owners, especially those hauling hundreds of thousands of passengers for whom safety is a priority.
“It affects appearance and safety.
A lightly oxidized boat is not as
bright,” Choate said. “Everything
needs to be immaculate on that
The coating eventually could be
used to seal the entire hull of ships,
Choate said.
The 26 lifeboats of the Carnivalowned Azura, sailing under the
P&O Cruises brand, are getting
Nano-Clear treatments this year.
It’s not an overnight revenue
windfall, however. Cruise ships typically do a full re-fit, including freshening the lifeboats, every three to
four years, Ashley said.
Nanotech Marine has an upcoming contract to coat the 18 lifeboats
from the Queen Victoria, the sister
ship of the Queen Elizabeth and
Queen Mary 2.
Germany’s Fassmer GmbH & Co.
KG , whose maritime services include manufacturing commercial
lifeboats, intends to use Nano-Clear
(via Nanotech Marine’s services) on
an order of 64 lifeboats for a cruise
line in 2017-18, Ashley said. Other
shipping lines and even oil rig firms
have been calling his office to ask
about Nano-Clear, he added.
“Really, Tom’s product is the only
coating quite like it,” he said.
Dennis Haag, owner of Lennox
Twp.-based Strategic Visionary So lutions LLC , called Nano-Clear a
“paradigm shift” in lifecycle maintenance budgeting. His firm is using
Nano-Clear to refinish the epoxy
coating in some of Michigan State
University’s pools.
“Everyone has a corrosion problem. It’s a fact of life,” Haag said. 䡲
Bill Shea: (313) 446-1626
Twitter: @Bill_Shea19
7:02 PM
Page 1
DVP, from Page 1: VC entity reaffirms investment pace, focus
might demand quick returns.
“Our limited partners all have a
long-term view of this business and
what we’re trying to accomplish, and
what it takes to
grow an ecosystem,” said DVP
That has allowed DVP to
grow the local
industry to the
Jake Cohen:
point where VC
Growing an
Arbor, the state’s
normal hotbed of VC activity, in
Detroit ranked 38th nationally, according to National Venture Capital
Association, with $106.1 million invested in 18 deals. Ann Arbor was
No. 46, with $67.2 million in 21 deals.
“I give them credit,” said a venture
capitalist who asked to remain
anonymous. “They got the VC community, which can be cynical, excited
about what was going on in Detroit.”
The question is whether they will
continue to look at Detroit if DVP
isn’t stable.
Said a second area venture capitalist, who also asked not to be
named: “People are worried that if
DVP becomes inactive, Detroit will
stop being a place you can go to get
a deal done.”
Hermelin reiterated Gilbert’s
commitment to Detroit.
“Dan views entrepreneurship
and the tech startup environment is
one of the key legs on the stool that
is going to reposition Detroit for
economic growth, and we’re going
to continue to invest in it.”
That may be because Gilbert has
objectives beyond just reaping profits. For example, said one venture
capitalist, many of the companies
pay rent in Gilbert-owned buildings
and bodies in seats help Gilbert sell
Detroit as a place that is open for
A couple of departures
When Linkner left DVP in November, he told Crain’s he wanted to
pursue his own entrepreneurial interests, primarily his book writing
and speeches. Subsequently he
launched Fuel Leadership , a oneday leadership conference that had
its debut in Detroit in April and
which Linkner, who co-founded
Companies closed or sold by DVP
HiredMYWay: Closed in 2013. Started as a hiring site but closed after several
Chalkfly: Sold last November. At the time of the sale, Jake Cohen declined to
say whether the deal could be considered a successful exit for DVP. Sources
familiar with the deal say the company was sold as a way to salvage
something for its investors.
StyleCaster: Sold. A New York-based fashion site for young women.
Sociocast: Sold. A New York-based data analytics company.
Flud: Closed. A California-based social news site.
Miso: Closed. A music education app.
Success stories from the DVP portfolio
LevelEleven, which makes sales motivation software, was one of 12
companies nationwide that presented at the annual Google Demo Day in
Silicon Valley in April, winning the Game Changer award.
Detroit Labs, which designs custom smartphone apps for customers, longago outgrew its incubator space in the Madison Building and keeps adding to
its space in the 1520 Woodward building.
In January, iRule closed on an investment round of $2.5 million. The round was
led by Kramer Electronics Ltd., a large Israeli company that will distribute
iRule’s products for controlling high-end home and office entertainment.
Are You A Human began as a project by University of Michigan students to
create simple games that websites could use to replace captchas, the often
indecipherable string of letters and numbers that site visitors are supposed
to identify. The company now uses algorithms to identify which visitors to
sites are humans and which are bots. Last week, it announced a contract with
PK4 Media that will allow the Los Angeles-based company to charge a higher
rate by being able to show its clients that ads are only shown to humans, not
Marxent Labs designs 3-D product demos for manufacturers and retailers.
Marxent Labs launched in June 2011 with an app that allowed anonymous
social chat. Marxent now operates as a company that develops iOS and
Android-augmented reality apps and games for retail customers and
marketing campaigns.
ePrize Inc. in
1999, wants to
take worldwide.
Linkner is still
a limited partner
in DVP and told
Crain’s last week:
“I continue to be
Josh Linkner: “I
excited at the
continue to be
impact DVP is
excited” by DVP.
making in the
Detroit entrepreneurial scene and remain optimistic that the fund will deliver a
positive outcome.”
At the time of Linkner’s departure,
Hermelin said he would replace
Linkner as interim CEO and managing partner. Now, though, he says
DVP is not actively seeking a replacement CEO and for now he is content
to spend more time at DVP as its
managing partner.
Hermelin also remains as managing partner of Detroit-based
Rockbridge Growth Equity LLC, a private equity firm he co-founded in
2007 with Kevin Prokop and Gilbert.
Another departure from DVP in
December fueled more speculation.
Partner Ted Serbinski, a member of
the Crain’s class of 40 under 40 last
year, announced in December he
was leaving to join Techstars , the
Boulder, Colo.-based organization
that provides mentoring and seed
money for tech companies.
Serbinski is heading up Techstars
Mobility, an accelerator program
that will be based in downtown Detroit and hopes to launch 30 transportation-related startups.
The timing of Serbinki’s move,
coming on the heels of Linkner’s departure, was coincidental, say Hermelin and Cohen.
Batting .300 is the goal
These companies have significant mention in this week’s Crain’s Detroit Business:
Anton, Sowerby & Associates ...................... 1
Blossom Heath Inn ........................................ 14
Blue Economy Initiative ..................................11
Continental Services ......................................14
Detroit Bikes .................................................. 17
Detroit Venture Partners ................................ 1
Downtown Detroit Bike Shop ...................... 17
EBuy Media........................................................ 6
Fifth Third Bank .............................................. 12
First State Bank .............................................. 12
Fleis and VandenBrink ....................................19
General Motors ................................................ 5
Hiller’s Markets ................................................ 3
Homestead Home Health Care .................. 10
Honey Baked Ham ..........................................18
Kosch Hospitality .......................................... 14
Kroger Co. of Michigan .................................... 3
Lawrence Technological University .............. 7
Macomb Community College ........................11
Macomb County Department of Roads .... 19
Metropolis Cycles .......................................... 17
Michigan Department of Corrections ..........3
Michigan Department of Transportation .. 19
Moceri Cos. ........................................................5
Motorless City ................................................ 17
Nanovere Technologies....................................3
Omega Talent .................................................. 12
Original Equipment Suppliers Association .. 18
Presbyterian Villages of Michigan .............. 10
St. John Macomb-Oakland Hospital .......... 12
Sakthi Automotive Group USA ..........................3
Tanner Friedman ............................................ 6
Taubman Foundation .................................... 7
UHY Advisors ................................................ 12
U.S.Army Tacom Life Cycle Manage. Comm. ..12
University of Michigan .............................. 7, 10
Victor International ........................................ 4
Warner Norcross & Judd .............................. 12
Wheelhouse Detroit ...................................... 17
DVP, however, has been paring
down its portfolio companies.
Cohen said DVP currently has 15
active companies, having shut
down three firms and sold off three
others that were struggling. Those
six accounted for 29 percent of
DVP’s portfolio at its peak.
“The nature of seed-stage investing is if you bat .300, you’re in the
Hall of Fame, like baseball,” said
That is in line with national expectations. According to a 2012
study by Shikhar Ghosh, a senior
lecturer at Harvard Business School,
more than 30 percent of firms receiving VC funding between 2004
and 2010 failed outright, with their
assets being liquidated.
Since that includes later-stage as
well as seed-stage investing, the
percentage of failure is likely higher
for seed-stage companies.
“Not all your early-stage investments are going to work out. At
some point you have to say, ‘That
company is not going to make it,’
and move away. DVP is doing just
what it needs to do,” said Adrian
Fortino, the former Invest Detroit
vice president who opened the Ann
Arbor office of the Houston-based
Mercury Fund last year.
But it was the collapse of a funding
round for another highly touted DVP
company, Ginkgotree Inc., that really
fueled DVP rumors. The firm was
founded in Georgia but company cofounder and CEO Scott Hasbrouck
moved it to Detroit, and into Gilbert’s
Madison Building, in 2013 after getting
a DVP-led investment of $750,000.
Last fall, Hasbrouck told Crain’s
he was about to sign documents for
a funding round of $6 million for his
company. It has licenses with book
publishers to allow university professors to craft their own course
material at a fraction of the price to
students compared with traditional
One Ann Arbor venture capitalist
who asked not to be named had
committed to the deal, which he
thought was imminent, only to be
told the deal had collapsed.
Hasbrouck told Crain’s that a
book publisher had verbally committed to invest $2 million in that
round, but changed its mind after a
bad quarter. A difference of opinion
with DVP executives in how to fund
the company on an interim basis
while it tried to put the $6 million
round back together led Hasbrouck
and his co-founder and wife, Lida,
to leave the company late last year.
They are in the process of moving
to San Francisco, where he has cofounded a new company, Convoy,
which provides consumer electronics technical help. Cohen said that
DVP still has hopes for Ginkgotree
and has started two pilot programs
with new customers.
Cohen said the perception that
DVP has slowed down its pace of investing is mistaken.
He said the company invested
$12 million last year, the most in its
three full years of investing. However, most of that went to Detroitbased LevelEleven , iRule LLC and
Dayton, Ohio-based Marxent Labs.
DVP invested in just one new
company last year, Detroit-based
Spirit Shop, an online provider of officially licensed merchandise. And
so far it has made one investment
this year: market analytics firm
Reach Influence.
Still, that may be the smarter
pace, say local VCs, and Hermelin
doesn’t bristle at the feedback.
“DVP was a startup, and with any
startup you can say, what would
you have done differently?” asked
Hermelin. “There are things we
would do differently. ... But we
wanted to establish companies on
the ground quickly. We wanted to
get some momentum.” 䡲
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6:26 PM
Page 1
MSX to move North American
operations base to Southfield
Root Restaurant duo to open
farm-to-table spot in Hazel Park
SX International Inc.
plans to relocate its
North American
operations center
and 325 employees from Warren
to Travelers Towers in Southfield
during the third quarter. The new,
36,000-square-foot location will
provide 30 percent more space,
the company said. The move follows MSX’s relocation of its global
headquarters with about 15 of its
executives to Ally Detroit Center,
formerly One Detroit Center, in
downtown Detroit from Warren
in 2013.
䡲 The Grosse Pointe War Memorial Association named University of
Michigan fundraiser Ann Rock, 60,
its first vice president of institutional advancement. Rock, who
will be the organization’s chief
fundraising officer, had been director of development for the UM
William L. Clements Library.
䡲 Crain’s Detroit Business and
Bridge Magazine hired Lansing
State Journal business reporter
Lindsay VanHulle, 29, as Lansing
correspondent in a joint venture
for the publications. Bridge is a
thrice-weekly online news-andanalysis publication of the Ann
Arbor-based nonpartisan nonprofit Center for Michigan. VanHulle begins her post May 4.
䡲 The Detroit Lions sought to bolster their offensive line in the first
round of the 2015 National Football
League draft by making a trade with
the Denver Broncos that netted two
guards. For the 23rd overall pick,
Denver sent 2007 Lions draftee
Manny Ramirez back to Detroit,
along with the 28th pick, a fifthround pick this year and a 2016
fifth-round selection. The Lions
then took Duke University’s Laken
Tomlinson with the 28th pick.
䡲 Aston Martin Lagonda Ltd.
named Detroit-based Ally Financial
Inc. as its preferred U.S. auto lender
to help the United Kingdom-based
maker of luxury sports cars expand
sales, Bloomberg reported.
䡲 Leader Dogs for the Blind
launched the public phase of its
$14.5 million campaign to renovate its canine kennel and care
center in Rochester Hills. The campaign is the largest Leader Dogs
has undertaken since its 1939
founding. The quiet phase of the
campaign, during which the nonprofit sought larger-dollar gifts
from major supporters, has raised
$12.3 million since November
2013. Leader Dogs expects to finish
work on the canine center in 2016.
䡲 Budapest-based automotive
navigation software supplier NNG
LLC last week celebrated the
grand opening of its North American headquarters in Birmingham.
The new office had a quiet opening in December.
䡲 Livonia-based Trinity Health
struck a definitive agreement to
acquire 451-bed St. Joseph’s Hospital Health Center in Syracuse,
N.Y., Modern Healthcare reported.
䡲 On Monday, the second
group of what J.P. Morgan Chase &
Co. calls its Detroit Service Corps
starts work with four metro Detroit nonprofits: the Detroit Land
Bank Authority, Youth Development Commission, Eastside Community Network and Accounting
Aid Society of Detroit. Three
Chase professionals from around
the world will be embedded at
each nonprofit for three weeks.
䡲 Michigan Gov. Rick Snyder said
he wants to break the troubled Detroit Public Schools into two entities
and will ask the Legislature to contribute more state funding to resolve nearly a half-billion dollars in
operating debt, AP reported. On
the day of Snyder’s announcement
April 30, classes were canceled at
18 Detroit schools after teachers
failed to show up.
䡲 The Nuclear Regulatory Commission approved DTE Energy Co.’s
proposal for a new nuclear power
plant in Southeast Michigan, although the Detroit-based utility
said it has no immediate plan to
build a third unit at the Fermi
plant in Monroe County, AP reported. Opponents say regulators
haven’t done enough to assess environmental impacts.
䡲 Nearly 20 downtown
Rochester boutiques and salons
are sending a clear message to
shoppers: Feel free to bring your
dog with you. The Rochester
Downtown Development Authority
has designated
the dog-friendly businesses
with a window
cling featuring
an icon of a dog
䡲 As George Hynd was officially
inaugurated as president of Oakland University, he reiterated his
commitment to liberal arts education. Hynd also expressed the need
for OU to invest resources into
community outreach, expand resi-
Detroit Digits
A numbers-focused look at the
week’s headlines:
$5 million
The amount of cash Detroit
International Bridge Co. owner
Manuel “Matty” Moroun will give
the city of Detroit to rehab
Riverside Park in exchange for the
3 acres it needs for a second
Ambassador Bridge span.
The number of helmets Xenith
LLC, co-owned by Dan Gilbert,
could produce through 2016 at its
new manufacturing space on West
Fort Street. The Massachusettsbased company announced it
would move production of its
concussion-fighting football
helmets to Detroit last week.
$27.8 million
The potential price the Fisher
Building and the Albert Kahn
Building in Detroit’s New Center
could each fetch at a June auction.
The buildings fell into default last
year on a $27 million mortgage.
The amount of the Michigan
Strategic Fund grant to support
the renovation of a vacant building in
Detroit’s Paradise Valley that will
become the new home of the
Michigan Chronicle newspaper.
The day in May known as Flower
Day at Detroit’s Eastern Market,
which is dedicated to selling
flowers ahead of locals’ spring
beatification projects. The market
is also celebrating an $8.5 million
expansion of Shed 5.
dence life and diversify international opportunities for students.
䡲 Former Detroit Tigers outfielder Kirk Gibson, who joined the
team’s local TV broadcast booth as
an analyst this season, has been
diagnosed with Parkinson’s disease. The Tigers and Fox Sports Detroit announced Gibson’s condition; the broadcaster said Gibson
will return to the air when he can.
䡲 Nancy Schlichting, CEO of
Henry Ford Health System in Detroit, and Patricia Maryland, former CEO of St. John Providence
Health System and now COO of
Ascension Health in St. Louis, are
included in the Top 25 Women in
Healthcare by Modern Healthcare,
a sibling publication of Crain’s Detroit Business.
Leader Dogs for the Blind began work to upgrade its kennel in Rochester Hills
last August and expects to complete work on its canine center in 2016.
elebrity chef James Rigato and business partner
Ed Mamou have targeted
Hazel Park for their next
restaurant venture.
The pair, partners in the successful The Root Restaurant & Bar in
White Lake Township, will open 40seat Mabel Gray later this summer
at John R and Woodward Heights in
the storefront at 23825 John R that
most recently was Liza’s Place and
Ham Heaven.
The fare will be a truncated version of the Root’s traditional American offerings (along with Korean,
Chaldean and Italian touches) that
are Michigan-sourced, but with a
farm-to-table menu that rotates
much more often, Rigato told
Crain’s. It will have a full bar.
Rigato, 30,
who appeared
on Bravo’s “Top
Chef” last season, and Mamou
will spend up to
$300,000 for the
location, which
includes the
price of the
building and a
build-out of the narrow building’s
coney island-style interior. It will be
kept intentionally imperfect, he
Roman Bonislawski of Birminghambased architects Ron & Roman Concept & Design is creating the interior.
The Mabel Gray name comes
from a folklore legend about a Lake
Michigan ghost, and a seafaring
folk song.
Quicken legal team gets busy
Managing partner Jeffrey Morganroth of Birmingham law firm
Morganroth & Morganroth PLLC and
Thomas Hefferon of Boston-based
Goodwin Procter LLP will represent
Quicken Loans Inc. in dueling lawsuits with the U.S. Department of
Justice over loans insured by the
Federal Housing Administration.
Morganroth, perhaps best known
in recent years as an attorney for
former Detroit mayoral Chief of
Staff Christine Beatty and for the late
assisted suicide advocate Jack
Kevorkian, brought Quicken’s April
17 lawsuit in Detroit against Justice
and the U.S. Department of Housing
and Urban Development.
He and Hefferon, of Goodwin’s
Washington office, are plaintiff’s
counsel in that case as well as defense counsel in the April 23 civil
suit that Justice brought against
Quicken at a federal court in Washington, D.C. Both cases stem from a
three-year investigation of FHA-insured loans originated by Quicken
starting in 2007.
The government alleges Quicken
initiated hundreds of such loans
between 2007 and 2011 that were
not eligible for the program. Quick-
en alleges violations of the federal
Administrative Procedures Act and
claims that the government wanted
Quicken to pay an exorbitant settlement and “publicly admit to
wrongdoing that the company did
not commit,” to avoid litigation.
‘SNL’ alum rounds out
cabaret’s season
“Saturday Night Live” alum and
Broadway star Ana Gasteyer will
headline the grand finale to Cabaret
313’s second season this weekend.
Gasteyer’s “Elegant Songs From a
Handsome Woman,” on stage at the
Boll Family YMCA’s Marlene Boll The atre, will be the latest installment in
what began as a passion project for
producers Sandi Reitelman and
Allan Nachman, who had the idea
two years ago to bring award-winning cabaret performers to intimate
venues throughout Detroit.
“We wanted to help the city in its
rebuilding effort in some small way
by adding a genre of music that
hasn’t been part of the cultural
scene,” said Nachman, Cabaret 313
managing producer, who is counsel
at Butzel Long and a real estate developer.
Nachman and Reitelman, the past
director of corporate gifts for the Detroit Symphony Orchestra, scout the
city for intimate performance
spaces. Like the upcoming night
with Gasteyer, Cabaret 313 usually
presents two shows in one evening;
artists typically do a meet-and-greet
and CD signing after each show.
Shows are at 7 and 10 p.m. Friday. Ticket prices range from $25 to
$125. For details, call(313) 405-5061
or visit cabaret313.org.
Busted glasses mean new biz
Every inventor has an “aha moment” story to tell. For Birmingham
entrepreneur Nancy Oram, that
story begins three years ago in a
Palace of Auburn Hills bathroom.
She was taking a break at a Detroit
Pistons game when her favorite
pair of sunglasses slipped off her
head and crashed to the floor.
After the game, Oram, who
works in purchasing at Ford Motor
Co., began researching gripping materials.
That’s how she
came up with
— sunglasses
and reading
glasses that douOram
ble as headbands.
Oram, 48, has invested $90,000 in
Nancy Oram Design LLC, through
which she secured a licensing agreement with a company based in New
York which manufactures the line of
glasses and headbands that sell for
$19.99. See Staysoneyewear.com.
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Crain’s Annual Mackinac Edition | ISSUE DATE: June 1 | EARLY CLOSE: May 14
The Detroit Regional Chamber
Mackinac Policy Conference, May 26–29.
Bonus distribution
on Thursday
at the Governor’s
Reach the area’s most influential business, civic and government
leaders, plus thousands of Crain’s Detroit Business readers who can’t
attend the Detroit Regional Chamber Mackinac Policy Conference.
This special edition includes two other powerful features:
Crain’s tenth class of
20 in their 20s — spotlighting
Page M51
June 2, 2014
2014 Mackinac Policy Conferen
the distinct accomplishments of the
area’s newest generation of business
ng small
Growing large by thinki
d by big business alone
it can’t be fuele
If entrepreneurship is to revive Detroit,
visionaries still in their twenties.
Between 2007 and 2013
, which
䡲 Served 866 companies
jobs and raised
believe in entrepreneurs.
That is what I would say
I were on the old NPR show
“This I Believe,” where
contributors talked about
range of topics that spoke
their souls, from ghosts to
power of diversity. My food
critic friend Jason Sheehan
one of the
most popular missives: I believe in
I’ve always wondered what I would
I besay if asked. I know now:
lieve in entrepreneurs.
created 1,155
more than $103 million in
follow-on investment
Building numbers
䡲 Physical tenants:
(82% occupancy
䡲 Mailbox tenants (mailbox
access to conference rooms
support services): 24
(share desk space
䡲 Co-workers 17
off the lobby):
The venture capital-fueled
startups toiling away in Dan
Gilbert’s incubator and acceleralaudtor are doing important and
able work that will
bringto huge successes. They are
showing sexy back to Detroit by
Moing the world a very different
tor City than the one
ons. But
in the ruin-porn compilati
while they are a critical piece
our future, they alone cannot
bethe resurgence of the Motor
I believe in their hustle. I
It will take an entrepreneurial
lieve in their drive. I believe
deculture of entreprea
their unwillingness to accept
neurship, rather than a myopic
feat. I believe in their ability
opportunities needed in the
cus on one industry, to grow
welding and other skilled trades
pick themselves up and start
in MichiTechShop in Allen Park provides
economy and create jobs
in the
again. I believe in their willingand checked shirts sitting
gan. Anything else is an old-school
profits. The result of that
ness to see opportunity where
Madison Building,” said
jobs that allow people to support
model of economic developm
the urban
— of being big — is that small
ers only see challenges.
bethese small business
“To put all our money in one
I believe in the men and women
not been celebrated. However,
beplanning and studies departme
deThe Detroit Regional Chamber
thing, that is the classic whating small leads to more disruptive
commercializing new medical
at Wayne State University. “That’s
startleads to
lieves in them, too. So much
the enwe’ve-done-in-the-past,” said
innovations. Being small
vice innovations and the ones
presented in the media as
busileads to
I believe
that it made entrepreneurship
“We throw big money at big
being nimble. Being small
ing new auto-body shops.
Politrepreneurial spirit, and
who are
tenet of this year’s Mackinac
ness that will come there.
creativity. Being small leads
in the food entrepreneurs
to many people.”
world is gone. We need a more
new possibilities.”
turning jams and sausage
we’re trying to do here is
an delicacies
really have a different culture
When the idea of entrepren
also has the ability to remake
nesses. I believe in the immigran
mindset in Michigan,” said
ship as an economic developm
state, and revive our cities.
who move to our shores with
eurship is about so
and codtool was formally introduce
only if we define “entrepre
entrepreneurial spirit and
much more than optimism
it seemed
need to make being an entrepreand
the region six years ago,
I believe in high-tech companie
someone who sets his or her
ing skills. It’s about growing
neur a much more celebrated
like a crazy idea to many
destiny, rather than the narrow
developing products we never
starting a business, supportin
that has
for individuals. This has been
Even those who did embrace
sion of small tech startups
even knew we needed. I believe
adding jobs, building
state that
g your
captured the zeitgeist.
neighborhood businesses
See Next Page
wealth. It’s about controllin
to be
culbeing big.
“Entrepreneurship tends
our communities and our
fast“Big companies. Big unions.
presented as four kids with
tures. And I believe in the
government, and even big
growing companies that
Starting small
— Leave it to Detroit to
find the downside in a
$100 million gift.
That was my first reaction to hearing negative comments about
the $100 million commitment to Detroit revitalization that J.P. Morgan
Chase Chairman Jamie
Dimon announced in
Detroit on May 21.
At the policy conferDemocrat
ence here, a prominent
told me that given the
on Demeltdown’s traumatic effect
troit, many people he was
Colleges and
Business Education
Time for talk about real engage
with believed $100 million was hardly enough.
After all, the bank settled with the feds late
last year for a record $13
billion over its role in
mortgage-backed securities at the core of the
mortgage mess that
helped to decimate Detroit’s neighborhoods.
But what do you do?
Leave the Chase money
on the table? Or take the
of it to
and hope to leverage more
finance Detroit’s turnaroun
Clearly, I think it’s the latter.
Detroit needs most is investmen
the city’s
and jobs. Without both,
turnaround chances are dim.
I was out of town the week
Chase’s announcement,
media coverage I saw was
positive. One exception:
ThompChronicle editor Bankole
son, who framed the Chase
in the context
“public relations.”
The Chronicle is Michigan
in the
leading media voice
role —
Thompson raised Chase’s
s it acor the role of companie
quired — in the mortgage
The $100 million announce
g since
was somewhat surprisin
Chase has been a quiet presence
Detroit, clearly not in the
of its ancestor, NBD Bank.
At the very least, Thompson
hopeful that Chase’s $100
fingercould spur others “whose
prints are absent or barely
on Detroit’s economic landscapea
out of
to now act in goodwill, and
crucial need to make a difference
As he concluded in the column:
“Corporate social responsib
should go beyond just sponsorin
more than
banquet or a dinner. It is
have your
writing a $5,000 check to
… It
name mentioned at an event.
and conshould mean taking part
better in
tributing to making lives
some of
the communities in which
these institutions operate.”
arThompson offers a reasoned
gument for genuine engageme s
beyond cash.
who listen to some of the communiout
ty chatter, it is tough to figure
just what to do without
called a carpetbagger, interloper
nt. We
Detroit needs investme
on the
can’t afford to leave money
table — or vilify
ion that
definitely a conversat
needs to happen. Who will
it? Maybe Thompson and
can help start it.
LISTS: Michigan Graduate Degree Programs; Private 200
For advertising opportunities, contact Marla Wise at [email protected] or (313) 446.6032.
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