Crain`s Detroit Business, July 11, 2016

Transcription

Bridal shop owner
among those setting
up shop along
Jefferson Avenue,
Page 3
JULY 11 - 17, 2016
50 firms in the fast lane
Auto suppliers, construction companies and more ride
improving economy as Fastest-Growing Companies in
Southeast Michigan, Pages 11-20
Coke fight to go before
zoning appeals board
City wants pile to be
contained in a structure;
estimated cost $3.2M
By Kirk Pinho
[email protected]
A Detroit business owner may
have to spend piles of cash to store
piles of an industrial byproduct that
was the subject of a furor last fall
started by a tweet.
In October, former state Rep.
Rashida Tlaib notified several thousand followers on Twitter of the piles
of what she referred to as “petcoke”
on a Detroit riverfront site, 2½ years
after a River Rouge-based company
came under fire for not properly
containing dust from the petroleum
refining byproduct at a site near the
Ambassador Bridge.
CRAIN’S MICHIGAN BUSINESS
Up north bucks
A slew of media coverage followed.
But it wasn’t petroleum coke at
the Waterfront Petroleum Terminal
Co. site, according to the property
owner’s attorney, Beth Gotthelf, a
shareholder in the Bloomfield Hills
office of Butzel Long PC.
Now the city is trying to force the
owner of the site to build a 100-by700-foot structure costing an estimated $3.2 million to contain the
mounds of metallurgical coke
breeze — not petroleum coke — in
an area of the city that has been
heavily industrial for decades but
has long had tensions over pollution.
Harry Warner, owner of Waterfront Petroleum Terminal Co. and
subsidiaries that own the former Revere Brass and Copper Inc. land on
SEE ZONING, PAGE 35
KOSCH DINING SOLUTIONS
Main Street Market opened May 23 in downtown Gaylord in a 136-year-old building that was home to a hardware store for
about 100 years.
Rochester’s Kosch Hospitality hunts double-digit revenue increase
By Sherri Welch
[email protected]
CHRIS EHRMANN
Piles of construction aggregate, like rocks and sand, at the Waterfront Petroleum
Terminal Co. site along the Detroit River.
© Entire contents copyright 2016
by Crain Communications Inc. All rights reserved
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From where Gordie Kosch is
standing, Gaylord is about as central as it gets in Michigan.
Its location is why he and his
brother Gary opened the Otsego
Grand Event Center in the city last
fall, and just over a month ago,
Main Street Market, an upscale bistro, coffee bar and gourmet market downtown.
“For people who have family or
business throughout the state,
Gaylord is ... easy to get to, and it’s
growing,” said Gordie Kosch, pres-
More Crain’s Michigan
Business: Small Petoskey VC
firm finds big deals, Page 21
ident and CEO of Rochester-based
Kosch Hospitality LLC, which is doing business as Kosch Dining Solutions.
The northern Michigan city is
on I-75, the largest artery in the
state, and near a significant eastwest artery in M-32. It’s about
three hours from Rochester, and
an hour from the Mackinac
Bridge, making it a shopping des-
tination for many Yoopers, he
said.
“I think that’s why a lot of big
boxes have opened there on the
west side of I-75,” he said.
The new market and banquet
facility in Gaylord, combined with
contracts to manage food and
beverage at the new Jimmy John’s
Field in Utica, Maple Lane Golf Club
in Sterling Heights and three municipal golf courses in Kentucky
are expected to put Kosch Dining
Solutions on track for $18 million
in revenue this year. That’s up 29
SEE KOSCH, PAGE 34
Nurturing rapidly growing businesses
2
C R A I N ’ S D E T R O I T B U S I N E S S // J U LY 1 1 , 2 0 1 6
MICHIGAN
BRIEFS
parently chose the free version of
Pandora’s service. Deacon’s lawsuit
against Pandora — a music streaming and automated music recommendation service headquartered
in Oakland, Calif.— was dismissed
in 2012 by a federal judge in California; Deacon is appealing.
A downtown Grand Rapids
doughnut shop closed after more
than two years in business — and,
in a Facebook post, blamed the closure on the local homeless population that impacted its operation.
Propaganda Doughnuts said in the
post last week that it was “unable to
find answers and overcome the
problem of the increasing amount
of homeless and disadvantaged
people who now frequent the street
in front of our location,” the Grand
Rapids Business Journal reported.
“It was too much to ask our customers to accept being harassed and
approached by panhandlers. ...
Some customers were approached
and panhandled even before getting out of their vehicles.”
The post was removed from the
shop’s Facebook page but was posted via screenshot by a commenter.
Before the removal, many commenters replied they were disappointed
the business attributed its closing to
the homeless, but others were sympathetic. One commenter criticized
Propaganda as an “Overpriced Hip-
The metro Detroit-based Great
Lakes Water Authority has voted to
GR doughnut shop blames
demise on homeless
ster Doughnut Shop — Unable to
Gentrify (an) Entire Neighborhood
to (the) Satisfaction of (its) Owners.”
Landlord Bob Dykstra said he’s
seeking another tenant but that the
neighborhood issues of homelessness, gang activity, drug dealing and
prostitution continue to grow. “Tenants aren’t the problem,” he said.
Music lover dealt court
setback in Pandora case
The Michigan Supreme Court hit a
sour note with a state resident who
accused Pandora of illegally sharing
his music tastes with others on the
internet.
In a unanimous decision last
week, the high court ruled that the
resident, Peter Deacon, did not qualify as a “customer” who rents or borrows music from the streaming service, AP reported. A federal appeals
court had asked the Michigan court
to rule on the issue, and the answer
was important because Deacon
claimed Pandora violated state privacy law by sharing his preferences.
The high court said Deacon isn’t a
customer under the law because no
money changed hands. Deacon ap-
Detroit authority extends
Flint water contract
extend its emergency service agreement with Flint for another year
without an increase in charges while
the city copes with a lead-tainted
water crisis, AP reported.
Flint’s supply was switched from
the Detroit water authority to the
Flint River to cut costs in 2014 in anticipation of an eventual move to
the Karegnondi Water Authority when
it starts taking water from Lake Huron. Flint switched back to Detroit
water last fall after the problems
with lead became apparent. Just
when Flint will start receiving water
from Karegnondi is uncertain.
MICH-CELLANEOUS
n The Michigan Court of Appeals
has upheld a 2013 decision by state
regulators to allow Consumers Energy to roll out high-tech meters, AP
reported. The attorney general’s office had challenged the Jackson-based utility’s ability to recover
the costs of the so-called smart meters, but in a 2-1 decision last week,
the appeals court said state regulators relied on sufficient evidence
supplied by the company. Smart
meters allow utilities to track electricity consumption without sending someone to each home.
n Officials in Flint are ready to
kick off renovations at the Capitol
Theatre Building with last week’s announcement that the Uptown Reinvestment Corp. and The Whiting have
officially acquired the building,
MLive.com reported. The downtown theater is slated to reopen in
fall 2017. Officials said previously
that the project was expected to cost
$21 million and includes renovations of 25,000 square feet of attached office and retail space.
n Grand Rapids-based Universal
Forest Products Inc. was named by
Forbes magazine as the best performing company in Michigan,
based on total returns, MLive.com
reported. The lumber wholesaler
and manufacturer reported a total
rate of return of 65.6 percent, according to the magazine, which tracked
every publicly traded company in
the U.S. and selected the top performer in each state by evaluating
their rate of returns for the past year.
n The Gerald R. Ford International
Airport officially transitioned to a regional authority governance model
after 60 years as a wholly owned asset
of Kent County, MiBiz reported. The
airport will now be governed by an
airport authority board appointed by
Kent County commissioners. Backers of the move say it allows the air-
INSIDE
THIS ISSUE
CALENDAR .........................................31
CLASSIFIED ADS.............................. 33
DEALS & DETAILS.............................31
KEITH CRAIN....................................... 8
MARY KRAMER .................................21
OPINION .............................................. 8
OTHER VOICES ............................... 8, 9
PEOPLE .............................................. 32
RUMBLINGS ......................................38
WEEK ON THE WEB .........................38
COMPANY INDEX:
SEE PAGE 37
port to be more of a regional asset.
n Ferris State University has received support for a $30 million
project to renovate and expand an
academic building on campus, the
Grand Rapids Business Journal reported. The state will provide $22.5
million toward FSU’s future Center
for Welding Excellence and Center
for Advanced Manufacturing. FSU
will contribute the rest. Construction is slated to begin this year and
be completed in 2018.
n TecNiq Inc. will invest $6.6 million in the construction of a
100,000-square-foot production facility in Comstock Township near
Kalamazoo, MiBiz reported. The
manufacturer of LED lighting products for fleet vehicles, construction
trailers and other applications, expects to hire an additional 120
workers as a result of the expansion
from its current facility in Richland.
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3
Chesterfield
Cabela’s is a
go, but mall
plans shift
Outlet center plans idle
due to tenant pullback
Years of effort pay off
as small businesses grow
in Detroit corridor
By Sherri Welch
[email protected]
CHRIS EHRMANN
The intersection of Jefferson Avenue and Chalmers Street is part of Detroit’s East Jefferson corridor, which is benefiting from an ongoing redevelopment effort.
East Jefferson’s new direction
By Marti Benedetti
[email protected]
TV fashion star Keasha Rigsby co-owns a recently
opened upscale bridal salon that is among the new
businesses along the Jefferson corridor.
A force she can’t quite explain is responsible
for Keasha Rigsby locating her upscale bridal
salon in an 1889 mansion in Detroit’s East Jefferson Avenue corridor.
“It was meant to be. Every time I drove by
this mansion, something was pulling me
there,” said the co-owner of Beautiful Bridal with
Keasha.
She and co-owner Vallery Hyduk moved to
Detroit from New York earlier this year after
starring in the TLC reality show “Say Yes to the
Dress” and hosting “Keasha’s Perfect Dress” on
TV One last summer. Earlier this year, the partners were the recipients of a $50,000 Motor City
Match grant.
Beautiful Bridal, along with a new Caribbean
restaurant, a Christian yoga center, women’s
clothing boutiques, a casual branded clothing
store, a used record store, and a coffee shop and
bakery, are a few of the more recent businesses
that have planted roots along the eight miles
between downtown Detroit and Grosse Pointe
Park.
Josh Elling, executive director of Jefferson
East Inc., which promotes neighborhood rede-
velopment, said more than 20 years of efforts to
revitalize the East Jefferson Avenue corridor on
the city’s east side have been paying dividends
in recent months. “Over the last two years, the
amount of interest we’ve seen in Jefferson Avenue has been astounding,” he said.
Since 2009, $1 billion has been invested in
the five neighborhoods from Alter Road to
downtown along East Jefferson, Elling said,
adding that $540 million of that went to improvements to the giant FCA US plant. Within
the last year, seven new businesses have
opened in the Jefferson-Chalmers neighborhood in the corridor. Since 2007, JEI’s budget
has climbed from $140,000 to more than $1
million.
“This is one of those areas that continues to
grow, but is growing quietly,” Elling said, adding
that the city and mayor’s office have been “very
supportive of development deep within the
city’s neighborhoods.”
JEI has its offices in an old bank building in
SEE JEFFERSON, PAGE 36
A new Cabela’s store in the works
for Chesterfield Township since last
fall has secured final site plan approvals to locate near I-94 and Hall
Road, but it won’t be part of an outlet center, as developers had hoped.
Instead, the property’s owners
are moving forward with development of an open-air mall known as
a lifestyle center, the Chesterfield
Towne Center. As planned, it would
include a large grocery, big-box retailers like Marshall’s and Home
Goods, a movie theater and several
hotels.
Developers Thomas Guastello,
owner of Birmingham-based Center
Management, and Cincinnati-based
Jeffrey R. Anderson Real Estate, which
jointly own the 200-acre parcel
where Cabela’s and other retailers
are locating, had been working on
the outlet center proposal for the
past two years. But they have not
been able to attract large, upscale
retailers such as Polo, Nordstrom,
Saks Fifth Avenue, Nike and Adidas to
serve as anchors at the proposed
center.
Major retailers “are not expanding at any discernible pace at all,”
Guastello said, noting they’ve cut
back considerably on new outlet
center stores over the past 16
months.
“At the end of the day, when we
view the outlet center, we had and
still have leasing, but that’s contingent on getting anchors,” he said.
“And if any of the anchors were to
SEE CABELA’S, PAGE 33
Conflicting bills prompt debate over
mission, funding of community colleges
By Lindsay VanHulle
Crain’s Detroit Business/Bridge Magazine
LANSING — In the long-running
policy battle about whether community colleges in Michigan should
be allowed to offer bachelor’s degrees, some state lawmakers opposed to the idea are willing to let
them do it — if they’ll agree to forfeit
revenue they collect from local
property taxes.
It’s an ultimatum that advocates
for expanded degree choices for
two-year schools say will stop the
effort dead, because the colleges
rely on property taxes for, on average, roughly a third of their operating revenue.
A two-bill package introduced in
the House by Rep. Jeff Farrington,
R-Utica, would prevent community
colleges from levying property taxes
if they created bachelor’s degree
programs, with the exception of
four programs the Legislature approved in 2012.
Farrington’s bills are in direct response to a separate bill that has
stalled in the Senate for more than a
year. Introduced by Sen. Mike
Shirkey, R-Clarklake, the legislation
would allow community colleges to
offer bachelor’s degrees in ski area
management, allied health, information technology, manufacturing
technology and nursing. They
would be allowed in addition to the
four programs greenlighted in 2012
— cement technology, energy production technology, maritime technology and culinary arts.
The outcome may not be decided
this legislative term. Shirkey’s bill
hasn’t gone up for a vote in the
SEE COLLEGES, PAGE 37
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OF THE WEEK
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Some local insurers say they’ll still offer policies that avoid ACA
mandates for last time in 2017, Page 6
World Watch: U.K.
In the wake of the Brexit, here are
some local companies with
significant British operations, Page 26
Afghanistan center opens
After fits and starts, an auto center in Afghanistan opens for TTI
Global, Page 27
4
ANDREW POTTER
Mark Brodie (left), managing member of Global Transportation Management and vice president of Deshler Group; Richard
Kaufman, deputy Wayne County executive; Dennis K. Wright, mayor of Livonia; and Robert Gruschow, president of Deshler Group,
listen to remarks by Lisa Lunsford, CEO of GS3 Global (Global Strategic Supply Solutions) and vice president of Deshler Group at
a recent ribbon cutting in Deshler’s Livonia offices.
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RUFDOO
Livonia’s Deshler Group buys
door striker manufacturer
By Dustin Walsh
[email protected]
Livonia-based Deshler Group is
quietly expanding in Livonia after
adding to its manufacturing portfolio.
The family of companies, ranging
from a hood striker supplier to logistics firm, closed in March on the
$9 million acquisition of fellow Livonia company MSD Stamping Co.
The transaction is expected to
add $16 million to $17 million to
Deshler’s bottom line as well as establishe a local manufacturing presence for Deshler’s Amanda Manufacturing LLC
subsidiary, which
operates out of a plant in Ohio, said
Robert Gruschow, president of
Deshler and its warehousing, distribution subsidiary Feblo International LLC.
MSD will be rebranded as Amanda Manufacturing Michigan.
Revenue for Deshler, and its seven subsidiaries, was $135 million in
2015, up from just $40 million in
2009. Gruschow projects the company to top $150 million in 2016, an
annual growth rate of 32 percent
since 2010.
MSD manufactures door strikers,
which aligns with Amanda Manufacturing’s door and hood closure
systems it supplies to the auto industry.
“We gain a bit of market share,
but the acquisition really gives us
technology we didn’t have inhouse,” Gruschow said. “This allows
us to expand and sell into other (automakers) as well as expand into
nonautomotive markets.
“Everything has a door, and every
door needs to close. We feel this is an
engineered product that isn’t going
away any time soon.”
ANDREW POTTER
The Deshler Group recently completed a yearlong renovation of its Livonia headquarters. It closed in March on the $9 million acquisition of fellow Livonia company
MSD Stamping Co.
Gruschow said Amanda is now
targeting markets like off-road vehicles, agricultural, military and others.
Deshler acquired MSD from New
York private equity firm Monomoy
Capital Partners after customer Ford
Motor Co. pointed Deshler to the opportunity, Gruschow said. Kim Rodriguez, owner of advisory firm
SCRMVision and former principal at
KPMG, negotiated the deal for Deshler.
Gruschow said Deshler had been
working on the deal since February
2015.
“There was considerable negotiations that went on over time,” Gruschow said. “Privately held companies and private equity have
different goals. They were interested
in buying and selling, we were interested in long-term goals.”
Last week, Deshler celebrated
renovation of its offices in Livonia
with a ribbon cutting and plant
tours.
Its other subsidiaries include aftermarket supplier Amanda Products (USA); Amanda International,
which operates in Costa Rica; sensor assembly firm Global Strategic
Supply Solutions LLC, known as GS3;
logistics services firm Global Transportation Management LLC; and Redford-based Automated Media Inc.
GS3 is a certified minority-owned
supplier — Gruschow co-owns it
with CEO Lisa Lunsford. Lunsford is
also the vice president of sales and
marketing for Deshler.
Lunsford was named one of
Crain’s 100 Most Influential Women
in June.
Deshler employs 440 worldwide,
with 210 in Michigan.
Dustin Walsh: (313) 446-6042
Twitter: @dustinpwalsh
5
Michigan-China
Innovation
Center to open
downtown
YOU FLY PRIVATE
By Marti Benedetti
[email protected]
The
Michigan-China Innovation
BECAUSE YOU DON’T LIKE RULES.
Center plans to open its new office
in the 1001 Woodward Building in
downtown Detroit on Monday.
“This center will focus on creating jobs in Michigan in partnership
with China,” said Brian Connors,
center executive director and formerly the China business development manager for the Michigan Eco-
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Connors has been interviewing
candidates to fill the 10 full- and parttime positions for the new office. The
staff will be bilingual, he said.
The creation of the nonprofit
center was announced in March after it received a $5 million grant
from the Michigan Strategic Fund
Board. Its goal during the next five
years is to encourage Chinese companies to invest in the state, thereby creating new job opportunities. Funding
will go toward salaries, marketing
along with a Chinese website, startup
costs, leasing 2,000 square feet of office space and travel. The board is
part of the MEDC.
“With the incredible growth of
China’s economy, it is a crucial strategic partner. We want to make sure
Michigan is taking advantage of all
the opportunities so we can drive
economic growth and increase our
competitiveness,” he said.
Connors said that while there will
be an emphasis on attracting automotive component manufacturing
and research and development, the
center also will pursue other industries, namely mobility.
“As mobility evolves in the U.S., it
is also evolving in China,” he said.
“From autonomous vehicles to
ride-sharing platforms to new forms
of energy, we will have the opportunity to align what we are doing with
mobility with the exciting things
coming out of China.”
Connors said he felt strongly
about locating the center downtown. “As Detroit goes, so goes the
state of Michigan. It is an exciting
opportunity. We expect to see a lot
more traffic downtown by senior
Chinese businesspeople. We’re excited to be part of the innovation
downtown.”
He already has “a number of fish
on the line” for potential job creation, and he predicted announcing
job-creating investments in the
state in the coming months.
Connors said Gov. Rick Snyder
has been active in procuring relationships with China. In August
2015, he signed cooperative agreements with the provinces of
Guangdong, Sichuan, Hubei and
Zhejiang, as well as the city of
Chongqing, which is independent
of the province.
The state is home to about 200
Chinese companies representing $3
billion in direct foreign investment.
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6
Some biz get option to keep to 2018 non-ACA conforming plans
By Jay Greene
[email protected]
Health Alliance Plan, Priority Health
and Federated Insurance have decided to continue offering small-business customers with two to 50 employees the option of continuing
through 2017 health plans that do
not conform to new benefit and
rate-setting rules mandated by the
Affordable Care Act.
After President Barack Obama
was criticized for his campaign
promise that individuals and businesses could “keep their policy if
they wanted,” he deferred to state
insurance commissioners in November 2013 whether to allow
health insurers to extend plans that
were not Obamacare-compliant
through 2017.
Under Obamacare, health insurance policies must include a minimum of 10 essential health benefits
— including wellness, mental
health, ambulatory and maternity
coverage — set prices using an age
rating system, and comply with other affordability requirements.
Michigan’s health insurers were
allowed to choose whether they
wanted to extend existing plans for
three years starting in 2015. Only a
few allowed small businesses to
continue their existing plans with
price increases that reflect historical
trends.
In late 2014, Detroit-based Blue
Cross Blue Shield of Michigan was one
of several insurers that decided not
to extend non-Obamacare-compliant health plan choices for 2015,
forcing many clients of the state’s
dominant insurer to decide whether
to purchase a more expensive
ACA-compliant plan with the Blues
or go elsewhere.
Michael Embry, president of
Comprehensive
Southfield-based
Benefits
Inc.,
said HAP and
Priority Health’s
decision to extend transitional
relief for another
year is good
news for his
small-employer
group clients.
“They have Michael Embry:
been struggling Decision to extend
with age rating,” relief is good news
said Embry, noting that noncompliant plans can
use composite rating to price their
products, which can save some
small groups money.
Under composite rating, insurers
use a variety of factors to create a
uniform rate for single employees
and families in a small-business
group, which could include health
status, claims history, gender, occupation and industry. However, there
is no age rating of individual employees and their family members.
For example, adding a 25-year-old
costs the same as adding a 60-year
old. Moreover, employers charge
employees the same cost-sharing
contributions, making it easier to
administer plans.
But under Obamacare’s age, or
per member, rating, insurers price
total premiums based on the age of
each enrolled member in the plan,
up to three children under age 21.
Other factors affecting rates could
include tobacco use and geography.
Each employee is charged different
cost-sharing rates for their health
insurance.
Scott Lyon, senior vice president with the Small Business Association of Michigan, said there is no
question that grandfathering in
existing
policies
will
help
small-business owners who wish
to remain with their current plans
and avoid the change to an ACA
plan. He said he is not sure how
many small groups are affected.
“My sense is that the vast majority of small businesses have, in the
last few years, moved away from the
grandfathered plans to an ACA
plan,” Lyon said. “If I had to bet, the
“There was a lot of backlash when the
ACA was rolled out and the president
said you can keep the plan you wanted.
This upset small businesses because
they couldn’t keep their plans.”
Steve Selinsky, HAP’s director of sales
number of small-business grandfathered plans would be in the single
digit percentages.”
Lyon
said
SBAM supports
eliminating the
member-level
rating system
that was mandated by the Affordable Care
Act.
“We support
Scott Lyon: Most movement back
biz have moved to to
a
siman ACA plan.
pler-to-administer rating system of single, two-party and family
rates based upon the ages of all the
covered employees of the company
— the pre-ACA system employed by
most carriers,” Lyon said.
Lyon said the biggest advantage
of staying in a grandfathered plan is
avoiding member level rating and
sticking with the single employee,
two-person or family rates that were
in place before Obamacare.
“While that is certainly an important consideration, the prices
(rates) that a small-business owner
will pay for employees’ health insurance plan is most likely more important,” he said.
Last year, small-business group
price increases averaged about 10
percent for renewed policies that
weren’t ACA compliant, but the
range was from no increase to about
25 percent, experts told Crain’s.
For newer ACA-compliant
plans, price increases initially
ranged from 20 percent to 60 percent over predecessor plans. Price
increases have since dropped to
average below 10 percent, but
rates usually depend on the average age of the plan members and
geography of the business. Some
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7
ACA
FROM PREVIOUS PAGE
employer groups, if their workforce average age is younger, could
have received up to 10 percent
price cuts.
Traditionally,
small-business
groups pay higher rates — 8 percent to 18 percent more than large
firms for the same health insurance policy — because they don’t
have the buying power of larger
companies, said the National Conference of State Legislatures.
Steve Selinsky, HAP’s director of
sales, said Detroit-based HAP decided to extend its small-business
plans through 2017 to give its customers flexibility to choose a new
Obamacare plan or keep their old
plan.
“There was a lot of backlash
when the ACA was rolled out and
the president said you can keep
the plan you wanted. This upset
small businesses because they
couldn’t keep their plans,” Selinsky said.
But once Obama allowed state
insurance commissioners to decide whether to allow insurers to
grandfather in plans, HAP decided to work with its customers to
offer what was best for them from
2015 through 2017, Selinsky said.
“Some carriers pushed customers into the new health plans,” he
said. “We have a nice block of small
group businesses. Some felt their
current plan fit them better.”
Scott Norman, vice president of
sales and client services at Grand
Rapids-based Priority Health, said
Priority’s price increases for 2017 for
small groups are expected to average only about 3 percent, with no
small businesses paying more than
a 10 percent increase.
Of Priority’s 100,000 total members in its small group plans, Norman said about 40,000, and several thousand employers, remain in
old pre-Obamacare plans. He estimated about half of the small
businesses in Michigan initially
stayed with their older plans, but
every year more small groups
switch to Obamacare-compliant
plans.
“They stay to maintain benefit offerings or avoid a rate increase,” said
Norman, noting that some small
group employers have switched to
Obamacare plans to increase benefits and decrease costs.
Overall, Priority’s small-group
business product line has increased
by 2 percent the past year after declining for several years.
“We have really favorable rates
now,” he said.
Small businesses will have to
switch to Obamacare-compliant
plans after the extension expires at
the end of 2017.
Jay Greene: (313) 446-0325
Twitter: @jaybgreene
University research network seeks to
partner with private-sector companies
Group of six Michigan schools offering up to $40,000 for opportunity
By Tom Henderson
[email protected]
The state’s six largest research
universities want to do something
about the disconnect between the
private sector and their researchers
and lab facilities, and they’re offering up to $40,000 to companies
looking for collaborative help.
Last week, Crain’s reported findings from a report on the state’s 21st
Century Jobs Trust Fund and its efforts to diversify Michigan’s economy, which included the fact that
Michigan fares poorly compared to
Midwest and benchmark states at
collaboration between the private
sector and its research universities.
The Michigan Corporate Relations
Network is hoping to change that by
offering financial incentives to help
for-profit companies improve their
technology or broaden their product offerings through partnering
with university researchers.
According to the report, by Co-
lumbus, Ohio-based TEConomy
Partners LLC in 2013, there was just
$1,610 spent per $10 million of
gross state product in Michigan on
industry-sponsored R&D at state
universities.
That compared with the national
average of $2,049 and ranked Michigan ninth among the 12 benchmark states identified by the report,
which included Midwest states and
other states with similar diversification efforts.
MCRN was formed in 2011 by
the Michigan Economic Development
Corp. and is a partnership of the
state’s six largest research organizations — the University of Michigan, Michigan State University,
Wayne State University, Western
Michigan University, Michigan Technological University and the University of Michigan-Dearborn — to connect the private sector to
university researchers.
Through a MCRN program called
Small Company Innovation Pro-
gram/Technology & Commercialization Assistance, applications are
now being accepted for companies
in need of research help. Companies can get up to $40,000 but must
come up with matching funds.
According to Mike Forbis, who
works in the technology and commercialization assistance program
at UM’s Institute for Research on Labor, Employment and the Economy,
who will oversee the MCRN program, about 20 companies will be
accepted.
He said he hopes to finish enrollment by early fall. “We evaluate candidates’ viability, technology roadmap and business model as part of
the process to ensure funds are utilized wisely and strategically,” he
said.
Companies can get more information or apply at https://michigancrn.org, or they can send Forbis
an email at [email protected].
Tom Henderson: (313) 446-0337
Twitter: @tomhenderson2
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8
OPINION
Coke issue merits fairness
P
et coke. Met coke. Coke breeze. Which of these pose the greatest
danger to human health? And does an industrial property owner
have a right to store manufacturing byproducts on site?
Those are among the questions suggested by Kirk Pinho's Page 1 story
about Harry Warner, owner of Waterfront Petroleum Terminal Co. in
southwest Detroit. Waterfront is appealing a decision that would require
him to spend more than $3 million to build a storage facility for manufacturing byproducts en route to being shipped elsewhere.
The stakeholders involved all have compelling points. But terms have
been thrown around loosely to define the various forms of “coke.” But
there are important distinctions. Pet coke, a byproduct of petroleum processing, has health risks ascribed to airborne particles. Metallurgical coke
breeze, formed during the process to make steel, is composed of larger
particles that don’t create clouds of dust, similar to an aggregate. Waterfront was storing the latter, but has been condemned with the health risks
of the former.
This dispute, working its way through Detroit zoning appeals, is part of
bigger and broader issues. First is the tension between the longtime industrial use of many riverfront sites in southwest Detroit, neighborhood demands and potential for non-industrial redevelopment.
Detroit needs jobs and investment. But it also needs clean air and
healthy neighborhoods. The only fair way to get both is to use data and
facts and leave emotion and politics out of the decision-making process.
Past may show forward path on race
The racially motivated sniper attacks on Dallas police officers last week
stunned the nation and the world. But so, too, did cellphone video of the
aftermath of the earlier fatal shooting of Philando Castile by a police officer
in a suburb of St. Paul, Minn.
What have we learned about race in America? About training police officers?
The answers to both may be “not enough.” Fortunately in Detroit, Police
Chief James Craig has espoused the principles of community policing
since returning home to lead the force in 2013. Redeploying officers to
work closely with neighborhood groups and residents is one of the best
ways to build community trust.
Last month, the Pew Research Center released a survey about racial attitudes among black and white Americans. Most blacks — 88 percent — say
more work on racial relations is needed; 38 percent of whites say the country
has done enough. More dramatically, 70 percent of white Americans believe
individual instances of discrimination are more prevalent than institutional
racism; 40 percent of blacks think institutional racism is the issue.
Ironically, next July, Detroit will observe the 50th anniversary of its own
tragedy that claimed 43 lives, injured more than 1,100 people and resulted
in 7,200 arrests. Call it the “riots,” the “insurrection” or the “rebellion,”
among the root causes were allegations of a history of police brutality toward the city’s African-American residents.
The Detroit Historical Museum’s initiative, “Detroit 67: Looking Back to
MOVE FORWARD,” may be one of the best opportunities for our entire
region. To date, 100 community organizations have joined the initiative to
record the past but create paths to move forward. For more information,
visit www.detroit1967.org.
Immigration policies must change
if U.S. wants to remain on top
N
early 130 years ago when automobile manufacturing began
in Detroit, the United States led the
world in invention and innovation.
Today, that momentum has stalled.
Unfortunately, for partisan reasons, Republicans and Democrats
are continuing to avoid what is best
for the nation’s economy and our
world position as leaders in innovation.
National policies on immigration
need to change if the Motor City and
the nation are to remain an industrial
superpower. The refusal of Democrats and Republicans to increase the
number of foreign-born engineers
permitted to come and work in the
U.S. is hurting us. This is an issue
Donald Trump and Hillary Clinton —
who both want to boost U.S. job
growth — must stand behind.
America is a nation of business
administration and liberal arts majors. Those are the top two degrees
that U.S. students have chosen to
pursue over the past few decades.
There are more individuals majoring in fields where jobs are scarce or
wages are falling than there are in
engineering, where jobs are abundant and high-paying.
Mechanical engineering, a necessity in Detroit, does not even
rank nationally in the top 20. It trails
behind history and sociology majors at a weak 26. Engineering itself
ranks 92, according to the National
Science Foundation and the National Academy of Engineering.
That was not the case four decades ago. The reasons we choose to
be philosophers instead of engineers are for another debate.
But, for now, elected officials
OTHER VOICES
Tel Ganesan
Ganesan is CEO and president of Kyyba
Inc., a Farmington Hills-based global IT,
engineering services and a software
product company.
need to look to talent outside of our
borders to fill the talent gap at U.S.
corporations.
One hundred years ago, horses
and buggies were still in every
American town. Mass manufacturing of automobiles struck fear in the
hearts of Americans who thought it
would kill jobs. Of course, the opposite proved true and this country
shaped the global economy in manufacturing, industry and innovation. Fear of change is normal, but it
shouldn’t cause us to resist growth.
What about today? Where is the
innovation?
The next phase of great global-changing technology is in connected cars, and Detroit should lead
the way. Again, the problem is there
simply are not enough engineers to
help bring the auto industry to the
next major level.
Corporations and companies
from coast to coast are dealing with
the serious issue of employment vacancies in areas of science, technology, engineering and mathematics.
The fix, compared with other areas
of immigration, is nearly free of controversy.
Last year, the feds permitted
65,000 foreign-born workers to
work in the states through an H1-B
visa, yet received more than double
the number of applications. Every
submission was tied to a specific
available U.S. job — meaning there
were more than 170,000 employment positions last year that needed
to be filled by foreign workers because there were not enough qualified U.S.-born candidates to fill
them, but the number of available
H1-B visas was not expanded to fit
those needs.
Our elected officials are too jittery
to touch any immigration reform. In
the same way we feared 100 years
ago that manufacturing would diminish jobs, elected officials now
play into our fears that foreign-born
high-tech workers will steal jobs,
when in fact they actually help create more.
If they outline a plan clearly and
concisely, Clinton and Trump —
Democrats and Republicans — can
support lifting the H1-B cap. National policies must become aligned
with the economy, or the nation will
lag behind other countries in development.
Connected cars and autonomous
vehicles will take the world to the
next level in technological growth,
safety and a better way of living. Detroit must continue its historical
path as a captain of that automotive
journey. If elected officials update
our archaic immigration laws, we
can bring the best and brightest talent into the U.S. and lead the world
in innovation.
TALK ON THE WEB
Re: Wayne County moves
forward with Detroit jail project
Reader responses to stories and blogs
that appeared on Crain’s website.
Comments may be edited for length
and clarity.
Don’t worry, this is probably a
negotiating ploy to get more money
from Gilbert and Gores.
John
How do we protest against this
and get the soccer stadium? This is
just dumb. Nobody wants that stupid jail downtown.
Drew Gaines
Re: Lack of staff forces
resort to close restaurant
Didn’t understand the lodging at
$220 a month. If they hire these people just for the summer from out of
the area, provide the lodging without charging them. That might help
attract more people.
E M Parmelee
Evans’ team is showing great improvement
If you ever want to test an executive’s ability to comprehend a complicated balance sheet, hand them
the current analysis of their pension
plan and ask the exec to explain it.
Wayne County Executive Warren
Evans sent me a copy of the county’s
current pension plan. He has the
numbers.
It is an impressive improvement
over his predecessor. Evans’ team
has done a remarkable job in an extremely short time to make sense
out of a very complicated pension
plan, a plan few people would ever
KEITH CRAIN
Editor in chief
bother to try and understand.
The county’s numbers are better
now and, once again, this group of
bright executives has been able to
get their arms around a very confusing plan. I think I will ask them to
tackle our company's plan next in
their spare time.
I continue to marvel at just how
successful Evans has been in assembling a team that has been doing
some remarkable things with a
county that was somewhere just
short of ruin. They have put the
pieces together in a way that makes
sense.
Evans inherited a disastrous financial situation from Robert Ficano; many folks might have expected
that bankruptcy was the only solution. The turnaround, with a plan
that avoids bankruptcy court, has
been nothing short of miraculous.
The pension plan is only the latest example of setting things right
on the road to recovery.
We have all watched Oakland
and Macomb counties over the
past few decades and have often
marveled at how well Oakland’s
Brooks Patterson, particularly, has
managed that county’s finances.
Wayne was always left behind in a
near-death situation, marked by
the type of corruption and theft
that Detroit experienced pre-bankruptcy.
There is no easy fix to the problems of incompetence except to
root it out and replace the bad with
the good. The salesmanship necessary to get those talented folks to
come to work in Wayne County has
to be quite a task.
Wayne County, like Detroit, is on
its way to recovery. It gets better every day. Let us hope Evans can keep
his team intact. It’s a great beginning.
9
I
Understanding the autonomous vehicle industry is a complex dance
n less than two decades, it is likely
that approximately 21 million autonomous vehicles will have been
sold worldwide — including 4.5 million in the United States.
The projections, released by IHS
Automotive in June, are another signal of how technological advancements in the autonomous vehicle
sector are accelerating at a pace
without precedent in automotive
history. Another sign of this accelerated advancement is evident in
Southeast Michigan, where stretches of “smart roads” have been
equipped with more than 100 sensors capable of detecting a vehicle’s
speed and location (“Coming to
sensors,” Crain’s story, June 27 edition). The sensors will communicate with connected and driverless
vehicle prototypes and alert them to
oncoming hazards.
As this trend continues, one result is an intersection of traditional
manufacturers and high-tech companies, requiring a change in approach for automotive companies
comfortable with the tried-and-true
steps of the manufacturer-supplier
dance. Those companies will have
to learn a whole new step if they
don’t want to be left without a dance
partner at the ball.
To survive and thrive in the
changing mobility sector, traditional manufacturers and suppliers
must rapidly adapt to the startup
mentality of technology companies
and venture capital investors. In The
Third Wave: An Entrepreneur’s Vision of the Future, well-known entrepreneur and investor Steve Case
identifies partnerships as one of the
prerequisites for success in what he
calls the third wave of the internet
— the internet of everything. Case
quotes an African proverb that applies to traditional manufacturers
and high-tech innovators, particularly those involved with autonomous vehicles: “If you want to go
quickly, go alone. If you want to go
far, go together.”
Going back to the dance analogy,
traditional manufacturers and hightech innovators who want to successfully make their way around the
obstacles on the emerging industry
dance floor must understand their
partners’ backgrounds, strengths
and weaknesses to avoid stepping
on any toes. Innovators need to understand that they cannot succeed
long term by following the prior
path of going it alone. In addition to
technology that the innovators provide, production of autonomous
vehicles requires expertise in integration, logistics, supply chain
management, and compliance with
a very complex regulatory environment that traditional automotive
companies can provide. Simply put,
the high-tech innovators and the
traditional manufacturers will need
to work together if they each want to
go far and actually profitably manufacture and sell large numbers of
autonomous vehicles.
For these partnerships to work,
all aspects of each organization,
from engineering to legal to marketing, must learn when to take the
lead and how to communicate and
understand the other’s needs and
concerns — to avoid tripping over
each other.
OTHER VOICES
Gerald Lievois
and Alexis Schostak
Lievois and Schostak are members at
Dykema Gossett, Lievois in the corporate
finance practice group, automotive industry
group; Schostak is assistant corporate
finance practice group leader.
Crain’s event focus:
Food economy
Behind Michigan’s food story is a
business story. The food economy
is one of untapped growth potential. At Crain’s Food Summit, key
players from local food companies
will gather to focus on building
Michigan’s supply chain and pairing ideas with the visions from major national food companies.
The summit will connect entrepreneurs, farmers, manufacturers,
distributors, retailers, growers and
processors to potential customers
and those interested in learning
more about our food ecosystem.
Investors will be introduced to food
entrepreneurs from around the
state in an effort to showcase the
investment-worthy companies.
The program includes a keynote
panel featuring Jeff Dunn, president of Campbell Fresh, along with
breakout sessions on how the local
food movement is impacting agriculture, processing, distribution,
and retail and restaurants.
There will also be a local food
truck rally.
The event runs from 2-7 p.m.
Aug. 22 at Eastern Market in Detroit. Individual tickets are $80, and
groups of 10 or more are $75 each.
A discount combo ticket with
the Live Love Local event is available for $100. Registration closes
Aug. 18.
To register, go to CrainsDetroit.
com/events. Questions can be
directed to Kacey Anderson at
[email protected].
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Employers
face higher
fines for I-9
form errors
By Dustin Walsh
[email protected]
The U.S. Department of Justice is
substantially increasing fines for violating federal immigration law in
an attempt to more vigorously deter
employers from hiring illegal immigrants.
On the surface, the rule adjustment seems of no consequence to
law-abiding employers, but the
hiked penalties carry consequences
for every employer, said Alexandra
LaCombe, partner at immigration
law firm Fragomen, Del Rey, Bernsen
& Loewy PLLC in Troy.
The new DOJ ruling, issued June
30, increases the fine for errors on
employment eligibility forms, called
Form I-9, that is completed by all
employees at the start of employment. The I-9 form asks whether an
employee is a U.S. citizen, non-citizen, lawful alien or work-authorized
alien, as well as asking for copies of
two legal forms of identification.
The previous rule held a maximum fine of $1,100 per violation for
I-9 paperwork errors, increasing to a
maximum penalty of $2,156 per violation on Aug. 1.
“Certainly, there’s the knowingly
hiring of illegal immigrants, but the
vast majority of violations stem
from clerical errors on the I-9 form,”
LaCombe said. “These are forms every employer submits, and if they
are not filled out correctly, the mistakes can be costly.”
LaCombe said a recent audit for a
large client reviewed millions of dollars in potential fines if the government had audited the company’s I-9
forms.
“It’s almost always an honest mistake, but the government doesn’t
care whether there was intent,” LaCombe said. “If you’re audited and
they find mistakes, you will be
fined.”
However, companies can correct
the mistakes internally after they’ve
been submitted, protecting them
from fines if an audit occurs.
“It’s really important, even more
so now, that employers periodically
audit these forms internally,”
LaCombe said. “Establish a system,
whether that’s just another pair of
eyes, an audit from a law firm, etc.
Employers must establish some sort
of accountability. These forms
should be treated as seriously as tax
forms.”
LaCombe said the most common
audit occurs after a company becomes a government contractor.
“Some of it is complaint-driven,
but if you’re a government contractor, you will get audited more often,”
LaCombe said.
Dustin Walsh: (313) 446-6042
Twitter: @dustinpwalsh
11
SPECIAL REPORT: FAST 50
Riding the
fast lane
50 Fastest-Growing Companies
in Southeast Michigan
1. Meridian Health Plan Inc.
2. Diplomat Pharmacy Inc.
3. Metaldyne Performance Group Inc.
4. Barton Malow Co.
5. Sun Communities Inc.
6. The Diez Group
7. Victory Automotive Group Inc.
8. General RV Center Inc.
9. Aristeo Construction Co.
10. United Road Services Inc.
From automotive to real estate,
these companies found a way to grow
11. Talmer Bancorp Inc.
Welcome to Crain’s Fast 50, a dive into Michigan’s biggest corporate growth
stories.
This year’s entry reflects the big economic trends of the past few years: a
resurgent automotive industry, bounce-backs in real estate and construction,
and a raft of M&A.
A glance through the list shows many auto suppliers, including some of the
biggest in the business, and auto dealerships and construction companies
(including one that renovated Daytona International Speedway, and both
Michigan Stadium and Spartan Stadium).
How we pick the companies: We mine our vast database of private and
publicly traded companies then come up with a ranking based on dollar
amount of revenue growth between 2012 and 2015 and by percentage revenue growth during the same period. The two rankings are then added together to create the list. The lower the number, the higher the final ranking.
What follows on Pages 12-17 are profiles of the 50 companies that have the
highest rankings. Want to see the data that backs the rankings? Check out the
list on Pages 19-20. For a searchable database of the companies, go to
crainsdetroit.com/Fast50.
14. LaFontaine Automotive Group
12. Acro Service Corp.
12. Alta Equipment Co.
14. Piston Automotive LLC
16. Danlaw Inc.
17. Diversified Restaurant Holdings Inc.
18. RevSpring Inc.
18. Ramco-Gershenson Properties Trust
20. Michigan CAT
21. H.W. Kaufman Financial Group Inc./Burns &
Wilcox Ltd.
22. Gentherm Inc.
23. The Suburban Collection
24. Penske Corp.
24. United Shore Financial Services LLC
26. Sherwood Food Distributors LLC
27. Medcart Specialty Pharmacy
28. The Christman Co.
28. Auburn Pharmaceutical Co.
30. PrizeLogic LLC
31. Technical Engineering Consultants
32. American Axle & Manufacturing Holdings Inc.
33. Ray Laethem Inc.
34. WorkForce Software LLC
35. The Ideal Group Inc.
36. Amerisure Mutual Insurance Co.
36. Ghafari Inc.
38. Domino’s Pizza Inc.
39. W3R Consulting
40. Lear Corp.
40. Buff Whelan Chevrolet
42. Reliable Software Resources Inc.
43. Credit Acceptance Corp.
43. International Automotive Components
43. Agree Realty Corp.
43. Syntel Inc.
47. Ilitch companies
48. Orleans International Inc.
49. Plante Moran PLLC
50. National Food Group Inc.
PHOTO ILLUSTRATION BY LISA SAWYER
12
1. MERIDIAN
HEALTH PLAN INC.
Detroit
David Cotton, president and CEO
Revenue 2015/2012: $3.36B/$977M
Revenue percent change: 244
What it does: Government health
insurance programs
Reason for revenue increase: Driving
growth has been the expansion of
its Medicaid health plans in
Michigan, Iowa and Illinois. Its
4-year-old pharmacy benefit
management company, MeridianRx Inc., has also seen significant
membership growth, Cotton said.
2. DIPLOMAT
PHARMACY INC.
Flint
Phil Hagerman, chairman and CEO
Revenue 2015/2012: $3.37B/$1.13B
What it does: Nationwide specialty
pharmacy
Reason for revenue increase: Continu-
ing to expand into new markets
through acquisitions, including the
2015 acquisition of Cincinna-
ti-based BioRx LLC, a pharmacy
and infusion services company, for
$210 million in cash and $105
million in Diplomat common stock.
Also diversified into high-growth
therapeutic medication.
3. METALDYNE
PERFORMANCE
GROUP INC.
Southfield
George Thanopoulos, CEO;
Douglas Grimm, president and COO
Revenue 2015/2012: $3.05B/$1.10B
What it does: A global automotive
supplier providing precision-engineered products for powertrain
applications.
Reason for revenue increase:
Metaldyne was acquired by private
equity firm American Securities
LLC in 2012 and merged with
$1 billion companies Grede
Holdings LLC and HHI Group
Holdings LLC, both majority-owned by American Securities,
to form MPG in 2014. The merger
created about a $3 billion automotive and industrial parts supplier.
4. BARTON
MALOW CO.
Southfield
Ryan Maibach, president and CEO
Revenue 2015/2012: $1.78B/$1.0B
What it does: General contracting,
construction management,
design-build, engineer-procure-construct, integrated project
delivery, self-perform services: civil,
concrete, rigging and interiors
Increased regional and national
presence with strategic clients and
markets, particularly in industrial,
manufacturing and education.
Projects include helping in the
redevelopment of the Daytona
International Speedway, expanding
and renovating the football
stadiums for the University of
Michigan and Michigan State
University, and building automotive
facilities, said Doug Maibach,
executive vice president.
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Southfield-based construction manager Barton Malow Co. helped in the “Daytona Rising” redevelopm
Daytona Beach, Fla.
5. SUN COMMUNITIES
INC.
8. GENERAL RV
CENTER INC.
Revenue 2015/2012: $675M/$340M
What it does: Real estate operations
Reason for revenue increase: Growth
Revenue 2015/2012: $582M/$303M
What it does: Recreational vehicle
Southfield
Gary Shiffman, chairman and CEO
from acquisitions, including last
year’s $1.32 billion acquisition of
the Green Courte Partners LLC
portfolio of 59 properties in 11
states, including Michigan. Also
expanded existing communities
and increased from 136 communities nationwide and 45,000 housing
sites to 337 communities nationwide and 117,000 housing sites.
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and trailer dealership
stems mostly from out-of-state
expansions, said Baidas. A new
corporate headquarters and
supercenters in Wixom and Florida
opened last year, and the company
has seen strong sales growth and
increased market share.
6. THE DIEZ GROUP
9. ARISTEO
CONSTRUCTION CO.
Revenue 2015/2012: $1.08B/$610M
What it does: Aluminum and steel
Revenue 2015/2012: $410M/$206M
What it does: General contractor
Dearborn
Gerald Diez, CEO
sales, processing and warehousing
companies
Reason for revenue increase: New
sites, new equipment and an
overall increase in business have
helped propel the company’s
growth.
7. VICTORY
AUTOMOTIVE
GROUP INC.
Canton Township
Jeffrey Cappo, president
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Wixom
Robert Baidas, CEO; Loren Baidas,
president and chairman
Revenue 2015/2012: $1.22B/$703M
What it does: Automotive dealerships
Reason for revenue increase: Has
seen significant sales from launching its service retention program
CarDoc in 2013, and growth from
purchasing 15 dealerships nationally, mainly in California.
Livonia
Joseph Aristeo, president
and construction manager
Diversified into new markets,
including energy and higher
education. A recent project
includes DTE Energy Co.’s wind
farm, about a $30 million project,
in mid-Michigan’s Gratiot County
that is the largest in the state in
terms of energy production. Also
saw growth from expanded
services and an increase in
automotive projects.
10. UNITED ROAD
SERVICES INC.
Romulus
Kathleen McCann,
president and CEO
Revenue 2015/2012: $500M/$275M
What it does: Vehicle logistics for
vehicle manufacturers, remarketers, auctions, dealers and internet
vehicle transactions nationally
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telematics for the automotive
insurance industry.
17. DIVERSIFIED
RESTAURANT
HOLDINGS INC.
Southfield
Michael Ansley, chairman, president
and CEO
Revenue 2015/2012: $172M/$77M
What it does: Buffalo Wild Wings
franchisee, Bagger Dave’s restaurants.
Reason for revenue increase: Expansion in Buffalo Wild Wings franchises.
18. REVSPRING INC.
ROSSETTI ASSOCIATES INC.
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for $225 million in December 2013.
Has also seen growth organically.
11. TALMER BANCORP
INC.
Troy
David Provost, chairman,
president and CEO
Revenue 2015/2012: $235M/$103M
What it does: Banking and financial
services
Acquired eight banks through
acquisitions, including First of
Huron Corp. of Bad Axe and its
wholly owned subsidiary, Signature
Bank, in a deal valued at about
$13.4 million. The bank is in the
process of being acquired by
Midland-based Chemical Financial
Corp.
12. ACRO SERVICE
CORP.
Livonia
Ron Shahani, president and CEO
Revenue 2015/2012: $318M/$160M
What it does: Staff augmentation for
IT, engineering, office support,
outsourcing and IT and engineering consulting, application
development and enablement,
relational database design and
development, Web design and
development
Reason for revenue increase: Organic
growth, as well as an increase in
demand for its staffing and
technology tools and services.
12. ALTA
EQUIPMENT CO.
Wixom
Steven Greenawalt, CEO
Revenue 2015/2012: $303M/$152M
What it does: Heavy construction
equipment, material handling
equipment, industrial equipment,
cranes
Expansions into new construction
markets including cranes, contractor rentals, and power generation,
as well as a robust auto sector that
continues to benefit the industrial
side of the business.
14. PISTON
AUTOMOTIVE LLC
Redford Township
Vincent Johnson, chairman
Revenue 2015/2012: $931M/$570M
What it does: Automotive supplier
Company did not comment, but
sales in the automotive sector have
grown with the economy.
14. LAFONTAINE
AUTOMOTIVE GROUP
Highland Township
Michael LaFontaine, owner and
chairman; Maureen LaFontaine,
owner and president
Revenue 2015/2012: $768M/$453M
What it does: Automobile dealer-
ships
Reason for revenue increase: Rapid
growth from purchasing about
eight dealerships. Vehicle sales also
increased.
16. DANLAW INC.
Novi
Raju Dandu, chairman and CEO
Revenue 2015/2012: $118M/$30M
What it does: Cloud-based,
Wixom
Timothy Schriner, president and CEO
Revenue 2015/2012: $416M/$236M
What it does: Business process
What it does: Specialty insurance,
reinsurance, premium financing,
loss control and premium audits.
growth, acquisitions and investments in acquiring solid talent,
said Daniel Kaufman, senior vice
president.
22. GENTHERM INC.
Revenue 2015/2012: $2.00B/$1.37B
ships
from the upswing in the automotive industry and aggressively
pursuing acquisitions that led to
the purchasing of 14 dealerships,
said Fischer. In 2014, eight dealerships were purchased.
Northville
Daniel Coker, president and CEO
24. PENSKE CORP.
Revenue 2015/2012: $856M/$555M
What it does: Global developer and
Revenue 2015/2012:
marketer of thermal management
technologies for heating and cooling
and temperature control applications
Continued growth from penetrating key automotive markets and
has seen an increase in its customer
base.
23. THE SUBURBAN
COLLECTION
Troy
David Fischer, chairman and CEO
Bloomfield Hills
Roger Penske, chairman
$29.18B/$21.30B
What it does: Retail automotive,
truck leasing and logistics, motorsports racing
growth due to the increase in
automotive sales. Also saw significant
growth from acquisitions, including
Texas-based Premier Truck Group,
which added $18 million in annual
revenue.
SEE NEXT PAGE
outsourcing, accounts receivable
management
Reason for revenue increase: Grew
both organically and through
acquisitions, said Schriner. Four
buyouts from the last two years
have also added further revenue.
18. RAMCOGERSHENSON
PROPERTIES TRUST
Farmington Hills
Dennis Gershenson, president and
CEO
Revenue 2015/2012: $252M/$125M
What it does: Real estate investment
trust focused on shopping centers
Acquisitions, shopping center
redevelopments and property sales
has added revenue. Last year sold
$88.7 million in properties.
20. MICHIGAN CAT
Novi
Bill Hodges, executive vice president
Revenue 2015/2012: $627M/$392M
What it does: Heavy equipment
dealer providing sales of new and
used equipment as well as rental
and parts and service
Benefited from increased funding
passed by Legislature specific to
infrastructure projects, and also
benefited from low interest rates
and reinvestment in Michigan. Also
increased sales by investing in
building and expanding four
facilities in 2015.
Progress.
At the heart of West Michigan’s economic development,
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are uniquely prepared to meet the challenges of a changing
world. That’s the Laker Effect.
21. H.W. KAUFMAN
FINANCIAL GROUP
INC./BURNS &
WILCOX LTD.
Farmington Hills
Alan Jay Kaufman, chairman,
president and CEO
Revenue 2015/2012: $1.83B/$122B
gvsu.edu
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FROM PREVIOUS PAGE
24. UNITED SHORE
FINANCIAL
SERVICES LLC
Troy
Mat Ishbia, president and CEO
Revenue 2015/2012: $510M/$321M
What it does: Mortgage banking
Reason for revenue increase: Saw a
220 percent increase in new hires
and training, and invested in
technology to streamline the
mortgage process, including loan
tracking mobile apps.
26. SHERWOOD FOOD
DISTRIBUTORS LLC
Detroit
Earl Ishbia, chairman,
president and CEO
Revenue 2015/2012: $2.18B/$1.52B
What it does: Wholesale food distributor
Reason for revenue increase: Saw
rapid growth from two new
distribution centers in Atlanta and
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Miami, said Jason Ishbia, CFO. Also
saw growth from an undisclosed
large national food service
customer.
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27. MEDCART
SPECIALTY PHARMACY
Det
Fran
Livonia
Eddie Abueida, co-CEO; Ed Saleh,
co-CEO
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Revenue 2015/2012: $81M/$35M
What it does: Specialty pharmacy
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distribution industry, and with the
demand for new drug therapies for
managing chronic diseases,
including hepatitis C.
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28. THE
CHRISTMAN CO.
Detroit
Ronald Staley, senior vice president,
Southeast Michigan operations
Revenue 2015/2012: $120M/$61M
What it does: Construction
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A recent project for Detroit-based construction manager The Christman Co. was the Detroit Medical Center specialty
children’s center in Troy.
management, general contracting,
design/build, facilities planning
and analysis, program management, real estate development,
self-perform skilled construction
trades
A F e e - O n l y We a l t h M a n a g e m e n t G r o u p
Michigan’s #1 Financial Advisor
Benefited from the uptick in the
economy and awarded multiple
projects that include higher
education, office buildings and
public work. Recent projects
include Detroit Medical Center’s
specialty children’s center in Troy, a
$22 million project.
28. AUBURN
PHARMACEUTICAL CO.
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Jeffrey Farber, chairman, president
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What it does: Distributor of generic
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growth stems from uptick in
generic drug demand. Also
expanded West Coast operations
and invested in technology,
including an online service that
offers patients 24-hour prescription
refills.
30. PRIZELOGIC LLC
Southfield
Keith Simmons, CEO
Revenue 2015/2012: $50M/$14M
What it does: Online promotion
execution for Fortune 100 brands
Expanded internationally, grew
from new product investments,
benefited from mobile marketing
incentives and won many contracts
as compared with competition.
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Troy
Kurt Mains, senior vice president
Revenue 2015/2012: $75M/$33M
What it does: Staffing in automo-
tive, engineering, IT, machine tool
and other technical fields
due to the merger of two staffing
companies — Batton Technical Inc.
and Technical Engineering
Consultants Inc. — combined with
organic growth.
32. AMERICAN AXLE &
MANUFACTURING
HOLDINGS INC.
Detroit
David Dauch, chairman and CEO
Revenue 2015/2012: $3.90B/$2.93B
Reason for revenue increase: Record
pharmaceuticals
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ENGINEERING
CONSULTANTS
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Developing customized investment strategies is a
continuum. We are honored to serve our clients.
Relationships. Rigor. Results. sales and gross profits due to strong
North American automotive
market.
33. RAY LAETHEM
INC.
Grosse Pointe
Jeff Laethem, president
Revenue 2015/2012: $148M/$87M
ship
fueled by strong new vehicle sales.
www.zhangfinancial.com
34. WORKFORCE
SOFTWARE LLC
Livonia
Mike Morini, CEO
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Revenue 2015/2012: $66M/$30M
What it does: Complete workforce
management platform for large
employers
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software products.
35. THE IDEAL
GROUP INC.
Detroit
Frank Venegas Jr., chairman and CEO
Revenue 2015/2012: $276M/$182M
What it does: General contracting,
specialized miscellaneous steel
manufacturing and distribution of
protective barrier products, global
supply chain management, other
Increased business with General
Motors Co., introduced new
products and saw growth from
corporate customers that include
Wal-Mart Stores Inc., Target Corp.
and Walgreens Boots Alliance Inc.
36. AMERISURE
MUTUAL
INSURANCE CO.
Farmington Hills
Gregory Crabb, president and CEO
Revenue 2015/2012: $760M/$551M
What it does: Property and casualty
insurance company
Continuing to grow due to the
rebound of the construction
industry and demand for workers’
compensation.
DOMINO’S
Domino’s Pizza expanded its store count by more than 2,000 in the past three
years and has expanded into new international markets.
36. GHAFARI INC.
Dearborn
Yousif Ghafari, chairman
Revenue 2015/2012: $174M/$110M
What it does: Architecture and
engineering organization providing
architectural, manufacturing and
process engineering; 3-D building
information modeling and laser
scanning, consulting and professional staffing
Business diversification, and grew
with the resurgence of the economy, particularly in the automotive
industry.
38. DOMINO’S PIZZA
INC.
Ann Arbor
Patrick Doyle, president and CEO
Revenue 2015/2012: $2.22B/$1.68B
What it does: Restaurant franchisor
Reason for revenue increase: Saw an
increase in store sales and expanded by more than 2,000 stores. Also
expanded into new international
markets, including Italy.
39. W3R CONSULTING
Southfield
Eric Hardy, chairman,
president and CEO
Revenue 2015/2012: $57M/$27M
What it does: IT staffing and
consulting, including application
development, business intelligence
and data analytics
Acquired major accounts and
expanded business by developing a
health care division.
LEAR CORP.
Lear Corp. purchased this building at 119 State St. in Capitol Park in downtown
Detroit from Bedrock Real Estate Services LLC last fall and plans to turn it into its
Innovation and Design Center.
40. LEAR CORP.
Southfield
Matthew Simoncini,
president and CEO
Revenue 2015/2012:
stems from product development
in industry trends such as safety,
fuel and economy. Also saw an
increase in market share and
$18.21B/$14.57B
SEE NEXT PAGE
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LITTLE CAESARS
The proposed Little Caesars Global Resource Center along Woodward Avenue in
Detroit is among the newly announced projects from the Ilitch companies.
FROM PREVIOUS PAGE
growth from the acquisition of
automotive leather supplier Eagle
Ottawa LLC for $850 million.
40. BUFF WHELAN
CHEVROLET
Sterling Heights
Kerry Whelan, president
Revenue 2015/2012: $208M/$137M
What it does: Automotive dealership
sales and service
IS EVERYTHING.
Company did not comment, but
sales in the automotive sector have
grown with the economy.
42. RELIABLE
SOFTWARE
RESOURCES INC.
Northville
Ravi Vallem, CEO; Sridhar Kodati,
CFO; Venkat Gone, president
Revenue 2015/2012: $58M/$28M
What it does: Data and application
services including big data, advanced analytics, business intelligence
Advanced technologies and global competition require new skills. Lawrence
Technological University’s innovative master's degree programs in Colleges of Architecture
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Invested in new talent, and has
seen growth due to high demand
for data and analytic services, said
Vallem.
43. CREDIT
ACCEPTANCE CORP.
Southfield
Brett Roberts, CEO
Revenue 2015/2012: $825M/$609M
What it does: Financial institution
from increases in loans in recent
years.
43. INTERNATIONAL
AUTOMOTIVE
COMPONENTS
Southfield
Robert “Steve” Miller,
president and CEO
Revenue 2015/2012: $5.90B/$4.70B
What it does: Global supplier of
interior automotive components
and systems including cockpits and
overhead systems and soft trim and
acoustics
Reason for revenue increase: Added
14 facilities in seven countries for a
total of 103 facilities. Countries
include Brazil, South Africa, Mexico
and China.
43. AGREE REALTY
CORP.
Farmington Hills
Joey Agree, CEO
Revenue 2015/2012: $70M/$36M
What it does: Real estate investment
trust focused on retail properties
Invested $600 million in development of acquisitions in net lease
retail, which includes more than
200 properties in more than 30
states, said Agree.
43. SYNTEL INC.
Troy
Bharat Desai, chairman; Nitin
Rakesh, CEO and president
Revenue 2015/2012: $969M/$724M
What it does: IT outsourcing,
knowledge process outsourcing,
application development and
management, e-business services,
architecture consulting and
support, IT infrastructure management, cloud computing, data
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warehousing and business intelligence, application testing, migration solutions
mainly from banking and financial
services.
47. ILITCH
COMPANIES
Detroit
Christopher Ilitch, president and CEO
Revenue 2015/2012: $3.30B/$2.60B
What it does: Little Caesars Pizza,
Detroit Red Wings, Blue Line
Foodservice Distribution, Champion Foods, Olympia Entertainment,
Olympia Development, MotorCity
Casino Hotel, Little Caesars Pizza
Kit Fundraising Program and Ilitch
Holdings Inc.
Continued growth mainly due to
demand for products under the
Little Caesars brand.
48. ORLEANS
INTERNATIONAL INC.
Farmington Hills
Earl Tushman, president and CEO
Revenue 2015/2012: $856M/$637M
What it does: Meat importer
due to general increases in meat
costs and diversification of
products, including higher-end and
imported meats. Market share has
also increased.
49. PLANTE MORAN
PLLC
Southfield
Gordon Krater, managing partner
Revenue 2015/2012: $466M/$331M
What it does: Accounting and
management consulting firm
growth in the private equity, wealth
management and management
consulting practices. The merger of
Chicago-based Blackman Kallick in
2013 accounted for about $50
million in revenue.
50. NATIONAL FOOD
GROUP INC.
Novi
Sean Zecman, president and CEO
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Revenue 2015/2012: $96M/$57M
What it does: Food distribution,
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opportunity buys, commodity
processing
due to pursuit of new talent.
Employee turnover rates have
decreased from 18 percent in 2011
to 9 percent in 2015.
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Detroit Manufacturing
Systems
FirstMerit Bank
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Nancy and Jim Grosfeld
Gilda and John Jacobs
Jaffe Counsel PLC
MGM Grand Foundation
RHP Properties Inc.
Stephanie and Jared
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Services
Roxbury Group
Schechter Wealth
Simmons & Clark Jewelers
SourceAmerica
Testing Engineers &
Consultants Inc.
Elissa and Jeff Tischler
Denise and Michael Tobin
Vesco Oil Corporation
Lori and Steven Weisberg
Ziecik & Segal Families
Supporting Sponsors
Action Wood 360°
The Bottle Crew
Brooks Financial
Cherry Health Community
Treatment Centers
CORE Partners
Associates LLC
Ellyn and Jon Davidson
Suzi Dell and Jodi Neff
Deloitte
Denha & Associates PLLC
Diane Farber
Suzie and Steve Feldman
Gateway Travel Service
Goldfish Swim School
Franchising LLC
Gorman’s Furniture
Judy Greenwald
Guardian Industries Corp.
Jeffrey Kaftan
Linda and Dennis Kayes
Fern and Brian Kepes
Law Offices of Jorin G.
Rubin PC
Marquette University
Merrill Lynch – Lisa London
MORC
Muchmore Harrington
Smalley & Associates
Inc.
New Center Stamping
Pappas Financial
Pulse 220
Rehmann
Donna Rosenthal
Paul Schwarzbaum
Richard S. Schwartz, M.D.
SMZ
SNL Unlimited Vending
Soave Enterprises
Ulliance Inc.
David Victor
Ron Yolles, Diversified
Portfolios Inc.
www.jvsdet.org
DBpageAD_DBpageAD.qxd 7/6/2016 11:42 AM Page 1
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19
CRAIN'S LIST: THE FAST 50
Rank
Company
Address
Phone; website
Top executive(s)
Ranked by combined revenue growth rankings, 2012-2015
Combined
Revenue
revenue
Revenue
Revenue
3-year
growth
Revenue
growth ($000,000) % change % change ($000,000) growth
rankings 2015/2012 2015-2012 ranking
2015-2012 ranking Reason for increase
1
Meridian Health Plan
1 Campus Martius, Detroit, 48226
(313) 324-3700, corp.mhplan.com
David Cotton
CEO
9
$3,365.5
$977.3
244%
3
$2,388.3
6
Driving growth has been expansion of its Medicaid health plans in
Michigan, Iowa and Illinois. MeridianRx Inc, has also seen
significant membership growth.
2
Diplomat Pharmacy Inc.
4100 S. Saginaw St., Flint , 48507
(888) 720-4450, diplomatpharmacy.com
Phil Hagerman
chairman and CEO
11
3,366.6
1,126.9
199
4
2,239.7
7
Acquisitions, including the 2015 acquisition of Cincinnati-based
BioRx LLC, a specialty pharmacy and infusion services company.
Also diversified into high-growth therapeutic medication.
3,047.3
1,100.0
177
5
1,947.3
8
42
1,780.3
1,005.9
77
28
774.4
14
4
Barton Malow Co.
26500 American Drive, Southfield, 48034
(248) 436-5000, www.bartonmalow.com
George
Thanopoulos, CEO;
Douglas Grimm,
president and COO
Ryan Maibach
president and CEO
13
3
Metaldyne Performance Group Inc.
One Towne Square, Suite 550, Southfield , 48076
(248) 727-1829, www.mpgdriven.com
Gary Shiffman
chairman and CEO
50
674.7
339.6
99
21
335.1
29
5
Sun Communities Inc.
27777 Franklin Road, Suite 200, Southfield, 48034
(248) 208-2500, www.suncommunities.com
6
The Diez Group
8111 Tireman Ave., Dearborn, 48126
(313) 491-1200, www.thediezgroup.com
Gerald Diez
CEO
52
1,079.0
610.0
77
29
469.0
23
Metaldyne LLC was acquired by private equity firm American
Securities LLC in 2012 and merged with $1 billion companies
Grede Holdings LLC and HHI Group Holdings LLC, both
majority-owned by American Securities, to form MPG in 2014.
Increased regional and national presence, particularly in
industrial, manufacturing and education. Projects include the
Daytona International Speedway, the football stadiums for the
UM and MSU, and building automotive facilities
Growth from acquisitions, including last year’s $1.32 billion
acquisition of the Green Courte Partners LLC portfolio. Also
expanded existing communities and increased to 337
communities nationwide to 117,000 housing sites.
New sites, new equipment and an overall increase in business
have helped propel the company's growth.
7
Victory Automotive Group Inc.
46352 Michigan Ave., Canton Twp., 48188
(734) 495-3500, www.victoryautomotivegroup.com
Jeffrey Cappo
president
53
1,223.7 B
703.5 B
74
32
520.3
21
Has seen significant sales from launching its service retention
program CarDoc in 2013, and growth from purchasing 15
dealerships nationally, mainly in California.
General RV Center Inc.
25000 Assembly Drive, Wixom, 48393
(248) 349-0900, www.generalrv.com
Robert Baidas, CEO;
Loren Baidas,
president and
chairman
Joseph Aristeo
president
57
582.0
303.0
92
25
279.0
32
Growth stems mostly from out-of-state expansions.
61
410.0
206.0
99
20
204.0
41
Diversified into new markets, including energy and higher
education. Also saw growth from expanded services and an
increase in automotive projects.
8
9
Aristeo Construction Co.
12811 Farmington Road, Livonia, 48150
(734) 427-9111, www.aristeo.com
10
United Road Services Inc.
10701 Middlebelt Road, Romulus, 48174
(734) 947-7900, unitedroad.com
Kathleen McCann
president and CEO
63
500.0
275.0
82
27
225.0
36
Completed an acquisition of auto hauling division of Billings,
Mo.-based Waggoners Trucking Inc. for $225 million in December
2013. Has also seen growth organically.
Talmer Bancorp Inc. C
2301 W. Big Beaver Road, Suite 525, Troy, 48084
(248) 649-2301, www.talmerbank.com
David Provost
chairman, president
and CEO
64
234.9
102.6
129
8
132.3
56
12
Acro Service Corp.
39209 W. Six Mile Road, Suite 250, Livonia, 48152
(734) 591-1100, www.acrocorp.com
Ron Shahani
president and CEO
66
318.3
159.6
99
19
158.7
47
Acquired eight banks through acquisitions, including First of
Huron Corp. of Bad Axe and its subsidiary, Signature Bank. The
bank is being acquired by Midland-based Chemical Financial
Corp.
Organic growth, as well as an increase in demand for its staffing
and technology tools and services.
12
Alta Equipment Co.
28775 Beck Road, Wixom, 48393
(248) 449-6700, www.altaequipment.com
Steven Greenawalt
CEO
66
303.2
152.0
99
18
151.2
48
Expansions into new construction markets including cranes,
contractor rentals, and power generation, as well as a robust auto
sector that continues to benefit the industrial side of the business.
14
Piston Automotive LLC
12723 Telegraph Road, Redford Twp., 48239
(313) 541-8674, www.pistongroup.com
Vincent Johnson
chairman
67
930.8
569.9
63
39
360.9
28
Company did not comment, but sales in the automotive sector
have grown with the economy.
Michael LaFontaine,
LaFontaine Automotive Group
4000 W. Highland Road, Highland Township, 48357 owner and
chairman; Maureen
(248) 887-4747, www.thefamilydeal.com
LaFontaine, owner
and president
Raju Dandu
Danlaw Inc.
chairman and CEO
41131 Vincenti Court, Novi, 48375
(248) 476-5571, www.danlawinc.com
Michael Ansley
Diversified Restaurant Holdings Inc.
chairman, president
27680 Franklin Road, Southfield, 48034
and CEO
(248) 223-9160,
www.diversifiedrestaurantholdings.com
Timothy Schriner
RevSpring Inc.
president and CEO
29241 Beck Road, Wixom, 48393
(248) 567-7300, www.revspringinc.com
Dennis Gershenson
Ramco-Gershenson Properties Trust
president and CEO
31500 Northwestern Highway, Suite 300,
Farmington Hills, 48334
(248) 350-9900, www.rgpt.com
Bill Hodges
Michigan CAT
executive vice
24800 Novi Road, Novi, 48375
president
(248) 349-4800, www.michigancat.com
67
768.4
453.3
70
37
315.1
30
Rapid growth from purchasing about eight dealerships. Vehicle
sales also increased.
68
118.2
30.0
294
1
88.2
67
Continued growth by adding telematics for the automotive
insurance industry.
72
172.5
77.4
123
9
95.0
63
Expansion in Buffalo Wild Wings franchises.
74
416.0
236.1
76
30
179.9
44
Grew both organically and through acquisitions, said Timothy
Schriner, CEO. Four buyouts from the last two years have also
added further revenue.
74
251.8
125.2
101
17
126.6
57
Acquisitions, shopping center redevelopments and property sales
have added further revenue. Last year, sold $88.7 million in
properties.
76
627.0
392.0
60
41
235.0
35
Benefited from increased funding passed by Legislature specific
to infrastructure projects, and also from low interest rates and
reinvestment in Michigan.
H.W. Kaufman Financial Group Inc./Burns &
Wilcox Ltd.
30833 Northwestern Highway, Farmington Hills,
48334
(248) 932-9000, www.kaufmanfinancialgroup.com
Alan Jay Kaufman
chairman, president
and CEO
79
1,830.0
1,225.0
49
61
605.0
18
Organic growth, acquisitions and investments in acquiring solid
talent, said Daniel Kaufman, senior vice president.
Gentherm Inc.
Daniel Coker
president and CEO
80
856.4
555.0
54
49
301.5
31
Continued growth from penetrating key automotive markets and
has seen an increase in its customer base.
The Suburban Collection
1795 Maplelawn Drive, Troy, 48084
(877) 471-7100, www.suburbancollection.com
David Fischer
chairman and CEO
83
2,001.5
1,370.8
46
66
630.7
17
Upswing in the automotive industry and dealership acquisitions.
Penske Corp.
2555 Telegraph Road, Bloomfield Hills, 48302-0954
(248) 648-2000, www.penske.com
Roger Penske
chairman
86
29,178.0
21,300.0
37
84
7,878.0
2
Organic growth due to the increase in automotive sales. Also saw
significant growth from acquisitions, including Texas-based
Premier Truck Group, which added $18 million in annual
revenue.
11
14
16
17
18
18
20
21
22
23
24
21680 Haggerty Road, Suite 101, Northville, 48167
(248) 504-0500, www.gentherm.com
This list is an approximate compilation of the fastest-growing companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. Fastest growing is a measurement of revenue growth and
does not denote whether a company is profitable. It is not a complete listing but the most comprehensive available.
B Automotive News.
C Midland-based Chemical Financial Corp. has agreed to buy Talmer Bancorp Inc. Pending approval by shareholders, the deal is expected to close this year. David Provost will join the Chemical
Financial Corp.'s board of directors once purchase is approved.
SEE NEXT PAGE
20
FROM PREVIOUS PAGE
CRAIN'S LIST: THE FAST 50
Rank
Company
Address
Phone; website
Top executive(s)
Ranked by combined revenue growth rankings, 2012-2015
Combined
Revenue
revenue
Revenue
Revenue
3-year
growth
Revenue
growth ($000,000) % change % change ($000,000) growth
rankings 2015/2012 2015-2012 ranking
2015-2012 ranking Reason for increase
24
United Shore Financial Services LLC
1414 E. Maple Road, Troy, 48083
(855) 888-8737, www.unitedshore.com
Mat Ishbia
president and CEO
86
$510.1
$321.3
59%
43
$188.8
43
Saw a 220 percent increase in new hires and training, and
invested in technology in order to streamline the mortgage
process, including loan tracking mobile apps.
26
Sherwood Food Distributors LLC
12499 Evergreen Road, Detroit, 48228
(313) 659-7300, www.sherwoodfoods.com
Earl Ishbia
chairman, president
and CEO
88
2,181.3
1,523.4
43
72
657.9
16
Saw rapid growth from two new distribution centers in Atlanta
and Miami, said Jason Ishbia, CFO. Also saw growth from an
undisclosed large national food service customer.
27
Medcart Specialty Pharmacy
32131 Industrial Road, Livonia, 48150
(877) 770-4633, www.medcartpharmacy.com
Eddie Abueida and
Ed Saleh
co-CEOs
96
81.0
35.0
131
7
46.0
89
Grew with the specialty pharmaceutical distribution industry,
and with the demand for new drug therapies for managing
chronic diseases, including hepatitis C.
28
Auburn Pharmaceutical Co.
2354 Bellingham, Troy, 48083
(248) 526-3700, auburngenerics.com
Jeffrey Farber
chairman, president
and CEO
100
106.2
52.7
101
16
53.5
84
Uptick in generic drug demand. Also expanded West Coast
operations and invested in technology, including an online
service that offers patients 24-hour prescription refills.
Ronald Staley
senior vice
president, Southeast
Michigan operations
100
120.1
60.9
97
22
59.2
78
28
The Christman Co.
The Fisher Building, 3011 W. Grand Blvd., Detroit,
48202-3030
(313) 908-6060, www.christmanco.com
Benefited from the uptick in the economy and awarded multiple
projects that include higher education, office buildings and
public work. Recent projects include Detroit Medical Center's
specialty children center in Troy, a $22 million project.
30
PrizeLogic LLC B
25200 Telegraph Road, Suite 405, Southfield, 48033
(888) 795-6442, www.prizelogic.com
Keith Simmons
CEO
103
49.9
14.2
251
2
35.7
101
Expanded internationally, grew from new product investments,
benefited from mobile marketing incentives and won many
contracts as compared with competition.
31
Technical Engineering Consultants
850 Stephenson Highway, Suite 600, Troy, 48083
(248) 720-5020, www.tec.biz; www.battoninc.com
Kurt Mains
senior vice president
104
74.6
33.5
123
10
41.1
94
Growth due to the merger of two staffing companies, Batton
Technical Inc. and Technical Engineering Consultants Inc.,
combined with organic growth.
American Axle & Manufacturing
Holdings Inc.
David Dauch
chairman and CEO
111
3,903.1
2,930.9
33
99
972.2
12
Record sales and gross profits due to strong North American
automotive market.
32
One Dauch Drive, Detroit, 48211
(313) 758-2000, www.aam.com
33
Ray Laethem Inc.
1677 Mack Ave., Grosse Pointe, 48224
(313) 886-1700, www.raylaethem.com
Jeff Laethem
president
112
148.0
87.0
70
35
61.0
77
Growth is fueled by strong new vehicle sales.
34
WorkForce Software LLC
38705 Seven Mile Road, Livonia, 48152
(877) 493-6723, www.workforcesoftware.com
Mike Morini
CEO
113
65.9
30.3
118
11
35.6
102
Growth stems from product demand for its software products.
35
The Ideal Group Inc.
2525 Clark St., Detroit, 48209
(313) 849-0000, www.weareideal.com
Frank Venegas Jr.
chairman and CEO
118
276.3
182.0
52
54
94.3
64
Increased business with General Motors Co., introduced new
products and saw growth from corporate customers that include
Wal-Mart, Target Corp. and Walgreens Boots Alliance Inc.
36
Amerisure Mutual Insurance Co.
26777 Halsted Road, Farmington Hills, 48331
(248) 615-9000, www.amerisure.com
Gregory Crabb
president and CEO
121
759.7
551.2
38
81
208.4
40
Continuing to grow due to the bounce-back of the construction
industry and demand for workers’ compensation.
36
Ghafari Inc.
17101 Michigan Ave., Dearborn, 48126
(313) 441-3000, www.ghafari.com
Yousif Ghafari
chairman
121
173.9
110.3
58
46
63.6
75
Business diversification, and grew with the resurgence of the
economy, particularly in the automotive industry.
38
Domino's Pizza Inc.
30 Frank Lloyd Wright Drive, Ann Arbor, 48105
(734) 930-3030, www.dominos.com
Patrick Doyle
president and CEO
122
2,216.5
1,678.4
32
102
538.1
20
Saw an increase in store sales and expanded by more than 2,000
stores. Also expanded into new international markets, including
Italy.
39
W3R Consulting
1000 Town Center, Suite 1150, Southfield, 48075
(248) 358-1002, www.w3r.com
Eric Hardy
chairman, president
and CEO
124
57.0
27.0
111
13
30.0
111
Acquired major accounts, and expanded business by developing
a health care division.
40
Lear Corp.
21557 Telegraph Road, Southfield, 48033
(248) 447-1500, www.lear.com
Matthew Simoncini
president and CEO
125
18,211.4
14,567.0
25
121
3,644.4
4
Growth from product development in areas such as safety, fuel
and economy. Also an increase in market share, and growth from
the acquisition of Eagle Ottawa LLC.
40
Buff Whelan Chevrolet
40445 Van Dyke Ave., Sterling Heights, 48313
(586) 939-7300, www.buffwhelan.com
Kerry Whelan
president
125
207.9
136.7
52
53
71.2
72
Company did not comment, but sales in the automotive sector
have grown with the economy.
42
Reliable Software Resources Inc.
22260 Haggerty Road #285, Northville, 48167
(248) 504-6869, www.rsrit.com
Ravi Vallem, CEO;
Sridhar Kodati, CFO
126
58.0
28.0
107
14
30.0
112
Invested in new talent, and has seen growth due to high demand
for data and analytic services, said Ravi Vallem, CEO.
43
Credit Acceptance Corp.
25505 W. 12 Mile Road, Southfield, 48034
(248) 353-2700, www.creditacceptance.com
Brett Roberts
CEO
128
825.3
609.2
35
90
216.1
38
Growth from increases in loans in recent years.
Syntel Inc.
525 E. Big Beaver Road, Suite 300, Troy, 48083
(248) 619-2800, www.syntelinc.com
Bharat Desai,
chairman; Nitin
Rakesh, CEO and
president
Joey Agree
CEO
128
968.6
723.9
34
94
244.7
34
Growth mainly from banking and financial services. Also great
organically.
128
70.0
35.8
95
24
34.2
104
Invested $600 million in development of acquisitions in net lease
retail, which includes over 200 properties in over 30 states, said
Joey Agree, CEO.
Robert Miller
president and CEO
128
5,900.0
4,700.0
26
118
1,200.0
10
Added 14 additional facilities in seven different countries for a
total of 103 facilities. Countries include Brazil, South Africa,
Mexico and China.
Christopher Ilitch
president and CEO
129
3,300.0
2,600.0
27
114
700.0
15
Continued growth mainly due to demand for products under the
Little Caesars brand.
Earl Tushman
Orleans International Inc.
30600 Northwestern Highway, Suite 300, Farmington president
Hills, 48334
(248) 855-5556, www.orleansintl.com
Gordon Krater
Plante Moran PLLC
managing partner
27400 Northwestern Highway, Southfield, 48037
(248) 352-2500, www.plantemoran.com
Sean Zecman
National Food Group Inc.
president and CEO
46820 Magellan Drive, Suite A, Novi, 48377-2454
(800) 886-6866, www.nationalfoodgroup.com
130
856.0
637.0
34
93
219.0
37
Growth due to general increases in meat costs and
diversification of products, including higher-end and imported
meats. Market share has also increased.
132
465.9
331.0
41
77
134.9
55
Growth in the private equity, wealth management and
management consulting practices. The merger of Chicago-based
Blackman Kallick in 2013 accounted for about $50M in revenue.
134
96.4
56.9
69
38
39.5
96
Growth due to pursuit of new talent. Employee turnover rates
have decreased from 18 percent in 2011 to 9 percent in 2015.
43
43
43
47
48
49
50
Agree Realty Corp.
31850 Northwestern Highway, Farmington Hills,
48334
(248) 737-4190, www.agreerealty.com
International Automotive Components
28333 Telegraph Road, Southfield, 48034
(248) 455-7000, www.iacgroup.com
Ilitch companies
2211 Woodward Ave., Detroit, 48201
(313) 471-6600, www.ilitchcompanies.com
This list is an approximate compilation of the fastest-growing companies in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. Fastest growing is a measurement of revenue growth and
does not denote whether a company is profitable. It is not a complete listing but the most comprehensive available.
B The Charlotte, N.C.-based private equity firm Pamlico Capital took majority ownership stake in the company on June 30.
LIST RESEARCHED BY SONYA D. HILL
21
SPECIAL REPORT: CRAIN’S MICHIGAN BUSINESS
MARY KRAMER
Publisher
[email protected]
Twitter: @mkramercrain
40 years later,
Gerald Ford
gets his due
W
ho do you trust?
Distrust in politics and public
institutions is all around us, from
Flint to presidential politics. Maybe that’s
why there’s a small groundswell aimed at giving President Gerald R. Ford his due. Only
about 40 years too late.
A new documentary about Ford, commissioned in part by the Peter F. Secchia Family
Foundation, debuted in May on the National
Geographic cable channel. New York Citybased Ark Media wrote and produced “Gerald
R. Ford: A Test of Character.”
Michigan’s own Jeff Daniels narrated the
film, which includes interviews with Ford
Cabinet members like Dick Cheney and
Henry Kissinger.
Ford is also the only person to serve as vice
president and president without being elected to either post. Last but not least, he’s the
only president who earned the rank of Eagle
Scout. Which may actually have something
to do with the reputation he built for trust
and integrity.
Ford is known best for giving a full and unconditional pardon to the disgraced Richard
Nixon. Now even his critics admit it was the
right call to move the country forward, though
it may have cost Ford the election that instead
gave us four years of Jimmy Carter.
But we can learn business lessons from
Ford as well. Like putting a high-performing
team together and setting two or three key
goals.
Ford liked to mix top-drawer younger staff
with more seasoned veterans, encouraging
them to debate ideas, once telling a reporter
that he worried about “group think” and “circle the wagons” mentality.
After the Nixon pardon, he focused on the
ailing economy. He told Congress that no
new spending programs would come until
the budget was balanced. He vetoed 66 bills.
Peter Secchia, a former U.S. ambassador
to Italy and a Grand Rapids supporter of
Ford’s, said the film will be shown in education programs at the presidential museum in
Grand Rapids to teach lessons in character
and integrity.
“His (Ford’s) presidency was so short, nobody knows enough about him,” Secchia
said last week.
Here’s one lesson: Martha Griffiths, a
Democrat and congressional veteran and
lieutenant governor of Michigan, said of Ford
that she never knew him to “make a dishonest statement nor a statement part-true and
part-false. He never attempted to shade a
statement, and I never heard him utter an
unkind word.”
What member of an opposing party would
say the same of the current crop of political
leaders?
Mary Kramer is publisher of Crain’s Detroit
Business. Catch her take on business news at 6:10
a.m. Mondays on the Paul W. Smith show on WJR
AM 760 and in her blog at www.crainsdetroit.com.
BioStar shines
bright in VC sky
Physician-run firm in Petoskey finds big deals despite small size
By Tom Henderson
[email protected]
Here’s the venture capital equivalent of a
man-bites-dog story:
TransMedics Inc., a medical device company
in Andover, Mass., hopes to have approval
from the U.S. Food and Drug Adminstration later
this year to revolutionize the way organ transplants are done in the U.S.
Its device, already approved for use in Europe, keeps organs warm and oxygenated and
viable for transplant for two or three days,
compared to the low-tech method used now of
putting an organ on ice and needing to get it
delivered in an Igloo cooler to a recipient in
three or four hours.
TransMedics raised a funding round of $51.2
million in May. It is hardly a surprise that joining that round was Menlo Park, Calif.-based
Kleiner Perkins Caulfield & Byers, one of the oldest and largest venture capital firms in the U.S.,
having raised about $7.5 billion in various
funds and invested in more than 500 companies since its founding in 1972.
What might be surprising — the equivalent
of the man who bites the big dog — is that a
small venture capital firm in northern Michigan was asked to join the organ transplant innovation deal. It certainly would have come as
a surprise to skeptics who told Lou Cannon
and Steven Almany, two very successful heart
surgeons, that they must be crazy when they
said 13 years ago that they wanted to become
venture capitalists, too.
Stick to your day jobs as doctors, they were
told. They ignored the advice.
BIOSTAR VENTURES LLC
Their BioStar Ventures LLC is a small venture
capital firm by national standards, the size of
its funds more like rounding errors to the huge
national players on the East and West coasts.
And BioStar is based in an as out-of-the-way
place as venture capital gets — far, far away
from Silicon Valley or Route 158 in Boston or
even Michigan’s hotbed of investing in Ann Arbor. Instead, Biostar has a small office in the
northern Michigan tourist destination of Petoskey.
But its reputation is anything but small, or
small town. In addition to Kleiner Perkins, its
investment partners include Texas-based
SEE BIOSTAR, PAGE 22
A closer look at BioStar’s investments, Page 22.
Lou Cannon (pictured above) moved his office to
Petoskey to be closer to his summer home. Now he can
look out his office window onto Little Traverse Bay.
22
BIOSTAR
FROM PAGE 21
Essex Woodlands Health Ventures,
which has raised $2.5 billion in various funds since being founded in
1985.
And BioStar counts among its institutional investors Morgan Stanley’s FrontPoint Partners LLC, JANA
Partners LLC in New York City, the
Dow Foundation, the Trout Group in
New York, the William Beaumont
Foundation and Becker Ventures LLC,
the Grosse Pointe-based family office for Chuck Becker, the former
chairman of the Karmanos Cancer
Institute.
And while its first three funds
were relatively small — BioStar finished raising its first fund of
$28.7 million in 2005, its second
fund of $38.4 million in 2010 and its
third fund of $68.8 million in 2015
— Cannon, BioStar’s senior managing director, says he has already begun talking to investment bankers
and would-be investors about a
fourth fund of $250 million.
This fund would be the largest
in state history, surpassing the
$220 million raised by Ann Arbor-based Arboretum Ventures LLC
last September.
“A fourth fund is two years out,”
Cannon said. “We want to make
sure BioStar III is successful first.
Investments so far
BioStar Ventures’ first fund invested in 14 companies. It sold seven and still has
four in its portfolio.
The second fund has had nine exits and still has eight portfolio companies.
The third fund has 10 portfolio companies and no exits yet.
BioStar has one portfolio company in Michigan, Ablative Systems Inc. of
Kalamazoo, which has developed a catheter-based system for delivering
diagnostic and therapeutic agents for the treatment of hypertension.
Other companies include:
Angioslide Ltd. of Natanya, Israel, which makes a balloon catheter for use in
the lower limbs.
Aria CV Inc. of St. Paul, Minn., which is developing a cardiovascular medical
device to treat patients with pulmonary hypertension, which is high blood
pressure in the arteries of the lungs.
Avantis Medical Systems Inc. of Sunnyvale, Calif., which makes devices to
detect and treat cancers of the gastrointestinal tract.
Domain Surgical Holdings Inc. of Salt Lake City, Utah, which is developing a
surgical tool that aids clotting, with an initial focus on the spine and neurological
markets.
Kona Medical Inc. of Bellevue, Wash., which is developing a noninvasive
ultrasonic device for the treatment of hypertension.
OrthoSpace Ltd. of Tel Aviv, Israel, which develops implantable, biodegradable
balloons that can relieve pain and return the range of motion to patients with
massive tears of the rotator cuff.
We’ve returned 147 percent of investor capital from the second fund,
and we still have eight companies
left.”
Cannon said TransMedics should
play a big part in making the third
fund a success. “I wouldn’t be sur-
prised if this didn’t become a $1 billion company in three or four years,”
he said.
That quarter-of-a-billion target
for BioStar is bolstered by a series of
lucrative exits from some of its portfolio companies.
BIOSTAR
TransMedics’ new device to preserve
organs for transplants attracted the
interest of BioStar Ventures, which
joined a funding round on behalf of the
Massachusetts company’s innovation.

In March 2011, less than a
year after the second fund was
raised, it got a nice return when
Wayne, Pa.-based Embrella Cardiovascular Inc., which made devices to
reduce strokes during cardiovascular procedures, was sold for $43 million to Edwards LifeSciences Corp. of
Irvine, Calif.

In January 2013, Palo Alto,
Calif.-based CV Ingenuity Corp.,
which made devices to reduce vascular obstructions, was sold to Dublin-based Covidien Ltd. for $270 mil-
lion, with an upfront payment of
$100 million, which provided an
immediate return on invested capital to BioStar’s limited partners.

In February, Aliso Viejo,
Calif.-based Ellipse Technologies Inc.,
a developer of remote-controlled
implant technology, was acquired
by San Diego-based NuVasive Inc. for
$380 million.
“While BioStar isn’t as well known
as many venture funds in the Midwest, the team at BioStar has a great
national reputation,” said Chris
Rizik, CEO and portfolio manager at
Ann Arbor-based Renaissance Venture Capital Fund, an affiliate of Business Leaders for Michigan that invests
in VC firms that in turn are willing to
invest in Michigan companies. He is
not an investor in BioStar.
Cannon is a surgeon at McLaren
Northern Michigan hospital in Petoskey. Almany, one of BioStar’s managing directors, is director of the Cardiac Catheterization Laboratory at
Beaumont and an associate professor at the William Beaumont School of
Medicine at Oakland University.
“BioStar doesn’t get invited into
great deals because the startup companies need their money; they get
invited because the startup companies want their expertise, and the
money follows,” Rizik said.
“TransMedics didn’t need our
money, but they liked having us in
the deal. We’ve become the Good
Reliable, modernized grid
Energy is essential to the way we live, work and play.
ITC operates, builds and maintains the region’s
electric transmission infrastructure. We’re a Michiganbased company working hard to improve electric
reliability and increase electric transmission capacity
throughout the Midwest.
We’re ITC – your energy superhighway.
www.itctransco.com
Hou
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23
Housekeeping seal of approval,”
said Almany.
That Almany is at Beaumont, one
of the premier health systems in the
U.S., isn’t a surprise. But why is such
a nationally known doctor as Cannon based in Petoskey? Before he
was recruited to the hospital there in
2003, prior to its acquisition by McLaren, he had been founder and
president of the Michigan Cardiovascular Institute, a medical practice with
about 20 doctors in Saginaw, Bay
City and Midland.
The move to Petoskey gave him a
chance to live in the summer home
he owned on Lake Charlevoix but
had been too busy to get to very often.
“I love it here,” said Cannon,
pointing to his office window and
the view of Little Traverse Bay in the
foreground.
Almany said his interest in investing in medical device companies
goes back to 1999, when he was recruited by a New York hedge fund to
help it look into possible health care
investments.
He said he was at a meeting in
2003 in Las Vegas where medical
specialists from around the country
had been brought together to vet
possible investments. He said he
and Cannon knew each other by
reputation but had never met.
They met there and decided that
rather than receive modest stipends
to help investors make fortunes by
choosing the right companies to invest in, they’d rather become investors themselves.
They quickly formed a company,
found out institutional investors
wanted no part of a new fund run by
doctors, and started the labor-intensive, two-year process of raising
money from high-net-worth individuals and colleagues.
“Who knows why? Eventually
people gave us money,” said Almany.
Typically, they invest between $1
million and $3 million in very-earlystage companies.
“You want to do what?”
David Brophy, director of the Center for Venture Capital and Private Equity
at the Ross School of Business at the
University of Michigan, is one of the
godfathers of the local VC community, having founded the annual
Michigan Growth Capital Symposium in 1979. The symposium brings
together investors from around the
U.S. to hear pitches for capital from
early-stage Midwest firms.
In 2003, having decided to launch
a fund, Cannon paid him a visit for
advice. “Louie walked into my office
one day and said, ‘Everyone says I
have to talk to you because I want to
start a medical technology fund,’”
recalled Brophy. “I said, ‘Why would
you want to do that? You’re a successful doctor. Funds aren’t easy;
David Brophy:
“They fight above
their weight.”
Marty Sutter:
“They are the real
deal.”
they’re hard work.’”
“David laughed at us: ‘You want to
do what?’” said Almany.
Not only did Cannon convince
him there was a need for a fund led
by practicing physicians, he talked
Brophy into becoming a member of
his board of directors.
“Everyone on BioStar’s team is
very tightly connected to all the big
players in the medical device field,”
said Brophy, who said that includes
such large device companies as
Dublin-based Medtronic and New
Brunswick, N.J.-based Johnson &
Johnson — one of its directors, William Kucheman, is the recently retired CEO of Marlborough, Mass.based Boston Scientific Corp. — and to
such institutions as the Cleveland Clinic, New York University Medical Center,
Stanford University and the University
of Texas.
“They fight above their weight,”
Brophy said. “They get invited into
deals with very large funds based on
their knowledge and on their connections.”
Helping Biostar size up deals is
Managing Director Renee Masi, a
veteran of more than 25 years in
venture capital. In 1990, she opened
the Boston office of Technology Funding, a $250 million VC firm based in
San Mateo, Calif. Before joining BioStar in 2006, she was a partner in
Windward Ventures, a Los Angeles-based VC firm focusing on early-stage companies.
Impact for patients,
investors
Marty Sutter, a co-founder and
managing director at Essex Woodlands, said Cannon first came to
his attention seven or eight years
ago. He kept seeing a hospital in
northern Michigan being listed as
a participant in various FDA human clinical trials and wondered
why a small hospital in an obscure
location could be such a national
player.
“The answer was Lou Cannon,
who’s been at the cutting edge of
technology for a long time,” said Sutter.
Cannon has been president and
CEO of the Petoskey-based Cardiac &
Vascular Research Center of Northern
Michigan, which tests medical devic-
es and pharmaceuticals and partici-
pates in FDA trials, since 2004. He
has also been program director for
the Heart & Vascular Institute at the
Petoskey hospital since 2005.
“BioStar is a great group to focus
on. They’re rising stars in Michigan.
They’re the real deal,” said Sutter.
“There’s a void in practicing physicians involved in deal flow, so it
helps that they are practicing doctors who are good at identifying unmet clinical needs.”
“There really is a secret sauce
with Louie and his team,” said Jim
Bennethum, executive vice president of Becker Ventures, which invested in the third BioStar fund.
“They’re savvy doctors who are current practitioners, which means
they cut through the B.S. of deal
flow. Cannon and Almany do this
for a living, and they know what will
work and what won’t. What the gaps
and needs are.
“BioStar is working on some really
exciting opportunities that will make
a good return for their limited partners and a transformational difference for patients,” Bennethum said.
“We’ll be eager investors in their
fourth fund.”
Said Cannon: “I didn’t think BioStar would grow the way it has, or
have the impact we’ve had. It’s one
thing to make money, which is nice.
It’s better to have an impact.”
24
Varsity News Network brings sports to web, expands reach
By Tom Henderson
[email protected]
Sometimes, the right business
model boils down to a better way of
handling a nuts-and-bolts task.
Take the business of tracking high
school sporting events. Offered as
part of a web platform that allows
schools to post game results and
photographs from their sports programs, Grand Rapids-based Varsity
News Network Inc. is making headlines and earning attention from
funders. And growing.
CEO Ryan Vaughn says generating revenue at an annual rate of
$6.5 million puts the company within range of being cash-flow positive,
but the short-term goal isn’t breaking into the black, it’s continuing its
rapid market penetration of U.S.
high schools.
“We’re within shouting distance
of being cash-flow positive, but that
has never been the goal. The goal is
to grow. Value is predicated on scale,
not profit,” said Vaughn.
Varsity News was founded in
2010 to provide a web-based platform for schools to post content
about their sports programs. It first
made headlines when it won the
grand prize of $500,000 at the annual Accelerate Michigan Innovation
in Detroit in 2013, and subsequent
headlines when it raised $3 million
in venture capital in 2014 and
$3.7 million last September.
When it won the Accelerate
Michigan event, VNN was working
with some 250 high schools in 14
states. Today, it has about 1,750 U.S.
schools and 7 million users in 43
states. Vaughn said that works out to
total market penetration of more
than 8 percent of U.S. high schools.
VNN also works with about 500
middle schools.
For now, net income will take a
back seat to such numbers as the
number of athletic directors who
Fishers High School in Fishers, Ind., has been using the Varsity News Network since
March 2015 to post information about the school’s sports team, including
calendars, results of games and lots of photos from parent volunteers.
are customers, the number of companies VNN signs up to be sponsors
of school websites, the number of
unique visitors and page views
schools generate and, of course,
market penetration.
If he can hit his penetration targets, revenue and profits will take
care of themselves, Vaughn said. It’s
market share that will translate into
a return on investment for his investors.
“If we can capture 50 percent of
the market by 2020, which we think
we can do, we’ll have a $1 billion
exit,” he said, referring to a sale price
for the company.
VNN has 40 employees. More important, it has a freelance sales force
of about 50 spread across the states
to find sponsors for individual
schools. VNN gets 75 percent of
sponsor fees, with the schools getting 25 percent.
“Most of the schools we were
with are profitable with their sites,”
he said.
One national sponsor is the National Guard, which Vaughn said
paid a “substantial” fee to be able to
place banner ads on school sites.
One of VNN’s customers that
generates a profit is Fishers High
School in Fishers, Ind., a school with
3,600 students a few miles northeast
of Indianapolis.
Fishers Athletic Director Rob Seymour said he has been using VNN
since March 2015. He said the only
cost to the school was a one-time
fee of $1,400.
“They’ve been great, really easy to
work with,” he said.
The school posts calendars of upcoming sports events, results of
games, news about car wash fundraisers or seniors’ nights and lots of
photos from parent volunteers.
During the school season, he said,
the school’s site gets as many as
90,000 hits a month.
“In football, we have a freshman
team, a JV team and a varsity team,
and we have parent volunteers who
work every game. They upload hundreds of photos and then I just hit
the select button for the ones I
want,” he said.
In February, Fishers began
streaming student broadcasts of
games, which gave visitors to the site
the feel of a live game while providing students with hands-on training.
Seymour uses the site to handle
registration to various sports camps
the school is involved with and to
serve as a clearinghouse for coaches
trying to reserve school facilities for
meetings or practice.
Seymour said the site has 13
sponsors. One posts coupons that
SEE NEXT PAGE
25
FROM PREVIOUS PAGE
can be downloaded for discounts
on meals.
Seymour said he avidly recommends VNN to other athletic directors. “They’ve been great, really easy
to work with,” he said. “They even
helped us with our Facebook presence. We had 3,500 Twitter followers
but weren’t doing much with Facebook. They said, ‘Here’s what you
need to do.’ ”
VNN also offers a free app it calls
Sportshub, where parents or school
fans can check their mobile device
for schedules, driving directions,
photos and results.
Vaughn said expanding VNN’s
presences nationally and ramping
up sales and marketing will require
another fundraising round later this
year, despite projections of growing
revenue to between $10 million and
$15 million in 2017.
“Growing really fast requires capital. We’re looking for a growth
round this year,” he said, declining
to put a dollar figure to it. “We’re prepared to make a major push into
schools across the country.”
Here to stay
In November, VNN moved into
6,000 square feet on the third floor
of the Riverview Center, a renovated
industrial building along the Grand
River just north of downtown.
Vaughn said he has been urged
by New York investors to move there,
“but this is where we are going to
stay,” said Vaughn. “There’s less
competition for talent and a cheaper cost of living, and western Michigan is where I’m from.”
Vaughn played basketball and
football at Grand Haven High School,
where he graduated in 2003, then
VARSITY NEWS NETWORK
Ryan Vaughn, CEO of Varsity News Network Inc., says the company is within range of being cash-flow positive, but is concentrat-
ing on growing market penetration.
got an undergraduate degree in creative writing from Western Michigan
University and a master’s degree in
communications from Grand Valley
State University.
While at GVSU, “I fell in love with
the internet,” said Vaughn.
In 2007-08, he ran a site called the
Detroit Sports Report, which did
updates on Detroit sports teams. “It
absolutely bombed,” he said.
From 2008 to 2010, he ran the
West Michigan All Star, an online
site that posted game results on
high school sports, which morphed
into VNN, thanks to $20,000 in
funding from Momentum, a tech accelerator in Grand Rapids that itself
morphed into Start Garden.
“That $20,000 lasted two years,”
said Vaughn. He and his co-founder,
Matt Anderson, worked part-time
jobs to pay the bills while they beat
the bushes for high school custom-
ers and investors.
By the time of Accelerate Michigan Innovation, VNN had received
funding from the Grand Angels in
Grand Rapids; Lakeshore Advantage,
an economic developing agency in
Zeeland; and a matching investment of $250,000 from the Michigan
Pre-Seed Fund, a state fund administered by Ann Arbor Spark.
The win at Accelerate Michigan
certainly accelerated VNN. While
many of the competitors and attendees at the event at Orchestra Hall
groused that VNN wasn’t high-tech
enough, and that the money should
have gone to someone in health care
or biotech, investors took notice.
It only took three months for
Vaughn to close on his first VC
round. That financed the push into
Indiana and Ohio in 2013 and 33
states by the end of 2014.
Institutional investors now include Arsenal Venture Partners of
Winter Park, Fla.; Ann Arbor-based
North Coast Technology Investors LP;
New York City-based RSL Venture
Partners, whose partners include
Dick Parsons, the former CEO of
Time Warner Inc.; Start Garden of
Grand Rapids; Invest Detroit’s Detroit Innovate fund; the Grand Angels; Traverse City-based Northern
Michigan Angels; and the Ann Arbor-based Michigan Angel Fund.
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26
WORLDWATCH
WHERE MICHIGAN DOES BUSINESS: UNITED KINGDOM
Altair Engineering
Based: Troy
Operations: A headquarters in
Royal Leamington Spa and regional
offices in Bristol and Manchester
Employees: 55
Products/Services: Proprietary
software and services, which
include engineering simulation
software, software for on-demand
computing and software for
industrial design
Top executive: Royston Jones,
managing director and CTO for
Altair Product Design
Clients: Jaguar Land Rover, Airbus,
Unilever, BAE Systems, McLaren
Automotive, Bombardier Transportation and Ford Motor Co.
Belfor Holdings Inc.
Based: Birmingham
Operations: Headquarters in
Tamworth with operational
branches in Livingston, Washington, Runcorn, Worksop, Abingdon,
Bristol, South Brent, Cardiff and
Dungannon
Employees: 200
Products/Serives: Disaster
restoration and recovery services
including commercial and
domestic fire, smoke and water
restoration services, document and
data recovery, mold remediation,
electronics and machinery
restoration, environmental services
Top executive: Alasdair Phillips,
managing director
Beringea LLC
Based: Farmington Hills
Operations: Office in London
Employees: 30
Products/Services: Growth
capital investments in rapidly
growing businesses
Top executive: Malcolm Moss,
co-founder, senior managing
director
Bissell Homecare Inc.
Based: Grand Rapids
Operations: A subsidiary office in
Slough
Employees: 15
Products/Services: Floor care
products all across the U.K. and
Ireland
Top executive: Tracey Scully, sales
and marketing director
Clients: Amazon.com Inc., Argos,
Currys, Lakeland, JD Williams, Shop
Direct Group, AO.com and Tesco plc
Cooper-Standard
Automotive Inc.
Based: Novi
Operations: Sales and engineer-
ing office in Coventry
Employees: 25
Products/Services: Sales and
engineering
president of IAC Europe
W
Clients: Jaguar Land Rover,
Nissan, GM Opel, Ford Motor Co.,
Mercedes-Benz, Volkswagen and
BMW
ith a nominal 2015 GDP of $2.8 trillion, the
United Kingdom is the 10th largest economy
in the world as well as the third largest economy in
Europe, according to the CIA World Factbook. The
country has a large supply of natural gas, coal and oil
resources but has also been a net importer of energy
in the past decade. In light of the recent “Brexit” vote,
the following data on imports and exports is likely to
change.
The United Kingdom’s largest exports are fuels,
chemicals, manufactured goods, tobacco, food and
beverages. Its biggest export partners are the United
States (12.7 percent), Germany (10.5 percent), the
Netherlands (7.6 percent) and France (6.5 percent),
according to 2014 data.
The United Kingdom’s largest imports are fuels,
foodstuffs, machinery and manufactured goods. Its
biggest import partners are Germany (14.6 percent),
China (8.9 percent), the Netherlands (8 percent) and
the U.S. (6.8 percent).
Each World Watch features a different country. If
you know of a Michigan company that exports,
manufactures abroad or has facilities abroad, email
Gary Piatek, senior editor, at [email protected].
Lear Corp.
Based: Southfield
Operations: Manufacturing
operations in Alfreton, Coventry,
Redditch and Sunderland
Employees: 1,900
Products/Services: Fully assembled seats and seat components
(foam and fabric)
Top executive: Gideon Jewel,
president for Global JIT
Clients: Jaguar Land Rover and
Nissan
NSF International
Based: Ann Arbor
Operations: Offices in Oxford,
COMING UP
August: Thailand and Malaysia | September: India
Belfor Holdings has
200 workers employed
at its facilities
throughout the United
Kingdom, including its
headquarters in
Tamworth (left).
COURTESY/BELFOR
Top executive: Fernando de
Miguel, senior vice president and
president, Europe
Clients: Honda, Nissan, Jaguar
Land Rover, Vauxhall
Dayco Products LLC
Based: Troy
Operations: An aftermarket sales
and technical support office in
Basildon as well as a distribution
center in Redditch and original
equipment sales and engineering
associates in the region
Employees: 20
Products/Services: Timing and
accessory drive system products for
passenger and heavy-duty vehicles
including timing belt kits, PV and V
belts, belt tensioners and idlers,
dampers, water pumps and
alternator pulleys as well as sales
support at the national, branch and
garage level and technical, product-focused training
Top executive: Bruno Vallillo,
president for Europe, Middle East,
Africa and India
Clients: Ford Motor Co., Daimler,
Products/Services: Pizza, soft
drinks, breadsticks and chicken
wings
Top executive: David Wild, CEO
More information: Domino’s Pizza
Group plc is the master franchise
company for the U.K., Ireland and
Switzerland. DPG just purchased
minority ownership in the master
franchise for Iceland and Denmark.
Federal-Mogul Corp.
Based: Southfield
Powertrain operations: Manufac-
Jaguar Land Rover
turing and technical center in
Coventry and a manufacturing
facility in Bradford
Motorparts operations: Manufacturing and technical center in
Chapel-en-le-Frith
Products/Services: Valve seats
and guides, piston pins and brake
friction
Employees: 1,000
Top executives: Martin Hendricks,
Federal-Mogul Motorparts,
president for global braking and
EMEA; Gian Maria Olivetti,
Federal-Mogul Powertrain, chief
technology officer
Domino’s Pizza Inc.
George P. Johnson Co.
Based: Ann Arbor
Operations: 869 pizza stores
across the country
Employees: 18,760
Products/Services: Strategy and
planning, creative, studio, production, digital, client services, event
management and registration
Top executives: Jason Megson,
managing director; Joost Dop, CEO,
Project: WorldWide
Clients: Cisco, Salesforce, One
Young World, Statoil, Gartner,
Workday Inc., IBM, Magento, GSMA,
Gilead and Swift
International Automotive
Components Group
Based: Southfield
facilities in Coleshill, Elmdon,
Halewood, Scunthorpe and
Sunderland as well as a technology
center in Coleshill and a customer
center in Basildon
Employees: 3,000
Products/Services: Vehicle interior
products including cockpit and
overhead systems including doors,
instrument panels and consoles as
well as flooring and acoustics
products
Top executive: Kelli Carney,
Northwich, York and Rotherham
and Oakdale
Employees: 365 in addition to a
network of over 500 contractors
Products/Services: A wide range
of certification, testing and safety
auditing services for a number of
industries and products
Top executives: Tom Chestnut,
vice president, global food division;
Bob Pietrowski, vice president,
global health sciences; Tarik
Bellahcene, managing director/
European Agency for the Evaluation of Medicinal Products, water
division
TI Automotive Ltd.
Based: Auburn Hills
facilities in Deeside, Sunderland,
Telford and Burnaston and
administrative offices in Oxford
Employees: 275
Products/Services: Coex fuel
tanks, mono layer fuel tanks, filler
pipes, brake and fuel lines and
bundles, fuel line assemblies
Top executive: Tim Edwards,
group controller
Clients: Toyota, Honda, General
Motors Co., Nissan, Jaguar Land
Rover, BMW, Bentley, Aston Martin
Natalie Broda
Based: Auburn Hills
Operations: A facility in Kingston
upon Thames
Employees: 102
Domino’s has 869 pizza stores across the United Kingdom.
COURTESY/DOMINO’S PIZZA
27
TTI Global opens auto service center in Afghanistan
By Blake Froling
[email protected]
When Lori Blaker, president and
CEO of TTI Global, went to the U.S.
Embassy in Afghanistan in 2012, it
had been years since anyone there
had seen an American looking to
open a business in the region, she
said. She was met with skeptical
looks and almost a sense of bewilderment.
Blaker said
she saw the 35
percent unemployment rate in
the country and
the extremely
young population — with a
median age of
18.4 years, acLori Blaker:
cording to the
President and CEO
CIA — as a recipe
of TTI Global.
for disaster. She
also noticed that
foreigners were being brought in for
simple services such as plumbing
and electrical work and weren’t
passing on those skills to locals. She
thought she could help.
After years of delays, her Rochester Hills-based company, which provides staffing and training services
focused mostly on the automotive
industry, opened its first retail automotive service center in Kabul, Afghanistan, on May 26.
Crain’s first reported in 2012 on
TTI’s plans after Blaker completed a
U.S. Department of Commerce trade
mission in Afghanistan. But the
project was met with delay after delay.
It took nearly two years to find an
appropriate location, which needed
modification to meet the company’s
requirements.
TTI applied for and received a USAID ABADE (Assistance in Building
Afghanistan by Developing Enterprises) grant for $25,000, but the
process took six months. Then Blaker said USAID, an anti-poverty U.S.
government agency, wanted to buy
the equipment and tools necessary
for the centers in Afghanistan to try
to prevent the funds from being
wasted or disappearing, which Blaker said was a common occurrence.
Months later, they found out that
this was nearly impossible, and
Blaker was able to purchase equipment in Dubai.
Then came more delays, this time
with customs. Blaker said the equipment she bought was mixed in with
equipment USAID bought, which
made matters even more complicated. The equipment sat in customs
from February to April of this year,
and “90 percent of it was probably
someone was waiting for a gratuity
at some point, and that’s very prevalent,” Blaker said. TTI didn’t pay any
bribes.
The original goal was to open in
September 2015. “Everything was
difficult,” Blaker said. “There wasn’t
one step that didn’t cause issues. I
had to go out myself and rattle cages
and shake trees.”
Blaker hopes all of the headaches
will pay off.
The Kabul service center employs
20 people — 15 men and five women — all from the local community.
Blaker estimated startup costs were
about $175,000, which included
purchasing tools and other equipment and buying facilities and remodeling them to fit their specifications. The training center will open
in about three months. Recent business at the service center was slow
because of the Muslim holiday of
Ramadan, which took place June
6-July 5. Now that it is over, they expect to return to business as usual.
Blaker’s goal for the Afghanistan
project is improving the quality of
life for people there by training them
to be mechanics or technicians,
skills that are severely lacking in a
country where vehicles routinely
break down because of the harsh environment. She wants Afghan people to staff both centers completely
and eventually open more centers or
their own mechanic shops.
It’s especially tough for women to
work in Afghanistan, said Blaker,
one of Crain’s 100 Most Influential
Women this year. She experienced
the hardships they face firsthand
during her 2012 trade mission.
“It’s a totally different world,” she
said. “It seems like in the professional circles, the young people are more
open to men and women working
together. Older generations are very
difficult. I was covered up from head
to toe the whole time.”
TTI GLOBAL
A small sign directs people to Rochester Hills-based TTI Global’s auto service center
in Kabul, Afghanistan.
Because of the cultural difference,
TTI can’t train women as mechanics
or technicians. Instead, the business
administration staff is made up entirely of women, who learn about
marketing, finance, parts ordering
and coordinating workshops.
“In our office, the management
completely belongs to women,”
said Maryam Sahak, the project
manager and a native of Afghanistan. “We are trying our best, and if
we have a few more organizations
like this with women working in
management, then it will definitely
get better.”
During the Taliban rule in the early 2000s, women lived in constant
fear and had few human rights, Sahak said.
“Over the 2000s, the situation was
not good,” she said. “Women weren’t
allowed to go out from their homes
for shopping, but it’s getting better.
Women can work outside; in open
areas, they’re fine.”
Progress is being made more
quickly than Blaker expected. She
said women would constantly approach her, ask if she was American,
and tell her how grateful they were
for the Americans’ support.
“The women especially, their lives
are changing in a good way,” she
said. “And we don’t hear that on the
news. We don’t hear how thankful
they are. We only hear about the ‘bad
guys.’”
Unfortunately, the “bad guys” are
making the area more dangerous,
Blaker said. American employees
are afraid to go to markets or restaurants, and she said the last time she
visited, she heard two explosions in
one day.
Security is always the biggest con-
cern and played a role in delaying
the centers’ opening. But she hopes
economic investment in the area,
like hers, can help to stabilize the
area.
“Security is always an ongoing
concern,” Blaker said. “It’s hard to
freely move and schedule meetings
and basically get business done.”
TTI Global employs nearly 2,000
people in 25 or more countries, and
revenue has grown to about $100
million from $3 million when Blaker
took over in 1992.
If all goes well, Blaker said, she’ll
start thinking about opening another center in the region at the end of
the year, and possibly more after
that. This is a for-profit venture, but
she said she would be OK with just
covering operating costs at about
$75,000-$100,000 per year.
So what would she consider a
success?
“If the training center is fully
booked on a continual basis and the
service center is covering its costs,”
she said. “What we’re doing is, to me,
I’m making a statement.”
Blaker hopes that statement is
successful enough to be seen by other Western companies and entice
them to open in the region.
“I would hope that we could send
a message to others that it’s possible,” Blaker said. “Not only can you
set up a viable business, but you can
do a lot of good in the process.”
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28
COSTAR GROUP
The Raleigh Officentre at 10 Mile and Telegraph roads in Southfield is two
interconnected buildings totaling about 290,000 square feet.
Raleigh Officentre note
in Southfield goes to
auction next month
By Kirk Pinho
[email protected]
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NONPROFITS: Tell your story to the business community at a discounted rate!
HURRY - Sales close on Aug. 12
For more information, contact Matt Langan at (313) 446-6054 or [email protected]
The note on the Raleigh Officentre
office complex in Southfield is expected to go to auction next month.
The starting bid for the nonperforming loan on the connected
six-story buildings totaling about
290,000 square feet is $2.25 million,
according to the online listing at
Ten-x.com, the commercial property affiliate of auction.com.
The $35 million loan’s current
balance is $22.57 million with an interest rate of 5.71 percent, according
to the listing.
It matured in December.
The two connected buildings
that make up Raleigh Officentre,
originally built in 1989 at 10 Mile
and Telegraph roads, were collateral
on the loan, according to the listing.
The property has 1,235 parking
spaces and the occupancy rate is
53.45 percent, according to the listing.
The owner is Bloomfield Hillsbased Kojaian Management Corp., according to CoStar Group Inc., a Washington, D.C.-based real estate
information service.
Newmark Grubb Knight Frank,
which has offices in Southfield and
Farmington Hills, has the leasing
contract on the property, which
rents for $17.50 per square foot per
year, according to the company’s
website.
According to NGKF, Southfield
has 17.22 million square feet of office space. Of that, 22.4 percent was
vacant during the first quarter, the
most recent quarter for which data
was available.
Parts inspection equipment maker
in Saline faces fine over Iran deal
By Chad Halcom
[email protected]
A Saline engineering company
that makes parts inspection and imaging equipment could face a
$200,000 fine, five years of federal
probation and special compliance
measures on charges of illegally selling equipment to Iran.
Mectron Engineering Co. Inc. awaits
a criminal sentencing Aug. 2 before
U.S. District Judge John Corbett
O’Meara in Ann Arbor, after its president in February entered an agreement to plead guilty to violating the
federal International Emergency
Powers Act for exporting equipment
to Iran without a license.
The charge carries a maximum
penalty of $1 million, but the plea
agreement calls for Mectron to pay
$200,000 and establish a corporate
compliance program “monitored by
an independent entity” to follow
federal law in the future.
The company, established in
1968 and based in the Sauk Trail
Business Park of Saline, makes quality control and handling equipment, including its own laser, eddy
current and thread inspection systems to test auto parts, firearm ammunition and aerospace fasteners.
It allegedly sold a magnetic imagery, or MI8500, inspection system to
the Iran Tohid Co. of Tehran in March
2010 for $47,500, and once before in
late 2008 for $44,600, according to
court documents. An attorney allegedly advised the company in
2009 that it was illegal to make such
a sale.
Iran Tohid is a diversified parts
manufacturer for automotive and
other customers, according to its
website.
Mectron President Mark Hanna
and CFO Carol Hanna did not return messages seeking comment
last week. Also not immediately
available were the company’s attorney, Chairman David DuMouchel of
the compliance, internal investigations and criminal defense practice
at Butzel Long PC.
A federal prosecutor at the U.S.
attorney’s office in Detroit declined
to comment on the case last week.
Chad Halcom: (313) 446-6796
Twitter: @chadhalcom
29
Michigan tax on Glacier Hills to become subsidiary of Trinity Senior Living
paid self-insured
claims allowed
to stand
By Blake Froling
[email protected]
By Jerry Geisel
Crain News Service
For the second time, a federal
appeals court has upheld a 2011
Michigan law that imposes a 1
percent state tax on paid health
care claims for self-insured and
other employers.
That law had been challenged
by the Self-Insurance Institute of
America Inc., which argued that
the statute ran afoul of a provision in the Employee Retirement
Income Security Act that preempts state and local laws related
to employee benefit plans.
In 2014, the 6th U.S. Circuit
Court of Appeals in Cincinnati,
upholding a U.S. District Court
ruling, disagreed, saying the
Michigan law had no effect on
plan administrators.
The SIIA later asked the U.S. Supreme Court to review the ruling,
and the high court in March ordered the appeals court to review
its decision. That was after the
high court struck down — on ERISA pre-emption grounds — a
Vermont law requiring employers
turn over health care claims information to the state.
But in its latest ruling, issued
early this month, the 6th Circuit is
sticking to the core of its 2014 decision that ERISA does not preempt the Michigan health care
claims tax law.
The Michigan statute “does
not directly regulate any integral
aspects of ERISA,” the threejudge appeals court panel ruled
in its decision written by Judge
Karen Nelson Moore.
While the law requires plan administrators and insurers liable
for the tax to keep accurate records, “these provisions are not
direct regulation of employee
benefit plans. Rather, they are peripheral requirements that did
not warrant pre-emption,” Moore
added.
The SIIA now is reviewing
what, if any steps, the Simpsonville, S.C.-based trade group will
take.
“We are obviously disappointed by the court’s ruling and will be
reviewing our appeal options,”
SIIA President and CEO Mike Ferguson said in a statement last
week. “What is very clear is that
ERISA pre-emption threats have
become increasingly serious, so
industry stakeholders should be
prepared to respond accordingly.”
The Michigan tax is intended
to raise several hundred million
dollars a year to fund the state’s
Medicaid program.
This story originally appeared
in Crain’s sister publication Business Insurance.
Glacier Hills, a full-service senior
campus in Ann Arbor, finalized an
agreement to become a subsidiary
of Livonia-based Trinity Senior Living
Communities.
The agreement was signed June
21 and went into effect July 1. Financial details were not disclosed.
“Aligning with TSLC will preserve
our mission into the future,” Ray Rabidoux, president and CEO of Glacier Hills, said in a statement. “It enhances the continuum of care in the
region for seniors and aligns Glacier
Hills to meet the needs of health
care reform, deepens the existing
relationships with St. Joseph Mercy
Health System and enables us to
continue providing quality care and
service to our residents and their
families. It also assures our continuing relationship with the University
of Michigan Health System.”
Glacier Hills will not be adding
any staff at this time, and everything
will be mostly “business as usual,”
said Betsy Pilon, communication
manager for TSLC.
TSLC is looking to create a “sustainable regional model with other
Trinity Health Regional Health Ministries,” according to a news release.
Pilon said TSLC is currently in a
“growth phase.”
As part of the deal, more patients
from St. Joseph Mercy Health System will have easier access to Glacier Hills and a “stronger continuum
of care,” Pilon said.
Last year, United Methodist Retirement Communities took a 50 percent
stake in Glacier Hills Home Care Inc.
for $1.3 million. According to John
Thorhauer, president and CEO of
United Methodist Retirement Communities, they agreed to be bought
out of their agreement, receiving the
$1.3 million back. TSLC is a competitor of United Methodist and
thought it would be best to accept
the buyout, Thorhauer said.
“Glacier Hills has been a
long-standing partner with United
Methodist, and we are certain this
will continue,” Thorhauer told
Crain’s.
Glacier Hills and TSLC will also
establish The Glacier Hills Legacy
Fund with the Ann Arbor Area Community Foundation “to focus on supporting the future needs of seniors
in Washtenaw County,” said the
news release. Pilon said more details about
specific funding
amounts and dates will be announced later.
“HOW DOES DTE ENERGY
KEEP NATURAL GAS SAFE?”
Customer safety is our highest priority. That is why we take many precautions when
delivering natural gas to over 1.2 million homes and businesses across the state. We inspect
nearly 10,000 miles of pipeline each year using advanced technologies, and modernize about
100 miles of pipeline annually. We also add an ingredient that makes natural gas smell like
rotten eggs, making it easily identifiable in the case of a leak.
If you smell natural gas or suspect a leak, do not use electronic devices or open flames,
leave the area immediately, and call DTE Energy at 800.947.5000 24 hours a day.
30
Blue Cross’ new Medigap pricing strategy to raise rates in 2017
By Jay Greene
[email protected]
Blue Cross Blue Shield of Michigan
last week announced its plan to increase prices for its Medicare supplemental insurance policies, effective Jan. 1, following the ending of its
five-year rate freeze with Attorney
General Bill Schuette and its twoyear agreement with the state to
continue more than $200 million in
annual Medigap subsidies.
Price increases in Southeast
Michigan for the Blues’ Medigap
policies — which cover a portion of
the 20 percent of bills that tradition-
al Medicare doesn’t cover — will
range from a low of about $48 per
month for Plan C for a 65-year-old
female to about $177 per month
more for an 80-year-old male. Rate
increases for those younger than 65
and with disabilities will be about
$188 more than they currently pay.
“Anyone living on a fixed income
is going to be concerned when they
are asked to pay more for their insurance coverage,” Julie Smith, Blue
Cross senior vice president for senior health services, said in a statement. “Even though this is our first
rate change in five years, we under-
stand the concern this will cause.”
Blue Cross is working with members to explain the changes, she said.
Last week, the Michigan Health Endowment Fund board approved a
plan to partially take over the duty
from the Blues of providing subsidies for an estimated 79,000 seniors
who purchase Medicare supplemental insurance policies.
The Michigan Health Endowment said those under 65 with a disability will get a $125 per month
subsidy, those 65 to 75 will get $40
per month and those over 75 years
of age will receive $65 per month.
Eligibility was set for seniors at 150
percent or below the federal poverty
level.
Open enrollment starts Oct. 1
and runs through Dec. 15 for policies effective Jan. 1.
There are approximately 200,000
seniors purchasing Medigap policies through Blue Cross. Another
200,000 seniors purchase Medigap
from the dozen or more carriers in
Michigan.
Smith said Blue Cross Medigap
rate increases in other parts of
Michigan will be substantial, but
lower than in Southeast Michigan.
Trust.
“Even though this
is our first rate
change in five
years, we
understand the
concern this will
cause.”
Julie Smith, Blue Cross senior vice
president for senior health services
For example, Medigap purchasers under age 65 in Southeast Michigan and greater Michigan will pay
$226.14 per month. In Southeast
Michigan, males age 70 will pay
$148.98 and females age 70 will pay
$137.94, but those in greater Michigan will pay $138.58 for males and
$132.09 for females.
In a news release, Blue Cross said it:
Will not profit on Medigap business despite the rate increases. This
year, Blue Cross estimates it will lose
$249 million on its Medigap business.
Future losses will average about 10
percent of revenue per year.
Will eliminate rate increases for
those age 81 or older who have received Medigap coverage from Blue
Cross in the past.
Will allow seniors to keep their
same policies and will not price
rates based on health status.
Will introduce new Medigap
plans next year.
As part of the 2014 conversion of
Blue Cross into a nonprofit mutual
health insurance company, Blue
Cross was allowed to drop at the end
of this year its 36-year mandate to
provide Medigap subsidies.
In exchange, Blue Cross is paying
$100 million in annual taxes and
contributing $1.56 billion over 18
years to the Michigan Health Endowment Fund, which was created
with a mission to fund a broad range
of child and senior preventive
health services, including Medigap.
Jay Greene: (313) 446-0325
Twitter: @jaybgreene
Deadline near for
Crain’s 20s event
For the kindhearted, giving comes
naturally. Time, donations, friendship,
advice, and maybe just room to expand.
But what of trust—is that something
freely given, or only earned? The answer
is hardly simple, especially in the context
of managing another’s money. At
Greenleaf Trust, every decision we
make is with your best interests in mind.
We have no proprietary investments,
no conflict of interest in our research,
no self-enriching kickbacks from
mutual funds, and no third-party
ownership. Instead, we have the
profound responsibility and broad skill
set to oversee and manage eight billion
dollars of assets for our clients. It requires
trust, which we ask for once. And every
day thereafter, we earn it anew. For
more reasons why trust is in our name,
call us or visit greenleaftrust.com.
3 4 9 7 7 w o o d wa r d av e n u e b i r m i n g h a m , m i 4 8 0 0 9
Financial Security from Generation to Generation
g r e e n l e a f t r u s t. c o m
248.530.6200
Time is running out to purchase
tickets to Crain’s annual 20 in their
20s event.
The reception, which salutes this
year’s class of metro Detroit’s best
and brightest under age 30, is set for
5:30-9:30 p.m. July 20 at the Detroit
Yacht Club on Belle Isle.
Tickets are $60 for individuals,
$55 for groups of 10 or more and $45
for 20 in their 20s alumni. The prices
increase after July 17.
A portion of each ticket purchased will be donated to the Belle
Isle Conservancy.
To purchase tickets, go to CrainsDetroit.com/events.
Questions
can be directed to Kacey Anderson
at [email protected] or (313)
446-0300.
31
CALENDAR
DEALS &
DETAILS
CONTRACTS
Altair Engineering Inc., Troy, and
Maplesoft, Waterloo, Ontario,
announced an agreement allowing
Altair to use the modeling language
engine of MapleSim to support its
development strategy and focus on
multi-physics simulation. Also,
Altair and APWorks, by Airbus Group,
Taufkirchen, Germany, announced
an agreement for additive
manufacturing with joint, end-toend consulting and other benefits.
Websites: altair.com, apworks.de,
maplesoft.com.
Meridian Health Plan, Detroit, and
ConcertoHealth, Irvine, Calif.,
announced a contract to serve
Medicare and Medicaid-eligible
patients in the greater Detroit area
with Meridian’s Medicare
Advantage HMO, Dual Special
Needs plan, Medicare-Medicaid
plan and Medicaid for aged, blind
and disabled patients 55 and older.
Websites: mhplan.com,
concertohealthcare.com.
EXPANSIONS
UBreakiFix, Troy, a franchise of
uBreakiFix, Orlando, Fla., has
opened at 24508 12 Mile Road,
Southfield. The technology repair
company is owned by Drew
Lessaris, Ron Harb, Joyce Harb and
Matthew Harb. Telephone: (248)
281-4958. Website: ubreakifix.com.
WEDNESDAY
JULY 13
Big Data — Small Bytes. 8:30-10:30
a.m. Automation Alley. Better
understand what big data is and
how it can be used to create
easy-to-use yet powerful visual
interfaces. Topics to be covered
are an overview of what big data
is, how it can be extracted and
how it can be used with low-cost
tools. Automation Alley, Troy. $15
members; $25 nonmembers.
Contact: Lori Podsiadlik,
phone: (248) 457-3212; email:
podsiadlikl@automationalley.
com.
UPCOMING EVENTS
Starting Up: An Introduction to the
Entrepreneurial Support Ecosystem in
Michigan. 9:30-11 a.m. July 19.
Macomb-OU INCubator. A
workshop to explore the
resources in Michigan to help
start and/or grow high-tech
innovation. Items for discussion
include business incubators,
SmartZones, various support
services, university technology
acceleration and
commercialization, and funding
programs. The incubator at
Velocity Center, Sterling Heights.
Free. Contact: Joan Carleton,
phone: (586) 884-9324; email:
[email protected].
Scam and Fraud Prevention. 8-10 a.m.
July 20. Better Business Bureau.
Presentation on common frauds,
scams, prevention tips, protection
from ID theft and protection from
financial crime. BBB, Southfield.
Free. Contact: Demitria Robinson,
phone: (248) 799-0305; email:
drobinson@easternmichiganbbb.
org.
2016 Crain’s 20 in their 20s. 5:30-9
p.m. July 20. Crain’s Detroit
Business. Each year, Crain’s
publishes a special feature on the
best and brightest up-and-coming
local businesspeople in their 20s.
The recognition program celebrates
them and their achievements.
Detroit Yacht Club, Detroit. $60
individual; $55 each for groups of
10 or more; $45 alumni. $5 of each
ticket will be donated to the Belle
Isle Conservancy. Preregistration
closes 5 p.m. July 18. If available,
walk-in registration will be $70 per
person. Contact: Kacey Anderson,
phone: (313) 446-0300; email:
[email protected].
Minority Business Women’s
Conference. 7 a.m.-7 p.m. July 27.
Michigan Minority Supplier
Development Council. This event
is designed to bring together
minority women business owners
and corporate executives from
around the country to discuss
industry trends, share practical
advice and network. The
conference will feature national
headliners, keynote speakers,
discussion forums, breakout
sessions and a few surprises. The
Henry Hotel, Dearborn. $200.
Phone: (313) 873-3200; email:
[email protected];
website: www.minoritysupplier.org.
Doing Business in Mexico. 11:30
a.m.-1:30 p.m. July 28. Automation
Alley. Seminar aims to help
Michigan’s small and midsize
companies identify key market
opportunities, determine entry
strategies, and learn more about
technical requirements for selling
products, services and technologies
in Mexico. Hear case studies from
those who have been there,
discover more about industry in
Mexico, and identify opportunities
and find potential Mexican
business partners and customers.
Automation Alley, Troy. $20
members; $40 nonmembers.
Contact: Lisa Lasser,
phone: (248) 457-3283; email:
[email protected].
New Enterprise Forum Showcase and
Pitch Pit. 5-7:30 p.m. July 28. Spark.
Training entrepreneurs on how to
present to investors. Learn what is
important to communicate and
what not to do. Three
entrepreneurs will each give a
four-minute pitch of their business
idea to a panel of investor judges in
a kinder version of TV's “Shark
Tank.” Spark, Ann Arbor. Free.
Contact: NEF Public Relations,
phone: (734) 214-0110; email:
[email protected]
Location, Location, Location —
Geo-targeting Your Audience. 11:30
a.m.-1 p.m. Aug. 10. Troy Chamber
of Commerce. Brian Blau, Quell
Communications Group, will walk
attendees through an integrated
digital marketing program to target
specific audiences within specific
markets. Discussion includes
messaging and positioning, content
generation, digital production and
media deployment across diverse
online channels including Hulu,
Pandora, Spotify and others. Troy
School District Services Center,
Troy. $28; $18 Troy Chamber
members. Add $5 for registering
on day of event. Contact: Jaimi
Brook, phone: (248) 641-8151;
email: [email protected].
Calendar guidelines. Visit
crainsdetroit.com and click “Events”
near the top of the home page.
Then, click “Submit Your Events”
from the drop-down menu that will
appear. Fill out the submission form,
then click “Submit event” at the
bottom of the page.
More Calendar items can be found
at crainsdetroit.com/events.
Maxion Wheels, Novi, a division of
lochpe Maxion S.A., opened a new
light vehicle aluminum wheel plant
in Limeira, Sao Paulo, Brazil.
Website: maxionwheels.com.
IP Experience
Tropical Smoothie Cafe of Westland,
a franchise of Tropical Smoothie
Cafe, Atlanta, Ga., has opened at
35599 Warren Road, Westland. The
food and smoothie café is owned by
Salem Najjar and John Abuaita.
Telephone: (734) 351-5986. Website:
tropicalsmoothiecafe.com.
In Your Corner.

Patent and trademark prosecution.

Freedom to operate, novelty, and state
of the art searches and opinions.

Intellectual property license agreements.
NEW PRODUCTS
Continental Automotive Systems Inc.,
Auburn Hills, a division of
Continental AG, debuted a new
electronic integrated brake system,
MK C1, that is lighter and more
compact than conventional
systems and results in shorter
braking distances. Website:
continental-corporation.com.
®
Ziebart International Corp., Troy,
has introduced Z-Shield paint
protection film, which custom fits
to vehicle specifications and
wraps around surfaces such as
mirrors and bumpers. Website:
ziebart.com.
Deals & Details guidelines. Email
[email protected]. Use
any Deals & Details item as a model
for your release, and look for the
appropriate category. Without
complete information, your item will
not run. Photos are welcome, but we
cannot guarantee they will be used.
Ŷ
Detroit
Ŷ
Novi
Ŷ
Grand Rapids
Ŷ
Kalamazoo Ŷ Grand Haven
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32
For auto suppliers, self-driving payday nears
Sensor, software boom
expected by 2020
By David Sedgwick
Crain News Service
A true driverless car — one that
will give you a look-ma-no-hands
experience from door to door — is
not going to liven up dealer showrooms for another decade or two.
But for suppliers, the payoff is
right now.
By 2020, vehicles that can accelerate, brake and steer themselves
will generate additional annual
sales of $20 billion to $25 billion
worth of sensors and software, according to a study by Southfield-based AlixPartners.
AlixPartners based that forecast
on market surveys published this
year by two consulting firms, IHS Automotive in Southfield and Dolcera
in San Mateo, Calif.
Annual software revenue from
the sale of navigation maps, collision-avoidance programs and other
features will range from $10 billion
to $15 billion, predicted Dolcera.
Meanwhile, sales of vehicle cameras, radar, ultrasonic sensors and lidar will generate an estimated
$9.9 billion in annual revenues, according to IHS Automotive.
“It’s not a mature market yet,”
said Mark Wakefield, a managing director at AlixPartners who co-authored the report. “The ‘take rate’ is
still going up, and it’s well above the
market growth of vehicles.”
Radar, cameras and ultrasonic
sensors each have established
markets, but lidar is just starting to
attract automaker attention. By
2020, lidar will generate annual
sales of $185 million, barely a drop
in the bucket by comparison to the
other rapidly emerging technologies.
Lidar technology, which uses light from a laser to track the distance of objects, is likely to enjoy growing demand as suppliers cut
costs. Several of the industry’s largest suppliers are developing lidar products.
“It’s not a mature market yet. The
‘take rate’ is still going up, and it’s well
above the market growth of vehicles.”
Mark Wakefield, AlixPartners
But lidar, a vision technology that
uses light from a laser to track the
distance of objects, is likely to enjoy
growing demand as suppliers cut
costs and shrink the hardware package. Several of the industry’s largest
suppliers, including Continental AG,
Robert Bosch GmbH, Valeo, Autoliv,
Delphi and Denso, are developing lidar products.
While those suppliers are familiar
names to the auto industry, Silicon
Valley companies are poised to
dominate the market for vehicle
software.
“I think Google is probably in the
best position,” Wakefield said. “And
Mobileye is hot and heavy in this
space,” he added, referring to the
fast-growing supplier of obstacle-detection software.
Meanwhile, automakers and traditional suppliers are frantically hiring software engineers to keep pace
with newer Silicon Valley automotive competitors, which are accustomed to the one-year cycle of consumer electronics.
“This is really where the automakers and traditional suppliers are
furthest behind,” Wakefield said.
“They have to shift their workforce
and their capital expenditures.”
The ranks of technology suppliers will be evolving at an inopportune time for the industry, according to the AlixPartners report. It
forecasts that 2016 will be the end
of the current U.S. auto sales
boom.
According to the report, U.S.
sales will top out this year at 17.8
million new light vehicles, ahead
of 2015’s 17.47 million sales. It forecasts that 2017 will begin a cycle of
lower sales, bottoming out in 2019
at 15.2 million.
This story first appeared in Crain’s
sister publication Automotive News.
Foley picks up 3 senior Honigman partners in expansion
By Chad Halcom
[email protected]
Sometimes building a footprint
sells lawyers, as much as clients, on
a law firm, as the Detroit office of Foley & Lardner LLP picked up three
partners with 75-plus years experience from Honigman Miller Schwartz
and Cohn LLP.
Former Honigman litigation department co-Chairman Norman
Ankers, former firm assistant general counsel and white-collar crime
and investigations practice Chairman Jennifer Zbytowski Belveal,
and tax appeal and real estate litigation partner Jason Conti all left
Honigman to start July 1 as partners
at Foley.
Ankers, senior of the trio with 36
years’ experience, said the three
attorneys had “bonded” well
during their time at Honigman
and had been shopping their ser-
vices to several local and national
firms for several months, with several suitors.
“There was no plan to act as a
group, but all of us were looking for
ways to augment our own practices,
and complement the services of a
larger firm,” he said.
“More and more, as I’ve tried to
pitch litigation work, particularly
with prospective new clients, I’ve
been in situations where the general
counsel (of a corporation) is impressed with my services, and our
talents. But the response was ultimately, ‘Well, we really need the cover
of a national firm.’”
Foley, headquartered in Milwaukee, has nearly 900 attorneys
across 17 U.S. locations including
Detroit plus overseas offices in Belgium, China and Japan. It also consistently ranks among the top 50
national law firms with more than
$600 million global revenue, according to recent data from American Lawyer.
Honigman, at less than a third
that size, historically has avoided
much expansion out of state and
only recently added a Chicago location to its five Michigan offices by
acquiring the 14 attorneys of Schopf
& Weiss LLP last year.
Honigman declined to comment
for this story, but has said in the
past no other out-of-state expansions were imminent after the
Schopf deal.
The Chicago office of Honigman
has grown to more than 20 lawyers
since late last year, according to its
website, while total headcount was
slightly off since January across the
firm as a whole.
The three lateral hires bring Foley
to about 36 local attorneys, and that
figure could approach 40 when
some summer associates join the
firm full-time this fall, said Daljit
Doogal, managing partner for the
firm’s Detroit office. He also said the
new hires bring some new
white-collar and real estate tax expertise.
Ankers, who was also previously a
managing partner of Honigman’s
first Oakland County office, said he
and the other laterals were not seeking management positions at the
new firm for now.
“I come as a foot soldier, which
is to say I wanted to devote myself
more fully to the practice of law,”
he said. “I believe leadership is
something you earn, and you aren’t just knighted with it, and if I
grow my practice to a point where
a leadership role makes a good fit
later, we’ll see.”
Chad Halcom: (313) 446-6796
PEOPLE:
SPOTLIGHT
Fanuc America names
Cicco president, CEO
Mike Cicco has been named
president and CEO of Rochester
Hills-based Fanuc America Corp.,
which also
named Rick
Schneider, a
board
member of
Japanese
parent
company
Fanuc Corp.,
as its new
Mike Cicco
chairman.
Fanuc provides robotics,
computer numeric control
systems and factory automation.
Cicco, with Fanuc since 1999,
transferred to its headquarters in
Rochester Hills to become the
national account manager of the
company’s authorized system
integrator sales group. He later
became the general manager of
several robot division groups and
then was promoted to vice
president of North and South
American sales and execution.
Eubanks appointed to
MPSC for partial term
Rachael Eubanks, director of
public finance for Robert W. Baird
& Co. Inc. in
Lansing, has
been
appointed to
the Michigan
Public Service
Commission.
Eubanks
fills a partial
term vacated
Rachael Eubanks
by the
former commission chairman,
John Quackenbush. Her term will
end in July 2017. Quackenbush
left his six-year term in March to
return to the private sector.
TechTown adds 7 to board
TechTown Detroit, a nonprofit
business incubator and
accelerator, named seven new
members to three-year terms on
its board of directors.
The new members are Diane
Dunaskiss, retired principal of
Pine Tree Elementary School in
Lake Orion; Robert Forsythe,
dean of Wayne State University’s
Mike Ilitch School of Business;
Jacalyn Goforth, partner with
PricewaterhouseCoopers LLP’s
assurance services; Christopher
Graunstadt, director of treasury
services and project
management office for Henry
Ford Health System; Tonya
Matthews, president and CEO of
the Michigan Science Center;
Rodrick Miller, president and
CEO of the Detroit Economic
Growth Corp.; and Fredrick
Molnar, vice president of
entrepreneurism and
innovation for the Michigan
Economic Development Corp.
CABELA’S
FROM PAGE 3
burn out, that would allow the other
tenants to leave.”
“We had the choice of doing (the
outlet center) or the more traditional lifestyle center ... with restaurants
... bigger boxes like Marshall’s or
Home Goods, a bookstore,” Guastello said.
“Those are longer-term uses
(that) we think better serve the project,” he said, with 10- to 20-year
leases rather than the five-year leases outlet center projects typically
bring.
Guastello said he and the
co-owner of the property plan to
hold in reserve the 40 acres or so
planned for the outlet center at the
corner of I-94 and M-59/Hall Road
in case upscale-anchor interest in
the project is revived once the Cabela’s and lifestyle center bricks start
going up.
Developers of the Outlets of Michigan, another luxury outlet center
JOB
FRONT
TECHNOLOGY
planned in Romulus, declined to
comment last week on the status of
the project.
Like the Chesterfield outlet center, the Romulus plan, at Vining
Road and I-94 near Detroit Metropolitan Airport, has been in development since summer 2014.
A third outlet center plan proposed for Canton Township was
abandoned for infrastructure cost
reasons at the end of 2014, and that
project’s
developer,
Baltimore-based Paragon Outlet Partners,
teamed up with Newton, Mass.based New England Development on
the Romulus outlet center plan.
They secured initial approvals for
their jointly developed center from
Romulus during the first quarter of
2015 and had planned a summer
2015 groundbreaking, pending
lease negotiations with retailers.
As planned, the $100 million,
open-air concept will include 80-90
national retailers, according to the
site plan submitted to the city.
Reported anchors for the Romulus center were announced during
the International Council of Shopping
Centers’ annual retail conference in
Novi last summer. They included
Nike, Tommy Hilfiger, Calvin Klein,
Gap, Brooks Brothers, Old Navy, Under
Armour, Express and Off Broadway
Shoes.
But last week, Kelvin Antill, development partner at Paragon, declined to confirm or release any
names of the retailers that have
signed on to the project.
Outlet anchors are pulling back
because they do better when the
economy is challenging, said retail
consultant Cindy Ciura, principal of
CC Consulting LLC in Bloomfield Hills.
“Customers shop more full-price
traditional lifestyle centers when
the economy is doing well, like
now,” she said.
Despite competition from nottoo-distant lifestyle centers like Partridge Creek and The Village of Rochester Hills, the Chesterfield Township
site “is located on two major Detroit
metropolitan freeways in a market
that continues to grow its population pretty steadily, so I would say it
MARKET PLACE
POSITIONS AVAILABLE
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33
CRAIN’S DETROIT BUSINESS
July 11, 2016
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hunting, fishing and camping gear
retailer.
“Until we make an announcement, we can’t speak about or speculate about a potential new store
location,” said Cabela’s communications specialist Nathan Borowski.
However, “nothing is out of the
realm of possibility; we’re still in retail expansion mode,” he said, noting the company has moved to a
smaller footprint of 70,000-100,000
square feet for its stores.
The Grandville store Cabela’s
opened best characterizes the size
of its next-generation stores,
Borowski said. The company is no
longer developing large stores of
roughly 200,000 square feet, such as
the one in Dundee, or smaller stores
of roughly 42,000 square feet, such
as Cabela’s “outpost” location in
Saginaw.
“The new size allows us to build
closer to highly populated areas,
putting us in more convenient locations for customers,” Borowski said.
Sherri Welch: (313) 446-1694
Twitter: @sherriwelch
REAL ESTATE
INDUSTRIAL SERVICES
BUSINESSES WANTED
BUSINESSES FOR SALE
is a good site for new development,”
Ciura said.
Sidney, Neb.-based Cabela’s Inc.
(NYSE: CAB) secured final site-plan
approvals from the township’s zoning board of appeals June 29 and is
working with the township’s engineering department on infrastructure prep for the new store.
Its store will be closer to 21 Mile
Road on the east side of the property, along I-94, Guastello said. Construction is expected to begin within a month, and the store is slated to
open next spring.
Township Treasurer Linda Hartman said the new store will create
150 to 180 jobs. Cabela’s did not seek
incentives for the project.
The outdoor gear retailer is “a
strong lead tenant for the Chesterfield Towne Center, and (its) presence already has attracted quality
business interest, a diversified land
use to accommodate retail as well as
commercial, office uses,” Hartman
said.
The Chesterfield location will be
the fourth Michigan store for the
Page 33
AUCTIONS
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34
KOSCH
FROM PAGE 1
percent from $14 million last year.
The company's 2014 revenue was
$12 million.
Kosch Dining began as a tavern
and restaurant operator in Sterling
Heights in the early 1980s. Today, it
manages onsite dining operations
for several metro Detroit companies
and parks, ranging from the Huron-Clinton Metroparks to Troy Community Center, Walsh College, Monroe
County Community College, Blossom
Heath in St. Clair Shores and Paint
Creek Country Club in Lake Orion
through a joint operating agreement with Davey Golf, which is the
Lake Orion-based division of the
Davey Tree Co. in Kent, Ohio.
Though based in Rochester,
Kosch isn’t new to Gaylord or northern Michigan. Its owners began acquiring property 10-20 years ago,
beginning in Rochester and then
heading north to Traverse City, Elk
Rapids, Petoskey and Gaylord. In establishing the Kosch Properties Division, the idea was to hold the
properties as a hard asset and to
lease them to produce revenue.
The brothers operated the wellknown Gordie Howe’s Tavern & Eatery
in Traverse City from 1994-2005 and
today rent the restaurant to the operators of Agave Mexican Grill, Gordie
Kosch said.
They also own and operate other
eateries familiar to many tourists
and northern residents, including
the Alpine Tavern & Eatery in Gaylord, with its outdoor beer garden
during the warm weather; The Boathouse, on Traverse City’s Mission
Peninsula; the building that houses
Trout Town Tavern & Eatery in Kalkaska; and the 140-year-old Cook Electric building in Petoskey. The Cook
building is now a multi-tenant office and retail building that houses
Great Lakes Pie Co. and other businesses.
Their newest northern Michigan
property, Main Street Market,
Founders Gordie (left) and Gary
Kosch: The brothers began acquiring
property 10-20 years ago, beginning in
Rochester and then heading north.
KOSCH DINING SOLUTIONS
Main Street Market in Gaylord offers customers a glass of wine or coffee and a
selection of baked goods before or after they peruse its selection of gourmet
cheese, meat and other made-in-Michigan products.
opened May 23 downtown in Gaylord in a 136-year-old building
they’ve held and leased to a number
of tenants for the past 12 years.
Installing new electricity and
heating, ventilation and air conditioning systems, Kosch Dining Solutions invested $400,000 to convert
the historic building, a hardware
store for roughly 100 years, into a
bistro, bar and gourmet market. Its
venerable tin ceiling and interior
brick walls remain intact.
“The uniqueness of the concept
is a progressive, upscale, new consumer experience,” Kosch said.
With seating for up to 60, the
market offers customers a glass of
wine, a selection of small plates or a
coffee and baked good before or after perusing its limited gourmet selection of high-end cheeses, cured
meats, pasta, chutney and other
made-in-Michigan products.
The market is the second business Kosch has opened in Gaylord
this year. Last fall, it purchased the
4-acre parcel next to the Big Buck
Brewery on I-75 in Gaylord for
$350,000 and spent an equal
amount to expand and renovate the
former Wisconsin Street Hall building and surrounding area. Now operating as the Otsego Grand Event
Center, the venue has seating for up
to 220 people, an onsite ceremony
space with a waterfall, and arbor
and landscaping to create a private
setting for wedding parties in the
back garden area.
“We already have $600,000 of
business for that venue on the
books for this year,” Kosch
said.“That’s better than expected.”
Two-thirds of the booked business is for weddings and the remainder is for corporate, nonprofit
and private events such as birthday
parties and baby showers.
“A banquet business is different
from a restaurant (where) ... pretty
much how you do the first few
months is typical of the volume
you’re going to realize,” Kosch said.
A banquet center takes time to
build a customer and referral base,
Kosch said. Despite competition
from established venues including
TreeTops Resort and Otsego Club &
Resort, he projects Otsego Grand
will do about $750,000 in revenue
this year and $850,000 to $900,000
next year.
Kosch Dining Solutions is also
seeing growth on the local and outof-state fronts, its co-owner said.
The company has a three-year
contract to manage the 15 concession stands, AAA Clubhouse, 30
suites and all catered, on-premise
picnics for the new Jimmy John’s
Field, which opened May 30 in Utica. The stadium is expected to do
about $2.5 million in food and beverage revenue each year, Kosch
said.
Gordie Kosch said he and his
wife, Julie, have known Andy Appleby, who built the stadium for his independent United Shore Professional
Baseball League, and his wife, Kris,
for 20 years through Young Presidents’ Organization. That relationship, coupled with a competitive
bid, won Kosch Dining Solutions
the contract, he said.
“I think it had a lot to do with customized solutions — a national
(food and beverage company) will
not customize solutions; they’re going to go with their format.”
Appleby wanted a unique, customer-driven service, and that’s
what Kosch Dining is delivering,
Kosch said. He and his wife drove to
Kansas City, Kan., late this spring to
buy a commercial smoker that had
been used in professional competitions so they could smoke pork butt,
beef brisket and other meats right
on site at the new stadium.
“I don’t know of any national
(food and beverage company) doing on-site smoking” at a stadium,
Kosch said. (Most use commissaries
and then transport.)
Kosch, which now employs 600650 people, also landed a two-year
contract in February to manage
food and beverage for Maple Lane
Golf Club in Sterling Heights for
owner Moceri Cos. And last week, it
took over the food and beverage operations for the 54-hole Kenton
County Golf Course and its banquet
center in Kentucky through a second joint operating agreement with
Davey Golf, which is managing the
golf operations for the courses. The
contract, which runs through December 2019, is expected to do
$550,000 in gross food and beverage
revenue on an annual basis, Kosch
said.
Kosch Dining and Davey Golf —
which is projecting $10 million in
sales this year, up from $7.7 million
last year — are now talking with a
Florida course about taking over operations as well, he said, noting the
golf industry is trending significantly to outsourcing.
The majority of golf courses have
a food and beverage operations. “If
you can’t have that under your management direction, you just can’t
compete for management contracts,” said Davey’s national division manager, Mark Jackson.
“We are not a food and beverage
company; Kosch is. They get that
end of the business, and we get all
the facets of golf,” he said. “So we’ve
teamed up with them so we have
the best practices of both worlds.”
Sherri Welch: (313) 446-1694
Twitter: @sherriwelch
Judge to limit deposition order for OEMs in supplier price-fixing litigation
By Chad Halcom
[email protected]
A federal judge will rein in a previous order for automakers, including
General Motors Co., FCA US LLC and
Toyota Motor Engineering & Manufacturing North America Inc., to give
depositions in the massive Detroit
auto supplier price-fixing litigation,
after more than half a dozen of the
companies challenged the order in
court.
U.S. District Judge Marianne Battani held a hearing in late June and
is expected to adopt a written ruling
as early as this week, limiting the
April deposition and discovery order by court-appointed special
master Gene Esshaki. The lawsuit in
Detroit combines various cases filed
nationwide, alleging price-fixing in
more than 30 industry segments of
the automotive supply chain.
Esshaki ordered that nine
“non-party” automakers and some
of their affiliate financing and re-
search and development companies each offer up to 14 hours of
deposition over two days apiece,
covering pricing data for the auto
parts in dispute and some vehicle
sales data and price adjustments for
their networks of automobile and
truck dealerships.
But attorneys told Crain’s that
Battani will order that first subpoenas must go out to the OEMs well in
advance and give the companies
time to respond, and that the suppliers and consumers in the litigation must give the OEM witnesses at
least a rough outline of questioning
topics beforehand.
Fiat Chrysler, GM, Hyundai Motor
America, Nissan North America Inc.,
American Honda Motor Co. Inc., Daimler Trucks North America and other
trucking operations of Daimler AG
either brought or supported various
objections to the deposition and
discovery order in early May.
Ford Motor Co. is involved in an
OEM plaintiff action against the suppliers within the Detroit litigation, so
it is not named as a “non-party OEM”
in the deposition order.
The OEMs have generally stayed
out of the case since it began in
2012, and they contend in court that
the depositions as previously ordered improperly involve them in
questions on “broad substantive
topics” about it.
The 4-year-old civil lawsuit in Detroit has closed in on a half a billion
dollars in commitments from about
a dozen companies that have settled since 2013 — but more than 100
supplier companies or their subsidiaries in more than 30 industry segments are still defendants.
The federal government and other regulatory agencies in Europe
and Japan have alleged that suppliers around the world were involved
in a global practice of fixing inflated
prices of parts shipped to OEMs or
other suppliers in violation of anti-
trust laws, from at least the late
1990s until about February 2010,
when a handful were raided in
Southeast Michigan and Japan.
The U.S. Department of Justice has
surpassed $2.6 billion in criminal
fines levied against about 40 companies in Michigan and several other states, in separate criminal proceedings since 2011.
But many companies were accused of participating only in parts
of the conspiracy, involving specific
auto industry segments like exhaust
systems, seating and safety systems,
instrument panels and other subsystems, or of participating for more
limited periods.
Michael Palese, corporate communication strategy and litigation
communications manager for Fiat
Chrysler, said the company continued to “monitor developments on
this matter and to consider its legal
options,” but did not elaborate on
whether the expected Battani order
was satisfactory or if Chrysler would
appeal.
Nick Richards, GM product development communications manager, said in a statement last week
that the company would not comment on pending litigation.
In court, both automakers have
argued that Esshaki stepped outside
his role as a referee on evidence-sharing matters.
“If this were an evidentiary hearing, then both sides — the (OEM
groups) and the (suppliers and consumers who are parties) — would
have a right to obtain and present
evidence. It would not be a one-sided affair, in which the parties may
cross examine the (OEMs), but
(they) have no power to compel testimony as to the parties’ lack of substantial need for information
sought,” they argued in a motion
before Battani in May.
Chad Halcom: (313) 446-6796
35
ZONING
FROM PAGE 1
West Jefferson near Junction Street,
is expected to go before the Board of
Zoning Appeals on Tuesday to appeal the April Buildings, Safety Engineering and Environmental Department decision to require a
structure on the site.
“The zoning ordinance ... allows
us to impose conditions we feel are
for the safety and protection of the
public's interest, health, safety, welfare and environment,” David Bell,
director of BSEED, said in a statement.
“We would let them have storage
of coke or coal-related products at
this location, but not according to
their current proposal.”
But Gotthelf says there has been
no evidence the site has posed a
public health hazard.
She says toxicologists and air
quality and stormwater experts
have all said that piles at the site
have not caused public health or
water quality problems. The case
may be taken to circuit court if Waterfront Petroleum's appeal is denied, Gotthelf said.
The company provides bulk liquid storage and fueling for ships up
to 1,000 feet long. It also is petroleum provider for the city of Detroit.
Tlaib, who is now community
partnerships and development director for the Detroit-based Maurice
& Jane Sugar Law Center for Economic
and Social Justice, which is representing Bridge Watch Detroit in a
lawsuit against Waterfront Petroleum over the piles, said she understands the Detroit-based company's concern over cost but is
concerned about public health impacts in the surrounding Southwest
Detroit community where she lives.
“We are not trying to make them
stop; we are trying to make them do
it better,” Tlaib said.
Health, environmental
concerns
Gotthelf says the site had about
30-foot-tall piles of coke breeze derived from metallurgical coal, not
petroleum coke, a coal-like byproduct of oil refining. Metallurgical
coke is produced from coal and
used in steelmaking, while pet coke
is used as a fuel source in industrial
and power generating plants.
According to testimony in the
Bridge Watch Detroit case from Ranajit Sahu, an independent environmental expert who has worked
with the Sierra Club in North Dakota
on coal issues and others, “met
coke” breeze is generally used as a
fuel source in the iron and coal industries. He testified that pet coke
breeze is commonly used as a protective backfill around oil pipeline
protection systems.
In July 2014, the Michigan Department of Environmental Quality determined that Detroit Bulk Storage Inc.
didn't have sufficient dust control
measures to prevent air pollution
from pet coke that came from Marathon Petroleum Corp. refining.
Cardiovascular and respiratory
problems could be caused by
lengthy exposure to particulate
“We can’t kick out
the residents. We
can’t kick out
industry.”
Kathy Wendler, Southwest Detroit
Business Association
matter from pet coke, the DEQ determined five months earlier in February 2014.
The U.S. Environmental Protection
Agency says it is “particularly concerned” about dust particles smaller
than 10 micrometers (one-tenth the
thickness of a human hair) in diameter because those are the ones that
enter the lungs through the throat
and nose.
Tlaib on Thursday said Waterfront Petroleum has referred to the
piles both as “met coke,” as well as
one of its derivative, coke breeze,
which has individual pieces ranging
in sizes from that of a split pea down
to pretzel salt.
But that is beside the point, Tlaib
said.
“They can call it coke milkshake,”
she said. “They have said it’s a different thing, met coke. They refer to it
as coke breeze, which according to
our experts and research, is just a
smaller, finer product of pet coke.
What we know is that there were
high piles of coke.”
Waterfront Petroleum says in legal documents that there have been
“no complaints of visible dust com-
ing from the Waterfront properties”
made to the companies when the
coke breeze was put on the property, when it sat there waiting for
transfer, or when the transfer actually took place.
Teresa Seidel, assistant division
chief for the DEQ's Air Quality Division in Lansing, said there have
been no violations or complaints
filed with the state agency about the
Waterfront Petroleum property.
And Gotthelf says that requiring a
structure to be constructed to house
the material, which is temporarily
stored on the site for periods generally ranging from 30 to 45 days before it is shipped, would make Detroit one of only three markets in the
country with such a requirement.
The other two are Chicago and
Los Angeles, and Detroit companies
would effectively be “priced out” if
there is such a requirement, which
is part of a new bulk storage ordinance currently being considered
by the Detroit City Council.
There are currently “no coke
products whatsoever” on the site,
Gotthelf said.
The met coke breeze piles from
October came from Zug Island, the
heavily industrialized island mostly
in River Rouge south of Detroit
where U.S. Steel Corp. has mill operations.
“We are just a port,” Gotthelf said.
“Other people bring the material
on-site and ship it off-site. We don’t
know where the material goes” after
it leaves the property.
History of the site
This isn't the 13 acres’ first flirtation with potentially hazardous materials.
It is part of the former 29-acre Revere Copper and Brass Inc. property,
where between 1943 and 1944, at
least 1,220 tons of uranium were extruded as part of the Manhattan
Project, which led to the creation of
the world’s first nuclear bomb
during World War II. (The site is not
believed to hold residual radiation.)
Revere Copper, established in
Massachusetts in 1801, vacated the
site in 1985 after melting scrap and
virgin copper into cakes for fabrication into copper bearings there for
decades. The property tax-reverted
back to the city in 1986.
Between 1987 and 1988, the EPA
removed barrels and drums, as well
as the organic chlorine compound
polychlorinated biphenyls, more
commonly known as PCBs.
Kathy Wendler, president of the
Southwest Detroit Business Association, said the area has historically
been used for heavy industry.
“But it’s also a place of jobs and
entrepreneurship and dense community and a real sense of community here,” she said.
“We can’t kick out the residents.
We can’t kick out industry. We’ve
been figuring out how to live together for some time,” said Wendler,
whose organization was started in
1957. “It’s part of our history and part
of our identity, and we have to make
it work because we don’t want to lose
either. We think people are entitled
to a clean environment, and we also
don’t want to lose the jobs and industry. We struggle on a daily basis
working on this.”
Warner began buying parts of the
former Revere Copper plant in 2013
as the city teetered on the largest
Chapter 9 municipal bankruptcy
case in American history.
The first portion, totaling 6.8
acres, he paid $1.2 million to acquire. The second portion, totaling
5.5 acres, cost him $735,000. Between the two parcels, Warner expects to spend $6 million on improvements as it expands its marine
liquid and bulk distribution operations, Gotthelf said. Some of those
improvements have already taken
place, including blight removal.
Among the things that were removed were 17 abandoned vehicles
from the water on which his property sits, said Gotthelf, who is also Butzel Long’s director of innovation and
external relations, co-chairman of
the energy and sustainability practice, and chairman of the aerospace
and defense industry team.
The rest of the former Revere
Copper site, totaling 17.1 acres, was
purchased earlier this year by Revere
Dock LLC, a subsidiary of Grand Rapids-based rigging, transport and engineering provider Erickson Inc., for
$2.28 million. The company plans
more than $10 million in improvements.
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Twitter: @kirkpinhoCDB
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36
JEFFERSON
FROM PAGE 3
Jefferson-Chalmers. Elling said Lester Gouvia will open a high-end Caribbean restaurant called Norma G’s
Caribbean Cuisine in the JEI building.
The area’s first sit-down restaurant
in decades also will serve as a home
base for Gouvia’s popular food
truck. Named after his mother, Norma G’s will offer entrees that hail
from Gouvia’s Trinidad birthplace.
“Mr. Gouvia’s passion for food and
his desire to be a community anchor
in the Jefferson-Chalmers neighborhood is one of the most exciting
things I have witnessed during my
entire
tenure
here at Jefferson
East,” Elling said.
“With
Norma
G’s, we are able
to provide that
desperately
needed community spot that allows long-term
Lester Gouvia:
Detroiters
to
Set to open
walk to a great
Caribbean eatery. meal from their
homes.”
Construction is expected to begin
in the fall, Gouvia said.
The 14,000-square-foot 14700
Jefferson building, on the first block
of Jefferson-Chalmers that borders
Grosse Pointe Park, was purchased
in May 2015 and is being rehabbed
by restaurant owner Jessica Caizza,
who owns real estate development
company Jeff14700 LLC. She said the
building and improvements will total more than $1 million.
The second floor of the building
was gutted and will become a
shared workspace, and retail on the
street level will continue to include
institutions such as Marshall’s Bar
and Moe’s Bait Shop, she said. “I feel
the resurgence of (downtown) Detroit, but I see the need to work on
improving the bookends. I bought
the building because I want to give
more walkable retail to the people
who live there. My building is (part)
of bridging the two communities
(Detroit and Grosse Pointe Park).”
JEI, formerly called the Jefferson
East Business Association and
founded in 1994, plans to move into
the back of the former Kresge building at the corner of Lakewood Street
and Jefferson. Four thousand square
feet in the front of the building will be
leased. JEI’s offices will temporarily
locate to a space near the intersection of Jefferson and Chalmers Street,
while its old headquarters is being
converted to Gouvia’s restaurant.
Elling said the resurgence of
downtown, combined with business-supporting organizations such
as TechTown Detroit and Motor City
Match, has had a positive impact on
East Jefferson.
“Where you have a walkable area,
people are gravitating there,” he
said, adding that would include The
Villages, parts of Rivertown near
downtown and Jefferson-Chalmers.
Those neighborhoods are three of
the five on or near East Jefferson.
The others are the Marina District
and Lafayette Park.
Elling said the refurbishing of a
New on Jefferson
Businesses along East Jefferson Avenue that have opened this year include:
1. Hello Again Records and Coffee and (____): Ray Cronk, owner of Hello
Again Records and co-owner of the adjoining coffee shop and bakery in the
Jefferson-Chalmers neighborhood, said getting the two businesses up and
running was a lengthy process. The former teacher, who has a background in
records and coffee, reunited with Angela Foster a few years ago. (They are old
friends from Saginaw.) JEI helped them get off the ground starting in 2014.
“They helped us get going during the pop-up stage,” he said. “I’m delighted and
fascinated that there is a resurgence and demand for this (record store),” he
said. Cronk and Foster got $35,000 for their businesses in round one of the
Motor City Match competition. The record store opened last October; the
coffee shop started in June.
2. Red Bag Boutique: This women’s clothing shop opened last November in
Jefferson-Chalmers.
3. Beautiful Bridal with Keasha: Its co-owners relocated from New York
City to open a bridal salon in turn-of-the-century Detroit entrepreneur John N.
Bagley’s red brick and sandstone manse.
4. Sacred Space Yoga Centre: Owner and founder Trina Campbell has
opened a Christian-centered yoga studio.
5. Posh Fashions: Billed as “a trendy, affordable women’s fashion boutique”
by owner Aisha Warrent, it opened in May in the Chene Park shopping center.
6. Three Thirteen Clothing: This casual clothing store for men and women
features clothing with its own brand in the Chene Square shopping center. It
also carries other Detroit-brand and some national-brand streetwear.
7. Detroit Denim: The founder of this jeans manufacturer, Eric Yelsma, moved
his business from Ponyride in Corktown to Franklin Street, just off East
Jefferson, in March. “We outgrew the space and wanted our own space and
storefront,” he said. He has eight employees and expects to add more this
year. Blue jeans are custom made and sell for $250 to $550.
8. Bucharest Grill: Shawarmas and more can be had at this restaurant,
which moved near the former Lucky’s Grille on East Jefferson in a shopping
strip earlier this year. The restaurant spent its first five years inside the Park
Bar on Park Street downtown. It also has locations on Michigan Avenue in
Corktown and Piquette Avenue in Milwaukee Junction.
handful of large, old, empty buildings on East Jefferson is in the offing
for the near future. One of those is
the $1 million redevelopment of the
12,000-square-foot, three-story St.
Columba Parish building and the
7,000-square-foot church behind it
on East Jefferson near Manistique
Street. Fox Creek Partners LLC, a local
investment group, purchased the
buildings from the Episcopal Diocese
of Michigan. The group stabilized the
building and is beginning work on
the upper floors and carving out
storefronts for lease on the street
level, said Kyle Hacias, co-managing
member of Fox Creek Partners.
The ornate parish building was
built between 1913 and 1922, and
the church was built between 1913
and 1927, Hacias said.
Elling said it is too soon to disclose plans for the historic, long-vacant Vanity Ballroom building on
East Jefferson at Lakewood Street or
the empty, dilapidated block to the
west of it, which is being held by the
owner who is dealing with a longtime city nuisance-abatement suit.
Across the street from there, the
historic building next to the Perry Liquor store will be renovated into the
Lakewood Century Apartments.
The $7 million project will include 35 apartment units with retail
on the street level, said Dorayd (Ray)
Bacall, owner of Detroit-based Bacall Companies Inc., which is developing the apartments.
Meanwhile, two apartment
buildings on Marlborough Street off
Jefferson will be rehabbed into 19
1
2
5
3
6
8
4
7
units. “We are still finalizing financing on those,” Elling said. “We want
to make sure this is an inclusive
neighborhood by providing (a percentage of affordable housing) so
long-term residents can stay.”
The multi-family housing projects, called the Jefferson Chalmers
Main Street Redevelopment Project,
will be redeveloped by JEI, Shelbourne Development, Enterprise Community Partners and the Michigan
State Housing Development Authority. This year, JEI received a multi-
year, $825,000 grant from the Troybased Kresge Foundation to help
support the project.
Kathy Makino-Leipsitz, owner of
Shelbourne Development, said the
two 1920s Marlborough apartment
buildings — the Marlborough and
the IDEO — have been vacant and
boarded for years. They will be gutted and turned into 11 and eight
units, respectively. “We will preserve
the exteriors of the beautiful brick
structures,” she said.
Since 2014, crime along the Jefferson corridor declined more than 31
percent. In 2015, there was a 38 percent drop in auto theft and a 22 percent reduction in robberies, according to JEI’s “Safe Jefferson” program.
Of note is that the Jefferson-Chalmers street-scape improvements, which include a halfmile protected bike lane and a
landscaped center island, will be
extended all the way to East Grand
Boulevard. The work for the extension will begin early next year and
the city likely will tie in repaving and
additional landscaped islands along
Hello Again Records (left) is among the businesses that have opened this year on East Jefferson Avenue.
-
CHRIS EHRMANN
Jefferson Avenue. “The mayor (Mike
Duggan) likes islands,” Elling said.
“People need a third place to go after home and work,” he said, adding
that Jefferson East keeps that in mind
as it plans for new business. “We’re
also working on transit linkages that
tie East Jefferson to downtown.”
If given the go-ahead by voters,
the Regional Transit Authority will
step in to provide enhanced bus service; the city has already put efforts
toward improved bus transit along
the route.
The corridor has several retail
strip centers, which were built about
15 years ago to revitalize the neighborhood. Before and during the
Great Recession, the shopping centers struggled, resulting in high vacancy rates. In the past couple of
years, new businesses have been
slowly moving in. But, Elling said, the
days of building suburban-style strip
centers in the city are likely over.
Duggan has emphasized a new vision that developers are embracing:
for the city to offer the type of development the suburbs don’t have.
Regina Ann Campbell, TechTown’s managing director of placebased entrepreneurship, said that
four years ago TechTown started the
small-business support program
SWOT (Strengths, Weaknesses, Opportunities and Threats). East Jefferson Avenue was one of four neighborhoods chosen. The other three
are Brightmoor, Osborn and Grandmont-Rosedale.
“We were looking for neighborhoods that have a strong partner
who invited us in,” Campbell said.
JEI’s Elling filled the bill.
“The partner needs to understand what (businesses) and residents in the area want,” she added.
Campbell has worked with Jefferson East to get the new businesses
rolling. “We’re very excited by the
activity that has come from new and
existing businesses along East Jefferson,” she said.
She said of the four neighborhoods in the SWOT program, the
area overseen by JEI, is making the
most progress. “There’s been a lot of
investment, both economic and
residential development. More people want to open businesses there.
It’s at a tipping point."
When asked why it has taken so
long for East Jefferson to take off,
Campbell said it took downtown’s
and Midtown’s revitalization and
Detroit riverfront’s redevelopment
“to spill over” to East Jefferson to
make a difference.
37
COLLEGES
FROM PAGE 3
Senate since it was reported out of
committee a year ago, and he said last
week that he doesn’t yet have enough
votes for passage. And with just 25
days left on the session calendar,
there may not be enough time to
wrap them up.
Still, the broader policy question
isn’t likely to go away.
Of the handful of subject areas
Shirkey proposed authorizing in the
Senate, nursing is the focal point. Language allowing colleges to offer bachelor’s degrees in nursing was introduced four years ago but taken out on
the Senate floor to win necessary
votes. Community college administrators believe the issue is about improving access — they want to offer
more students the opportunity to
earn a bachelor’s degree in career-ready fields, especially those
who live far from a university or otherwise couldn’t afford to attend.
Michigan in years past has had a
nursing shortage, but community
colleges are responding to what they
say is a desire from hospitals to employ nurses with higher credentials.
Opponents, mainly Michigan’s fouryear public and private universities,
worry that they will compete with
community colleges for students.
They point to ongoing partnerships
with two-year schools, from holding
university classes on community colleges’ campuses to agreements that
let students transfer credits.
“I give them credit for wanting to
broaden their base and scope, but I
just think there’s a line and we finally
crossed it,” said Farrington, adding
that he attended Macomb Community
College before earning degrees from
Walsh College. “It filled a void, but
that’s a lot different than the next step,
which is literally competing.”
Robert LeFevre, president of Michigan Independent Colleges & Universities, which represents nonprofit and
private universities, said he believes
there would be a “high probability” of
a lawsuit challenging Shirkey’s Senate
bill if it were to pass.
Said Shirkey of the House legislation: “It’s mostly a gesture of those
who are opposed to what I’m trying to
accomplish saying, ‘We’ve got to kill
this thing.’”
A financial matter
In the 2015 fiscal year, property taxes made up 34 percent of community
colleges’ operating revenue, according to state financial data compiled
for Michigan’s 28 public two-year
schools. That year, colleges took in
nearly $531.5 million in local dollars,
up from nearly $522 million the year
before.
Tuition and fees are their largest
revenue source, at 41.2 percent last
year. State aid makes up much of the
rest.
The Senate Fiscal Agency, in an
analysis of Shirkey’s bill, said community colleges’ locally elected boards
would have to decide whether to cover the extra costs of operating a fouryear program by charging higher tuition and fees to all students or just
those enrolled in bachelor’s degree
programs, or by spreading the costs
within the existing budget.
Those financial decisions would
be more challenging under the House
bills, because colleges “would need to
make up one-third of lost revenues or
drop the baccalaureate programs,”
according to a House Fiscal Agency
analysis.
“It would basically cause no community colleges to want to go down
that road,” Shirkey said. “It’s a punitive bill intended to be so.”
Daniel Hurley, CEO of the Michigan Association of State Universities,
said expanding the mission of community colleges would be an inefficient use of taxpayer resources because Michigan already has 15 public
universities that offer bachelor’s degrees. Community colleges doing the
same, he said, would be an unnecessary service duplication when collaboration between the two systems
could serve students just as well.
To date, only four such schools offer bachelor’s degrees. They include
Schoolcraft College in Livonia, which
launched a culinary arts degree program; Northwestern Michigan College
in Traverse City, which offers a maritime technology degree; and Jackson College in Jackson County and
Lake Michigan College in Berrien
County, which both teach energy
production technology.
Including Michigan, 23 states
have given community colleges
some authority to offer bachelor’s
degrees, according to the Washington, D.C.-based trade group Ameri-
INDEX TO COMPANIES
These companies have significant mention in this week’s Crain’s Detroit Business:
AlixPartners ........................................................ 32
Glacier Hills .......................................................... 29
Altair Engineering ............................................... 26
Health Alliance Plan ............................................. 6
Beautiful Bridal with Keasha ...............................3
Honigman Miller Schwartz and Cohn LLP ...... 32
Belfor Holdings ................................................... 26
International Automotive Components Group . 26
Beringea LLC ........................................................ 26
Jefferson East ........................................................3
BioStar Ventures ................................................. 21
Kosch Dining Solutions ........................................ 1
Bissell Homecare ................................................ 26
Lear ....................................................................... 26
Blue Cross Blue Shield of Michigan ..................30
Mectron Engineering .......................................... 28
Cooper-Standard Automotive ......................... 26
Michigan-China Innovation Center ....................5
Davey Golf ............................................................... 1
Michigan Corporate Relations Network ............7
Dayco Products LLC ........................................... 26
MSD Stamping ...................................................... 4
Deshler Group ....................................................... 4
NSF International ............................................... 26
Domino’s Pizza .................................................... 26
Priority Health ....................................................... 6
Federal-Mogul ..................................................... 26
Raleigh Officentre .............................................. 28
Federated Insurance ............................................ 6
TI Automotive ..................................................... 26
Fiat Chrysler ........................................................ 34
Trinity Senior Living Communities .................. 29
Foley & Lardner LLP ........................................... 32
TTI Global ..............................................................27
Fragomen, Del Ray, Bernsen & Loewy PLLC ....10
United Methodist Retirement Communities .. 29
General Motors ................................................... 34
Varsity News Network ....................................... 24
George P. Johnson Co. ........................................ 26
Waterfront Petroleum Terminal ......................... 1
can Association of Community Colleges and the Education Commission
of the States. Just 65 of the more
than 1,100 U.S. community colleges
offered one in 2014.
The movement toward giving twoyear schools more degree-granting
authority began in 1989 with West Virginia and continued throughout the
1990s, according to an April 2015
analysis from the Education Commission of the States.
Many states restrict the number
and type of degrees to certain programs, and some limit the number of
schools that can award them. How it’s
done varies by state.
In California, for instance, lawmakers approved a pilot program in 2014
that allows 15 community college districts to offer a single degree program
that could meet a specific workforce
need, though the program couldn’t
also be offered at a nearby state university campus. Florida’s legislature in
2001 limited the number of community colleges that could award fouryear degrees; it expanded the program in 2008 but required colleges to
get approval from the state board of
education and consult with four-year
universities.
Schoolcraft College wants to expand its nursing program to award
bachelor’s degrees, spokesman Frank
Ruggirello said. The two-year program has about 130 students per
class, with a wait list.
Schoolcraft this fall will charge
$102 per credit hour to in-district students, who live within the jurisdiction
of Livonia, Clarenceville, Garden City,
Northville, Plymouth-Canton and
part of Novi public school systems.
Ruggirello said the tuition rate would
not increase for nursing students in
their third or fourth years of a bachelor’s program; the college also did not
increase tuition for students enrolled
in its new culinary arts bachelor’s degree program.
“Is the funding issue a lot of political bluster? Probably,” Ruggirello said
of the House bills. “If we were allowed
to offer bachelor’s degrees, we would
be really judicious in the areas we
chose to do it.”
Just because they could offer higher degrees, though, doesn’t mean they
would: Oakland Community College
administrators said the college does
not plan to create bachelor’s degree
programs because of its proximity to
four-year universities, though the
concept makes sense in more rural
areas.
“First of all, we wouldn’t ask for
more state aid, and second of all,
there isn’t a lot of state aid to go
around,” said Mike Hansen, president
of the Michigan Community College
Association, which represents all 28
public community colleges.
The budget Gov. Rick Snyder recently signed for the 2017 fiscal year
that starts Oct. 1 includes a 1.4 percent funding increase for community
colleges, which equates to $4.4 million.
“None of the community colleges
yet have gone out and said, ‘We’re offering baccalaureate degrees, so now
we have to raise your property tax revenue,’” Hansen said.
Hansen said colleges view the programs they want to offer as “occupational degrees,” in demand by employers looking to fill gaps in their
workforce. Hospital systems across
Michigan are on record supporting
the Senate bill, in particular its nursing provision.
Critics argue the language in
Shirkey’s legislation is too broad, and
that allied health and information
technology are vague terms that encompass numerous programs.
“Tell me any college right now —
(a) four-year institution — that doesn’t
offer information technology,” Farrington said. “We went from a slippery slope to a full-on dive in the
pool.”
Constitutional question
Some opponents say the broader
policy question is irrelevant because
the state constitution doesn’t allow
community colleges in their present
form to offer any four-year degrees.
The 1963 constitution spells out
governance requirements for the
state’s three research universities, the
University of Michigan, Michigan State
University and Wayne State University; for “other institutions of higher education established by law having
authority to grant baccalaureate degrees,” generally the state’s other public universities; and for community
colleges.
Universities argue that the document calls for higher education institutions allowed to grant bachelor’s
degrees to have governor-appointed
boards, while community colleges are
governed by locally elected boards
with oversight from the state board of
education. Universities also can’t collect local property taxes.
Opponents say community colleges would have to be subject to the
same requirements as other public
universities if they want to offer bachelor’s degrees, including dropping
their local boards and millages.
“Our position has always been
constitutional,” said LeFevre, of the
independent colleges association,
who added that Farrington’s bill
doesn’t go far enough and should also
eliminate colleges’ local boards. “The
baseline question is can they (offer
bachelor’s degrees), and our position
is no they cannot, not in their current
structure.”
In 2012, LenWolfe, a Lansing-based
attorney with Dykema Gossett PLLC,
presented research his firm conducted on behalf of public universities
during the first round of bachelor’s
degree talks that reviewed the state
constitution, convention records,
case law and other opinions. His findings were that expanding community
colleges’ degree-granting authority
would create conflicts related to how
colleges are governed and raise concerns about the fate of community
colleges and their taxing power.
“It’s a legislative powers case, like a
lot of these cases,” said Wolfe, who
added that constitutional convention
records clearly show “that these were
really two different types of schools
and that they were complementary to
each other.”
Yet the document does not specifically state that community colleges
should only be allowed to award associate degrees, Hansen said.
If that were the intent of the framers in 1963, he added, “I don’t know
why they didn’t spell it out that way. ”
Lindsay VanHulle: (517) 657-2204
Twitter: @LindsayVanHulle
www.crainsdetroit.com
Editor-in-Chief Keith E. Crain
Group Publisher Mary Kramer, (313) 446-0399
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Contents copyright 2016 by Crain Communications Inc. All
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38
WEEK
ON THE WEB
JULY 2-8
Wayne County Detroit Digits
moves forward
with jail project 4
A numbers-focused look at last
week’s headlines:
W
ayne County is moving
forward with plans to
complete its unfinished
jail in downtown Detroit after
reaching a settlement with the
original design engineers and
architects and hiring a consultant
to oversee the project. The Wayne
County Commission approved a
settlement with Detroit-based
AECOM and Dearborn-based
Ghafari Associates LLC, which
provides the county with a $2.5
million payment from the two
firms, ownership of all design
documents and dismissal of all
counter claims against the county
and the building authority. Still up
in the air is an effort by businessmen Tom Gores and Dan Gilbert to
build a soccer stadium at the
15-acre site.
COMPANY NEWS
n More than 40 metro Detroit
Wendy’s Co. restaurants are among
more than 1,000 of the Ohio-based
chain’s outlets nationwide
potentially affected by hackers
being able to steal customers’
credit and debit card information.
A list of sites and more information
are at wendys.com.
n A group of investors led by
Quicken Loans Inc. Chairman Dan
Gilbert was expected to offer a third
and final bid for internet pioneer
Yahoo Inc., Redcode.net reported.
The bid was reportedly being
backed by billionaire investor
Warren Buffett. Experts predicted
bids between $3.5 billion and
$5 billion.
n Pamlico Capital, a Charlotte,
N.C.-based private equity firm, has
taken a majority ownership stake
in Southfield digital promotions
company PrizeLogic. Details were
not immediately disclosed.
n Reclaim Detroit got the green
light from the city to establish a
deconstruction center in a former
parks and recreation storage
building in Midtown. The
Highland Park warehouse the
nonprofit had been renting was
destroyed by fire in February.
n Robert Elmes, founder of
The number of locations for
Dearborn-based Westborn Market
Group once it opens a new site in
Plymouth on July 14. The downtown
market will join Westborn locations in
Berkley, Dearborn and Livonia.
68
The number of employees slated to
be laid off by Ontario-based
Martinrea International Inc. next
month at its Detroit subsidiary,
Martinrea Hot Stampings Inc.,
according to a notice filed to the
state of Michigan, as Fiat Chrysler
discontinues production of certain
models.
150
The approximate number of
employees to be hired for the new
Wahlburgers restaurant, owned by
actor Mark Wahlberg and his family
and scheduled to open in Greektown
later this month. Hundreds of
prospective employees turned out
last week for a job fair for the
restaurant.
Brooklyn-based Galapagos Art
Space, said he plans to transform a
128,000-square-foot building he
owns near Corktown into a
workspace for artists and a retail
incubator in a venture called
Commonwealth Detroit.
n American Girl will open a
temporary boutique in Twelve Oaks
Mall in Novi on Aug. 6. It will be the
first location in Michigan for the
doll maker and retailer, a subsidiary of El Segundo, Calif.-based
Mattel.
n Detroit is one of five Goodwill
Industries organizations to be
awarded part of a $4.5 million U.S.
Department of Labor grant to
establish LifeLaunch, a program to
help young adults exiting the
criminal justice system with
education and employment
services.
n Four organizations were
awarded federal Head Start and
Early Start grants to provide the
CITY OF DETROIT
The city of Detroit is seeking partners to convert more than 10 acres of vacant land
to ecological, agricultural, energy, crop and other uses within a neighborhood
context, according to the RFP.
programs for children in Wayne
County outside of Detroit over the
next five years. The awardees are
Wayne Metropolitan Community
Action Agency, $36 million; The
Guidance Center, Southgate, $33.2
million; Wayne County, $29.5
million; and Starfish Family
Services, Inkster, $22 million.
OTHER NEWS
n The city is targeting a quarter
square mile of northwest Detroit
for large-scale improvements with
the release of two requests for
proposals for 100 vacant houses
and 257 vacant lots between
Marygrove College and the
University of Detroit Mercy. The
properties are Fitzgerald
neighborhood houses to be
demolished or rehabilitated and
vacant lots to be turned into
“produce landscapes,” according
to a city news release. Responses to
the RFP are due Aug. 26;
respondents are expected to be
notified by Sept. 30.
n Visitors to Detroit’s
Mexicantown will be able to
navigate its main street businesses
and restaurants more easily with a
printed and digital marketing
brochure available starting in
September. The brochure will be
possible through the Southwest
Detroit Business Association and
the Mexicantown Community
Development Corp.’s MexicantownHubbard Communities Main
Street program.
n The National Highway Traffic
Safety Administration asked the
Pennsylvania State Police for
information about a July 1 Tesla
Motors Co. rollover crash that
involved Albert Scaglione, owner of
Southfield-based Park West Gallery,
and his son-in-law — the latest
incident spotlighting the safety of
Tesla’s Autopilot driver assist
technology, Bloomberg reported.
The Detroit Free Press quoted a
police officer as saying the driver
had told him the self-driving
system was engaged when the
accident occurred near Bedford,
Pa. Tesla said it had no evidence of
whether or not the system was
activated. Attempts to reach
Scaglione were unsuccessful.
n The Kensington Hotel in Ann
Arbor, formerly the Kensington
Court Ann Arbor, is undergoing a
multimillion-dollar renovation to
modernize its guest rooms,
hallways, restaurant, pool area and
meeting spaces.
n Planned renovations this
summer to the Detroit-Windsor
Tunnel are being delayed until 2017
so the project can be re-engineered, officials said.
n After being let go from
WJBK-TV2 in March, longtime
entertainment reporter Lee Thomas
returned to Fox 2. He will primarily
report for the morning program
“The Nine,” although that role may
expand to include more days as
well as reporting for other programs, a station spokesman said.
RUMBLINGS
Community policing
may get sharper focus
P
ublic furor over police
shootings of black
Americans, coupled with the
sniper shootings that killed five
officers in Dallas last week, may
cause police departments
nationwide to refocus on
community policing principles.
Research suggests increasing
the presence of officers in
communities, on foot or bike, and
not in a vehicle, greatly reduces the
fear of crime and policing, said
Harry Dolan, former chief of the
Grand Rapids Police Department and
now CEO of Raleigh, N.C.-based
firm Dolan Consulting Group LLC.
But following the terror attacks
of 9/11 and other terrorism-related
incidents, police departments
shifted training resources to
shootings — at the expense of
community-policing techniques
and training.
In Detroit, Police Chief James
Craig has touted communitypolicing since arriving from
Cincinnati in 2013. He launched
the Neighborhood Police Officers
Program in 2014 to get to know
businesses, residents, churches
and neighborhood groups in their
assigned precincts. The program
has been credited with improving
the trust of Detroit residents.
Additional training for officers has
focused on defusing volatile
situations officers encounter.
The chief also initiated
community advisory groups within
each precinct to meet regularly
with the captains in those districts,
said Cathy Govan, executive
director of the Detroit Public Safety
Foundation, which raises money to
support police programs not
covered by city budgets.
Dolan, who served as the chief in
Grand Rapids from 1998 to 2007,
agrees that working with business in
city neighborhoods can help boost
community policing efforts.
“Businesses have established
incredible mechanisms to reach
people,” Dolan said. “They can
play a vital role in coordinating
information sharing and support
these initiatives beyond the
resources available to local (police)
departments.”
Dolan and his consulting firm
are hosting a training session,
called “Community Policing:
Winning Back Your Community,”
on Aug. 3 at the Velocity Center in
Sterling Heights. Tickets are $195.
For more information, go to
dolanconsultinggroup.com.
The Detroit Zoo is beginning its campaign push for a 10-year renewal of the
one-tenth-mill that property tax voters in Wayne, Oakland and Macomb counties
approved in 2008 to support the zoo’s operation.
Detroit Zoo begins
millage renewal push
Tigers and birds and frogs are
coming to a lawn near you.
The Detroit Zoo is beginning its
campaign push for a 10-year
renewal of the one-tenth-mill that
property tax voters in Wayne,
Oakland and Macomb counties
approved in 2008 to support the
zoo’s operation.
Renewal of the millage, which
amounts to about $10 for a home
worth $200,000 and expires in
2018, goes before voters in the
three counties on Aug. 2.
The zoo is hoping the animal
lawn signs — which were very
popular the first go-round,
according to zoo CEO Ron Kagan
— will help do the trick once again.
In the campaign for the millage
renewal, the zoo is posting
information on its website and
social media and conducting
media interviews about its
impact, including its growth from
about 1 million visitors in 2008 to
1.5 million last year, and updates
since the millage passed, Kagan
said.
With the current millage, the zoo
initially expected to get just under
$15 million per year in tax revenue
to support its operations. But the
amount it’s taken in has fallen short
in the years following the housing
collapse and recession. The zoo
now receives just over $11 million
each year from property tax
revenue, Kagan said.
Even so, the zoo decided seeking
an increase wasn’t the right path to
go, he said. But with the millage
revenue representing just under a
third of the zoo’s $35 million
budget, a renewal was.
“The tri-county (area) has been
very clear it values culture and
understands the need for a
modest amount of money for the
zoo and (Detroit Institute of Arts),”
Kagan said. “The polling we did
last year and early this year all
suggests the public still feels very
strongly about the zoo and the
millage.”
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