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Page 1
®
www.crainsdetroit.com Vol. 26, No. 9
MARCH 1 – 7, 2010
$2 a copy; $59 a year
©Entire contents copyright 2010 by Crain Communications Inc. All rights reserved
Page 3
State budget relies on
funding assumptions
Marygrove expands sports,
sees enrollment expand, too
Inside
Want to give an intern an
award? See Mary Kramer’s
column, Page 7; story,
Page 8
Focus: Law
Top verdicts, settlements
of 2009,
Pages 11-16
Blues membership
off 6% amid layoffs
Investment
team may
seek Pistons
Some small companies BLUE CROSS MEMBERSHIP UPS, DOWNS
Cross Blue Shield of Michigan is losing
jump to other insurers Blue
members overall while posting a slight increase
Appleby: ‘We would
definitely take a look’
in the number of individual members:
BY JAY GREENE
CRAIN’S DETROIT BUSINESS
Individual:
562,000
Group:
4.14 million
Largest Asian-owned,
Hispanic-owned and Native
American-owned
businesses, Pages 20-21
This Just In
State board OKs forms
for casino petition drives
The Board of State Canvassers on Friday approved
petition forms for two groups
seeking casinos to move forward with drives to put the
measures on Michigan’s November ballot.
One measure, proposed by
Hazel Park-based Racing to
Save Michigan, would allow
the Michigan Gaming Control
Board to issue licenses to up
to eight new Michigan casinos, five of which would be at
horse racetracks that in 2009
NEWSPAPER
See This Just In, Page 2
BY BILL SHEA
CRAIN’S DETROIT BUSINESS
Blue Cross Blue Shield of Michigan lost 236,000
members in 2009, the single largest decline of
Total:
Total:
policyholders in the past 10 years.
4.46 million
4.69 million
Primarily due to the poor economy and lay2008 2009
offs in the auto industry, total membership in
Blue Cross group accounts dropped 6 percent,
Source: Blue Cross Blue Shield of Michigan
bringing membership in groups and individual
Sixty percent of the losses were in self-funded
products to 4.46 million, down from 4.69 million
in 2008, said Ken Dallafior, Blue Cross’ senior companies, and 40 percent were in the smallvice president for group sales and corporate group market of companies less than 100 employees, Dallafior said.
marketing.
“Some small groups went out of business or
“We had anticipated significant membership
losses because of the difficult economic times,” no longer offered coverage,” he said. “(Those
Dallafior said. “Most of the in-group losses are employees) either went to the individual policies or went uninsured.”
due to shrinking workforces
In addition to the poor
in the automotive sectors.”
economy, Mike Krause,
During the fourth quarter
president of Krause Benefits
of 2009, Michigan’s unemin Farmington Hills, said
ployment rate climbed to
Blue Cross also has lost
14.2 percent from 9.5 persmall-group members becent in the same period of
cause other insurers have
2008. Southeast Michigan’s
offered lower prices.
unemployment rate in“Blue Cross is not price
creased to 15.7 percent
competitive. In terms of
from 9.9 percent during the
cost of products, Blue
same periods.
Cross has the most expenDallafior said Blue Cross
sive products in Michigan,”
is projecting additional
Krause said. “I have written
membership losses this
year, although in smaller
numbers.
Ken Dallafior, Blue Cross
See Blue Cross, Page 26
anticipated
“ We had significant
Crain’s Lists
Individual:
571,000 (+1.6%)
Group:
3.89 million (-6%)
membership
losses because
of the difficult
economic
times.
”
The Detroit Pistons may become the target
of an investment consortium that includes
the owners of three U.S. pro sports franchises and is publicly fronted by a Rochester businessman.
“It’s something that
we would definitely
take a look at,” said
Andy Appleby, chairman and CEO of marketing and management firm General Sports
and Entertainment L.L.C.
Appleby, who was Wilson
previously an executive
for the company that
manages the Pistons, is
an investor and chair- Ilitch move: Hiring
man of Derby County F.C. Tom Wilson seen
as step toward new
Ltd., an English profes- Red Wings venue,
sional soccer team (and Page 28
its 33,597-seat Pride
Park Stadium) that he
co-owns with a group that bought the team
for $100 million in January 2008.
The group wants to buy a team in one of
the U.S. major leagues, for $200 million to
$300 million, within the next 12 months, Ap-
ARENA EFFORT
See Pistons, Page 28
Plans for college prep high schools get $13M kickoff
BY SHERRI WELCH
CRAIN’S DETROIT BUSINESS
Four Michigan foundations
have committed $13 million to
open the first of 35 new college
preparatory high schools planned
for metro Detroit over the next
eight years.
Ann Arbor think tank Michigan
Future Inc. is heading up an effort to
provide startup funds and technical assistance to the new high
schools.
The Battle Creek-based W.K. Kel-
logg Foundation and three metro
Detroit foundations — the Skillman
Foundation, Kresge Foundation and
McGregor Fund — have committed
initial funding.
“The impetus
for this was the
foundations …
wanting to do
this to scale …
rather than doing one school at
a time like they
had been doing,” said MichiGlazer
gan Future President Lou Glazer.
The foundations felt it was time
to take what the community had
learned from starting a variety of
high schools — such as University
Prep in Detroit and University High
School in Ferndale — and do something big, Glazer said.
With $13 million in initial foun-
dation commitments, Michigan $38 million to open 28 additional,
Future has begun making grants college-prep high schools by 2018.
to open the first of
“Whenever
seven new high
we talk about
schools over the
talent
in
next three years.
Southeast
Those schools
Michigan,
will commit to
we’re always
graduating 85 pertalking about
cent of their stubringing in
dents,
having
new talent. …
85 percent of those
We rarely talk
go on to college and
about growhelping 85 percent
ing our own,” said
of those college stu- Tonya Allen, Skillman Foundation Tonya Allen, vice
dents
stay
in
president of proschool and earn their degrees.
gram at Skillman and chairwoman
Michigan Future and a new of the Michigan Future Schools
high school governing council — governing council. “This is a
composed of representatives from growth strategy for our region —
Michigan Future Schools’ initial we have to prepare young people
funders, Ford Motor Co. Fund, Detroit to be competitive in the new econoParent Network, Cranbrook Schools my.”
and Nataki Talibah Schoolhouse of
See High schools, Page 27
Detroit — hope to raise another
This is
“a growth
strategy
for our
region.
”
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Page 1
Page 2
THIS JUST IN
■ From Page 1
conducted live racing with parimutuel wagering.
The new casinos would be subject to a wagering tax of 30 percent
of their adjusted gross receipts,
the petition language states.
Under the proposal, 75 percent
of the tax revenue would be paid
to the state for deposit into a fund
that would be used for purposes
such as education, job training
and economic development.
Twenty percent of the tax revenue would be paid to the state
for distribution to counties,
based on population. The remainder would go toward county and
local governments where the
casino is located.
The second group, called Michigan Is Yours, proposes to authorize
up to seven casinos. Locations
would be at Detroit Metropolitan Airport and in Detroit, Romulus,
Lansing, Flint, Benton Harbor
and Muskegon.
The petition form states that
casinos would pay a wagering tax
of up to 19 percent on their adjusted gross receipts.
Revenue would go toward the
Michigan Promise scholarship
program, K-12 education, Pure
Michigan tourism campaign, and
local and county governments
housing casinos.
Both measures would amend
March 1, 2010
CRAIN’S DETROIT BUSINESS
The way it was: 1991
Throughout our 25th-anniversary
year, Crain’s will use this space
to look at interesting items from
past issues.
It’s superior in selection,
“
and the people
were so doggoned nice.
Not syrupy sweet, but
informative and helpful.
”
Bob Young,
Wal-Mart shopper
From a July 1, 1991, article about
Wal-Mart’s growth in Michigan
markets. Young was interviewed at
the newly opened store in Port
Huron. It was one of the first
locations where Wal-Mart, Target
and Troy-based Kmart faced off.
Michigan’s constitution and require 380,126 valid signatures to
go on the ballot.
The deadline for backers to submit signatures is July 5.
— Amy Lane
Oberweis Ice Cream adds store
Oberweis Ice Cream and Dairy
Stores will open its second Royal
Oak location in March with a new
store at 32808 Woodward Ave.,
south of 14 Mile.
The opening of the store marks
the Aurora, Ill.-based chain’s
fourth store in metro Detroit and
its 49th location nationwide.
It is the company’s second Royal Oak store, with the first near 11
Mile and Main Street.
— Daniel Duggan
Sen. Thomas lends support to
metropark plan for fairgrounds
State Sen. Buzz Thomas, D-Detroit, is expressing tentative support for a proposal that would continue the Michigan State Fair under
the Huron-Clinton Metropolitan Authority.
The authority’s board of commissioners voted last week to explore signing a long-term lease
with the state for the fairgrounds, creating a metropark at
the site and continuing the state
fair.
The commissioners asked findings to be prepared in 60 days.
In a letter to constituents,
Thomas — in whose district the
fairgrounds are located — said
he’s watching the issue closely.
But the senator cautioned that
any plan to create a metropark at
the fairgrounds must have funding, and said that funding must
not come from a tax increase.
— Nancy Kaffer
Hotel saves liquor license
Last Monday, the Rochester
City Council set a March public
hearing to recommend the Royal
Park Hotel in Rochester lose its
liquor license, citing that the
high-end hotel had not paid its
$110,000 tax bill for 2008.
Four days later, on Friday, the
hotel paid its taxes. Rochester
City Manager Jaymes Vettraino said
the public hearing will still be
held, but the only reason to hold it
was the tax issue, which is no
longer valid.
A phone message was left Friday for Jay Haratsis, general manager of the hotel, but the call was
not returned in time for deadline.
— Daniel Duggan
its appeal of Edwards’ Feb. 1 decision that the company has three
weeks to submit a plan and
timetable to remove the structures.
Bridge owner Manuel Moroun
wants to build a new, larger span
adjacent to the 81-year-old Ambassador Bridge and the construction ruled illegal was part of that
project.
MDOT filed suit in October
saying that Detroit owns the land
on which the structures were
built, and that Moroun’s projects
were illegal and not in accordance with the $230 million Ambassador Gateway project that
added new ramps and connections to the bridge and adjoining
highways.
— Bill Shea
Legal battle over Ambassador
Bridge structures continues
TV shops added to Art Van stores
The Detroit International Bridge
Co. on Feb. 19 sought from the
Michigan Court of Appeals a stay
pending appeal of Wayne County
Circuit Judge Prentice Edwards’
ruling that said the new duty-free
store, toll booths and fuel pumps
at the Ambassador Bridge were
built illegally and must be torn
down.
The court hasn’t ruled on the
stay and no action has been scheduled, said Leslie Jenkins, the court’s
public information assistant.
The bridge company asked for
the stay at the same time it filed
Warren-based furniture retailer Art Van Furniture has made a
deal with a California-based company to sell TVs in the 31 furniture stores around the state.
In March, Paul’s TV will open
small stores within five stores:
Warren, Lakeside, Westland, Royal Oak and Taylor.
The remaining 26 stores will be
completed by September, the company said.
Paul’s TV is expected to hire
150 new employees as part of the
sales team for the state.
— Daniel Duggan
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Page 1
CRAIN’S DETROIT BUSINESS
March 1, 2010
Page 3
State budget seeks federal help
Concern is finding a long-term solution
BY AMY LANE
CAPITOL CORRESPONDENT
LANSING — There are lots of
Michigan eyes on Washington right
now, on the lookout for a key chunk
of the state’s proposed budget.
The approximately $514 million
the state would receive if Congress
extends a higher matching rate for
Medicaid is of keen interest to
Michigan health and human services groups, who worry that if the
money isn’t forthcoming there will
be more cuts to Medicaid provider
reimbursements or patient services.
It’s just one of the assumptions
Gov. Jennifer Granholm used to
base her proposed budget on.
Extending Michigan’s sales tax
to consumer services would help
the state avoid what might otherwise be a $255 per-pupil cut in K-12
education, and a controversial tax
on physicians’ gross receipts
would help the state draw down
more federal money for its
strained Medicaid program.
Those three measures are major
components of how Michigan
would close an otherwise $1.5 billion budget gap in the fiscal year
that starts Oct. 1.
To some, they are a necessity.
Sharon Parks, president and
CEO of the Michigan League for Human Services, said the federal Medicaid match funding, the physi-
cian’s tax and the consumer services tax “are three things out
there that need
to happen, in order to salvage
services.”
But beyond
the items’ merits, or their
chances of being
passed, is the
question of how
far they and othParks
er proposals in
the governor’s budget go toward
See Budget, Page 29
Inside
United Way plans to help
schools feed more kids,
Page 17.
Company index
These organizations appear in this week’s Crain’s
Detroit Business:
Marygrove to build center for new sports
Smaller schools
use athletics
to win students
East side of Marygrove campus
BY RYAN BEENE
CRAIN’S DETROIT BUSINESS
Marygrove College plans to break
ground this month on a 10-acre
outdoor athletic development on
its Detroit campus at 8425 W. McNichols Road.
The site — to include a running
track, soccer field and golf practice
facility — will be the cornerstone
of Marygrove’s expanding intercollegiate athletic program and
highlights the college’s recent
growth.
Marygrove’s enrollment of oncampus undergraduate students
hit more than 1,300 in the 2010 winter semester, up 10 percent from
the same period last year and up 25
percent since 2006, said Marygrove
President David Fike.
ad
Ro
ls
ho
Nic
Mc
Planned golf
practice facility
Planned
soccer field
and track
.
wn Ave
Greenla
COURTESY OF GUNN LEVINE ASSOCIATES INC.
Marygrove College plans to use the 10-acre site marked by the dotted lines to
expand its athletic offerings as shown in this rendering.
“We’re up the highest we’ve
been in 15 years in on-campus (enrollment), and we’ve seen a 25 percent growth in on-campus undergrads just since four years ago,”
Fike said.
Helping to spur that growth re-
cently has been the college’s expanding intercollegiate athletics
program.
Marygrove launched five new
athletics teams in 2009 — men’s
and women’s soccer, men’s and
women’s cross country, and
women’s volleyball, adding 60 student athletes in the fall 2009 semester. Men’s and women’s golf programs are being developed.
Marygrove competes in the National Association of Intercollegiate
Athletics.
“We understood that in this day
and age many high school students, transfer students, like the
idea of continuing to play their
sport of choice while they are focused on getting their college education. And we made a commitment as a college that we would
work to expand those opportunities,” Fike said.
Fike also credited new academic
programs — forensic science,
dance, criminal justice and a
health degree that leads to an accelerated nursing program — with
fostering the enrollment growth.
“It’s important to understand
that Marygrove’s growth is really
a holistic and integrated strategy
that’s bringing more students to
Detroit,” Fike said.
See Marygrove, Page 27
I-94 industrial park: An idea whose time is past?
Cyr
ok
lbro
Ho
Huber
St.
f
Mt. Elliott
nif
Ca
Detroit
City Airport
il
8
t
nan
Co
St.
75
I-94 Industrial
Park
in
Aub
Let’s call a 4-H club and say, ‘Plant some
“corn.’
There is no one coming to an I-94
industrial park.
”
Conrad Mallett Jr., DMC Sinai-Grace Hospital
94
d.
Blv
ck
Ma
tiot
nd
10
Gra
Detroit
Gra
r
Wa
ren
E.
Over the past 10 years, Detroit’s
Economic Development Corp. has
spent $8.6 million acquiring property to form an industrial park on
the city’s east side.
Today, the EDC controls about
90 percent of the land at the 189acre site, home to just a few tenants occupying about 10 percent of
the available land.
With an intensive acquisition
process ahead — about 130 privately owned parcels remain at the site
— an EDC board member is asking
for a course change, suggesting
that the 1999 plan to assemble an
industrial park may be outdated in
2010 Detroit.
Van Dyke
BY NANCY KAFFER
CRAIN’S DETROIT BUSINESS
CDB
“We ought to begin to recognize
that some of our best ideas are 10
years old and reassess them,” EDC
board member Conrad Mallett Jr.,
president of DMC Sinai-Grace Hospital, told fellow board members and
Detroit Economic Growth Corp. officials at a meeting last week. “It’s
time to throw in the towel and say,
‘It was a hell of an idea, but it’s not
working out.’ ”
Board
Chairman
Warren
Palmer, director of the city’s Planning and Development Department, said there have been some
successes at the site but questioned whether more would come.
Palmer asked DEGC staff to prepare a report on the status of the
project for the EDC’s next meeting.
The EDC pays roughly $30,000 a
year to maintain the site, said
DEGC CFO Glen Long, spending
about $48,000 in 2009 because of an
See Industrial park, Page 29
Ackerman Ackerman & Dynkowski . . . . . . . . . . . . 14
Blue Cross Blue Shield of Michigan . . . . . . . . . . . . . 1
Bridgewater Interiors . . . . . . . . . . . . . . . . . . . . . . 15
Business System Solutions . . . . . . . . . . . . . . . . . . . 8
Butzel Long . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Center for Oral & Facial Surgery . . . . . . . . . . . . . . 14
Chrysler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Citizens Research Council of Michigan . . . . . . . . . 29
CMS Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Detroit Economic Development . . . . . . . . . . . . . . . . 3
Detroit Economic Growth . . . . . . . . . . . . . . . . . . . 28
Detroit Edison . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Detroit Edison Public School Academy . . . . . . . . . . 27
Detroit Pistons . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Detroit Public Schools . . . . . . . . . . . . . . . . . . . . . 27
Detroit Red Wings . . . . . . . . . . . . . . . . . . . . . . . . . 28
Detroit Regional Chamber . . . . . . . . . . . . . . . . . . . . 8
Detroit Tigers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Dickinson Wright . . . . . . . . . . . . . . . . . . . . . . . . . 11
Doeren Mayhew . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Dykema Gossett . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Eight Mile Style . . . . . . . . . . . . . . . . . . . . . . . . . . 16
EnGenius . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
EPrize . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Estate Development . . . . . . . . . . . . . . . . . . . . . . . 15
Fisher Dynamics . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Ford Motor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
General Sports & Entertainment . . . . . . . . . . . . . . . 1
Grubb & Ellis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Haggerty Corridor Partners . . . . . . . . . . . . . . . . . . 14
Ilitch Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Jaffe, Raitt, Heuer & Weiss . . . . . . . . . . . . . . . . . . 12
Johnson Controls . . . . . . . . . . . . . . . . . . . . . . . . . 15
Krause Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Kresge Foundation . . . . . . . . . . . . . . . . . . . . . . . . . 1
MachineTools.com . . . . . . . . . . . . . . . . . . . . . . . . . 4
Mantese Honigman Rossman & Williamson . . . . . . 13
Marygrove College . . . . . . . . . . . . . . . . . . . . . . . . . 3
McGregor Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Michigan Dept. of Transportation . . . . . . . . . . . . . 14
Michigan Economic Growth Authority . . . . . . . . . . 25
Michigan Future . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Michigan League for Human Services . . . . . . . . . . . 3
Miller, Canfield, Paddock & Stone . . . . . . . . . . . . 11
Morganroth & Morganroth . . . . . . . . . . . . . . . . . . 13
O’Keefe & Associates Consulting . . . . . . . . . . . . . 12
Palace Sports & Entertainment . . . . . . . . . . . . . . . 28
Plante & Moran . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ProQuest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Rehman Financial . . . . . . . . . . . . . . . . . . . . . . . . . 18
Robert Gittleman Law Firm . . . . . . . . . . . . . . . . . . 14
Secrest, Wardle, Lynch, Hampton, Truex & Morley . 15
Skillman Foundation . . . . . . . . . . . . . . . . . . . . . . . . 1
Smith Sivertson & Zahn . . . . . . . . . . . . . . . . . . . . 14
Soble Rowe Krichbaum . . . . . . . . . . . . . . . . . . . . . 12
The Miller Law Firm . . . . . . . . . . . . . . . . . . . . . . . 13
United Way for Southeastern Michigan . . . . . . . . . 17
Valassis Communications . . . . . . . . . . . . . . . . . . . 11
W.K. Kellogg Foundation . . . . . . . . . . . . . . . . . . . . . 1
Department index
BANKRUPTCIES . . . . . . . . . . . . . . . . . 16
BUSINESS DIARY . . . . . . . . . . . . . . . . 24
CALENDAR . . . . . . . . . . . . . . . . . . . . 24
CAPITOL BRIEFINGS. . . . . . . . . . . . . . 26
CAREERWORKS . . . . . . . . . . . . . . . . . 22
CLASSIFIED ADS . . . . . . . . . . . . . . . . 24
KEITH CRAIN . . . . . . . . . . . . . . . . . . . . 6
LETTERS . . . . . . . . . . . . . . . . . . . . . . . 6
MARY KRAMER . . . . . . . . . . . . . . . . . . 7
OPINION . . . . . . . . . . . . . . . . . . . . . . . 6
OTHER VOICES . . . . . . . . . . . . . . . . . . 6
PEOPLE . . . . . . . . . . . . . . . . . . . . . . 23
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RUMBLINGS . . . . . . . . . . . . . . . . . . . 30
SMALL BIZ SOLUTIONS. . . . . . . . . . . . . 6
STAGE TWO SOLUTIONS . . . . . . . . . . . . 4
WEEK ON THE WEB . . . . . . . . . . . . . . 30
20100301-NEWS--0004-NAT-CCI-CD_--
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Page 4
March 1, 2010
CRAIN’S DETROIT BUSINESS
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Users can post want ads, view upcoming auctions, read industry
news and share advice. In addition
to English, the site is also available
in four languages — English, Spanish, German and Chinese — with
more on the way. The company
also plans to expand to several other regions — Brazil, France, Italy,
Russia and Japan — this year.
CEO: Stuart Carlin.
Founded: 1999.
Employees: 20.
Revenue: $2.75 million in 2009,
projected $3.5 million in 2010.
Problem to be solved: Operating
as a virtual company meant that
face-to-face contact with the company’s 20 employees would be
nearly impossible. Stuart Carlin,
the company’s CEO and founder,
needed to ensure customer needs
could be met regardless of where
employees were stationed. Working virtually also poses a problem
with training, consistency and accountability, Carlin said.
Considerations:
Maintaining
good customer service is critical.
“I worry that if we lose commu-
nication with each other and organization, we’d lose the consistency of our customer service,” he
said.
Solution: Carlin hired a programmer to design a content
management
system
that
gives employees access to operational information, such as
customer data,
Carlin
from one hub.
The company also uses online
project management software
Basecamp to manage day-to-day
documentation, such as business
reports, time cards and contracts.
Skype handles the company’s
phone and video conference
needs, and quarterly meetings
and training sessions are done
through videoconferencing service GoToMeeting.com.
The entire MachineTools.com
team meets once a year in one of
its telecommuters’ home city.
Last year the group came to Carlin’s home in West Bloomfield,
where they held a meeting and attended a Detroit Tigers game.
“The host employee chooses
what we all do,” he said. “It’s
great for us all to get together and
get to know each other.”
Expert opinion: Gil Gordon, president of Monmouth Junction,
N.J., Gil Gordon Associates and a
telecommunications consultant,
said the most important aspect to
consider with a virtual company
is the concept of a shared culture.
“You have to create that social
glue that’s necessary to keep employees attached when they are
all over the globe,” he said. “A
telecommuter that’s never been
into an office is essentially a contractor. The company is just a
name and a paycheck and not
much else.”
Gordon recommends flying all
employees to a central location at
least twice a year. Whether the
time is spent bowling or on company training, it doesn’t matter as
long as bonds are made, he said.
“It’s important to remind employees who they work for and
why they are working so hard,”
he said. “Companies that do well
have some sort of built-in booster
shot like this.”
Also, make sure to remember
the “social” in social media is being used. Encourage employees to
keep each other updated on their
personal lives as well.
“The same technology you’re
using to do work is also great for
creating your community and
company culture,” he said.
— Dustin Walsh
If your second-stage company has recently made a tough business decision, contact Michelle Darwish, entrepreneurship editor at Crain’s Detroit Business, at [email protected].
Linkner sees 3-D, games in ePrize’s future
BY BILL SHEA
CRAIN’S DETROIT BUSINESS
Josh Linkner is a jazz musician
in his off hours, and he sees his
new role as ePrize L.L.C.’s chief idea
guy as a natural progression of
that.
“Leadership
is improvising,
like jazz, creating,” he said.
“That’s who I
am at my core.
Your role becomes more like
a
symphony
conductor, orLinkner
chestrating.”
Linkner, 39, announced on Feb.
8 that he was stepping down as
CEO of the Pleasant Ridge-based
online promotions and sweepstakes company he founded in 1999
to focus on new ideas, strategies
and business relationships. He remains chairman of the board.
“This is completely my decision,” he said. “I’m going to be focused on innovation, and cutting
edge products and services for the
future. I wasn’t able to devote as
much time to that side of the business (as CEO).”
A search firm was hired to find a
replacement, and Matt Wise, CEO
of Chicago-based online marketing
services firm Q Interactive L.L.C.,
was hired. As CEO, he will handle
day-to-day operations of the company, which is headquartered in a
46,000-square-foot former brewery
east of Woodward near I-696.
Since its inception, ePrize has
launched more than 6,000 interactive promotion and loyalty campaigns for such companies as General Motors Co., The Coca-Cola Co.,
Yahoo, Procter & Gamble Co., The
Walt Disney Co. and AT&T.
EPrize deploys 30 to 50 new programs each month. Linkner thinks
the company can do more and different stuff.
“I decided to make a change in
my focus. I love the innovation side,
coming up with new ideas,” he said.
Some of the areas Linkner will
steer the company into include social media, 3-D virtual worlds,
games, mobile marketing and
what he calls “engagement marketing,” in which campaigns engage consumers but may not be
tied to a promotion.
EPrize also will expand its use of
metrics and analytics for its
clients and their promotion campaigns, he said.
Linkner declined to discuss revenue specifics but said revenue
was down in 2009 after a decade of
growth. The company, which has
about 250 employees and offices in
Atlanta, Chicago, Dallas, Los Angeles and New York, had revenue
of $40 million in 2008.
“Most marketing companies
took a little bit of a hit,” he said,
adding that ePrize forecasts revenue growth for 2010.
Linkner noted that his decision
to step back is not unprecedented,
noting that founders of eBay,
Google, Yahoo and Microsoft Corp. all
stepped away from day-to-day control.
“That model has been a proven
one,” he said.
The change is also a time for reflection.
“It is a little weird, for sure, and
something I considered deeply,”
Linkner said.
Bill Shea: (313) 446-1626,
[email protected]
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20100301-NEWS--0006-NAT-CCI-CD_--
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March 1, 2010
CRAIN’S DETROIT BUSINESS
OTHER VOICES
OPINION
Transit authority’s Diverse boards good for biz
arrival overdue
S
outheast Michigan has tried for a truly regional public
transit system 23 times in recent decades. State lawmakers are poised to decide whether 24 is a charm.
A three-bill package under review by the House Intergovernmental and Regional Affairs Committee would create a
new Southeast Michigan regional transit authority that could
apply for and manage federal transit dollars.
The authority would execute a long-term regional transit
plan that calls for a mix of light rail and rapid bus transit to
improved feeder-line service. A five-member board, with appointees from the governor, Detroit, and Wayne, Oakland and
Macomb counties, would operate on a straight majority — vs.
unanimous — vote structure.
But so far, Detroit isn’t on board. In a formal statement, Detroit’s CFO Norm White told Crain’s last week: “The mayor
categorically agrees there should be a regional transit system.
However, these bills fall short of that goal.”
Specifically, through a spokesman, the city objects that the
legislation does not maintain the 65/35 percent funding formula that favors Detroit’s bus system over the suburban system
when it comes to distributing state dollars within the region.
The legislation, in fact, has no funding formula because that
would be one purpose of the authority.
Detroit’s concerns are understandable; the mayor is under
fire for cutting bus service now and the city wants to ensure its
funding levels for its not-very-good service aren’t decimated.
Yet a regional authority could relieve much of Detroit’s financial burdens if suburban SMART buses took over mainline
thoroughfare service, allowing Detroit to improve its feederline service. That’s a key reason to have an authority: to determine how best to use all of the transit assets within the region.
What would help relieve Detroit’s anxieties and make this
authority reality is to include in legislation a solid proposal
for expanded transit funding. Whether that’s a penny gas tax
or even fees collected on driver’s licenses in the region is up to
the Legislature.
Southeast Michigan needs a single, regional voice for transit as it seeks increasingly competitive federal transit dollars.
Backers of the authority hope to get the regional authority created before Congress votes on a reauthorization bill for federal
transit funding.
We hope someone is thinking of the actual residents and
riders of transit as they determine whether this region will remain the only major metro area without a comprehensive regional transit system.
Whatever the obstacles, this is a time for people to act like
leaders and let go of whatever past frictions exist. A regional
transit authority is long overdue. Let’s get this done.
Editor’s note: Crain’s Publisher Mary Kramer spoke in favor
of the bills at a hearing last week in her capacity as co-chair of a
transit committee created by the Metropolitan Affairs Coalition
and the Southeast Michigan Council of Governments.
Wrong time for automatic raise
Not all of the state’s budget problems are easily solved, but
there’s at least one quick action the Legislature can take to help.
An automatic pay raise of 3 percent is scheduled to kick in
for unionized state employees on Oct. 1 if not rejected by a twothirds vote of each house of the Legislature by April 12.
Rejecting the raise seems like a no-brainer. The Michigan
Civil Service Commission already has rescinded the same increase for nonunion workers. And employees of cash-strapped
employers throughout the state have had their wages frozen or
cut. The state is in the same position, and the Legislature
needs to make the same kind of hard decision.
This should not be a partisan issue. It’s a budget issue. The
state can’t afford the increases and needs to act accordingly, just
as thousands of private employers in Michigan already have.
Actions taken by federal
Goldman Sachs that found
regulators can have a big
closing the gap between
impact on how America
male and female employdoes business. That could
ment rates could boost U.S.
be the case with U.S. SecuGDP by as much as 9 perrities and Exchange Comcent, European zone GDP
mission regulations that
by 13 percent and Japanese
took effect yesterday.
GDP by 16 percent.
The new disclosure
In September 2008, a rerules, adopted by the SEC
port published by McKinlast December, require
sey & Co. provided solid
Terry Barclay
public companies to make
evidence that the gender
new disclosures to shareholders gap at U.S. companies is much
about many things. Most notably more than just an image or publicfrom Inforum’s perspective, com- relations problem. McKinsey repanies now will be required to pro- searchers wrote that gender divervide information about the role di- sity “can have real implications
versity plays in considering and for company performance.” For
selecting board candidates. We that reason, McKinsey found, leadthink that is a good thing.
ing companies such as J.P. MorWhy should shareholders care gan Chase have taken proactive
about that? There is growing evi- steps to move more women to the
dence that diversity in corporate top of their organizations.
leadership measurably impacts
In a comment letter to the SEC
long-term profitability, especially about the new rules, the InterOrgawhen putting women into deci- nization Network — a national netsion-making positions.
work of the 14 largest professional
In its recent “Groundbreakers” women’s organizations, of which
report, accounting and consulting Inforum is part — cited a “growing
firm Ernst & Young brought togeth- body of research (that) places board
er research that makes the case for diversity squarely within the realm
more women business leaders. For of solid business strategy.
instance, the report cites data from
“Studies now show that compa-
KEITH CRAIN
They’re still coming
to downtown events
One of the largest
weekend shows in our
city ended last night at
Cobo Center.
The Michigan Hot
Rod Association, along
with longtime promoter
Bob Larivee, once again
held Autorama at Cobo.
And once again, there
will have been tens of
thousands of people who
braved the weather to
come downtown to enjoy an annual
car show in the middle of winter.
Just in case you think this is a
Detroit-only event, the Larivees
hold more than 100 car shows all
over the country. Detroit happens
to host the granddaddy of them all.
But like everything else in this
world, content is king. People tell
me all the time that no one’s going
to head downtown in Detroit.
They’re wrong.
Whether it’s health care at the
Detroit Medical Center or Henry
Ford Hospital, sporting events at
our three stadiums or simply dining in one of our many restaurants, if the event has some great
appeal, folks will come.
I think our downtown gets a bad
rap all too often. Not enough people stop to realize that millions of
people come downtown for all
sorts of exciting events and locations. Just think of all the visitors
to our museums every year.
I may have a jaded point of view
since I’ve always worked down-
town and enjoyed the
opportunities that our
city has presented.
Let’s not kid ourselves, Cobo Center still
needs a great deal of
work. Just because they
put a couple of BandAids on it for the North
American International
Auto Show in January
doesn’t mean that it
still isn’t in dire need of
lots more investment to make it
competitive with other cities.
We don’t need nor could we afford a multimillion-square-foot exhibition hall like Las Vegas or Orlando. But we do need to upgrade
our facility with a large infusion of
capital to make it more efficient for
exhibitors to set up and to attract
even larger audiences to our events.
Autorama is a perfect example
of a great show that has attracted
thousands of people to Cobo every
year for more than 50 years. But
that show, like all the shows that
present at Cobo, deserve a firstrate facility with high quality and
reasonable labor rates.
Recently, the contractor who
had the electrical contract for
Cobo pleaded guilty to paying hundreds of thousands in bribes to get
the contract since it was so lucrative. That has got to stop.
People are coming downtown
for exciting events. Let’s make
sure that the facilities are firstrate as well.
nies with more diverse boards, in
particular those with a higher proportion of women directors, perform better as measured by key financial metrics including return
on equity, return on sales and return on invested capital,” ION
president Rona Wells wrote.
Yet, data compiled by Eastern
Michigan University for Inforum’s
research arm, Inforum Center for
Leadership, last year showed that
women on the boards of Michigan
public companies do not come
close to matching the percentage
of women in the workforce. Similar studies in other parts of the
country show the same trend.
It’s past time for corporate leaders to recognize that women —
who represent the majority of
their customers and about half of
the U.S. employed workforce —
should have a much stronger presence on corporate boards. If the
SEC’s new rules help nudge corporate America toward that goal,
then corporations and their shareholders will almost certainly be
better off because of it.
Terry Barclay is president and
CEO of Inforum and Inforum Center for Leadership.
LETTERS
Correcting
confusion
on stem cells
Editor:
I would like to correct a
statement made by Larry
Giroux in a Feb. 22 letter. He
stated that “there is no excuse
to use an aborted embryo for
(stem cell) research to build up
false hopes.”
Embryonic stem cells are not
aborted. They are derived from
eggs that have been fertilized
outside of the body.
They were to be used for invitro fertilization in women
who could not get pregnant by
natural means.
The fertilized egg is frozen at
five days of age, in what is
called the blastocyst stage, and
kept this way until it can be implanted into a woman.
The blastocyst at this point
is no bigger than the dot at the
end of this sentence.
The eggs that will not be
used for future implantation
will either be destroyed, or
they can be donated for research purposes with the informed consent of the donors.
Adult stem cells are derived
from tissue in living cells.
They have the potential for
cell-based regenerative therapies, but they are limited to differentiating into cell types of
their tissue of origin.
See Letters, Page 7
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CRAIN’S DETROIT BUSINESS
March 1, 2010
Page 7
MARY KRAMER: Contest promotes value of internships
I was a college intern.
(That sounds like a title for a
Grade B movie — or maybe an expose of the Clinton White House.)
But like many in journalism, internships were critical to landing
a job in my chosen field more than
35 years ago.
That’s one reason I’m passionate about InternInMichigan.com, a
project that links employers with
potential interns from around the
state.
More than 9,000 students have
enrolled, but more employers are
needed to make the match.
Internships are a great “try-before-you-buy” opportunity for employers as well as a chance for college-age talent to test their wings.
The Detroit Regional Chamber’s
Greg Handel calls it a “test drive”
for employers.
Now, Crain’s and the chamber
are looking for nominees of both
outstanding interns (see the details on Page 8 and at crainsdetroit.com/nominate) and employers who offer best-practice-worthy
internships other employers can
learn from.
We’re looking for an Intern of
the Year and an Employer of the
Year in both for-profit and nonprofit categories. The deadline for
entry is April 9.
The winners in both categories
will be recognized at the chamber’s Mackinac Policy Conference in June. And the winning intern will receive an iPad from
Crain’s.
The contest is open to any intern
or employer in Southeast Michigan — not just those who were
matched by the InternInMichigan.com Web site.
Full disclosure: I serve on an advisory panel for the chamber’s in-
tern program, which is
funded by federal workforce and foundation
dollars.
Help for second-stage
companies
Last week, Crain’s
held its first event for
second-stage
companies. “Where’s the Money” was a forum on financing
for
entrepreneurial
companies.
Attendees learned a lot about potential sources of financing, but
two things bear repeating here.
First,
Gov.
Granholm has proposed altering the income tax credit that’s
available to angel investors. The state currently offers a 50 percent credit when the
investment matures;
Granholm
proposes
changing it to a 25 percent credit up front. If
such a credit were created, it could
easily boost the amount of private
capital available to companies that
want to grow.
MEDC President and CEO Greg
Main said a similar program in
which he was involved in Oklahoma increased angel investment
nearly tenfold in a couple of years.
Surely this is an idea that deserves support.
The second point made by several panelists was the need for growing companies, $1 million a year in
revenue or more, for capable financial talent.
If entrepreneurs made a single
investment this year, it could be to
upgrade the management talent in
their companies with an expertise
in finance.
“Get a good CFO,” our panelists
urged.
Not only would the company
benefit, but the company’s ability
to reach out to banks or specialized financing opportunities
would improve enormously.
You can find more on our coverage of the financing ideas at
www.crainsdetroit.com
/secondstage.
Mary Kramer is publisher of
Crain’s Detroit Business. Catch her
take on business news at 6:10 a.m.
Mondays on the Paul W. Smith show
on WJR AM 760 and in her blog at
www.crainsdetroit.com/kramer.
E-mail her at [email protected].
LETTERS CONTINUED
■ From Page 6
But embryonic stem cells have
the capability of becoming all cell
types in the human body.
This could make it possible to
treat or cure cancers, a vast number of neurological diseases,
spinal injuries and many other
disorders.
If this were you or a family
member, wouldn’t you want to be
offered the hope that there is a possibility to relieve pain and suffering from an incurable disease or
injury?
Abe Slaim, D.O.
Bloomfield Hills
Crain’s Detroit Business
welcomes letters to the editor.
All letters will be considered for
publication, provided they are
signed and do not defame
individuals or organizations.
Letters may be edited for
length and clarity.
Write: Editor, Crain’s Detroit
Business, 1155 Gratiot Ave.,
Detroit, MI 48207-2997.
E-mail: [email protected]
SERVING MICHIGAN
A better partnership. | wnj.com
SOUTHFIELD
|
STERLING HEIGHTS
|
GRAND RAPIDS
|
HOLLAND
|
LANSING
|
MUSKEGON
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March 1, 2010
CRAIN’S DETROIT BUSINESS
When diversifying, look to
specialize; start in own field
State University’s department of professional and
executive development,
Irene Grabowski of
but there’s a fine line to
Dearborn-based Business
walk.
System Solutions L.L.C.
Some businesses may
worked as a contractor
be missing moneymakto the Detroit 3 for years,
ing opportunities befocusing on her specialcause of overspecializaty, internal audit traintion, while others may
ing.
be casting too wide a net.
In 2007, jobs started to
“I often tell my stuNancy
Kaffer
dry up.
dents they’re too generic
“Every year, you’re
and that they should spetaking a pay cut,” she said.
cialize,” he said. “The more you
So in 2008, Grabowski went back specialize, the more you appear to
to school, learning standard audit- be an expert, and the more you aping procedures for a range of pear to be an expert, the more you
fields: medical, aerospace and en- can charge.”
vironmental, and started dabbling
But there’s a caveat.
in military and defense protocols.
“In terms of niche businesses,
In 2009, she quit consulting and the niche has to be growing or exlaunched her own business.
panding,” he said. “If a niche is,
Expanding her knowledge out- like, selling typewriters, right now
side automotive opened profes- you’re in suck city.”
sional doors, she said, giving her
Small-business owners who
the opportunity to get a lot more want to diversify should begin, he
work.
said, by looking at opportunities to
Now, Grabowski still does inter- diversify within their current
nal audit training but also offers a fields.
broader range of services to sever“Not only should you diversify
al industries.
but diversify within your own in“Now I implement entire busi- dustry — look at something counness systems for companies or fix tercyclical,” he said, like a compowhat they have to work on their re- nent of the industry that’s still in
strained budgets,” she said.
demand in an economic downturn.
In 2008, she made about $28,000.
“There’s a very easy answer to
In 2009, Grabowski grossed all this: People should not only sell
$150,000.
new stuff but also repair stuff,”
Diversification can be a smart King said.
move for businesses large and
“The easiest example is the car
small, said Ed King, director of business. You sell new cars when
small-business services in Wayne times are doing well, and when
BY NANCY KAFFER
CRAIN’S DETROIT BUSINESS
Mission Night Light!
What are the
business issues that
keep you up at night?
Our attorneys are on a mission to shed
light on those issues and help identify
insightful legal solutions that work for
you and your business.
As your legal counselor and business
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We never lose sight of it.
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Small
Biz
Solutions
times are not doing well, you concentrate on repairing old cars. So
no matter what happens, you have
the market covered one way or the
other. A person selling new shoes
is in a world of trouble when the
economy goes down the tubes, because people are going to go out
and have their old shoes resoled.
They should get involved in repairing shoes.”
That doesn’t mean retail store
owners need to learn how to fix a
roof, or that lawyers should learn
how to snake a drain.
For an accountant, King said,
that strategy might mean taking
forensic accounting contracts with
a bankruptcy court when business
is slow.
A business owner whose base is
too broad should find a growth sector within the industry.
For the average janitorial service, it’s a tough field, King said.
“Everyone with a mop and a
bucket is your competition,” he
said. “I have one student … all she
does is clean up at crime scenes.
Another one, all he does is use a
special machine that cleans
garbage chutes in high-rises.”
Another student cleans only gas
station bathrooms.
“You’re staying in the same
business,” he said. “You’re not
opening a pizza restaurant in
Shreveport, La., but you’re focusing on a specific aspect of the business.”
Nancy Kaffer: (313) 446-0412,
[email protected]
Nominations sought for top interns, employers
BY MICHELLE DARWISH
CRAIN’S DETROIT BUSINESS
What’s the best way to promote
the benefits of internships?
Recognize the region’s top intern and those employers that provide the best opportunities.
Today Crain’s Detroit Business,
working with the Detroit Regional
Chamber’s InternInMichigan.com,
will kick off its Intern and Employer of the Year contest.
Crain’s, which has a long tradition of recognizing local talent and
employers through such recognition programs as “20 in their 20s,”
“40 under 40” and “Cool Places to
Work,” will select one model intern and a for-profit and nonprofit
employer as winners.
All three will receive a paid trip
to the chamber’s 2010 Mackinac
Policy Conference, June 2-5, courtesy of InternInMichigan.com, and
be recognized in Crain’s and the
The Detroiter, the chamber’s member publication.
The Intern of the Year will also
receive an Apple iPad, courtesy of
Crain’s.
Not every internship ends in a
job offer, but the selected intern
would have treated the experience
as a real audition, not just as satisfying a credit requirement.
Selected employers likely will
HOW TO NOMINATE
To nominate an Intern or Employer
of the Year, go to
crainsdetroit.com/nominate. The
deadline is April 9. Internships
must have occurred between
January 2009 and May 2010. If
you have questions about the
process, contact Michelle Darwish
at (313) 446-1621 or
[email protected]
have defined programs that offer
interns genuine opportunities to
learn and grow.
Nominees need not have worked
through InternInMichigan.com.
Launched in April 2009, the site
connects students graduating from
Michigan colleges and universities with internships at Michigan
companies. It was developed
among the Detroit chamber and
the West Michigan Strategic Alliance,
along with Michigan’s higher education community.
The intent is to keep young talent
in the state by helping line up internships that could turn into jobs.
Surprisingly, employers still
say it’s hard to find good talent,
said Greg Handel, senior director
of workforce development for the
chamber. At the same time, young
professionals feel they need to
leave to find opportunity.
Handel suspects that it’s just not
easy for employers and interns to
connect.
By logging into InternInMichigan.com and creating profiles, students can search and apply for internships. Employers can create
organizational profiles, post internships and recruit college graduates.
Since the site’s launch, more
than 10,600 Michigan college and
university students and 890 employers have registered. Those employers have posted about 530 internships — 147 of which are now
open. The chamber estimates that
about 67 percent of those posted
are filled by registered interns,
though it’s hard to be certain because employers aren’t required to
report results.
Even the chamber has bumped
up its number of interns in the
past year, from an annual average
of five to as many as 10 — and
they’re not just doing busy work,
Handel said.
“This is your chance to test drive potential employees,” he said.
“We need to look at internships as
an important part of development,
not a laborious exercise.”
Michelle Darwish: (313) 446-1621;
[email protected]
DBpageAD.qxd
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CRAIN’S DETROIT BUSINESS
March 1, 2010
Page 11
REPORTER’S NOTEBOOK
Chad Halcom
covers law,
manufacturing and
defense. Call
(313) 446-6796
or write chalcom
@crain.com.
Law
Chad Halcom
Bloodletting in the nation’s
financial centers means Detroit’s top
law firms will likely climb up The
American Lawyer list of 200 largest
law firms, either by doing well or doing
less badly than their competition.
Dykema Gossett P.L.L.C. reports
2009 revenue of $175.8 million, up
from $169.8 million in 2008. Lawyer
headcount increased from 332 to
351, and profits per equity partner
climbed 9 percent.
CEO Rex Schlaybaugh said energy,
bankruptcy and restructuring,
intellectual property and practices
representing pharmaceutical
companies helped drive growth.
But he acknowledged the firm,
which now has its largest office in
Chicago at more than 110 attorneys,
fared better elsewhere than in
Southeast Michigan.
“Texas and Illinois were relatively
stronger areas, (but) had assets for
our clients like IP and litigation
practices that were strong everywhere
and spread throughout the firm.”
Dickinson Wright P.L.L.C. saw
revenue climb from $100.5 million to
$105.8 million. The 260-lawyer firm
made the Am Law 200 for the first
time last year at No. 198, and should
climb in the 2010 list since some
larger firms lost revenue or merged.
Both revenue and profits grew in
2009, CEO Bill Burgess said. The firm
acquired a Nashville office by merger
with Stuart Estes & Donnell, and a
small Phoenix office through hires.
Miller, Canfield, Paddock and Stone
P.L.C. reported revenue declined to
$143 million in 2009, compared with
$146 million in 2008. Profits, and
profits per partner, were nearly flat,
said CEO Michael Hartmann.
Hartmann said the firm fared well in
bankruptcy and commercial
foreclosures, but lost automotive
litigation amid the reorganizations of
Chrysler and General Motors.
Hartmann and CEO Philip Kessler of
Butzel Long P.C. said it’s possible
they fared well by comparison, since
many large law firms saw revenue
declines. The legal services sector
lost 45,000 jobs in 2009, according
to the Bureau of Labor Statistics.
Kessler said Butzel lost more
attorneys than it gained last year and
numbered around 220 by January. He
said 2009 was “marked with
challenges” but “if revenue is down, it
did not drop dramatically.”
Honigman Miller Schwartz and Cohn
L.L.P. also saw 2009 revenue and
profits per partner improve over 2008,
CEO David Foltyn said in an e-mail.
American Lawyer placed firm revenue
at $145 million in 2008, but Foltyn
has said the firm does not disclose
financial data.
Foltyn said IP, commercial law,
bankruptcy and reorganization were
strong, as real estate continued to
struggle. The firm grew its IP practice
through hires and tallied more than
$15 million in legal fees from GM
alone during its Chapter 11.
Top verdicts and settlements of 2009
T
he big cases of 2009 for
metro Detroit attorneys and
judges ranged from liability
and contract disputes to bellwether
fraud claims.
The largest case by dollar value
was the $500 million settlement
between coupon company rivals
News America Marketing and
Livonia-based Valassis Inc.
Also last year, auto suppliers
battled with Chrysler L.L.C., and
Ford Motor Co. and investors
fought for damages based on
financial deception at Ann Arborbased ProQuest.
And a 13-year-old case involving
abuses of women inmates at
Michigan prisons reached its
conclusion: a $100 million
settlement.
In environmental case highlights,
fumes from a Lenox Township
landfill had residents crying foul.
This selection of large verdicts,
settlements and ongoing litigation
is the result of law reporter Chad
Halcom’s efforts combing through
lawsuits and submissions from law
firms and case parties. Profiles
begin on this page and continue
through Page 16.
Valassis Communications Inc. v. News America Inc. et al
Valassis victory
Coupon giant clips rival News America over competitive practices
Beyond the jaw-dropping sums of
money, the competitive practices
dispute between Livonia-based
Valassis Communications Inc. and
New York-based rival News America
Marketing Inc., a unit of News Corp.,
could lead to new rules of play within the coupon industry.
The Valassis case generated both
the largest verdict of 2009 ($300 million against News America on July
24) and the largest settlement of
2010 to date ($500 million, announced Jan. 30).
But Crain’s will count both together here, since the case dominated 2009 headlines and could bring a
new level of scrutiny to both companies’ practices.
Attorneys for both companies
held a status conference at U.S. District Court in Detroit in mid-February on a proposed order that will
create a three-member expert antitrust panel to review the companies’ future competitive
practices as needed.
Valassis and News America
also will enter into a 10-year
deal to use Valassis’ shared
mail services — another condition of the settlement.
The companies
had yet to agree
on the language
of a court order
for Judge Arthur
Tarnow to sign to
create the panel.
But the companies propose to
split the costs for
three antitrust experts to examine
HIGHLIGHTS
Detroit firms
likely to climb
Wings’ Fedorov
scores judgment
Inmates await
harassment award
12
any future violations alleged by either company and to make advisory
recommendations to the court.
The panel would consist of a
Valassis nominee, a News America
nominee and a third member to be
appointed by the
court at the others’ suggestion.
“The hope is
that there will be
a quick and effective response to
address any issue
of tying and
bundling or antitrust violations
Curtner
like those resolved in this case, if they should
come up again,” said Gregory Curtner, principal at Miller, Canfield, Paddock and Stone P.L.C. and lead counsel for Valassis.
Richard Stone, partner at Hogan
ISTOCKPHOTO.COM
Parties clear air
in landfill odor case
ProQuest settles
over false reports
13
& Hartson L.L.P. in Los Angeles and
lead counsel for News America in
the case, declined to comment.
The settlement came just before a
second trial was set to begin in
Tarnow’s court last month. Valassis, which was seeking $1 billion in
damages, won the jury verdict in
July for $300 million before Wayne
County Circuit Judge Michael
Sapala for unfair competition and
tortious interference with business
practices. Tortious interference is
intentional conduct, usually in violation of civil law, that disrupts a
company’s contractual relationships or business practices.
Valassis alleged that News America coerced client companies to participate in its freestanding insert, or
FSI, newspaper products in markets
where Valassis tends to dominate.
News America customers who
did not oblige or take FSI business
away from Valassis allegedly
could face “penalty pricing”
or even exclusion from instore advertising, according
to Valassis.
News America had made
similar allegations of anticompetitive practices
against Valassis.
The Wayne County verdict was under appeal, but the
settlement resolved
both the federal and
state court matters,
along with a separate civil case at Los
Angeles County Superior Court.
— Chad Halcom
M-5 land case settled
for $18.7M
Award hits cap in
missed-cancer case
Johnson Controls
recovers surcharges
Developer wins $2.2M
over blocked drain
14
15
䡲 Venue: Wayne County
Circuit Court, Judge
Michael Sapala; U.S.
District Court, Detroit,
Judge Arthur Tarnow;
Los Angeles County
Superior Court, Judge
Anthony Mohr
䡲 Case filed: January
2006; later split into
three courts
䡲 Verdict: $300 million,
July 23, 2009
䡲 Settlement: $500
million, Jan. 30, 2010
䡲 Plaintiff: Valassis
Communications Inc.
䡲 Lead counsel:
Gregory Curtner,
partner, Miller, Canfield,
Paddock and Stone
P.L.C., Ann Arbor. Cocounsel: Anthony
Rusciano, Plunkett
Cooney P.C., Bloomfield
Hills; and David
Mendelson, president of
the Law Offices of David
Mendelson P.C.,
Birmingham
䡲 Defendants: News
America, subsidiaries
News America
Marketing In-Store
Services Inc., News
America FSI Inc.
䡲 Lead counsel:
Richard Stone, partner,
Hogan & Hartson L.L.P.,
Los Angeles. Cocounsel: David Ettinger
and Herschel Fink,
partners, Honigman
Miller Schwartz and Cohn
L.L.P., Detroit
Eminem
downloads
costly for
Apple
16
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March 1, 2010
CRAIN’S DETROIT BUSINESS
Focus: Law
Sergei Fedorov v. Joseph Zada,
Zada Enterprises L.L.C. et al
Investment fraud
Former Detroit Red Wings center
Sergei Fedorov won a quick default judgment against former financial adviser Joseph Zada and
his company
for $60.1 million, but collection could take
a while.
Fedorov, 40,
playing most recently with the
Washington Capitals and for
team Russia at
Alter
the
Olympic
Games in Vancouver, alleges in a
lawsuit that Zada of Grosse Pointe
Shores defrauded him out of
$43 million under the guise of investment from 1998 to early 2009.
“Zada actually paid out a minimal ‘return’ to Fedorov to deceive
Venue: Wayne County Circuit Court, Judge Kathleen McDonald
Case filed: July 23, 2009
Default judgment: $60.1 million, Aug. 28, 2009
Plaintiff: Sergei Fedorov, former Detroit Red Wings center
Lead counsel: Peter Alter, litigation group, Jaffe, Raitt, Heuer & Weiss
P.C., Southfield
Defendants: Zada Enterprises L.L.C., Grosse Pointe Shores, and
president Joseph Zada; Xandarius L.L.C. of Wellington, Fla.; and
Xandarius L.L.C. of Grosse Pointe Shores
Lead counsel: Benjamin Aloia, president, Aloia & Associates P.C., Mt.
Clemens
him and trick him into believing
that the entrusted assets were invested and earning a return —
neither of which were true,” the
lawsuit states.
Wayne County Circuit Judge
Kathleen McDonald entered a
judgment of more than $60.1 million against Zada and his various
businesses in August after Zada
and his attorney could not set
aside a past entry of default. Zada
in March agreed but failed to pay
Fedorov $60 million by late April,
according to the July lawsuit.
Peter Alter, lead counsel for Fedorov and his attorney in some
other matters at Southfield-based
Jaffe, Raitt, Heuer & Weiss P.C., said
Zada has other investors seeking
to collect on his assets.
Bloomfield Hills-based O’Keefe
& Associates Consulting L.L.C. is
court-appointed
receiver
of
Zada’s assets, charged with locating, preserving and liquidating
them to satisfy investors.
“I am optimistic about our ability to make some recovery as assets become available,” Alter
said. “But it is a process.”
The time limit for an appeal
has lapsed.
— Chad Halcom
Tracy Neal et al v. Michigan Department of Corrections
Inmate abuse
As many as 900 women could
have to wait until October 2014 for
the full payout on a combined
$100 million settlement to a classaction lawsuit alleging a pattern of
sexual abuse to female inmates at
Michigan prisons.
The lawsuit involved inmates
mostly at the now-closed Robert
Scott Correctional Facility in Plymouth, but also at the also-closed
Western Wayne Correction Facility in Plymouth Township and other corrections facilities in Oakland and Branch counties.
The case continued for 13 years,
on behalf of
women who alleged abuses by
corrections staff
dating to early
1993.
A state settlement in July
covered two sets
of plaintiffs who
won verdicts at
Soble
separate trials
in 2008 valued at more than $40
million with interest, plus all of
the plaintiffs whose cases had yet
to go to trial.
Under the terms of the settlement, 10 plaintiff attorneys who
represented the women will divide around $28.6 million, and
nearly $15.9 million is earmarked
for the 18 women who won damages in the previous two trials.
One group of those women will receive 67 percent of trial damages,
and the second group will receive
65 percent.
Another $37 million is ear-
Venue: Washtenaw County
Circuit Court, Judge Timothy
Connors
Case filed: 1996, 2003
Settlement: $100 million, July
15, 2009
Plaintiffs: Tracy Neal, Nicole
Anderson and more than a dozen
other named plaintiffs, on behalf of
a class of inmates who were
victims of sexual assault,
harassment or privacy rights
violations by prison staff between
March 1993 and July 2009
Lead counsel: Deborah LaBelle,
solo practitioner, Ann Arbor, and
Richard Soble, partner, Soble Rowe
Krichbaum L.L.P., Ann Arbor
Defendants: Michigan
Department of Corrections, former
MDOC Directors Kenneth McGinnis
and William Overton, and more
than 25 employees including
prison wardens, administrators,
guards and others
Lead counsel: John Thurber,
assistant state attorney general
marked to resolve sexual intercourse claims, $11 million is for
claims of groping or inappropriate
cross-gender
pat-downs,
and
$5 million is to resolve claims of
sexual harassment or inappropriate viewing of nude inmates.
The settlement and allocation
plan do not specify exactly how
many inmates will be eligible to
participate. But Richard Soble,
partner at Ann Arbor-based Soble
Rowe Krichbaum L.L.P. and co-counsel in the case, has said he believes
up to 900 women had submitted
claims as of last August.
— Chad Halcom
Chrysler L.L.C. v. Hutchinson F.T.S.
Michigan State University
College of Law
THE MICHIGAN STATE UNIVERSITY COLLEGE OF LAW is a
progressive law school with a proud reputation for excellence.
An MSU legal education is increasingly recognized by employers
throughout the nation and abroad. Our graduates benefit from a
well-developed clinical program, an array of dual-degree programs,
and a menu of electives that allow students to earn certificates and
develop areas of concentration. MSU Law graduates are known for
being practice-ready attorneys and accomplished scholars. .
Spring 2009 graduates who took
The MSU Law faculty is composed of first-rate scholars who
offer an exciting learning environment and demonstrate a strong
commitment to teaching. They strive to ensure that all students
are provided with the tools to succeed in any legal environment.
Our faculty hails from the ranks of established and accomplished
attorneys, widely respected scholars, and the most promising
newly credentialed faculty candidates.
appeals), which was the highest
We invite you to discover how the MSU College of Law’s
curriculum and facilities provide students with a rich and
rewarding legal education.
Visit law.msu.edu for more information.
the Michigan Bar examination for
the first time in July celebrated a
passage rate of 95 percent (before
passage rate among law schools
in Michigan, and well above the
state’s 88 percent average.
Auto supplier contract
A jury at Oakland County Circuit Court returned the largest civil award in county history to
Chrysler L.L.C. last year for contract
violations after the manufacturer
was involved in a recall of its 2005
minivans due to leaks in lines for
the rear heater and air conditioner.
A verdict of $47.7 million was returned against Hutchinson F.T.S.,
which had supplied the parts in
question.
Offset against a judgment in
Hutchinson’s
favor
for
$29 million for unpaid accounts, Chrysler will receive
nearly $20 million.
Finding in Chrysler’s favor, Judge Steven Andrews
cited the reasonableness of
Chrysler’s behavior.
Attorney for the plaintiff
James Feeney, membershareholder of Dykema Gossett P.L.L.C., said that “our position
was that Hutchinson and Chrysler
had agreed in making the contract
that they would share the financial
consequences of any breach of
warranty of a Hutchinson-supplied part on an 80 percent-20 percent basis. The jury found a breach
and awarded Chrysler exactly
80 percent of Chrysler’s total damages, which was $47 million-plus.
It was extremely gratifying to
Chrysler that the jury enforced
Venue: Oakland County Circuit
Court, Judge Steven Andrews
Case filed: January 2007
Verdict: $47.7 million, April 10,
2009
Plaintiff: Chrysler L.L.C.
Lead counsel: James Feeney,
Dykema Gossett P.L.L.C., Detroit
Defendant: Hutchinson F.T.S.,
Troy
Lead counsel: Thomas Kilbane,
Squire, Sanders & Dempsey L.L.P.,
Cleveland
The jury
“
enforced that
contract that
the parties
had made.
Nothing could be
fairer in our system
of justice
”
James Feeney,
Dykema Gossett P.L.L.C.
that contract that the parties had
made. Nothing could be fairer in
our system of justice.”
— Brett Callwood
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CRAIN’S DETROIT BUSINESS
March 1, 2010
Page 13
Focus: Law
EnGenius Inc. v. Ford Motor Co.
ProQuest Co. securities ligitation
Breach of contract
Earnings dispute
An award of $22.6 million was
made against Ford Motor Co. over a
breached contract with Livoniabased EnGenius Inc., Ford’s longtime software engineering supplier.
EnGenius was part of a team in
the late 1990s responsible
for
maintaining
Ford’s end-ofline test system.
This
system
tests each vehicle part individually at the
plant before a
vehicle
is
Morganroth
shipped.
Ford wanted to update its system, and EnGenius won the bid to
design, build and maintain a new
system.
An arbitration panel agreed on a
breach of contract judgment
against Ford.
The plaintiff claimed that Ford
repeatedly changed the launch
priorities after a written agreement had been completed, but
that EnGenius continued to do
what it could to make its customer
happy.
䡲 Venue: Wayne County Circuit
Court, Detroit, Judge Michael
Sapala
䡲 Case filed: Sept. 5, 2003
䡲 Judgment: $22.6 million, Jan. 9,
2009
䡲 Plaintiff: EnGenius Inc.
and EnGenius-EU Ltd.
䡲 Lead counsel: Jeffrey
Morganroth, Morganroth and
Morganroth P.L.L.C., Birmingham
䡲 Defendant: Ford Motor Co.
䡲 Lead counsel: Kathleen Lang,
Dickinson Wright P.L.L.C., Detroit
It is alleged that Ford then fell
behind with payments due to budget issues, but when pushed to pay
attempted to put EnGenius out of
business by canceling other contracts.
If EnGenius ceased to exist, Ford
would own the rights to the testing
system.
Ford was also found to be liable
for tortious interference.
Attorney for the plaintiff Jeffrey
Morganroth said EnGenius owners “were pleased with the award.
They didn’t get every penny that
they asked for … but it was a satisfactory award.”
— Brett Callwood
Hellebuyck et al v. Pine Tree Acres Inc., Waste Management Inc.
Landfill odor
The price tag on an “intolerable
… sickening odor” was nearly
$19 million for Houston-based
Waste Management Inc. — but most
of that is dedicated to corrective
action at the Lenox Townshipbased Pine Tree Acres Landfill.
Thirteen plaintiffs, including
Frank Hellebuyck, owner of New
Haven-based H&B Auto Electric Inc.,
filed a proposed class-action lawsuit in August on behalf of hundreds of residents
and
business owners with property near the landfill on 29 Mile
Road.
At issue was
an alleged recent increase in
“blowing debris,
Honigman
dust and odor”
from the 840-acre landfill.
Neighbors sued for nuisance,
negligence and violations of the
Michigan Environmental Protection Act.
They claim land values suffered
after processing equipment at
Pine Tree could no longer keep up
with gaseous emissions.
“The waste disposal site’s noxious emissions became really bad
… about four or five years ago,”
said David Honigman, partner at
Troy-based Mantese Honigman
Rossman & Williamson P.C. and lead
attorney for the neighbors.
“(There was an) inability of the
existing plant and equipment to
process the growing volume of
waste and the changing character
of the waste stream. As a result (of
the settlement), Waste Management agreed to dramatically increase the capacity of the site to
process emissions.”
The lawsuit was proceeding to
䡲 Venue: Macomb County Circuit
Court, Judge Donald Miller
䡲 Case filed: Aug. 18, 2009
䡲 Settlement: $18.76 million
according to plaintiffs, $3 million
according to defendants; Dec. 14,
2009
䡲 Plaintiffs: Frank Hellebuyck, April
Heiler, Jeffrey and Marnie Ickes,
Jack Domanski, Dennis Dorgosch,
Dreanna and Joseph Fileccia, Don
and Shelly Vavro
䡲 Lead counsel: David Honigman,
partner, Mantese Honigman
Rossman and Williamson P.C., Troy
䡲 Defendants: Pine Tree Acres
Inc., Waste Management Inc.,
Waste Management of Michigan
䡲 Lead counsel: Steven Berry,
partner, Berry Johnston Sztykiel &
Hunt P.C., Zeeland
case evaluation before Macomb
County Circuit Judge Donald
Miller when the parties reached
the settlement Dec. 14 for
$18.76 million. The case was formally dismissed last month.
The settlement includes a “commitment to pursue in good faith”
an estimated $15 million in plant
improvements that will boost
Pine Tree Acres’ ability to convert landfill gas into electrical
power.
But Tom Horton, vice president
of Midwest public affairs at Waste
Management, said that proposed
expansion is subject to getting a
power purchase agreement from a
utility company for the enhanced
power output.
Exclusive of the waste-to-energy
plant expansion, Waste Management estimates its obligation includes around $2.2 million in other
plant improvements and $750,000
to the plaintiffs and their attorneys.
— Chad Halcom
The former ProQuest Co. and its
past management in March settled a proposed class-action case
on behalf of institutional and individual investors who claimed
losses after the company disclosed it had misreported its
earnings for several years.
Brought as securities litigation
in 2006, the lawsuit proposed to
create a class of investors who
bought stock between February
2001 and December 2006 in ProQuest, which was later delisted
and dismantled as a company.
“It really stood to represent
thousands of investors,” said E.
Powell Miller, president of The
Miller Law Firm P.C. in Rochester
and co-lead counsel for investors.
Shares of ProQuest (NYSE:
PQE) fell more than 40 percent in
value, from $29.41 in February
2006 to $15.20 in April 2006, after
the company reported that an accounting review had uncovered
that revenue was overstated and
that royalty accounts payable had
been understated in prior years
for its ProQuest Information and
Learning subsidiary, negatively
䡲 Venue: U.S. District Court, Detroit, Judge Avern Cohn
䡲 Case filed: February 2006
䡲 Settlement: $20 million, March 19, 2009
䡲 Plaintiffs: Industry City Associates Employee Pension Plan Trust Money
Purchase, Sales Marketing Group MPP, several individual investors
䡲 Lead counsel: E. Powell Miller and David Fink, partners, The Miller Law Firm
P.C., Rochester; Joel Strauss of Kaplan Fox & Kilsheimer L.L.P., New York;
and Marc Topaz of Schiffrin, Barroway Topaz & Kessler L.L.P., Radnor, Pa.
䡲 Defendants: ProQuest Co.; CEOs James Roemer and Alan Aldworth;
CFO Kevin Gregory; and Scott Hirth, vice president of finance at the
company’s ProQuest Information and Learning Co. subsidiary
䡲 Lead counsel: Laurie Silman and Michael Faris, partners, Latham &
Watkins L.L.P., Washington and Chicago, for ProQuest; George Donnini and
David DuMouchel, shareholders, Butzel Long P.C., Detroit, for Hirth
Miller
Fink
affecting earnings.
The investors claimed false reporting about earnings during the
investment period, knowledge and
consent by company principals
and violations of the federal Securities Exchange Act of 1934.
In 2007 ProQuest was delisted
from the New York Stock Exchange
and closed the sale of its information and learning division for
$222 million to Maryland-based
Cambridge Information Group. CIG
turned the unit into a privately
held subsidiary, ProQuest L.L.C.
The original ProQuest, concentrating mainly on K-12 education
materials, became Dallas-based
Voyager Learning Co. Voyager settled
the lawsuit for $20 million along
with the past managers in March
and is now a part of Cambium Learning Group Inc. (Nasdaq: ABCD).
ProQuest L.L.C., specializing
in electronic and microform information products and services,
remains in Ann Arbor.
— Chad Halcom
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March 1, 2010
CRAIN’S DETROIT BUSINESS
Focus: Law
Michigan Dept. of Transportation v.
Haggerty Corridor Partners L.P. et al
Grand Rapids
Open House
Auburn Hills
Open House
THURSDAY,
MARCH 4
THURSDAY,
MARCH 11
GRAND RAPIDS
AUBURN HILLS
LANSING
knowledge. skills. ethics.
Condemnation case
ANN ARBOR
Lansing
Open House
Ann Arbor
Open House
THURSDAY,
MARCH 18
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ICG.0110.002.AD
The owners of land taken by condemnation for the M-5 Haggerty
extension
project
received
$18.7 million in January 2009 under a settlement to end 13 years of
litigation with the Michigan Department of Transportation.
Haggerty Corridor Partners L.P. lost
51 acres of a vacant 335-acre tract of
land in West Bloomfield Township
for the Haggerty project but got the
rest of the land rezoned from residential to commercial use in 1998
and eventually
built an office
park.
The landowners and MDOT
clashed for years
on which zoning
use should have
determined the
value of the land.
MDOT in 1995
Ackerman
estimated
the
value around $2.7 million, including
damages incurred to the remaining
land, and later lowered the value to
$1.4 million. The landowners sought
$18 million through Bloomfield
Herta Hopton, BCBS of Michigan v.
John Sivertson, Center for Oral and
Facial Surgery, Warren Vallerand et al.
Dental malpractice
communicate.
collaborate.
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March 25, 2010
Detroit, MI
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Retired Michigan State Police
Trooper Herta Hopton and Blue
Cross Blue Shield of Michigan received
a $15 million verdict on paper in a
pair of lawsuits alleging her dentist,
periodontist and
oral
surgeon
failed to diagnose cancer in
her mouth despite repeated
visits.
Because state
law caps noneconomic damages in medical
Gittleman
malpractice, a separate negotiation
during jury deliberations capped
the payout at $525,000.
Hopton said two lesions were
misdiagnosed before the cancer was
finally found. Hopton’s dentist settled before the second jury trial in
August 2009, and the jury awarded
no damages against periodontist
John Sivertson and Brighton-based
Smith Sivertson & Zahn P.L.L.C.
Jurors awarded more than
$15 million against the Center for
䡲 Venue: Oakland County Circuit
Court, Judge Rae Lee Chabot
䡲 Case filed: December 1995
䡲 Settled: $18.7 million, January
2009
䡲 Plaintiff: Michigan Department
of Transportation
䡲 Lead counsel: Patrick Isom,
assistant Michigan attorney general
䡲 Defendants: Haggerty Corridor
Partners L.P., President Neil Sosin,
trustee Paul Yeger
䡲 Lead counsel: Alan Ackerman,
managing partner, Ackerman
Ackerman & Dynkowski P.C.,
Bloomfield Hills
㛮
Hills-based Ackerman Ackerman &
Dynkowski P.C., based on the land’s
highest and best use in 1995.
An Oakland County jury awarded $14.9 million in damages, but the
case went through lengthy appeals
on whether it was improper to inform the jury that the property was
rezoned after the dispute began.
The state Court of Appeals and
Michigan Supreme Court sided with
MDOT, remanding the case to Oakland County for a new trial. The
parties in December 2008 entered
into a consent judgment to dismiss
the case, pursuant to a settlement
for $18.7 million, which Ackerman
said was paid in January 2009.
— Chad Halcom
䡲 Venue: Oakland County Circuit
Court, Judge Steven Andrews
䡲 Case filed: August 2007, January
2008 (combined)
䡲 Verdict: $15 million, $525,000
paid; Aug. 27, 2009
䡲 Plaintiff: Herta Hopton, Blue
Cross Blue Shield of Michigan
䡲 Lead counsel: Robert Gittleman,
manager, Robert Gittleman Law
Firm P.L.C., Orchard Lake
䡲 Defendant: Center for Oral &
Facial Surgery, oral surgeon Dr.
Warren Vallerand
䡲 Lead counsel: Craig Nemier,
partner, Nemier, Matthieu, Nash &
Johnson, P.C., Farmington Hills
Oral & Facial Surgery in Novi and
oral surgeon Warren Vallerand —
the largest known dental malpractice award in the country.
But under a 1994 law, Hopton
could not have received more than
about $420,000 for non-economic
damages. Her economic damages
were slightly more than $400,000.
Based on the verdict, Hopton
and Blue Cross netted the maximum $500,000 from ProAssurance
Corp. as professional liability insurer for Vallerand and the Center
in Novi, plus the minimum $25,000
from OMS National Insurance Co. for
Smith Sivertson.
— Chad Halcom
Suzette Zeidan et al v. City of Roseville, Thomas Mulhern
Police crash
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The city of Roseville is not appealing a judgment of nearly
$6.1 million for injuries to a St.
Clair Shores passenger in a vehicle struck by a police officer in December 2007.
Suzette Zeidan, 83, was in the
passenger seat when a police car
driven by Lt. Thomas Mulhern
struck the vehicle as her husband
turned left at 13 Mile and Utica
roads.
The collision caused multiple
bone fractures and other injuries
to Suzette Zeidan, who now requires the aid of a walker.
Mulhern claimed he was distracted by another vehicle when
he ran a red light and struck the
Zeidans nearly head-on, according
to the lawsuit and court testimony.
Jurors in April awarded
$3.5 million for suffering from the
time of the crash, plus $300,000 per
See Crash, Page 15
20100301-NEWS--0014,0015-NAT-CCI-CD_--
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11:47 AM
Page 2
CRAIN’S DETROIT BUSINESS
March 1, 2010
Page 15
Focus: Law
Estate Development Co. v. Oakland County Road Commission
Flooded lots
A developer with six large lots
planned for development off Orchard Lake’s Mirror Lake was
awarded $2.2 million after the Road
Commission for
Oakland County,
during a road
construction
project on Pontiac Trail, blocked
the drain serving the lake and
caused it to
flood.
In the lawsuit,
Crow
Estate Development said it repeatedly asked the
road commission to clear the pipe
and relieve the floodwaters, but
the requests were ignored.
Estate Development’s proposed
development on six to eight acres
around Mirror Lake, which previously was approved by the village
of Orchard Lake, was subsequently destroyed by the flooding.
The jury found in favor of the
plaintiff. The road commission sued
䡲 Venue: Oakland County Circuit
Court, Judge Steven Andrews
䡲 Case filed: March 26, 2004
䡲 Verdict: $2.2 million, March 18,
2009
䡲 Plaintiff: Estate Development
Co., Orion Township
䡲 Lead attorney: Michael Crow,
Secrest, Wardle, Lynch, Hampton
Truex and Morley P.C., Farmington
Hills
䡲 Defendant: Road Commission
for Oakland County. Third-party
defendant: Thompson-McCully Co.
䡲 Lead attorney: Steven Potter,
Potter, DeAgostino, O’Dea &
Patterson, Auburn Hills
䡲 Attorney for third party: Mary
Massaron Ross, Plunkett Cooney
P.C.
contractor Thompson-McCully, which
sued subcontractors. The jury said
the road commission and Thompson-McCully were responsible; the
case is next to be reviewed by the
Michigan Court of Appeals.
— Brett Callwood
Johnson Controls Inc., Bridgewater Interiors L.L.C. v. Fisher & Co. Inc.,
dba Fisher Dynamics
Supply chain litigation
Johnson Controls Inc. recovered
more than $3.7 million under a Macomb County judgment in the lawsuit it brought, along with Detroitbased Bridgewater Interiors L.L.C.,
against St. Clair Shores-based Fisher Dynamics over surcharges tied to
soaring steel prices in early 2008.
The tier-one suppliers got a temporary restraining order and sued
for breach of contract, common-law
conversion and for claim and delivery after Fisher began imposing surcharges to absorb higher steel costs
and threatened to stop shipping
parts for seat assemblies. Conversion is the taking or holding of assets without consent of the owner.
During litigation, JCI paid more
than $2.9 million worth of surcharges and placed another $2 million in escrow. The tier-one suppliers allege Fisher was not allowed to
raise prices for material costs, under an agreement dating from 1998.
Judge Switalski found in July after a trial that the surcharges
breached the contract and JCI was
entitled to recover them — but also
found that JCI had already re-
䡲 Venue: Macomb County Circuit
Court, Judge Matthew Switalski
䡲 Case filed: April 30, 2008
䡲 Judgment: $3.7 million pursuant
to July 2009 court ruling. Sept. 25,
2009
䡲 Plaintiffs: Johnson Controls Inc.,
Bridgewater Interiors L.L.C.
䡲 Lead counsel: E. Powell Miller,
The Miller Law Firm P.C.,
Rochester, for JCI; David Griem, of
counsel, Jaffe Raitt Heuer & Weiss
P.C., Southfield, for Bridgewater
䡲 Defendants: Fisher Dynamics
䡲 Lead counsel: Fredric Smith,
partner, Warner Norcross & Judd
L.L.P., Southfield
ceived nearly $1.4 million from its
OEM buyers tied to materials costs
and had failed to turn over a key
exhibit to Fisher before trial.
An August court order in the
case authorized JCI to recover the
$2 million paid into escrow but deducted the $1.4 million from a prior $3 million or so that was paid directly to Fisher — for a net
judgment of about $3.7 million.
— Chad Halcom
Crash: Cruiser struck car
■ From Page 14
year over eight years based on actuarial projections for her life expectancy. St. Paul, Minn.-based
The Travelers Insurance Cos. Inc.
is the city’s insurer.
With
other
costs added in,
the court entered a final
judgment
of
nearly $6.1 million in late May.
Johnson
The city later
brought a motion for new trial but
withdrew that request in August.
— Chad Halcom
Professor Alan Schenk
䡲 Venue: Macomb County Circuit
Court, Judge Mark Switalski
䡲 Case filed: Feb. 7, 2008
䡲 Judgment: $6.1 million, May
2009
䡲 Plaintiffs: Suzette Zeidan, 83, of
St. Clair Shores; husband-driver
Sam Zeidan was dismissed before
trial.
䡲 Lead counsel: Ven Johnson,
partner, Fieger, Fieger, Kenney,
Johnson & Giroux P.C., Southfield
䡲 Defendants: City of Roseville,
police Lt. Thomas Mulhern
䡲 Lead counsel: Timothy
Tomlinson, partner, York Dolan &
Tomlinson P.C., Clinton Township
Wayne Law.
Expert faculty leading the way.
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20100301-NEWS--0016-NAT-CCI-CD_--
2/26/2010
12:14 PM
Page 1
Page 16
March 1, 2010
CRAIN’S DETROIT BUSINESS
Focus: Law
Eight Mile Style L.L.C. et al
v. Apple Computer Inc. et al
CONFUSED ABOUT
SOCIAL MEDIA?
Download dispute
Eight Mile Style L.L.C., the Ferndale record label of rapper Eminem, settled before completing a
federal court trial in its lawsuit
over iTunes downloads of 93 Eminem recordings.
The record label brought suit
in 2007, alleging
that a licensing
agreement for
those
recordings did not allow record label
Aftermath Entertainment or parent
company
Busch
Universal Music
Group to make a separate agreement allowing sales via Apple’s
popular iTunes software and online store.
After four days of trial testimony, the companies entered a settlement Oct. 2. Terms were undis-
MARKETING ‡ PR ‡ DESIGN ‡ NEW MEDIA
identitypr.com
closed due to a confidentiality
agreement, but Eight Mile Style
lead attorney Richard Busch of
Nashville-based King & Ballow said
the case was “resolved to the satisfaction of both parties.”
Eight Mile Style and copyright
manager Martin Affiliated sued for
copyright infringement, unfair
competition practices under state
and federal law, violations of the
Michigan Consumer Protection Act
and tortious interference — voluntary conduct not covered under contract law that disrupts another company’s lawful business practices.
The record label had claimed
Apple did not have proper licensing to release the Eminem tracks,
and sought damages including a
portion of iTunes sales traditionally distributed to recording artists.
Eight Mile Style had estimated
before trial that Apple earned up
to $2.58 million on iTunes downloads of various Eminem recordings. Legal sources said that claim
would likely net a settlement
worth $2 million or more, and an
agreement to pay the artist’s label
a cut from future downloads.
— Brett Callwood
Utility rate increase
®
has recognized
E. Powell Miller
as Best Lawyers'
"Bet-the-Company"
Litigator of the Year
for the Detroit Area.
The Miller Law Firm, PC
is a 21-attorney firm specializing in:
• Complex commercial litigation
• Shareholder disputes
• Securities fraud litigation
Best lawyers® is the oldest and most
respected peer-review publication
in the legal profession.
revenue of downloads at trial was $2.58 million.
Plaintiffs: Eight Mile Style L.L.C. and copyright manager Martin Affiliated
L.L.C., both of Ferndale.
Lead attorneys: Richard Busch, partner, King & Ballow, Nashville; cocounsel Howard Hertz and Jay Yasso, partners, Hertz Schram P.C.,
Bloomfield Hills
Defendants: Apple Computer Inc., Cupertino, Calif.; Aftermath
Entertainment, Santa Monica, Calif.
Lead counsel: Kelly Klaus, partner, Munger Tolles & Olson L.L.P., Los
Angeles; co-counsel Daniel Quick, partner, Dickinson Wright P.L.L.C.,
Bloomfield Hills
Attorney General, Michigan Public Service Commission
v. Detroit Edison Co., Constellation NewEnergy Inc. et al
Best Lawyers
E. Powell Miller, President
The Miller Law Firm, P.C.
Venue: U.S. District Court, Detroit, Judge Anna Diggs Taylor
Case filed: July 30, 2007
Settled: Oct. 2, 2009
Settlement: Undisclosed but estimated at more than $2 million. Alleged
• Class action litigation
• Automotive supplier disputes
THE MILLER LAW FIRM
Rochester, Michigan • 248.841.2200 • www.millerlawpc.com
The Michigan Supreme Court in
May found that Detroit Edison Co.
could not impose a rate increase to
consumers in connection with parent company DTE Energy Co.’s costs
to acquire MCN Energy Group Inc.
several years ago.
The utility company went to the
Michigan Court of Appeals after the
Michigan Public Service Commission
denied its request to levy a rate increase to recover $590 million, plus
interest, of the nearly $900 million
DTE had paid above the market
value of MCN in the 1999 purchase.
Edison has sought for at least
seven years to impose the increase, valued at $63.8 million for
last year, according to past testimony from Daniel Brudzynski,
vice president of regulatory affairs
at DTE.
In 2007, the appeals court reversed the MPSC, but last May the
Supreme Court reversed the lower
court, upholding the MPSC’s decision to deny the rate increase.
The attorney general’s office
lost on a separate portion of case:
The Supreme Court upheld an
MPSC ruling opposed by the attor-
Venue: Michigan Supreme Court
Case filed: 2003 at MPSC
Decision: $63.8 million-per-year,
40-year increase rejected by 5-2
court majority, May 1, 2009
Plaintiffs: Michigan Public Service
Commission, office of state attorney
general
Lead counsel: Albert Ernst and
Gary Gordon, member-shareholders,
Dykema Gossett P.L.L.C., Lansing;
Assistant Attorney General Donald
Erikson
Defendants: Detroit Edison Co.,
Constellation NewEnergy Inc., et al
Lead counsel: William Fahey,
partner, Fahey Schultz Burzych
Rhodes P.L.C., Okemos
ney general that allowed Edison to
impose a cost increase to cover energy transmission costs.
That ruling set a precedent as
the first time the high court had
addressed the mechanism Edison
had used as the basis for cost recovery, according to membershareholder Gary Gordon at Dykema
Gossett
P.L.L.C.,
who
represented the MPSC.
— Chad Halcom
BANKRUPTCIES
The following businesses filed for
Chapter 7 or 11 protection in U.S.
Bankruptcy Court in Detroit Feb. 1925. Under Chapter 11, a company files
for reorganization. Chapter 7 involves
total liquidation.
A.K.E.G. Inc., aka Manhattan Club,
25836 Warrington, Dearborn Heights,
voluntary Chapter 7. Assets: $164,918;
liabilities: $850,571.
D2 Abatement Inc., 20901 Kelly Road,
Eastpointe, voluntary Chapter 11. Assets and liabilities not available.
H.A.M. Two L.L.C., 906 S. Main St., Plymouth, voluntary Chapter 11. Assets
and liabilities not available.
JMM Property Investments L.L.C.,
10828 Fellows Creek Drive, Plymouth,
voluntary Chapter 7. Assets: $23.75; liabilities: $1,153,568.
K.B.V. L.P. , 6111 Jackson Road, Suite
120, Ann Arbor, voluntary Chapter
11. Assets: $151,000; liabilities:
$60,050.
Michael A. Hartman D.P.M. P.C., 12885
Northline, Southgate, voluntary
Chapter 11. Assets and liabilities not
available.
Ross Enterprises Inc., dba The Pantheion Club, fdba Café Chablis, 12900
Michigan Ave., Dearborn, voluntary
Chapter 11. Assets: $193,599; liabilities: $3,361,656.
— Compiled by Dustin Walsh
20100301-NEWS--0017-NAT-CCI-CD_--
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12:47 PM
Page 1
CRAIN’S DETROIT BUSINESS
March 1, 2010
Page 17
United Way plans program to help schools feed more kids
BY SHERRI WELCH
CRAIN’S DETROIT BUSINESS
The United Way for Southeastern
Michigan plans to launch a pilot
program in March to embed “food
navigators” in school districts in
Wayne, Oakland and Macomb
counties to make free and reducedcost meals more accessible to
needy students.
The program also hopes to increase the number of students registering for existing programs.
The state of Michigan requires
districts with needy students to offer free and reduced-cost lunch programs and to offer breakfast programs if more than 20 percent of
students enrolled qualify for the
programs.
But no such mandate exists for
making after-school snacks, suppers and summer meals available to
students, said Bill Sullivan, director of the 2-1-1 health and human
services hot line for United Way.
Offering other free meals “is at
the will of the school or district.
Schools are relying on their own assessment of need and their capacity
to provide those programs,” he said.
Parents often are unaware of
free meal programs, and for some,
illiteracy prevents them from filling out applications to enroll their
children in the programs.
Union rules and unwillingness
among some administrators and
teachers to offer free meal programs at the start of the school
day, rather than before it, also presents challenges at some schools,
Sullivan said.
“Schools ask where they would
get money to staff the (free) meals,
keep the lights on, or bus the students home,” he said.
The money to develop and run
free meal programs at schools is
reimbursable from the U.S. Department of Agriculture, he said.
“But throwing money at the
problem isn’t the answer. I think
it’s about introducing new ways of
(schools) doing business,” Sullivan said.
Enter the food navigators.
United Way plans to hire four
people to serve as food navigators
by March and another six by the
end of the year, Sullivan said. The
navigators will help set up free
meal programs at schools that express readiness to put them in
place, Sullivan said.
They also will be called on to
help willing schools and districts
shift their breakfasts to the beginning of the school day, rather than
before it, so more children get fed.
“We want to help so that kids
who are hungry can be fed. We
think the food navigators will help
schools achieve this, and by doing
so … permanently (change) the
system.”About 290,000 children in
Bill Sullivan,
director of the
2-1-1 health and
human services
hot line for
United Way, said
the food
navigators
progam will help
to permanently
change the
system of
feeding
students. Hazel
Park’s Webster
Elementary
participates in a
lunch program.
DUSTIN WALSH/CRAIN’S DETROIT BUSINESS
the tri-county area are eligible and
most are receiving free lunch, Sullivan said. But less than a third of
them are getting free breakfast.
Research shows that offering
breakfast to all students in low-income districts at the beginning of
school day decreases tardiness and
absenteeism and improves performance, said Madeleine Levin, senior policy analyst at the Food Research and Action Center, a
Washington, D.C.-based nonprofit
working with United Way.
According to FRAC, 81.5 percent
of schools in Michigan provide a
breakfast program.
“But the problem is it’s harder
for kids to participate in breakfast
than in lunch because … the buses
would have to get there on time,”
Levin said.
There are also other barriers to
participation, she said.
“Kids that walk to school in Detroit may want to hang out in the
school yard with their friends
rather than eating breakfast...What
we have been promoting with United Way in Southeastern Michigan
is for schools to establish that
breakfast program at the beginning
of class,” for all students, Levin
said.
The work is fraught with issues,
Levin said.
“Any time you make a change in
a school building, there’s going to
be a little resistance; you’re going to
have to change the way people do
their jobs, such as janitors and the
cafeteria folks.
“It takes a little bit of getting used
to, but in the end everyone thinks
the effort is worth it because kids
benefit so much,” Levin said.
United Way’s food navigator approach is laudable, she said.
“The schools really need help in
these tight times. This is a wonderful public-private partnership.”
FRAC is also working with United Way to encourage more schools
in low-income areas offering afterschool snacks, supper and summer
meal programs.
“There are other organizations
like health departments and YMCA
and YWCA that can do the programs in the summer with (fewer)
hurdles.”
Sherri Welch: (313) 446-1694,
[email protected]
Food navigator program part of
larger effort to close hunger gap
BY SHERRI WELCH
CRAIN’S DETROIT BUSINESS
United Way for Southeastern Michigan’s food navigator program is
part of a three-pronged approach
to meet the rising need for food in
a depressed economy.
United Way is using a report
completed last summer by Minneapolis-based McKinsey & Co. as a
guide.
The report, funded by the W.K.
Kellogg Foundation and the Kresge
Foundation, projects that by 2013
one in four people living in Southeast Michigan won’t have enough
food. It also identified a current
gap of about 120 million meals and
projected demand would outpace
supply by about 300 million meals
by 2013.
Based on the report’s recommendations, United Way is focused on three goals:
䡲 Increasing the number of people registered for public benefits.
䡲 Increasing the capacity of the
local nonprofit food distribution
system.
䡲 Advocating policy changes
that will make more people eligible for benefits.
Currently, about half of the
emergency food coming into the
region is through public programs
such as free lunches, food stamps
and the Women Infants and Children program. Friends and relatives of those in need contribute
another quarter of emergency food
assistance.
Gleaners Community Food Bank of
Southeastern Michigan and Oak
Park-based Forgotten Harvest distribute another 6 percent of the total emergency food coming into
the region — about 45 million
pounds per year at last count.
“Clearly our strategies are
around the best ways to eliminate
the gap,” said United Way President and CEO Michael Brennan.
Bank of America recently made a
$400,000 grant to United Way to
help fund its efforts to improve access to benefits.
The Michigan Association of United Ways is developing a Web site —
supported with a $275,000 grant
from the DTE Foundation — to serve
as a portal for eligible Michigan
residents to apply for benefits and
reduce the amount of public benefits currently left on the table,
Brennan said.
Aligning with another study
recommendation, United Way last
year designated $600,000 over
three years to develop additional
client choice pantries, which look
and operate much the same as a
grocery store and offer longer
hours of operation.
United Way also is overseeing
grants targeted to the pantry network for purchasing food and improving access to it, Brennan said.
The agency is also chairing a local board that’s overseeing more
than $2 million in federal funds
from the Emergency Food and Shelter Program to support local efforts
to feed and house needy people.
Sherri Welch: (313) 446-1694,
[email protected]
In here, it’s more than a game.
It’s an experience.
Multiple Season Ticket Packages
available for the first time ever!
Packages starting at 10 games
Experience Tigers baseball in first-class fashion in a
plush, prestigious atmosphere rich with exclusive benefits:
t Game tickets and reserved seats
t All-you-can-eat dinner and
dessert buffet including
non-alcoholic beverages
t One VIP parking pass for every
four seats purchased
t Large private bar with a complete
selection of beer, wine and spirits
Call 313-471-2222
or email [email protected]
20100301-NEWS--0018-NAT-CCI-CD_--
2/26/2010
11:27 AM
Page 1
Page 18
Tax Experience
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CRAIN’S DETROIT BUSINESS
March 1, 2010
Downturn good for expanding accounting firms
BY TOM HENDERSON
CRAIN’S DETROIT BUSINESS
The economic downturn is providing opportunities for expansion
for at least a few local accounting
firms.
Doeren Mayhew, a Troy-based accounting and consulting firm, has
kicked off an expansion campaign
with the purchase of Troy-based
R.W. Frickel Co., a seven-person
firm with $2.5 million in revenue
that focuses on the construction
industry.
“It adds 50
contractors to
our
portfolio.
It’s a really nice
addition to one
of our key niche
areas,”
said
Mark Crawford,
Doeren’s managing director.
Doeren also foCrawford
cuses on the
construction industry.
Crawford said Doeren, which began the year as the eighth-largest
accounting firm in Southeast
Michigan, with 200 employees,
plans on “at least two more acquisitions and perhaps several” of small
local firms this year and to announce a major expansion out of
state in the next couple of months.
He declined to name the city, but
said it would fit in with plans announced last year to expand into
the Southwest or Southeast.
Doeren opened up a two-person
office in Houston last November.
Crawford said Doeren had revenue of about $36 million last year.
He said he wanted to add $4 million in revenue through internal
growth this year and $12 million
through acquisitions.
“We’re about 75th in size in the
U.S. now. Our goal is to get to
about the 50-60 range. We don’t
want to get any bigger than that,”
he said.
He said that while the recession
has lowered the price of doing
deals, the chief driver behind acquisitions is the need for small
firms such as Frickel to be able to
add resources and a wider range of
services for their existing clients,
or risk losing them.
“It’s harder for small firms to
keep up,” he said.
Crawford said that while Doeren
wants to grow its geographic footprint,
“We’re firmly committed to Michigan. We’re doing mergers here and
growing our practice here. We’re
going to remain headquartered
here.”
Another accounting and consulting
firm,
Saginaw-based
Rehmann, whose Troy office is the
seventh-largest in Southeast
Michigan with 224 employees,
kicked off a geographical expansion in January, when its Rehmann
Financial business unit acquired
Dawson Wealth Management, a
Cleveland-based firm with $1.4 billion under management.
Rehmann Financial made a second Cleveland-area acquisition in
February, of Cotter Advisory Group
L.L.C., a boutique firm with $200
million under management, and
has memoranda of understanding
to acquire a third Cleveland firm
and three in southern Florida.
Gordon Krater, managing partner for Southfield-based Plante &
Moran P.L.L.C., the second-largest
area firm with 840 employees as of
the beginning of the year, said it’s
a good time to expand through acquisition, and his firm expects to
do so, as well.
“There are more opportunities
out there with the downturn,” said
Krater. He said Plante & Moran
added 50 employees through an acquisition in Cincinnati last July
and is looking to expand its Chica-
go operations through acquisitions.
“We’re looking at a couple of
mergers there. We’re talking to
people all the time,” he said.
Krater said the company also expects to expand into Kentucky and
Tennessee to serve its Japanesebased auto parts suppliers.
Tom Henderson: (313) 446-0337,
[email protected]
Got
Ethos?
4th Annual
EMU Ethos Week
March 15-19
Capstone Lunch March 19:
I EMU Student Center
I $35 general public
I $5 EMU students
Keynote Speaker, Robert Bobb,
Emergency Financial Manager,
Detroit Public Schools
For ticket information,
call 734.487.4140 or visit cob.emich.edu
DBpageAD.qxd
2/8/2010
11:07 AM
Page 1
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20100301-NEWS--0020-NAT-CCI-CD_--
2/26/2010
11:45 AM
Page 1
Page 20
March 1, 2010
CRAIN’S DETROIT BUSINESS
CRAIN'S LIST: LARGEST ASIAN-OWNED BUSINESSES Ranked by 2009 revenue
Rank
1.
Company
Address
Phone; Web site
Revenue
($000,000)
2009
Revenue
($000,000)
2008
Percent
change
Local
employees
Jan. 2010
Local
employees
Jan. 2009
Percent
Asianowned
NYX Inc.
Chain Sandhu
CEO
$180.0
$232.0
-22.4%
1,100
1,100
NA
Plastic injection molding
Saturn Electronics & Engineering Inc.
Wally Tsuha
chairman and CEO
141.6
151.0
-6.2
114
124
100
Manufacturing
HTC Global Services Inc.
Madhava Reddy
president and CEO
111.0
85.0
30.6
260
240
100
Application development and maintenance, business
process management, document and content management
and PMO services
Acro Service Corp.
Ron Shahani
president, chairman and
CEO
102.0
105.0
-2.9
850
868
100
Staff augmentation (information-technology, engineering,
office support, industrial, other), outsourcing and IT and
engineering consulting
KC Integrated Services L.L.C.
Kenyon Calender
CEO
79.0
79.0
0.0
330
330
100
Logistics and truckload transportation
Synova Inc.
Raj Vattikuti
chairman and CEO
65.5
92.0
-28.8
652
NA
100
Information-technology consulting and IT staffing
Saturn Electronics Corp.
Nagji Sutariya
president
21.4
26.0
-17.7
155
155
100
Printed circuit board manufacturer
Roy Smith Co.
Peter Wong
president
20.0
20.0
0.0
NA
22
100
Solution provider for industrial gases, welding robotics,
consumables, welding engineering and consultation and
uniform and fire resistant garments
Ebinger Manufacturing/
Jets Manufacturing Co.
Janny Lu
president and CEO
19.7
24.7
-20.4
18
21
100
Manufacturing and master distribution
Rapid Global Business Solutions Inc.
Bati Devi
18.5
15.4
20.1
295
210
100
Engineering design, staff augmentation, vendor
management services, payroll
Majority owner
36800 Plymouth Road, Livonia 48150
(734) 462-2385; www.nyxinc.com
2.
3.
4.
5.
6.
7.
8.
9.
10.
2120 Austin Ave., Rochester Hills 48309
(248) 853-5724; www.saturnee.com
3270 W. Big Beaver Road, Troy 48084
(248) 786-2500; www.htcinc.com
39209 Six Mile Road, Suite 250, Livonia 48152
(734) 591-1100; www.acrocorp.com
25840 Sherwood, Warren 48091
(800) 476-6317; www.kcintegrated.com
1000 Town Center, Suite 700, Southfield 48075
(248) 281-2500; www.synovainc.com
28450 Northline Road, Romulus 48174
(734) 941-8100; www.saturnelectronics.com
14650 Dequindre, Detroit 48212-1597
(313) 883-6969; www.rscmain.com
Type of business
7869 Kensington Court, Brighton 48116
(248) 486-8880; www.ebinger-mfg.com
31791 Sherman Ave., Madison Heights 48071
(248) 589-1135; www.rgbsi.com
This list of Asian-owned businesses is an approximate compilation of the largest such businesses based in Wayne, Oakland, Macomb, Washtenaw or Livingston counties. It is not a complete listing but the most comprehensive available. Unless otherwise noted,
information was provided by the companies. NA means not available.
LIST RESEARCHED BY ANNE MARKS
Ductz sweeps into carpet, upholstery cleaning
BY SHERRI WELCH
CRAIN’S DETROIT BUSINESS
Less than a year after launching a commercial hood-cleaning
business, Ductz International L.L.C.
is entering the residential carpet
and upholstery market.
President and Founder John
Rotche expects the new Total Care
carpet and upholstery cleaning service line,
the popularity
of the company’s
recently
launched Hoodz
commercial
hood-cleaning
franchises, and
large, national
Rotche
duct-cleaning
projects to increase the company’s revenue to between $25 million and $30 million this year, up
from $17 million in 2009.
“In franchising, diversification
is key,” said Rotche.
“It’s the role and obligation of
the franchisor to ensure the success of your franchisees … by providing them with opportunities to
increase their revenue.”
The company’s new Hoodz franchise “is everything we hoped it
would be and 10 times more,”
Rotche said.
Since last May, when it
launched the commercial hoodcleaning business, Ductz has sold
69 Hoodz franchises, and it expects to award another eight this
month.
“We looked at Hoodz as repeat
work to allow franchisees to increase their revenue,” Rotche
said. “But … it’s taken on a life of
its own.”
After initially offering Hoodz
franchises to its Ductz franchisees, the Ann Arbor-based
company opened them up to
everyone.
Overnight, Hoodz has become
the nation’s largest kitchen exhaust-cleaning company and one
of the fastest-growing franchisees
in America, serving major restaurant chains across the U.S.,
Rotche said.
Rotche and the company see the
same opportunity with carpet and
upholstery cleaning.
Ductz plans to roll out the new
Total Care line in March so it can
improve indoor air quality from
the ground up, Rotche said.
“Historically, we’ve grown our
business as B-to-B — we’d network with contractors and get referrals,” he said.
Now, to increase its brand
recognition with consumers,
Ductz plans to launch a $250,000
television, radio and print advertising campaign.
Rotche said he expects Total
Care to do $4.5 million in consumer sales after its launch,
based on conservative estimates
that about half of Ductz franchisees will offer the new service.
Ductz International will receive
a royalty from every cleaning
done.
“What’s great for the franchisees is there is a very strong
repeat business, and it’s going to
allow them even more contacts
with homeowners to really share
our (indoor air quality) expertise,” Rotche said.
Like Ductz with its decision to
enter the carpet and upholstery
cleaning business, Troy-based
Modernistic also was responding
to customer requests when it began offering duct cleaning to residential customers three months
ago.
Since Modernistic launched the
business in October, “we’re very
busy with it,” said Bob McDonald,
president, who has been in carpet
and upholstery cleaning for over
35 years.
“Because we serve so many
customers every day — 2,000 in
metro Detroit a month and 5,000
across the state — it’s just a natural if we talk to these customers
and ask if they’ve had their ducts
cleaned.”
Modernistic closed 2009 almost
flat at $6.5 million in revenue, McDonald said.
He’s projecting the company’s
duct-cleaning business — which
he says will never be core like its
carpet and upholstery business —
will bring in about $300,000 in the
first year.
“That’s 5 percent of our sales.
It’s not much, but it’s growth,” he
said. “Carpet-upholstery and duct
cleaning both go hand in hand as
far as indoor air quality.”
Since its early days, Ductz has
relied on large projects across the
country to help buoy its franchisees’ revenue during periods
of low revenue in local markets.
Its management teams fly in to
evaluate the projects and then
staffs them with franchisees from
across the country.
In January, Ductz and its franchisees worked on four major projects: one of the Hershey buildings
in Pennsylvania, a Santa Barbara
courthouse, a city transit building
in Milwaukee and the Coleman A.
Young Municipal Center in Detroit.
In March, Ductz will begin another major cleaning project at
the National Aeronautics and Space
Administration campus in Cape
Canaveral, Fla., Rotche said.
Last year, the Ductz’s National
Service Team projects brought in
about $3 million of its $17 million
in revenue, he said.
Even Ductz’s namesake brand
has continued to grow.
Last year, it sold 40 new Ductz
franchises, giving it 178 territories across the country, said
Rotche.
Ductz recently purchased its
Ann Arbor headquarters building for an undisclosed amount
“to continue our investment into
the franchise space,” Rotche
said.
It plans early this year to invest
up to $500,000 to build a commercial kitchen at its headquarters
that will be used to not only to
feed its trainees who travel to
Ann Arbor from around the country but also to train its new Hoodz
franchisees.
Sherri Welch: (313)446-1694,
[email protected].
Urban Land Institute
to showcase properties
The Urban Land Institute Detroit
District Council will host a Metro
Marketplace deal-making event
March 24 at Oakland University.
The event, held with Southeast
Michigan Council of Governments and
the Michigan Suburbs Alliance, will
feature speakers Paul Tait, SEMCOG; Greg Erne, Redico L.L.C.; Sue
Mosey, University Cultural Center Association; Bill Phillips, The Windham
Group; and Eric Schertzing, chair
of the Ingham County Land Bank. Following will be 90 minutes for municipalities, schools and nonprofits to
showcase properties for investors.
Details: http://detroit.uli.org.
— Nancy Kaffer
Ann Arbor wants Google network
The city of Ann Arbor and the
University of Michigan are working
on a proposal to be one of the first
communities to install Google’s
new ultra-fast broadband network.
Google announced Feb. 10 its
planned “experiment” to build and
test a new type of high-speed broadband technology in communities
around the country. The network
would be about 100 times faster
than most broadband currently
available. Google is seeking proposals from municipal governments.
Ann Arbor Mayor John Hieftje
said the city is working on a plan
that would provide the network for
Ann Arbor’s central business district, the university and possibly
city residents.
The proposals must be submitted to Google by March 26.
— Ryan Beene
20100301-NEWS--0021-NAT-CCI-CD_--
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March 1, 2010
Page 21
CRAIN’S DETROIT BUSINESS
Spotlight on minority-owned businesses
Ranked by revenue, these
Hispanic-owned and Native
American-owned businesses
were among the top 10 when
they first appeared on Crain’s
lists and are also among the
top-ranked today. The
Hispanic-owned business list
first appeared in 1991, and
the Native American-owned
business list first ran in
1999.
Hispanic-owned businesses
Elder Automotive
Group (formerly
Troy Ford)
1991
Today
Gonzalez Design Group
(formerly Gonzalez
Design Engineering)
1991
Today
$14.4 million
$85 million
Aztec Manufacturing
Corp.
1991
Today
$6.8 million
$19 million
$46 million
$296.7 million
Native American-owned businesses
Top-five totals
Rush Trucking
Corp.
1999
Today
Here’s combined revenue of the top five
Hispanic-owned and Native Americanowned companies then and now. (Not all
companies at left were represented.):
Systrand
Manufacturing
Corp.
1999
Today
$90 million
$80 million
Hispanic-owned businesses
$45.7 million
$20 million
1991
Today
$294.1 million
$922.5 million
Native American-owned businesses
1999
Today
$213.6 million
$129.4 million
CRAIN'S LIST: LARGEST NATIVE AMERICAN-OWNED BUSINESSES Ranked by 2009 revenue
Rank
1.
2.
3.
4.
5.
Company
Address
Phone; Web site
Majority owner
Revenue
Revenue
($000,000) ($000,000)
2009
2008
Percent
change
Local
employees
Jan. 2010
Percent
NativeAmerican
owned Type of business
Rush Trucking Corp.
Andra Rush
president
$80.0
$90.0
-11.1%
198
100%
Arrow Strategies
Jeff Styers
president and
owner
21.7
18.3
18.3
202
51
Staffing
Systrand Manufacturing Corp.
Sharon Cannarsa
president and CEO
20.0 B
28.5
-29.8
130
100
Precision machining and assembly of automotive
products
Human Capital Staffing L.L.C.
Mary Oxendine
Adams
president
5.4
9.6
-44.0
228
100
Staffing services and human resources
R.B. Construction Co.
Russell Beaver
president and CEO
2.3
1.9
22.8
3
100
Construction services
35160 E. Michigan Ave., Wayne 48184
(734) 641-1700; www.rushtrucking.com
30300 Telegraph Road, Suite 117
Bingham Farms 48025
(248) 502-2500; www.arrowstrategies.com
19050 Allen Road, Brownstown Township 48183
(734) 479-8100; www.systrand.com
6001 Adams Road, Suite 208, Bloomfield Hills 48304
(248) 593-1950; www.hcsteam.com
6489 Metro Parkway, Sterling Heights 48312
(586) 264-9478; www.rb-construction.com
Motor carrier
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. It is not a complete listing but the most comprehensive available. Unless otherwise
noted, information was provided by the companies. NA = not available.
B Crain's estimate.
LIST RESEARCHED BY ANNE MARKS
CRAIN'S LIST: LARGEST HISPANIC-OWNED BUSINESSES Ranked by 2009 revenue
Company
Address
Rank Phone; Web site
1.
2.
3.
4.
The Diez Group
8111 Tireman Ave., Dearborn 48126
(313) 491-1200; www.thediezgroup.com
Elder Automotive Group
777 John R Road, Troy 48083
(248) 585-4000; www.elderautomotivegroup.com
VisionIT
3031 W. Grand Blvd., Suite 695, Detroit 48202
(877) 768-7222; www.visionit.com
The Ideal Group Inc.
2525 Clark St., Detroit 48209
(313) 849-0000; www.weareideal.com
Gonzalez Design Group
5.
6.
7.
8.
9.
10.
29401 Stephenson Highway, Madison Heights 48071
(248) 548-6010; www.gonzalez-group.com
PMA Consultants L.L.C.
1 Woodward Ave., Detroit 48226
(313) 963-8863; www.pmaconsultants.com
Marisa Industries Inc.
1426 Pacific Drive, Auburn Hills 48326
(586) 754-3000; www.marisaind.com
Industrial Control Repair Inc.
28601 Lorna Ave., Warren 48092
(586) 751-3335; www.industrialcontrolrepair.com
ASG Renaissance L.L.C.
22226 Garrison, Dearborn 48124
(313) 565-4700; www.asgren.com
Aztec Manufacturing Corp.
15378 Oakwood Drive, Romulus 48174
(734) 942-7433; www.aztecmfgcorp.com
Majority owner
Revenue
Revenue
($000,000) ($000,000)
2009
2008
Percent
change
Local
employees
Jan. 2010
Percent
Hispanicowned Type of business
Gerald Diez
chairman and CEO
$350.0
$525.0
-33.3%
240
100%
Irma Elder
CEO
296.7
500.1
-40.7
408
100
Automobile dealerships
David Segura
CEO
101.0
102.0
-1.0
485
100
IT consulting, managed services, staffing, vendor
management
Frank Venegas Jr.
chairman and CEO
89.8
164.0
-45.2
178
100
Construction services, manufacturing,
technologies and integrated supply management
Gary Gonzalez
CEO
85.0
68.0
25.0
420
100
Design engineering, staffing, manufacturing
technologies, integrated marketing, production
systems, containers, welding systems, assembly
systems, printed circuitboard assemblies
Gui Ponce de Leon
managing principal and
CEO
36.5
39.0
-6.4
48
100
Construction consulting. Program, project and
construction management and experts in dispute
avoidance and resolution
Jesse Lopez
president and CEO
35.0
62.0
-43.5
250
100
Stamped metal products
Paul Gutierrez
chairman and CEO
22.3
31.7
-29.7
107
61
Electronic and mechanical repair of industrial
equipment
Lizabeth Ardisana
CEO
21.3
21.6
-1.4
205
51
Marketing communications, public relations,
staffing, performance management and diversity
services
Francis Lopez
chairman
19.0
21.6
-12.1
47
70
Automotive manufacturer of machine castings,
forging and aluminum
Steel sales, processing, stamping and assembly
This list of Hispanic-owned businesses is an approximate compilation of the largest such businesses based in Wayne, Oakland, Macomb, Washtenaw or Livingston counties. It is not a complete listing but the most comprehensive available. Unless otherwise noted,
information was provided by the companies. NA = not available.
LIST RESEARCHED BY ANNE MARKS
20100301-NEWS--0022-NAT-CCI-CD_--
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10:31 AM
Page 1
Page 22
March 1, 2010
CRAIN’S DETROIT BUSINESS
CareerWorks online
Visit www.crainsdetroit.com
/careerworks to search for jobs,
post a résumé or find talent.
Help for Job-hunting GM workers find strength in numbers
job seekers Local group forms to share skills, leads and moral support
C
areerWorks is a
weekly collection of
advertising, news
and information geared toward readers in career transition or looking for new
jobs.
CareerWorks is also online.
On our Web site, at
www.crainsdetroit.com/
careerworks, you can post an
anonymous résumé and attract employers. You can
scan the newest jobs from
our area or all of Michigan.
You can set up e-mail alerts
so whenever a job that interests you is posted, you’ll
know about it.
Employers can post jobs
or search résumés for talent
they seek.
BY DUSTIN WALSH
But on October 2008, after nearly
24 years with the company, Cannello accepted a buyout.
During the past two years in the
“I had never been on my own
automotive industry, thousands of
before,” she said. “I hadn’t even
offices have gone dark, name placupdated my résumé in nine or 10
ards have been
years.”
stripped
Cannello,
from cubiwho had been a
cles and lomanager
in
gin aliases
GM’s global lohave been
gistics
divierased
sion, quickly
from comrealized that
puter sysfinding a job
tems.
required a set
The layAmy Cannello, GM Job
of skills she
offs have
Search Team
didn’t have.
left hordes
“I’m not a
of managers, engisalesperson and didn’t know how
neers and other professionals
to sell myself,” she said. “Netlooking for work — some not havworking was not easy for me.”
ing been in the job market for
She began reaching out to other
decades.
laid-off GM workers for support.
Amy Cannello was in that posi“I talked to them about what I
tion. She began working for Generdid and what I was going to do,”
al Motors Corp. right out of college.
she said. “We sent out e-mails to
each other and quickly became a
cross-function job-search team.”
The group, now called the GM
Job Search Team, began meeting
at a local Starbucks to discuss best
practices, job research and lead
development, she said. The
group’s participants each had different skill sets, allowing each to
concentrate on specific areas to
help the group.
“Some were good at research; I
concentrated on generating best
practices,” she said. “The group
was raising everyone to a higher
level.”
The group members also help
each other prepare for job interviews with practice sessions, she
said, and job postings are e-mailed
to members to keep them updated
on what jobs are available.
Debbie Perkins, of Troy, joined
the group after losing her job at
the GM Tech Center in Warren
last April. She worked for GM for
SPECIAL TO CRAIN’S DETROIT BUSINESS
group
“wasTheraising
everyone to a
higher level.
”
CAREER
MOVES
GENERAL
AGD
nearly 23 years.
al outplacement service, they’re
She said the group provides her supporting many people and
with a one-stop location for her you’re just another unemployed
job-search needs — support, assis- worker,” she said. “This group oftance and structure.
fers personal support.”
“Everyone shares information
Perkins also said that making
with each other,” she said. “Two every member accountable with
heads are better than one, and we weekly updates on the job search
all bring in a lot of different re- provides everyone with a sense of
sources.”
accomplishment and structure.
Therese Marie Boldt, career
“When you see what you’ve
coach and author of Yes! You Can done and what you’re going to do,
Land a Job (Even) in a Crummy it allows you to know why you’re
Economy, said job support groups doing this,” she said. “Run the
can help you manage your search group like a meeting and set an
much better than doing it alone.
agenda, make sure everyone stays
“People in these groups find op- accountable.”
portunities they wouldn’t have
Set goals often and set goals that
ever come across on their own,” are attainable, she said.
she said.
“More negative is going to hapThe GM search team also dou- pen than positive (in a job
bles as a therapy group among search),” she said. “Be accountlike-minded peers,
able for the stuff
Cannello said.
you can control,
“The
group
like contacting
could re10 companies or
ally emconnect
with
pathize
five people in
with your
your network.”
situation,
The
group
and it altopped out at 20
lowed us
and moved to
to vent,
Cannello’s
too,” she
home, then to a
said.
conference
“And
room at the
everyone celebratRochester Comed if someone landmunity House,
ed somewhere.”
Therese Marie Boldt, career coach where the nowBoldt said that
16-member
it’s important to keep the group fo- group meets every Tuesday.
cused on best practices for future
There have been successes, and
placement, not wallowing in the others are expanding their skill
past.
sets. Cannello landed a job last
“This is about sharing and sup- fall as chief strategist for Patuxporting, not to get together and ent, Md.-based Naval Air Systems
commiserate,” she said.
Command, and Perkins has enKeeping the support group rolled in advanced Microsoft Exsmall is important to keeping the cel courses.
group personal, Perkins said. The
“People are starting to get posigroup is holding its number of tions,” Perkins said. “There’s defmembers to its current 16.
initely a light at the end of the
“When you’re using a tradition- tunnel.
in these
“ People
groups find
opportunities
they wouldn’t
have ever come
across on their
own.
”
EMPLOYMENT CALENDAR
ESD hosts spring job fair
Film tech program formed
The Engineering Society of Detroit
is hosting its “Spring Engineering
and Technology Job Fair” on
March 8, 2-7 p.m., at Rock Financial Showplace in Novi.
The expo is for engineers of all
disciplines, trained technicians
and students.
The $15 fee includes a one-year
membership to the ESD for new
members, and an opportunity to
network with employers.
Attendees are encouraged to enter their résumés into the free ESD
Job Bank at jobs.esd.org.
For more information or to register, visit www.esd.org.
Applications are being accepted
for a new yearlong film production
technician training program for
Detroit residents.
The program is funded by a
$438,000 U.S. Department of Labor
grant that pays for student costs.
The curriculum will be developed by the Wayne County Community College District in collaboration
with the International Alliance of
Theatrical and Stage Employees and
the Michigan Film Office.
To apply: www.detroitmi.gov/
Departments/DetroitWorkforce
DevelopmentDepartment/tabid/81
/Default.aspx.
20100301-NEWS--0023-NAT-CCI-CD_--
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CRAIN’S DETROIT BUSINESS
March 1, 2010
Page 23
PEOPLE
John Grant to U.S.
board of directors, Deloitte Tax
L.L.P., Detroit, remaining partner.
AUTOMOTIVE
Callen Vickers, senior director of purchasing, Nissan North America Inc.,
Farmington Hills, to board of directors, Automotive Industry Action
Group, Southfield.
Michael McGunagle to marketing
director,
THI
Corp., Ann Arbor,
EDUCATION
Troy Glover to education
planner,
Fanning/Howey
Associaties Inc.,
Grant
Novi, from vice
president of urban schools, DeJong Inc., Dublin,
Ohio.
FINANCE
Glover
Wayne Boucher to
first vice president, Leonard & Co.
Inc., Sterling Heights, from first vice
president, Oppenheimer & Co. Inc.,
Port Huron.
from marketing
manager, Origen
Financial
Inc.,
Southfield.
Gary Cortner to
executive managing director, First
Michigan Bank,
Troy, from president and managing director, The
PrivateBank,
Grosse Pointe.
LAW
Cortner
Shusheng Wang
to co-director of international busi-
Commercial Residential Retail
•
•
IN THE SPOTLIGHT
Freedom House, a Detroit-based
nonprofit that provides services for
political refugees, has named
Deborah
Drennan
executive
director.
Drennan, 53,
program
director for the
agency since
2006, had
served as
interim
director,
Drennan
succeeding
Pegg Roberts, who resigned for
personal reasons in January 2009,
said Pamela Marcil, vice chair of
Freedom House and director of
public relations for the Detroit
Institute of Arts.
Drennan, who was educated in
religious studies and pastoral
ministry certification, has more
than 30 years of nonprofit
experience.
Before joining Freedom House, she
was coordinator of intake and
outreach services at Women ARISE
and transitional housing program
director and community relationsintake coordinator at the Coalition
on Temporary Shelter, both in
Detroit.
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Susan Koval to partner, Nemeth Burwell P.C., Detroit, from senior attorney; also, Deborah Brouwer to partner,
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Stanley
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Contact Joe Vig to
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Honigman Miller
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MARKETING
Douglas Stone to director of shopper
marketing, Mars Advertising Co. Inc.,
Southfield, from senior executive,
Stone & Simons Advertising Inc.,
Southfield.
MANUFACTURING
Jim Pletcher to vice president of
wholesale sales, Brass-Craft Manufacturing Co., Novi, from senior director.
SERVICES
Rhonda Powell to executive director,
Macomb County Rotating Emergency
Shelter Team, Roseville, from associate director, South Oakland Shelter,
Birmingham.
Doug Decaire to general manager,
Xpedx, Detroit, from regional sales
manager, Wausau Paper Co., Wausau,
Wis.
www.biggby.com
20100301-NEWS--0024-NAT-CCI-CD_--
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11:34 AM
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Page 24
CRAIN’S DETROIT BUSINESS
CALENDAR
NATURAL GAS / PROPANE HEATERS
WEDNESDAY
MARCH 3
How to Brand Your Business Using Social Media. 11:30 a.m.-1 p.m. Lunch
Ann Arbor Marketing. With David Kiley, vice president of content, brand
Portable Heaters (Natural or LP Gas) from 16,000
to 4,000,000 BTU’s are available for sale or rent.
Also in stock are Ground Thawers and Fans.
development, Icon Creative Technologies. Conor O’Neill’s, Ann Arbor. $3
donation suggested; lunch includes
tip, drink and meal for $10. Contact:
(734) 272-4698; [email protected]; Web
site: la2m.org.
THURSDAY
*Lift Truck Fuel*
*Temporary Heat*
7200 Inkster Rd.
P.O.Box 35
Taylor, MI 48180-0035
Phone: (313)292-9100
Fax: (313) 292-5950
www.propaneservices.net
MARCH 4
Industry Cocktails: Finance, Legal and
HR. 4:30-6 p.m. Detroit Regional Chamber. For those employed in the finance, legal and human resources industries. Lucky Strike, Novi. Free for
members Business Builder and above.
Contact: (313) 596-0392; e-mail:
[email protected]; Web
site: www.detroitchamber.com.
Women and Leadership in the Workplace Symposium and Awards. 7:30
a.m.-noon. Michigan Business and
Professional Association. With
Faye Alexander
Nelson, president
800-292-3831
and CEO, Detroit
Riverfront Conservancy; others.
Fairlane
Club,
Dearborn.
$65
members;
$75
nonmembers.
Contact: (734) 667Nelson
2005; Web site:
www.michbusiness.org.
NG
ONE HUND
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COMING EVENTS
ARS
100
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ED
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indiantrails.com
Maverick Marketing Mondays. Noon1:30 p.m. March 8. With Catherine
Juon, co-founder, Pure Visibility, dis-
BUSINESS DIARY
ACQUISITIONS
Chi Solutions Inc., Ann Arbor, a diagnostic consulting company, owned by
Carilion Clinic, Roanoke, Va., an-
Comfort and
Luxury
nounced that Chi will be acquired by
current management.
Inovo Technologies Inc., Ann Arbor,
an innovation services company, has
acquired Daso Consulting, St. Joseph.
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promotional code at time of booking: CDB52feb
ZipLogix, Fraser, has renewed its zipForm licensing agreement with the
Oklahoma Association of Realtors,
Oklahoma City.
Hired on the Spot, Lake Orion, a job
placement service for job seekers, employers and recruiters, has been chosen by WJBK-TV2, Southfield, to power
the résumé section of the Job Shop on
myFoxDetroit.com.
RouteOne L.L.C., Farmington Hills,
has completed integration with independent subprime lender Nationwide
Acceptance Corp., Irving, Texas. Dealers in markets served by Nationwide
may now process credit applications
electronically to Nationwide through
the RouteOne platform.
Servant Systems, Ann Arbor, was
commissioned by Domino’s Pizza
Switzerland, Zurich, to install the
Domino’s franchise office system.
NEW PRODUCTS
St. Claire Inc., Farmington Hills, a
technical communications company,
has launched Sign Builder Desktop
Edition, new software for the creation
of safety, industrial and general-purpose
messages.
Web
site:
www.stclaire.com.
mail: [email protected]; Web
site: www.esc-detroit.org.
CELEBRATE M&A AWARD
WINNERS MARCH 18
Crain’s Detroit Business, in
association with the Association
for Corporate Growth-Detroit
Chapter, presents the third annual
Crain’s M&A Awards 5-9 p.m.
March 18 at Big Rock
Chophouse/The Reserve, 325 S.
Eton St., Birmingham.
Awards will be given out to honor
companies and executives in the
following four categories: Best
Deal of the Year, Deal Maker of
the Year, Expansions, and Lifetime
Achievement.
Tickets are $60 each, $50 ACG
members and groups of 10 or
more, $70 at the door. ACG
members and groups should call
(313) 446-0300 to register.
For more information, visit
www.crainsdetroit.com. To
register, visit www.regonline.com/
builder/site/Default.aspx?eventid=
796821.
cussing search engines and paid campaigns. Detroit Zoo, Royal Oak. $20
chamber members Business Builder
and above; $30 Basic members; $40
nonmembers. Contact: (313) 596-0392;
e-mail:[email protected];
Web site: www.detroitchamber.com.
Best Practices from the Best-Managed Nonprofits Seminar. 2-5 p.m.
March 8. Crain’s Detroit Business;
DTE Energy Foundation; Lawrence
Technological University. With James
Nicholson, president and CEO, PVS
Chemicals Inc.; Rich Homberg, president and general manager, Detroit
Public Television. Network reception
at 5 p.m. Buell Management Building,
LTU campus, Southfield. $45 seminar
and reception; $30 seminar; $20 reception. Contact: (248) 395-2840, ext. 25; e-
Detroit Economic Club. 11:30 a.m.-1:30
p.m. March 10. With Michael McCallister, president and CEO, Humana,
Townsend Hotel, Birmingham. $45
members; $55 guests of members; $75
nonmembers. Contact: (313) 963-8547;
Web site: www.econclub.org.
Managing the Public Conversation:
Comment
Moderation
at
AnnArbor.com. 11:45 a.m.-1 p.m. March
10. Lunch Ann Arbor Marketing.
With Edward Vielmetti, lead blogger at
AnnArbor.com. Conor O’Neill’s, Ann
Arbor. $3 suggested donation; lunch
$10. Contact: (734) 272-4698; e-mail:
[email protected]; Web site: la2m.org.
Detroit Economic Club. 11:30 a.m.-1:30
p.m. March 11. With Dan Gilbert,
chairman and founder, Quicken
Loans. Westin Book Cadillac, Detroit.
$45 members; $55 guests of members;
$75 nonmembers. Contact: (313) 9638547; Web site: www.econclub.org.
Social Media Boot Camp. 8 a.m.5 p.m. March 11 and 8 a.m.-noon March
12. American Marketing Association
Detroit Chapter. With Toby Bloomberg
of divamarketingblog.com; Dave Evans,
author of Social Media Marketing: An
Hour a Day; and Dana Vanden Heuvel,
founder, BlogSavant. Davenport University, Livonia. $700 AMA members,
$960 nonmembers. Contact: (800) 2621150; Web site: www.marketingpower.
com.
Detroit 2.0 6-8 p.m. March 11. Marketing and Sales Executives of Detroit.
With Matt Cullen, president and COO,
Rock Ventures L.L.C. Management
Education Center, Troy. $45 MSE
member; $60 nonmember; $360 member table of eight; $480 nonmember
table of eight. Contact: (248) 643-6590;
Web site: www.msedetroit.org.
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20100301-NEWS--0025-NAT-CCI-CD_--
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5:15 PM
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CRAIN’S DETROIT BUSINESS
March 1, 2010
Page 25
IT center tops list of MEGA grants
Southfield expansion promises to create up to 700 jobs
BY AMY LANE
CAPITOL CORRESPONDENT
LANSING – The state last week
granted some $25.5 million in tax
credits or other assistance to companies planning nearly $134 million in investment in Southeast
Michigan.
Heading the list in projected job
creation was a Colorado-based information technology company
that is planning to expand in
Southfield and ultimately create
up to 700 jobs.
Ciber Inc., which provides IT outsourcing and consulting services,
plans to establish an $8 million
U.S. development center in Southfield.
The board of the Michigan Economic Growth Authority granted
Ciber a $10.1 million state tax credit, and the city of Southfield has
approved a $1.2 million tax abatement in support of the project, the
state announced.
Other Southeast Michigan projects that received MEGA board
assistance were:
■ A $51.3 million project by
startup automotive supplier ALTe
L.L.C. to open a factory in Auburn
Hills, where it will manufacture
hybrid-electric vehicle powertrains and retrofit vehicle fleets
with the systems. The project is expected to create 305 jobs.
The MEGA board approved an
$8.4 million tax credit for the project, and the city of Auburn Hills
has granted a $242,500 tax abatement.
■ A $31.1 million investment by
a subsidiary of South Korea-based
Techno SemiChem Co. Ltd. to locate
its new North American headquarters in Northville Township, creating 279 jobs.
At the headquarters, TSC Michigan Inc. plans to conduct research
and development and pilot-production efforts to produce electrolytes
for advanced lithium-ion battery
cells. The project is aided by a
$3.2 million MEGA tax credit.
■ A $13.3 million Chesterfield
Township project by Plano, Texasbased Advanced Integrated Tooling
Solutions L.L.C. to produce custom
equipment, machines and tooling
to be used in the manufacture and
assembly of commercial, business
and military aircraft.
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The company expects to create
275 jobs and was awarded a
$3.2 million state tax credit.
■ A $3.7 million technical center
in Auburn Hills, by Katcon USA Inc.
The technical center will handle
worldwide research and development for the supplier of catalytic
converters and vehicle exhaust
systems. The project is expected to
create 35 jobs and is aided by a
$534,633 state tax credit.
■ A proposal to capture $58,500
in state and local taxes to support a
$26.5 million expansion and
brownfield redevelopment by NWS
Michigan Inc., in Brownstown
Township.
The state-authorized distributor
of wine and liquor plans to redevelop vacant land next to its current location, to expand warehousing and office operations and
create 10 jobs.
Amy Lane: (517) 371-5355,
[email protected]
Motivate.
Celebrate.
Congratulate.
For More Information:
Jason Capitani or Joe DePonio
248-637-9700 www.Lmcap.com
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Additional Properties & Land for Sale or Lease:
Fully viewable property list on our websites
INDUSTRIAL PROPERTY
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4,000 to 100,000 sq. ft.
Also 10,000 & 25,000 sq. ft.
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REA CONSTRUCTION
(734) 946-8730
Also Heavy Industrial
Land Available
www.reaconstruction.net
OFFICE SPACE
Professional Office Space for Lease - Southfield
400 - 11,000 sq ft
Central location, close to expressways
Move-in Incentives
248-424-8632
[email protected]
OFFICE BUILDING
St. Clair Shores Beauty Salon for Sale
On Jefferson, near 12 Mile Road
Beautiful beauty salon and investment property
Excellent Price -- LaHood Realty 313.885.5950
INVESTMENT PROPERTY
Property 20 cents on the dollar
• Residential land, Chesterfield Township,
72 acres, $550,000
• Six fast-food sites on I-94, south of 21 Mile,
easy on /off,1.25 acres, $390,000, 6%
selling broker.
• Residential lots, Macomb Twp, 70’ wide,
$23,500
• Jefferson Ave. Harrison Twp, (9) 50’ lots,
zoned commercial, $15,000/each.
• Waterford Twp, 56,256 sq ft, $8.80/sq ft,
bank financing, zero down, 4% interest
Bill McMachen -- [email protected]
586-915-4441 Lee & Associates
MISCELLANEOUS
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Drive in doors, Truck docks. $2.00 sq ft/NNN
Centrally located off I-75/12 Mile Road
Immediate Occupancy
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Wet Labs from $8/sq.ft.
Shared cell culture facility
Offices, conference rooms, kitchen & more
Free Fenced Onsite Parking
Metropolitan Center for High
Technology
2727 Second Ave. Detroit, MI, 48201
Ernie -- 248-840-6081
Contact: Dan Goulston (313) 961-3390
WAREHOUSE STORAGE SPACE
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20100301-NEWS--0026-NAT-CCI-CD_--
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March 1, 2010
CRAIN’S DETROIT BUSINESS
Blue Cross: Layoffs hurt Gieleghem: Tighter budgets, growth plans for Macomb
BY CHAD HALCOM
■ From Page 1
one medical group policy for Blue
Cross in the last two years, and that
is because the group had major
health problems.”
Dallafior said some group members have left Blue Cross to seek
policies with other insurers.
He said Blue Cross has been trying to cut health care cost increases that range from 5 percent to
12 percent per year nationally. Increases for groups are lower in
Southeast Michigan and range in
the 6 percent to 8 percent range,
depending on coverage.
“We are working closely with our
customers to bend the trend and
help them with solutions that will
actually address the costs by addressing health, productivity, wellness of employees,” Dallafior said.
One of the biggest departing accounts was the state Department of
Corrections, which accounted for
50,000 members, Dallafior said.
But “we had success stories in
new business,” Dallafior said.
For example, new customers included Dana Corp., Art Van Furniture,
Belle Tire and Mercy Memorial in
Monroe.
Krause said the discounts Blue
Cross is able to wring out of hospitals and doctors helps keep costs
lower for employers that self-fund
health-care expenses.
“Blue Cross probably has the best
prices in the state for their administrative services contracts,” Krause
said. “They are price competitive in
the large self-funded accounts. Companies that have multistate locations have to go with (national) commercial carriers or Blue Cross.”
Blue Cross also increased members in existing groups, including
Penske Automotive Group, Guardian
Industries and Pulte Homes. New
member groups and growth in existing groups accounted for 80,000
new members, he said.
In the individual market, Blue
Cross increased membership
1.6 percent in 2009 to 571,000 members. The gains were primarily
driven by increases in Medicare
supplemental policies and those
who migrated from group policies,
said Helen Stojic, Blue Cross’ corporate affairs director.
Despite the overall membership
losses, Blue Cross reversed financial losses of $46.8 million for the
first six months of 2009 by posting
a slight profit of $582,972 in the
third quarter ended Sept. 30, according to the state Office of Financial and Insurance Regulation.
Financial results for 2009 are expected to be released today, Stojic
said.
Stojic declined to comment on
whether Blue Cross will post a
profit or a loss for 2009.
But in fiscal 2008 ended Dec. 31,
Blue Cross lost $145 million on total revenue of $21.2 billion. It was
the first time in 19 years that Blue
Cross could not contribute profits
to its subscriber reserves, according Blue Cross’ 2008 annual report.
During the third quarter of 2009,
Blue Cross reported a net underwriting loss of $210.6 million compared with losses for the same period in 2008 of $50.5 million.
However, Blue Cross made up
for the underwriting losses with
net investment gain of $228.9 million in the third quarter 2009 compared with $158.8 million for the
same period in 2008.
Jay Greene: (313) 446-0325,
[email protected]
CRAIN’S DETROIT BUSINESS
Macomb County Commission
Chairman Paul Gieleghem talked
tighter government budgets and
structural change amid falling
property values at his State of the
County address Thursday — but
left room for growth in economic
development efforts.
Gieleghem, delivering his last
address as board chairman to an
audience at MacRay Harbor Inc. in
Harrison Township, said the
county will split the cost with
Michigan State University for a new
employee in its Planning and
Economic Development Department devoted entirely to boating,
water quality and marine recreational tourism.
The county’s defense- and
homeland security-themed business incubator in Sterling
Heights will also host a threemember staff of Automation Alley
experts, including primary Alley
defense-automotive consultant John Bedz,
to help startups and local
businesses
land contracts.
“Businesses,
or
governments — we all
reach a point
Gieleghem
in our budget
process, no matter how complex,
(where) we can’t just cut our way
out of this. We must find the
means to grow our way out,”
Gieleghem said.
The county, which expects to
face a $23.4 million budget shortfall amid falling property values,
rising employee health care costs
and a possible sunset of some pri-
or union concessions this year,
tentatively approved a plan to
seek $18.8 million in cost cuts for
the 2011 budget Wednesday at its
budget committee meeting.
The full board on Thursday
also approved the outline for
cuts, along with a proposal to pay
up to $50,000 toward the new specialist in the Planning and Economic Development Department.
Commissioners Ed Bruley and
Brian Brdak said the staffer will
be an employee of MSU, which
contributes another $50,000 and
pay’s the employee’s legacy
costs.
The county has asked the local
communities of St. Clair Shores,
Harrison Township, New Baltimore and Chesterfield Township
to help defray its own share of the
cost with $5,000 apiece.
Chad Halcom: (313) 446-6796,
[email protected]
Democrats seek increase in
renewable energy standard
House Democrats are moving
forward plans to increase the
amount of electricity that Michigan utilities must get from renewable sources.
Bills introduced last week
would build on the current requirement that 10 percent of utilities’ electricity come from renewable sources by 2015 and
establish a 20 percent renewable
portfolio standard by 2020 and a
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“keeping rates afford30 percent standard by
able for customers.”
2025.
House Bill 5906, sponsored by Dan Scripps,
D-Leland and House
Bill 5907, sponsored by
Pam Byrnes, D-Chelsea,
Bills that would allow
were hailed by environmunicipalities
and
mental groups and oththeir brownfield redeer interests who said
velopment authorities
the legislation would
to use tax increment
help Michigan compete
revenues to assemble
for jobs-producing inAmy Lane
and acquire land are
vestment by renewablemoving forward in the
energy companies.
Legislature.
“Raising Michigan’s renewMunicipalities and authorities
able energy standard will help
could generally use local tax dolmake our state a leader in one of
lars, but not state school operatthe fastest-growing sectors in toing taxes, to purchase and clear tiday’s economy,” said Gayle
tle for properties for economic
Miller, legislative director of the
development purposes. The bills
Michigan chapter of the Sierra
are designed to provide an ability
Club, in a news release.
similar to that given to land
But CMS Energy Corp. and DTE
banks.
Energy Co. say Michigan’s current
House Bill 5566, sponsored by
standard, enacted in 2008 law,
Robert Jones, D-Kalamazoo, last
needs time to work.
week passed the House in a 100-7
Both companies are moving
vote, while Senate Bill 492, sponahead with substantial investsored by Tom George, R-Kalamaments in such areas as wind enzoo, was approved by a Senate
ergy.
committee.
“Our position on that legislation is that we are opposed to the
bills that are being proposed,”
said Len Singer, senior specialist, external communications at
䡲 The state Senate passed bills
that would eliminate retirement
DTE.
“We believe that it’s prema- health care benefits for lawmakture at this point to be expanding ers and other state officials electon the renewable portfolio stan- ed on or after Nov. 1.
Current law provides for lawdard, until we better understand
our ability to achieve the 10 per- makers, after six years of service,
cent goal by 2015, particularly to qualify for free lifetime health
considering the revenue con- care benefits upon reaching age
straints ... in the 2008 legisla- 55.
tion.”
䡲 Former state representative
Jeff Holyfield, director of news and Garden City Mayor Jim Plakas
and information at CMS, said has been appointed to the Michi“the existing standard was set af- gan Gaming Control Board by Gov.
ter nearly two years of discus- Jennifer Granholm.
Prior to Plakas’ appointment,
sion, analysis and debate, and it’s
the five-seat board had just three
working.”
He said the 10 percent was a members, preventing the issue of
level arrived at that balanced any new gaming licenses —
the need to encourage renewable which under Michigan law reenergy
development,
with quires four votes.
Capitol
B r i e fi ng s
Bills would let
local taxes buy land
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Page 1
CRAIN’S DETROIT BUSINESS
March 1, 2010
High schools: Plans get $13M kickoff
■ From Page 1
Part of the plan for the Michigan
Future Schools or “high school accelerator” project is to launch it
nationally after it takes root in Detroit “so that national thought
leaders understand there’s innovation in Detroit, or that we’re fertile for investment and fertile for
reform,” Allen said.
Michigan Future has committed
the first grant of $850,000 to Detroit
Edison Public School Academy in Detroit — led by Superintendent
Ralph Bland — to expand its successful kindergarten through
eighth-grade offerings into a high
school set to open this fall.
Bland is working with the Engineering Society of Detroit to design
the new high school and its curriculum.
“Too much has been said about
high schools being able to graduate students, but those students
still need remedial help,” Bland
said.
“Students should be able to
graduate and go straight into college-level courses. That is the bar
we would like to set.”
Michigan Future Schools also
has made a $50,000 planning grant
to the Detroit Public Schools to develop a proposal for a new scienceand medicine-themed high school
that would open in 2011, Glazer
said.
Michigan Future plans to fund
two other high schools in 2011 and
is taking applications through
April 1 at its Web site, www.
should be
“ableStudents
to graduate and
go straight into
college-level courses.
That is the bar we
would like to set.
”
Ralph Bland, Detroit Edison
Public School Academy
Michiganfuture.org/schools.
It will provide average grants of
about $800,000 to cover a year of
planning and three years of operation for new college-prep high
schools — not previously established, failing ones — whether
they are traditional public, charter, private or parochial.
The new high schools won’t be
required to locate in the city of Detroit, Glazer said. But they will
have to be located east of Telegraph Road and south of 12 Mile
Road to be easily accessible to students from Detroit.
More than anything else, Michigan Future Schools will be vetting
for passion, commitment and competence in the educators who are
going to lead the new high schools,
Glazer said.
Achievement requirements are
similar to University Preparatory
Academy’s commitment to graduate 90 percent of its students and
have 90 percent of graduates go on
to college.
Michigan Future Schools also
will have dedicated counselors
helping its graduates stay in college.
Just as the Michigan Future
Schools governing council will
hold its high schools to the student
achievement goals, University
Prep’s primary supporter, philanthropist Robert Thompson, holds
its nonprofit operator New Urban
Learning accountable, said New Urban Schools CEO Doug Ross.
Michigan Future Schools and
New Urban Learning “share exactly the same mission,” he said.
“The only thing that matters is
graduating college-ready children
and sending them off to college.”
Michigan Future Schools aligns
with a broader citywide education
plan under development since last
year by the collaborative Excellent
Schools Detroit.
Michigan Future, the four foundations and New Urban Learning
are among its members.
One of the key strategies of the
citywide education plan, expected
to be released March 11, calls for
the creation of 70 new college prep
high schools in Detroit, said
William Hanson, director of communications and technology at
Skillman.
Sherri Welch: (313) 446-1694,
[email protected]
Marygrove: Athletics draw students
■ From Page 3
Fike said by expanding course
and athletic offerings, Marygrove
has been able to attract students
from areas beyond its traditional
market that has predominantly
been Southeast Michigan.
Adrian College President Jeffery
Docking said his
college experienced similar
results after it
launched a new
intercollegiate
men’s ice hockey team about
five years ago.
Since creating the hockey
program, Adri- Docking
an College has ballooned from
about 850 students to more than
1,600 this year, with an average
freshmen class of about 500 compared with the average of about
260 prior to the hockey program.
Docking estimates that last year
about 150 freshmen enrolled in the
college who are involved in men’s
hockey, women’s hockey, two
flights of ACHA club hockey and
women’s synchronized ice skating.
The hockey team was the center
of a business plan to grow the college.
With launching the program,
the college built a $6.5 million ice
arena funded by gifts; and because
of higher tuition and room-andboard revenue from the increased
student influx, the college’s budget
is now about $48 million and is in
the black, compared to a $23 mil-
lion budget before 2005 that was in
the red.
“It’s been a great model for us,
and we’re glad that other small private colleges are replicating this,”
Docking said.
Ed Blews, president of the Association of Independent Colleges and
Universities of Michigan, said a number independent colleges have expanded athletic offerings in recent
years, both intercollegiate and intramural athletics.
He said the primary factor drawing students to smaller independent colleges is still academics, but
athletics do add another dimension to a college.
“Offering students a variety of
athletic opportunities — intercollegiate and everything in between
— it does become an additional
draw for students to the campus,”
he said.
Marygrove will be sharing the
golf practice facility with Midnight
Golf, a Detroit-based youth development and college readiness program that works with 140 students
per year, mostly seniors in the Detroit Public Schools, to develop golf
and life skills.
Midnight Golf will use Marygrove’s new two-sided driving
range, putting green, sand traps
and four short-distance practice
holes twice weekly, saving the
high school program the trip to a
driving range in Southfield.
“That’s what we love about this
facility,” Fike said.
“It confronts head-on many of
the perceptions about golf as a
sport that has traditionally not
provided a lot of access to urban
youth. This program — both the
partnership with Midnight Golf
and the program being here at a
college in Detroit that serves urban youth — is bucking that
trend.”
Ryan Beene: (313) 446-0315,
[email protected]
CRAIN’S CALLS FOR
UNDER 40 NOMINATIONS
Crain’s Detroit Business is seeking
nominations for the 2010 class of
40 under 40, which
recognizes young
achievers based on
factors such as
financial impact and
civic and community
leadership.
Winners will be profiled
in the Oct. 4 issue,
and Crain’s will
celebrate their achievements at an
Oct. 28 awards event.
To be eligible, nominees must be
under age 40 as of Oct. 4, 2009.
For sponsorship opportunities,
please call (313) 446-6052.
Nominations must be received by
April 5. Visit
www.crainsdetroit.com/nominate
to fill out the online form.
Questions? Contact Jennette
Smith, assistant managing editor,
at [email protected] or (313)
446-1622.
Page 27
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Page 1
Page 28
March 1, 2010
CRAIN’S DETROIT BUSINESS
Ilitches’ hiring of Wilson points toward arena effort
BY BILL SHEA
CRAIN’S DETROIT BUSINESS
Last week, the Ilitch sports and
entertainment empire announced
two major hirings: Johnny Damon
to play left field for the Detroit
Tigers and Tom Wilson to be lead
new business ventures — which
collectively saw revenue of $2.1 billion last year.
Damon’s job is to get the Tigers
back to the World Series, but Wilson may have the greater challenge.
Through a to-be-named new entity, he will command the Ilitch
family’s likely effort to finance and
construct a new downtown arena
for the Detroit Red Wings, one possibly built jointly with his former
employer, Auburn Hills-based
Palace Sports & Entertainment and
the Detroit Pistons.
Almost all of the questions during the press conference introducing Wilson on Tuesday were a
variation on one theme: Does his
hiring signal the Ilitches’ intention to build a replacement for
city-owned Joe Louis Arena,
where the Wings have played since
1979?
The Ilitches declined to renew
the current lease last June, triggering the talks for a new agreement. However, they’ve said
they’re also performing due diligence on possible construction of a
new arena, and they’ve acquired
land in the city to that end. It’s also
believed that at least preliminary
plans exist on paper for a new
venue.
Justification for new sports and
entertainment arenas is that they
can generate new revenue streams
from modern luxury suites, corporate sponsorships and naming
rights deals. There’s also little argument that Joe Louis, built by the
city for $57 million to keep the
Wings from following the Pistons
and Detroit Lions to the suburbs, is
aging and needs repairs and up-
DAVE REGINEK/COURTESY OF ILITCH HOLDINGS
Tom Wilson fields questions Tuesday
at a press conference about his new
position with the Ilitch sports empire.
grades — cost figures floated range
from $10 million to $150 million for
a total facelift.
The Ilitches’ Olympia Entertainment venue management business
has been negotiating a new lease
with the city through its quasipublic Detroit Economic Growth Corp.
A new lease, for a shorter term,
likely would contain language that
allows the team an easy exit.
The Ilitches won’t comment
specifically on either the lease or a
new facility, or on speculation that
the Red Wings could play temporarily at the Palace of Auburn
Hills or even Ford Field.
Three messages left for DEGC
President George Jackson were
not returned.
Wilson has been given the authority over the lease negotiations,
so he can lead the talks himself or
continue to have Dana Warg and
others continue to head the discussions.
If the Red Wings and the city
don’t reach a new deal by June 1,
when the current lease expires,
the hockey team isn’t expected to
be turned out into the street.
“Do I look worried?” asked
Chris Ilitch, chuckling. He is president of Detroit-based Ilitch Holdings
Inc., which oversees the various
companies that make up the business, sports and entertainment
empire assembled by his parents,
Little Caesar Enterprises Inc.
founders Mike and Marian Ilitch.
Evidence suggests that the Ilitches are tacitly signaling their
intentions behind closed doors, although they say no decisions have
been reached.
Chris Ilitch said he’s briefed all
of the new City Council members
about the company and its plans —
including some discussion of the
Red Wings’ venue situation.
Detroit Mayor Dave Bing’s office confirmed that he has been
briefed on the arena situation. Wilson said Bing — who played for the
Pistons from 1966 to 1975 as part of
a Hall of Fame basketball career —
has been a friend for more than 20
years.
Wayne County Executive Bob
Ficano confirmed previously that
he’s had talks with the Ilitches
about a new arena and financing.
If the Ilitches finalize a decision
to build a new facility, alone or
with the Pistons, Wilson will enter
a political landscape quite different from anything he’s experienced. He has orchestrated an arena, however.
He drew up on a paper napkin the
basic concept of the multi-concourse Palace of Auburn Hills, with
its 180 suites both atop and at midlevel, and then oversaw its $90 million birth in 1988. That success, and
his subsequent stewardship of
Palace Sports and its other venues,
earned him praise within the industry and got him his new job.
“I’ve assumed all along that the
Ilitches will at least try for a new
facility — you can’t get it if you
don’t ask, right? — so Wilson’s hiring is just more evidence for what I
already expected,” said Neil deMause, author of Field of Schemes
and a Web site of the same name
that’s critical of public investment the Ilitches to Detroit’s future and
in stadiums.
redevelopment is well known,”
The Palace was built entirely said Mark Rosentraub, a professor
with private money by majority of sports management at the Uniowner Bill Davidson, whose death versity of Michigan. “If an arena
last March set in motion Wilson’s could be built that anchored a new
downtown neighborhood, as was
decision to leave Palace Sports.
This time, it’s likely that a new done in Columbus, Washington
Red Wings arena would involve D.C., Los Angeles, and that is besome level of public financing — a ing planned for Edmonton, this
dicey political proposition in a fi- could be the exact sort of shot in
nancially stricken city and reces- the arm the city needs.”
Speculation is
sion-mired metro
that a new hockey
region, and with
arena would be
banks loathe to
built on Ilitchlend money.
owned land in the
A new hockey
Foxtown area or
venue is expected
between
Grand
to cost $300 million
River and Cass
to $400 million.
south of I-75.
The Pittsburgh PenChris Ilitch acguins, who edged
knowledged that
the Red Wings in
the family has acthe Stanley Cup fiquired land but
nals last June,
Mark Rosentraub,
declined to say if
open next season
University of Michigan
enough has been
at the $321 million,
18,087-seat Consol Energy Center gathered to build a new arena.
Navigating the politics of Deafter 48 years at Mellon Arena.
troit and Wayne County also will
Consol has 66 suites.
The Ilitches could choose to fol- be quite different than dealing
low their previous venue path: with the Auburn Hills City CounComerica Park, home to the Mike cil, Wilson admitted.
“It’s a new experience for me,”
Ilitch-owned Tigers, opened in
April 2000 at a cost of $300 million he said. In coming days and weeks,
financed by Ilitch, the city, Wayne he’ll meet with the Ilitches to priCounty and corporate investors. Il- oritize more than 60 ideas and iniitch paid $185 million of the cost of tiatives, he said.
Andy Appleby, a former senior
the stadium, owned by the DetroitWayne County Stadium Authority and vice president at Palace Sports under Wilson and now owner of a
subleased to the team.
marketing
firm
in
Forbes.com valued the Red sports
Wings at $337 million in Novem- Rochester that might be interested
ber, fourth in the 30-team National in buying the Pistons, said the IlHockey League. The financial news itches hired the right guy.
“Tom makes the Ilitch organizasite also put a $1.4 billion worth on
Mike Ilitch, who bought the Wings tion better and even more strong to
for $8 million in 1982 from former pull something off like (building a
new arena),” he said. “Tom is a
owner Bruce Norris.
Sports industry watchers think wonderfully talented guy and really
Wilson is the right choice for an one of the very best executives in
sports. He was the father of modernarena effort.
“Tom Wilson has the experience day sports team marketing.”
Bill Shea: (313) 446-1626,
to ensure that an arena project is
successful, and the commitment of [email protected]
(An arena)
“
could be the exact
sort of shot in the
arm the city
needs.
”
Pistons: Investment consortium may seek to purchase team
■ From Page 1
pleby said. He cautioned that it’s
still very early and a list of potential teams is still being assembled
for consideration.
The investment group is known
to include these deep-pocket
names:
䡲 Jeff Mallett, who made his fortune as president and COO of Yahoo Inc. from 1995 to 2002 and is
principal owner of the San Francisco Giants among numerous investments. He became principal investor in the Derby County
franchise in March 2009 and is an
investor in the new Major League
Soccer expansion team that begins
play next year in Vancouver.
䡲 Tom Ricketts, co-owner and
chairman of the Chicago Cubs,
which his family bought in October for $845 million. He’s CEO of
Chicago investment bank Incapital
L.L.C. and sits on the board of TD
Ameritrade Holding Corp.
䡲 Dave Freeman, founder and
CEO of Nashville-based investment firm 36 Venture Capital and
managing partner of Predators
Holdings L.L.C., which owns hockey’s Nashville Predators. His money
comes from the 2007 sale of medical waste handler Commodore Medical Services, which he founded.
䡲 Bill Luby, founding partner of
New York-based private equity firm
Seaport Capital, which invests in media, communications and businessand information-services companies. One of the investments is in
Mandalay Baseball Properties L.L.C.,
which owns several minor-league
baseball teams, including the Detroit
Tigers’ Double-A affiliate the Erie
SeaWolves. He’s a former managing
director at Chase Capital.
䡲 Jeff Martinovich, chairman and
CEO of Newport News, Va.-based
wealth management consultants
MICG Investment Management L.L.C.
䡲 W. Brett Wilson, co-founder of
Canada’s FirstEnergy Capital Corp., a
brokerage firm in the oil and gas
sector. He’s retired from the firm
but remains non-executive chairman. He owns the West Tenn Dia-
mond Jaxx minor-league baseball
team in Jackson, Tenn., and also is
managing director and president
of Calgary-based Prairie Merchant
Corp., which invests in energy,
agriculture, real estate, sports and
entertainment industries.
It’s believed there are at least
two or three more investors in the
Derby County consortium, which
would likely be the same group
that would bid on the Pistons. Appleby declined to discuss the other
investors, but they have been indentified by the British press in
coverage of Derby County.
Karen Davidson inherited the
Pistons when her husband,
Guardian Industries Inc. Chairman
Bill Davidson, died last March.
She said in January that she’s interested in selling the team, valued
by Forbes.com at $480 million, with
or separately from Palace Sports &
Entertainment, the venue management company.
Sports industry insiders have
said they expect the Pistons to sell
for less than the Forbes estimate.
Tom Wilson, who left Palace
Sports after 32 years to join Detroit-based Ilitch Holdings Inc. last
week, said previously that a halfdozen groups had expressed interest in the Pistons. He didn’t identify any of them.
The Ilitch organization, which
includes the Detroit Red Wings and
the Detroit Tigers, has declined to
speculate on rumors it might be interested in buying the Pistons or
cooperating with the team on
building a joint arena downtown.
Chris Ilitch, president of Ilitch
Holdings, also did not rule out any
of the deals.
Appleby previously was interested in buying the St. Louis Blues
and in bringing a minor-league
baseball team to suburban Detroit,
deals that didn’t bear fruit. His
company did own the Fort Wayne
Wizards, a Class A minor-league
baseball affiliate of the San Diego
Padres, for several seasons until
selling the team in 2006.
Appleby worked at Palace
Sports from 1986 to 1998, leaving as
a senior vice president to found
General Sports.
General
Sports specializes in consulting, team management,
marketing,
sponsorships
and has synthetic turf and naming-rights diviAppleby
sions.
“After owning a major league
team for over two years now, I’m
more cautious,” he said. “That
doesn’t mean I haven’t loved every
minute of owning that team.”
He said that if given the chance
he would still have bought Derby
County, which has struggled on
the field but regularly draws
crowds of more than 30,000.
“We’ve learned a lot,” he said.
Bill Shea: (313) 446-1626,
[email protected]
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6:23 PM
Page 1
CRAIN’S DETROIT BUSINESS
March 1, 2010
Page 29
Budget: Concern is federal help not long-term fix
■ From Page 3
dealing with the state’s chronic
imbalance between spending and
revenue.
In an analysis released last
week, the nonpartisan Citizens Research Council of Michigan said that
while some of Granholm’s proposals “grapple with aspects” of a
structural deficit problem, other
solutions “are instead aimed at
short-term balance.”
But it’s also not realistic to expect one year’s budget to eliminate
a problem that’s existed for more
than a decade, said Craig Thiel,
the council’s director of state affairs.
The council said that while
Granholm’s fiscal 2011 budget contains some elements that “are meritorious from the vantage point of
providing long-term stability to
the state budget, many have experienced strong opposition because
they entail increasing taxes or cutting services.”
Overall, the organization gives
Granholm’s budget a mixed review for addressing the state’s
structural budget deficit.
For example, the council points
out her proposal to extend Michigan’s sales tax to consumer services would bring in revenue to K12 schools from the state’s
fastest-growing segment of the
economy.
However, Granholm’s proposal
excludes “the rapidly growing
health care sector,” Citizens Research said.
“Increasing health care costs
are driving much of the spending
pressures facing the state, in both
the general and school aid fund
budgets. While adding services to
the tax base will increase the
growth rate of Michigan’s sales
tax, the resultant rate will likely to
continue to trail the growth in
state health care costs,” the council said.
Granholm proposed the tax on
consumer services as a way to
modernize what she said is an outdated tax structure and provide a
stable source of funding for K-12
education.
But the tax, which faces significant business opposition, is also
the main assumption to address a
School Aid Fund budget shortfall
that will require further cuts in education equating to a $255 perpupil reduction.
Kerry Birmingham, media relations specialist at the Michigan Education Association, said lowering
the sales tax rate to 5.5 percent and
expanding it to services is “a good
first step” toward providing stable
funding for schools. She said
schools cannot take “another
round of really devastating cuts.”
Beyond the services tax, other
budget components that Citizens
Research said take aim at Michigan’s structural challenges in-
clude changes in school employee
pension benefits, correctional policy steps that would reduce prison
populations and state employee-related savings from areas that include requiring employees to pick
up more of the cost of retirement
benefits.
However, “the clearest example
of a short-term budget fix” that
does not address underlying structural problems, is the federal Medicaid assumption, Citizens Research said.
In the state general fund, nearly
half of a projected $1.09 billion
funding gap would be closed if the
federal government grants an additional six months of the enhanced federal match for Medicaid, or FMAP, assistance.
The federal stimulus package already provides for about $208 million in enhanced FMAP to states
for one quarter of fiscal 2011.
Citizens Research said that the
“chief problem associated with this
(FMAP) assumption is to postpone,
until fiscal year 2012, crafting structural solutions totaling $700 million
in one of the state’s largest general
fund budget items.”
The nation’s governors and a
host of interest groups are urging
Congress to extend the assistance,
with many states like Michigan including the FMAP extension in
their budgets.
At the Michigan Health & Hospital
Association, officials are talking to
the state’s congressional delegation and working with their national organization to lobby for
passage of the FMAP extension.
Absent the federal money that is
essential to Granholm’s Medicaid
budget, the group is worried there
could be further cuts to Medicaid
providers’ reimbursements or reductions in Medicaid eligibility or
optional services that could decrease Medicaid patients’ access to
primary care physicians and send
them to emergency rooms.
Granholm’s general fund budget
also relies on an additional
$133 million in savings that would
come from a 3 percent physician
tax — an issue that faces an uphill
battle in the Legislature.
The Michigan State Medical Society and the Michigan Osteopathic Association oppose the proposal and
are urging lawmakers to reject an
estimated $300 million tax that
they said would harm the state’s
health care system and lead fewer
doctors to practice in Michigan.
State Budget Director Bob
Emerson has said the tax would
bring in $527 million in additional
federal money for Medicaid, and
would increase state reimbursement rates to Medicaid physicians
by 80 percent and bring reimbursements up to Medicare levels.
Amy Lane: (517) 371-5355,
[email protected]
www.crainsdetroit.com
EDITOR-IN-CHIEF Keith E. Crain
PUBLISHER Mary Kramer, (313) 446-0399 or
[email protected]
EXECUTIVE EDITOR Cindy Goodaker, (313) 4460460 or [email protected]
MANAGING EDITOR Andy Chapelle, (313) 4460402 or [email protected]
ASSISTANT MANAGING EDITOR/FOCUS Jennette
Smith, (313) 446-1622 or [email protected]
ENTREPRENEURSHIP EDITOR Michelle Darwish,
(313) 446-1621 or [email protected]
COPY DESK CHIEF Gary Piatek, (313) 446-0357
or [email protected]
ASSISTANT NEWS EDITOR Jeff Johnston, (313)
446-1608 or [email protected]
DATA EDITOR Anne Marks, (313) 446-0418 or
[email protected]
WEB EDITOR Christine Lasek, (313) 446-0473,
[email protected]
WEB DEVELOPER Steve Williams, (313) 4466059, [email protected]
EDITORIAL SUPPORT Robertta Reiff (313) 4460419, YahNica Crawford, (313) 446-0329
NEWSROOM (313) 446-0329, FAX (313) 4461687 TIP LINE (313) 446-6766
REPORTERS
Ryan Beene: Covers auto suppliers, steel, higher
education and Livingston and Washtenaw
counties. (313) 446-0315 or [email protected]
Daniel Duggan: Covers retail, real estate and
hospitality. (313) 446-0414 or
[email protected]
Jay Greene: Covers health care, insurance and the
environment. (313) 446-0325 or
[email protected].
Chad Halcom: Covers law, non-automotive
manufacturing, defense contracting and Oakland
and Macomb counties. (313) 446-6796 or
[email protected].
Tom Henderson: Covers banking, finance,
technology and biotechnology. (313) 446-0337 or
[email protected].
Nancy Kaffer: Covers small business, the city of
Detroit, Wayne County government. (313) 4460412 or [email protected].
Bill Shea: Covers media, advertising and
marketing, entertainment, the business of sports,
and transportation. (313) 446-1626 or
[email protected].
Nathan Skid: Multimedia reporter. Also covers the
food industry. (313) 446-1654, [email protected].
Sherri Begin Welch: Covers nonprofits and
services. (313) 446-1694 or [email protected]
LANSING BUREAU
Amy Lane: Covers business issues at the Capitol,
telecommunications and utilities. (517) 3715355, FAX (517) 371-2492, [email protected]. or
115 W. Allegan, Suite 220, Lansing 48933.
ADVERTISING
Industrial park: Is plan out of date?
■ From Page 3
extensive cleanup to remove 1,500
tires, furniture, boats and other
trash that had been illegally
dumped on the property.
The EDC has spent $18.9 million
over the past 10 years at the site,
including property acquisition
costs, of a budgeted $37 million,
Long said.
Just north of I-94, bounded by
Mt. Elliott to the west, Miller to the
south, Huber and Winfield to the
north and St. Cyril to the east, the
site was targeted for development
as an industrial park in the 1990s,
said Malik Goodwin, director of
project management at the DEGC,
which provides support services to
the EDC and handles property acquisition for the site.
The site is inside a renaissance
zone, set to expire in 2017, which
eliminates many taxes for businesses within the project boundaries.
Long said that the recent purchase of the old Cooper School, located in the project area, is a sign
of progress. But roughly 130 privately owned parcels scattered
across the site must still be acquired, a process Goodwin said is
complicated.
The private parcels, Goodwin
said, are 30-by-100-foot former residential lots.
“If you can imagine having a
120-acre parcel that’s ready to go
and we’ve got a 30-by-100-foot lot in
the middle of it, you can imagine
the level of frustration,” he said.
Goodwin said last year that the
Detroit City Council approved the
use of eminent domain to acquire
the properties but said that negotiations are a better way to obtain
land.
Eminent domain hasn’t served
the project well in the past. By the
mid-2000s, the city had acquired
about 60 percent of the land at the
site, Goodwin said, but an error in
the process meant property owners had to be renotified that the
parcels were subject to tax reversion. That took about a year and a
half.
And state laws have changed, restricting the circumstances in
which municipalities can use eminent domain.
Acquisition of the remaining
parcels, which Goodwin said he
has targeted for completion this
year, will allow the EDC and
DEGC to market the site more effectively.
“Without full control, we cannot
assemble the sizeable parcels of
land we need to market that area
to users who might be looking for
larger tracts of land,” he said.
“We’re talking about end-users
that, for the most part, would not
have as tough a time if they were
scouting suburban locations. But
in the city, that’s really the number-one thing that’s keeping us
from being competitive, and it’s
stymieing our marketing strategy.”
As property acquisition has
lagged, the industrial real estate
market has changed.
“Ten years ago it was an excellent idea, an excellent concept and
very viable,” Dan Labes, a senior
vice president at the Southfield of-
fice of Grubb & Ellis, said of the project. “They rolled it out as a renaissance zone, the economic incentives were there, the automotive
industry was stable, and there was
healthy demand for space in the
urban area. Well, fast forward to
today. Because of huge amounts of
vacancy and a significantly different automotive industry, the demand for space just isn’t there
right now.”
Labes said that industrial vacancy rates are the highest they’ve
been in his 23-year career and that
rental rates and sales prices are at
a 23-year low.
“Right now, it’s at the point
where you couldn’t even give the
land for free to a developer and
they could afford to spec a building,” he said. “Today’s rents are so
low that it can’t justify the costs of
new construction, even excluding
the cost of the land.”
Labes said that it’s possible the
market will rebound, but said he
can’t predict when that will occur.
Mallett pointed to the abundance of vacant land in Detroit — a
survey recently completed by Data
Driven Detroit found that one in
three lots in the city is vacant or
occupied by an abandoned home
— the condition of the industrial
real estate market and Mayor
Dave Bing’s mandate that the city
must shrink to survive.
“Let’s call a 4-H club and say,
‘Plant some corn,’ ” Mallett said.
“There is no one coming to an I-94
industrial park.”
Nancy Kaffer: (313) 446-0412,
[email protected].
HEALTH CARE HEROES
Crain’s Detroit Business is
seeking nominations for Health
Care
Heroes, a
special
report on
health
care professionals that will run
in the Aug. 9 issue.
The program will honor top-notch
medical innovators and patient
advocates — the inspiring
leaders who bring new meaning
to the word “dedication” through
their efforts to save lives or
improve access to care.
Winners will be chosen in five
categories:
䡲 Corporate achievement in
health care — Honors a
company which has created an
innovative health benefits plan
or has solved a problem in
health care administration.
䡲 Advancements in health care
— Honors a company or
individual responsible for a
discovery or for developing a
new procedure, device or
service that can save lives or
improve quality of life.
䡲 Physician — Honors a
physician whose performance is
considered exemplary.
䡲 Allied health — Honors an
individual from nursing or allied
health fields deemed exemplary
by patients and peers.
䡲 Trustee — Honors leadership
and distinguished service by a
health care trustee.
A panel of health care judges
will choose the winners. Visit
www.crainsdetroit.com/nominat
e to submit a nomination. The
deadline is May 10. Questions?
Contact Jennette Smith at
(313) 446-1622 or
[email protected].
ADVERTISING DIRECTOR Marla Downs, (313)
446-6032 or [email protected]
SALES INQUIRIES: (313) 446-6052; FAX (313)
393-0997
ADVERTISING SALES Jeff Anderson, Matthew J.
Langan, Lori Tournay Liggett, Tamara Rokowski,
Kimberly Ronan, Cheryl Rothe, Dale Smolinski
CLASSIFIED SALES (313)-446-0351
MARKETING MANAGER Irma Clark
MULTIMEDIA MANAGER Alan Baker, (313) 4460416 or [email protected]
EVENTS MANAGER Nicole LaPointe
MARKETING ARTIST Sylvia Kolaski
SALES SUPPORT Suzanne Janik, YahNica Crawford
CIRCULATION Candice Yopp, Manager.
MARKETING COORDINATOR Kim Winkler
PRODUCTION MANAGER Wendy Kobylarz
PRODUCTION SUPERVISOR Larry Williams,
(313) 446-0450
CUSTOMER SERVICE
MAIN NUMBER: Call (888) 909-9111 or write
[email protected]
SUBSCRIPTIONS $59 one year, $98 two years.
Out of state, $79 one year, $138 for two years.
Outside U.S.A., add $48 per year to out-of-state
rate for surface mail. Call (313) 446-0450 or
(888) 909-9111.
SINGLE COPIES: (888) 909-9111.
REPRINTS: (800) 290-5460, ext. 125; (717) 3991900, ext. 125; or ashley.zander@theygsgroup
.com.
TO FIND A DATE A STORY WAS PUBLISHED:
(313) 446-0367 or e-mail [email protected].
CRAIN’S DETROIT BUSINESS IS PUBLISHED BY
CRAIN COMMUNICATIONS INC.
CHAIRMAN Keith E. Crain
PRESIDENT Rance Crain
SECRETARY Merrilee Crain
TREASURER Mary Kay Crain
Executive Vice President/Operations
William A. Morrow
Group Vice President/Technology,
Manufacturing, Circulation
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Vice President/Production & Manufacturing
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Chief Information Officer
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Corporate Circulation/Audience Development
Director
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Mrs. G.D. Crain Jr. Chairman (1911-1996)
EDITORIAL & BUSINESS OFFICES:
1155 Gratiot Ave., Detroit MI 48207-2732; (313)
446-6000
Cable address: TWX 248-221-5122 AUTNEW DET
CRAIN’S DETROIT BUSINESS ISSN # 0882-1992
is published weekly, except for a special issue the
third week of January, a special issue the fourth
week of August, and no issue the third week of
December by Crain Communications Inc. at 1155
Gratiot Ave., Detroit MI 48207-2732. Periodicals
postage paid at Detroit, MI and additional mailing
offices. POSTMASTER: Send address changes to
CRAIN’S DETROIT BUSINESS, Circulation
Department, P.O. Box 07925, Detroit, MI 482079732. GST # 136760444. Printed in U.S.A.
Entire contents copyright 2010 by Crain
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Reproduction or use of editorial content in any
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20100301-NEWS--0030-NAT-CCI-CD_--
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March 1, 2010
CRAIN’S DETROIT BUSINESS
RUMBLINGS
Prentice,
Vicari vie for
Seldom Blues
att Prentice, CEO
of Bingham
Farms-based Matt
Prentice Restaurant Group,
and Joe Vicari, CEO of Warren-based Andiamo Restaurant Group, are both eyeing
the former Seldom Blues
space in
the Renaissance Center.
Prentice
said he and
Vicari each
have a good
chance of
Prentice
taking over
the space because they already have successful Renaissance Center restaurants.
“It’s obviously prime
space, and I’m sure other
people are interested, but I
would imagine Joe and I
would have an inside track,”
Prentice said.
Vicari said he is considering splitting the space in
half and opening two concepts. One would be Rojo
Mexican Bistro; he wouldn’t
divulge the other.
“I am looking at something that will be a big surprise to Detroit if it comes
through,” Vicari said.
Prentice said he has a
meeting with building owner General Motors today to
discuss the possibility of a
fish house in the space but
said it will not be a reiteration of Bloomfield Hills’
Northern Lakes Seafood Co.
“If the city had the second coming of Joe Muer’s, I
think it would be extremely
successful,” Prentice said.
“Every great city has a clas-
M
sic fish house.”
Real estate sources said
other restaurateurs are
looking at the space but no
deal is imminent; GM is reviewing options.
Burgers won’t do?
Is a lavish lifestyle helpful, even crucial, if you’re
trying to sell software for
Covisint, the Compuware
Corp. business unit that has
employed Kwame Kilpatrick
for more than a year?
That’s what the ex-mayor’s attorney, Daniel Hajji,
claimed in filings with an
appeals court last week.
Hajji said Kilpatrick’s
ability to make court-ordered restitution was impacted by what he needs to
spend on would-be clients,
that they weren’t the types
you could take out for a
burger.
Bill McGraw, the former
Free Press reporter now director of media relations at
Compuware, told Crain’s
that Compuware’s “policy
on reimbursement is just
like most other companies’
— legitimate business expenses are reimbursed.”
Karmanos told Paul W.
Smith on his WJR morning
show, after he hired Kilpatrick last February, that
he told him “if another shoe
drops, you understand you
are not working here.”
Apparently the Michigan
Department of Corrections’ request last week for a bench
warrant for Kilpatrick’s arrest on probation violations
did not meet the fallingshoe standard. McGraw
WEEK ON THE WEB
FROM WWW.CRAINSDETROIT.COM, WEEK OF FEB. 20-26
also said the ex-mayor remains a Covisint employee.
On Friday, the arrest warrant was put on hold by the
Michigan Court of Appeals.
At what address will
the address be held?
Troy Mayor Louise
Schilling has canceled her
Thursday State of the City
address.
The annual speech was
set to be held at the city’s
community center — one of
several city facilities threatened to be closed after a
failed tax increase vote last
Tuesday.
Hmmm ... perhaps the
city is looking for a new location for the event?
Winning Futures looking
for everyday heroes
Nonprofit Winning Futures
is taking nominations for
its annual “Rare Everyday
Hero” awards.
In its eleventh year, the
program honors Michigan
adults doing extraordinary
work in both their personal
and professional lives.
Winning Futures is taking nominations through
April 15 at www.winningfutures.org under the “Rare
Everyday Hero” tab.
The organization plans to
host an awards ceremony in
July.
BITS & PIECES
■ Philanthropist and life
balance speaker Malaak
Compton-Rock (wife of comedian Chris Rock) is the
keynote speaker at the Jackets for Jobs Inc. Red Carpet
Gala on March 25 at the
Charles H. Wright Museum of
African American History. The
nonprofit Jackets for Jobs
Inc. provides career skills
training and professional
clothing to economically disadvantaged individuals. For
more information or tickets,
see www.jacketsforjobs.org.
BEST FROM THE BLOGS
READ THESE POSTS AND MORE AT WWW.CRAINSDETROIT.COM/BLOGS
Noticed among rapper’s gear
“
Bruce Egnater, who
makes some of the most
well-respected tube
amps in the world, is a
metro Detroit business
owner. … He’s got an
off-the-shelf line that’s
sold in major retail
chains. And, apparently,
he has the respect of
one Jay-Z.
”
Reporter Nancy Kaffer’s blog on the city of Detroit
and small business can be found
at www.crainsdetroit.com/kaffer
Restaurateur helping Haiti
“
George Gjekaj,
owner of Georgios Pizza
and Pasta in downtown
Rochester, is putting
up 5 percent of his
profit ... to help
suffering children in
Haiti.
”
Reporter Nathan Skid’s Detroit-area restaurant blog
can be found at www.crainsdetroit.com/skid
Suppliers’
offices
searched in
antitrust probe
enso Corp. in Southfield, Yazaki North
America Inc. in Canton, and Tokai Rika Group
North America in Plymouth
were searched by FBI
agents from the Detroit
field office Tuesday in connection with an international antitrust investigation. A spokesperson with
the U.S. Department of Justice wouldn’t elaborate on
the investigation. Denso
said the search was not related to the Toyota recall
investigations.
On Thursday, a European
office of Southfield-based
Lear Corp. was searched by
officials in connection with
the widening international
investigation. Lear declined
to specify the information
contained in the documents.
D
ON THE MOVE
䡲 John Cocciolone, president and CEO of Easter
Seals of Michigan Inc., has
left the agency for undisclosed reasons. COO Brent
Wirth has been named acting CEO.
䡲 Ken Matzick, CEO of
Royal Oak-based William
Beaumont
Hospitals
since 2005
and an employee of
the threehospital
system for
41 years,
Matzick
has announced he will retire on
May 31, his 67th birthday.
Gene Michalski, Beaumont’s
executive vice president
and COO, has been named
new CEO, effective June 1.
䡲 Steve Wilson, lead investigative reporter at Detroit’s
WXYZChannel 7,
announced
that his
contract
wasn’t renewed.
For more
Wilson
details,
read Bill Shea’s blog at
www.crainsdetroit
.com/shea.
䡲 Delphi Automotive L.L.P.
CFO John Sheehan plans to
leave the Troy-based supplier to be the CFO at Pittsburgh-area pharmaceutical
company Mylan Inc. on
April 1, where he will oversee the company’s global finance operations.
COMPANY NEWS
䡲 Miramar, Fla.-based
Spirit Airlines has announced it will begin seasonal service — May 21Nov. 10 — between Detroit
and Atlantic City.
䡲 Farmington Hillsbased AAM I L.L.C. has purchased the headquarters of
the Handleman Co., which is
liquidating. The $3 million
sale was brokered by Farmington Hills-based Friedman
Real Estate Group, which
represented both the buyer
and the seller.
ELECTIONS
䡲 Troy officials say the
city will close its library,
nature center, community
center and museum and lay
off 47 police officers after
voters Tuesday rejected a
five-year, 1.9-mill tax increase, the Associated
Press reported.
Voters in nearby Bloomfield Township approved a
10-year, 1.3-mill public
safety millage. Voters in
the
Chippewa
Valley
School District approved
an $89 million bond, while
Berkley residents rejected
a $168 million school bond.
䡲 Macomb County Sheriff Mark Hackel announced
his candidacy to become
Macomb County’s first
county executive.
The other officially announced candidate is Anthony Marrocco, county public
works commissioner.
䡲 U.S. Rep. John Dingell,
D-Dearborn, announced he
plans to run for re-election.
LANSING
䡲 State Rep. Mark Meadows, D-East Lansing, has
added a reduction in the
gross receipts tax in the
Michigan Business Tax base
to his earlier proposal to
lower Michigan’s sales and
use tax rates to 5 percent
and extend them to consumer services, while eliminating the nearly 22 percent surcharge on the MBT.
OTHER NEWS
䡲 U.S. Magistrate Judge
Steven Pepe ordered former
Kmart CEO Charles Conaway
to pay more than $10 million for misleading investors before the retail
chain filed for bankruptcy
protection in 2002, but denied a request that would
have prevented Conaway
from serving as an officer
or director at another public company, AP reported.
䡲 The Detroit Tigers said
they’re adding eight more
promotional giveaways
and special events, totaling
31, for the upcoming season to lure fans to Comerica
Park.
䡲 The Rev. Wendell Antho-
ny, leader of the NAACP’s
Detroit chapter, withdrew
from contention to
become
chair of the
national
organization after
he was not
re-elected
Anthony
to his seat
on the board. Roslyn Brock, a
Maryland health care executive who spent 10 years in
health programs with the
W.K. Kellogg Foundation in
Battle Creek, was elected to
succeed Julian Bond.
䡲 The NCAA has accused
the University of Michigan of
five potentially major rules
violations under coach Rich
Rodriguez, who will nevertheless be back for a third
season, AP reported. The
allegations include failing
to “promote an atmosphere
of compliance within the
football program” and not
making sure players were
following NCAA rules, particularly those limiting the
time spent on practice and
football-related activities.
UM has 90 days to respond.
䡲 The Detroit Public
Schools is outsourcing bus
service for more than 22,300
students at an expected savings of $49 million over five
years, emergency financial
manager Robert Bobb said
Tuesday, AP reported.
䡲 In his State of the
County address Tuesday,
Wayne County Executive
Robert Ficano touted $2 billion in new investment in
the county, and said he is
launching an effort to make
Wayne County a center for
autism research and treatment, and renewed his
commitment to creating an
“aerotropolis.”
䡲 A survey released by
the Detroit Data Collaborative
says 23 percent of 343,849
residential parcels in the
city are unimproved or
dangerous open lots. Ten
percent of residential units
are vacant or possibly vacant. But only a fraction of
the city’s occupied housing
is in poor or worse condition. The survey can be
found at detroitparcel
survey.org.
䡲 The Salvation Army Eastern Michigan Division has received word from the state
that its donors will no
longer be able to take the
Michigan food and shelter
tax credit since it is primarily a religious organization. The group said it
was working to regain the
tax credit.
OBITUARIES
䡲 Kelvin Scott, director of
the Michigan Department of
Civil Rights, died Feb. 20 of
cancer. He was 47.
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