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JUNE 26 - JULY 2, 2017

Foxconn said Bill Shea: A


to focus on hard look at
Romulus site subsidies
in plant search. for team
Michigan still in running,
owners.
Page 3 Page 3

Trade
SPECIAL REPORT
DETROIT 1917 / 1967 / 2017
Gateway
Still rebuilding shows path
to China’s
potential
By Dustin Walsh
dwalsh@crain.com

Andrew Chmielewski, founder


and CEO of Harrison Town-
ship-based Dave’s Sweet Tooth,
didn’t think about China as a market.
His handmade toffee is a hit in the
states. The seven-year-old company
is set to surpass $1.2 million in sales
this year thanks to tireless efforts to
get its product into 5,000 grocery
stores like Whole Foods Market, Bus-
ch’s Fresh Food Market, Fresh Thyme
Market and Kroger Co.
But Alibaba Group Holding Ltd.’s
Gateway ’17 event last week at Cobo
Center opened Chmielewski’s eyes
to China’s desire for U.S.-crafted
candies and the potential from the
JACOB LEWKOW FOR CRAIN’S e-commerce platform’s more than
Eric Vaughn stands in front of what remains of his father’s former book store on Dexter Avenue. Ed Vaughn’s shop was one of the 2,509 businesses destroyed during the 500 million online shoppers.
violence of 1967. Eric is now a small business owner, as is his son Wynton. “Candy is trending really high in
China; something I was only vague-
Part 2, pages 10-13 Detroit’s nascent comeback hinges on ly aware of before this event,” Ch-
By the numbers: The economic
rebuilding a vast network of small businesses
mielewski said. “Even getting a
causes and impact of a riot that tore small piece of that market would be
through Detroit’s commercial districts.
First hand: Then-surgical resident John
that were lost in the aftermath of 1967 a huge win for us.”
It’s hard to argue the facts. China’s

E
Crissman worked in post-op at Detroit By Chad Livengood | clivengood@crain.com middle class is about 300 million
General Hospital in the summer of 1967. people, with expectations to reach
d Vaughn was attending a meeting of black nationalists in Newark, N.J., when violence erupted near 600 million in the next five years, ac-
More online his bookstore on Detroit’s west side in the early morning hours of July 23, 1967. ¶ Vaughn, then 32, cording to a 2016 McKinsey & Co.
Focus HOPE and New Detroit: owned an African American bookstore on Dexter Avenue that had become a gathering place for a report. Even as China’s economic
Fifty years later, nonprofits founded to growing social and political movement. He drove back to Detroit that Sunday night after hearing the growth has slowed in recent years, its
address root causes of rebellion retool first radio reports of looting and fires engulfing the west side. ¶ After running into a temporary police middle class continues to flourish —
their strategies. Read it online at blockade near the Michigan-Ohio border in Toledo, Vaughn and his friends were able to get back into the city, 76 percent of China’s urban
crainsdetroit.com/Detroit1967 about 24 hours after the rebellion began. SEE VAUGHN, PAGE 10 SEE CHINA, PAGE 15

Inside Education

Special report:
Fashion business
City officials, business execs work
Everyone wants “made in
Detroit” goods. Page 8
to breathe life into Randolph High
By Chad Livengood Today, McLean is a carpentry Now they’re trying to breathe new
Q&A with Rufus Bartell, clivengood@crain.com
teacher at Randolph, which now has life into the school, raising more
owner of Simply Casual. The basic construction skills Tony fewer than 150 students amid a than half of a $6 million goal toward
Page 9 McLean learned at Detroit’s Ran- growing shortage of carpenters, buying new equipment for class-
© Entire contents copyright 2017 dolph Technical High School in the electricians, plumbers and masons rooms and making capital improve-
by Crain Communications Inc. All rights reserved mid-1980s set in motion a career that in Southeast Michigan. ments to the building that the cash-
crainsdetroit.com Vol. 33 No 26 $2 a copy. $59 a year. included working on building Ford “The reason I’m here is because of strapped Detroit Public Schools
Field, Detroit Metro’s airport termi- this school,” he said. Community District cannot afford.
nals and homes in New Orleans after The undercapacity of Randolph It’s part of a larger effort the re-
Hurricane Katrina. and the building’s outdated equip- constituted Workforce Development
When McLean attended Ran- ment has caught the attention of Board has been quietly pursuing for
NEWSPAPER

dolph, the vocational school on the Mayor Mike Duggan’s administra- the past two years to tackle systemic
city’s northwest side was filled to ca- tion and his Workforce Development problems in Detroit’s education and
pacity with 700 students interested in Board, a panel comprised primarily talent-development pipeline.
pursuing careers in the skilled trades. of Detroit’s top C-suite executives. SEE RANDOLPH, PAGE 16
2 C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7

MICHIGAN BRIEFS INSIDE


CALENDAR 14
CLASSIFIED ADS 15
Hospitals benefit from report, Michigan Hospitals: Leading DEALS & DETAILS 14
Medicaid expansion the Way to Healthy Communities,
KEITH CRAIN 6
showing that Michigan hospitals in
Michigan’s more than 170 hospi- 2015 accounted for $2.6 billion in OPINION 6
tals cut bad debt and unpaid costs of community benefits and other pro- OTHER VOICES 7
care by more than $400 million in grams designed to improve popula-
2015, the first full year of Healthy tion health. PEOPLE 14
Michigan Medicaid expansion and While the community benefit to- RUMBLINGS 19
individual private insurance market tal dollars were 10 percent lower
WEEK ON THE WEB 19
assistance that added nearly 1 mil- than the $2.9 billion provided in
lion people to insurance rolls, ac- 2014, Michigan hospitals also in- COMPANY INDEX:
cording to a new report by the Mich- curred nearly $1 billion in Medicare SEE PAGE 18
igan Health and Hospital and Medicaid payment shortfalls in A company hired to analyze the worst-case scenario of an oil pipeline failure in the
Association. 2015. Note: MHA received survey Straits of Mackinac has been fired because of a conflict of interest with Enbridge
“We’re encouraged to see that the data from 126 hospitals in 2014 and Energy LP. “Our trust was violated and we
Healthy Michigan Plan is making a 128 hospitals in 2015. now find ourselves without a key
dent in uncompensated care in legislation until the governor gets Michigan fires oil spill piece needed to fully evaluate the fi-
Michigan and doing exactly what it House adjourns without back from Europe, can look me in analysis contractor nancial risks associated with the
was designed to do when Republi- approving job bill the eyes and can look the caucus in pipeline that runs through our Great
cans and Democrats worked togeth- the eyes and explain to them the an- A company hired to analyze the Lakes. This is unacceptable,” Attor-
er to approve the plan — reducing The Michigan House has ad- swers to the questions that we have worst-case scenario of an oil pipe- ney General Bill Schuette said in a
uncompensated care costs and im- journed for at least three weeks with- at this point,” the DeWitt Republican line failure in the Straits of Mackinac news release.
proving the health status of men and out voting to approve tax incentives told reporters. has been fired because of a conflict
women who couldn’t afford health for companies that add jobs in the Snyder spokesman Ari Adler said of interest with Enbridge Energy LP,
insurance in the past,” Brian Peters, state, after a top Republican said he the governor and his team had talk- the state of Michigan announced last
Correction
CEO of the state hospital associa- learned that Gov. Rick Snyder had ed to Republicans and Democrats to week, according to the Associated
tion, said in a statement. won Democratic support for the bills finalize the legislation. Press. JJA story on Page 3 of the June 19

“In some cases, our hospitals have in a deal that would undermine “There are a lot of stories floating An employee on the project sub- issue misstated Hudson-Webber
seen a 50 percent reduction in the House GOP priorities, the Associat- around and the best thing right now sequently worked on another proj- President and CEO Melanca
number of people coming through ed Press reported. is for everyone to get some rest,” he ect for Enbridge, which owns Line 5 Clark’s previous role at the
the doors without insurance — that’s House Speaker Tom Leonard said said. “The governor looks forward to in northern Michigan. Nor- NAACP Legal Defense and Edu-
significant when it comes to health he would wait for Snyder to return meeting with all the legislative lead- way-based Det Norske Veritas, also cation Fund. Clark led public pol-
care coverage and access to care for from a European trade trip to ad- ers next week to address any con- known as DNV GL, is the contractor. icy and civil rights initiatives at
Michigan residents.” dress House Republicans’ concerns. cerns they have or additional infor- The deal was terminated before the the fund; she did not lead the
Last Wednesday, the MHA re- “We agreed to put the pause but- mation they need to complete this draft report had been delivered to fund as a whole.
leased its annual community benefit ton on the ‘Good Jobs for Michigan’ package of bills. the state.

TECHNOLOGY IN MOTION
C O B O C E N T E R // S E P T E MB E R 6-8, 2017
DETROIT TIMDETROIT.COM

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C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7 3

Analysis

Why does Gores need $34.5M to bring Pistons downtown?


Detroit Pistons owner Tom Gores, Judge Mark Goldsmith blocked a re-
the immigrant success story who quest to block the Detroit City Coun-
bootstrapped himself from modest cil from voting on the arena subsidy
roots in Flint to become a California on Tuesday — effectively halting
private equity billionaire, is no what little resistance there has been
stranger to writing hefty checks. to any aspect of the arena deal. The
For example, he will pay Pistons council OK’d the additional subsidy
center Andre Drummond $23.7 mil- on a 7-2 vote on Tuesday.
lion next season. Last October, he BILL SHEA David Fink, an attorney repre-
paid $100 million for a 30,000-square- bshea@crain.com senting the Downtown Develop-
foot mansion in Los Angeles’ tony ment Authority, which owns the are-
Holmby Hills neighborhood. new Little Caesars Arena to accom- na, argued in court that delaying or
Six years ago, he cut a deal to buy modate Gores’ Pistons as part of stopping the $34.5 million would
the Pistons and the Palace of Auburn their relocation from the Palace of prevent the Pistons from moving
Hills for $325 million. Then he spent Auburn Hills? downtown: “If the Pistons decide
$40 million to modernize the Palace. That’s been the lurking question they’re going back to Auburn Hills, BILL SHEA/CRAIN’S DETROIT BUSINESS
So why is the public footing the amid recent legal wrangling over the the last time it took them 40 years to The public is footing the $34.5 million bill to reconfigure the new Little Caesars
$34.5 million bill to reconfigure the money. Last Monday, U.S. District SEE PISTONS, PAGE 18 Arena to accommodate part of the Pistons relocation from the Palace.

Health Care Manufacturing

DMC program reduces ER visits, admissions Sources say


By Jay Greene
Foxconn
considering
jgreene@crain.com

An innovative program to reduce


costs, improve care continuity and
connect high users of emergency
departments at four Detroit Medical
Center hospitals with a primary care
Romulus site
team has led to significant reduc- By Chad Livengood
clivengood@crain.com
tions in unnecessary ER visits, hos-
pitalizations and readmissions, said Electronics giant Foxconn Tech-
a top DMC physician executive. nology Group is now eyeing a site
DMC’s Gateway to Health pro- in Romulus for a potential manu-
gram — funded by a three-year, $10 facturing facility that would give
million grant through the Patient the Taiwanese company proximity
Protection and Affordable Care Act to Detroit Metro’s direct flights to
of 2010 — has enrolled more than Chinese cities, Crain’s has learned.
6,500 people and enabled those pa- Foxconn has narrowed its
tients to visit DMC Gateway outpa- search in Southeast Michigan to a
tient clinics a total of 16,000 times Romulus site as Wisconsin and
over nearly three years, said Su- Ohio also vie for its business in
zanne White, M.D., DMC's chief what could be an interstate com-
medical officer. petition for multiple facilities, ac-
While financial savings and com- cording to sources familiar with
plete patient outcome data isn’t ex- the company’s search who de-
pected until later this year, White clined to identify the specific Ro-
said the federal government is hap- mulus location.
py enough with the initial results of State and local economic devel-
DMC’s Gateway program to extend opment officials have been active-
the funding to a fourth year. ly working for weeks to woo Fox-
Any reduction in unnecessary conn — the world’s largest contract
emergency room visits is good news electronics manufacturer — and
for hospitals and health care costs. its promise of a multibillion-dollar
They have been an intractable prob- manufacturing investment in
lem that comes with high costs and Michigan.
a high level of uncompensated care The aggressive courtship of Fox-
for hospitals. conn has been quickly developing
“We are very proud of what the in recent weeks, even as a tax in-
Gateway team has done,” said White, centive package Gov. Rick Snyder
an emergency medicine physician has said is needed to win over Fox-
and principal investigator of the conn and other companies has
study. “Patients have improved out- slowed in the Legislature con-
comes and we have a 95 percent sat- trolled by Snyder’s Republican
isfaction rate.” JACOB LEWKOW Party.
SEE DMC, PAGE 17 Suzanne White, M.D., DMC’s chief medical officer, meets with a patient in the Gateway Health Center. SEE FOXCONN, PAGE 17

MUST READS OF THE WEEK In the


market
A reunion AudioNet’s Nino Salvaggio
A chance encounter with success International
Jack Ma in China and Marketplace plans a
— years later in Detroit Company grows despite spring opening in
— a reunion. controversy with hearing aid Bloomfield Township.
Page 19 professionals. Page 4 Page 5
4 C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7

AudioNet grows, despite controversy with hearing aid professionals


By Jay Greene
jgreene@crain.com
“We have been growing very contracts and enters into deals with
unions outside of the auto industry.
Shield of Michigan’s network.
Szot said some customers who re-
AudioNet America is riding a rapidly the past year as People also are losing their hearing at ceived hearing tests and hearing
changing hearing-aid industry to patient satisfaction an earlier age, in their early 70s, she aids at businesses owned by hearing
rapid growth as employers and other said. instrument specialists were forced to
payers aim to lower costs. improves because of better Ron Berry, chief administrative of- find other companies when Audio-
Managed care group purchasing (hearing aid) technology.” ficer with the UAW VEBA, declined to Net began restricting services.
has caught on in the multibillion-dol- comment on vendor contracts such as “This meant many consumers
lar industry. That has helped the Clin- AudioNet’s. However, UAW VEBA who were happy with their providers
ton Township-based AudioNet to ex- Colleen Shefferly, AudioNet America spokesmen in the past have said gen- had to seek out new providers and
pand the number of people its services erally that their vendor contracts are many practices who had a lot of UAW
cover by 660 percent to 800,000 during work offers annual hearing assess- R-Iowa, in the Senate and Reps. Joe saving the trust millions of dollars. consumers lost a great many of their
the past year by adding a number of ments by more than 5,000 audiologists Kennedy III, D-Mass, and Marsha AudioNet employs 12 workers clients,” Szot said. “This had a very
state and national contracts, said Col- under contract for a flat fee. Two hear- Blackburn, R-Tenn., in the House, the and expects to grow to about 30 by negative effect on these businesses
leen Shefferly, its president. ing aids are offered every three years. “Over the Counter Hearing Aids Act” the end of 2018, Shefferly said. The as well as it reduced access to pro-
Earlier this year, AudioNet, a Before flat fees were negotiated, would order the Food and Drug Ad- company outsources information vider options and hours of service
third-party network administrator Shefferly said the benefits structure for ministration to open the market. technology, member services and availability for UAW members.”
founded in 2007 by Shefferly, was the UAW often resulted in patients be- Shefferly said AudioNet is neutral third-party administration to Michi- Szot said many businesses owned
awarded a $12 million contract for ing balance-billed $3,000 to $8,000 for on the legislation, but she said the gan companies, Shefferly said. by dispensers had to close because
hearing aids by the state of Michi- a pair of hearing aids. Now, AudioNet bill’s purpose is similar in intent as they did not employ an audiologist
gan’s Rehabilitation Services pro- saves companies up to 51 percent over the company — to lower costs and Some providers unhappy or only had one part-time.
gram, which helps people with dis- their previous bills. improve outcomes for people with Shefferly said this happened be-
abilities get back to work. “We are totally medically focused. hearing loss. Not everyone is supportive of Au- cause AudioNet does not allow hear-
“We have been growing very rap- People who have hearing loss also AudioNet also contracts with the dioNet, however. Officials and mem- ing aid dispensers to bill for services
idly the past year as patient satisfac- sometimes have high blood pressure, UAW Retiree Medical Benefits Trust, bers of the Michigan Alliance of Hear- unless they are directly employed by
tion improves because of better diabetes and other conditions like also known as the UAW Trust, and ing Care Professionals, which an audiologist. She said this rule is
(hearing aid) technology,” said Shef- general depression,” she said. “We en- active union employees with General represents audiologists and the retail intended to combat fraud.
ferly, who was a 2013 Crain’s Health courage people to use hearing aids so Motors Corp. and Chrysler Corp., hearing aid dispensers, say AudioNet “Sometimes dispensers owned
Care Hero in the corporate achieve- their quality of life is better.” Shefferly said. The company also is has unfairly interfered with its mem- the (business) and say there is an au-
ment category. The high cost of hearing aids has expected to soon finalize a preferred bers’ business models and reduced diologist there,” she said. “We would
Shefferly, a longtime consultant prompted Congress to act. Pending vendor arrangement with Blue Cross access to care for the hard of hearing. get improper claims because a dis-
with the United Auto Workers, said federal legislation would allow for the Blue Shield of Michigan. Laura Szot, president of the Mich- penser would employ the audiolo-
she founded AudioNet because auto- sale of hearing aids, which average Shefferly declined to name other igan Alliance, said AudioNet’s man- gist who would sign off on claims.
makers, unions and health plans were about $5,000 for a pair, over the count- customers, citing confidentiality. aged care network has excluded We don’t allow that.”
looking for ways to reduce costs, im- er for people with mild to moderate But by 2018, Shefferly projects her some audiologists and hearing in- Shefferly said a hearing aid dis-
prove hearing care and increase op- hearing loss. company will double to more than 2 strument specialists. Before Audio- penser can be employed and creden-
tions for workers and retirees. Proposed by Sens. Elizabeth War- million clients as the company signs Net, most UAW union workers had tialed by AudioNet, but only through
AudioNet’s national provider net- ren, D-Mass., and Charles Grassley, additional commercial health plan open access through Blue Cross Blue an audiologist who is required to per-
form the exam and evaluation. Audio-
Net also doesn’t allow dispensers to
file claims if they are employed by a
hearing aid manufacturer.

Welcome, 2016-2017 Laterals


Another reason AudioNet only
credentials audiologists — along
with ear, nose and throat physicians
— is because Medicare is moving to
require professional accreditation
for reimbursement, Shefferly said.
“Holding the audiologist and
ENT responsible for the claim en-
sures quality and eliminates fraud,”
Shefferly said.
Szot also said that AudioNet’s
subcontracted provider networks
have cut fees paid to audiologists.
Under the Blue Cross program,
Szot said dispensing companies
were paid $1,500 for a single hearing
aid plus $200 in testing services. But
AudioNet’s reimbursement rate
dropped to $700 for a pair of midlev-
el digital hearing aids, she said.
“Our membership has shared that
(provider reimbursement) is signifi-
cantly reduced from the previous mod-
el,” Szot said. “It is unclear currently if
the UAW Trust is saving money or if
manufacturers reimbursements have
been reduced, but for providers there
was a significant reduction.”
In a Sept. 27, 2016, letter obtained

Varnum. by Crain’s, however, the UAW said


AudioNet has saved the union 50
Your Career Home. percent of costs that has allowed
members to receive up to two hear-
ing aids per year instead of one.
Shefferly said she hears com-
plaints sometimes that claims paid
are slow. “By contract, 95 percent are
Legal Experience www.varnumlaw.com/careers paid in less than 10 days,” she said.
In Your Corner.® “(Networks) may pay their providers
late. I am trying to alleviate that.”
Jay Greene: (313) 446-0325
Twitter: @jaybgreene
C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7 5

WE’RE LOOKING AT
CRAIN’S DETROIT BUSINESS
WITH
FRESH EYES…

NINO SALVAGGIO INTERNATIONAL MARKETPLACE


YOUR EYES.
Nino Salvaggio International Marketplace plans to invest $5 million in a new location
in Bloomfield Township. It currently operates in Clinton Township (above), St. Clair
Shores and Troy.

Nino Salvaggio Market


to open in Bloomfield
Township next spring See how: crainsdetroit.com/innercircle
By Tyler Clifford “Our new store will be a wonderful
tclifford@crain.com
complement to the current offerings
Nino Salvaggio International Mar- in Bloomfield Plaza and the sur-
ketplace is set to open a new Bloom- rounding area, as well as meet cus-
field Township location next spring tomer demand for our specialty
— the chain’s fourth store in metro products and services,” Taylor said in
Detroit. a statement.
The family-owned company The new marketplace will be de-
signed a seven-year lease, at an un- signed by Birmingham-based Ron &
disclosed cost, with options in a Roman LLC with assistance from
42,000-square-foot space formerly Bingham Farms-based Rogvoy Ar-
occupied by Kroger at the Bloomfield chitects PC.
Plaza Shopping Center at the south- Construction is expected to begin
west corner of Telegraph and Maple this summer. Taylor said his team is
roads. While it will be a smaller store working on a timeline and expects to
than its other locations, which are open contractor bids by the end of
more than 50,000 square feet, Presi- July.
dent Kirk Taylor said the company is Nino Salvaggio also operates
investing $5 million into the store. He stores in Clinton Township, St. Clair
expects to hire more than 200. Shores and Troy.

Michigan Black Chamber acquires


National Business Leagues
By Kurt Nagl with regional offices in Detroit, At-
knagl@crain.com
lanta, Georgia, Washington, D.C.,
The Michigan Black Chamber of and Los Angeles.
Commerce has acquired the Nation- The nonprofit MBCC has a similar
al Business League Inc., founded in goal of economically empowering
1900 by Booker T. Washington. and sustaining African American
The national organization will re- businesses by advocating for “eco-
locate from Washington, D.C., to De- nomic development through entre-
troit at 1001 Woodward Ave. build- preneurship, procurement, commu-
ing, the MBCC announced last week. nity reinvestment, programmatic
“We are now the National Busi- and professional development, and
ness League,” Ken Harris, the CEO capitalistic activity,” the group said
and co-founder of the Michigan in a statement.
Black Chamber, said in an an- The acquisition makes sense be-
nouncement at Campus Martius cause Detroit is considered the cen-
Park. “This gives black businesses a ter for black business development
national platform with a 117-year in the U.S., the advisory said, and the
history.” location will enhance the National
Aimed at promoting the commer- Business League’s access to 2.5 mil-
cial and financial development of lion black businesses in the country.
African Americans, the National National Business League mem-
Business League is made up of 365 bers employ almost 1 million peo-
chapters serving 15,000 members, ple, the organization said.
6 C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7

OPINION
EDITORIAL

Detroit should have


response to ’67 hype
“Here in Detroit, a city of war,” a poison. That would be the authentic
newsman intones with his baritone case for today’s Detroit, a city that is
voice of authority, “violence contin- learning from its past and working,
ues.” together, to build a better future.
And so goes the trailer for “De- Community policing. Neighbor-
troit,” a movie based on the 1967 ri- hood investment. Economic devel-
ots, produced by Academy opment. What has metro Detroit ac-
Award-winning writer and director complished in these areas, and what
Kathryn Bigelow. It gets worse with else are its leaders committed to do-
the words that frame scenes of police ing? Those answers should be
brutality, burning streets and loot- fleshed out and at the fingertips of
ing. every civic and community leader
“The rebellion in the streets of De- who might be contacted this sum-
troit was only the beginning,” one mer by a journalist.
graphic reads, followed by: “Discover Some of the threads of that coun-
the truth behind one of the most ter- ternarrative might include:
rifying events in American history.” J The push to link Detroit’s River-

The movie premieres Aug. 4, Walk, a jewel of industrial reclama-


shortly after the 50th anniversary of tion, to the neighborhoods through
the events that Crain’s Detroit Busi- a series of greenways.
ness documents in this issue. As the J Private-public partnership aimed

“Detroit” trailer suggests, national at rehabilitating the Fitzgerald in


and international media, as well as northwest Detroit without displac-
Hollywood, are likely to use hype ing longtime residents, a pilot proj-
and hyperbole rather than mea- ect that, if successful, would be a na-
sured context to mark 1967. tional model.
Detroit is an easy mark. After sev- J Efforts by employees of Quicken

eral years of writing a relatively posi-


tive media narrative for post-bank-
Loans and other companies to fight
blight and help the school system.
LETTERS
ruptcy Detroit, journalists will be Do you have other civic talking
looking for a new story, a “hot take,” points? Send them in the form of a Memories of 1967 Once we arrived at an office, we portunity to use the phones in the
and the summer of 1967 gives them letter to the editor or op-ed and we’ll were greeted by numerous members branch offices to make long-dis-
a fresh hook. publish them all summer (rfourni- To the Editor: of the Michigan National Guard, who tance calls. Back in those days there
As evidenced by our two-part se- er@crain.com). Back in 1967, I was a neophyte in were standing guard outside the of- was no special rate for long-distance
ries, Crain’s isn’t interested in paint- One CEO asked us to float this the auditing department of Detroit fices. Removing the cash from the calls and thus I suspect that some
ing over the past. But we don’t want idea: Why not produce a pro-Detroit Bank and Trust (now Comerica). At vaults while standing in water was seized upon the commotion to call
to see the city’s future — and, for lack ad and have it played before every the time of the riot we determined quite a task. We then loaded all the friends in other states.
of a better word, its brand — spoiled showing of “Detroit”? Worth a that several banking offices had currency into the truck and returned So all in all, it was an interesting
by irresponsible and inflammatory thought. burned and had been looted for fur- to the main office in downtown De- yet disconcerting day for me —
storytelling. We can’t escape our past, but our niture. In addition, in putting out the troit. In some instances the flood wa- something that hopefully will never
Which is why we are urging Mayor past isn’t all that defines our future. fires, the offices were flooded start- ters had seeped into the area with be repeated.
Mike Duggan, Sandy Baruah of the We can’t ignore the anniversary and ing with the basements. It was under safe deposit boxes, and we wondered Bill Kalmar
Detroit Regional Chamber and other hope everybody else does, too. They this situation that I was assigned to if the contents had been ruined. Lake Orion
civic leaders to join together and pre- won’t. The question is, what is our travel to the affected offices and re- The broken windows and the
pare an antidote to public relations answer to their hype and hyperbole? move the cash from the vaults. burned-out homes in some of the ar-
I then traveled to the Twelfth-Clair- eas were a sight one does not quickly Send your letters: Crain’s Detroit
“Detroit,” a mount, Oakland-Woodland, Lin- forget. Most of the branch offices re- Business will consider for publication
movie based wood-Joy and Kercheval-Van Dyke opened again, but I think the all signed letters to the editor that do
on the 1967 branch offices in an armored truck Twelfth-Clairmount office remained not defame individuals or
riots, with guards brandishing rifles. It was closed. organizations. Letters may be edited
premieres on an unsettling ride as we observed the As an aside, we learned weeks lat- for length and clarity.
Aug. 4 results of the fires in the neighbor- er that during the riot some people Email: rfournier@crain.com
hoods. in the neighborhoods used the op-

So you want to get rich


The fun has already begun with well get sick of them by the time the more than willing to donate mil- If car sales slow somewhat,
next year’s state elections. election rolls around, but the lions for their Democratic cause. It which I doubt, this will pick up the
But everyone is probably trying broadcasters are going to be driv- does not matter whether she can slack. And nothing better than lots
to figure out how to make their for- ing around in Lincolns and Cadil- win or even if she deserves to win: of money from outside the state to
tune from the politicians. lacs next year, probably with chauf- She'’ll get the money by the bucket- perk up the economy. Sort of like
I just heard that one little con- feurs. ful from Hollywood, helping our tourism in overdrive.
gressional seat in Georgia hotly Just start counting the contests gross state product increase dra- Sadly, most of these riches will
contested by both the Republicans that will be up for grabs, starting matically. go to broadcasters, but hopefully
and the Democrats generated over KEITH CRAIN with the governor and senator and To be honest, television and ra- they will add to their payroll and
$50 million from both candidates. Editor-in-chief working your way down the list. dio will get the lion’s share of the share their temporary wealth.
Well, we in Michigan have all Whatever Sen. Debbie Stabenow money, but newspapers will get It won’t last forever, but we are
sorts of hotly contested political money, will be raking in the dough raised last time won’t even get her pennies, as well as direct mail and talking about hundreds of millions
contests starting right about now. for the next 18 months from all the started. The good news for her is outdoor. They will all share in this in political spending.
Broadcasters, who get most of the political ads. You and I might very that all the Hollywood types are bonanza. Too bad it’s only every two years.
C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7 7

Treasurer’s office works hard to reduce foreclosures


Since my election as Wayne Coun- the number of foreclosures to percent. igan and federal government in the
ty treasurer nearly one year ago, we 13,900. J Enrolled thousands of homeown- Step Forward program to bring addi-
have taken aggressive steps to pre- J We are working to reduce the ers in monthly payment plans. tional resources to help.
vent foreclosures in Wayne County. number of properties in the auction J Joined a kiosk network to allow J Commissioned a door knocking

Contrary to some recent media in the fall of 2017. The office of the people to make payments in their campaign for over 6,200 properties in
reports (“Foreclosures lucrative for Wayne County treasurer has fewer neighborhoods in a safe, convenient Detroit. Securing and boarding up
Wayne County,” Page 3, June 12) re- than 10,000 properties scheduled to manner with no “convenience fees.” unoccupied structures that are open
flecting special interests, there’s be auctioned. (This has increased collections, re- to trespass and pose a safety hazard.
simply no incentive to foreclose on OTHER VOICES J Conducted an unprecedented duced overhead and stabilized pay- One of the root causes of property
homeowners anywhere in Wayne Eric Sabree outreach campaign using paid and ment programs.) tax foreclosure is poverty, which is
County. The assertion we are count- earned media to educate people on J Engaged homeowners in Taxpayer compounded by a lack of education,
Sabree is Wayne County treasurer.
ing on foreclosures to balance the options to prevent foreclosures. Saturdays and Talk with the Treasur- job training and employment op-
county budget is absurd. J Supported and attained new leg- er sessions throughout Wayne Coun- portunities. Our office will continue
We are doing everything we can look at just the past few years: islation for the Interest Rate Reduc- ty to educate residents on all of the to fulfill our statutory duties and col-
to reduce foreclosures, help people J In 2015, some 28,000 properties tion program allowing homeowners options and resources available to lect taxes and enforce the law while
get into payment plans and obtain were auctioned due to foreclosures. to reduce their interest rates on de- help them stay in their homes. doing everything possible to help
the financial aid and advice they J In 2016, we were able to reduce linquent taxes from 18 percent to 6 J Cooperated with the state of Mich- people stay in their homes.
need to be productive homeowners
in our greater community.
Without question, the foreclosure
issue is a major one in Wayne Coun-
ty and may well be unprecedented
anywhere in the nation. Wayne
County and its largest city, Detroit,
were impacted by the Great Reces-
sion and subsequent largest munic-
ipal bankruptcy in U.S. history — all
following decades of decline in pop-
ulation due to evaporating jobs in
automotive and related industries
and globalization. No other region
has been affected by similar eco-
nomic shock waves. I cite these is-
sues to provide context to the chal-
lenging dilemma of the continuing
foreclosure problem.
From my perspective, we have a
firm grasp on the challenge and can
demonstrate great progress in fore-
closure reductions. We are optimis-
tic that the worst is behind us. Let’s

TALK ON
THE WEB
Re: Olympia confirms
plans to demolish hotel,
apartments on Cass
Yes, preserve the buildings in
their current state as a reminder of
what goes on. Maybe use them as
some sort of slum museum, like an
ode to futility.
GaryRodda CRAIN CONTENT STUDIO is the business
solutions arm of Crain’s Detroit Business.
This is really ridiculous and
should be blocked. These are great, We’re a team of storytellers, visionaries
historic, mixed-use structures that
are irreplaceable. and creators. We work with your brand to
Katherine Leigh deliver your message in a customized way
Yep, sadly, most surburbanites that gets results. One popular approach:
are going to eat up the brand new
stucco “mixed-use development” Our Executive Insights roundtable report,
buildings instead of seeing any old where you give us the guest list and we
buildings and maybe feeling like
they’re in an actual unique city in- invite those business and civic leaders
stead of a sterile, cookie-cut sporting
district meticulously designed to ex- into one room to talk about the issues
tract their money. your business aligns with most.
Llewellyn23

“Preservation Detroit, a local his-


toric preservation advocacy group,
started a petition drive to spare the
Hotel Ansonia and Atlanta Apart-
ments from demolition.” Petitions
are all fine, but nobody wants to
cough up the MONEY, and those Learn more about our custom business solutions by contacting
who are paying the bills don’t care
what petitions people sign... Lisa Rudy at 313-446-6032 or lrudy@crain.com
wolftimber
8 C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7

SPECIAL REPORT:
FASHION BUSINESS

PHOTO BY JACOB LEWKOW

Karen Buscemi founded the Detroit Garment Group (DGG), an organization that supports Detroit’s fashion industry in a variety of ways.

Can Detroit become America’s next fashion hub?


By Aaron Mondry that doesn’t mean fashion is no longer import- Sanders isn’t the only one working to raise dustry talent leaving the state, almost always
Special to Crain's Detroit Business
ant here. That’s why Sanders started The Seen, Detroit’s profile as an important fashion city, for New York City or Los Angeles. “They felt
When he was little, Nelson Sanders remem- which started off as a collective of fashion-con- and not just in the way it dresses. In design, man- they couldn’t make it here,” Buscemi said.
bers his parents dressing up almost every time scious individuals highlighting neighborhoods ufacturing and distribution for the fashion in- To remedy the problem, Buscemi founded
they went out. And his parents weren’t the only and businesses, and has recently morphed into dustry, Detroit is growing its local talent and the Detroit Garment Group (DGG), an organi-
adults in Detroit who cared about their appear- a creative marketing and talent agency. businesses to become a fashion hub. zation that supports Detroit’s fashion industry
ance after they took off the work clothes. “When people think fashion, they think of in a variety of ways. For starters, DGG runs a
“There was crazy style here,” Sanders said. Paris, New York, London,” Sanders said. “Most Keeping talent local business incubator program out of TechTown,
“My parents didn’t have much, but they’d always wouldn’t say Detroit. I wanted to show people which has mentors and services for the various
make sure they were decked out. On Friday around here and the world what Detroit style Like Sanders, Karen Buscemi was frustrated aspects of running a fashion business, as well
nights in Detroit, you had to come with it.” looks like. There are a lot of genuinely stylish with Detroit’s inability to realize its potential in as access to industrial sewing machines and
While dressing up in a suit and tie or your nic- people here, but they just don't have the plat- the fashion industry. While the editor of fash- design studios.
est dress is no longer the norm for a night out, form to showcase it.” ion magazine StyleLine, she kept noticing in- SEE HUB, PAGE 9

Detroit’s independent fashion retailers


focus on customer experience, not price
By Aaron Mondry
Special to Crain’s Detroit Business
vintage-inspired, casual, modern — but each
is underpinned by the same principles. “People don’t buy a
Rachel Lutz hates shopping. As a self-de- Fashion retail is on the rise in Detroit. Na- product, they buy an
scribed plus-sized woman, she often had trou-
ble finding clothes that fit her correctly and
tional and international brands — John Varva-
tos, Nike, Under Armor, Warby Parker, Bono-
experience.”
staff to help her through the process. bos — have opened stores in downtown Sarah Donnelly, TechTown
“It’s pretty ironic that I now own two appar- Detroit. But local, independent fashion retail-
el retail stores,” said Lutz, owner of The Pea- ers are carving out space for themselves as have something valuable to offer.
cock Room and Frida, with a third, Yama, on well. And they’re doing so by creating a special “People don’t buy a product, they buy an
the way this fall. experience for the customer. experience,” said Sarah Donnelly, retail ser-
Lutz opened her stores as a response to the Nationally, retail is changing at an astonish- vices director at TechTown. “I firmly believe
deficiencies of the department store shopping ing rate. Online shopping has granted the con- that the only thing left anyone has to sell is the
experience. “It used to be that you’d have sumer unprecedented convenience, which service they provide. Brick and mortar can’t
someone serve and help you,” Lutz said. has resulted in shrinking market share and offer the same assortment of choices as Ama-
“Nowadays, you dress under fluorescent light- scores of store closures for big box retailers zon. But nothing beats that in-person conver-
ing, which makes everyone look terrible. like Macy’s and J.C. Penney. While it’s impos- sation about a product they make themselves
JACOB LEWKOW There’s no sales staff to assist, no one to inter- sible for even the most affordable department or travel across the world to find just for you
Rachel Lutz is owner of The Peacock Room and act with.” stores to compete on price and convenience and your community.”
Frida, with a third, Yama, on the way this fall. Each of Lutz’s stores has different theme — with online retailers, traditional stores still SEE FOCUS, PAGE 9
C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7 9

SPECIAL REPORT: FASHION BUSINESS

Q&A: Rufus Bartell, owner of Simply Casual in Detroit


For more than What are your thoughts on the Avenue of Fashion should be enue of Fashion to be included in by the hour.
two decades, growing fashion retail scene in defined by its historical ties to that. People buy into it and feel a But here’s where Detroit can win:
Simply Casual midtown and downtown? apparel? sense of place when they’re here. So distribution and warehousing. Pick,
has been a staple Well, there’s always been great The Avenue of Fashion has a his- we can have a plan that’s forward pack and ship. We have lots of cheap
of the Avenue of retail shopping in the neighbor- toric significance that should always thinking and also embraces history. warehouse space — it’s much cheap-
Fashion, a dis- hoods. But if you were only going to be kept. And we’re working on get- er here than in New York. And within
trict on Liver- Midtown, you wouldn’t know that. ting historic markers for where it was. What do you think the future of the a six hour radius, we have access to
nois Avenue If you went only to downtown Los That said, it takes a lot of courage fashion industry is in Detroit? all the Midwest.
once known for Angeles, for example, you wouldn't and vision to recognize when a name There’s talk about creating a And that’s where the garment in-
its apparel-re- know about Melrose. There hasn’t no longer fits the trend and where a garment district. Do you think that’s dustry really is. After something is
Rufus Bartell:
lated business. been a high concentration of retail neighborhood is going. We need new a viable plan? manufactured, it’s boated over into a
Owner, Simply
Over that time, downtown for some time. branding that represents this whole Regarding manufacturing and in- warehouse. That’s the nerve center.
Casual on the
owner Rufus However, I’m certainly glad there stretch of Livernois. We’re talking tellectual capital, Detroit is too far Detroit could be a hub, if you can get
Avenue of Fashion.
Bartell has seen are additional retail options. For a about three miles instead of three behind. The Chinese market has a the city to sit down and get them to
plenty of chang- rebuilding city to have a wide vari- blocks. labor force and market that’s at the understand the opportunity. This is
es in Detroit, along the way gaining ety of retail is a good thing. But the Avenue of Fashion can still right price. We’re too far behind low-hanging fruit — we can put peo-
insights into the city’s fashion in- be relevant. You have subdistricts them, Turkey, Korea. These places ple to work. Cheap warehouse space
dustry. Do you think the future of the here, and there’s still room for the Av- can push out thousands of garments gives this city an advantage.

HUB in New York City and Los Angeles


contain concentrations of designers,
investing in a piece of clothing, rather
than something disposable.”
“We said, ‘Let’s try to make white
the best possible white T-shirt’ and
an important institutional partner,
which she declined to disclose, and
FROM PAGE 8 cut and sew operations, bigger man- Detroit Denim recently moved to see what was possible,” Birky said. hopes to make an announcement by
“Michigan has a lot of colleges that ufacturers, showrooms, distributors a new retail and manufacturing “But also know who it’s made by, the end of the summer.
have really good fashion programs,” and wholesalers. The districts are a space in Harbortown and currently where it’s made, and what it’s made “This is the perfect time,” Buscemi
Buscemi said, “but not one offers a catalyst for the industry, which bene- employs eight people. out of.” said. “Detroit is so damn sexy right
business program — they just teach fits from the vertical integration cre- Another Detroit clothing manu- The shirts are sold out of several now. Everyone wants to manufacture
the craft. Students graduate, and ated by close proximity. facturer, Lazlo, makes plain white Michigan stores as well as online. in Detroit, wants to say this is from
don’t know what to do with the skills.” But due to rising property values, T-shirts out of the Corktown maker- The company also worked with Detroit, made in Detroit — it’s ridicu-
Another issue in the state is the the garment district in Manhattan is space Ponyride. Once again, it’s not the Michigan Department of Correc- lous.”
scarcity of skilled industrial sewers. no longer a practical place to locate your standard T-shirt. Lazlo’s shirts tions to train inmates in cutting and Shinola, founded just six years
So DGG helped found an industrial for smaller manufacturers or ware- are made of supima cotton, an ex- sewing and recently hired its first re- ago, is possibly the most prominent
sewing certificate program through houses, which are essential to the in- tra-long staple variety that results in turning citizen, who earns $15 an example of the popularity of Detroit
Henry Ford College with support dustry. hour. as a brand. The company displays
from Michigan Works. The program That’s where Detroit has an advan- “I tell customers The biggest obstacle Detroit Den- “Detroit” on all its products, which
has graduated 14 classes so far, and tage. Buscemi’s initial plan calls for that they’re im and Lazlo have to overcome is they sell from over 20 stores in every
will be adding a fabric cutting pro- the aggregation of 40,000 square feet consumer conventions around the corner of the United States. Other
gram in the fall. of space with room to grow. investing in a cost of clothing. Higher-quality ma- fashion companies have capitalized
The certificate program has be- Detroit Denim is an example of a piece of clothing, terials and fairly-compensated labor on the Detroit brand, such as Detroit
come a pipeline to Buscemi’s busi-
ness, Detroit Sewn, a full-service
small manufacturer that might bene-
fit from locating in a local garment rather than results in much higher prices — $250
for a pair of jeans and $110 for a
Is The New Black, Detroit Versus Ev-
erybody, and Detroit Hustles Hard-
sewing factory she started in 2015 district. The company makes men’s something T-shirt. er.
because of the lack of garment man-
ufacturing in the state. “I was getting
jeans. Each pair is hand-sewn and
made from high-quality selvedge
disposable.” “Even though these are not tradi-
tionally luxury products, because of
While Detroit Denim and Lazlo
may not be large-scale manufactur-
daily inquiries about where you denim sourced in the United States. Brenna Lane, Detroit Denim the quality and craftsmanship, ers, their impact could be significant.
could produce garments locally,” she Because of the smaller production they’re priced as a luxury product,” Birky thinks there’s an opportunity to
said. scale — Detroit Denim makes about softer and more durable fabric, and said Erin Patton, director of Retail define Detroit as a center for ethical
Customers have flocked to Detroit 40 pairs of jeans per week — the which accounts for about 3 percent and Marketing at Ponyride. “Fashion clothing manufacturing.
Sewn. Buscemi said the company company does limited runs, special of United States cotton production. has struggled for many years to have “There’s a number of people work-
services 130 clients and has 12 em- orders, and unique cuts that other Of this, Lazlo sources organic, which proven models that are sustainable. ing to bring advanced knitting facili-
ployees. And all the industrial sewers jean producers don’t offer. is only 1 percent of supima growers If someone doesn’t try to do it, it’ll ties to Detroit,” Birky said. “No city in
have come from the certificate pro- The result of this process is consid- produce. never be done. … It’s a lot they’re the country owns that yet. This is new
gram. erably less waste. Sustainability is important to Laz- asking to shift customer behavior.” technology and a new approach that
“Our country promotes a culture lo’s business model. Co-founder New York or L.A. doesn’t have a mo-
Detroit’s innovative of disposable clothing,” said Brenna Christian Birky said he was appalled The time is now nopoly on. Detroit can say, ‘Here's
Lane, production and operations at the waste and poor labor practices what we do.’ That’s a movement that
Buscemi’s most ambitious project manager. “Most clothes have a lifes- in the fashion industry, where the Buscemi’s been working on bring- some city is going to seize sooner rath-
is the creation of a garment district in pan of months and then get thrown norm is to manufacture clothes from ing the garment district to fruition for er than later, and I hope it will happen
Detroit. Renowned garment districts out. … I tell customers that they’re cheap materials using cheap labor. several years now. She said she has here.”

FOCUS is focus on the customer experience


and take care of them and give them
can buy something from us and,
months from now, it will still be in
FROM PAGE 8 highest quality product they can get.” style.”
1701 Bespoke, a custom suit bou- Suits at 1701 Bespoke cost any- In fact, few of Detroit’s indepen-
tique that opened in 2015, is one of where from $1,250 to $3,500. A block dent retailers pay much attention to
those retailers selling an experience. away at Thrift on the Ave, an upscale trends. Because they don’t have the
The store is located in an intimate resale shop, the average item costs capital to drastically overturn their
third-floor loft space in Midtown. A about $25. And yet, the two shops collection, they instead commit dog-
service representative takes 20 differ- have a lot in common. gedly to an aesthetic, one that isn’t
ent measurements for the customer to “When we look at the fabric and tethered to popular culture.
get the perfect fit, then goes over fab- construction of garments, quality is all Lutz has pretty strong opinions on
rics, designs, and color schemes to get we value,” co-owner Chris Prater said. the subject. “I’m an anti-consumer-
the perfect look. Fabrics are purchased “Today, because trends change so ism shop owner,” she said. “When you
from some of the finest mills in Italy. fast, the attention to detail is not what buy something, you should wear it as
Four to six weeks and two fittings later, it used to be. So much is mass pro- long as you can and look relevant as
the customer has the ideal suit. duced in China and the quality is just long as you can. I think people should
“It’s all about having a really high not there.” buy fewer things, but be more satis-
quality product,” co-owner Max So Chris and his wife Tanisha cu- fied with the things they have and get
Schmidt said. “We’re not the type of rate the store with timeless pieces. more use out of them.” PHOTO BY MICHELLE AND CHRIS GERARD
company that can compete on price or “We sell things that don’t need to keep That message has clearly resonated 1701 Bespoke’s flagship location at 4160 Woodward Avenue, which opened in
turnaround. But what we can really do up with the times,” Prater said. “You with her customers. January 2016.
10 C R A I N ’ S D E T R O I T B U S I N E S S // J u n e 2 6 , 2 0 1 7 C R A I N ’ S D E T R O I T B U S I N E S S // J u n e 2 6 , 2 0 1 7 11

DETROIT 1917 / 1967 / 2017


PART 2: STILL REBUILDING Surgical resident John Crissman
was called into work at Detroit
General Hospital on July 23, 1967.
Editor’s note: This is the second in our two-part series about the 1967 uprising
­— an exploration of economics and business in Detroit in the 50 years before the
He worked in the post-op ward
summer of ’67 and the 50 years since. Last week, we chronicled the decades of
social and economic racial tension that contributed to the violent summer.
for the next five days.
Here, he remembers what he saw.
VAUGHN days in late July, city leaders know
Detroit’s nascent comeback hinges
FROM PAGE 1 on rebuilding a vast network of small
Early that morning of Monday, July businesses that were lost in the after-
24, Vaughn arrived at his bookstore math of 1967.
and found that it been spared from Unlike most businesses that were
the fires that had been set to mostly destroyed by the riots, Vaughn was
white-owned businesses along Dex- able to rebuild his retail enterprise,
ter, Linwood, Grand River and 12th hang on for two more decades of
Street, the epicenter of the riots. slow decline and then watch his chil-
But Vaughn found a five-word dren carry on the spirit of entrepre-
sign of trouble spray-painted on the neurship that propelled him to De- JACOB LEWKOW FOR CRAIN’S
front of his store: “Long live the black troit in search of a better life. Crissman was a second-year surgical resident at Detroit General Hospital, now DMC
revolution.” In examining how Detroit can re- Detroit Receiving, in 1967. He oversaw the post-op ward during the five-day uprising.
“I said, ‘Uh, oh, I know I’m in trou- build thriving neighborhoods of the
ble now,’” Vaughn recalled. future, the burning of Vaughn’s looking for the shooter. “They went He advised hospitals to lock all doors
Two nights later, during a citywide Bookstore serves as a focal point of up and killed him. The riots had except for the ER and discontinue
curfew, according to residents in a the decades-long decline of the Dex- been going on long enough. People visiting hours. Other advice is to
nearby apartment building who told ter and Linwood neighborhood that who were displaying bizarre, an- have adequate security, safe trans-
Vaughn they watched it happen, De- was once a mixed-race enclave of ti-social behavior were not treated port for staff and patients, create
troit police officers arrived in three blacks, Jews and Muslims with a kindly,” he said. flexible schedules, ensure adequate
cruisers around 4 a.m., knocked thriving commercial corridor. Another incident Crissman re- medical supplies and blood.
down the store’s door, broke win- Before the riots, Dexter Avenue had calls involved a young white teenag- But at Detroit General, Crissman
dows with the butt of their rifles and restaurants, a Jewish delicatessen, a er, maybe 16 years old, who the po- said “the riots didn’t change the hos-
set the place on fire. Muslim-owned fish market, record lice brought in to the hospital. pital one iota. We were ready for it
No books had been stolen, but the stores, a tuxedo rental shop, the Dex- Crissman said the teenager’s old- and always maintained tight securi-
bathroom sink was intentionally ter Theater, the Minor Key jazz club er brother, in his early 20s, had told ty. Before, we always checked visi-
clogged to flood the store and ruin the and Bowl-O-Drome, a bowling alley him they had come to Detroit from tors. But during (the riots) we had no
books that didn’t burn, Vaughn said. and jazz club, according to lifelong Ohio “to shoot some cops. They got visitors whatsoever.”
“I know that Negroes did not do residents and newspaper accounts. In into an abandoned building and The hospital was “like a MASH
this,” Vaughn told a Michigan Chron- 1963, one-time auto worker Ed Davis started sniping.” unit,” Crissman said. You were hurt
icle reporter while surveying the opened the nation’s first black-owned At this point, the military had and you were taken care of. No ques-
damage the morning of July 27, 1967. Chrysler-Plymouth car dealership on jeeps and soldiers patroling the riot tions asked.
“Why should they? In the first place, Dexter Avenue — two blocks from area with 50-caliber machine guns. But it’s true, Crissman said, that
no Negro was out on the street at that Vaughn’s book store. “They would just aim where the the team at Detroit General pulled
time of morning — he would have Today, all that remains of gunfire was coming from and blow together.
been shot down. ... And what Negro Vaughn’s original bookstore is a out the walls. The young kid pan- Alfred Plotkin, administrator of

Five days at
would chance his life just to steal a boarded-up one-story commercial icked and ran out the front door and Detroit General at the time of the un-
few books?” building with a collapsed roof along tripped, knocking himself out. That rest, said it was one of the most
Vaughn’s long-standing claim a mostly deserted corridor that emp- probably saved him. His brother was amazing displays of camaraderie
that his bookstore was intentionally tied out in the years following the obviously killed.” he’d seen in two decades of work at

Detroit General
set fire and flooded by the Detroit 1967 riots. Most of the nearby com- One of the saddest moments for the institution.
police was never substantiated in of- mercial buildings along Dexter Ave- Crissman was when he was helping “In the 20 years I’ve been here, I’ve
ficial investigations of Detroit’s nue are boarded up, with some slat- to treat a fireman who had been never seen such spirit. It was com-
bloody and destructive uprising, ed to be razed through the city’s electrocuted putting out a fire when pletely amazing,” he said to Hospitals

Hospital
which led to 43 deaths, hundreds of on-going blight removal efforts. a high-voltage wire fell on him. magazine. “Some of our people
charred buildings and millions of “Dexter used to be a heck of a “His wife was there. He was badly worked 36 to 40 hours with only an
dollars in damage. Witnesses recant- street ... no vacancies along here,” hurt, burned frontal lobes, was hour or two of sleep when they could.”
ed their story to FBI agents, and only said Bill Redden, an 86-year-old con- blinded. The electricity came out his Crissman said he believes the riots
one woman was ever willing to testi- crete construction company owner left arm and (his arm) was almost to- could have either been prevented or
fy at a public tribunal black commu- who has lived in the neighborhood tally destroyed. It was awful. He died ended much earlier if Detroit Police
nity leaders held at the Shrine of the his whole life. “Dexter back then was a few days later.” had better tactics and exhibited
Black Madonna on Linwood. almost like Woodward downtown.” COURTESY AMERICAN HOSPITAL ASSOCIATION Over the next two months after greater understanding of the black
Fifty years after those five riotous CONTINUES ON PAGE 12 Unrest across the country during the summer of 1967 changed many procedures at hospitals, including security, visiting hours and emergency crisis preparations. But at Detroit General, “we were ready for it,” said Dr. John Crissman. the riot, residency work at Detroit community. He said he believes De-
General settled down to more rou- troit Police learned their lessons and

J
By Jay Greene | jgreene@crain.com emergency,” he said. “We were just all post-operative activities. He over- the injured prisoners were calm and tine duties for Crissman. But he said are much better trained today.
always ready. You could have had saw a 120-bed post-op ward. well-behaved in the hospital. he noticed a large number of people After five days on duty, “I finally
Read more on crainsdetroit.com ohn Crissman had an omen of the violence that erupted in Detroit in the summer of 1967. ¶ He was a World War Three and you would “I never went to the OR. It was re- “We had a very polarized communi- coming in for alcoholism and pan- went home Thursday for the first
second-year surgical resident at the former Detroit General Hospital, now called DMC Detroit Receiv- have been taken care of.” served for attendings and senior resi- ty. But once a black person is injured, creatitis. time,” he said. “They worked my ass
What 1967 means for 2017, and beyond ing. He remembers vividly an elderly black woman he treated who gave him a warning of unrest on the When Crissman arrived at Detroit dents. They loved to operate and they your relationship changes drastically. “They reported (to me) stealing off there the whole time.”
horizon. ¶ “She said, ‘Doctor, be careful out there. Things are not good in the city. There will likely be General, ambulances were trans- stuck me with the dirty work. But I was They know you are there to help them. large amounts of booze from liquor After his second year of residency,
Refocusing: Focus:HOPE and New Detroit were both formed to address
some fracas.’ Then, she tipped over her pocketbook and a .38 revolver fell out,” said Crissman, shaking porting patients to other hospitals to all around the hospital and saw every- I never had a problem,” he said. stores,” which they drank over the Crissman said he was drafted into
the root causes of the uprising in 1967. Fifty years later, both organizations
make room for the traumatic injury thing. I wasn’t isolated in the OR.” On Tuesday — the third day of the next five to six weeks. the Air Force. “Every male doctor of
are shifting strategy and sharpening their focus on racial equity. his head in remembrance. ¶ A few days later, violence erupted on 12th Street after police raided an unlicensed bar
patients everyone expected: people Most of the people who came to riots — Crissman was in the fourth- that era went into the service, either
Deeper data: What today’s economic indicators tell us the future might on the city’s near west side. who had been shot, stabbed, tear the ER over the next five days were floor post-op ward. It was quiet, as Crisis response after internship or go into the lottery.
hold for Detroit in the next 50 years. Crissman, now 78, is the former the smoke coming out from the hori- ambulance and police escort. Over gassed, beaten or cut by broken glass. brought in by police — many of them usual. I got a two-year exemption and then I
dean of Wayne State University zon. I said, ‘Oh, something is going the next five days, Crissman saw The hospital’s disaster plan had in handcuffs. “We had the lights on. They were The unrest across the country went” to San Antonio. “Don’t ask me
Catch up on last School of Medicine, a role he held on,” said Crissman. “We got back to first-hand more than 900 injured been put into effect. “General hospitals had prisoners shining through frosted glass win- during the summer of 1967 changed why. I should have gone to Vietnam.”
week’s report from 1999 to 2004. He was also a my house on Dickerson, across from people come through the city’s main all the time. There were always two dows. I heard a ‘ping’ sound. No- many procedures at hospitals: secu- After four years of surgery, he
Part 1: How urban renewal routed member of the medical school facul- Chandler Park, and the TV an- trauma hospital. What he saw policemen at the start of every triage. body really paid attention. Then an- rity, visiting hours and emergency changed his residency to pathology
a thriving black business district ty until his retirement in 2014. nounced: ‘Would the Pontiac Na- In total, 43 people died during the We had a lot of police supervising other ‘ping,’ and another ‘ping.’ We crisis preparations. and finished up at hospitals in Cleve-
But on a Sunday afternoon in 1967, tional Guard please report to your unrest, 33 black and 10 white. At By Monday morning, Crissman the patients” along with doctors and recognized somebody was shooting Edwin Crosby, M.D., president of land and Cincinati.
— and foreshadowed the
Crissman was 28 and enjoying a rare armory.’ ” least 26 of them died at Detroit Gen- said the rebellion turned into a riot. nurses. “This was not a change from at us. We turned off the lights and the American Hospital Association, “I went to Detroit General for ex-
destruction of 1967.
day off with friends at a Tigers double- An hour later, Crissman was eral Hospital. “People were destroying, burning,” normal activity.” moved the patients out.” gave advice to hospitals to prepare citement,” he said. “And I got it.”
Fournier: The words we use to talk header against the New York Yankees. called in to Detroit General. Injured “We had no word or alerts from he said, and “we became very busy.” But regardless of how angry or vi- Crissman said police went out to for riots, in a paper published by the Jay Greene: (313) 446-0325
about what happened in 1967. “We were driving home and I saw citizens were starting to arrive via staff, no official preparation for any Crissman was assigned to handle olent people were during the riots, the parking deck across the street New England Journal of Medicine. Twitter: @jaybgreene
12 C R A I N ’ S D E T R O I T B U S I N E S S // J u n e 2 6 , 2 0 1 7 C R A I N ’ S D E T R O I T B U S I N E S S // J u n e 2 6 , 2 0 1 7 13

DETROIT 1917 / 1967 / 2017


PART 2: STILL REBUILDING

FROM PAGE 10 poured in from publishers and mul- Factors leading In 1994, Vaughn’s son, Eric,
to the 1967 riots
tiple countries. bought the 91-year-old building and
Seeking opportunity “The Chinese government sent turned his passion for framing pho-
me tons of books,” Vaughn said. The events of ’67 were about more than the tographs and paintings into a small
economy, but the numbers show that job loss
Like tens of thousands of young “Business really took off after the and labor discrimination were part of the business, Eric’s I've Been Framed.
black men in his generation, Ed cops burned my store.” equation. How do these factors look today? “When I decided to come into here,
Vaughn came to Detroit in 1956 from Vaughn used his late 1960s and my wife thought I was crazy because
the South in search of work and op- early 1970s profits to invest in com- Employment the building was in disrepair,” Eric
portunity after earning a bachelor’s mercial real estate in the city. The economic boom of WWII drastically Vaughn said. “It needed a new roof,
degree at Fisk University in Nashville. But the book business began to reduced unemployed Detroiters from windows, doors — the whole nine
135,000 in 1940 to 6,000 in 1943
He grew up in Dothan, Ala., the same decline along with Dexter Avenue, yards. But I had the vision. I could see
hometown of Dr. Charles H. Wright, where several businesses never re- 1940: 135,000 this place being a good place.”
the physician who founded the Mu- opened after the riots, Vaughn said. 1943: 6,000 Eric Vaughn said he had to take out
seum of African American History in Like many parts of Detroit, white a second mortgage on his home in the
Black workers accounted for 4 percent of
Detroit that bears his name. and middle class black flight sped auto workers at the start of WWII but grew to Boston-Edison neighborhood to get
“When I got to Detroit, blacks up in the years following the rebel- 15 percent by 1945. his gallery and framing shop open.
couldn’t get jobs anywhere, except lion. Many of the black-owned busi- “I didn’t get any bank loans, no
1940: 4%
in the automobile industry, and they nesses along Dexter Avenue and grant programs like they have now,
stuck you in the worst place in the surrounding corridors disappeared. 1945: 15% no Motor City Match — none of that
plant,” Vaughn said. After selling 1,000 Chrysler, Plym- was around at the time,” Vaughn
After busing tables at a downtown outh and Imperial cars annually in By the 1950s, black Detroiters said, referencing a Detroit Economic
resturant, Vaughn worked at the Post the mid-1960s, Ed Davis’ dealership earned 81 percent of what their Growth Corp. grant program for
Office until he was drafted in 1957 closed in 1971, according to the De- white male counterparts earned small businesses.
— one of the smallest wage gaps
for two years of service in the Army. troit Historical Society. in the country. Like many middle class blacks of
When he was discharged, Vaughn “The legacy of black entrepre- 81% his generation, Eric Vaughn is the only
headed back to Detroit and resumed neurship was burned, destroyed, one of his four siblings who stayed in
working at the Post Office until he decimated during the riots,” said De-industrialization Detroit. His brother and two sisters
took up selling African American Harold Ellis, a retired Detroit educa- Between 1947 and 1963, production shifts, moved to Atlanta, where they have
consolidation and automation led to 143,000
books on the side out of his car trunk. tor who taught one of Vaughn’s job losses in Detroit. Job losses were
made a life as small business owners. JACOB LEWKOW FOR CRAIN’S
At the time, Vaughn said the Civil daughters in school. exacerbated by the closures of major auto Randall Vaughn owns a barbershop Above and left: A community carnival Eleos Ministry hosted in the lot behind the
Rights movement was fueling a renais- Ellis, 71, grew up in the Dexter and employers, including Packard Motor Car Co., and sisters Sybil and Attallah own and former Vaughn’s bookstore attracted about 600 people on a June evening.
sance for African history, black litera- Linwood area and lives in the historic Hudson Motor Car Co. and Studebaker Co. operate a beauty salon.
ture and political writing in response to Russell Woods neighborhood to the Michgan’s % of U.S. auto jobs “My wife's been saying for years tries, sandwiches and hosting daily Before the coffee shop opened
systemic post-Civil War racism. northwest of the riot zone. 1950: 56% she wanted to move, but I’m a stead- Bible study sessions and monthly last fall, the Eleos Ministry launched
In 1964, Vaughn and his business “We did have black businesses,” fast and die-hard Detroiter,” Eric community meetings with Detroit its mission in the neighborhood with
partner, Polly Ross, opened up a said Ellis, who was in college at the 1960: 40% Vaughn said. police officers from the 10th Pre- a carnival in a vacant grassy field be-
bookstore primarily selling black lit- time of the riots. “But when they Eric’s 22-year-old son, Wynton, cinct. The coffee shop ministry is hind Vaughn’s original bookstore
erature at 12123 Dexter Ave., in the burned down, many of them did not
Labor discrimination has started making sports T-shirts managed by two couples from Mis- where houses once stood.
Despite a labor shortage in post-WWII
heart of what had been a predomi- JACOB LEWKOW FOR CRAIN’S come back to life.” Detroit, most job listings with the state’s jobs
and selling them in pop-up shops in souri: Sean and Joni Adams and Ni- Eleos held its second annual carni-
nately Jewish neighborhood for the The Detroit Land Bank Authority has been demolishing blighted properties near Dexter Avenue. “It’s a beautiful thing what agencies specifically excluded minorities. Job Virginia while attending college at cole and Jacob Cumberford. val on June 8, attracting about 600 peo-
first half of the 20th Century. they’re doing across the street,” said one neighborhood resident. ‘Die-hard Detroiter’ listings that were closed to nonwhites by Hampton University. “Everything about this place is ex- ple from around the neighborhood.
“Everybody thought I was crazy, written specifications, by year: “He’s got the bug,” Eric Vaughn said actly what we thought the Lord was Children played carnival games and
but I knew something was happen- “That was a black consciousness and other groups advocating vio- ed in its July 29, 1967, edition docu- In the late 1970s, Vaughn moved 35.1% 44.7% 55.5% of his son. “I think he’s going to be an leading us to do,” said Sean Adams, a bounced around in inflatable bounce
ing, something was about to go movement, which some maybe would lence against the government — ac- menting the five-day riot. his bookstore two doors down on entrepreneur too because he’s got pastor from the St. Louis area who houses as Eleos’ volunteers grilled and
down … something was on the hori- mischaracterize as a black power cusations Vaughn denies to this day. “Every book that I had left that did Dexter for a few years while he tried that mind and that drive. He gets it moved his family of five to Detroit to served up hot dogs and chips.
zon,” Vaughn said. “The movement movement," Hancock said. “There was Inside the bookstore after the fire not burn was floating in water,” his hand at politics, serving one term from his father and his grandfather.” run the ministry. “This is the best thing that’s hap-
began to take shape and people were an awakening of black people.” and flood, framed-glass posters of Vaughn recalled. in the Michigan House and then 1946 1947 1955 The coffee shop’s vibrancy has pened to this community in a long
looking for black books.” Malcolm X, Martin Luther King Jr. For Vaughn, the destruction of his working in the administration of Riot damage Sign of life given longtime residents like Harold time,” Hancock said as he pushed his
The store quickly became a gath- Legacy burned and southern black heroes were store actually served as short-term Mayor Coleman A. Young.
2,509 Detroit businesses were burned,
Ellis hope that a turnaround for Dex- grandson around in a stroller.
ering spot on Thursday nights for the smashed, Vaughn said. boost for his entrepreneurship as The independent book-selling looted or otherwise destroyed — the On Dexter Avenue, the only rem- County Treasurer’s Office over the ter is just around the corner. In the middle of the evening car-
black community to discuss the Vaughn, who is now 82, believes Book cases were overturned, word spread internationally about business was in decline, and Vaughn equivalent of losing every business in the city nant of Vaughn’s book store is a por- past decade for unpaid property tax- Across the street, demolition con- nival, Eric Vaughn showed up to
pressing issues of the day. Vaughn his store was targeted by police be- painting canvasses were slashed and books being burned in Detroit. eventually moved the store around to of Ferndale, Garden City, or Allen Park. tion of the original glass window es, city records show. tractors for the Detroit Land Bank Au- pose for a photo for Crain’s in front of
dubbed the gatherings Forum ’65, cause it was rumored to be a gather- the phones were ripped from the As Vaughn rebuilt the store, book a downtown store on Griswold, fol- $43 to $49 million in estimated property above the entrance that bears the But in the midst of desperation, thority recently knocked down an his father's original store.
Forum ’66 and Forum ’67. ing spot for the Black Panther Party wall, the Michigan Chronicle report- donations to replenish the shelves lowed by a stint on 7 Mile near Outer loss in 1967 dollars, or $315 to $359 million last two digits of the 12123 Dexter there’s a sign of life on the next block abandoned commercial property that He hadn’t driven down Dexter in a
in today’s dollars. Missing from that equation
Vaughn had carved out a niche Drive before buying a building at are untabulated losses from businesses that
Ave. street address. to the south at the corner of Dexter was most recently a liquor store. Burnt- long time and didn’t know about the
business, but was mindful that out- “Everybody thought I was crazy, 16527 Livernois Ave. across the street were under-insured or had no insurance at all. The last business to occupy the and Duane St. out and stripped houses near Dexter coffee shop, much less the commu-
siders considered him a “subversive” but I knew something was from the University of Detroit Mercy. building was O.M School Resale & Inside a former Monster Burger Avenue are next in line for demolition, nity carnival taking place in the lot
at an increasingly tense time of so- Vaughn’s book store faded away Current-day vs. 1967 Boutique. A hand-painted sign on restaurant, a Kansas City-based according to the land bank. behind his father’s first book store.
cial upheaval in the country.
happening … something was on in the early 1990s as sales declined economic indicators building’s facade said the store sold Christian ministry has set up a coffee “It’s beautiful what they’re doing “This is really amazing,” Eric
Edward Hancock, a 66-year-old the horizon. The movement and Vaughn pursued a second stint Black unemployment in Detroit a “little bit of this, little bit of that.” shop that has become a popular across the street,” Ellis said as a bull- Vaughn said. “Who is brave enough
black Detroiter who has lived in the began to take shape and people in politics, winning a seat in the state 1960: 18.2% 2014: 14.4% It’s unclear when the store shut- gathering place for longtime resi- dozer cleared the lot across Dexter to come over to this area and start a
neighborhood on Webb Street since were looking for black books.” House in 1994. But small business
White unemployment in Detroit
tered for good, but the building is dents like Ellis and Hancock. from the coffee shop where he sat on coffee shop?”
1956, said he recalls browsing books ownership has lived on in the one of thousands of properties trans- Eleos Coffee House opened in Oc- a recent day in May. “One day that’s Chad Livengood: (313) 446-1654
in Vaughn’s store as a teenager. Ed Vaughn, pictured in 1967 and now Vaughn family. 1960: 5.8% 2014: 4.9% ferred in foreclosure to the Wayne tober of last year, selling coffee, pas- going to be a business again.” Twitter: @ChadLivengood

Detroit 1967 timeline: 1967 to 2017


>> July 23-29, 1967: On Sunday, July 23, at 3:30 a.m., Detroit police raid an illegal after April 4–5, 1968: Violence again >> Jan. 1, 1974: Former state Sen. Oct. 14, 1984: The Tigers beat the San April 29-May 4, 1992: Violence erupts in Los 2010: Quicken Loans Inc. founder Dan July 18, 2013: Detroit files for Chapter 9
hours bar in the building that housed the former Economy Printing Co. at 12th Street and erupts in the 12th Street area of Detroit Coleman Young takes office as Detroit’s first Diego Padres in Game 5 at Tiger Stadium Angeles after a jury acquits four police officers in Gilbert relocates the company’s bankruptcy protection. Long-term debt
Clairmount. Police find 83 people inside, celebrating the return of two soldiers from Vietnam. after the assassination of Martin Luther black mayor. He’s re-elected four times to clinch the World Series championship. the beating of motorist Rodney King. 58 are headquarters and 1,700 employees from obligations are estimated at up to $20 billion.
Additional paddy wagons are called from neighboring precincts as a crowd grows agitated in King Jr., amid more than 100 instances of before retiring in 1993. Fans riot, overturning vehicles and killed and the damage is estimated at more Livonia to the Compuware building.
Nov. 5, 2013: Mike Duggan is elected as
the hot summer night. Bricks and bottles are tossed at police. At 6:30 a.m., Hardy Drugs is the rioting across the country. The Michigan setting them ablaze. National and than $1 billion — making it the first U.S. riot more
1976: 12th Street is renamed Rosa Parks Dec. 27, 2011: Gov. Rick Snyder creates a the city’s first white mayor since Roman
first building set ablaze. There would be 1,300 more fires by the riot’s end, requiring assistance Army National Guard quells the riot. One international press coverage is negative. costly and deadly than Detroit’s 1967 violence.
Boulevard. review board for Detroit’s finances. Within a Gribbs in 1973. However, his power is
from 43 other fire departments. person is killed, and the number of No one is killed.
July 1, 1976: The first phase of the Jan. 1, 2002: Kwame Kilpatrick takes office few months, the board determines the city curtailed before taking office because of the
By the end of the day on Sunday, the crowd on 12th Street has grown to about 10,000 people buildings damaged is much smaller than
Renaissance Center complex opens along 1989: Mike and Marian Ilitch move their as mayor at age 31, the city’s youngest-ever is in jeopardy. state takeover of the city.
and violence and looting begins to spill into other areas of the city. Detroit Police 1967.
the Detroit River at a cost of $337 million. Little Caesars pizza chain headquarters from chief executive
April 4, 2012: Detroit City Council agrees to a Dec. 10, 2014: The city exits bankruptcy.
Commissioner Ray Giradin seeks help from the Michigan State Police, Wayne County Sheriff
Department and the Michigan National Guard. Mayor Jerome Cavanagh orders all bars,
>> Oct. 10, 1968: The Tigers beat the Farmington Hills to Detroit after renovating 2002-2003: Compuware Corp. founder consent agreement with the state to shore up Orr resigns as emergency manager and
St. Louis Cardinals to win the World Series. the ornate Fox Theatre and its
theaters and gas stations closed. A 9 p.m. curfew is mostly ignored. Peter Karmanos Jr. spends $350 million to the city’s finances in a bid to avoid bankruptcy. government control of Detroit returns to the
Thousands celebrate peacefully in the 186,000-square-foot office space. build a 15-story company headquarters in elected city council and mayor.
It takes five days and more than 8,000 Michigan Army National Guardsmen and 5,500 veteran streets, and the team plane is diverted to March 14, 2013: Michigan Gov. Rick Snyder
Campus Martius and brings more than 4,000
paratroopers from the Army’s 82nd and 101st Airborne divisions to quell the violence. In the end, Willow Run Airport because an estimated June 15, 1990: Eight people are killed in appoints Kevyn Orr as emergency manager May 12, 2017: The $187 million QLine
employees to Detroit from the suburbs.
2,509 businesses have been destroyed. The human toll is 43 dead (including 33 black residents, killed 30,000 jubilant fans had gathered at Detroit, from accidents, gunfire, and a for Detroit. By May, Orr reports that the city streetcar launches passenger service along a
mostly by police and troops), 1,189 injured, and 7,231 arrested. Ironically, the Economy Printing Co. Detroit Metro, prompting authorities to hit-and-run, during a citywide celebration Sept. 18, 2008: Felony convictions force is insolvent and cannot meet payments to 6.6-mile loop of Woodward Avenue in
survives the riot without much damage. DETROIT HISTORICAL SOCIETY halt all air traffic. DETROIT HISTORICAL SOCIETY DETROIT HISTORICAL SOCIETY of the Detroit Pistons’ NBA championship. Kwame Kilpatrick to resign as mayor. creditors, unions and pension funds. downtown Detroit.
Sources: detroithistorical.org, detroit1701.org, U.S. Census, thewright.org, Chicago Tribune, New York Times, detroitjournalism.org, mtu.edu/mhugl, hourdetroit.com, Crain’s archival and research. Compiled by Bill Shea.
14 C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7

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C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7 15

CHINA without
understanding
fully “I don’t think it’s
any more risky
“Using Alibaba
may alleviate
dent, questioned publicly whether
the move was politically motivated
FROM PAGE 1 the Chinese cul- some legal con- against the Chinese company, not-
population will be considered mid- ture, Tsai warns. doing business in cerns, but you ing Alibaba had taken significant
dle class by 2022, according to the The compan- China than it is better have law- steps in battling piracy, including
report. In 2000, that figure was just 4 pies that per- yers on the blurring trademarks in product im-
percent. form the proper here. You’ve got to ground in China, ages and technology that prevents
China’s retail market totaled $5 due diligence to protect your so if something counterfeit sellers from returning to
trillion in 2016 and is expected to be understand intellectual does go wrong, the sites.
11 percent larger than that of the shoppers in you have the But the opportunity is worth the
U.S., the current world leader, by China will have property to get proper help in risk, said John Nemazi, partner
2020. Much of that will be growth in the most suc- maximum value ... navigating that and co-chair of patent protection
online sales — where 60 cents of ev- cess, versus but the market system.” for Brooks Kushman PC in South-
ery dollar spent online worldwide those that are Alibaba has field.
will be by Chinese consumers by looking to just opportunity in also struggled “There are issues with counter-
2020, according to Alibaba. dump product China is just too for years in pre- feiting on everywhere, even Ebay,”
“There’s quality here (in the U.S.),” as-is into the big to ignore.” venting counter- Nemazi said. “It’s hard to police
Joseph Tsai, Alibaba’s vice chairman market, he said. feit products those things, but I don’t think it’s any
and co-founder, said in an interview “Selling in John Nemazi, partner and co-chair from showing up more risky doing business in China
with Crain’s. “Consumers in China, China is not for of patent protection for Brooks on its sites. In than it is here. You’ve got to protect
what they care about is anything everybody,” Tsai Kushman PC December, the your intellectual property to get
they eat, they put on their face (cos- said. “(The U.S. Office of the U.S. maximum value ... but the market
metics) and baby products. They business) has to Trade Represen- opportunity in China is just too big
want safety and quality. That search have an open mind about taking to consider for any business, but par- tative put Alibaba’s Taobao market- to ignore.”
for quality is only going to increase their offering to a consumer popula- ticularly small businesses that lack place on its “Notorious Markets For Chmielewski, the risks aren’t
with the growing middle class in tion that’s very, very different than legal and cultural sophistication, List.” The list is meant to steer U.S. great enough to sway his desire to
China.” the U.S.” said Steve Richman, partner and at- shoppers away from marketplaces expand.
Alibaba held Gateway ’17, its first Tsai said the exporter must un- torney focused on international that reportedly engage in and facili- “They can replicate our packag-
non-investor event in the U.S., to derstand that packaging in China is commercial law for Detroit-based tate counterfeiting and violating of ing, I suppose, but I don’t think they
find small businesses like Dave’s different and fashion styles are dif- Clark Hill PLC. U.S. intellectual property laws. The could replicate our quality,” he said.
Sweet Tooth and sign them up to sell ferent. So while people are eager to “The main concern with China is U.S. removed Taobao from the same “Why worry about a threat I can’t
on its platforms like its busi- spend money on U.S. products, there always enforcement; it’s a very dif- list in 2012 after it began a new strat- change? The opportunity outweighs
ness-to-consumer portal Tmall and are cultural norms Chinese shop- ferent legal system in China that is egy in combating counterfeit prod- that risk, in my opinion.”
consumer-to-consumer portal Tao- pers expect. politicized, heavily influenced by the ucts. Dustin Walsh: (313) 446-6042
bao. More than 3,000 attended the Legal hurdles are also important Communist party,” Richman said. Michael Evans, Alibaba’s presi- Twitter: @dustinpwalsh
June 26, 2017 CRAIN’S DETROIT BUSINESS Page 15
conference, with roughly 700 busi-
nesses from Michigan.
Anthony Montalbano, managing
director and partner at Detroit-based MARKET REAL JOB FRONT
PLACE ESTATE
website and mobile app develop-
ment company Ambr Detroit LLC,
attended Gateway to learn more POSITIONS AVAILABLE
about opportunities for his clients. BUSINESS OPPORTUNITIES WATERFRONT PROPERTY
“This is unknown territory for
me,” said Montalbano, who was in- FAMILY HOME ON û PRINCIPAL ARCHITECT û
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vited by Goldman Sachs 10,000 A LAKE!! Work with cros-func Cust & dev team in anal requi & desi Android Apps/Serv for Autom
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new feat, debug issues & wri test case for unit test. Lead & or parti in meet bw the cust & in-
sor of the event. “I came for info Don’t be left Suiteless! ter team (onsite & offsite res) for des rev & clarif in the specs doc. Lead coms on Perf issu
gathering, to find awareness of what bw cust & Harman, incl repo & investi the issue, identify priorities, updat track & root cause
Rare opportunity for 12 ’Royalty’ all event
doc etc. Dev & track KPIs for each SW rel to insure it meet the accep criteria. Inter with
(Alibaba) is trying to do. What I’m seats in the open-air Section 22 Suite in
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Little Caesars Arena with great views
realizing is there’s a hell of a lot of facing the stage for all LCA controlled
exp peer by shar k’ledge in Android, Linux, Perf analy & related tools to carry-out the activ.
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areas of assig & related fields. Work with prog mngr to dev proj plan to manage proj risk &
design placement, catering, concessions Truly enjoy Family and Friends like nowhere
fee that could retail for $10 or $12 in to sec dom deliver. Lead activ of Sys domain to ramp up new proj with prog mngr & other
and parking preferences included with the else on your own Waterfront Property in teams. Req: Bach’s deg or for Equi in Comp Sci Eng/Electr, Elec, Comm or Tele Eng & 8
China, compared with just $5.99 in suite. Offer won’t last. Northern Michigan! yrs of progr work exp in SW desi & dev on Mob Smartphone p’form and/or In-Vehicle Infot
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Sale by Owner. $760,000 Gross Rent,
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Work location: Novi, MI. May have long term assignment
in other location in U.S. including Livonia, MI area.
Mandarin language, among other
26.5% influence the purchase of 26 Year History. Industrial, Warehouse,
considerations. Offices. Much Potential. Email Contact:
Chmielewski said he discussed office/industrial and commerical space.
srsco3500@gmail.com
û SENIOR ENGINEER û
those options with half a dozen ser- Help them find you by advertising in
Perf root-caus eff & gener tech solution for prob reso to component level. Prov f’back &
vice providers at the Gateway ’17 Crain’s Real Estate Section. docu on issue. Supp pre-prod & prod build activ & vehicle ride tri as req. Revi Captur
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event. Test Fleet data for tren & leads/aids in iss investi as need. Plan & impl updat to test
313.446.6086 • FAX: 313.446. 034 7 prop. Coordinate & perf Cap Test Fleet SW updat as neces. Comm, coordin & cons
“Shipping chocolate around the E-Mail: cdbclassified@crain.com with engin depart. Particip in PDT meet. Respon for eval design & component & sys
world is a scary thing for us,” Ch- SURVEY perf, perfor analysis, dev & test of major eng proj & maintain test prop. Req: Bach’s de-
mielewski said. “Logistics are a con- gree or for equi in Eng in one of the foll dis: Mech Eng, Elec Eng, Indus Eng, Manu
cern; warehousing, fulfillment, etc. It ANALYZE Eng, Comp Sci, Aeron Engi with 2 Yrs of rel work exp in autom infotain sys. Exp must
incl:- 2 yrs of exp in Automotive elec/elec/SW engi exp, K’ledge of vehicle serial data
has to be the right fit, but I think comm (CAN, MOST, ETHERNET) K’ledge of verif & valid proc (component- bench,
we’ve made some really important MATCH vehicle-level) U’standing of HW des & fail mode Res dri indi with high levels of initi &
connections here (at the event).” ptivity High level of oral & wri comm skill - 2 yrs exp work with curr a’motive infotain sys
incl Navig, GPS, B’tooth, USB, Speech Recog, Microphone, Hands-free Proce & Audio
But using Alibaba’s services and Mana, Disp & HMI, Cam & Vid Mgmt, AM/FM/XM Rece/Tun Internet Apps incl. Internet
selling into the China market are not Rad, Med Play, Text to Spe Sys & Phone, Data Carr 7 Data Dw’loads.
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Many of the small companies that Attn: Gokul - Job Code SE-01,
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exporting for the first time, many Work location: Novi, MI.
16 C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7

RANDOLPH peer cities and lagged far behind the


67 percent of all Michigan workers in
FROM PAGE 1 that age bracket who were employed
Those efforts include the new De- in 2015, according to federal Bureau
troit at Work initiative connecting job of Labor Statistics data.
seekers and employers, the creation “This is a Detroit focus, and our
of new training programs for jobs in sense is if we don’t intervene, we’ll
information technology and patient have a generation of adults that never
attendant care at city hospitals and a work ... (and) we’re not going to
focus on training imprisoned Detroi- re-establish the middle class in De-
ters for jobs in culinary arts and troit,” said Meador, who co-chairs the
heavy equipment operating before mayor’s Workforce Development
they re-enter society. Board with Strategic Staffing Solu-
At Randolph, “the building is dat- tions Inc. CEO Cindy Pasky.
ed, the equipment is old and they
don’t even have the dollars they need Another route
for supplies,” said David Meador, vice
chairman and chief administrative In the case of Randolph, the busi-
officer of DTE Energy Co., who has ness and city leaders are bypassing
taken a keen interest in rescuing the the normal political routes of turning
school. “In the construction man- around a public school that is seen as
agement class, they can’t get new a critical training ground for skilled
wood, so they build things and they trades apprenticeship programs.
have to take them apart and straight- Instead of beating the drum for a
en the nails out and do it again.” career technical education millage to
City officials and business leaders pay for the improvements, the CEOs
are trying to convert Randolph are passing the hat for the capital ex-
school into a dual training facility for penses and an on-going $100,000 an-
Detroit high school students during nual operating subsidy.
the day and adults at night through “$6 million isn’t a small number,”
federally funded job-training pro- Pasky said. “But so much of it is a PHOTOS BY LARRY A. PEPLIN FOR CRAIN’S
grams. one-time expense to have the right Damarcus Holton (left) marking railing piece, and carpentry teacher Tony McLean (third from left) works with students on railing
The city’s labor statistics paint a equipment, the right teachers.” installation.
sobering picture of the board’s com- And rather than putting public
plex challenge: Detroiters held just pressure on Detroit’s school leaders en to us, and we just have to put the
26 percent of the city’s 258,807 jobs in to focus on reversing the school’s right structure in place,” said Jeff
2014 — a figure that’s lopsided com- downward decline, the Workforce Donofrio, executive director of work-
pared to most major American cities. Development Board and the mayor’s force development for Duggan.
Total employment among Detroit staff are attempting to do it them- The Workforce Development
residents ages 16-64 was 49 percent, selves. Board entered into a 10-year agree-
a share of the population that trails “We have the facilities that are giv- ment with Detroit schools last year to
make improvements to the school,
make changes to the curriculum and
promote its programs for juniors and
seniors to underclassmen in high
schools across the city.
“There hasn’t been a strong mes-
sage about the value of the school,”
said Nicole Stallings, deputy director
of workforce development for Dug-
gan’s office. “We want to get to a
place where we’re driving interest in
the trades and how lucrative of a ca-
reer that can be.”
Detroit Employment Solutions Bricks at Randolph Technical High School in Detroit.
Corp., the city’s workforce agency, is
in the process of hiring a firm to run school district and teachers union on The EAA high schools are rejoin-
night classes for adults at the school a plan to pay instructors at the school ing the Detroit school district in July
to train them for a variety of industry more than the district’s collective and Randolph school's boosters are
certificates, Donofrio said. bargaining agreement requires in an hoping to see an enrollment increase
City officials also are coordinating effort to attract quality educators, this fall.
improvements to the school facilities Donofrio said. McLean said the school’s bare-
this summer, including interior bones budget has limited learning
painting and modernizing the build- Barebones budget opportunities in his class. His stu-
ing’s entrance. dents learn the basics of framing by
“It hadn’t fallen into disrepair, but As a career and technical educa- building a house inside a classroom
there isn’t the feeling of a modern, tion school, Randolph serves stu- workshop — and then tear it apart.
clean construction site,” Stallings dents from four traditional high “We could take them to a different
said during a recent tour of the build- schools in the city. The school is split level, but they need to give us more
ing. in two: a 94-student traditional high resources,” McLean said.
The mayor’s 37-member Work- school and 140 students in career The juniors in McLean’s class end-
force Development Board includes and technical education, Belcher ed this school year by building a tiny
six members from the leadership said. house in the front lawn of the school
ranks of labor unions who also are Randolph’s student population at West McNichols Road and Hubbell
involved in resuscitating Randolph. took a hit in 2013 after the Education Avenue.
The International Brotherhood of Achievement Authority took over six “The girls are starting to excel be-
Electrical Workers is working with DPS high schools in a school reform yond the boys,” McLean said of his 28
workforce development officials to effort that has since fizzled out. students this year.
restart an electrical program that was The EAA would have lost state Jamea Delaine, 16, said she likes
axed a few years ago. funding if its high school students framing walls more than anything
“That one we weren’t able to keep had attended Randolph for half of else she’s learned this year in Mc-
because we just couldn’t find a the day. Lean’s construction class.
teacher for the program,” said Brenda “When they split DPS up, (Ran- “That's more my territory,” De-
Belcher, a school district administra- dolph’s enrollment) declined, and laine said. “Don’t knock it until you
tor who oversees 29 city schools, in- the EAA wouldn’t send us any stu- try it.”
cluding Randolph. dents,” said McLean, the school’s car- Chad Livengood: (313) 446-1654
City officials are working with the pentry teacher. “That’s crazy.” Twitter: @ChadLivengood
C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7 17

DMC “These are very high-cost ers and administrators.


“We create a CREDO brief, a syn-
clude access to a multi-disciplinary
primary care team. Patient satisfaction
FROM PAGE 3 patients. We assess their yopsis of their medical problems,” scores averaged 95 percent approval.
Using DMC's electronic medical re- physical and mental health. Stokes-Buzzelli said. “They are guide- J Of the 112 diabetic patients who

cord system, ER staff have identified lines that summarize” the medical re- came in for more than one visit, 78 ex-
the patients who either have one of Their own self-assessments cord of each patient. perienced improved HbA1c (blood
seven chronic conditions or are fre- shows they are lower than When a patient enrolled in CREDO sugar levels), or 70 percent, compared
quent flyers in the ER — five or more
visits per year, White said.
baseline for health.” presents in a Henry Ford ER,
Stokes-Buzzelli said, he or she is eval-
with their initial visit. More than 285
total diabetic patient have been seen
“Our multidisciplinary teams are Suzanne White, M.D., DMC uated and treated like any other pa- at least once.
providing expanded services with be- tient for an emergency condition. But J Of 232 patients with high blood

havioral health, social work, pharma- gency departments. The goal is to made in the study years of 2013 and CREDO patients are flagged for extra pressure who came in for multiple vis-
cy and dietary,” White said. minimize unnecessary use of services 2014. Some 77 percent of adults under attention. its, 118 showed improved cholesterol
When patients seek ER care for and improve patient safety. age 65 said they used the ER because “An alert appears (on their electron- levels, or 51 percent, compared with
non-life threatening conditions, ER Others like St. John Hospital in De- they believed their medical problem ic chart). If there is alignment with a their initial visit. Some 771 total pa-
staff explains the Gateway program troit and Providence Hospital in was serious. Another 12 percent of previous complaint, we treat them, but tients have been seen at least once for
and recommends they enroll. DMC Southfield refer ER patients without adults said they used the ER because maybe we don’t do another MRI” if hypertension.
offers Gateway outpatient clinics adja- primary care doctors to their physi- their physician's office was closed they had one recently enough, J Data shows the number of multiple

cent to the hospital ERs with hours cian referral lines. Most all try to sign when they needed treatment. Stokes-Buzzelli said. “Some patients emergency department visits by Gate-
that range from 8 a.m. to 11 p.m. About up the uninsured to Medicaid or direct Still, hospital ER officials say one require extra social services, a primary way enrolled patients decreased by
75 percent of enrolled patients sched- patients to free outpatient clinics or solvable problem is to reduce the care visit or a meeting with a commu- about 70 percent. Some 2,075 patients
ule direct appointments with the federally qualified health centers for number of people who use the ER five nity mental health partner” such as showed a decrease in ER use after their
Gateway clinic. followup care. to 10 to 20 or more times each year. Central City Integrated Health or New first Gateway appointment. Another
“Patients who enroll are sticking But White said many of these pro- These high ER users with multiple Center Community Services. 1,153 patients have had zero ER visits
with the program, which is what we grams that refer patients to outside chronic conditions are what many ex- The ultimate goal, said Stokes-Buz- since their initial visit.
hoped to see,” she said. “These are very providers don’t address the root cause perts are trying to address with pro- zelli, is to “channel them back to a pri- White said diabetes and hyperten-
high-cost patients. We assess their of inappropriate ER use. grams like Gateway and the Commu- mary care provider, avoid duplication sion were chosen for closer reviews
physical and mental health. Their own “Historically that model (of referral) nity Resources for Emergency of services because ER care is so frag- because those patients visited hospital
self-assessments shows they are lower has not worked. If you have the patient Department Overuse, or CREDO. mented.” ERs more frequently.
than baseline for health.” in front of you, you have an opportuni- Federal funding for the Gateway
White said ER visits, hospitaliza- ty for patients to have teachable mo- Henry Ford ER use Results of Gateway grant was provided by various taxes
tions and readmissions have gone ments in the ER,” White said. “When collected under Obamacare and are
down significantly for the patients en- you refer them to a clinic a block away, Over the past decade, Henry Ford Under Gateway, patients who don’t part of the act’s quality-improvement
rolled in the program. “We found up to typically that model fails with that pa- Hospital has used the CREDO pro- have primary care physicians and and cost-reduction provisions. DMC’s
70 percent reductions (in ER visits) for tient because it requires a lot of naviga- gram to identify high users of emer- have multiple chronic conditions are grant is funded through Sept. 1, 2018.
the super utilizers” (more than five per tion up front.” gency services and either offer them identified and offered coordinated After federal funding ends, White
year), she said. Data from a recent report of Michi- additional services or track their use to care services. The four participating said she hopes to work with federal
gan hospital ERs showed that 10 per- reduce misuse of DMC hospitals are DMC Harper Uni- and private payers to continue the
Frequent ER users cent of the uninsured use the hospital tests or proce- versity Hospital, DMC Detroit Receiv- program well into the future by devel-
emergency department for routine dures. ing Hospital, DMC Sinai-Grace Hospi- oping payment codes for various pri-
Several metro Detroit hospitals try primary care, compared with 3 per- About 275 tal and DMC Children’s Hospital of mary care services rendered in the ER.
to identify high ER users and expand cent for those with insurance, said people are en- Michigan. “We are hoping to sustain the pro-
primary care access for those patients Ann Arbor-based Center for Health- rolled in Henry Patients have a variety of condi- gram by working with payers to devel-
when they can. Some hospitals like care Research and Transformation. Ford’s CREDO tions, including diabetes, asthma, hy- op reimbursement models,” White
DMC and Henry Ford Hospital in De- Nationally, total ER visits have re- program at any pertension, heart failure, chronic lung said. “This is an innovative model, the
troit have added same-day clinics for mained somewhat stable at about 410 one time, said disease, depression and HIV. About 51 first step in the direction for direct ac-
primary care services. They use social per 1,000 people, or about 130 million Stephanie percent have Medicaid coverage, 25 cess to primary care.”
workers for patient education and per year, the past decade. Michigan Stephanie Stokes-Buzzelli, percent are uninsured, 14 percent DMC covered about 85 percent of
work closely with mental health pro- annually has about 5 million hospital Stokes-Buzzelli: M.D., a Henry have Medicare and 10 percent have the costs of the program from the $10
viders for outpatient care. ER patient visits. Goal to send back Ford emergency commercial insurance, White said. million federal grant. Additional fund-
Hospitals affiliated with Ann Ar- While reducing unnecessary ER to primary care physician. Pa- Here is some preliminary data from ing came from insurance coverage
bor-based St. Joseph Mercy Health use was one of the goals of the Afford- provider. tients are chosen the Gateway to Health program during with the rest was funded by DMC,
System use a program called Complex able Care Act, a 2016 report by the for CREDO by a January 2015 to May 2017: White said.
Care that helps identify high-risk users Centers for Disease Control and Pre- multi-disciplinary committee of nurs- J 6,500 enrolled patients had 16,000 Jay Greene: (313) 446-0325
of hospital services, including emer- vention said little improvement was es, doctors, psychologists, social work- total outpatient visits. The visits in- Twitter: @jaybgreene

FOXCONN Foxconn officials


on a site in De-
Michigan mentioned ence at Foxconn’s shareholder meet-
ing.
everyone back on the same page and
get this package done so we can bring
FROM PAGE 3 troit, but said it Foxconn chairman Terry Gou said Expansion into the United States thousands of new jobs to Michigan,”
“Michigan remains very much in wasn’t the un- Thursday the manufacturer of Apple’s would reduce Foxconn’s reliance on Adler said Thursday.
the hunt for a large manufacturing derutilized Cole- iPhone and other electronic devices China, where it has the bulk of its op- Republican House members sus-
facility that would create thousands man A. Young may spend up to $10 billion in the U.S. erations and employs about 1 million pected the governor made promises
of jobs,” Snyder strategy director John International over five years and will announce the people. to Democrats to curb legislation labor
Walsh told Crain’s. Airport that his first three states for its investments by unions don’t want passed, said Rep.
“The company continues to ex- administration is early August. Setback for Snyder Jim Tedder, R-Clarkston.
pend time and resources evaluating studying for uses That timeframe matches what state “We’re just waiting to get clarity. It’s
Mike Duggan:
locations in our state and remains other than gen- economic development officials have As Foxconn studies its options, the rather difficult — the governor is do-
Going to be more
actively engaged with the adminis- eral aviation. been told in discussions with the Snyder administration was dealt a set- ing his trade mission.”
opportunities.
tration.” “I didn’t fly to company, a state source said. back this week in its pursuit of a new Tedder chairs the House Tax Policy
Wayne County’s economic devel- Asia because I At a Foxconn shareholders meet- tax incentives program that would al- Committee, which sent the full House
opment department declined to didn’t have anything to offer,” Dug- ing Thursday in Taipei, Taiwan, Gou low new companies that create more the so-called “Good Jobs” bills on
comment through a spokesman gan told reporters after a midday mentioned Michigan as one of six than 500 new jobs in Michigan to cap- Tuesday — a sign that there were
about Foxconn’s interest in Romulus, news conference. “... We didn’t talk to states under consideration for its ex- ture up to 50 percent of their employ- enough votes from Republicans and
which would fall into the county’s Foxconn about City Airport. We had pansion into manufacturing liquid ees’ state income taxes. Democrats to pass the legislation.
“aerotropolis” district between the a much better site.” crystal display screens in the U.S., ac- House Speaker Tom Leonard, But Leonard abruptly adjourned
Detroit Metro and Willow Run air- Duggan said Thursday he and cording to the Associated Press. R-DeWitt, called off a vote on the legis- the House until the representatives
ports that has struggled to take off. Snyder “learned a lot in Asia and Gou said Foxconn plans to develop lation late Tuesday, publicly question- return to Lansing next month for a
Michigan officials have been in there are going to be a lot more op- operations in the U.S. that combine ing whether Snyder cut a side deal with one-day session on July 12.
hot pursuit of Foxconn since Snyder portunities” to attract manufacturing hardware manufacturing and soft- Democrats to get votes that would un- “Until we get more clarity as to
and Detroit Mayor Mike Duggan flew back to southeast Michigan as Mexi- ware development in technologies dermine Republican caucus priorities. whether or not there were deals to
to Japan the weekend of June 2 to co’s wage rates rise, closing the gap including artificial intelligence and Snyder has been in Europe this undermine House Republican prior-
meet with representatives of the between U.S. and Mexican workers. automation. week on a trade mission and will meet ities, I would say my vote is on hold,”
company after the Mackinac Policy “I don’t know what’s going to hap- Details for each state were not set- with legislative leaders next week, Tedder told Crain’s. “That sentiment
Conference. pen with Foxconn, but there are going tled, but overall, “we will provide at spokesman Ari Adler said. is likely shared by others.”
Duggan confirmed for the first to be a lot more opportunities, and least tens of thousands of job oppor- “The governor is looking forward to The Associated Press contributed to
time Thursday that he tried to sell we’re prepared for it,” Duggan said. tunities,” said Gou at a news confer- meeting with legislative leaders to get this report.
18 C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7

PISTONS tax-exempt bonds spent on stadi-


ums and arenas. There’s even a bi-
FROM PAGE 3 partisan bill in Congress to halt the
www.crainsdetroit.com
come back (to Detroit),” Fink told use of municipal bonds, which are
Editor-in-Chief Keith E. Crain the judge. “... This would kill the exempt from federal taxes, for stadi-
Executive Vice President KC Crain
Publisher/Editor Ron Fournier, (313) 446-1674 or project. And not just this project — um construction.
rfournier@crain.com many others as well.” In the case of Little Caesars Are-
Group Publisher Mary Kramer, (313) 446-0399
Representatives for the Pistons na, the pitch was an estimated $1.8
or mkramer@crain.com
Managing Editor Michael Lee, (313) 446-1630 and Red Wings would not comment billion economic impact, creation
or malee@crain.com for this story, but Pistons CFO Greg of 8,300 construction and related
Director, Crain Custom Content Kristin Bull,
(313) 446-1608 or kbull@crain.com
Campbell, in an affidavit filed in the jobs, and another 1,100 permanent
Product Manager/Marketing and Events Kim Winkler, case and first reported by the De- jobs.
(313) 446-6764 or kwinkler@crain.com troit Free Press, wrote that the pub- City Council President Pro Tem
Digital Product Manager Carlos Portocarrero,
(313) 446-6056 or cportocarrero@crain.com
lic dollars are a condition of moving George Cushingberry, Jr., who
Creative Director David Kordalski, (216) 771-5169 downtown. The implication is that chairs the council’s budget and fi-
or dkordalski@crain.com the National Basketball Associa- nance committee, said the Little
News Editor Beth Reeber Valone, (313) 446-5875
or bvalone@crain.com
tion’s other owners, who are sched- Caesars Arena project is spurring
Special Projects Editor Amy Elliott Bragg, uled to vote on the Pistons’ move on development in Midtown and
(313) 446-1646 or abragg@crain.com July 11, could balk at the relocation downtown, helping boost sur-
Design and Copy Editor Beth Jachman, (313) 446-0356
or bjachman@crain.com if the public money isn’t squarely in rounding taxable property values
Research and Data Editor Sonya Hill, (313) 446-0402 place. and generating more city income
or shill@crain.com But why? Why do billionaire taxes from new workers.
Newsroom (313) 446-0329, FAX (313) 446-1687,
TIP LINE (313) 446-6766 team owners need tax dollars at all? “We have to continue to march
The question takes on additional DISTRICT DETROIT for development in the city if we in-
REPORTERS
Tyler Clifford, breaking news. (313) 446-1612 or
importance if Gores and partner A conceptual image of the Little Caesars Arena retrofitted to accommodate the tend to be able to grow our way into
tclifford@crain.com Dan Gilbert get the Major League Detroit Pistons. success on our plans to exit state
Annalise Frank, breaking news. (313) 446-0416 or Soccer expansion team they’re (oversight),” Cushingberry said.
afrank@crain.com
Jay Greene, senior reporter Covers health care.
seeking. They’ve pitched a $1 billion owners can afford to build their financial tools. Banks are happy to Mayor Mike Duggan downplayed
(313) 446-0325 or jgreene@crain.com mixed-use sta- own venues. Detroit native Steve lend cheap cash to major league the significance of the Davis law-
Chad Livengood Covers Detroit rising. (313) 446-1654 or dium develop- Ballmer, the former Microsoft Inc. owners because their leagues rake suit. He told Crain’s on Tuesday that
clivengood@crain.com
Kurt Nagl Breaking news. (313) 446-0337 or ment downtown CEO, pledged this month to pay for in billions from enormous broad- city attorneys warned of the Pistons
knagl@crain.com and they’re ex- a new arena for his L.A. Clippers to cast rights contracts. Hence, Co- staying in Auburn Hills to make “an
Kirk Pinho Covers real estate. (313) 446-0412 or pected to seek open in 2024. William Davidson merica Bank and Merrill Lynch irreparable injury” legal argument
kpinho@crain.com
Bill Shea, enterprise editor Covers the business some type of tax spent $90 million to build the Pal- bought all the arena bonds. Leagues to U.S. District Court Judge Mark
of sports. (313) 446-1626 or bshea@crain.com subsidy or dis- ace in 1988. themselves often make credit avail- Goldsmith.
Lindsay VanHulle Lansing reporter. (517) 657-2204 count. Tom Gores can afford to cover the able to teams, too. The NBA has a $1 “That was a frivolous lawsuit that
or lvanhulle@crain.com
Dustin Walsh, senior reporter Covers economic issues. Why team Little Caesars retrofit. Forbes says billion-plus revolving credit facility has played out more drama than it
(313) 446-6042 or dwalsh@crain.com owners seek Gores is worth $3.3 billion, and his that teams can cheaply tap for arena needed … the judge handled it ap-
Sherri Welch, senior reporter Covers nonprofits and subsidies is easy Platinum Equity business is an enor- projects. propriately,” Duggan said after
philanthropy. (313) 446-1694 or swelch@crain.com Tom Gores: Is
to answer: mous player in the private equity Oh, and Gores and the Pistons speaking at a Downtown Detroit
ADVERTISING worth $3.3 billion,
Elected officials universe. In 2015, it ranked as the are also getting a $20 million brown- Partnership meeting.
Sales Inquiries (313) 446-6032; FAX (313) 393-0997 according to
Director of Sales Lisa Rudy are willing to 22nd-largest private U.S. company field tax abatement as part of a It’s too soon to really know if the
Forbes.
Senior Account Manager Katie Sullivan hand them over. by revenue at $12.5 billion. In March, stand-alone deal to build a privately Pistons coming downtown as the
Senior Account Manager/Political Specialist In the case of it hailed its new $6.5 billion Platinum financed team headquarters, train- Red Wings’ new roommate will be a
Maria Marcantonio
Advertising Sales Gerry Golinske, Sharon Mulroy, the Little Caesars Arena project, it’s Equity Capital Partners IV global ing and rehab facility for $65 mil- windfall for Detroit beyond civic
Diane Owen $324.1 million in public funding, or buyout fund, and last year it spent $4 lion. pride. It certainly won’t help Au-
Classified Sales Manager Angela Schutte, about 38 percent of the total current billion to buy a division of St. Lou- Cities and team owners argue burn Hills, which is losing the bas-
(313) 446-6051
Classified Sales Lynn Calcaterra, (313) 446-6086 cost. Public backing for private is-based Emerson Electric Co. that taxpayer-backed subsidies for ketball team and all the entertain-
Events Manager Kacey Anderson sports venues is a trend that’s been But as a businessman, sterile log- stadiums fuel increased nearby ment events at the Palace.
Marketing and Sales Promotions Manager under way now for decades across ic says the efficient play is to ask for spending and create new tax reve- Whatever the value the teams
Christina Fabugais-Dimovska
Senior Art Director Sylvia Kolaski the country. Effective resistance is free money to pay the costs, be- nue for the municipalities — spuri- and arena may bring, it strains cre-
Special Projects Coordinator Keenan Covington rare, even amid examples of gross cause it is usually available. ous logic with little evidence of sup- dulity to suggest that Gores and the
Sales Support Suzanne Janik failure of such subsidies to deliver Gores and the billionaire Ilitch port, many economists argue. A Ilitches cannot afford to cover the
Media Services Manager Hussein Abdallah
the litany of promises about new family, who own the Red Wings and Brookings Institution report in Sep- $34.5 million. But no one is really
CUSTOMER SERVICE
jobs, spending and spinoff develop- are financing much of the new are- tember deconstructed the pro-sta- suggesting that, are they?
Main Number: Call (877) 824-9374
or customerservice@crainsdetroit.com
ment. na development, both have easy ac- dium subsidy arguments and calcu- Crain’s senior reporter Chad
Subscriptions $59 one year, $98 two years. Out of state, Certainly, today’s sports team cess to low-interest loans and other lated the federal revenue lost via Livengood contributed to this story.
$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)

EY names Michigan Entrepreneur of the Year honorees


446-0450 or (877) 824-9374.
Single Copies (877) 824-9374
Reprints Laura Picariello (732) 723-0569
or lpicariello@crain.com
To find a date a story was published (313) 446-0406
or e-mail infocenter@crain.com By Tyler Clifford Manufacturing Holdings Inc., Vi- Business J Carla Walker-Miller, president and
tclifford@crain.com
sionary J Chris Rizik, CEO, Ann Ar- CEO, Detroit-based Walker-Miller
Crain’s Detroit Business is published by
Crain Communications Inc. More than a dozen Michigan en- J Chris McCuiston, co-founder and bor-based Renaissance Venture Energy Services LLC, Business and
Chairman Keith E. Crain trepreneurs received EY Entrepre- CEO, Troy-based Goldfish Swim Capital Fund, Financial Services Consulting Services
President Rance Crain neur of the Year awards in 10 catego- School Franchising LLC, Education J Barry Spilman, CEO and manag- Next, the honorees will be consid-
Treasurer Mary Kay Crain
Senior Executive Vice President William A. Morrow ries for the Michigan and northwest & Training ing member, Royal Oak-based RPM ered for the Entrepreneur of the Year
Executive Vice President/Director of Strategic Ohio region. J Jenny McCuiston, co-founder, Freight Systems, Emerging National competition, which will be
Operations Chris Crain
Executive Vice President/Director of Corporate
More than two dozen were select- Goldfish Swim School Franchising J Peter Osten, executive and man- announced at the national awards
Operations KC Crain ed as finalists in April. LLC Education & Training aging member, RPM Freight Sys- gala in Palm Springs, Calif., on Nov.
Vice President/Production & Manufacturing The award, in its 31st year, honors J Lon Offenbacher, CEO and presi- tems, Emerging 18.
Dave Kamis
Chief Financial Officer Bob Recchia
entrepreneurs who excel in innova- dent, Troy-based Inteva Products
tion, financial performance and per- LLC, Automotive & Technology
INDEX TO COMPANIES
Chief Information Officer Anthony DiPonio
G.D. Crain Jr. Founder (1885-1973) sonal commitment to their busi- Solutions
Mrs. G.D. Crain Jr. Chairman (1911-1996) J Brent Parent, founder and CEO,
Editorial & Business Offices
nesses and communities, among These companies have significant mention in this week’s Crain’s Detroit Business:
1155 Gratiot Ave., Detroit MI 48207-2732; others. Ohio-based Material Handling Ser-
Alibaba 1 Frida 8
(313) 446-6000 Award categories include health, vices LLC, Industrial Products & Ser-
visionary, education and training vices AudioNet 4 Henry Ford Health System 17
Cable address: TWX 248-221-5122 AUTNEW DET
CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 is published weekly and family business, among others: J Doug Armstrong, founder and 1701 Bespoke 9 Lazlo 9
by Crain Communications Inc. at 1155 Gratiot Ave., Detroit MI J Jan Akervall, president and found-
48207-2732. Periodicals postage paid at Detroit, MI and additional
CEO, Ann Arbor-based North Star Dave’s Sweet Tooth 1 Nino Salvaggio International Marketplace 5
mailing offices. POSTMASTER: Send address changes to CRAIN’S er, Saline-based Akervall Technolo- Reach, Experiential Services
DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, Detroit Denim 8 Peacock Room 8
MI 48207-9732. GST # 136760444. Printed in U.S.A.
gies Inc., Health J Charles Stocking, co-CEO, Ohio-

Contents copyright 2017 by Crain Communications Inc. All rights J Sassa Akervall, CEO, Akervall based Principle Business Enterpris- Detroit Garment Group 8 Shinola 9
reserved. Reproduction or use of editorial content in any manner
without permission is prohibited.
Technologies Inc., Health es Inc., Family Business Detroit Medical Center 3 Simply Casual 9
J David Dauch, chairman and CEO, J Carol Stocking, co-CEO, Principle
Detroit Pistons 3 Thrift on the Ave 9
Detroit-based American Axle & Business Enterprises Inc., Family
C R A I N ’ S D E T R O I T B U S I N E S S // J U N E 2 6 , 2 0 1 7 19

THE WEEK ON THE WEB RUMBLINGS


JUNE 16 - 22 | For more, visit crainsdetroit.com

QLine free rides Tapas restaurant La Dulce closed


Detroit
J
its doors in Royal Oak on Monday
extended through
digits
after almost two years as it prepares

Labor Day
to reopen in Detroit at 2 Washing-
ton Blvd. next month.
A numbers-focused look at last J Detroit Lions Training Camp

W ith funding from the Kresge week’s headlines: kicks off July 31, giving fans a free

$300 million
Foundation, the QLine is chance to interact with favorite
again extending free rides, this time players at the team's Allen Park
through the summer, as M-1 Rail The amount Williams headquarters.
and its service provider, Paris-based International Co. LLC may invest J A new 150,000-square-foot office
Transdev, work to improve waits in two sites in Oakland County, building is coming to Grace Lake
and travel times. potentially bringing in around 900 Corporate Center at One Village
The Kresge-sponsored fare-free jobs, according to the Associated Center Drive in Van Buren
ride period will run July 1 through Press. Township.
Labor Day. Rides were free the COURTESY ALIBABA HOLDINGS
opening weekend, but that was al-
most immediately extended a week 600 OTHER NEWS Veteran attorney Bruce Thelen was able to meet up with Alibaba founder Jack Ma, his
one-time tour guide, at last week’s Gateway ‘17 event.

A chance encounter with


as demand exceeded expectations, The number of events the J The city of Detroit is seeking de-
resulting in long waits and some Downtown Detroit Partnership signers to create a community park
frustrated passengers. It was then plans to host at DTE Energy Co.’s in the east side’s Morningside

Jack Ma — and a reunion


extended through July 1. Beacon Park before the end of neighborhood using city funding
Kresge contributed $50 million to 2017. and a grant received through the

4
the $187 million it took to build the Knight Foundation’s Cities
streetcar project, which opened to
the public May 12.
“The funding will be a grant and is Buildings owned by Olympia
Challenge.
J The Detroit City Council voted
7-2 in favor of $34.5 million in
B illionaire Jack Ma and his Aliba-
ba Group Holdings Ltd. were in
Detroit for the first time last week,
the city, highlighting landmarks
and introducing him to his father.
“He didn’t ask for money. ... He
open-ended, depending on rider- Development of Michigan that bonds to modify the new Little Cae- and made something of an seemed quite intent and focused on
ship through Labor Day,” Jennifer are slated to be demolished, sars Arena to accommodate the De- impression. wanting to take any opportunity to
Kulczycki, director of external affairs despite pushback from troit Pistons’ move back downtown But Ma also left an impression on meet people outside of China and
and communications for Kresge, conservationists. after a 40-year suburban hiatus. veteran attorney Bruce Thelen near- find out what was really going on in
told Crain's in an email. “Kresge of- J The Detroit Home Mortgage pro- ly four decades ago — when Ma was the world,” Thelen said. “I remem-
fered the funding to maintain and gram gained a $5 million invest- only a teenager, long before he ber being so impressed with his am-
grow ridership while the QLine ops J The Detroit Red Wings an- ment from Comerica Bank to beef founded Alibaba. bition and drive.”
team works out some operational nounced they will open their first up its effort to address the city’s ap- In 1980, Thelen left his post as a In a 2008 profile in Inc. magazine,
kinks this summer.” regular season at Little Caesars praisal gap conundrum. Wall Street attorney for a trip around Ma said he spent eight years offering
The 6.6-mile QLine loop record- Arena on Oct. 5 with a match J Gov. Rick Snyder, along with a the world — with plans to return to tours to foreign tourists.
ed more than 100,000 rides in its against the Minnesota Wild. delegation of Michigan executives his native Michigan and practice law Thelen spent half the day with
first month, according to the re- J Meijer Inc. is expanding its app- and aerospace business leaders, by the end. Part of it was a rare trip Ma, enjoying the boy’s rap on his
lease. That works out to about 3,300 based grocery delivery service had their first meetings in Paris, for a Westerner to China’s mainland. hometown in a changing Commu-
a day. through Shipt Inc. to more metro kicking off last week’s economic Thelen says it was there, out front nist China — one that Ma, now
The goal under the system’s fi- Detroit households, including in development mission in Europe. of the only hotel opened to western- worth more than $30 billion, would
nancial model is 5,000-8,000 daily. Ann Arbor, Allen Park and J A Michigan State University ers in Hangzhou, known then as play a major role in reshaping.
That goal was not expected to be Belleville. alumnus is gifting the school $3 mil- Hangchow, that he was greeted by a “I must have told the story about
reached in its early stages, M-1 Rail J Urbanrest, a beer production fa- lion to create the Gaynor Entrepre- young Jack Ma. this young man at least a hundred
spokesman Dan Lijana told cility and taproom, plans to open neurship Lab in the school’s Broad “He told me his name ... and times after I returned to the U.S.,”
Crain’s. In the last couple of weeks, June 30 in Ferndale at 2615 Wolcott College of Business. The gift is from asked me if he could give me a tour Thelen said. “I told everyone that if
the QLine has seen about 3,500- St. from Larry Gaynor, president and of his city,” said Thelen, now a part- there were more young people like
4,000 riders per day and officials J Stryker Corp. has agreed to buy CEO of Farmington Hills-based ner at Dickinson Wright PLLC and this very impressive young guy in
expect that number to remain sta- Canadian fluorescence imaging TNG Worldwide Inc., and his wife appointee to the U.S. Department of China, the country’s economy was
ble or see a slight uptick, Lijana technology manufacturer Novadaq and company vice president Teresa. Commerce’s East Michigan District really going to take off.”
said. Technologies Inc. for $701 million. J Despite earlier budget concerns, Export Council. “He said he wanted (Postscript: Thelen was able
J Delta Air Lines Inc. will debut its the annual Accelerate Michigan In- to practice his English.” during last week’s Gateway ’17 event
BUSINESS NEWS new Airbus A350 this fall and De- novation Competition will return Ma escorted Thelen through to meet up with Ma.)
troit Metropolitan Airport will host for an eighth round this year on
J The Siren Hotel in downtown De- its first voyage. Nov. 16 at the Masonic Temple.
troit’s historic Wurlitzer Building
will be ready for guests in Novem- Emagine looks at sites
in Detroit for megaplex
ber, following a $22 million build-
out of the 55,000-square-foot space
at 1509 Broadway St.
J Kensington Church, a nonde-
nominational church based in Troy,
planned to break ground last week
on 33.1 acres in Clinton Township
E magine Entertainment Inc. is
looking to bring a megaplex the-
ater to downtown Detroit.
The population base is a little light
right now, but Glantz said Emagine
believes it will be there in the not-
for about $14 million. Co-founder and Chairman Paul too-distant future.
J The Michigan Black Chamber of Glantz said the company is evaluat- A new theater would be the first
Commerce has acquired the Nation- ing two undisclosed sites, one that megaplex downtown but second in
al Business League Inc., founded in would be new construction and one the city, joining the Bel Air Luxury
1900 by Booker T. Washington. that would entail renovating an ex- Cinema on Eight Mile between Van
J Erin Vermeulen, who most re- isting building. Dyke and Hoover Road.
cently served on the “Bill Handel He estimates the investment will Emagine is working on two other
Morning Show” team on KFI-AM be around $15 million and said he’s new theaters locally.
640 in Los Angeles, will join the 94.7 inclined to locate the new theater The Livingston County Board of
WCSX-FM morning team starting KURT NAGL/CRAIN’S DETROIT BUSINESS near residential development as op- Commissioners last week turned down
July 10. Bedrock Detroit is settling into its new downtown Detroit digs at 630 Woodward, a historic posed to commercial development. Emagine’s request for incentives for a
J Avalon International Breads plans four-floor building once home to retailer Christopher Mabley. At four stories and 39,000 “If you look at all the housing new theater in Hartland Township
to open a new cafe and biscuit bar in square feet, it is attached to the First National Building. Nearly 180 employees are units that are being developed near U.S. 23 and M-59, Glantz said, not-
the New Center area, the breadmak- stationed at the 39,000-square-foot headquarters, including its executives. The real downtown and in Midtown, I think ing he’s still pursuing that location.
er announced about two months estate development firm, part of the Detroit-based Quicken Loans Inc. family of you’re going to see an enormous Emagine is also looking to put an-
after its downtown Detroit location companies, moved from One Campus Martius to its new headquarters in February to amount of housing come online in other location in Oakland County in
opened. consolidate operations. next couple years,” Glantz said. an undisclosed area, he said.
“ EMPOWERING.
Enlightening.

Life-changing. REWARDING.
– C1: Spring 2017 Graduates

Crain’s Leadership Academy is a unique multisession development experience,



designed for the next generation of leaders. This 3-month program guides
participants on a journey of personal discovery and cross-sector perspectives,
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