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www.crainsdetroit.com Vol. 29, No. 45 N O V E M B E R 4 – 1 0 , 2 0 1 3 $2 a copy; $59 a year

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©Entire contents copyright 2013 by Crain Communications Inc. All rights reserved

Packard plant plans havebarriers to tear down

Diversity: Firms embrace itbecause it’s good business

COTSreachesout tofamilies

African American-, NativeAmerican-, Asian andHispanic-owned businesses,Pages 16-18

M-1 Rail expects to choosevehicle vendor next week

The M-1 Rail Detroit street-car project expects to select itsvehicle vendor from three bidpackages by the end of nextweek, project spokesmanJames Canning said Friday.

The $137 million nonprofitM-1 Rail effort remains intalks with all three bidders,which were not disclosed, andwill have additional talksnext week, Canning said.

After that, the project willnegotiate a deal with the pre-ferred vendor by the end ofthe year.

Bids for design, engineerand manufacture of six street-cars were due Oct. 21. Street-cars typically cost between $2million and $6 million apiece,depending on size and op-tions.

Construction of the 3.2-milegrade-level rail loop on Wood-ward Avenue by the public-private effort is expected to be-gin with the spring thaw, M-1CEO Matt Cullen said. A cere-monial groundbreaking mayhappen yet this year, he said.

M-1, running betweenWest Grand Boulevard andCongress Street, plans to beoperating for paying passen-gers by February 2016.

— Bill Shea

This Just In

Page 3

Year-round exposure. High-quality leads. Exclusive content.

CLOSE DATE EXTENDED TO

NOV. 13

Crain’s Lists

Karmanos: McLaren adds strength

Repair or replace? I-375 at crossroads

Walbridgeland salestokes I-96development

BY DUSTIN WALSH

CRAIN’S DETROIT BUSINESS

Oakland County’s largest, andlong-sought-after, single-ownerland parcel is back on the market.

Detroit-based Walbridge AldingerCo. put its long-held 515-acre site,near I-96 at Grand River Avenue

and MilfordRoad in LyonTownship, upfor sale becauseit no longer pro-duces profitablereturns, CEOJohn Rakolta Jr.told Crain’s lastweek.

The timing,real estate and

economic development officials say,could be just right as developmentof all types begins to heat up againalong the I-96 corridor. The targetprice for the land is $33.5 million.

The planned Lyon Township saleis just one of Walbridge’s westernsuburb real estate initiatives. About30 miles away, Walbridge is part ofan ambitious development plan tocreate a connected vehicle researchcenter in Ypsilanti Township.

BY JAY GREENE


The addition of Detroit-basedBarbara Ann Karmanos Cancer Insti-tute to McLaren Health Care, with its10 hospitals scattered over east-ern, central and northern Michi-gan, is expected to create one of thestate’s largest oncology hospitalproviders, with more than 12,000

patients and 165,000 outpatient vis-its per year.

The acquisition means patientreferrals for advanced cancer careto Karmanos in downtown Detroitfrom McLaren hospitals and 14outpatient centers could signifi-cantly increase — primarily withstem cell and bone marrow trans-plants, rare and complex cancer

surgeries, and patients involved inearly human phase-one clinicaltrials, said hospital officials andoutside experts.

“We will have a significant in-flux of patients coming down-town,” said Gerold Bepler, M.D.,Karmanos’ CEO.

For Flint-based McLaren, the ad-dition of Karmanos is expected tohelp further develop its lucrativeoncology program, which has beena major focus the past several years.To Karmanos, the deal is a financiallifeline because it comes withpledges for capital improvements

and a way out ofits ailing finan-cial position.

The deal withMcLaren hasbeen blessed bythe Karmanosfamily, and doc-tors and down-town staff likelywill welcomethe $80 million

McLaren has pledged to upgradefacilities downtown and in twosuburban clinics.

Acquisition expands reach,lifts cancer center’s finances

Bepler

See Karmanos, Page 25

See Walbridge, Page 24

Rakolta

City seeks expert to analyze thefeasibility, impact of changingbusy freeway to boulevard

BY BILL SHEA


The city of Detroit is seeking an expert to tell it, alongwith a group of public and private stakeholders,whether a proposal to transform I-375 into a grade-levelboulevard is a good or bad idea — or even feasible.

Detroit’s Downtown Development Authority on Oct. 24 is-sued a request for proposals seeking a consultant tostudy and make recommendations on the project, whichwas floated in April as a way to boost investment alongthe roughly 1-mile stretch on the downtown’s east side.

The bids are due Nov. 14 and a contract would beawarded by Dec. 6.

The DDA wants a consultant to do a traffic analysis,economic and district impact analysis, public engage-ment plan and alternatives plan.

The schedule within the RFP concludes with the finalreport being done by July. Along the way are variousstakeholder and community outreach meetings, an eco-nomic impact analysis and other benchmarks.

A technical team comprised of staffers from the DDA,Detroit city government, the Detroit RiverFront Conservancy,Michigan Department of Transportation, Federal Highway Ad-ministration and the Southeast Michigan Council of Govern-ments regional planning organization will provide opin-ions on the technical information submitted by theconsultant.

Early cost estimates say the effort to raise the four-

See I-375, Page 23

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THE ROAD TO REDEVELOPMENT?Here are the key businesses and other entities thathave land or buildings that could be included in aredevelopment idea that would convert I-375 into aboulevard and raise the roadway to grade level. Theproposal would affect commuting patterns but is beingevaluated as a catalyst for commercial development.1. Ford Field2. Horatio Williams Foundation3. Shapero Hall4. Woodward Academy5. Jean Rivard apartments6. Lafayette Park7. Former Stroh’s Ice Cream plant8. Crain Communications Inc. land9. Brewster-Douglass projects

20131104-NEWS--0001-NAT-CCI-CD_-- 11/1/2013 5:59 PM

November 4, 2013CRAIN’S DETROIT BUSINESS

Do I make more? Survey aims to tell N. Michigan workers

What should you pay an employ-ee? And what should your boss payyou? The Traverse City Record-Ea-gle reports that a study prepared byNorthwestern Michigan College, theTraverse City Area Chamber of Com-merce and others hopes to docu-ment the salary and wage scales ofthe workforce of northern Michi-gan. The report shows regionalsalaries depend in large part on aworker’s experience, time on thejob and where they work.

A sampling of the respondents:� Forklift operator at a small

business: Expect to make about $11an hour.

� A carpenter at a small busi-ness: $10-$24 an hour.

� Chefs at small restaurants:about $25 an hour; cooks: less than$10 an hour up to $21.

� CEO of a company with 51-100employees: up to $150,000 annually.

� Janitors at similarly sizedbusinesses: up to $15 an hour.

List alert: In Grand Rapids, noaverage Joe among the inn crowd

It’s time for our weekly list oflists:

� Readers of Condé Nast Travelerranked two downtown GrandRapids hotels among the best in aregion encompassing Indiana,

Ohio, Michigan, Minnesota, Mis-souri and Wisconsin. The AmwayGrand Plaza ranked No. 6 and the JWMarriott No. 10.

� A digital media companynamed Thrillist asked 11 coffee writ-ers and shop owners across thecountry to rank the nation’s bestroaster. Their No. 3: Madcap Coffeein downtown Grand Rapids.

MICH-CELLANEOUS� Michigan State University plans

to open a research institute in Mid-land to look at how businessesbring products and services tomarket, The Associated Press re-ported. The institute is beinglaunched with pledges of $15.5 mil-

lion. Donors include Midland-based Dow Chemical Co., Dow Corn-ing Corp. and The Herbert H. andGrace A. Dow Foundation.

� The Allegan City Council award-ed tax abatements on $23 million ofproperty owned by Perrigo Co.,MLive.com reported. The cityhopes the move retains 918 jobs andgenerates an additional 172 jobswithin two years, as promised inPerrigo’s application. The pharma-ceutical company, after announc-ing its acquisition of the Irishbiotech company Elan Pharmaceuti-cals, plans to reincorporate in Ire-land to take advantage of a lowertax rate.

� A Clinton County Circuit Courtjudge struck down ordinances in

three townships that would haveput restrictions on a $120 millionwind energy project in centralMichigan, the Lansing State Jour-nal reported. Judge Randy Tahvo-nen said the rules infringe on thecounty’s zoning powers. The rul-

ing clears the way for Chicago-based Forest Hill Energy-FowlerFarms LLC to begin work on theproject.

� The Flint City Council passed thecity’s first comprehensive masterplan in more than half a century,The Flint Journal reported. Theplan will direct growth and devel-opment and create a new zoningcode.

� Thanks to a $1 million gift fromthe Dan and Pamella DeVos Foun-dation, the new fashion studies pro-gram at the Kendall College of Art andDesign in Grand Rapids is being re-named in honor of fashion designerPamella Roland DeVos, The Associ-ated Press reported. Kendall is partof Ferris State University.

MICHIGAN BRIEFS

Trustees of Grand Valley State University have ap-proved an $18.9 million expansion of its health cam-pus in downtown Grand Rapids.

At a meeting Friday at Grand Valley’s Detroit Cen-ter, the board approved the purchase of about 11 acresnortheast of downtown. The area encompasses resi-dential properties, most of which are not occupant-owned. Any construction probably will not start forabout five years, said Matthew McLogan, GVSU’s vicepresident of university relations. GVSU already owns4 acres next to its Cook-DeVos Center for Health Sciences.

Grand Valley’s College of Health Professionals andthe Kirkhof College of Nursing offer 12 undergradu-ate and graduate degree programs and enroll about

5,000 students combined annually. The universitywants to expand existing programs in areas such asphysical therapy, physician assistant studies, occu-pational therapy and nursing, McLogan said.

By expanding its current programs and potentiallyadding more, GVSU hopes to double the amount ofcombined students in the College of Health Profes-sionals and College of Nursing in the next 10 years

If the purchase is approved, tuition will not beraised to pay for the property purchase, McLogansaid. Rather, university reserves will finance the deal.

The next steps: Which programs to expand andwhich to add, McLogan said.

— Ross Benes

Grand Valley plans expansion of GR health campus

CORRECTIONS� Two photo captions in a story on Page 6 of the Michigan Deal sup-

plement, which was bundled with the Oct. 14 edition, incorrectly iden-tified entrepreneur Dick Sarns as a founder of DLP Inc. The companywas founded by Jim DeVries and Ron Williams.

� A story on Page 13 of the Oct. 28 issue about TI Automotive Inc. incor-rectly identified a vehicle that the company supplies TAPT tanks for.The vehicle is the Mercedes-Benz S-class nonhybrid. Also, the descrip-tion of how the company’s technology works in hybrid vehicles shouldhave said the tanks perform better under high pressure, not heat.

Find business news fromaround the state at crainsdetroit.com/crainsmichiganbusiness.

Sign up for Crain's MichiganBusiness e-newsletter at crainsdetroit.com/emailsignup.

20131104-NEWS--0002-NAT-CCI-CD_-- 11/1/2013 4:50 PM Page 1

BY SHERRI WELCH


When the Coalition onTemporary Shelter openedin the Detroit neighbor-hood formerly known asthe Cass Corridor 30years ago, most of the peo-ple coming for emergencyhousing were single men.

But a growing numberof families are makingtheir way to the shelter,now a part of the boomingarea called Midtown,forced by the housingmarket bust and ensuingrecession.

It’s not out of the ordi-nary to see single moth-ers with children and married cou-ples with and without children

going to the shelter for help.But what has become jolting to

CEO Cheryl Johnson is the num-ber of families with mul-tiple generations comingto COTS.

“We’re seeing four gen-erations at one time in theemergency shelter,” shesaid. “What really hap-pened with great-grandmathat this cycle of home-lessness has not been bro-ken and continues, gener-ation after generation?”

To help address theroot issues and end thecycle of homelessness forfamilies, COTS will askits board in December toapprove shifting itsemergency shelter beds

November 4, 2013 CRAIN’S DETROIT BUSINESS

These companies have significant mention in thisweek’s Crain’s Detroit Business:Albert Kahn Associates . . . . . . . . . . . . . . . . 21Algal Scientific . . . . . . . . . . . . . . . . . . . . . . . 6Arboretum Ventures . . . . . . . . . . . . . . . . . . . 6Barbara Ann Karmanos Cancer Institute . . . . 1Bernard Financial Group . . . . . . . . . . . . . . . 21Blue Cross Blue Shield of Michigan . . . . 10, 22Burger & Co. . . . . . . . . . . . . . . . . . . . . . . . 21Center for Empowerment and EconomicDevelopment . . . . . . . . . . . . . . . . . . . . . . . 22Center Management Properties . . . . . . . . . . 4Chrysler Group . . . . . . . . . . . . . . . . . . . . . . 22Clark Hill . . . . . . . . . . . . . . . . . . . . . . . . . . 21Coalition on Temporary Shelter . . . . . . . . . . . 3Colliers International . . . . . . . . . . . . . . . . . 21Crain Communications . . . . . . . . . . . . . . . . . 4Detroit Rescue Mission Ministries . . . . . . . . 23Detroit Medical Center . . . . . . . . . . . . . . . . 25Detroit Venture Partners . . . . . . . . . . . . . . . 22Dow Chemical . . . . . . . . . . . . . . . . . . . . . . 15Ford Motor . . . . . . . . . . . . . . . . . . . . . . . . . 22Franklin Property . . . . . . . . . . . . . . . . . . . . 24Freudenberg North America . . . . . . . . . . . . 24General Motors . . . . . . . . . . . . . . . . . . . . . 22General RV Center . . . . . . . . . . . . . . . . . . . . 7Ghafari Associates . . . . . . . . . . . . . . . . . . . 24Grand Valley State University . . . . . . . . . . . . 2GS Roussillon . . . . . . . . . . . . . . . . . . . . . . . . 4Hengst . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Homeless Action Network of Detroit . . . . . . 23International Automotive Components . . . . . 11Jvis USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Kelly Services . . . . . . . . . . . . . . . . . . . . 14, 22Letzmann Associates . . . . . . . . . . . . . . . . . 21McLaren Cancer Institute . . . . . . . . . . . . . . 25McLaren Health Care . . . . . . . . . . . . . . . . . . 1Michigan Association of Health Plans . . . . . 10Michigan Venture Capital Association . . . . . . 6New Economy Initiative . . . . . . . . . . . . . . . . . 6Packard Detroit . . . . . . . . . . . . . . . . . . . . . . 3Pure Detroit . . . . . . . . . . . . . . . . . . . . . . . . 24Qualigence International . . . . . . . . . . . . . . . 3RACER Trust . . . . . . . . . . . . . . . . . . . . . . . . 24R.L. Polk . . . . . . . . . . . . . . . . . . . . . . . . . . 22Rock Ventures . . . . . . . . . . . . . . . . . . . . . . 23Signature Associates . . . . . . . . . . . . . . . . . 24Southeast Michigan Council of Governments 22TechTown Detroit . . . . . . . . . . . . . . . . . . . . 11Walbridge Aldinger . . . . . . . . . . . . . . . . . 1, 24Warner Norcross & Judd . . . . . . . . . . . . 13, 22Wayne State University . . . . . . . . . . . . . 23, 25West Construction Services . . . . . . . . . . . . . 21Zausmer, Kaufman, August & Caldwell . . . . 24

THIS WEEK @WWW.CRAINSDETROIT.COM

Company index

Department index

When coffee just isn’t enoughStart the day with the latest business news fromacross the state. Sign up for the Crain’s MichiganMorning newsletter at crainsdetroit.com/morning.

Just between you and us ...Read what Crain’s staffers have to sayabout the business communities theycover at crainsdetroit.com/blogs

Macomb to expand online

property directory, Page 4

Inside

CALENDAR . . . . . . . . . . . . . . . . . . . . 19

CAPITOL BRIEFINGS. . . . . . . . . . . . . . . 9

CLASSIFIED ADS . . . . . . . . . . . . . . . . 21

KEITH CRAIN . . . . . . . . . . . . . . . . . . . . 8

MARY KRAMER . . . . . . . . . . . . . . . . . . 8

OPINION . . . . . . . . . . . . . . . . . . . . . . . 8

OTHER VOICES . . . . . . . . . . . . . . . . . . 9

PEOPLE . . . . . . . . . . . . . . . . . . . . . . 20

RUMBLINGS . . . . . . . . . . . . . . . . . . . 26

WEEK ON THE WEB . . . . . . . . . . . . . . 26

GIVING GUIDE

See thesupplementdelivered with thisissue of Crain’s.

Video: SeeCOTS meetits mission,

crainsdetroit.com/video

Experts: Bottom line ... diversity is good for businessBY AMY HAIMERL


When Stephen Lowisz was grow-ing up in metro Detroit, his dadwas “one of the most racist sons ofa gun you’ll ever meet,” he said.

And he didn’t know much bet-ter. “I went to a Catholic gradeschool in the suburbs,” Lowiszsaid. “Diversity was what color tieyou were going to wear.”

When Lowisz went to college atLawrence Technological University in

Southfield,though, hisroommate wasAfrican Ameri-can and he be-gan to thinkabout issues ofdiversity andculture.

Today, he is adiversity con-sultant and CEO

of Qualigence International, a Livo-nia-based recruiting and research

firm with more than 60 employeesand $5.5 million in annual rev-enue.

“When a client comes to me andsays, ‘We have a focus on diversi-ty,’ my first question is, ‘Why?’ ”Lowisz said. “ ‘Is it a mandatefrom the top because it makes youfeel better, or does it actually makesense for your business?’ ”

If the answer is the formerrather than the latter, you’ll get

See Diversity, Page 22

HOW DIVERSITY WORKSCrain’s profilesfour Michigancompaniesknown forstrongcommitmentsto diversity andasks how theymake ithappen. Focus

section startson Page 11.

Kenneth Gardnerof IAC

Packard plant no quick turnaroundSome hurdles:Financing,liens dispute

BY KIRK PINHO


Bill Hults has big dreams to re-develop the carcass of the Packardplant site.

But the Chicago-area developeralso has big obstacles ahead:Namely, financing the $750 millionto $850 million he expects the pro-ject to cost, a less-than-desirablelocation off I-94 for more than 2,000residential units and a dispute

financial backer fell through. Now, he says, he has the money

for the plant, which has long beena target of vandals, graffiti taggers,scrappers and arsonists.

His plans include a 120-roomluxury hotel, 750-plus loft resi-dences, 1,500 single-family homes,and dining and commercial space.

over liens on the property. Hults has until 3 p.m. Monday to

come up with $2.003 million for the3.5 million-square-foot plant aftermaking a $100,000 nonrefundabledeposit to Wayne County on Fri-day. Hults was the second-highestbidder in a Wayne County tax fore-closure auction and became firstin line to buy the property after a

Dallas family physician and herinvestment group failed to make adown payment on a $6.038 millionwinning bid earlier last week.

Hults, owner of Packard DetroitLLC and Evanston, Ill.-based DurkinJoyce LLC, is no stranger to theplant. He tried to purchase it inSeptember for $974,000 in back tax-es, but that deal collapsed when a See Packard, Page 21

COTS seeks tofocus on families Shelter responds to rising need; someservices for singles would continue

CEO Cheryl Johnson is seeingmultiple generations of familiesseeking help at COTS homelessshelter in Detroit’s Midtown.

See COTS, Page 23

GARY ANGLEBRANDT COURTESY ALBERT KAHN ASSOCIATES INC.

The abandonedPackard planttoday (far left)and a vision forthe future fromdeveloper BillHults.

Lowisz

ISTO

CK

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OTO


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Macomb County to expand online property directoryBY CHAD HALCOM


A Macomb County-led onlineproperty directory and showcaseis being expanded as developerspoint to success in attracting newcorporate interest in sites.

The county will announce thisweek that its Prime PropertiesWeb tool, which allows local gov-ernments and developers to high-light industrial development sites,now features the land lots ofChesterfield Towne Centre inChesterfield Township.

The Towne Centre is the long-vacant 190-acre site of a mixed-usedevelopment proposal east of I-94and north of M-59 that was boughtby Center Management PropertiesInc. of Birmingham and Ohio-based JR Anderson in 2010.

Prime Properties launched inAugust and has since been featur-ing Cherry Creek Corporate Park, a200-acre tract east of M-53 between23 Mile and 24 Mile roads in ShelbyTownship that is about half-devel-oped.

Eugene D’Agostini, co-owner

and principal of Sterling Heights-based GS Roussillon LLC, whichowns most of the Cherry Creekproperty, said corporate tenant in-terest in the area is growing andthe Prime Properties effort seemsto be a big help.

He expects the newest Roussil-lon tenant to arrive by late nextspring, when Sterling Heights au-tomotive supplier Jvis USA LLC relo-cates its headquarters to a 100,000-square-foot new building at thecorporate park.

Shelby Township in Septemberapproved a 12-year, 50 percent taxabatement for the Jvis building

construction, and D’Agostini saidhis company began clearing the lotfor construction a few weeks ago.That deal has been in developmentfor about eight months and is un-related to Prime Properties.

“We’ve had various conversa-tions with buyers and users from atenant standpoint since that (tool)went online. The activity has defi-nitely picked up, and the corporatecommunity seems very receptiveto getting its information on (de-velopment properties) this way,”D’Agostini said.

The Web tool has led to “sub-stantive talks” with other prospec-tive tenants or buyers, he said, andhe hopes to close at least one dealfrom those discussions by the endof the year.

Stephen Cassin, executive direc-tor of Macomb County Planning &Economic Development, said theChesterfield Township phase ofPrime Properties launches thisweek, and Macomb Township isalso in discussions with the countyto add its own land sites to PrimeProperties — possibly later this

year. Other communities havealso been in discussions with thecounty, he said, but those are atdifferent stages of development.

“The plan is to at least offer it forevery community in the county tobe able to participate, althoughwe’re not going to insist with any-one,” he said.

“The prime land areas to focus onfor attraction will be large lots thatare undeveloped so they don’t havea brownfield history or cleanupcost, easy street access, alreadyhave the appropriate zoning andwhere it makes sense for large man-ufacturers to want to move in.”

The Macomb listing is athttp://gis.macombgov.org/primeproperties.

Roussillon acquired the CherryCreek land in 2010, and D’Agostiniestimates that just over 80 acres of itremains undeveloped before theJvis move, which will take up an-other 6.3 acres or so. Other compa-nies with offices at Cherry Creek in-clude Eagle Manufacturing Corp. andKUKA Robotics Corp., which previ-ously received a $4.7 million incen-

tive to invest in its Shelby location.Thomas Guastello, owner and

president of Center Management,said he and partner Jeff Andersonacquired 178 acres of the TowneCentre site in Chesterfield fromprevious developers Aragona Prop-erties LLC, GTR Builders Inc. and Trini-ty Land Development through atransaction brokered by Fifth ThirdBank. The company also won a bidto acquire an additional 12 acres atthat site from the township in thelast several weeks.

Like the previous developers,Guastello also envisions a conven-tion center of at least 100,000 squarefeet on that site, and a mix of indus-trial and retail properties betweenM-59 and 21 Mile Road. He also saidhis company is in the process of de-signs for two speculative industrialbuildings of about 100,000 squarefeet and 75,000 square feet andhopes to go before the townshipboard for regulatory approvals byDecember or early next year.

Chad Halcom: (313) 446-6796,[email protected]. Twitter:@chadhalcom

Crain Communications Inc. lastweek named company executivesBrian Reilly and David Klein tokey positions.

Reilly hasbeen named di-rector of digitalstrategy, report-ing to KC Crain,vice president,group publisherfor Crain Com-munications,the Detroit-based parentcompany ofCrain’s DetroitBusiness and 26publicationbrands.

Reilly plans tosplit his time be-tween Detroitand Chicago,with about 60percent of histime in Detroit.

Reilly will beresponsible for acceleratingCrain’s transformation to a digi-tal- and mobile-first media compa-ny. He will work with company,brand and technology leadershipon digital relationships with read-ers and advertisers.

For the past three years, in hissecond stint with the company,Reilly has been director of digitalstrategy for Crain’s Chicago Busi-ness.

Klein was named senior vicepresident and senior group pub-lisher overseeing a variety of titlesat Crain.

Klein, based in Chicago, suc-ceeds Gloria Scoby, who is retiringafter 35 years. He will report toRance Crain, president of CrainCommunications.

Klein has been with Crain for 30years, currently as group publish-er over Advertising Age and BtoB.He will take on additional over-sight for Crain’s New York Busi-

Crain Communications makes executive movesness, InvestmentNews and ModernHealthcare.

Chris Battaglia, publisher ofPensions & Investments and grouppublisher of Business Insurance,

will report to Klein.As part of the realignment, KC

Crain will add oversight of Crain’sChicago Business to his group du-ties.

Reilly

Klein

The plan is to atleast offer it for every

community in thecounty.

Stephen Cassin, Macomb CountyPlanning & Economic Development

”

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51 semifinalists vie for AccelerateMichigan’s $500,000 top prize

BY AMY HAIMERL


There is $500,000 on the line. That’s the top prize for the win-

ner of the annual Accelerate Michi-

gan Innovation Competition, whichdraws high-technology entrantsfrom around the globe.

This year, 213 firms applied —from Ann Arbor to China — andwere narrowed down to 51 semifi-

nalists. That group will be judgedby panels of venture capitalistsand others during three gruelingdays on Nov. 12-14 at the WestinBook Cadillac Detroit.

“The quality of everyone in thefinals is fully fundable right now,”said Dave Egner, executive direc-tor of the New Economy Initiative,which leads the event. “There isincredibly high quality. We did notanticipate this caliber of concept,intellectual property and businessdevelopment in Michigan.”

The competition gives out morethan $1 million in cash and in-kindawards. First prize is that coolhalf-million, while second place is$150,000 and third place goes homewith $50,000.

The competition covers ninesectors — advanced materials, ad-vanced transportation, alternativeenergy, defense and homeland se-curity, information technology,life science, medical devices, next-generation manufacturing, andproducts and services — each ofwhich has a $25,000 winner.

Plymouth Township-based AlgalScientific Corp. won the big prizelast year for its process of convert-ing algae into a food supplementfor livestock.

“Getting that lump sum reallygave us the chance to fast forwardour projects,” said Geoff Horst,CEO and chairman. “It allowed usto pull to trigger on some efficacytrials – one with shrimp and onewith chickens — and those arevery expensive to conduct. Butthey have already paid off in termsof garnering interest from somekey customers.”

While many of the competitorsare from Michigan — includingsome bred at the University of Michi-gan, Michigan State University andWayne State University — any non-local winner must relocate itsheadquarters to the Mitten state asa condition of the prize.

“The competition brings our toptech companies out of the wood-work and all together in one place,generating an excitement and buzzthat is reflective of the burgeoninginnovation economy in the state,”said Tim Petersen, chairman ofthe Michigan Venture Capital Associa-tion and managing director of AnnArbor-based Arboretum Ventures.

“Our original objective,” addedEgner, “was this: Can we get VCfirms to look differently at Michi-gan? The answer to that has clear-ly been yes.”

The conference is being head-lined by VMware Inc.’s newly ap-pointed CIO, Tony Scott, and Mor-gan Stanley Managing DirectorCarla Harris, who recently was ap-pointed to chair the NationalWomen’s Business Council.

The program is organized byNew Economy Initiative, MichiganEconomic Development Corp., Quick-en Loans/Opportunity Detroit and theBusiness Accelerator Network forSoutheast Michigan. Crain’s DetroitBusiness is also a sponsor.

For more information, visitacceleratemichigan.org.

Amy Haimerl: (313) 446-0416,[email protected]. Twitter:@haimerlad


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125 CELEBRATING

YEARS


General RV adds site in Fla., jobs in Mich.BY SHERRI WELCH


As work continues on its newWixom dealership, General RV Cen-ter Inc. is making plans to open adealership in Florida near Tampa.

The 83,000-square-foot dealer-ship will be located on 30 acres ad-jacent to I-4 in Dover, Fla., and fea-ture a recreational vehicle servicecenter, parts area and showroom.

“That’s a good RV market ... oneof the best ... in the country,” saidDennis Anderson, vice presidentof marketing.

Meanwhile, construction on theprivately owned company’s newsite in Wixom, on 34 acres thatwere once part of the Ford WixomPlant, is scheduled to be completedby the end of 2014.

The company has added 100 newjobs across its six Michigan dealer-ships in Wixom, White Lake Town-ship, Mt. Clemens, BrownstownTownship, Birch Run and Way-land/Grand Rapids and sites inNorth Canton, Ohio; Huntley, Ill.;Draper, Utah; and Jacksonville,Fla., since January, Andersonsaid. That’s brought its total em-ployee numbers to about 700.

It plans to add roughly another100 additional positions in market-ing, sales and service across thoselocations by spring.

General RV did not release whatit’s investing in the Florida pro-ject, expected to be completed byfall 2014.

The Florida RV industry is agrowing market, the company saidin a news release, pointing to a re-port from Statistical Surveys Inc.that said motor home registrationswere up 29 percent through May2013, compared to the previousyear.

General RV, on Crain’s 2013 listof fastest-growing companies with2012 sales of $303 million, is pro-jecting sales will increase about 15percent this year, Anderson said.

And it projects similar growthin 2014.

“RV-ing is more popular thanit’s ever been,” Anderson said.“With the high price of airlinesand hotels, people are looking atRV travel and vacations as beingvery economical and familyfriendly.”

In Wixom, the company is con-structing an 83,000-square-foot,two-story building that will housea showroom, 40 service bays and aparts area, along with office spaceon its second floor.

It plans to consolidate its otherWixom operations and corporatefunctions from other states to thesite once it’s completed.

General RV employs about 75people in Wixom and expects todouble that number with thelaunch of the new dealership.

Anderson declined to say whatthe company is investing in thenew dealership, which will havefrontage on I-96.

“It’s going to repurpose thatproperty, and it’s perfect for us,”Anderson said.

General RV has outgrown itscurrent facility, he said, noting thenew dealership will give it thespace it needs to better serve cus-tomers and display its products.

Sherri Welch: (313) 446-1694,[email protected]. Twitter:@sherriwelch

RV-ing is more popular than it’s everbeen. ... People are looking at RV travel and

vacations as being very economical. Dennis Anderson, General RV

”“



Re: Packard’s new top bidder plans luxuryhotel and mixed-use, manufacturing

Doesn’t the county have any ac-tual procedure in place to verify be-fore accepting a bid if someone actu-ally has the ability to complete adeal? What a joke.

John md

This borders on the surreal. Whowould stay at a high-end hotel inthis part of Detroit? And 750 lofts?

Dave W

Re: Detroit Water and Sewerage Dept.offer: Turn green, ease fees

Pie in the sky propositions fromDWSD instead of separating sewerpipes from rain pipes and buildingditches for rainwater. Does anyonedistinguish reality from fantasy?

Saulius Simoliunas

Re: Wayne County asks for plan detailsbefore considering proposal for jail site

Almost anything is better thanputting a prison in downtown De-troit. Allowing Gilbert to sprinklemore of his magic downtownseems like a no-brainer.

Shawn Duffy

Analysis: Obamacare-driven insurance rate hikes don’t tell complete story

The taking of money from one togive to another is called theft, ifnot done by the government. Weshould be able to provide support tothose who legitimately need it,

through circumstance and notchoice, without making things un-affordable for the majority.

Dpad

How does adding coverage thatdidn’t exist before, forcing insur-ance companies to accept pre-ex-isting conditions and adding peo-ple to the health care systemwithout an increase in money (in-dividuals who would rather paythe $95 than the premium) translateinto lower costs?

I Callahan

Thanks for this insightful analy-sis. I’m tired of all the paranoiaand hatefulness some people areattaching to this. In the end, it lev-els the playing field for everyone. Iknow it’s not perfect, but certainlya worthy try.

Guest

Bankruptcy or nobankruptcy, Detroitcan’t pull out of itsmalaise unless moreDetroiters have jobs.

So, on the eve of De-troit’s pivotal mayoralelection and in the is-sue in which we’ve fo-cused on the meaningof corporate diversity(See stories, Page 3 andPage 11), let me sharean idea that could workfor public- and private-sector in-vestment in Detroit. James Moyer,associate vice president for facili-ties planning at Grand ValleyState University, calls it “Boots onthe Ground.”

Since 2006, Moyer has askedcontractors on major building pro-jects to document and increase thediversity of their “boots on theground” workers on that particu-lar project.

Moyer said he wants to see morewomen and minorities on construc-tion sites, particularly in skilledtrades training programs. Eachproject is tracked by contractorand subcontractors, with each re-

porting the number ofhours worked, the totalpayroll and the minori-ty workforce payroll.

Full disclosure: I’m amember of GVSU’sboard of trustees andlearned of the programwhen Moyer updatedthe board over thesummer on the 2013 re-sults.

Moyer, who is Af-rican-American, said

most public-sector contracting pro-grams push diversity of contrac-tors, meaning one or two minority-owned ventures benefit. But thatapproach doesn’t do much to in-crease minorities and women inthe skilled trades, he said.

“Boots on the Ground” is not aquota system, Moyer said. And hecan’t require contractors to con-form. But asking for reports sendsa clear message that GVSU valuesdiversity on the project.

He started with projects in 2006with Erhardt Construction and Pi-oneer Construction and expandedwith a housing project completedin 2010 in Allendale. In 2013, two

more projects opened: a new down-town business school building andan innovative library/learningcenter on GVSU’s main campus inAllendale.

Some numbers: The $43 millionbusiness school included a minori-ty worker payroll of more than $3million. For the $65 million library,the payroll was more than $2 mil-lion.

“On the construction sites, wesee more women and minorities,”Moyer said. “Their presence is vis-ible in all trades, from steel erec-tion to electrical installations. Weare also seeing more tours by con-struction trade training programson our construction sites as theconstruction contractors showcasethe projects as part of the trainingefforts.”

Couldn’t this work in Detroit tohelp get more Detroiters intoskilled jobs?

County mulls wrongquestions on jail site

ayne County and its building authority last weekfiled suit against the contractors on its unfinishedjail.

Findings from the Wayne County prosecutor’s one-persongrand jury investigation of the jail project have been sealed.

Federal authorities are reportedly investigating.Those three things do not change this: In its current state,

the site is a white elephant and an embarrassing deterrent toadditional development along a prime entry into downtownDetroit.

Wayne County commissioners said last week they wantedto wait to decide for more details about what went wrong onthe jail before considering a purchase deal on the table. Otherswanted more time to review plans.

The deal on the table — an offer of $50 million for the siteand surrounding county buildings by investor/developer DanGilbert — should stand on its own. Gilbert’s Rock Venturesproposes a mixed-use project of housing, retail, parking andhotel rooms.

How does knowing what went wrong on the jail projecthave a bearing on whether the county should sell the site?

The real questions for the county are these: What is thebest use of that site? Who else would buy it and have thewherewithal to develop it? And will the county have enoughmoney to consolidate jail and court operations at a formerstate prison site offered to the city in the past for $1?

Between Gilbert’s cash, the remaining bonding moneyavailable for the jail construction and possibly dollars recov-ered in settlements with its jail contractors, the county mightcome out without a lot of financial pain — especially consider-ing property taxes generated by the land’s return to privatehands. That’s in addition to income taxes on construction jobsand eventually the jobs held by people working in the mixed-use project Gilbert envisions.

Guide outlines the gist of givingAs 2013 winds down, some thoughts turn to … tax deduc-

tions!Subscribers this week got a bonus with their delivery of

Crain’s: the largest special feature on charitable giving andarea nonprofits the publication has ever produced.

The 2013 Giving Guide includes our traditional lists of theregion’s top nonprofits, foundations and major gifts, as well astips on how to evaluate nonprofits before writing the check.

Stories on topics like corporate volunteerism and endow-ment practices also make it a handy reference for companiesand individuals as they build plans for supporting charities.

Detroit could try on ‘Boots’ plan

Tuesday is a very important dayfor a lot of people — in Detroit, ourregion and our state.

And although I will not be ableto vote in Detroit, I feel like I havejust as much a right to voice myopinion as Detroit’s citizens.

I’ve been working in Detroit formany decades and have been pay-ing taxes all those years. Youmight say it’s taxation withoutrepresentation. Every day that Iwork in our city, I use the city ser-vices and am very aware of thegood and the bad.

The election for Detroit’s next

mayor is important notjust for Detroit but forthe entire region, per-haps even the state.

Detroit is in the spot-light today like no othercity in the country.Since Detroit filed forbankruptcy, more hasbeen written about ourcity than any other cityin the world.

It is important forDetroit that as many citizens voteas are registered. It won’t happen,but it should. Turnout predic-

tions hover around 25percent or more. Somepredict low turnoutwill be tied to Detroi-ters’ view that theyhave lost control to anappointed emergencymanager.

But this is a very im-portant election.

That’s why Crain’sDetroit Business lastweek endorsed Mike

Duggan. I was on the board at theDetroit Medical Center when wehired him. I saw what he did

there, with no prior experience inrunning a large medical institu-tion. He has the experience neces-sary to run a large city with somany challenging problems. Hedemonstrated at the DMC that heknew how to turn around a insti-tution that was wallowing in redink.

Duggan isn’t going to need anytime to understand what makes acity work or not work. He will hitthe ground running.

His opponent is a sincere manwho has spent most of his career inlaw enforcement. Regardless of

how you think he did during hiscareer, he simply doesn’t have thebroad experience necessary to runa great city like Detroit with all thespecial and unique problems ofthis city.

Crain’s believes that Mike Dug-gan will do the best job as the nextmayor. But we also believe verystrongly that everyone should beout there Tuesday voting for thecandidates of their choice.

If you live in Detroit, be sureand vote on Tuesday. The rest ofus will be very interested ob-servers.

It’s important to vote in Michigan

W

From www.crainsdetroit.comReader responses to stories andblogs that appeared on Crain’swebsite. Comments may beedited for length and clarity.

OPINION

KEITH CRAIN:

TALK ON THE WEB

MARY KRAMER

Mary Kramer is publisher ofCrain's Detroit Business. Catch hertake on business news at 6:10 a.m.Mondays on the Paul W. Smith showon WJR AM 760 and in her blog atwww.crainsdetroit.com/kramer. E-mail her at [email protected].



The image of Michigan’shistory is an image of man-ufacturing — since thefirst automobile rolled offthe assembly line.

We make things; we cre-ate and innovate. Scan thecities of Michigan and youwill find businesses spe-cializing in a wide varietyof manufacturing, includ-ing automotive, metals,machinery, food and beverage, agrowing subsector of beer andwire manufacturers, plastics, rub-ber, bioscience, furniture, chemi-cal, electronic, defense and many

more.While Michigan manu-

facturing was jumpstart-ed by the automobile, ourfocus has never been lim-ited to it. Despite the di-verse manufacturing sec-tors in our state and thegrowing number of ad-vanced manufacturingcareers available, manu-facturing is still consid-

ered a dirty, dingy, low-rate jobpath. This could not be furtherfrom the truth.

National Manufacturing Day onOct. 4 provided Michigan the op-

portunity to trumpet the work wehave always done better than anyother state.

Continue the celebration ofmanufacturing for the rest of theyear. Visit a plant or facility tosee what it is all about. Studentswill discover an array of opportu-nities they never knew they hadand perhaps spark a decisionabout what they want to do afterthey graduate. Educators will seethe immense skills required to dothese jobs. Parents will see menand women working to make agood living with great benefitsand stable careers. Community

residents will see manufactur-ing’s role as a focal point for theircity or township, promoting thegrowth of jobs and investment formanufacturers and non-manufac-turers alike.

National Manufacturing Daycan be the starting point tochange the image of manufactur-ing and Michigan. This is not theindustry of your grandfather’sgeneration, but an industry thatwill push Michigan toward abright future.

Chuck Hadden is president andCEO of the Michigan Manufactur-ers Association.

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NOMINATIONS SOUGHT FORCRAIN’S M&A AWARDSInvolved in a merger or acquisitionin 2013? You may be eligible for

Crain’s M&AAwards.Crain’s DetroitBusiness andtheAssociation forCorporateGrowth willhonorcompaniesand individuals

in the following categories:� Best Deal of the Year: Under$100 million and $100 million ormore. The deal must have closedin 2013. The buyer or the businesssold must be in Wayne, Oakland,Macomb, Washtenaw or Livingstoncounties.� Dealmaker of the Year/buyer-seller.� Dealmaker of the Year/adviser.M&A experts, lenders, CPAs,consultants and attorneys, amongothers, are eligible.Dealmaker candidates also mustbe in Wayne, Oakland, MacombWashtenaw or Livingston counties.Winners will be profiled in theMarch 24 issue of Crain’s DetroitBusiness and will be honored at anawards event in May.For questions concerning thenomination process or thenomination form, contact AmandaDuque at (313) 446-6083 [email protected] deadline for nominations isJan. 13.

CRAIN’S SEEKS NOMINATIONSFOR HEALTH CARE HEROESCrain’s Detroit Business is seekingnominations for Health CareHeroes, a special report on healthcare professionals that will run inthe Feb. 17 issue.The program will honor top-notchmedical innovators and patientadvocates.Our winners will be chosen in fivecategories:� Corporate achievement inhealth care: Honors a companythat has created an innovativehealth benefits plan or solved aproblem in health careadministration.� Advancements in health care:Honors a company or individualresponsible for a discovery ordeveloping a new procedure,device or service that can savelives or improve quality of life.� Physician: Honors a physicianwhose performance is consideredexemplary.� Allied health: Honors anindividual from nursing or alliedhealth fields who is deemedexemplary by patients and peers.� Trustee: Honors leadership anddistinguished service on a healthcare board.A panel of health care judges willchoose the winners.Nominations, which are dueDec. 9, can be made atcrainsdetroit.com/nominate.Statewide nominations accepted.Questions? Contact Bill Shea [email protected] or (313) 446-1626.

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House bill seeks to tally ACA’s toll on premiumsCommercial health insurers and

health maintenance organizationswould be mandated by the state toinclude an estimate of how muchof a customer’s premium is attrib-utable to the federal Patient Pro-tection and Affordable Care Act,under a bill being considered inthe state House.

Rep. Mike Shirkey, R-Clarklake,testified Thursday in support of hisbill, HB 4816, saying it was aboutprotecting insurance companiesthat will have to deliver the badnews of higher premiums.

“(It would) highlight to Michi-gan consumers the exact impact of

the Affordable Care Acton their health care costsand their health care de-cisions, so that there isno guessing,” Shirkeysaid.

However, insurancecompanies aren’t seeingthis as protection, but asa mandate that would bedifficult, or next to im-possible, to meet.

Kristen Kraft, directorof state relations for De-troit-based Blue CrossBlue Shield of Michigan, said theBlues oppose the bill because it

would be a “nightmare”to determine premiumincreases attributable tothe ACA for each of its4.3 million customers.

It also could actuallyadd to overall costs to doso, she said, if an insurerhas to look at each indi-vidual policy and com-pare it to the policy thatcustomer had previously,then determine howmuch of the old premiumwas due to state or federal

taxes, the ACA, or some other pro-vision.

Kraft said Blue Cross is workingwith Shirkey on amending the billto give an annual, aggregate per-centage to give to all customers,rather than to determine it on anindividual basis.

The Lansing-based Michigan As-sociation of Health Plans is officiallyneutral on the bill at this time, butits deputy director of the office oflegislation and advocacy, Chris-tine Shearer, said the bill as writ-ten would be administratively bur-densome to comply with.

“And in some cases administra-tively impossible,” she said.

The health care law has been in

effect for three years already, shesaid, and some of the benefits, in-cluding allowing dependents underage 26 to stay on their parents’ in-surance, and full coverage for pre-ventative care, are already includ-ed in premiums. To determine theamount of premium increase due tothe federal law from previous yearswould be difficult, she said.

Shirkey saidhe does notthink this wouldbe burdensomeor result inlarge cost in-creases to the in-surance compa-nies. Instead, itwould “providecover” to insur-ance companies

that are hearing from their cus-tomers about higher premiums.

“I think it’s important to makesure we do everything we can toinsulate them from being improp-erly maligned because they’re ac-tually delivering the bad news thatis a result of this federal law,”Shirkey said.

Democrats have scoffed at theidea behind the bill, saying it is po-litically motivated and does not in-clude any provisions to show anycost decreases or added benefits toa health care plan under the ACA.

The bill remains in the HouseInsurance Committee.

Ticket scalping would be legalTicket scalping would be legal-

ized in Michigan, if House Bill 5108becomes law.

The bill, introduced last weekand sponsored by Rep. Tim Kelly,R-Saginaw Township, would bringMichigan in line with more than 30

other states thatallow some formof the practice ofselling eventtickets abovetheir face value.

By repealingthe 1931 statelaw, it would al-low what has be-come a commonpractice outside

sports stadiums and concertvenues, with people offering ticketsfor sale at a much higher price.

Kelly said in a statement that aperson who buys a ticket to a con-cert or game owns that ticket andshould have the ability to sell thatticket for whatever price the mar-ket dictates if he or she wishes.

“If a willing buyer wants to buya ticket from a willing seller,there’s no reason why our govern-ment should get involved,” Kellysaid.

He said the bill would also re-duce strain on the court system, asthe police would no longer be ar-resting ticket scalpers.

Venues are expected to opposethe legislation, as they have in thepast when attempts to undo thelaw have come up.

The bill has been referred to theHouse Criminal Justice Commit-tee.

Chris Gautz: (517) 403-4403,[email protected]. Twitter:@chrisgautz

Chris Gautz

CapitolBr iefings

Shirkey

Kelly


International Automotive Components rosefrom the ashes of two distressed organi-zations. Billionaire investor WilburRoss assembled the deal, bringing to-gether the interior systems division of

Lear Corp. with the remains of Collins & Aik-man Corp. to create the North American divi-sion of the global IAC group.

The company, created in April 2007, founditself in the position of being a global power-house with the ability to build its own corpo-rate culture. The first goal: Create a strongdiversity supplier initiative for the U.S.

Leading that initiative is Kenneth Gard-ner, who came from Dana Corp., where helearned the value of the supply chain thehard way.

“Dana lost a quality award because we did-n’t have a supplier diversity program inplace that demonstrated to a customer thatwe thought like they thought, that we wantedto do everything that we could possibly do to

be a part of their culture,” said Gardner, whoalso chairs the Rochester Hills-based Councilof Supplier Diversity Professionals. “So theymade me the director of minority businessdevelopment so that wouldn’t happen again.”

His next challenge: Oversee diversity in acompany that has filed for a $115 million ini-tial public offering.

Crain’s asked Gardner about IAC’s diver-sity initiatives.

What is the business case for having diversityin your supply chain?

It’s about giving IAC the ability to useevery supplier, the best suppliers. We takethe supply chain seriously because it’s ourlifeblood.

What was the impetus for creating these pro-grams?

We had initiatives from our customers,whom we cherished very much, surroundingquality, on-time delivery and supplier diver-sity. The expectation was there from them,so we knew we needed a supplier diversityinitiative for our company.

GLENN TRIEST

Kenneth Gardner is manager of supplier diversity and business development at International Automotive Components. He also is chairman of the RochesterHills-based Council of Supplier Diversity Professionals.


Can diversitycome to Detroit’stech scene?

When Twitter Inc. announced itsIPO, the filing revealed that thecompany has no women or people ofcolor on its board. When the NationalVenture Capital Association completedits most recent census, it found that 87percent of respondents were white and80 percent were male.

And exactly nobody is shocked. Detroit even has its own Twitter

meme: #YoungWhiteEntrepreneurGuy. “The composition of our boards and

our teams don’t look like the places wesit or serve,” said Leslie Lynn Smith,executive director of TechTown Detroit.“There is this easy layup response thatwhat the market provides is what themarket provides and there just aren’t alot of tech entrepreneurs of color or whoare female. That’s not true. You have toattract them.”

Darrin Redus has a few ideas.Until recently he was the chief

economic inclusion officer at Cleveland-based accelerator Jumpstart Inc. The

organization iscommitted todiversity inentrepreneurship,and when he left,more than 50percent of dealscame from theminoritycommunity.

The NewEconomy Initiative

brought his firm, MainStreet InclusionAdvisors, to Detroit to work withTechTown and its other grantees.

“When you look at all theseincubators, accelerators, early-stageventure funds, angel groups, they arecollectively charged with creating ourmost promising business oftomorrow,” Redus said. “We’ve got tofigure out how to infuse more inclusioninto this budding ecosystem.”

His mission isn’t about tick boxes orset-asides; it’s about connectingqualified talent with opportunities theydidn’t know about. For example, whenhe speaks with some African-Americanentrepreneurs, they are unfamiliar withBizdom Detroit, one of the city’s mostidentifiable tech resources.

On the venture side, Redus’ networkincludes minority-led private equityfirms. When he told Henry FordInnovation about the potential funders,“They were like, ‘That’s fantastic,’Redus said. “This is capital that shouldbe connected to their deal flow.”

It will be fascinating to watch hisresults. Maybe Detroit’s first big techIPO of this generation won’t beembarrassed by a board devoid ofwomen and minorities.

“We are trying to tackle it more headon than we have in the past,” Smithsaid. “The meme is very real in Detroit.There is this whole savior complex intech, so we have to address it headone. We can’t just say we’re doing it,we have to act.”

diversity

How diversity works

See IAC, Page 12

EDITOR’S NOTEBOOK

Amy Haimerl

Amy Haimerl isentrepreneurshipeditor. She can bereached at (313)446-0416 or [email protected]

Redus

To help organizations thatare looking at diversity sup-

plier programs and finding thebest talent for their teams,Crain’s Detroit Business gath-ered case studies on four Michi-gan companies that are doingthat hard work. These are busi-nesses that are known to havestrong commitments to diversi-ty and commentary on how it isimplemented.

One universal takeaway:The commitment must comefrom the C suite.

The following interviews areedited and condensed for clarity.

The four companies profiled:� International Automotive

Components, this page� Warner Norcross & Judd

LLP, Page 13� Kelly Services Inc., Page 14� Dow Chemical Co., Page 15

IAC: ‘Treat it like its own business unit’INTERNATIONAL AUTOMOTIVE COMPONENTSWhat it does: Vehicle interiors supplier withclients such as BMW AG, Chrysler Group LLC,Ford Motor Co. and General Motors Co.Founded: 2007Employees: 18,000 in North AmericaAnnual revenue: $4.7 billion in North AmericaHeadquarters: SouthfieldDiversity supplier program initiated: 2007Why diversity matters for the company: “Havinga strong and diverse supply chain is thedecision that gets IAC over the hump inobtaining new business as well as keeping ourexisting customers.”


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Focus: Diversity

IAC: Diversity’s a process■ From Page 11

How do you connect with diversesuppliers?

We have a very strong bench ofpotential suppliers in Michigan be-cause of the effort the automotiveOEMs have done in the past. One ofthe immediate things we did withthem was to go out and find differ-ent community-based groups, suchas the Hispanic Chamber of Com-merce and the Michigan Minority Sup-plier Development Council, whichhonors ethnic minorities. We alsojoined the National Women’s Busi-ness Council. We treat these coun-cils as customers, and part of myjob is to go to these councils andsearch for diverse suppliers thathave the right footprint.

How do you discuss the case for di-versity internally?

We basically tell them for IAC tocontinue doing business, we have todo a couple of things better thananybody else: quality, on-time deliv-ery and supplier diversity. Havinga strong and diverse supply chain isthe decision that gets IAC over thehump in obtaining new business aswell as keeping our existing cus-tomers.

How do you measure the success ofIAC’s diversity supplier program?

Our president and CEO (James

Kamsickas) doesn’t want it to beabout numbers; he wanted the in-tent of the program to be the focus. Our intent is to make sure that wedo business with as many diversesuppliers as we can. We don’t mea-sure it by trying to do as many dol-lars as we can. You can have onediverse supplier and do a billiondollars of business, but that’s notthe best thing for the community.

What advice do you have for othercompanies implementing supplier di-versity programs?

You have to have a dedicatedprocess for supplier diversity. Youhave to treat it like its own busi-ness unit. Supplier diversity, itshould touch every operation,every functional part. We educateall employees on the value of di-versity.

What trends do you see in supplierdiversity?

If you think about it, we’re talk-ing about underutilized groups inthe United States. Many companiesalready recognize gays and les-bians as being such a group thathas been underutilized. Many com-panies, they recognize veterans asbeing underutilized. I think you’llsee a more concentrated effort inaccepting those types of groups.

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Focus: Diversity

Warner Norcross: Create environmentfor workers to find career opportunities

hen Rodney Martin firstinterned at Warner Nor-cross & Judd LLP in 1979,

he didn’t expect to stay long. Asmanaging editor of the University ofMichigan law review, he had anumber of attractive offers, andhis friends were heading off toNew York and Washington, D.C.

But he was attracted to thefirm’s diversity, something he’dbeen passionate about since highschool when, as he said, it wascalled human relations work.

“There were only two womenlawyers and no attorneys of color,but the firm had attracted lawyersfrom all over the country,” Martin

said. “Theybrought togeth-er lots of differ-ent perspec-tives, and Ithought thatwas healthy anda good sign thata firm could dothat.”

Twenty-sevenyears later, Mar-

tin was tapped by the managingpartners to be the firm’s diversitypartner, overseeing all diversityand inclusion efforts. At the timethere was a committee in charge ofthat work, but the partners wantedsomeone to own the area, to be ac-countable for pushing things for-ward.

Today, 15 percent of the firm’spartners are women — a 60 per-cent increase from when Martintook the reins. Almost 16 percentof the firm’s associates are ethnicminorities, though they make uponly 4 percent of the partners.

WNJ also helped form GRAB Law(Grand Rapids Achieve BalanceLaw), an initiative by the GrandRapids Bar Association and 13 arealaw firms to market and promoteWestern Michigan as a great placefor diverse talent to find opportu-nity. Crain’s spoke with Martinabout Warner Norcross’ diversityinitiatives.

How does Warner Norcross definediversity?

We tend to focus on gender andrace because we recognize that ourprofession is behind in attractingwomen and attorneys of color. Butwhen we talk about it, we reallyhave a broader definition. We talkabout people bringing differencesand perspective to the practice.

What is the business case for hav-ing a diverse workforce?

We operate in an increasinglyglobal economy, and our clientshave expectations that we will beable to do well for them in all cul-tural contexts.

In the war for talent, we want tobe able to attract the best and thebrightest to our practice. If 46 per-cent of the people who graduatefrom law school are women and 22percent are persons of color, and ifyou exclude yourself from thosepeople, you’ve cut down the mar-ket.

Finally, we want people in our

organization to be fully engaged.Being respected for who they areand the talents they bring is key tothis.

What was the impetus for creatingthese programs?

There is a program here in WestMichigan called the Institute forHealing Racism, and it is a two-dayextensive workshop on learningabout institutional racism and un-derstanding it. In the late 1990s, wehad many people go through it.That gave us a critical mass of peo-ple who were willing to say, “Thisis important, important enoughfor me to devote some time work-ing on it.”

But the firm has been involvedwith diversity for a long time. In1991, we worked with the GrandRapids Bar Association and FloydSkinner Bar Association and otherlaw firms to create a minorityclerkship program to attract first-year law students of color to cometo Grand Rapids for the summer.

How does WNJ develop its talentpool?

We continue to attempt to re-cruit women and attorneys of col-or to come in as starting associ-ates, but we’ve also been workingto identify established attorneyswho would fit with the firm andwould be willing to join us.

How do you retain diverse talent?There are two keys to retention.

One is making sure that peoplehave an opportunity to work oncareer-enhancing work; the otheris to make sure that women and at-torneys of color are in positions ofleadership in the firm.

We developed a system thattracks every assignment made inthe firm, so we can look at how op-portunity is distributed through-out the firm.

Do you use benchmarks for diversehiring?

We don’t establish quotas at all.But we do establish the goal of hav-ing a diverse class and attractingpeople who can be leaders.

A lot of people get stuck at therevolving door and they say,“Well, we can’t find enough quali-fied candidates.” But if you’re thetype of organization where peopleof color feel like they will have op-portunity, word will spread.


(In addition to a series of café

conversations about race, lead bySouthfield partner Mary Jo Lar-son, the company also has a diver-sity book club.)

Every summer we choose a bookthat relates to diversity and inclu-sion and we encourage everyone toread it in the firm. Of course, theydon’t all.

(They have read Stealing Bud-dha’s Dinner, Bich Minh Nguyen’smemoir of growing up in GrandRapids in search of American foodand identity; as well as Hands ofMy Father, Myron Uhlberg’s storyof growing up as the hearing childof deaf parents.)

The book was all about deaf cul-ture; I had never thought aboutdeaf culture before that. One of mypartners is the hearing child ofdeaf parents, so we had him comeand talk about growing up.

What advice do you have for othercompanies?

I think a lot of people when theyare thinking about a diversity pro-gram, they think about doing a lotof lunch-and-learns — Mexicanfood one day and Asian food thenext. That kind of cultural aware-ness stuff is good, but it’s reallynot sufficient at all.

You need to be willing to lookyourself in the mirror and figureout where the impediments are tosuccess.

Martin

ABOUT WARNER NORCROSSWhat it does: Law firmFounded: 1931Employees: More than 200Annual revenue: Not disclosedHeadquarters: Grand RapidsDiversity program initiated: 1991Why diversity matters to thecompany: “The real work ofdiversity is making sure you arecreating opportunity for people toperform at their highest level.”

W



Focus: Diversity

Kelly Services: Diversity must help bottom line to be sustainablen 1979, Kelly Services Inc. becameone of the first staffing compa-nies to enact a diversity pro-

gram. Today, its formalized suppli-er diversity program encompasses4,600 suppliers worldwide and 800in the U.S. The Troy-based compa-ny itself has grown, too, expandingbeyond temporary staffing and intohelping companies manage theirtalent supply chains.

For the past 12 years, BrendaMarshall, senior director of globaldiversity solutions, has been re-sponsible for the day-to-daygrowth and development of Kelly’ssupplier base. Under her watch,the company has won the MichiganMinority Supplier Development Coun-cil’s award for Corporation of theYear – Professional Services forthe past five years.

Crain’s talked with Marshalland John Healy, Kelly’s vice presi-dent and talent supply chainstrategist, about the company’s di-versity initiatives.

How does Kelly define diversity?Marshall: We look at it as minori-

ties, women, small disadvantaged,veteran-owned. As the economycontinues to evolve, so does theface of diversity. Diversity startedout of the civil rights movement. Itwas a process designed to ensurethat minorities were incorporated

into procurement as well as solu-tions to corporate consanguinity.Today, it’s about business results.Every initiative in a company hasto be sustainable and deliver val-ue. Diversity is no different.

What is the business case for hav-ing diversity in your supply chain?

Healy: We’re a talent supplychain. We need to ensure that oursupply base reflects the communitythat our customer is operatingwithin and that Kelly operates with-in. It’s not just about capturingspend, which is how these initia-tives began for some organizations.

Marshall: This is not about set-asides and preferential treatment.These suppliers have to compete,perform and deliver like everyoneelse. They just might not have thedeep pockets or abundance of re-sources like a majority supplier.But they can be our most valuedsuppliers.

How does Kelly develop its diversesuppliers?

Marshall: A cornerstone of ourstrategy is development and con-tinuing education so that once wefind suppliers and assess theirreadiness and capabilities, we canmake sure they become a sustain-able profile in our supply chain.

(Kelly recently launched an of-fice of innovation, which has a pi-lot project that was brought for-ward by one of the company’sdiverse suppliers.)

Healy: They had something thatthey thought was unique but did-n’t know how to bring it to marketor have the network to extend that

out. Now it has the potential tochange the staffing market, andKelly’s recruitment business is asupplier to one of its suppliers.That’s an exciting thing to me,when the relationship becomesbidirectional.


Healy: This isn’t something youdo alone; diversity is a team initia-tive. This is a strategic imperative.We have CEO-level commitmentthat extends into a supplier diversi-ty advisory council and a supplierdiversity team that Brenda leads.

Marshall: Diversity does not be-long to the diversity department. Ithas to be a part of your culture andhow you do business.

How do you measure the success ofKelly’s diversity supplier program?

Marshall: Obviously, we have ourscorecard — on-time delivery, qual-ity, etcetera — but we take it onestep further. We look at businessacumen, cultural alignment to Kel-ly and the value vendors bring interms of innovation. If you’re talk-ing about building partnerships,it’s about more than about perfor-mance; it’s about the infrastruc-ture, financial solvency, resourcesand technology to succeed.

What challenge does Kelly face inbuilding its diverse supply chain?

Marshall: To maintain inclusionin our supply chain, it is importantfor us to develop a network of scal-able minority, women and disad-vantaged business enterprises. Assuch, professional development andcontinuing education is the corner-stone of our diversity initiatives.

By fostering ongoing growthand development, we have con-nected hundreds of diverse firmsto staffing industry leaders, pro-curement specialists and leadingFortune 500 companies, creatingviable, profitable, sustainablepartners.

What advice do you have for otherfirms implementing supplier diversityprograms?

Marshall: You must approach itas a business initiative, not just be-ing a good corporate citizen.Everyone is lean and mean; welearned from the recession that wehave to be smarter. So if your di-versity initiative is not contribut-ing to the bottom line and bringingvalue, then it’s not sustainable.

It’s not just identifying diversesuppliers; it’s about building a net-work. It’s beyond a commitment;it’s an investment. Diversity does-n’t just happen by itself.

Marshall Healy

ABOUT KELLY SERVICESWhat it does: Talent finders Founded: 1946Employees: 7,000 globallyAnnual revenue: $5.5 billion in2012Headquarters: TroyDiversity supplier program initiated:1979 Why diversity matters for thecompany: “Every initiative in acompany has to be sustainableand deliver value. Diversity is nodifferent.”

I


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Focus: Diversity

ow Chemical Co.’s headquar-ters sits in Midland, a cityof about 42,000 surrounded

by rural areas. Many of its out-posts are also found in smaller,rural areas. Add the fact that Dowlooks to hire graduates fromSTEM fields — which are notori-ously low in diversity — and thatmeans the large publically tradedcompany has more than a few chal-lenges to finding and hiring di-verse talent.

But this year, the company wason DiversityInc Media LLC’s 25 No-table Companies list. The Prince-ton, N.J.-based publisher identi-fied Dow as a potential candidatefor the 2014 version of its top 50 listbecause of its high marks acrossthe four areas it measures: talentpipeline, talent development,CEO/upper-management commit-ment and supplier diversity.

Leading the diversity initiativefor Dow is Sarah Kok, global hu-man resource director of organiza-tional effectiveness and diversityand inclusion. She is a STEM grad-uate herself — from Purdue Universi-

ty — but is now in charge of findingtalent to push Dow forward.

“We look for a recruiting poolthat reflects our shareholders, cus-tomers and communities in whichwe operate,” she said.

How does Dow define diversity?We really talk about diversity in

its broadest sense. It’s not just gen-der or minority status; it’s allforms of diversity: cultural,thought, etc. It’s about how we re-

ally tackle the world’s challenges.So when we talk about diversity, itis that whole spectrum.

How does Dow develop its talentpool?

We started walking before weran. We started by having key uni-versities that we work with in

terms of wantingto source theirtalent. We havestrategic hiringteams for each ofthese universi-ties plus a diver-sity liaison role.

That waswhere we start-ed, but we had tobroaden our

sourcing pool. So we’ve gone to re-cruiting fairs that are aimed at un-derrepresented populations in ourworkforce. We’ve been doing this afew years, and we’ve really, reallyseen a big difference in the diversi-ty of our recruiting pool.

How do you retain diverse talent?

We have had great success withour employee resource groups.They are having an impact. Wehave really said it’s everyone’s re-sponsibly. We want everyone talk-ing, regardless of who they are,about why Dow is a great place towork. So we view it as not ourCEO’s responsibility or my re-sponsibility, but it’s everyone’s re-sponsibility.

What metrics do you use for to mea-sure success?

We do look at a bunch of differ-ent metrics in terms of hiring andpromotions. Where we’ve reallyexpanded recently is looking atwhat acceptances we are gettingfrom people we offer full-time jobs.How many people did we make of-fers to? How many acceptances didwe actually get? But it’s no onething; it’s managing 17 differentballs. Maybe 18.

How do you discuss the case for diver-sity internally?.

We used to really focus on thebusiness case, but as a journey, that

starts to be “we’ve heard that al-ready.” So what we did last yearwas introduce unconscious-biastraining. We all have unconsciousbiases, so this conversation takesaway from that “it’s all me” or “it’smy fault.” If you bring those biasesto the forefront and are aware ofthem, you will potentially take dif-ferent actions going forward. Forexample, my bias might not be skincolor, it might be age or tech knowl-edge. Whatever it is, we all have oneor more, and talking about themcan help to create a diverse team.

What advice do you have for othercompanies?

There is no one magic thing todo. If you are creating the rightstructure from the minute yousource all the way to the life cycleof an employee, you can get the di-versity talent and you can keep it.You have to work at it, but it canbe done. It’s easy to say you’re in asmall town or the tech industry orchemicals, but all of these are ex-cuses. It can be done. Set goals andthen measure them.

Dow Chemical: Set diversity goals, then measure them

Kok

ABOUT DOW CHEMICALWhat it does: Plastics, chemicals,agricultural science, electronicmaterials and other products.Founded: 1897Employees: 54,000 globallyAnnual sales: $56.8 billion in 2012Headquarters: MidlandDiversity program initiated: 2005Why diversity matters for thecompany: “You can have a diverseworkforce whether you’re a Fortune50 or 50-employee company. It canbe done. Set goals and thenmeasure them.”

D



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CRAIN'S LIST: LARGEST AFRICAN AMERICAN-OWNED BUSINESSES Ranked by 2012 revenue

Rank CompanyAddress Phone; website Majority owner(s)

Revenue($000,000)

2012

Revenue($000,000)

2011Percentchange

LocalemployeesJan. 2013


PercentAfrican

American-owned Type of business

1.Bridgewater Interiors LLC4617 W. Fort St., Detroit 48209(313) 842-3300; www.bridgewater-interiors.com

Ronald Hallpresident and CEO

$1,838.7 $1,746.0 5.3% NA 992 51% Automotive interiors

2.Piston Automotive LLC12723 Telegraph Road, Redford 48239(313) 541-8674; www.pistongroup.com

Vinnie Johnsonchairman

569.9 473.8 20.3 225 226 100 Automotive supplier

3.Prestige Automotive LLC20200 E. Nine Mile Road, St. Clair Shores 48080(586) 773-2369; www.prestigeautomotive.com

Gregory Jacksonchairman, president andCEO

436.0 409.7 6.4 202 150 100 Automobile dealerships, insurance and real estate

4.Global Automotive Alliance LLC2627 Clark St., Detroit 48210(313) 297-6676

William Pickardchairman and CEO

415.0 329.0 26.1 510 500 100 Automotive manufacturer, assembler, warehouse sequencer,aerospace warehousing and logistics

5.SET Enterprises Inc.30500 Van Dyke Ave., Suite 701, Warren 48093(586) 573-3600; www.setenterprises.com

Sid Taylorchairman and CEO

350.0 330.0 6.1 180 165 100 Metal processing

6.Royal Oak Ford/Briarwood Ford27550 Woodward Ave., Royal Oak 48067(248) 548-4100; www.royaloakford.com

Eddie Hall Jr.president

138.5 136.9 1.2 161 157 NA Automobile dealerships

7.GlobalHue4000 Town Center Drive, Suite 1600, Southfield 48075(248) 223-8900; www.globalhue.com

Donald Colemanchairman and CEO

121.8 B 125.3 B -2.8 NA NA 100 Advertising agency

8.Bill Perkins Automotive Group21800 Gratiot Ave., Eastpointe 48021(586) 775-8300; www.merollischevy.com

Bill Perkinspresident

118.1 118.3 -0.1 127 126 100 Automobile dealerships

9.James Group International Inc.4335 W. Fort St., Detroit 48209(313) 841-0070; www.jamesgroupintl.com

John Jameschairman and CEO

110.0 30.0 266.7 131 142 100 Logistics and supply chain management

10.Avis Ford Inc.29200 Telegraph Road, Southfield 48034(248) 355-7500; www.avisford.com

Walter Douglas Sr.chairman and CEO

107.6 110.7 -2.8 102 102 NA Automobile dealership

This list of African American-owned businesses is an approximate compilation of the largest businesses headquarterd in Wayne, Oakland, Macomb, Washtenaw and Livingston counties. Percentage of the company that is African American-owned may not be solelyheld by a majority owner. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies. Actual revenue figures may vary. NA = not available.B GlobalHue's capitalized billings were $812 million for 2012 and $835 million for 2011. Revenue is an estimate based on 15 percent of billings.

LIST RESEARCHED BY BRIANNA REILLY



CRAIN'S LIST: LARGEST NATIVE AMERICAN-OWNED BUSINESSES Ranked by 2012 revenue

Rank

CompanyAddressPhone; website Majority owner

Revenue($000,000)

2012

Revenue($000,000)

2011Percentchange


PercentNative-

Americanowned Type of business

1.Rush Trucking Corp.35160 E. Michigan Ave., Wayne 48184(800) 526-7874; www.rushtrucking.com

Andra Rushpresident and CEO

$104.0 $115.0 -9.6% 532 NA Motor carrier

2.Systrand Manufacturing Corp.19050 Allen Road, Brownstown Township 48183(734) 479-8100; www.systrand.com

Sharon Cannarsapresident and CEO

49.8 45.0 10.7 222 50 Precision machining and assembly of automotive products

3.Arrow Strategies LLC30300 Telegraph Road, Suite 117, Bingham Farms 48025(248) 502-2500; www.arrowstrategies.com

Jeff Styerspresident and CEO

38.0 29.5 28.8 235 100 Staffing firm specializing placement of professionals in theinformation technology, engineering, finance/accounting andprofessional services industries on a contract, contract-to-hireand permanent basis

4.RB Construction Co.6489 Metro Parkway, Sterling Heights 48312(586) 264-9478; www.rb-construction.com

Russell Beaverpresident

18.0 3.0 499.2 5 NA General construction company, Native American-owned,SBA 8(a) certified, minority business enterprise, servicedisabled veteran-owned small business, disadvantagedbusiness enterprise

5.Elite Plastic Products/Elite Mold & Engineering51548 Filomena Drive, Shelby Township 48315(586) 314-4000; www.teameliteonline.com

Robert Mandevillechairman

15.2 12.0 26.7 71 60 Plastic injection molding, cleanroom medical molding, NorthAmerican and Asian tool building, handling prototypethrough production orders

This list of Native American-owned businesses is an approximate compilation of the largest such businesses based in Wayne, Oakland, Macomb, Washtenaw or Livingston counties. Percentage of business that is Native American-owned may not be solely held bymajority owner. It is not a complete listing but the most comprehensive available. Unless otherwise noted, information was provided by the companies. NA = not available.


CRAIN'S LIST: LARGEST HISPANIC-OWNED BUSINESSES Ranked by 2012 revenue

Rank

CompanyAddressPhone; website Majority owner(s)

Revenue($000,000)

2012

Revenue($000,000)

2011Percentchange


PercentHispanic-

owned Type of business

1.The Diez Group8111 Tireman Ave., Dearborn 48126(313) 491-1200; www.thediezgroup.com

Gerald Diezchairman and CEO

$612.0 $562.0 8.9% NA 100% Steel and aluminum sales, scallops/wave blanking, blanking (exposed/unexposed),slitting, laser welding

2.Elder Automotive Group777 John R Road, Troy 48083(248) 585-4000; www.elderautogroup.com

Irma ElderCEO

365.6 309.4 18.2 215 100 Automobile dealerships

3.Vision Information Technologies Inc. (VisionIT)3031 W. Grand Blvd., Suite 600, Detroit 48202(877) 768-7222; www.visionit.com

David SeguraCEO

226.5 239.0 -5.2 382 100 Mobile application solutions, IT managed services and talent management

4.The Ideal Group Inc.2525 Clark St., Detroit 48209(313) 849-0000; www.weareideal.com

Frank Venegas Jr.chairman and CEO

182.0 200.0 -9.0 413 NA General contracting, specialized miscellaneous steel manufacturing and distribution ofprotective barrier products, pure global supply chain management, centralized storageand on-demand distribution of parts for machinery and selling excess stock materials

5.Gonzalez Design Group29401 Stephenson Highway, Madison Heights 48071(248) 548-6010; www.gonzalez-group.com

Gary GonzalezCEO

70.0 82.0 -14.6 400 NA Design engineering, staffing, manufacturing technologies, integrated marketing,production systems, containers, welding systems, assembly systems and printed circuitboard assemblies

6.Industrial Control Repair Inc.28601 Lorna Ave., Warren 48092(586) 582-1500; www.icrservices.com

Paul Gutierrezpresident and CEO

47.0 35.0 34.3 147 75 Electronic and mechanical repair of industrial equipment, buy and sell refurbishedindustrial electronics and robots, buy and sell machinery

7.PMA Consultants LLC1 Woodward Ave., Suite 1400, Detroit 48226(313) 963-8863; www.pmaconsultants.com

Gui Ponce de LeonCEO

41.4 38.8 6.7 38 NA Construction consulting; program, project and construction management; experts indispute avoidance and resolution

8.Aztec Manufacturing Corp. Inc.15378 Oakwood Drive, Romulus 48174(734) 942-7433; www.aztecmfgcorp.com

Gregory Lopezpresident

26.0 25.2 3.3 62 59 Production machining for on- and off-road vehicle applications; castings and forgings;full product development capabilities

9.Reliance One1700 Harmon Road, Suite 1, Auburn Hills 48326(248) 922-4500; reliance-one.com

James Beathpresident

25.0 21.2 17.9 800 51 Staffing and recruiting

10.ASG Renaissance LLC22226 Garrison, Dearborn 48124(313) 565-4700; www.asgren.com

Lizabeth ArdisanaCEO

20.6 28.4 -27.3 165 51 Marketing communications, public relations, staffing, performance management anddiversity services

11.Three Star Trucking Co. Inc.36860 Van Born Road, Wayne 48184(734) 728-5500; www.threestartrucking.com

Denise Rayspresident and CEO

15.9 20.0 -20.5 59 NA Transportation

12.Alliance Technology Solutions LLC40 Engelwood Drive, Suite H, Lake Orion 48359(248) 364-2195; www.ATS.biz

Margie Carlsonpresident and CEO

11.9 13.3 -10.3 7 NA IT infrastructure solution provider and value-added reseller offering high-end and low-end hardware, software, services, maintenance and maintenance renewals

13.

Laurie Sall & Associates LLC5435 Corporate Drive, Suite 205, Troy 48098-2624(248) 641-2655; www.lauriesall.com

Laurie Sallpresident

8.5 6.3 34.9 3 100 Products sold include IRA's, 401(k) plans, pension plans, profit-sharing plans, executivebonus plans, business continuation plans, key person plans, deferred compensationplans, buy-sell agreements, individual disability income insurance, business overheadplanning, long-term care insurance, group health, life and disability insurance, healthsavings accounts, health reimbursement accounts, key executive benefits, Cobraservices assistance and self-insured prescription cards

14.Goodman Venegas2800 Livernois, Suite 170, Troy 48083(248) 740-9090; www.goodmanvenegas.com

M. Paul Venegaspresident

2.9 2.8 1.8 15 51 Commercial insurance agency

15.Inteligente Technologies LLC B

17199 N. Laurel Park Drive, Livonia 48150(734) 338-8980; www.inteligentetechnologies.com

Ignacio SalazarpresidentJacklyn Salazarvice president

1.2 1.0 20.0 35 51 Supplies die cut and adhesive backed products in foams, rubber, any soft material toautomotive and other industries; also assembles various products into one; can performmultiple activities to make full assemblies.

This list of Hispanic-owned businesses is an approximate compilation of the largest such businesses headquartered in Wayne, Oakland, Macomb, Washtenaw or Livingston counties. Percentage of the company that is Hispanic-owned may not be solely held by amajority owner. It is not a complete listing but the most comprehensive available. Vetbuilt Building Group Inc., No. 10 on last year's list, which Crain's believes would make the list, was unable to provide figures, and a reliable estimate could not be made. Actualrevenue figures may vary. NA = not available.B Inteligente Solutions Inc. and Plastomer Corp. joint venture.




millercanfield.com

CRAIN'S LIST: LARGEST ASIAN-OWNED BUSINESSES Ranked by 2012 revenue

Rank

CompanyAddressPhone; website Majority owner

Revenue($000,000)

2012

Revenue($000,000)

2011Percentchange



PercentAsian-owned Type of business

1.Camaco LLC40000 Grand River Ave., Suite 110, Novi 48375(248) 442-6800; www.camacollc.com

Arvind Pradhanpresident and CEO

$350.0 $300.0 16.7% 32 23 100% Automotive supplier

2.NYX Inc.36111 Schoolcraft Road, Livonia 48150(734) 462-2385; www.nyxinc.com

Chain SandhuCEO

330.0 302.0 9.3 1,600 1,300 NA Plastic injection molding

3.Acro Service Corp.39209 W. Six Mile Road, Suite 250, Livonia 48152(734) 591-1100; www.acrocorp.com

Ron Shahanipresident and CEO

159.6 133.0 20.0 1,448 1,207 100 Staff augmentation (information-technology, engineering,office support, industrial, other), outsourcing and IT andengineering consulting

4.HTC Global Services Inc.3270 W. Big Beaver Road, Troy 48084(248) 786-2500; www.htcinc.com

Madhava Reddypresident and CEO

135.0 116.0 16.4 185 180 100 Application development and maintenance, businessprocess management, document and content managementand project management office services

5.Dass International Inc. (Netlink)999 Tech Row, Madison Heights 48071(248) 204-8800; www.netlink.com

Dilip DubeyCEO, chairman and co-founder

84.5 71.5 18.2 112 90 NA Managed IT, supply chain and business process solutionsfirm

6.Synova Inc.1000 Town Center, Suite 700, Southfield 48075(800) 799-9625; www.synovainc.com

Raj Vattikutichairman

69.8 74.2 -6.0 200 250 100 Custom software development, maintenance and support,SAP technologies, SAP enterprise applications, SAPperformance management, mobile applicationsdevelopment for financial and telecom verticals, cloudenabling of organizational resources

7.Rapid Global Business Solutions Inc.31791 Sherman Drive, Madison Heights 48071(248) 589-1135; www.rgbsi.com

Bati Devichairman

64.5 54.5 18.3 470 390 100 Engineering design services, staff augmentation, vendormanagement services, managed service provider, payroll,own vendor management system tool, recruitment processoutsourcing services, production part approval processservices

8.FutureNet Group Inc.12801 Auburn St., Detroit 48223(313) 544-7117; www.futurenetgroup.com

Perry Mehtapresident and CEO

53.3 B 32.6 63.7 113 64 100 Customized solutions for environmental and infrastructureimprovement

9.Saturn Electronics Corp.28450 Northline Road, Romulus 48174(734) 941-8100; www.saturnelectronics.com

Nagji Sutariyapresident

39.9 34.7 15.0 NA 175 NA Printed circuit board fabricator providing quick-turnprototypes and high-volume production

10.WorkForce Software LLC38705 Seven Mile Road, Suite 300, Livonia 48152(877) 493-6723; www.workforcesoftware.com

Kevin ChoksiCEO

30.3 24.0 26.0 200 139 NA Complete workforce management platform for largeemployers with complex needs. EmpCenter suite providessolutions for time and attendance, scheduling, absenceand leave management and employee fatigue along withpowerful reporting and analytics.

This list of Asian-owned businesses is an approximate compilation of the largest such businesses headquartered in Wayne, Oakland, Macomb, Washtenaw or Livingston counties. Percentage of the company that is Asian-owned may not be solely held by a majorityowner. It is not a complete listing but the most comprehensive available. Crain's estimates are based on industry analyses and benchmarks, news reports and a wide range of other sources. Unless otherwise noted, information was provided by the companies.Actual revenue figures may vary. NA = not available.B Acquired Smith & Wesson Security Solutions Inc. July 2012.



TUESDAYN O V . 5

Capital Raise Meetup. 9:30-11 a.m. Ma-comb-OU Incubator. For owners ofstartup or early-stage growth-basedbusinesses seeking funding. WithMike Brennan, business commercial-ization and capital investment advis-er, Macomb-OU Incubator. Macomb-OU Incubator at VelocityCollaboration Center, SterlingHeights. Free. Contact: Joan Carleton,(586) 884-9324; email: [email protected]; website: www.oakland.edu/macombouinc.

WEDNESDAYN O V . 6

Business Research: Feasibility to Ex-pansion. 9 a.m.-noon. Oakland CountyEconomic Development & Communi-ty Affairs. For owners of startup or ex-isting small businesses looking to re-search a business idea or findresearch for a business plan. OaklandCounty Business Center, WaterfordTownship. Free. Contact: Karen Lear,(248) 858-0783; email: [email protected]; website: www.AdvantageOakland.com/startabusiness

THURSDAYN O V . 7

Wages and Income Mobility in the U.S.7:30-9 p.m. Lawrence TechnologicalUniversity. Addressing the issues ofhow well U.S. workers are doing com-pared to the rest of the world andwhether America remains an upward-ly mobile society. With Stephen Spurr,professor of economics, Wayne StateUniversity. Lawrence TechnologicalUniversity, Southfield. Free. Contact:Tracy Kash Thomas, (248) 204-3500;email: [email protected]; website:www.ltu.edu.

Eighth Annual Veteran Entrepreneur-ial Training Conference. 7:30 a.m.-4p.m. VetBizCentral Inc. Focusing on

assisting veterans, active duty, Na-tional Guard and Reserve members informing and expanding businesses.Learn about doing business with tier-one suppliers and engaging with sup-plier diversity professionals. WithKenneth Barrett, U.S. Navy veteranand chief supplier diversity officer,General Motors Co. Michigan StateUniversity Management EducationCenter, Troy. $45. Contact: (810) 767-8387; email: [email protected];website: www.vetbizcentral.org.

UPCOMING EVENTSHealth Care Reform Breakfast Sympo-sium. 7:30-10 a.m. Nov. 12. Construc-tion Association of Michigan. Focuson health care reform and how it will

impact employers of all sizes and in allindustries. With Lenny Brucato, direc-tor of sales and client services, PriorityHealth; Paul Catenacci, director ofsales and client services, Novara Tesi-ja PLLC; Leslie Loftus, COO, VeritasBenefits Group LLC; and Rob Walters,director of sales, CAM AdministrativeServices Inc. Michigan State Universi-ty Management Education Center,Troy. $30 per person, $150 table forsix. Contact: Marie Magyar, (248) 972-1127; email:[email protected];website: www.cam-online.com.

Higher Education Client Panel. 8-10a.m. Nov. 13. Michigan Chapter of theSociety of Marketing Professional Ser-vices. Directors of facilities, planning,design and construction from Michi-gan colleges and universities will meetto discuss current and planned campusprojects. With panelists Ken Dawson,project representative, Michigan StateUniversity; Bryan Valachek, construc-tion project director, University ofMichigan; and Tamara Batcheller, asso-ciate vice president, facilities manage-ment, University of Detroit Mercy. He-len Dennis, president and co-founder,300 Decisions, is the moderator. $30 students, $55 SMPS members, $90 nonmembers. Walsh College, NoviCampus. Contact: Nicole Franzen, (248)233-0107; email: [email protected];website: www.smps-mi.org.

Raising Capital to Grow Your Company.6-8:30 p.m. Nov. 13. Novi Oaks Chapter,American Business Women’s Associa-tion. With Ralph Sherman, foundingpartner, Sherman Law Offices. Double-Tree Hotel, Novi. $18.50. Contact: HollyHengstebeck, (734) 634-8383; email:[email protected]; website:www.abwa-novi.org.

Walshpreneur Fair. 5-7:30 p.m. Nov. 18.Blackstone LaunchPad. With VinceThomas, founder-chairman, Billhigh-way; Larry Gardner, president,Lawrence Gardner Associates. WalshCollege, Troy campus. Free. Contact:Carol Glynn, (248) 823-1262; email: [email protected]; website:walshcollege.edu/blackstonelaunchpad.

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INNO-VENTION 2013:MEDICAL MAIN STREETOakland County EconomicDevelopment & Community Affairshosts Inno-Vention 2013: A MedicalMain Street Conference from 6:30-8:30 p.m. Nov. 6, 8 a.m.-4 p.m.Nov. 7 and 9-11 a.m. Nov. 8 at theTroy Marriott.Learn how information technologyis fueling changes in health careand its impact on the nextgeneration of medical devices.Welcome address, Oakland CountyExecutive L. Brooks Patterson;keynote speaker, Rick Valencia,vice president and generalmanager, Qualcomm Life,addressing mobile technology andthe future of health care; otherspeakers include Subra Sripada,executive vice president, chiefadministrative and informationofficer, Beaumont Health System.Tickets are $149. For moreinformation, call Leslie Smith, (248) 353-0735, ext. 152; emailher at [email protected]; orvisit www.medicalmainstreet.org.


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Deana Wiegand toactivities director,Mendelson Homeat Lourdes SeniorCommunity, Wa-terford Township,from activities as-sistant, Cherry-wood Nursing &Living Center,Sterling Heights.

Kelly Ann Dinnan, D.O., to medical di-rector, surgical intensive care unit,Botsford Hospital, Farmington Hills,from fellow training in surgical criti-cal care and acute care surgery at Uni-versity of California, San FranciscoFresno.Reginald Eadie, M.D., to president,DMC Harper University Hospital andDMC Hutzel Women’s Hospital, De-troit. He continues as president, DMCSinai-Grace Hospital, Detroit.

INSURANCEEric Spencer to vice president, claims,Amerisure Mutual Insurance Co., Farm-ington Hills, from senior vice presi-dent, head of middle market claims,QBE Insurance Co., Bellevue, Wash.

MARKETINGEric Davies to global director, busi-ness development, Embark Digital

LLC, FarmingtonHills, from seniordirector of sales,Outcast Media,Detroit.

NONPROFITSLori Lutz to opera-tions director,Isaac AgreeDowntown Syna-

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Packard: Finances, liens make plant site no easy turnaround■ From Page 3

“There is a tremendous amountof work that’s going to happen lit-erally on the next day” after clos-ing, Hults said. “We have to cleanup the 40 years worth of debris andtrees, and then we have to fence it.We’ll also have our security forceon site, making sure nobody hasaccess. It’s going to be insured incase anything crazy does happen.We’ll go about the process.”

Before founding Durkin Joycein 2001, he worked from 1987-95 inadvertising and marketing for GolfDigest magazine. Durkin Joyce isdescribed as a company involvedin the revitalization of blightedneighborhoods and the building ofLEED-certified multifamily resi-dences.

Financing puzzleOne of the biggest stumbling

blocks will be getting financing forthe project, especially given its lo-cation between I-94 and EastGrand Boulevard.

Dennis Bernard, founder andpresident of Southfield-basedBernard Financial Group Inc., saidHults will need to approach

lenders with a significant amountof equity already secured for thedevelopment.

“There’s no leases,” Bernardsaid. “It’s not in an area that’s cur-rently developing or thriving. It’snot in the (central business dis-trict) or in Midtown — two areasin the city of Detroit that are thriv-ing.”

Drawing residents may alsoprove difficult, said Kyle West-berg, president and CEO of Ponti-ac-based West Construction Services,which developed the LafayettePlace project in Pontiac.

“It’s not like a riverfront or lake-front, or somewhere there’s anamenity that’s going to drive peo-ple to want to live there,” he said.“Are those loft-dwellers going to bepeople with jobs in the Midtownand downtown district? Maybethat’s the first wave of renters. ButI don’t know.”

Colliers International Inc. VicePresident Brian Schwartz said heis encouraged by the ambition ofthe Hults project, but said it facesmany obstacles.

“Those who are in commercialreal estate in the downtown De-

troit market and understand thatsite know the level of contamina-tion that are existing and how longthe site has been deteriorating,” hesaid. “The amount of investmentjust to repurpose it is going to faroutweigh anybody paying a mar-ket value for (property there).”

Hults disagrees with the skepti-cism.

“This is a 15-year project,” hesaid. “We’ll begin to put in busi-nesses that don’t need any kind ofresidential. The Cadillac plant isliterally a half-mile away, andthere are 4,000 people workingthere. Wouldn’t you want to have afive-minute trip to work?”

He said Durkin Joyce has doneredevelopment work in Chicagoand Minnesota and is pursuingother projects overseas.

Hults has hired the Detroit-based architecture firm Albert KahnAssociates Inc. for the project, andJoe Kopietz, a partner in the realestate practice at Detroit-basedClark Hill PLC who representslenders and investors in economicdevelopment matters.

The project would be financedusing a mixture of federal and

state tax incentives, and debt andequity, Kopietz said in an email toCrain’s.

Among the incentives being con-sidered are New Markets TaxCredits, Historic RehabilitationTax Credits, Community Revital-ization Program credits, and taxabatements through the ObsoleteProperty Rehabilitation Act. Taxincrement financing is also beingconsidered.

There is “a significant amountof resources that are available tous,” Hults said.

“The final mix on the incentivesside is far from being fully devel-oped since site control is requiredto even begin the process of pursu-ing many of these incentives,”Kopietz said.

Lien legwork?There is also a dispute between

previous owner Dominic Cristini’srepresentatives and Hults’ overwhether he would have to pay off$1.5 million to $2 million in liensremaining on the Packard plant.

David Wax, the owner represen-tative and senior sales associate

for Farmington Hills-based Burger& Co., said Hults could not get awarranty deed — which guaran-tees a title is clear of all liens — un-til all liens are satisfied.

“And if you don’t have a warran-ty deed, no bank will ever lend youmoney,” he said.

But David Szymanski, chiefdeputy Wayne County treasurer,said that all liens had been elimi-nated through the tax foreclosureprocess.

“The prior liens were extin-guished by the foreclosure and ex-piration of the redemption period,which occurred prior to the coun-ty’s sale of the property at auc-tion,” Kopietz said.

Peter Letzmann, a former mu-nicipal attorney and sole practi-tioner of Kentwood-based LetzmannAssociates, said that if the countynotified the lien holders of the taxforeclosure process when it beganand they didn’t make claims ontheir liens, the liens can be elimi-nated.

The dispute could prompt litiga-tion, he said, but if the county fol-lowed the proper legal procedures,it would likely be dismissed.


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Diversity: Inclusion makes good business sense, experts say■ From Page 3

Blue Cross Blue Shield of Michigan. In2012, the Detroit-based companyspent $180 million with minority-

and women-owned business-es in its supplychain, or about15 percent of itsadministrativespend.

“The businesscase is reallyquite simple,”said Tricia Keith,the health care

provider’s senior vice president, cor-porate secretary and services. “Weare a strong Michigan-based busi-ness, and we need to look and actlike our customers and our mem-bers, the people who are holding theBCBS card in their wallets.”

However, Lowisz and Keith arequick to remind, diversity pro-grams are no longer just about eth-nic minorities and women, the in-dustry is moving toward an“inclusion model.”

“It’s not just a white-versus-black issue,” Lowisz said. “It alsohas to be inclusive of upbringing,education, all of the things that getyou these new ideas, new thoughts,new perspectives. You want to re-flect your consumer. So if your con-sumer happens to be heavily di-verse and your company is not, areyou really developing products andservices that serve that con-sumer?”

With his own firm, Lowisz madediversity a priority from day one.Because his existing network wasfilled with people of different back-grounds — Arab-American, Afri-can-American, Hispanic — it waseasy for him to build a team.

“We had more nonwhite maleswhen I started the business thanwhite males,” he said. “We’re for-tunate today that most of our staffcomes from referrals. Diversityjust finds us because we areknown to be background blind.”

Of course, diversity doesn’t justfind everyone. Companies have toactively court and find diversesuppliers and employees. Thatmeans looking in different placesand actively seeking the talent, notjust waiting for who comes to you.

“Here’s the great thing about di-versity and inclusion,” Keith said.“When we have a diverse slate be-fore us, the best and the brightestare going to be who we hire. The de-mographics of the U.S. are chang-ing so dramatically that we knowthat if we don’t change, then wedon’t bring to the table the best andthe brightest.”

It’s no different on the supplierside of the business.

“It needs to be part of the corpo-rate culture; it needs to be a direc-tive from the leadership,” saidMichelle Richards, executive direc-tor of the Center for Empowermentand Economic Development in AnnArbor. “One of the biggest myths isthat this is a set-aside or you’re tak-ing a contractor that’s not the best.But corporations don’t do that.

“Between us and the Michigan Mi-nority Supplier Development Council,we have a tremendous pipeline ofvery capable, diverse suppliers. Be-hind us, we have almost 12,000 cer-tified women business owners that,on average, have $12.6 million insales.”

To find employees, Lowisz tells

his clients they have to activelysearch for the talent, use new chan-nels and make it a C-suite priority.Don’t just go to national confer-ences; connect with local chambersof commerce and organizationsthat can help identify suppliers andtalent within their ranks.

“Make it local, not just national,”Lowisz said. “Nationally, you willget accolades because you were in-volved in this or that program, buthere the local chambers have con-nections and can find you the tal-ent.”

Of course, once you have the tal-ent you have to keep it, executivessay. Sometimes, that’s the greaterchallenge.

“A lot of people get stuck at therevolving door, and they say, ‘Well,we can’t find enough qualified can-didates,’ ” said Rodney Martin, di-versity partner at Warner Norcross &Judd LLP, which has eight offices inMichigan. “But the real question is,‘If you’re the type of organizationwhere people of color feel like theywill have opportunity, word willspread.’ Creating opportunity,that’s the hard work.”

Detroit is tackling somethingthat even Silicon Valley hasn’t yetmastered: bringing inclusion anddiversity into the startup techfirms that are flooding the city.This is the engine for the city’sgrowth, and yet it remains verydisconnected to diverse talent andfunding pools.

“Diversity in this context is huge-ly important,” said Josh Linkner,managing partner of Detroit VenturePartners. “But the tech community’ssuccess rate is mixed, frankly. Weall would like to encourage more di-versity.

“To me, diversity isn’t just blackand white. It’s a lot more variety interms of diversity. There is every-thing from sexual preference to gen-der to political views and every-thing else. In Detroit, we are overlyfocused on the black-white thing,but it’s about more than that. It’sabout creating the opportunity forlots of different people to con-tribute.”

To assist, the New Economy Initia-tive for Southeast Michigan hired Inde-pendence, Ohio-based MainStreet In-clusion Advisors to work with itsgrantees, such as TechTown Detroitand Bizdom Detroit, and other organi-zations in town.

MainStreet founder Darrin Re-dus had been the chief economic in-clusion officer at Cleveland-basedventure development firm Jump-start Inc. When he left to start Main-Street, more than 50 percent of thedeal flow was from the minoritycommunity and 30 percent of port-folio companies were led by womenand minorities. That’s a trackrecord he’d like to duplicate — orimprove — in Detroit.

“This whole discussion has beenfocused on corporate America,”said Redus. “How diverse is yourstaff, your management team,your board, your supply chain? Weare shifting that lens to the thou-sands of businesses that areemerging across the country. Howdo we connect the work to the rele-vant and strategically aligned butdisconnected groups?”


schooled by Lowisz. Diversity, hetells his clients, is not about doingthe right thing or creating set-asides; it’s about building a busi-ness filled with the best and bright-est talent so your firm can competeglobally.

After all, research shows that di-verse teams — whether in the officeor the supply chain — are good forbusiness.

In the U.S., for public companieswith diversity on the executiveboard, return on equity was 95 per-cent higher than those without, ac-cording to a 2012 report by NewYork City-based McKinsey & Co.

The country’s demographics areshifting, with people of color mak-ing up 36 percent of the labor force,according to the U.S. Bureau of LaborStatistics, and there will be no eth-nic minority in the country by 2050.

Change is hitting SoutheastMichigan, too, where the minoritypopulation is expected to reach 40percent by 2040, according to the De-troit-based Southeast Michigan Coun-cil of Governments. (The mid-Atlanticregion, including Michigan, wasranked as the most open to diversi-ty in a recent report by the Wash-ington, D.C.-based Center for Ameri-can Progress.)

Companies must be prepared forthis evolution and have productsand services that meet the new de-mands, experts say. To do that, theyneed teams that understand andidentify with their new customers.

“Diverse teams that come fromvarious backgrounds actuallycome up with more creative solu-tions and new ideas and new prod-ucts than groups that are all whitemales or all white females,” Lowiszsaid.

That’s something to which theauto industry, and therefore South-east Michigan, is no stranger. Thenumber of Hispanic auto buyers,for example, grew 26 percent be-tween 2011 and 2012, while the over-all industry only grew 13 percent,according to Southfield-based auto-motive research firm R.L. Polk & Co.The automakers know they have tosnag these new clients and are mak-ing strides to make their workforceand supply chains more representa-tive of the country’s future.

The Rainbow PUSH Coalition and Cit-izenship Education Fund, for example,gave General Motors Co., Ford MotorCo. and Chrysler Group LLC top marksfor their supplier diversity pro-grams. GM and Ford also werecommended for their hiring.

The efforts by the Detroit 3 havemotivated many local organiza-

tions to innovate.“It’s the industry that got us in-

volved in our approach really earlyon,” said John Healy, vice presi-dent and talent supply chain strate-gist of Troy-based Kelly Services Inc.

But the business case is an imper-ative regardless of industry. Take

QUESTIONS TO ASK WHEN FORMING CORPORATE DIVERSITY PLANSAnswers from Stephen Lowisz, CEO of Qualigence International:� Ask yourself why: “When a client comes to me and says we have a focuson diversity, my first question is, ‘Why?’ Is it a mandate from the topbecause it makes you feel better or does it actually make sense for yourbusiness?’”� Culture is critical: “Feeling good is the wrong reason to do this. If you getdiverse talent in the front door with this attitude, they’re going to run out theback door.” � Actively seek new talent: “I would get involved in every local chamber,whether they are specific to an ethnicity or not. Fish in the ponds that havethe quality you are looking for so you are putting people on equal footing.”� Put diversity recruitment in the C suite: “I would be the one out theretouting the flag and saying, ‘We talk to all; we recruit all; we have anenvironment for all.’ Don’t pass it off.” � Insist on interviews: “It’s about more than just having a slate ofcandidates that are presented to a hiring manager. It’s about, ‘Who did thehiring manager sit down with?’ ”� Bake diversity into the culture; don’t use mandates: “Hiring managersresent mandates. You don’t want to set people up to fail just because theyare diverse.”

— Amy Haimerl

Keith

For publiccompanies withdiversity on theexecutive board,

return on equity was95 percent higher

than those without.


lane freeway, which is about 20feet deep, and transform it into aboulevard will cost about $80 mil-lion, which is the same amountthat MDOT believes will be neededin coming years for I-375 mainte-nance and repairs.

“The study will depict possibili-ties regarding potential economicdevelopment. That’s why the pub-lic/private group is engaging jobproviders on the corridor,” saidRob Morosi, an MDOT communica-tions representative for metro De-troit.

The consultant also is beingasked to consider any alternativesto the freeway-to-boulevard ideafor the corridor.

If the study concludes the ideashould not proceed, the state couldbegin making needed repairs to thecorridor and its overpasses, whichthe state says are in poor condition.

Companies, entertainment desti-nations and other organizations inthe footprint of the area under re-view are being consulted on theproposal and RFP.

No moneyI-375 is one of many roads the

state knows needs to be repaired,but it does not have the budget tocomplete all of them. Gov. Rick Sny-der and MDOT Director Kirk Steu-dle say the state needs about $1.2 bil-lion more annually to keep 90percent of the roads in fair condi-tion. The Legislature has not com-mitted to such a plan because of theamount in taxes or fees that wouldneed to be raised.

Project organizers freely admitthere is no money to pay to trans-form the roadway.

“The price tag to rebuild the free-way, including pavement, overpass-es, ramps, installing new drainage,utility upgrades and bringing thefreeway up to current design stan-

dards, etcetera, would be roughly$80 million. That is money we cur-rently do not have,” Morosi said.“And if we did have that fundingavailable, we would need to be surethat what we are investing fits intothe city’s future plans.”

Project backers have suggestedprivate money could be an optionto pay for construction, possiblyexchanging frontage along theboulevard in return for cash.

“Since a final determination hasnot been made, it’s premature tosay if, and how much, public-sec-tor funds would be used and howmuch would be tax dollars. Butagain, we do not have the fundingavailable,” Morosi said.

The roadway, which opened in1964 at a cost of $50 million, isowned by MDOT. Because it’s partof the federal highway system, theFederal Highway Administrationwould have to grant permission todo the project.

Messages seeking comment wereleft for George Jackson, presidentand CEO of the Detroit EconomicGrowth Corp. That agency staffs theDDA on behalf of the city.

Traffic questionsNearly 80,000 vehicles use I-375

daily, the state said. Turning astub of a major highway into a sur-face street raises questions aboutcommuting, especially as Detroitattracts more downtown workers.

The freeway is a main east-sidelink to I-96 and the Lodge Freeway.

The study is looking at possiblytransforming the corridor, noteliminating it, Morosi said.

“Keep in mind a freeway isn’t al-ways the best way to move traffic.Look at the numbers at Lafayetteand Jefferson — 45,000 dropping to14,000. You can bet that right laneat Lafayette backs up during spe-cific times of the day,” he said.

The Lafayette exit averages45,000 cars passing in both direc-tions daily, while Madison sees76,000 and Jefferson sees 14,000.

“Could traffic movement be bet-ter facilitated with a dual right-turn lane instead of a single-laneexit ramp? Those are the types ofsituations/instances the groupneeds to keep in mind.”

Morosi noted that commutertraffic would be able to use the newroad, and pointed to TelegraphRoad in Oakland County carrying80,000 vehicles a day.

“It’s not uncommon for a com-muter boulevard to carry substan-tial volume,” he said.

Major traffic generators for I-375include Greektown Casino-Hotel, BlueCross Blue Shield of Michigan, thesports stadiums, theaters, the river-front and the Renaissance Center andother downtown office buildings.

Development potentialA glance at a map suggests there

is a finite number of areas alongthe route that could be opened fordevelopment.

Steudle in April said the boule-vard idea opens about 12 acres.

The main open land is the unfin-ished Wayne County jail site,which Detroit real estate investorand Quicken Loans Inc. founder DanGilbert is in talks to buy from the

county for $50 million so he canbuild $500 million worth of resi-dential, hotel and retail space onthe 15.5-acre site. That includes thecounty’s other justice facilities ad-jacent to the jail land and theGreektown Casino-Hotel, whichGilbert took ownership control oflast year.

The RFP, in extolling recent in-vestments in the city, directlymentions Gilbert: “GreektownCasino has recently been pur-chased by Detroit businessmanDan Gilbert, who is heavily invest-ing in real estate throughout thedowntown area.”

Matt Cullen, CEO of Gilbert’sRock Ventures LLC, said he’s reserv-ing final judgment on the boulevardconcept until the study is finished.He has previously called himself a“philosophic fan” of converting thefreeway into a boulevard entranceinto downtown that also providesbetter access to the riverfront whilenot splitting the city in half.

Other stretches of I-375 areflanked by Ford Field, Greektown’scasino garage and the historicLafayette Park neighborhood.

A narrow strip of land east of I-375 between the Chrysler servicedrive and Rivard Street is home tothe Horatio Williams Foundation build-ing; Shapero Hall, the former WayneState University pharmacy schoolthat has stood derelict since 2007;the Woodward Academy K-8 school;the Jean Rivard apartment build-ings; and a couple of office build-ings.

The former Stroh’s ice creamplant near the Gratiot/I-375 over-pass has been on the market foryears. Across the street is the 5-acregrass lawn of the Brewery Park of-fice (home of Crain CommunicationsInc.) that was the former StrohBrewery Co.

The soon-to-be-demolished Brew-ster-Douglass housing projects just

northwest of the Fisher Freeway in-terchange could become vacantland open to developers as part ofan at-grade I-375.

“That is a possibility. The grouphas invited the Detroit Housing Com-mission to the table to discuss possi-ble usage of the land if a transfor-mation were to take place,” Morosisaid.

Such freeway-to-boulevard pro-posals are a trend in U.S. cities, andin Detroit it makes sense to betterconnect Lafayette Park to down-town, said Robin Boyle, a professorand chairman of Wayne State Uni-versity’s department of urban stud-ies and planning.

He did caution that commuting isa major question about the propos-al.

“It’s a big job. It’s not a small-scale street closure,” he said. “Itdoes have an impact on folks whohave a pre-determined route. That’sone of the biggest issues, how thiswill impact the commuter traffic.”

The Fisher Freeway inter-change that links I-75 and I-375 isabove and below grade level andlikely would require some sort ofalteration under a boulevard plan,the state said.

“If I-375 were to become a boule-vard, we would have to design ac-cess to and from the freeway. It’stoo early to tell right now what ex-actly that change would be,” Mo-rosi said.

What a new I-375 would look like— or be called, because it no longerwould be an interstate — remainsunknown. What is known is thatthe four-lane highway likelywould be narrowed into a boule-vard, which opens additionalspace for development.

Crain’s reporter Chris Gautzcontributed to this story.

Bill Shea: (313) 446-1626,[email protected]. Twitter:@bill_shea19


I-375: Repair or replace? City seeks experts to analyze project■ From Page 1

TRAFFIC COUNTRecent traffic counts at each I-375exit in Detroit. The numbers, whichhave held steady for the pastdecade, are daily averages fortraffic in both directions passingthat intersection:� 76,000 at Madison� 45,000 at Lafayette� 14,000 at JeffersonSource: Michigan Department of Transportation

COTS: Shelter’s focus on families responds to rising demand■ From Page 3

exclusively to families early nextyear. Single men and women willbe referred to neighboring emer-gency shelters. But COTS plans tocontinue to provide transitionaland permanent, supportive hous-ing for single individuals.

COTS ended its fiscal 2013 June30 with an operating surplus ofmore than $421,000, operating on abudget of $7 million, Johnson said.

“Right now, we get people housed,and that’s a success because they’reno longer homeless,” she said.

But many of them are still de-pendent on subsidies and othertypes of services provided by thegovernment.

“We want to push that wherepeople are working and have in-come that will sustain them ...without being dependent on localgovernment,” Johnson said.

To do so, COTS is talking withlocal health care, K-12 and highereducation, and workforce and ca-reer development providers.

It’s not yet clear how much ad-ditional funding COTS will needto shift its shelter operations tofamilies and to work with them to

help solve the root issues that con-tributed to their homelessness,Johnson said.

That will hinge on what thehealth, education and workforce/ca-reer development agencies bring tothe table, she said.

In the meantime, COTS is talk-ing with its funders, including theMcGregor Fund, Skillman Foundationand Homeless Action Network of De-troit (HAND), which administersHUD funding for COTS transition-al and permanent supportivehousing programs.

“This also opens doors to newtypes of funding because the ap-proach ... is a long-term solution tobringing these collaborative part-ners around the table in a differ-ent way to show different results,”Johnson said.

Last year, there were 19,714homeless people in Detroit, High-land Park and Hamtramck, the ser-vice area covered by HAND, saidExecutive Director Tasha Gray.That was up from 19,213 in 2011.

About 32 percent of the home-less in Detroit and the other twocities last year were families, ac-

cording to HAND.At its Detroit shelter in the

eight-story former Imperial Hotel,COTS provides 140 emergencyshelter beds, four in each of 35former hotel rooms on its thirdand fourth floors. Those roomsand beds will shift to serve fami-lies alone early next year, possi-bly with two families to a roomfor same-sex, single-parent fami-lies.

It’s been a challenge for areashelters to house entire homelessfamilies, said Chad Audi, presi-dent and CEO of the Detroit RescueMission Ministries.

“When we get a father and moth-er and children, we have to sepa-rate the father from the children,”Audi said. “That goes against whatwe’d rather do, but it is the lawand ethical to separate them. ...They have different needs.”

But it’s costly to put those typesof separate areas and bathroomsin place, he said.

Because the number of homelesspeople exceeds the number of avail-able shelter beds in Detroit, somefamilies have been placed in shel-

ters outside of the area, as far awayas Kalamazoo, HAND’s Gray said.

By changing the way it providesservices, COTS is responding tothe needs of the community, andthat’s a good thing, she said.“There’s definitely rising needfrom families.”

But COTS’ planned shift to serv-ing exclusively families in itsemergency shelter could increasedemand on other shelters in thearea and shift the over-occupancyissue even more onto single peopleseeking emergency shelter.

“We’ll have to see how this playsout for the single people COTS pro-vided services for in its shelters,”and for surrounding shelters, Graysaid.

Detroit Rescue Mission beganworking with education, trans-portation and health care organiza-tions in 2008 to help solve the rootcauses of homelessness for all of thepopulations it serves, Audi said.

The success rate for the peoplewho chose to enter its programs tohelp them solve key issues that ledto their homelessness is more than75 percent, he said.

“We’re measuring it by themhaving a job, having a home andno longer in the system — shelteror transitional housing — or re-liant on subsidies.”

Detroit Rescue Mission hashelped a minimum of 80 people tobecome 100 percent independent,some of them single and some ofthem the heads of a family.

With its planned shift, COTS istargeting a population that needshelp, Audi said.

“I don’t think anyone in the cityright now has the capacity to keepthe mother, father and children to-gether in an emergency shelter,”he said.

Detroit Rescue Mission will sup-port COTS’ approach with every-thing it can, “even with donors,”Audi said.

If COTS is willing to take this onand has the capacity to do it, “weshould all chip in,” he said.

“That will help fix the problemof family homelessness down theroad.”

Sherri Welch: (313) 446-1694,[email protected]. Twitter:@sherriwelch



Walbridge: Lyon Twp. land sale stokes I-96 area development■ From Page 1

The Lyon Township land camewith Walbridge’s acquisition of aconstruction company in 1984.

Toyota Motor Corp. consideredthe site for a technical center inthe 1990s, but the deal never closedand several more fell through overthe years.

A Crain’s report in 1999 estimat-ed the asking price for the site atthat time of $100,000 an acre, orabout $51.5 million.

In 2006, Walbridge put the prop-erty back up for sale and even hada purchase agreement in 2007, butthat deal fell through.

Walbridge currently leases theland to a company that subleases itto corn farmers, Rakolta said.

Walbridge has historically usedthe land as collateral in bonding con-struction projects, but Rakolta saidit’s no longer of value in that regard.

“The market has changed, and it’sno longer an asset because it isn’thelping our assurity limit,” he said.“It’s no longer providing returns.”

Walbridge paid $581,519 in prop-erty taxes on the land in 2012, ac-cording to township records.

The property is listed for $65,000per acre, or $33.5 million for theentire site. Industrial plots up to 20acres are listed for $95,000 per acreand 20-plus acres for $85,000 peracre.

Southfield-based Signature Asso-ciates is the commercial brokeragefirm on the property.

Michelle Aniol, downtown de-velopment authority administra-tor and economic development co-ordinator for Lyon Township, saidWalbridge is showing more initia-tive to move the property than ithas in past years.

“We are happy that they’ve takena more active role in marketing theproperty,” Aniol said. “With manu-facturing coming back to Michiganand a better understanding of eco-nomic development, there’s moreopportunity than before.”

Westward ho …Andrew Milia, president of Birm-

ingham-based real estate develop-ment firm Franklin Property Corp.,said Lyon Township is one of thestrongest housing markets in metroDetroit and missing complement-ing commercial development.

Franklin Property is developingthree new-home subdivisions,which will include 217 lots, along10 Mile Road in the township.

“It’s growing because there’savailable land and incoming infra-structure; it’s also a very well-man-aged community,” Milia said.“Those same elements make it at-tractive to commercial develop-ment because people want to livewhere they work.”

Rakolta said Walbridge spent mil-lions of dollars on new water, sewerand electrical to the property adecade ago to “protect our interest.”

The growing interest in LyonTownship is part of the trend of newdevelopment heading westward.

Several foreign-owned automo-tive suppliers announced plans toopen offices in the M-14 corridornear Plymouth Township, North-ville Township and Novi.

German-based conglomerateFreudenberg Group recently an-nounced the opening of its U.S. re-gional corporate center, Freuden-berg North America LP, in PlymouthTownship. Earlier in the month,German-based Hengst GmbH & Co.announced it was opening a tech-nical center in Novi.

The region is becoming known

for research and development ca-pabilities, experts said.

Lyon Township hopes the Wal-bridge land, currently zoned forlight industrial, becomes a high-tech development, Aniol said.

“The township would prefersomething more high tech, in the ad-vanced manufacturing field,” Aniolsaid. “They are going to want thatover a distribution/warehouse op-eration, which doesn’t provide thesame type of jobs, for the tax base.”

Connecting YpsiYpsilanti Township is also hop-

ing Walbridge can spark astronger tax base with a new devel-opment in that community.

Walbridge, which has built sev-eral test tracks and research facili-ties for automakers and suppliersin the region, is part of a conceptfor a new venture in R&D at a for-mer GM plant.

After bidding to scrap the formerGeneral Motors Co. Willow Run Pow-ertrain plant, it is taking steps tobuild a connected vehicle center on

the site, working with Ann ArborSpark.

Connected vehicles use modemsand sensors to wirelessly connectand communicate with infrastruc-ture, other vehicles and systems.Connected systems are used for ac-tive safety systems, diagnosticsand infotainment.

Walbridge Development, a sub-sidiary of Walbridge, proposed toredevelop the majority of the 332-acre site in Ypsilanti Township lastmonth. The plant closed in 2010during GM’s bankruptcy and is oneof many shuttered plants near Ypsi-lanti.

Experts say the project meets aneed for the region to continue todevelop disruptive vehicle tech-nologies as part of its arsenal ofR&D brainpower.

Under the memorandum of un-derstanding, Walbridge wouldown and operate the shared re-search and development center,which will be used by automakers,suppliers and research institu-tions, Bruce Rasher, redevelop-ment manager for the Revitalizing

Auto Communities Environmental Re-sponse Trust, told Crain’s.

Walbridge entered the deal withRACER, which owns the property.The trust was formed by the feder-al government in 2011 to liquidateGM’s holdings and clean up the en-vironmental contamination at its89 sites across 14 states.

Walbridge was approached byAnn Arbor Spark on the connectedvehicle center during the bidprocess.

“Our primary interest was thescrap value of the plant,” Rakoltasaid. “But RACER asked for rede-velopment ideas as part of the pro-posal and Spark had an idea.”

The demolition is expected to becompleted over the next 12 to 18months, as Walbridge and Ann Ar-bor Spark continue to assess viabil-ity and concepts for the site, saidLuke Bonner, vice president ofbusiness development for Spark.

Rakolta is traveling to theNetherlands this week to meetwith European leaders in the con-nected vehicle development. He’salready been to Japan to inspecttheir research developments.

“This idea is in its infancy, andit’s unclear whether there is aneed” for a center, Rakolta said.“What we do know is that no onecompany would need to use the cen-ter for more than five days to 10days a year, so I need to find 50 com-panies who plan to use the facilityin a given year.”

Bonner said Walbridge is takingon significant risk, but the centerwould make Michigan more com-petitive as technology advances.

“This is a very competitive field,”Bonner said. “While Michigan is theheart of the auto industry, pieces ofit are being pulled out to Southernstates, and this is the type of projectthat puts us ahead of the curve.”

Dustin Walsh: (313) 446-6042,[email protected]. Twitter:@dustinpwalsh

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515 acres in Lyon Townshipthat Walbridge Aldinger plansto sell.

BY AMY HAIMERL


America is about to meet PureDetroit.

American Express selected the 15-year-old seller of Detroit parapher-nalia — such as its eponymousT-shirts and other swag — as oneof six companies it’s featuring aspart of its Small Business Satur-day/Shop Small campaign.

The financial services companyfilmed a two-minute video tellingPure Detroit’s story, which will bea part of its marketing efforts that

debut today. “It’s going to be blasted out

through their digital platforms,”said Ryan Patrick Hooper, PureDetroit’s creative director. “Theyare estimating about 2 millionviewers through digital media andsocial platforms.”

It inspired Pure Detroit to createa shop-small campaign in the city.Company officials already hadbeen thinking about developingsomething with all the retailers inthe Fisher Building to draw moreshoppers. But when AmEx con-tacted them, they realized they

could be thinking bigger.So they created the Detroit

Small Business Passport, a shop-local campaign that gives cus-tomers discounts at 18 area retail-ers.

“We wanted to tie together morebusinesses in the community, notjust the Fisher Building, and makesomething like a passport so youare globetrotting in your neighbor-hood,” Hooper said. “We wanted togive it a worldly feel.”

The Detroit Small BusinessPassport works just like a regularpassport: Shoppers get a stamp —

and a discount — each time theyvisit a participating retailer,which unlocks deals at otherstores.

Passports are available startingtoday at any one of Pure Detroit’sthree locations: Renaissance Cen-ter, Guardian Building or FisherBuilding. The passports are goodthrough Jan. 31, but Hooper is al-ready thinking about how to ex-pand the program.

“I think you’ll see this become ayear-round kind of program,” hesaid. “Detroit small-business own-ers look out for each other natural-

ly. It’s exciting to be a small busi-ness and say, ‘Let’s help each otherand do something positive and doit all together.’ ”

Participating in the holiday-sea-son passport are Vera Jane, StellaGood Coffee, Human, RunDetroit, CassCorridog, Nest, City Bird, Detroit Hard-ware, Source Booksellers, Emily’sFashion Place, Todd’s Facets & Jewel-ry, Detroit Athletic Co., Workshop,Hugh, Nora, Detroit Gallery of Contem-porary Crafts and Rowland Café.


Pure Detroit provides passport to shop-local campaign

The ripple effect from Wayne County’s failed jailproject in downtown Detroit is creating challengesfor contractor Walbridge Aldinger Co.

Wayne County and its building authority filed a civ-il suit Thursday against Walbridge’s joint venturewith a Pittsburgh contractor, Walbridge dck, along withDearborn-based architecture firm Ghafari Associatesand Los Angeles-based AECOM, the project manager.

The county seeks to recover $154 million in costsfrom the unfinished jail on Gratiot Avenue.

Wayne County had already spent more than $130million on the jail project when it learned the pro-ject cost had escalated to more than $267 millionfrom a previous estimate of $220 million, Gary Au-gust, partner at Farmington Hills-based Zausmer,Kaufman, August & Caldwell PC and lead litigationcounsel for the county, told Crain’s.

Walbridge dck, the venture between Walbridgeand Pittsburgh-based Dck Worldwide LLC, told thecounty in May via a final guaranteed maximum pricestatement that the jail project, originally set for com-pletion in mid-2014, would actually cost nearly $270million, according to the lawsuit and August.

The building authority suspended work in Juneand terminated the price agreement in August.

Walbridge CEO John Rakolta Jr. is speaking out

against the county, telling WWJ-AM 950 on Friday thatthe jail debacle has damaged Walbridge’s reputation.

Walbridge signed a nondisclosure agreement with-out much thought, but “unfortunately it turned outthat while the jail spun into disarray, we were unableto defend ourselves or to comment publicly,” Rakoltasaid. The disclosure agreement is now terminated.

“We notified the county and AECOM throughmultiple forms whenever there was a legitimateprice increase that they (had) asked us to price,”Rakolta said. “We kept a running tally of those in-creases, and we only proceeded after receiving writ-ten authorization to proceed. In sum, we followedour contract and refused to proceed when it becameapparent that the cost commitment was going to ex-ceed the projects approved.”

Rakolta said Walbridge also lost construction con-tracts tied to the M-1 Rail project due to the publiccriticism.

“We were selected for that project, but when thebad press reports came out, M-1 chose to begin nego-tiations with another contractor to avoid being sub-jected to public criticism,” he told WWJ. “So now,many of the jobs and revenues are going to out-of-state contractors instead of staying in state.”

— Dustin Walsh

Effects of jail project dog Walbridge;civil lawsuit filed against joint venture



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CRAIN’S DETROIT BUSINESS IS PUBLISHED BYCRAIN COMMUNICATIONS INC.CHAIRMAN Keith E. CrainPRESIDENT Rance CrainTREASURER Mary Kay CrainExecutive Vice President/OperationsWilliam A. MorrowExecutive Vice President/Director of StrategicOperations Chris CrainVice President/Production & ManufacturingDave KamisVice President/Chief Human Resources OfficerMargee KaczmarekG.D. Crain Jr. Founder (1885-1973)Mrs. G.D. Crain Jr. Chairman (1911-1996)EDITORIAL & BUSINESS OFFICES:1155 Gratiot Ave., Detroit MI 48207-2732; (313) 446-6000Cable address: TWX 248-221-5122 AUTNEW DETCRAIN’S DETROIT BUSINESS ISSN # 0882-1992 ispublished weekly, except for a special issue the thirdweek of August, and no issue the third week ofDecember by Crain Communications Inc. at 1155Gratiot Ave., Detroit MI 48207-2732. Periodicalspostage paid at Detroit, MI and additional mailingoffices. POSTMASTER: Send address changes toCRAIN’S DETROIT BUSINESS, CirculationDepartment, P.O. Box 07925, Detroit, MI 48207-9732. GST # 136760444. Printed in U.S.A. Entire contents copyright 2013 by CrainCommunications Inc. All rights reserved.Reproduction or use of editorial content in anymanner without permission is strictly prohibited.

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Karmanos: Cancer center stronger with McLaren■ From Page 1

The business modelBepler said McLaren also will

help Karmanos expand its geo-graphic reach for patients seekingadvanced patient care by referringcancer patients to Karmanos’ cut-ting-edge research programs notgenerally available at communityhospitals.

Under the agreement signed lastweek, Karmanos — one of the na-tion’s 41 comprehensive cancer cen-ters — agreed to be acquired byMcLaren for an unspecifiedamount. The transaction also pro-vides Karmanos with “a substantialcapital investment over a multiyearperiod” to fund clinical trials, basicand translational research pro-grams, said Bepler.

“We will jointly develop careplans so patients who are not ableto come to Detroit will be cared for(at McLaren hospitals),” Beplersaid. “It is difficult for (extremelysick) patients to travel more than30 or 40 miles.”

Finding oppositionBut the plan doesn’t come with-

out opposition; board members ofDetroit Medical Center and WayneState University, which have busi-ness and clinical relationships withKarmanos, have voiced dissent.Sources say Wayne State and DMCmay react to the change by expand-ing relationships with other healthorganizations.

The agreement, though, is basedon Karmanos continuing its long-standing relationships with theWSU School of Medicine and theDMC, from which it leases space.Karmanos does not plan to movefrom the DMC campus, Bepler said.

DMC CEO Joe Mullany saidDMC, which sold its oncology op-

erations to Kar-manos in 2005,will explore de-veloping addi-tional oncologyaffiliations withother providers.DMC was ac-quired by for-profit TenetHealthcare Corp.in June after

Vanguard Health Systems, anotherfor-profit chain, took over DMC in2012.

“We are very disappointed in thedecision of the (Karmanos) boardand the way it was handled,” Mul-lany said. “We are aware severalboard members are opposed. (Theaffiliation) is detrimental to cancercare in Detroit.”

Sources have told Crain’s thatWayne State medical school offi-cials were not consulted about thedeal and felt blindsided by it.

Voting against the agreementwere Karmanos’ Wayne Stateboard members: Valerie Parisi,M.D., Wayne State’s medical schooldean; M. Roy Wilson, Wayne Statepresident; and Debbie Dingell,Wayne State Board of Governors’chair, sources told Crain’s.

Wayne State officials declined tocomment, as did several otherlarge cancer hospital providers inSoutheast Michigan. They includeHenry Ford Health System and theUniversity of Michigan Health System,which operates the state’s only oth-

er comprehensive cancer center.Sources also told Crain’s that

Wayne State could explore a closerrelationship with Henry Ford. Butsources said it was unlikely WayneState would sever its ties with Kar-manos or withdraw its comprehen-sive cancer center institutionalsponsorship.

Bepler confirmed that a smallnumber of Karmanos’ 50 boardmembers — several representingWayne State — expressed concernabout the agreement and votedagainst it. McLaren’s board unani-mously approved the agreement,said Phil Incarnati, McLaren’s CEO.

“Some people are afraid of the fu-ture, the unknowns,” he said. “Thisis a step forward” for Karmanos.

Opportunity for growthIncarnati said the nation’s only

multihospital system with a com-prehensive cancer center can now

grow financiallystronger and of-fer patients carealternatives aspharmaceuticaland medical de-vice companiescontract withthe system totest their prod-ucts.

Cancer is thesecond-leading cause of death inthe U.S., and some 20,570 peopleare predicted to die this year inMichigan from cancer. In 2013, theAmerican Cancer Society estimates,57,560 people in Michigan will benewly diagnosed with cancer, in-cluding 8,140 with breast cancer,9,490 with prostate cancer, and8,250 with lung cancer.

Sources told Crain’s thatMcLaren has pledged to spend $80million over four years to also up-grade Karmanos’ downtown hospi-tal and expand its two outpatientcenters at the Weisberg Cancer Centerin Farmington Hills and the MonroeCancer Center, a joint venture withMercy Memorial Hospital System andToledo, Ohio-based Promedica.

“We will double the size of theWeisberg Center, add new radia-tion oncology equipment andmake major investments in clini-cal trials,” Bepler said.

Nick Karmanos, the son of Bar-bara Ann Karmanos, said his fami-ly fully supports Karmanos’ deci-sion to join McLaren. Karmanos’

mother is Barbara Ann Karmanos,the cancer center’s namesake, whodied from breast cancer in 1986.

“Our commitment to Detroit hasnever been stronger. The effortswill be centered here forever,”Karmanos said. “My family is ex-cited, and this (affiliation will)strengthen the mission for ad-vanced cancer care in Detroit.”

The acquisition isn’t McLaren’sfirst attempt at combining forceswith another organization to ex-pand its cancer care business.

Justin Klamerus, M.D., presidentand medical director of McLarenCancer Institute, said McLaren hasbeen building its systemwide can-cer program the last decade withMichigan State University, but it wasreally only the past three yearswhen everything began to gel. TheMSU partnership ended last year.

“Our cancer service line is themost integrated one we have withMcLaren,” Klamerus said. “Mostof our oncologists are employed(22). We are aligned with best prac-tice guidelines” and electronicmedical record systems.

Klamerus said McLaren has agrowing network of 14 outpatientcenters that provide medical on-cology. Centered around its hospi-tals, other centers are planned, hesaid.

“This partnership will add greatquality and infrastructure,” hesaid. “Patients will get care wherethey live, and we will integrate thatwith academic programs throughKarmanos” and Wayne State.

On its own, Klamerus said, itmight take two decades for a com-munity health system like McLarento build what Karmanos bringswith its subspecialty expertise, clin-ical trial portfolio and Wayne Stateaffiliation.

“All the physicians are excitedabout this because it allows us allto take care to the next level ofopinion,” he said, adding it ismuch easier to collaborate on med-ical consultations.

“You are talking with your part-ners, you are sending emails, mak-ing a phone call” and conductingvideo conferences, Klamerus said.

Why now?There are two reasons Karmanos

sought a larger system to join, offi-cials said. First, complex clinicaltrials require a larger populationbase to draw upon to generate

enough patients to test drugs andtreatments. Second, Karmanos hasbeen struggling financially.

In November 2012, Crain’s re-ported that Karmanos projected $40million in losses over the next 10years under health care reform be-cause of Medicare reimbursementcuts. Hospitals have accepted $155billion in cuts under the AffordableCare Act.

Bepler told Crain’s that Kar-manos could be forced to reduceresearch and eliminate some mon-ey-losing services to avoid havingits projected net income of $4 mil-lion for 2013 wiped out.

Karmanos has used its slim profitmargins each year to help fundmany of its more than 700 cancer re-search programs and clinical trials.

Over the past year, Karmanoshas taken a number of steps to re-duce costs. It has ended shared ser-vices contracts with DMC in a num-ber of areas, including food service,laboratory, security, respiratorycare, environmental, cleaning andintensive care.

Last year, Karmanos sold its 20-year-old hospice program to Resi-dential Home Health in MadisonHeights for an undisclosed price.

But Bepler said Karmanos cutexpenses as much as it could on itsown.

“We couldn’t reduce costs any-more. You have to maintain yourmedical staffs. We haven’t hadraises in two years. You need topay competitive salaries or peoplewill leave,” Bepler said.

So, starting 18 months ago, Be-pler said he and Incarnati startedtalking about research partner-ships and other joint activities.Those talks ramped up recentlywhen the two CEOs finally agreedon a deal that would make Kar-manos McLaren’s 11th hospitaland provide a shot of capital.

“We realized we could do morefor our patients” as a single sys-tem, Bepler said.

Karmanos also entertainedmany offers from rival health sys-tems in Michigan, but none offeredthe complete package as didMcLaren, Bepler said.

“We talked with everybody inthe state,” said Bepler, declining toname any. “Maybe others will joinus.”

Sources say potential suitors in-cluded DMC, Henry Ford, St. JohnProvidence Health System, TrinityHealth and Beaumont Health System.

Incarnati said McLaren willbring additional economies ofscale to Karmanos.

“There are substantial opportu-nities to reduce costs,” he said. “Wehave done this elsewhere (with oth-er hospital acquisitions), and wefully expect additional savings.”

Bepler said cost savings will notcome from employee layoffs or re-ductions in clinical care services.

“We are talking about efficientlevels of care. It is impossible tosay what the numbers (percentcost reduction) are,” Bepler said.“We expect to reduce equipmentcosts, drug costs.

“The people who work here arevaluable, the valet parkers, thenurses … that is what this is allabout.”

Jay Greene: (313) 446-0325,[email protected]. Twitter:@jaybgreene

MullanyIncarnati

The Barbara Ann Karmanos Cancer Institute plans, through its agreement withMcLaren Health Care, to expand its geographic reach for patients seekingadvanced patient care beyond its Detroit facility.



Kickstarter pushrelights holidaycelebration inRochester

he Rochester Down-town Development Au-thority turned to

crowdfunding to success-fully raise the $27,000 need-ed for a main part of its an-nual Big, Bright LightShow through a Kickstartercampaign that ended Fri-day. The campaign fol-lowed an increase in instal-lation costs and a decreasein the budget for the De-cember holiday light show.

ON THE MOVE� Richard Gilfillan, M.D.,

was named president andCEO of Livonia-based CHETrinity Health, effective Nov.18. Gilfillan, 64, was direc-tor of the Center for Medicareand Medicaid Innovation. AtCHE, he will succeed JudithPersichilli, interim leader ofthe system formed in Maythrough the merger of Trini-ty Health and Catholic HealthEast.

� Canton Townshipmanufacturing companySchuler Inc. named SteveHealy as CEO, presidentand chairman. Healy, 53,was vice president and gen-eral manager for Farming-ton, Conn.-based Otis Eleva-tor Co. from 2009 to January2013. Former Schuler Presi-dent and CEO Tim McCaugh-ey will remain board vicechairman through March2014 and a board memberthrough March 2015.

� Former Detroit FreePress reporter and editorDavid Zeman was named ed-itor of Ann Arbor-basedBridge Magazine. Zemanmost recently was directorof content and communica-tions at Royal Oak-basedEducation Trust-Midwest, aneducation policy thinktank. He replaces DerekMelot, who left Bridge lastsummer.

COMPANY NEWS� BAE Systems Inc. has a

new U.S. Army contractworth $195 million startingnext year for a variant of itsM109 self-propelled how-itzer, under a program engi-neered and managed out ofits Sterling Heights offices.The award had been expect-ed since the federal DefenseAcquisition Board decided re-cently to proceed with aninitial production run.

� Taubman Asia, a sub-sidiary of Bloomfield Hills-based Taubman Centers Inc.,broke ground on a 4.5 mil-lion-square-foot shopping

center in Hanam City,South Korea. Taubman isinvesting $330 million inthe $1.1 billion Hanam UnionSquare project.

� Johnson Controls Inc.said it would explore op-tions, including a divesti-ture, for its unprofitablePlymouth-based automo-tive interiors unit, Automo-tive News reported.

� At the last minute,Chevrolet and Major LeagueBaseball canceled a “Silver-ado Strong” in-stadiumpromotion — a spot createdby Commonwealth in Detroit— during Game 5 of theWorld Series in St. Louisdue to fears it would strikefans as too similar to the“Boston Strong” reliefmantra. The Boston Red Soxdefeated the St. Louis Cardi-nals in six games.

OTHER NEWS� The Wayne County Com-

mission said it wantsspecifics before it votes ona proposal to sell the unfin-ished 15.5-acre jail site indowntown Detroit for $50million to Dan Gilbert’s RockVentures LLC.

� Detroit EmergencyManager Kevyn Orr testifiedat the city’s bankruptcy tri-al that he would have lis-tened to any proposal topreserve retiree pensionsbefore the city’s bankrupt-cy filing last summer, butthat he probably would nothave agreed to a deal.

� Former Detroit Tigersmanager Jim Leyland wasnamed grand marshal forThe Parade Co.’s Thanksgiv-ing parade in Detroit Nov.28. Meanwhile, Tigers slug-ger Miguel Cabrera under-went core muscle repairsurgery in the lower ab-domen area and is expectedto be ready for spring train-ing.

� Michigan’s businessclimate and economy haveimproved in the past few

years, but not enough tomake Michigan a top-10state, said a report from theBusiness Leaders for Michi-gan.

� New York City-basedFitch Ratings Ltd. affirmedMichigan’s AA credit rat-ing on its roughly $2 billionof general obligation debt.It kept the rating outlook atstable.

� The rate that substan-tially determines business-es’ cost for workers’ com-pensation insurance willdrop an average of 8.3 per-cent next year, the state’sDepartment of Licensing andRegulatory Affairs an-nounced.

� The Michigan GamingControl Board said it willdeny charities a license tohost millionaire parties atPocket Aces Charity PokerRoom inside Foutch’s Pub &Grill in Flint Township, the15th location where charitypoker games have been ter-minated for illegal gam-bling and violating otherstate laws since 2010.

� Michigan’s nearly 1.8million recipients of gov-ernment food assistance be-gan receiving less aid Nov.1, when extra benefits thatwere part of the 2009 feder-al stimulus program endednationwide, said the stateDepartment of Human Ser-vices. Cuts will vary de-pending on income, house-hold size and expenses.

� The Michigan EconomicDevelopment Corp. launchedits second “Michigan Mo-ments” photo contest, withthe winning photo to be fea-tured in the 2014 PureMichigan Travel Guide.Photos can be submittedthrough Nov. 10 on thePure Michigan Facebookpage or through Twitter andInstagram with the hashtag#puremichigancontest.From Nov. 11-17, Facebookfans will be able to vote forthe winner from 10 final-ists.

akland Press Execu-tive Editor GlennGilbert last week

apologized in print for anOct. 27 story about the 35thanniversary of actor andformer Birmingham resi-

dent TimAllen’s co-caine ar-rest.

The sto-rypromptedletters tothe editorexpress-ing out-rage or

disappointment, and Allen’smother, Martha Bones ofBloomfield Hills, also com-plained to the newspaper.

“Don’t blame the writer.Blame the editor — me — forallowing it to be published.We apologize to MarthaBones and anyone else of-fended by the story,” Gilbertwrote Oct. 30 in a story aboutthe reader blowback.

The newspaper also re-moved the story from itswebsite. Removing stories,or “scrubbing” them, is typ-ically frowned upon in jour-nalism circles in favor ofcorrections and updates, butGilbert said it was a casewhere important contextwas missing.

“The original story wastaken down. There wasnothing factually wrong,but we didn’t feel, upon re-flection, that it gave enoughcontext. We’ve gotten adozen calls and emails andhalf a dozen letters,” Gilberttold Crain’s on Friday.

The Oct. 27 story recount-ed Allen’s 1978 cocaine arrestat the Kalamazoo/Battle CreekInternational Airport and subse-quent two years in a federalprison in Minnesota.

Bones told the paper thatthe story was an “unneces-sary stab” at her son.

Allen, 60, parlayed hisstand-up comedy routineinto stardom on the popularABC sitcom “Home Im-provement” and a movie ca-reer. He has been a notedsupporter of Michigan’ssports teams, and is thevoice of the Pure Michigantourism campaign.

Comerica gets Tigers bumpDallas-based Comerica

Bank got an estimated $25.8million worth of media ex-posure thanks to the Detroit

RUMBLINGS WEEK ON THE WEBF R O M W W W . C R A I N S D E T R O I T . C O M , W E E K O F O C T . 2 6 - N O V . 1

Allen rehashno comedy fornewspaperO

TTigers’ five postseasongames in 2013 at ComericaPark this season.

That was second-most forall postseason baseballteams with naming rightsdeals, after an estimated$58.8 million for St. Louis-based Anheuser-Busch Com-panies Inc. for its nine-gameexposure of the St. Louis Car-dinals’ Busch Stadium.

The estimates come fromAnn Arbor-based JoyceJulius & Associates Inc.,which measures the impactof sponsorships across allforms of media.

Lunch launches economicdevelopment initiative

McCormack Baron SalazarDevelopment Inc. Chairman

and CEO Richard Baron willbe the guest speaker at aThursday lunch event cen-tered on the launch of the GoEast economic developmentinitiative promoting the re-vitalization of Rivertown,Lafayette Park, the Villages,the Marina District and Jef-ferson-Chalmers neighbor-hoods in Detroit.

McCormack Baron is thedeveloper behind the pro-posed $55 million Rivertownmixed-use residential andretail development in thearea along Atwater andFranklin streets betweenthe Dequindre Cut Green-way and Riopelle Street.

Jefferson East wasformed earlier this yearwhen the Jefferson East Busi-ness Association and the EastJefferson Corridor Collabora-tive merged. Jefferson Eastfocuses on economic devel-opment along Jeffersonfrom downtown to AlterRoad. Crain’s PublisherMary Kramer is the emcee forthe Thursday event.

Tickets for the noon-1:30p.m. lunch at Stroh RiverPlace are $50.

Call (313) 331-7939, ext. 310to purchase.

A timely farewell to a longtime Crain employeeWhen someone works for

your company for 47 years,you tend to have a lot ofquestions for him. One ofthem probably shouldn’tbe, “What are you going todo now?” Now … really.Forty-seven years?

Larry Williams was part ofthe deal when Slocum Pub-lishing Co., owner of Auto-motive News, was sold toCrain Communications Inc.in 1971. So if you want toget technical about it, Lar-ry was part of this compa-ny before a Crain was.

For the entirety ofCrain’s Detroit Business’nearly 28 years, no one hasbeen there at the end ofFriday deadlines for asmany issues as LarryWilliams. The staff box onPage 25 lists him as “pro-duction supervisor,”

which is accurate. But con-sidering that Larry beganin the era of Linotypes andhot lead and metamor-phosed into something of atechnology geek, that fallsa bit short as descriptionsgo. So let’s try to rectifythat before Larry puts thatShinola you see in the pho-to above on his wrist.

Companies talk a lotabout their brand. CrainCommunications has abrand. People like LarryWilliams are our brand.Or so we hope as we go for-ward, without him.

This is the last page wegave Larry on his last dayputting the issue “to bed.”On time. So he’s happy.And on this, Larry’s lastpage, we at Crain’s wanthim to know that we hopethe happiness never ends.

Larry Williams (right) receives a Shinola watch from Keith Crain(center), Crain Communications Inc. chairman and editor-in-chief of Crain’s Detroit Business, and KC Crain, vice president,group publisher for Crain.

Allen

SUMMIT ON HEALTH CARE

The annual Health Care Leadership Summit, hosted byCrain’s Detroit Business, drew 430 of metro Detroit’s healthcare executives to the San Marino Club in Troy last week.Keynote speaker Maureen Bisognano (above), president andCEO of the Institute for Healthcare Improvement, offeredideas on how innovation can lower costs and improve healthcare across the country. Other speakers addressed healthcare reform and wellness programs in the workplace.


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