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  • 1. Smoke and Indie hospitalsmirrors? under pressurePAGE 14 PAGE 22 OCTOBER 15, 2012 • VOL. 25/NO. 1 • $1.50 Serving Western Michigan Business Since 1988 www.mibiz.com SPEED READRack transplantGRAND RAPIDS — A Chicago-basedmanufacturer bought a building andplans to open up shop in Grand Rapidsto be close to its customers. Page 8Stock in the MarketGRAND RAPIDS — Downtown GrandRapids seems to have spilled a fewstreets south, the result of confidenceinspired by the $30 million DowntownMarket. Page 12Broader, younger audienceWEST MICHIGAN — Successfulnonprofits realize they must reachout to younger donors – and on theirterms – if they want to be sustainable.Page 15Accelerated actionGRAND RAPIDS — MichiganAccelerator Fund surpasses its fund-raising goal and prepares for potentialexits. Page 16Pine Rest makes a moveGRAND RAPIDS — Pine Rest plansto consolidate some offices to a newbuilding Dwelling Place has planned atits Herkimer Hotel project. Page 20 JUGGLING ACTNeuro needsGRAND RAPIDS — Spectrum Health’sexpansion of its neurosciences capa-bilities aims to serve a growing numberof patients with neurological disorders.Page 232012: An exceptional vintage?WEST MICHIGAN — Oenophiles that Wolverine World Wide CEO Blake Krueger prepares to integrateimmediately pass on Michigan winesin favor of more complex quaffs may one of the largest ever acquisitions in the footwear industry.want to give the state’s 2012 vintagesanother look. Page 24 SEE PAGE 4 STORY: JOE BOOMGAARD • PHOTO: JEFF HAGEPlan for crisisWEST MICHIGAN — The best way tomanage a crisis is to have a clear andeffective plan in place before one hap-pens, experts say. Page 26 Fifth Third ahead of schedule in Michigan lending programTech firms vie for prize By Mark Sanchez | MiBiz otherwise may not have done, The bank to date has surpassed 80 percent of the $2.5WEST MICHIGAN — Four firms from West msanchez@mibiz.com given the tight federal regu- billion commitment and is well ahead of expectations,Michigan have been selected as finalists lations right now over com- Doyle said. Fifth Third is 30 percent of the way to anotherin the $1 million Accelerate Michigan WEST MICHIGAN — When it came time for a mercial lending and collat- $2.5 billion commitment made in November 2011 forInnovation Competition. Page 32 Standish-based plastic molding company to grow, the eral requirements, said Tim consumer and mortgage lending. company went looking for a loan to finance an expan- Doyle, Fifth Third’s senior Huntington Bank, which committed $2 billion ISSUE INDEX sion. But the firm didn’t qualify for a loan because of vice president and business over four years to small business lending through a lack of adequate collateral, the result of the recession banking manager in West Pure Michigan Business Connect, said in June it hadCompany Index 3Design+Build 20 that pushed down the valuation of many companies. Michigan. originated more than $1.5 billion in loans to moreEconomic Development 12 The solution for Vantage Plastics came via a “They would have been than 2,500 business.Finance 16 Michigan Economic Development Corp. program harder transactions to get Doyle Doyle partly credits Fifth Third’s commercial loanFocus: Logistics 28 that supports the collateral needs for businesses seek- done,” Doyle said. “We’ve volumes through Pure Michigan Business Connect toFood Biz 24 ing credit, which enabled the company to secure a loan been somewhat handcuffed through regulatory the state’s improved economy, especially in the manu-Health Biz 22 from Fifth Third Bank. The transaction is one of many channels.” facturing sector where companies are making capitalManufacturing 8 Fifth Third has conducted as part of Pure Michigan Participation in the MEDC collateral program is purchases, acquisitions and facility expansions. FifthNonprofit Organizations 15 Business Connect, an initiative by Gov. Rick Snyder one aspect of Fifth Third’s broader role and its $2.5 Third’s overall commercial lending in Michigan isPeople & Datebook 33 and the MEDC to get Michigan businesses doing more billion, three-year commercial commitment made running about 30-percent higher in 2012 than in 2011,Pay It Forward 6 business with each other. a year ago to Pure Michigan Business Connect. The he said.Q&A and In the News 34Small Business 26 Fifth Third to date has funded $40 million in amount was about 25 percent higher than what Fifth “It’s very positive,” Doyle said.Talent Development 27 loans for 40 companies alone through the MEDC Third loaned to businesses in Michigan in the priorTechnology 32 collateral support program. They are deals the bank three years, Doyle said at the time. See PURE MI BUSINESS CONNECT | page 2P E R I O D I C A L S Magna plans new sunroof Battling Back facility for MiBiz Supplement: Holland Calhoun County BATTLING PAGE 10 M A D E I N INSIDE THIS ISSUE BACK CER EAL CIT Y REIN VEN TS ITS ELF MICHIGAN Sponsored by Chemical Bank
  • 2. 2 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.comAmway wants to exit wireless charging business By Joe Boomgaard | MiBiz Now, the company said the technology is rap- chips or phones,” Weaver said. “Now seems like jboomgaard@mibiz.com idly evolving to the point where it would better a good time to (sell the IP). The market seems to to hand off the technology to a new suitor who be right.” ADA — Amway parent company Alticor Inc. could expand its adoption and scope. If the sale happens, it would be the first time looks to cut the cord on the intellectual property “It’s a good time to sell the IP and exit the in the company’s more than five decades in behind eCoupled, the wireless charging technol- business, really to give the business the opportu- operation that it sold IP it developed, Weaver ogy it developed and nurtured over a decade, by nity to expand with an owner in the business of said. That’s because it is mainly focused on its finding a buyer to take it to the next level. consumer electronics or computer manufactur- core business and never has had “as big of a pat- Alticor took the unusual step earlier this ing,” said Jim Weaver, vice president at Alticor. ent estate in a big, emerging market” as it does month of announcing in a press release that it “They could bring the technology to life through with the eCoupled technology, he said. planned to sell the wireless charging IP devel- their product lines.” But rather than find an investment banker oped by its subsidiary, Fulton Innovation, an While Fulton Innovations developed more to quietly identify a buyer, make the transaction internal skunk works division that works on than 240 worldwide patents and has another and then make the announcement, Amway is product innovation. 480 patents pending behind the technology, the changing up that order. It led with the announce- The company initially created the technology business of wireless charging was too far away ment that it wants to sell the technology, is in the to power its eSpring line of UV water filters, but from Amway’s focus on health, wellness, beauty process of wrapping up a contract with an invest- handed it over to Fulton Innovation to see where and direct selling, he said. To really advance the ment banker, and then plans to shop around theAlticor plans to sell off the IP behind its eCoupled else the technology could be applied. That put the technology, the company felt it was time to find technology to suitors.wireless charging technology, which it originally company into unfamiliar territory, consumer an outside buyer and exit the business. Sources in the investment banking indus-developed for its eSpring UV water filter and later electronics, which could be fitted with adaptive “While licensing is something we under- try that spoke with MiBiz said the move seemedexplored as a solution for consumer electronics. devices that allowed for wireless charging. stand, we don’t have the ability to make power to indicate the company didn’t ascribe muchCOURTESY PHOTO value to the technology and wanted to walk away from it. Weaver insists that is not the case. He said the company chose to go about the process in the order it did out of fairness and transparency to the employees that worked on the technology and to the company’s licensing partners, some of which could be interested in buying the IP. “If we didn’t think it had any value, we would have quietly exited the business,” Weaver said. “We think differently. … This is valuable IP to sell. “We are not in any hurry to sell this. We want to do it the right way. And I’ve been candidly sur- prised how many people have expressed an inter- est. We’ve got a good business now, but we think it will be a great business in the right hands, and we want to help it along the way.” While Amway does want to get out of the wireless charging business, it sees the eCoupled IS THIS HOW YOUR technology as a “big success for the Amway busi- ness.” The company plans to continue licensing BANK SEES YOU? the technology to use in its water filters and other products. “We’re proud,” Weaver said. “There’s no We don’t. doubt that wireless power is in our future. To be a pioneer in creating that market space is a suc- We see you as an individual. cess, not a failure.” With the guts to run a business. Which makes us curious how you do it. And how we, as your bank, can help PURE MI BUSINESS CONNECT Continued from page 1 you do it better. What makes your business special? What is its true potential? The partnership with the state has exceeded How do you actually get paid? It’s how expectations for the Cincinnati-based Fifth we can generate ideas that work for you. Third, which is working to expand the model to Like integrated payables and receivables other states such as Ohio, Illinois and Florida. “The momentum we’ve made in Michigan solutions that may help you improve cash — others states are seeking to leverage that,” flow. Or, perhaps, financing options you Doyle said. “We’re taking this model on the never knew existed. We don’t think a road.” bank can do that without being curious. Key to the model is the MEDC’s referral of companies seeking assistance for an expansion Learn more at 53.com/BusinessIdeas or securing the capital or credit they need to grow. We’re Fifth Third Bank. Doyle recently detailed the program at a U.S. Department of Treasury conference in Chicago on sharing best practices to improve access to credit for businesses across the nation. His primary message in his presenta- The curious bank. tion was for both the public and private sectors was to “put down silos” and to look at how they can work together. Banks need to get more innovative as well in how they approach the market, Doyle said. Given the depth of Michigan’s economic troubles, the Pure Michigan Business Connect program and partnership with the state was an opportunity that Fifth Third welcomed. Deposit and credit products provided through Fifth Third Bank. Member FDIC. Equal Housing Lender. Lending is subject to credit review and approval. “This is the best situation for Michigan, if © Fifth Third Bank 2012. we’re working together,” Doyle said. “Banks have to change. What we realized in the last four years is we have to be more innovative because the cus- tomers’ needs are changing as well.”
  • 3. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 3WHAT’S INSIDE October 15, 2012 Published since 1988 MiBiz® is a registered trademark of REVUE Holding Co., Inc. Editor & Publisher Brian Edwards bedwards@mibiz.com Managing Editor Joe Boomgaard jboomgaard@mibiz.com Senior Writers Mark Sanchez (finance, health care) msanchez@mibiz.com Mike Brennan (technology) mbrennan@mibiz.com Staff Writer Elijah Brumback (design-build, real estate) ebrumback@mibiz.com 12 24 Contributing Reporters Carl Dunker, Kelly Hill, Lindsay Patton- Carson, Ruth Terry Minion Stephanie AllenMANUFACTURING FOOD BIZ Contributing Photographer 7 Out-of-state rack maker plans new Grand Rapids plant 24 West Michigan wineries excited for 2012 vintage Jeff Hage10 Magna International to expand in Holland Columnists11 MCC launches hybrid CAD/CNC program SMALL BUSINESS Melissa Anderson, Karl Dehn, Ron Kitchens, Birgit Klohs, Randy Thelen11 Event to highlight center’s training capabilities 26 Planning, communication key to crisis management Vice President of Sales Denise SchottECONOMIC DEVELOPMENT TALENT DEVELOPMENT dschott@mibiz.com 12 Downtown GR project gives developers confidence to invest 27 Summit shares best practices in employee retention Senior Advertising Consultant 14 Smoking gun? Study shows little impact from smoking ban Shelly Keel FOCUS: LOGISTICS skeel@mibiz.comNONPROFIT ORGANIZATIONS 28 State looks to bolster logistics capabilities Creative Services Director 15 Nonprofits broaden reach to younger donors 30-31 Statistics Kristi Kortman kkortman@mibiz.com 15 Q+A: Cecilia Cunningham, Major Gifts Director, Aquinas College 31 Governor, biz leaders near unanimous in bridge support Ad Designer & Traffic Coordinator Kellie ZaplitnyFINANCE TECHNOLOGY kzaplitny@mibiz.com 16 Accelerated Action: VC fund beats fundraising goal 32 Four West Mich. firms vie for Accelerate Michigan prize Web Editor 16 PNC survey shows small business owners planned for sluggish year Jayson Bussa NOTABLE jbussa@mibiz.comDESIGN+BUILD 6 Pay It Forward: Pete Brand Circulation 20 Pine Rest to anchor Herkimer project addition 33 People For address corrections or subscriptions, please visit www.mibiz.com 21 Industry slow to adopt new construction modeling software 33 Datebook 34 Q&A: Brian RyksHEALTH BIZ 34 In the News MiBiz 22 Indie hospitals feel increasing pressure to align, merge ISSN 1085-4916 • USPS 017-099 Formerly MiBizWest • Established 1988 23 Spectrum broadens neuroscience specialties MiBiz is published every other week by REVUE Holding Co., Inc., 4927 Stariha Dr., Suite B, Muskegon, MI 49441. Telephone (231) 798-4669. FAX (231) 798-8335. E-mail: info@ mibiz.com. Subscription changes: www.COMPANY INDEX Global Forex Trading ...............................16 Mich. Licensed Beverage Association ....14 Spectrum Health Innovations LLC..........32 mibiz.com. Periodicals Postage is paid atAccelerate Mich. ....................................32 Grand Action...........................................12 Michigan Accelerator Fund I...................16 Star Truck Rentals Inc. ...........................34 Muskegon, MI and additional mailing office. Grand Rapids Comm. 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  • 4. 4 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com JUGGLING ACT Wolverine World Wide CEO Blake Krueger prepares to integrate one of the largest ever acquisitions in the footwear industry.By Joe Boomgaard | MiBizjboomgaard@mibiz.comROCKFORD — Two decades of merger experi-ence have prepared Wolverine World Wide Inc.for the biggest acquisition in the company’s his-tory and one of the largest and most complexdeals ever in the footwear industry. The Rockford, Mich.-based footwear com-pany’s role in the $2.0 billion acquisition ofCollective Brands Inc. should yield consider-able growth for the company that makes HushPuppies and Merrell shoes. Company executivesproudly claim the transaction, which was final-ized last Tuesday, makes Wolverine the third-largest footwear company in the world, trailingonly Nike Inc. and Adidas AG. The acquisitionis expected to add $1 billion in annual sales toWolverine’s top line in 2013, pushing its totalrevenues to more than $2.5 billion. But some on Wall Street and in the footwearindustry are wondering if Wolverine will be ableto pull off an acquisition this large. The deal willcreate a new level of complexity as Wolverineworks to simultaneously integrate the acquiredoperations of Collective Brand’s Performance+ Lifestyle Group (PLG) and its four brands:Sperry Top-Sider, Saucony, Stride Rite and Keds.And for the first time in memory, Wolverine willfind itself heavily leveraged with the mountainof debt required to pull off the “transforma-tional” transaction that will vault it to the upperechelon of global shoe companies. Wolverine World Wide CEO Blake Krueger and the company’s management team are focused on integrating the company’s largest ever acquisition and one of the “We’re a pretty conservative Midwest com- largest deals in the history of the footwear industry. “The dovetail strategic fit for us is almost perfect,” Krueger said of the deal that adds four brands to Wolverine’spany,” Wolverine CEO Blake Krueger told MiBiz. portfolio and more than $1 billion in annual sales. The acquisition positions Wolverine — with projected 2013 total revenues of more than $2.5 billion — as the third-“For years, we’ve operated with basically no debt largest global footwear company behind only Nike and Adidas. PHOTO: JEFF HAGEand a pretty large cash surplus, but this was obvi-ously such a strategic opportunity for us. So wemade the decision to make a break from our past “The fact that Collective Brands went for so distribution and entry into new market seg- come from markets outside the United States.mode of operating.” much money — and that Wolverine had to take ments such as kid’s and athletic footwear. The The Sperry brand, for example, is one of the That break has given pause to some on Wall on debt to complete the deal — shook up the PLG brands, which are sold primarily in the most popular casual shoe brands domesticallyStreet. industry,” she said. United States, should see tremendous benefit with an estimated $330 million in annual rev- “Without a doubt you have integrated smaller from Wolverine’s international sourcing and enues, but only 4 percent of its sales come frombrands successfully in your portfolio,” said ana- distribution networks, as well as its disciplined outside of North America.lyst Diana Katz from Lazard Capital Markets FILLING WHITE SPACE approach to financial management. By comparison, Wolverine marketed nearlyon a conference call with the company, but she While there are questions, few argue with the “The dovetail strategic fit for us is almost two-thirds of its units in international marketsand others asked how Wolverine would be able strategy behind the deal, which saw Wolverine perfect,” Krueger said. “They’re brands we know last year, and international revenues accountedto handle the integration of such a large acqui- partner with two private-equity firms on the intimately, formerly as some direct or indirect for more than 40 percent of total revenue.sition. In fact, many analysts are taking a “wait complex bid. competitors of ours. We know that we can help “Our international scope is still really one ofand see” attitude about this deal, said Michelle From a strategic standpoint, the PLG them accelerate their current growth path.” the envies of the industry,” Krueger said. “AfterTay, business editor of industry trade publica- acquisition gives Wolverine added size and The first acceleration pedal is international. 50 or 60 years, operating with different cul-tion Footwear News. negotiating power, as well as expanded retail Less than 10 percent of PLG’s footwear sales tures, promoting and growing brands on a global basis — it’s kind of in our DNA now. “So we know we can take these (new) brands international and give them some pretty imme- Stiles is taking care of business. diate global mass and global extension.” There’s also tremendous upside for improv- ing PLG’s profit margins, which are about 40 percent lower than what Wolverine earns, Krueger said. “We can win just by improving their profit- ability up to our levels,” Krueger said. “We’re pretty good operators as a company and consis- tently deliver healthy profit margins. We can bring them up to our profitability level over We helped Energetx innovate with breakthrough technology. time.” Energetx Composites has successfully translated its deep manufacturing expertise to capitalize on opportunities in the growing KMT RoboTrim Wolverine should also see benefits. With the wind-energy industry. To procure the specialized equipment needed, they turned to Stiles. Key among the Holland, Michigan- addition of the four PLG brands into its portfo- based company’s acquisitions was a highly advanced, fully automated, KMT root end cut and drill system for processing the lio, the combined company expects to sell 100 150-foot-long, 9-ton blades used by utility-scale wind turbines. The system uses breakthrough drilling technology that’s 25% million pairs of shoes and units of apparel per faster than other systems and offers patent-pending automatic blade-location technology—drastically reducing set-up time and maximizing productivity for this growing enterprise. year around the globe — up from the 52 million units Wolverine sold in 2011. The company’s Find out how Stiles can help you take care of your business. Call Stephan Waltman at 616.698.7500 collective mass will allow it to get better pricing or email swaltman@stilesmachinery.com. stilesmachinery.com from its suppliers, and its increased volume will help spread out logistics costs, Krueger said.
  • 5. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 5 “It immediately makes you important to Opportunity Fund LP and Blum Capital “At 100 million pairs a year,everyone, and by everyone, I mean the factories Partners LP, jointly acquired the remaining por-that make footwear around the world,” he said. tions of Collective Brands, Payless ShoeSource“At 100 million pairs a year, we carry a very large and Collective Licensing International.collective pencil.” The acquisitions also fill “white space” “We were able to end up with the brands we wanted and not touch the Payless business, we carry a very large collective pencil.”in Wolverine’s portfolio, giving it entry into which is an entirely different kind of lower-mar-markets where it lacked a significant presence ket business,” Krueger said.— children’s, athletic and women’s footwear, The transaction required Wolverine to takein particular — and a significantly larger foot- on approximately $1.3 billion in long-term debt,print of company-owned retail stores. Krueger which was raised through a bank syndicate, and BLAKE KREUGER, WOLVERINE WORLD WIDEexpects Wolverine’s existing brands to benefit an offering of corporate notes. The companyby gaining immediate entry into the “better- secured a $1.1 billion credit agreement with agrade” domestic children’s footwear market syndicate of 20 banks, including JP Morganthrough Stride Rite’s 300 retail stores. Chase, Wells Fargo Bank, Fifth Third Bank and That’s a market where Wolverine had “pock- PNC Bank. The company also offered $375 mil- ramped up its pace, licensing Patagonia and from 2005 to 2011. Having Jeppesen on boardets of success” but never really had the infra- lion in senior notes, which will be used to fund acquiring Sebago, Chaco and Cushe. helped in the acquisition because he ran PLG’sstructure to make a significant play, Krueger the purchase and pay off PLG’s debts. Every one of them has been successful, operations and sourcing and was familiar withsaid. The notes offering was oversubscribed, said Krueger claims. its brand leaders. “It’s a different business,” he said. “(The Krueger, attributing the demand to a strong “We tend to be a pretty disciplined team “We’ve been trying to lasso him for years andstores) will also give our existing brands’ chil- national market for corporate debt as well as the when it comes to acquisitions and brands. were fortunate to do that six months or so beforedren’s business access to factories (and) product company’s track record as an operator. When you look at our history with Sebago, with the acquisition was announced,” Krueger said,development expertise that we frankly didn’t “I think the strategic fit, the strategic story, Caterpillar, with Harley-Davidson and with cracking a smile. “He’s made huge contributionshave in sufficient depth before.” our reputation for being pretty consistent and many of our other acquisitions, every one of already to our company.” PLG’s retail stores will effectively double good operators of the business sold very well,” those has been a success story. Frankly, (that) isWolverine’s retail sales as a percentage of rev- Krueger said. “We had a very high confidence unusual to have a period of sustained successesenue from 7 percent to 14 percent from brick and level.” over a period of years.” OFF THE DEAL PATHmortar stores and e-commerce websites, it said The poster child of that successful acquisi- The final driver of the company’s integrationin a filing with regulators. Following the acqui- tion strategy is Merrell. The company acquired strategy is focus. While the company has builtsition, Wolverine will operate about 425 stores, PROVEN TRACK RECORD Merrell from the Outdoor Division of Sports its business through a series of acquisitions andmostly in the United States. Based on Wolverine’s track record of acquiring Holding Corp. for $17 million in cash in 1997. brand licensing agreements, it knows it will “In today’s world, we believe you need to con- and integrating brands and operations over the The prior year, Merrell had sales of approxi- have to step back from the hunt for other dealstrol a certain percentage of your destiny at your past 18 years, the confidence may be well placed. mately $27 million. Today, “Merrell’s well over and pour all its effort into integrating the PLGown retail,” Krueger said. “It brings you closer Founded in 1883, Wolverine operated with just $500 million in sales,” Krueger said. business.to the consumer. It lets you present your brands three main brands — Wolverine, Hush Puppies “When we acquired Merrell, it wasn’t a very Because the companies shared a similarin the best possible way and actually creates a and Bates — for most of its existence. Beginning big brand, and it wasn’t a very good business,” he culture and because the acquisition processhealthier wholesale business.” in the early 1990s, though, Wolverine began to said. “When we were able to plug and play that has gone on for so long, Wolverine’s execu- license and acquire other brands, starting with a into our international distribution network, we tives estimate the PLG business will be fully license with Caterpillar Inc. for CAT Footwear were able to get some fairly accelerated growth.” integrated into Wolverine by the end of theCOMPLEX DEAL, EASY DEBT in 1994 and, later, the acquisition of the Merrell calendar year.Wolverine has already cleared a significant brand in 1997. A year later, Wolverine acquired “There are certainly some projects and somehurdle with the transaction: getting it done. the global license for the Harley-Davidson foot- THE PARTS OF THEIR SUM information services that will roll on into 2013,The company announced the acquisition had wear brand. Beginning in 2003, the company Wolverine’s management plans to use the same but in a lot of areas, the integration will be sub-cleared last week, two months later than origi- playbook for integrating the PLG brands. stantially complete this year,” Krueger said.nally anticipated and more than a year after While the size does far eclipse any other deal With the company taking on significantCollective Brands first put itself up for sale. in Wolverine’s history, the integration process financial burden, Wolverine will be out of the “It was about the longest process I’ve heardof in recorded M&A history,” Krueger said with Brand (new) revenues will be based around the parts rather than their sum. The four individual brands that make up acquisition market for about two or three years as it pays down its debt.a laugh. The four brands acquired by Wolverine the acquisition are of a size that Wolverine is “This acquisition and our existing business Collective Brands first put itself on the mar- World Wide will add more than $1 billion used to digesting, he said. are going to generate a lot of cash. Obviously,ket in August 2011, after shopping itself quietly in revenue to the Rockford-based footwear “Although this is a big business … you have we’re going to first use that cash to invest back infor a few months. Wolverine had reportedly been maker’s results in 2013. In 2011, the four to also remember it’s comprised of four differ- our brands, but then we’re going to take the casheyeing the footwear brands “for a long time,” recently acquired brands topped the billion ent brands. These are all brands of a size we cur- that’s generated and pay down the debt,” Kruegeraccording to an industry source, but was not dollar revenue mark. rently have,” Krueger told analysts in a confer- said. “But we’ll always be out there looking forinterested in the Payless ShoeSource retail busi- ence call. niche brands, maybe a smaller bolt-on acquisi-ness. The company and its advisers recruited The CEO argued that Wolverine does have tion. After a couple of years, we’ll certainly be intwo private equity firms with retail portfolios experience integrating brands the size of the a position to consider a larger acquisition.”to make the deal happen. The group decided to Sperry Top-Sider: $330 million individual PLG brands, which in 2011 ranged in Krueger does admit that there is one thingbid for CBI together and divide the respective revenues from $80 million (Keds) to $335 mil- that keeps him up at night related to the massivebusinesses. While it sounds simple, the three- lion (Stride Rite). He said the company can suc- acquisition.party“club bid” aspect of the transaction added a cessfully integrate the PLG business by using “The thing that really keeps me up is try-layer of complexity, said attorney Tracy Larsen Saucony: $270 million the company’s usual formula: “time, people and ing to prioritize all the opportunities in frontof Barnes & Thornburg LLP, which represented effort.” of the company right now,” he said. “When youWolverine. Negotiating terms among the three “There is always risk,” Krueger told analysts. look across our existing portfolio of 12 brands,parties and Collective Brands, and the subse- “It probably always takes more time and effort the global opportunities for these four (newly Stride Rite: $335 millionquent need to obtain audited financials on the than you think going into it, but we are pretty acquired) brands, the fact that our company haspieces of the Collective Brands business created good at execution.” become a one-stop shop for international dis-the bulk of delays, he said. Wolverine also had an insider’s perspective tributors and retailers, the collective power of In the final transaction structure, Wolverine on the PLG business. About six months before these 16 brands…(is) almost unlimited. Keds: $80 millionacquired the PLG brands and business for the acquisition was announced, Wolverine hired “For me, right now, and the managementabout $1.24 billion, while two San Francisco- SOURCE: WOLVERINE WORLDWIDE ANALYST PRESENTATION Mike Jeppesen, who served as Collective Brands’ team, it’s really a question of prioritizing ourbased investment firms, Golden Gate Capital senior vice president of design and sourcing efforts, time and resources.” H HISTORY OF WOLVERINE WORLD WIDE BRANDS Saucony Sperry Top-Sider Patagonia Stride Rite Hush Puppies HyTest Cat (Canada) Keds Wolverine Hush Puppies Harley- Merrell Track ‘N Trail Wolverine Chaco Colombia JV Bates Cat (U.K.) Merrell Davidson (Europe) Cat (Europe) Sebago (Canada) Cushe India JV 1883 1994 1996 1997 1998 2001 2002 2003 2005 2009 2012
  • 6. 6 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com UNDERWRITTEN BY: FORWARD Highlighting local business people giving back to the community. To nominate someone for a Pay It Forward feature, email editor@mibiz.com. PAY IT Pete Brand After completing an assignment in sixth grade that had him rifling through the help wanted ads in hospitality services to families in crisis, the local newspaper to find the job of his dreams, Pete Brand knew he wanted to be an entrepreneur. Brand is committed to empowering people As the co-founder of Mindscape at Hanon McKendry, he is constantly engaging businesspeople so they can get their lives on track. with startup ideas. Using his expertise to help others launch their own businesses, Brand goes one “It’s really easy to watch the guy get out Co-founder, Mindscape step further, putting confidence behind each person he works with in and out of the office. of his BMW wearing a slick suit and think A that’s what success looks like,” he said. at Hanon McKendry fter co-founding Mindscape in 2001, Brand has overseen his With those days in the rear view, Brand is using his experience to help others To Brand that’s not the kind of inspira- tion people need. Instead people need to company’s growth year after year. bounce back. look inward and promote their strengths. But the momentum he is working with “What drives me is helping people real- “If I can help people realize happiness now wasn’t always behind him. Like many ize they are significant,” he said. “Whether and not sell out and spend all of their people, Brand battled his share of personal you’re homeless or a multi-billionaire, time and effort doing something they issues, including the not-so-distant people’s biggest fear is not mattering.” hate just to pay the bills, that’s my goal,” passing of a loved one and the financial Through his work mentoring entrepre- he said. insecurity of being an entrepreneur with neurs or his efforts on the board of Family a dream. Promise, an organization that provides Interview and photo: ELIJAH BRUMBACK
  • 7. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 7
  • 8. 8 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com ManufacturingOut-of-state rack maker plans new Grand Rapids plantBy Carl Dunker | MiBiz million, has around 175 employees nationwide.cdunker@mibiz.com Originally a manufacturer of racks for use in electroplating, the product line at Associated GRAND RAPIDS — A Chicago-based manu- Rack Corp. expanded in recent years to includefacturer plans to open up shop in Grand Rapids fixtures for powder coating as well as protectiveto be close to a key customer, while riding the coatings, material handling products and heat-wave of the automotive recovery and a successful treating units.diversification strategy into growth industries. Currently owned by Bill Faulman, a descen- Associated Rack Corp. just purchased a dent of its founder, the company also diversifiedmore than 10,000-square-foot facility on Kraft its offerings to attract business from burgeon-Avenue in Grand Rapids, where the company ing industries, namely the aerospace sector,plans to open a new plant to make racks, which Bauer said. That’s led to successful bids on con- Associated Rack Corp. just purchased a facility in Grand Rapids to open a new manufacturing operation. Theits customers use in processes ranging from tracts from companies including aerospace $11 million company makes racks used in powder coat paint lines and other manufacturing processes. Thepowder coating to electroplating. giant Boeing, he said. site joins the company’s other facilities in Illinois and Florida, but will service local customers. COURTESY PHOTO The move into West Michigan follows This diversification strategy is partly toan increase in business at many of the firm’s thank for the company’s survival of the reces- trade school, but are developed over time through “Think about an artist or a sculptor, some-local customers, including automotive sup- sion, Bauer said, and helped make possible its on-the-job experience. He said he needs more can- one who can look at a block of marble and seeplier Lacks Enterprises Inc., said Don Bauer, move into Michigan. didates that think like people who grew up around what’s inside of it,” Bauer said. “You have yourAssociated Rack’s engineering manager. “We try to diversify what we can do in order farms and have a natural ability to find solutions prototype guy and you tell him you need certain The company has initial plans to hire up to to provide more services to our customers,” to products and can develop new products and pieces held a certain way, and he has to be able20 people at the site, he said. said Bauer. “Business was really kind of a roller prototypes that make business easier. to see how to make it work, and then form and “Things are much better this year than in the coaster in the past six years, especially in the “It’s a skill level that you can’t just go to shape the metal.”past four,” Bauer said. “We decided six or eight lows. We really were kind of just holding on and a community college and get someone who While Associated Rack also expects itsmonths ago that there was enough business for avoiding layoffs.” has two years of class experience,” said Bauer. employees to have hard skills and advancedus to move into the Grand Rapids area.” As the company enters the West Michigan busi- “Oftentimes, those are skills that you find in training in welding and fabrication, the most The real estate transaction was brokered by ness environment, Bauer sees staffing as the larg- someone like a farmer, because farmers are important quality that the company is lookingPamela Collins, a Grand Rapids-based broker at est obstacle to the expansion plans. He said finding always having to find ways to make things work. for in its people is that ability to see the finishedCallander Commercial. qualified candidates to fill positions is becoming We actually have a few guys who have that back- rack, how it will be used and the steps needed to The new Grand Rapids location will be increasingly difficult, for a variety of factors. ground, who worked on a farm when they were make it, he said.the company’s eighth, and it’s first location “Some of the workforce needs that we have younger.” Bauer knows that takes time, noting thatin Michigan — at least in a handful of years, are for welders, especially experienced ones,” Because the company is often manufacturing the company will work with the right person tosaid Bauer, who noted the company’s founders said Bauer. “I’m not talking about somebody racks that are custom-built to hold a specific part develop those traits.started the company in the state 60 years ago. who can weld a pipe or a seam, I’m talking about and fit into a defined manufacturing process, “We’re looking for people who have the abil-Currently, Associated Rack has locations serv- doing intricate, precision TIG (tungsten inert Associated Rack especially values employees ity to think carefully through a problem anding the southern states and the western U.S., gas) welding.” who can envision the entire manufacturing pro- form and bend metal by hand,” Bauer said. “Youwith two plants each in Florida and Illinois. Bauer said these skills are not the type that cess that goes into a part and then design a rack have to find someone who has the experience andThe company, with annual revenues nearing $11 can be easily picked up at a community college or to fit that whole production cycle, Bauer said. incubate that.” Have a specific need? Our candidates have specific training. Computers Health Engineering/ Education & Business Technology Human Services When you have a position to fill, you want someone who’s qualified and ready to hit the ground running. Baker College’s HireQualified® can help. Our candidates are highly trained in very specific areas by instructors who are working professionals. They know what’s needed in their industries and teach practical experience over theory. The service is free—the result is just the person you are looking for. To learn more about how we can help you find the best candidate for your needs, or to schedule a meeting at your place of business, visit HireQualified.com. HireQualified.com Free recruiting services from America’s leading career college. X6406HQ
  • 9. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 9
  • 10. 10 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com Manufacturing M A D E I N MICHIGAN MIBIZ SERIES FEATURING LOCALLY MADE PRODUCTS Sponsored byThe 2013 Ford glass roof Mustang offers a convertible-like experience with its large panoramic roof. As the size of sunroofs increases, automakers are also lookingfor ways to shade the large expanses of glass, which has suppliers like Magna developing innovations. Magna is investing $10.1 million in new R&D and productioncapabilities in Holland to make a new sunroof shading technology. COURTESY PHOTO, FORD MOTOR CO.Magna International to expand in HollandBy Joe Boomgaard | MiBiz The $10.1 million investment is just the tip of Advantage and the local township to make surejboomgaard@mibiz.com the spear for the company’s overall investment we would expand jobs here. in the new sunroof technology — and it could “It’s because of what both the community HOLLAND — A division of auto supplier have a broader impact on the local economy as brought to the table and the workforce … and it Made in MichiganMagna International Inc. is channeling a bright the company looks to source new components really made sense for this product to be integrated Magna International Inc. has 59 manufac-outlook for sunroof technology into a $10.1 mil- from Michigan suppliers, Warren said. into our glass manufacturing facility and to co- turing operations and 16 product developmentlion expansion in Holland Charter Township. While providing scant details about the prod- locate it here. All three (factors) led us to Holland.” centers in the U.S., including a significant Magna Sealing and Glass Systems, a uct, Warren said the new product would be “an Christine Powers, director of business ser- presence in Holland after the acquisition ofmanufacturing operation of Magna Exteriors innovative way to shade a sunroof” and would not vices at Lakeshore Advantage, the economic Donnelly Corp. in 2002. The global companyand Interiors, announced in September that be based on photo-chromatic technology. Magna development organization for the Holland- plans to invest more than $10 million intothe company would expand its operations in “will be providing the shading mechanism.” He Zeeland area, said Magna approached her group converting a warehouse into development andHolland to develop, test and commercialize a said the technology was developed in-house at early on with details on the potential expansion. production space for a new sunroof shadingnew automotive sunroof technology. Magna with some help from supplier partners. Lakeshore Advantage coordinated the incen- technology. Work on the plant, which could Bruce Warren, general manager of Magna “The sunroof market is growing at a record tive package with the state and Holland Charter employ about 177 people, will start in 2013,Sealing and Glass Systems in Holland, told MiBiz clip, and the number is substantially higher than Township. according to the company.the company planned to make the investment in what it was a couple of years ago,” Warren said. “As one of our area’s key employers, it is greatlate 2013. An existing 100,000-square-foot ware- “We’ve really been looking for some new shad- to see their investment in R&D result in signifi-house will be converted into manufacturing space ing technology.” cant new jobs for the community,” Powers told Warren said the investment would make theto accommodate new product R&D and produc- He expected the product to launch in the luxury MiBiz in an email. “Our community has a long, Holland operations by far the “core location fortion. The new project complements Magna’s other segment before expanding to the full range of the successful history of identifying new oppor- this product.”200,000 square feet of manufacturing space at the passenger vehicle market. The production will ini- tunities, developing a solution and ultimately “If we look at the product lines that we’resite. tially serve customers in North America, but the delivering a quality finished product to meet the going to invest in, both the trends and demo- “All of the technology is centered here in technology could eventually be exported, he said. demand. Magna’s new expansion fits this pat- graphics … support an increase in the take rateHolland,” he said. Warren said the strength of the Holland- tern of innovation to a T.” of sunroofs,” he said. The investment is “certainly sizeable for a area workforce helped convince the company to The Michigan Economic Development According Ward’s Automotive, automak-facility” project, said Mike Wall, a Grand Rapids- locate the expansion in West Michigan. Council awarded a $1.2 million Business ers installed sunroofs in 26.8 percent of cars —based automotive analyst for IHS Automotive. “We have a terrific workforce here,” Warren Development Incentive for the project, which the excluding trucks and SUVs — manufactured in “It’s a good-sized investment in a facility in a said, noting that he didn’t expect any issues find- company estimates could result in the creation of North America in 2011, a level that has remainedregion like ours, but it’s probably part of a broader ing talent to fill the positions that will be created 177 jobs. Holland Charter Township also planned nearly constant since 2001.investment in a product strategy,” Wall said. from the expansion. “We worked with Lakeshore to offer the company a 12-year tax abatement. But Warren said Magna sees opportunities in sunroofs, in particular as automakers con- tinue to focus on improving vehicle interiors across the entire product range. “We see growth there, absolutely,” he said. As automakers have moved toward making more smaller cars, they’ve avoided de-content- ing them, said IHS Automotive’s Wall. In fact, the interior content has improved, he said, not- ing the poster child of that trend is the Hyundai Elantra, which features rear seat heaters in mod- els starting at less than $21,000. Sunroofs are another premium feature automakers can use as a selling point or to differentiate their products. Wall said he’s noticed “a real proliferation” of automakers designing “complete roof systems” featuring larger sunroof panels for their vehicles. The larger openings “tend to make the car feel a little bigger,” a key feature in helping customers get comfortable with smaller classes of vehicles, he said. Sunroofs are in the top five interior/exte- rior feature contents that vehicle buyers want, alongside options such as infotainment systems and seat technology, he said.
  • 11. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 11 ManufacturingMCC launches hybrid CAD/CNC programBy Carl Dunker | MiBiz U.S. Department of Labor in coordination with college to learn these skills and instead get get approvals in time to put it into the next coursecdunker@mibiz.com the U.S. Department of Education. directed to programs at four-year colleges. catalog, in the summer semester. “The goal of the grant is to develop a CAD/CNC This combination of an aging manufactur- The grant will be used to set up the program MUSKEGON — A new community college associate program that will be a hybrid of the two ing workforce that is untrained in advanced as well as improve equipment. MCC will also beprogram aims to foster the development of flex- programs,” Rinsema-Sybenga said. “Companies manufacturing techniques and young workers expanding the program’s capacity over the nextible, multiple-skill manufacturing workers. are looking for cross-trained candidates to fit into that are uninterested in entering factories leaves three years in order to meet Anderson Global’s Thanks to a $500,000 grant aimed at cross- new, more technology-driven positions. This is all many companies wondering where they will need for skilled workers cross-trained in CADdisciplinary training, Muskegon Community part of the evolution of the workforce.” find more workers — especially when their older and CNC, and it will also incorporate metrologyCollege plans to develop a new program teaching Companies are finding it difficult to fill posi- employees retire, Rinsema-Sybenga said. study into the college’s machining curriculum toskills in CAD and CNC machining to students tions in their manufacturing plants because MCC is developing the program in conjunc- accommodate the needs of Alcoa Howmet.interested in careers in modern manufacturing. many workers — who may have come out of low- tion with Muskegon-area companies Anderson MCC was able to get the grant through a partner- Dan Rinsema-Sybenga, the college’s direc- skill jobs before the recession — lack training in Global and Alcoa Howmet. The courses are ship in a national coalition of colleges, Credentials totor of business and industry training, said MCC computer-aided design and machining that are designed to broaden graduates’ skill sets into Careers, headed up by Northern Virginia Communityplans to use the money to develop a combined ubiquitous in today’s plants. Such disciplines an effective understanding of both disciplines. College. While MCC had tried to get funding throughprogram that will prepare students for in- require a working knowledge of engineering and Specifics are currently unavailable since the pro- program from the departments of labor and educa-demand advanced manufacturing careers. design principles as well as computer program- gram is still under development, but Rinsema- tion in the past, they met with difficulty. The grant, provided through the Trade ming, skills most experienced traditional line Sybenga says that students will take a combina- “We were aware of it, and it’s a complicatedAdjustment Assistance Community College and workers do not possess. Also, young members of tion of regular CNC and CAD courses along with grant process,” said Rinsema-Sybenga. “TheCareer Training initiative, is part of a four-year, the workforce graduating from high school are specialized courses designed for the program. He Department of Labor wants to make sure the$2 billion initiative administered through the not inclined to go to a trade school or community said the college hopes to develop the program and money goes to high-level consortiums.”Event to highlightcenter’s trainingcapabilities FREMONT — The Newaygo County Career Tech Center wants West Michigan manufacturers to know they don’t have to send their employees out of the region for training. The organization’s staff, along with economic developers and local manufacturing support programs say the center is a hidden gem for companies looking to have an off-site location for training or certification programs. Their message to the broader manufactur- ing community: Come talk to us before you pay top dollar to send your employees elsewhere. “We’re looking to our partners in the business world and telling them: We’d love to dance with you,” said Kirk Wyers, director of career and tech- nical education at the center. The center can work with local partners on training, in addition to the welding, machining, CAD and electronics programs it already offers, Wyers said. “We’re open to partnerships and possibili- ties. We want to be nimble for people and help them switch gears quickly,” Wyers said. The center plans to get the word out about its offerings at an open house event scheduled for 4-6 p.m., Thursday, Oct. 25 at the Dogwood Center for the Performing Arts in Fremont. The event, which coincides with the center’s 40th year in operation, will feature a presentation on the needs of modern manufacturing by Terry Johnson, the factory manager of Gerber Products Co. Andy Lofgren, executive director of the Newaygo County Economic Development Office, said the goal of the event is to start a discussion between local manufacturers and service provid- ers about how everyone can work together more efficiently. “Manufacturing and agriculture are not dead, they’re alive and well,” Lofgren said. “A vast number of jobs don’t require four-year degrees, but they need technical training, not just a high school degree. (The Tech Center) helps train people for the work environment.” The west regional office of the Michigan Manufacturing Technology Center is also a sponsor of the event. “We just want to start good networking and conversation between the Career Tech Center and the manufacturing community so a well- kept secret can become more of a tool for the community,” said Bill Small, regional director of the MMTC. — Joe Boomgaard, MiBiz Managing Editor
  • 12. 12 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com Economic DevelopmentConstruction continues on the $30 million Downtown Market in Grand Rapids. The project has served as a catalyst for other nearby developments, which include several housing projects. PHOTO: MATTHEW GRYCZANStock in the market Downtown GR project gives developers confidence to investBy Matthew Gryczan said Dennis Sturtevant, CEO of Dwelling Place, a The 130,000-square-foot market — about The market boostedSpecial from Crain’s Michigan Business nonprofit community development corporation one-twelfth the acreage of Detroit’s Eastern the enthusiasm of father- that owns and manages more than 1,000 apart- Market — is expected to be a source for local son development team GRAND RAPIDS — Downtown Grand ments and homes in 21 housing communities fresh-grown foods for adjacent neighborhoods, Michael and Bob JacobsonRapids seems to have burst at the seams and throughout West Michigan. as well as a drawing card for suburban Grand “for developing in the areaspilled a few streets south, the result, some say, He said his organization will break ground Rapids residents and visitors. a great deal,” said Suzanneof confidence that an anchor project — the $30 this month on work that includes renovation Grand Action — a not-for-profit organiza- Schulz, planning direc-million Downtown Market — has brought to a of apartments in the historic Herkimer Hotel tion co-chaired by Dick DeVos, David Frey and tor for the city of Grandneglected part of the city. building and construction of two multistory John Canepa — played a critical role in launching Rapids. “I believe that the Crews working on the Downtown Market buildings for offices and retail. the Downtown Market. The organization has Downtown Market has— the name officially given to the project last There wasn’t this sort of activity in the area led or supported major projects that have trans- Michael Jacobson given developers greatermonth — and other projects near the intersec- a year ago — only plans that had been in discus- formed downtown Grand Rapids in the past confidence in the projectstion of Wealthy Street and Division Avenue sion for years. That changed with the demolition decade, including Van Andel Arena, the DeVos that they are doing and, perhaps most impor-Southwest almost trip over each other as they of six neglected buildings to make way for the Place convention center, the Michigan State tantly, will start to spur market-rate housingscurry to close up space before winter sets in. Downtown Market, an urban food market pro- University College of Human Medicine and the developments.” The frenzy only promises to pick up more moted by the Grand Action organization to add Grand Rapids Civic Theatre. The Downtown Market “made it a lot easiersteam nearby as Dwelling Place plans to break a shining amenity to the city. Jon Nunn, executive director of Grand for projects to go forward,” said Sturtevant ofground this month on a $30 million package Now about halfway through completion, the Action, said those projects represent a total Dwelling Place.of affordable housing and office space, and project calls for an outside seasonal space for 45 investment of $338 million, of which $109 mil- There’s much more heavy-equipment traf-Brookstone Capital LLC expects to launch vendors, inside space for 22 vendors, a commer- lion was raised privately. fic at the Downtown Market now that con-construction on three apartment complexes car- cial kitchen for culinary entrepreneurs, and Local observers say the Downtown Market struction crews from Baker Lofts have arrived.rying a total price tag of $36 million. children’s kitchens with equipment that adjusts provided tangible proof of confidence in the The Jacobsons broke ground ceremonially “There was a time when Grand Rapids didn’t to the varying heights of kids — all topped by area — a confidence that, in turn, may have on their project two weeks ago to renovate ainclude anything south of Fulton Street. Now we lighted greenhouses that will act as a beacon for accelerated projects that were in a holding 125,000-square-foot vacant building diago-are seven streets down, south of Wealthy Street,” motorists driving along the U.S. 131 freeway. pattern. nally across from Downtown Market into 87
  • 13. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 13 Economic Developmentapartments and about 12,500 square feet of and market rates of $900 to $1,400 a month.office and retail space. The three new apartment buildings will add 131 Downtown Grand Rapids Projects The site, formerly known as the Century housing units to downtown.Furniture Building, will become an affordable- Much of the housing demand can be tracedhousing project, with rents for low- and moder- to the influx of students locating downtown. LEGEND Williams 131 Williamsate-income residents ranging from $450 to $800 Schulz pointed to the fact that a number of A = Dwelling Place Maple Commercea month. The $28 million project should have colleges and universities now have a signifi- B = Dwelling Place Bartlett Ionia C = ICCF A La Graveits first unit available by April 1, with the entire cant presence downtown: the MSU medical A D = ICCF Finneybuilding open for business by July, Michael school, Grand Valley State University, Western B E = GR Univ. Prep Academy GoodrichJacobson said. Michigan University, Thomas M. Cooley Law F = Klingman’s Furniture Bldg. Division About a 100 yards directly east of Baker Lofts, School, Grand Rapids Community College, G = Baker Loftsconstruction crews have narrowed street lanes Ferris State University and its Kendall College of H =Wealthy Downtown Market Wealthyto make way for cranes and equipment working Art and Design. Fon the $9.2 million Grand Rapids University Grand Rapids has a population of more than ry Century King D C JeffersonPreparatory Academy school, which will house 40,000 people pursuing college studies, Schulz H McConnellabout 500 students in grades six through 12. said. The Grand Rapids Public Schools broke Logan Logan Logan ille Sheldonground in June on the 53,000-square-foot build- This article appeared in the October edition of G ndv Eing, with an expected completion date next Crain’s Michigan Business. More state and Grafall for all grades. The school, modeled after Southeast Michigan business news can be found at Pleasant BuckleyUniversity Preparatory Academy in Detroit, is www.crainsdetroit.com/crainsmichiganbusiness. SOURCE: CRAIN’S MICHIGAN BUSINESSa public-private partnership with a lead dona-tion of $3 million from the Steve and CindyVan Andel Foundation and significant contri-butions from the Steelcase Foundation, WegeFoundation and Daniel and Pamela DeVosFoundation. One huge question mark in the area is thefate of a 127,000-square-foot warehouse justacross the street from the open stalls of themarket. Dwelling Place, which owns the formerKlingman Furniture Co. warehouse, has listedthe property for $1.5 million for more than ayear, Sturtevant said. The number of prospectivebuyers going through the property has been ris-ing over the past several months, a rate that leadsSturtevant to think it will be sold in six months. Sturtevant said his organization plans tobreak down walls and renovate about 122 smallstudio apartments in the Herkimer building tocreate 55 larger affordable-housing apartments.Another part of the project will construct a four-story building of 67 apartments and an officebuilding. (See “Pine Rest to anchor Herkimerproject addition,” page 20.) About one block east of the DowntownMarket, the Inner City Christian Federationcompleted construction on phase one of severalphases to bring additional housing and retailspace to the area — including a much-neededsupermarket, said Jonathan Bradford, the orga-nization’s president and CEO. The ICCF developsnonprofit affordable housing in Kent Countyand provides housing counseling services forcommunities throughout West Michigan. Phase one is an $8.5 million project that con-sists of two mixed-use, three-story buildingsthat have retail on the ground floor and 32 apart-ments above. “We were amazed at the amount of interest inthese units,” Bradford said. “The buildings werefully occupied in 11 weeks.” The ICCF is in discussions to arrange financ-ing for four four-unit buildings that would costabout $2.4 million next to the phase one block,he said. The buildings would be constructed astownhomes, organized through a condominiumassociation. After those are sold, the next phasewould be five more four-unit buildings of a simi-lar design. Future phases directly west would emphasizeretail, with a full-service supermarket as its cen-terpiece, Bradford said. The supermarket wouldprovide the necessities of life for those living inthe neighborhood and wouldn’t compete withthe urban market. Brookstone Capital, a Midland-based realestate development firm that has been involvedin downtown Grand Rapids housing for years,plans to begin construction soon on a six-storyapartment building just north of the DowntownMarket and two six-story apartment buildingson adjacent lots. The apartment building will be about 75,000square feet with 48 apartments, with affordable-housing rates of about $340 to $815 a month
  • 14. 14 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com Economic Development Smoking gun? Study shows little impact from smoking ban, but trade group pushes for options By Nick Manes | MiBiz nmanes@mibiz.com False alarm Restaurant and bar sales collections dipped WEST MICHIGAN — Two and a half years slightly since the smoking ban took effect ago, many West Michigan bar and restaurant May 2010. owners worried that their businesses could be snuffed out like finished Marlboros in an 100 ashtray. The reason: The state had approved a ban 90 that would prevent people from smoking in their establishments. Without the ability to let patrons 80 smoke and drink, many wondered how they would continue to maintain the steady stream of regulars who helped sustain their businesses. 70 Smoking ban takes Depending on who you ask, the impact effect: May 2010 of the ban has either been indiscernible or 60 business-altering. In August, the University of Michigan released a study tracking sales tax collected at 50 bars and restaurants, as well as the sales of ciga- rettes and Club Keno, in relation to the state’s 40 smoking ban, which took effect on May 1, 2010. The authors said the data had “no significant 30 negative effect” on bars and restaurants — or on cigarette sales. The results of the state-funded study, how- 20 2006 2007 2008 2009 2010 2011 ever, are being called into question by a bar and ■ Average monthly cigarettes sold (tens of millions restaurant lobbying group, as well as some busi- of cigarettes) ness owners. ■ Average monthly sales tax collections, retail eating The U-M study states that “overall, the evi- and drinking establishments ($ millions) ■ Average monthly lottery sales ($ millions) dence is consistent with the results from other SOURCE: UNIVERSITY OF MICHIGAN, “THE ECONOMIC IMPACT OF states and localities that have found no significant MICHIGAN’S DR. RON DAVIS SMOKE-FREE AIR LAW,” AUGUST 2012 economic effects associated with smoking bans.” The Michigan Licensed Beverage “At night at Billy’s, I do not think that there Association, a trade group for bars and restau- was too much of a difference as we had an older rants, has disputed the findings of the study. crowd that really liked the fact that you couldn’t Scott Ellis, executive director for the MLBA, smoke in the bar,” she said. “At Mulligan’s, I stated that the U-M study was not comprehen- think it changed our sales a bit, but nothing sive because it failed to include on-premise extremely drastic.” liquor sales, which he said were down 3.2 percent. Charles supports the MLBA’s push for MLBA released a report using state numbers options, pointing to Florida’s smoking law that that showed off-premise sales increased the same permits smoking on patios and verandas in amount — 3.2 percent. instances where a bar is part of a restaurant. In Aside from the association squabbling about bars that are not restaurants, or where less than the numbers, however, the MLBA is not inter- 10 percent of their gross revenue comes from ested in repealing the smoking ban, Ellis said. food sales, smoking is allowed if the business so Instead, the group would like the state to con- chooses. sider different options other than a total ban. Just as the results of the two studies were Currently, the law is written that smoking is not vastly different, there is also little consensus allowed anywhere drinks or food are served. among business owners over the results of the The association said it would like the state to con- ban. The change brought opportunity for some sider “some sort of compromise, like a patio or smok- entrepreneurs, who are ecstatic about the effect ing room,” he said. “If the establishment wanted to the ban has had on their business. make a rule where the employees don’t have to go Downtown Grand Rapids restaurateur Mark in there to serve — (or) whatever the establishment Sellers of BarFly Ventures LLC, the parent wants to set up, but give them two options.” company of businesses such as HopCat, Stella’s The MLBA is not alone in those sentiments. Lounge, and the soon-to-open Grand Rapids Lyndi Charles works as the general manager Brewing Co., believes the ban has had a positive of Billy’s Lounge and Mulligan’s Pub, both impact on his business. While HopCat permit- located in the Eastown neighborhood of Grand ted smoking in an upstairs loft section, none of Rapids. Charles stated that when the ban went Sellers’ other bars allowed smoking. into effect, her bars experienced an immediate “We’ve been up every year since the smok- 40-percent drop in their happy hour business. ing ban took effect,” Sellers said. “In fact, in July “Since you couldn’t smoke inside the bars, 2010 (just after the ban went into effect) we hit people figured it was easier and cheaper to stay an inflection point and things really took off. I home,” Charles said. “Another thing was that think it’s because people who used to not go out they could now go anywhere to happy hour. to bars because of smoke now venture out more There were a lot of places around town that you often. couldn’t smoke at before (and) that served food, “Not only did it have no negative effect on our so why not go to those places instead. Obviously, business, it had a positive effect.” our perk before was that you could smoke.” Sellers said anecdotally that he thinks those Charles said that Billy’s and Mulligan’s grousing about the ban are mostly the establish- experimented with little things like bloody mary ments that have no food, since their crowds tend bars and free hot dogs on Sunday afternoons to to be there just to drink and are more likely to attempt to make up for the decrease in business. smoke. “There’s not much you can do if you don’t Sellers takes a hard line on the MLBA’s stance serve food,” she said. on the smoking ban. During traditionally busy bar hours, Charles “Any rhetoric uttered by fear mongers about believes there was not much of a change in sales at how the smoking ban would hurt restaurants the two bars, located just one block from each other. was pure political dogma,” Sellers said.
  • 15. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 15 Nonprofit OrganizationsNonprofits broaden reach to younger donorsBy Nardy Baeza Bickel | MiBiz “You want to feel connected to something. through e-mail newsletters, 18 percent thoughnbickel@mibiz.com When you’re doing something, you know what print and 17 through face-to-face conversations. your time is going into it, and it gives you a “With Facebook alone, people are constantly WEST MICHIGAN — When Janelle LaLonde greater sense of accomplishment,” LaLonde said. pointing their friends to other charities that aremoved to Grand Rapids three years ago, she “You’re putting in the work and seeing how (you doing work even if they’re in other parts of thelooked for an organization where she could get are) giving back.” world. There are many opportunities to give,”involved and get to know the community. The Grand Rapids Community Foundation Downey said, adding that organizations must Through a friend, she became involved in also organizes networking events to engage the come up with clear communications strategies toNextGen United Way, a program targeted at next generation. The “Knotty Cocktails,” for promote their brand and get heard in an increas- EDUCATIONattracting a younger generation of donors that example, are fun events educating attendees ingly competitive environment.was just beginning to take shape. about issues affecting their community, but also “It’s difficult for small organizations to “I was new to Grand Rapids and wanted to get provide a good place for networking and start keep up with social media and engage so currentinvolved in the community and meet young like-minded professionals. I started donating my timeand as I’ve developed my career, I can give back mon- building the relationships that will be key in future donor development. The foundation has a Youth Grant Committee donors don’t become distracted,” Downey said. Marilyn Zack, vice president of develop- ment with the Grand Rapids Community HAPPENS HEREetarily as well,” said LaLonde, 26, of Grand Rapids, comprised of high school-aged students who Foundation, agreed social media has changed sig-now the board chair at NextGen United Way. review the grant process, get to know how the nificantly how organizations reach out to people. For 65 years, the Organizations in West Michigan are reach- foundation works and decide where the grants go. “How we deliver that message about impact is much Grand Rapids Communitying out to the next generation of donors by pro- The foundation is also implementing the Big different than it used to be. We have different commu- Foundation has supportedviding multiple and innovative ways for them to Changers program, which now has 50 donors. nications strategies that are designed for this donorget involved. These organizations recognize that Through the program, people can show their com- audience to be more involved in a more local issue.” our local schools.young adults are much more willing that the pre- mitment to the organization by providing a one- Zack said the foundation was very focusedvious generation to roll up their sleeves and get time, $5,000 gift to the foundation or by commit- in planned gifts, but very little focused on We have investedto work rather than simply write a check, said ting to give a gift of any amount for five years. the donor pipeline, so they brought in Shira over $37 million in aMatthew Downey, nonprofit services program “The Community Foundation has recognized to engage with the younger generation. variety of programs anddirector for the Johnson Center for Philanthropy that cultivating relationships for future support Now, Shira is focusing on a new program to findat Grand Valley State University. is very important,” said Shaun Shira, a develop- the next generation of donors. The Community services, including our “The millennials are much more engaged ment officer with the foundation. “We’ve devel- Foundation plans to celebrate its 100th birthday new Challenge Scholarsand hands-on, so they don’t want to just donate oped annual giving programming to try and in 2022 by reaching a new goal: finding 100 new program, the Kent Schoolsto a nonprofit,” he said. “They want to be invited focus on younger and diverse audiences.” philanthropists in the community.to the advisory committee. … They may want to A recent survey, the 2012 Millennial Impact Having a donor-centered approach will continue Services Network, andbe welcomed to the table to make strategic deci- Report, showed 75 percent of the respondents to be key for any fundraising effort, Downey said. the Youth Enrichmentsions. They want a higher level of involvement in donated to a nonprofit last year, and another 70 per- “The good news about this is that when you Scholarship, all whichaddition to making a contribution monetarily. cent helped solicit donations from others, showing engage a donor and provide them with good oppor- are designed to keep local “They’re kind of all-in.” millennials’ willingness to work for a cause. tunities to be involved, then you end up with much At United Way’s NextGen program, young The report, based on a survey of 6,500 people more than cash,” Downey said. “You end up with students on the path toadults have the opportunity to participate in bian- ages 20 to 35, also shows the need for organiza- people who will bring their skills to the table.” higher education. Eachnual volunteer projects, in activities raising aware- tions to utilize all sorts of tactics to communi- And that’s just how millennials like it. year we also provideness of issues affecting the community, and in cate and engage potential donors. “It’s been such a wonderful thing for me to more than $500,000 innetworking and social events that include sporting According to the report, 65 percent of respon- get involved in and to get to know other peopleevents and themed mixers. The idea is to encourage dents learn about a nonprofit through its website with similar interests,” said LaLonde. “It’s really college scholarships toyoung adults to give, advocate and volunteer. and 55 percent though social networks, 47 percent exciting.” deserving students. From boosting education and the arts,Q&A: Cecilia Cunningham, Major Gifts Director, Aquinas College to helping build a healthyM economy, ecosystem, and aking college affordable through Generation Y donors are more likely population, we’re all endowed scholarships is a top priority to support things like disaster relief for Aquinas College’s advancement and celebrity causes than long-term about strengthening thestaff — and for recent alumni, thanks to some fundraising vehicles like endowments. Grand Rapids community.changes shepherded in by major gifts director How did you identify and cultivate alumni,Cecilia Cunningham. In just 18 months, the who graduated as recently as 2005?veteran fundraiser leveraged the momentum At the heart of Aquinas is family. The powerof the Catholic school’s 125th anniversary into of the alumni office [is] knowing where thosean unprecedented 44 new family scholarships, groups of people who are connected to eachwhich added $1 million to the college’s perma- other... and who might be a leader within thosenent endowment. groups. The other piece was getting the word out Now that Aquinas’ quasquicentennial celebra- so some people could begin to self-identify.tion is winding down, Cunningham finally hastime to reflect on what made the Aquinas College How does this campaign fit into AquinasFamily Scholarship Endowment Program such a College’s big picture strategy? Cecilia Cunningham, Aquinas College. COURTESY PHOTOsuccess. First, even though conventional wisdom The board of trustees had identified thesays older donors give to endowments, her cam- endowment, part of the overall piece of the $100,000. ... People want to think through thispaign skewed younger — much younger. She also advancement picture, as the number one priority. kind of commitment.cut the minimum family scholarship donation in So we wanted to kick off a campaign that wouldhalf, making $15,000 the new bar for entry through highlight the importance of the endowment. How was this experience different fromDecember 2012. Finally, AQ’s expansive definition past endowment campaigns?of family, which includes both biological and social Experts recommend that development On average over the past 20 years, we’ve cre-relatives, helped engage a “critical mass” of chari- officers spend at least 80 percent of their ated seven new permanently endowed schol-table alumni. Cunningham filled in more details time cultivating relationships with donors. arships on behalf of the college each year. Induring a recent interview with MiBiz. How long did it take before your alumni about 18 months, we’ve already created 44 new prospects became campaign contributors? endowed family scholarships. That has brokenEndowments are not particularly trendy Eighteen months ago, I couldn’t tell you all records, historically. It’s blowing the doors offgiving opportunities. What was your ‘wow’ how long it would take. Now I can definitely say all other related campaigns. And we’re not donefactor? four to six months. It might take one meeting yet. … This has been one of the most reward- We have a lot of momentum built around the and several more conversations on the phone. ing campaigns I’ve been in because I’ve worked125th anniversary — a time for multiple generations I usually send a draft ‘spirit of intent’ [docu- closely with families [on] identifying their pas-to celebrate and take note — [and] we have a compel- ment] that we make specifically for the family sions. There’s been laughter, there’s been tears. grfoundation.orgling story to tell about the scholarships. When people — that, we can do in 24 to 48 hours — then we It’s just really been momentous.pause, reflect and then see something meaningful meet again and dialogue about it. The small-on the horizon, they say: ‘how can I be involved?’ est scholarships are $15,000 and the largest are Interview conducted by Ruth Terry.
  • 16. 16 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com FinanceAccelerated Formed in late 2010 with $6 million in state seed money, Michigan Accelerator Fund I primarily targets life sciences PNC survey shows small businessAction startups in Michigan. It has invested $4.8 million in six companies and may do three more deals by the end of 2012, Grogan said. owners planned for sluggish yearBeating fundraising goal opens “There are companies in the pipeline By Mark Sanchez | MiBizmore options for GR-based VC fund we like,” he said. msanchez@mibiz.com Owners’ expectations for their business To help scout for deals, the fundBy Mark Sanchez | MiBiz recently added Linda Chamberlain as a WEST MICHIGAN — Survey data show business ■ Expect Decrease ■ Expect No Change ■ Expect Increasemsanchez@mibiz.com venture capital fellow to evaluate and rec- owners across Michigan are decidedly less upbeat about 17% 17% ommend investment opportunities. their prospects for the coming six months than they 29% GRAND RAPIDS — After closing Chamberlain joined the fund after were last spring, although they were better prepared for 37% 39% 54%fundraising on its flagship fund to invest leading global strategy and product a slowing U.S. economy than their counterparts in othermore than $15.1 million in early stage development for Global Forex Trading states. SALES PROFITS HIRINGMichigan-based businesses, a Grand in Ada. She previously served as execu- That’s the word from respondents to the semi-annualRapids venture fund can now focus on tive director of Grand Valley State survey by PNC Bank. 43% 41% 45% 73% 73%building its investment portfolio and University’s Center for Entrepreneurship Thirty-seven percent of respondents expect 33%recording its first exit. and Innovation and before that led the increased sales in the next six months, versus 54 percent The amount raised by the two-year- West Michigan Science & Technology in the prior survey in April. Eighteen percent expect 12% 18% 20% 23% 9% 7%old Michigan Accelerator Fund I is Initiative. Chamberlain also owns the sales to decline, compared to 12 percent six months ago.50-percent more than originally tar- consulting firm InnoValuation LLC. Twenty-nine percent expect higher profits, com- Apr ‘12 Oct ‘12 Apr ‘12 Oct ‘12 Apr ‘12 Oct ‘12geted, an indication of growing aware- Her “wide scope of senior-level experi- pared to 39 percent in April, and 23 percent expect lower SOURCE: PNC FINANCIAL SERVICES GROUP, INC (NYSE: PNC)ness among high-net worth individuals ence in nonprofit, public and private sectors earnings, versus 20 percent in the previous PNC survey.and institutional investors on the viabil- makes her uniquely qualified to provide Expectations for hiring held steady from the spring federal economic and fiscal policies to expect for twoity of venture investing in the market- valuable advocacy and insights as we con- to the fall, with 17 percent planning to add staff and 73 years, he said.place, the fund’s Co-Managing Director tinue to build out the MAF-1 portfolio,” percent maintaining their present workforce. “The election on Nov. 6, I think, really does have theDale Grogan said. Co-Managing Director John Kerschen said. The results reflect a sluggish U.S. economy, high potential to free up a lot of uncertainty that has been “There is an unmet need there,” Grogan Kerschen and Grogan are principals in unemployment and low job growth, low consumer con- holding us back for the past two years,” Rankin said. “Wesaid. “We’ve just seen in the last two years Grand Rapids-based M&A advisory firm fidence and uncertainty over the presidential election, know who will be in office and what policies will be gov-where the level of education and understand- The Charter Group, where Chamberlain PNC economist Kurt Rankin said. erning the U.S. economy, so businesses can start actuallying has gone up substantially as it relates to will also serve as vice president of busi- The findings are also more consistent with the planning.”venture investing and access to capital.” ness and transaction management. spring results than what PNC found in other states, PNC Bank’s findings generally align with the results The greater understanding among Michigan Accelerator Fund could make which signifies that small business owners coming out of the monthly survey of industrial purchasing manag-current and prospective investors, the another four or five deals in 2013, Grogan of Michigan’s economic malaise of the last decade have ers in West Michigan that shows flat economic activitygreater the chances of getting support said. The fund would then focus the next had comparatively lower expectations for the future for in Grand Rapids and Kalamazoo.for the eventual formation of a second two years on making follow-on investments both the state and national economies. “Because we have been reporting a relatively slowventure fund, provided Fund I generates in portfolio companies as they mature and While their counterparts elsewhere started the year economy for many months, the fact that the economysuccessful exits and returns, Grogan said. require additional capital. with higher expectations and are now significantly pull- has now turned flat will probably go unnoticed by most “Once you close that cycle, then people In scouting for deals, Michigan ing back, Michigan small business owners have operated people on the street. After four years of economic weak-understand how venture (funding) works. Accelerator Fund I will examine 450 to that way for some time “after having gone through a ness, it seems as though a flat or weak economy is simplyThey say, ‘Oh, we should do more of this,’” 500 business plans this year from startup much deeper recession and survived and emerged from becoming the new norm for many people,” economisthe said. companies, Grogan said. the other side,” Rankin said. They have planned accord- Brian Long wrote in his monthly reports on both the Funding for the $15.1 million Michigan Exceeding the initial $10 million ingly for the next six months and were ready for the eas- Kalamazoo and Grand Rapids areas.Accelerator Fund I (MAF-1) came from fundraising goal by $5.1 million enables ing of the U.S. economy, he said. Among key indexes in the Grand Rapids area, sales70 individual and institutional inves- the venture fund to get a look at better “It speaks to small business owners’ state of mind and production dipped into negative territory fortors including Van Andel Institute, the prospects and to do more syndicating coming out of the recession. They have lower expecta- September and indexes for purchases and employmentMichigan State University Foundation, with other venture funds, Grogan said. tions but better planning as a result,” Rankin said. declined, but remained in positive territory, said Long,Grand Valley State University and “It just means we can be more effec- Rankin said business owners did sufficient plan- director of supply chain management research forDavenport University, Grogan said. tive,” he said. “It really gives us a better ning in the previous six month such that a slower second Grand Valley State University’s Seidman College of The fund formally closed on fund- chance at success.” quarter and high unemployment rate didn’t disrupt Business.raising in late July, but waited until this The first exit of a portfolio company their plans for the rest of the year. In the Kalamazoo area, indexes for sales, purchasesmonth to publicize the amount because could come as early as 2013, Grogan said. Survey respondents generally view the economy as and employment improved in September over August,it was hoping for additional funding Successful exits for Fund I that generate “we’re not going to be booming anytime soon, but we although Long said the data still reflect a flat economy.from the state’s $120 million Venture a return for investors will enable Grogan are back on our feet and we have to plan accordingly and Views on the local and national economies were rela-Michigan Fund II. The state-sponsored and Kerschen to begin talking to prospec- be conservative until the rest of the U.S. economy is also tively unchanged among respondents to PNC’s survey.fund, which is managed by Credit Suisse, tive investors about the future formation back on its feet,” he said. Twelve percent of respondents feel optimistic about thechose not to invest at this time because of a second, larger venture fund. Hanging over the economy is the uncertainty of the local economy, compared to 13 percent six months ago,the two-year old MAF-1 has not had any “We have to get the exits. We have presidential election and the so-called fiscal cliff, a com- and 45 percent were pessimistic, two percentage pointsexits from investments in portfolio com- to be able to tell the story sustainably,” bination of deep federal spending cuts and expiring tax more than in April.panies, Grogan said. he said. “We have to be able to prove our cuts that take effect Jan. 1 unless Congress acts, Rankin Seven percent were optimistic about the national “It was kind of a longshot at best,” investments in companies and we have said. Whoever wins the election should ease some of the economy and 54 percent were pessimistic. Both are oneGrogan said. the results.” uncertainty, since businesses will at least know what percentage points higher than six months ago.
  • 17. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 17
  • 18. 18 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com 2012 WEST MICHIGAN DESI OCTOBER 25, 2012 - 1PM-7PM AT THE DELTA PL FREE EVENT ADMISSION & FREE PARKING 116 115 114 113 CONCESSIONS NETWORKING AREA BEVERAGE STAND RESTROOMS Fire Exit 10 11 28 29 46 47 62 63 80 81 98 106 9 12 27 30 45 48 61 64 79 82 97 105 13 26 31 44 49 60 65 78 85 94 CEU CLASSES 14 25 32 43 50 59 66 77 86 93 7 15 24 33 42 51 58 67 76 87 92 6 104 16 23 34 41 52 57 68 75 88 91 5 103 17 22 35 40 53 56 69 74 89 90 4 18 21 36 39 54 55 70 73 3 19 20 37 38 BX CSI 71 72 1:00PM EXHIBIT FLOOR OPENS 2 1:30PM CEU MARATHON 1 WECAN Build 5:00PM WECAN BUILD REGISTRATION EXHIBITOR LIST MEDIA SPONSOR REGISTRATION SPONSOR BEVERAGE SPONSORS
  • 19. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 19GN & CONSTRUCTION EXPOLEX - REGISTER TODAY - WWW.GRBX.COM CEU CLASS INFORMATION 1:30 PM to 2:30 PM 3:00 PM to 4:00 PM 4:30 PM to 5:30 PM 1A - The Life Cycle Cost Analysis of Load- 2A - Proper Product Selection Storefront Vs. 3A - Sound Decisions Create Repeat Clients – bearing Masonry Curtainwall Understanding Acoustics and Noise Control Dan Zechmeister, Michigan Masonry Institute Dan Goodman, Tubelite Bruce Burgess and John Rice, Mull-It-Over This presentation will discuss energy sources and This presentation discusses when to use store- Products consumption, and take a look at the effects that front or curtainwall. It also, discusses how rainwa- A well designed and constructed building is com- various glazing ratios have on the overall com- ter is handled by each system, gives budget con- plex and requires knowledge of many of the basic posite R-factor of a masonry wall. Also discussed siderations, and potential LEED Credits. sciences including acoustics and noise control. will be minimum energy code requirements and a This interactive discussion will explore the basic preview of new standards currently under devel- 2B - IPD & BIM Getting Teams & Systems to science of acoustics and noise control, code re- opment. Play Well Together quirements and trends related to acoustics, and Aileen Leipprandt and Steve Hilger, Hilger opportunities to innovation into profit. 1B - Weather Resistant Barriers in Vertical Hammond Attorneys at Law Exterior Construction Integrated Project Delivery (IPD) addresses the 3B - Choosing Sustainable Finishes Daniel Small, Certain Teed Siding Products age-old challenge of getting all the construction Jeff Fochs, Linetec Group project stake holders to act as a team. With the This presentation discusses why aluminum is cho- This presentation will discuss an overview of the increased use of Building Information Modeling sen as a building product and what are the sus- importance of weather resistant barriers in protect- (BIM), construction professionals are working to- tainable considerations of each finish: anodize, ing the building envelope and as a component of gether earlier and more closely than ever. Pre- PVDF, paint (kynar), and powder coat. green building design and sustainability. Lessons senters will identify design and construction con- include a comparison of various barriers based on tract obligations impacted by the combined use of specific performance criteria. the IPD and BIM. WECAN BUILD MICHIGAN COMPETITION BENEFICIARIES BUILDING TEAMS CORPORATE SPONSORS
  • 20. 20 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com Design+BuildPine Rest to anchor Herkimer project additionBy Elijah Brumback | MiBizebrumback@mibiz.com ICCF project GRAND RAPIDS — The efforts of one nonprofitorganization in transforming a key Grand Rapids pushes aheadneighborhood has attracted another like-minded While the Herkimer Hotelgroup to plant roots and help be part of the area’s project takes shape on Southrevitalization. Division Avenue, the nearby As Dwelling Place continues with its plans to ren- Inner City Christian Federationovate the historic Herkimer Hotel on South Division redevelopment site has alsoAvenue, its adjacent new construction has secured an seen a rush of activity.anchor tenant. ICCF’s master redevelop- Pine Rest Christian Mental Health Services ment plan covers a wide swathis expected to fill the 15,000-square-foot first-floor of property from Cherry Streetcommercial space in the new building being built in on the north to Franklin Streetthe area of an existing parking lot. The new facility on the South, bordered bywill connect to the historic hotel. Lafayette and Division Avenue. “This (new space) gives us a very strong presence The project includes severaldowntown and will help us serve the public sector,” new housing and commercialsaid Allen Jansen, corporate director for community developments.and residential services at Pine Rest. “We also plan The first phase, whichto become more involved in business and political The addition (above left) to the includes two mixed-use facili-issues in the neighborhood and bring what we can to Herkimer apartments will connect ties on Wealthy Street, is nowthe table.” through a elevated walkway and complete and fully leased, Pine Rest currently leases several building in the includes below- and above-ground except for one retail space.surrounding area near Dwelling Place and wanted to parking. Dwelling Place originally Jonathan Bradford, presi-consolidate its services under one roof, Jansen said. renovated the former hotel in 1994. dent of ICCF, said while he has The organization chose the new location because The new renovation will expand yet to sign any leases on theof its close proximity to the population it serves, studio apartments into 1 bedroom remaining site, the organizationwhile also realizing an opportunity to gain some living spaces and also includes a has had strong interest from aefficiency, Jansen said. courtyard green space for tenants. coffee retailer and food retailer. Pine Rest’s downtown services include case man- COURTESY RENDERINGS The second phase of theagement for adults with mental illness and a Michigan project saw ICCF sell part of itsprisoner re-entry program. The organization recently The project includes several property to the new Universitystarted a new program, Street Reach, which seeks to layers of financing with $25.4 Preparatory Academy, which ishelp homeless adults suffering from mental illness. million in investor equity com- being built on South Division The organization wants to be a strong advocate ing from the Lansing-based Great Avenue.for the individuals it serves and increase the dia- Lakes Capital Fund, $2.4 million Next up for ICCF is a grouplogue around real issues affecting the area, he said. from the Michigan State Housing Development “During the heyday of the neighborhood, sin- of 36 town homes split into two Pine Rest also expects to add additional staff Authority, $657,089 from the City of Grand Rapids gle-family homes and businesses were all along sub-phases.with the move. and $50,000 from the U.S. Department of Housing Commerce Street and basically what we’re doing The organization has not Dwelling Place, an affordable housing services and Urban Development. is putting buildings back,” Sturtevant said. “The yet set in stone a start date forprovider, lent support services to Pine Rest for its Dwelling Place’s contribution to project is opportunity to really address an entire city block the next phase, but BradfordStreet Reach program, and saw offering a lease for $500,000, and it expects to receive another $2 mil- is pretty exciting, and helping fill in all the holes said he hopes construction canthe new space as a logical next step, said Dennis lion in support from philanthropic contributions. should be a huge improvement.” start as early as this winter.Sturtevant, CEO at Dwelling Place. The project is also in the process of securing The money being invested south of downtown Based on the reaction and the In 1994, Dwelling Place acquired the former $1 million from the Federal Home Loan Bank Grand Rapids — including at the new Downtown quick leasing process for theHerkimer Hotel and completed a $5 million renova- of Indianapolis. If that financing falls through, Market — is drawing business farther south along the first phase, Bradford said hetion of the building following historic renovation Sturtevant said he hopes to make up for it in philan- Division Avenue corridor. By increasing the residential believes interest is still high forstandards. Now the company is revisiting the apart- thropic dollars. density in what he calls reverse integration, Sturtevant further development.ment complex with updated plans that include six The organization has also secured historic pres- hopes to draw more high-income and middle-income Part of the master planrevamped commercial spaces along Division Ave., a ervation credits and low-income housing credits for people to Grand Rapids’ Heartside District. With more involves the development ofparking structure and infill green space in addition the project. people in the neighborhood, the area will realize more a grocery store, which couldto an entirely new apartment building. There is still a lot of paperwork to do, but opportunities for retail business, he said. come in one of the next phases, While the project was originally reported to cost Sturtevant said the project should break ground Rockford Construction is the general con- he said.$10 million, the real construction cost is roughly $20 sometime next month. Once construction starts, the tractor on the project for Dwelling Place. DTS-million with a total development cost of about $30 renovation and the new construction could be com- Winkleman served as the architectural design — Elijah Brumback, MiBiz Staff Writermillion. plete in as little as 12 months, he said. firm.
  • 21. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 21 Design+BuildIndustry slow to adopt newconstruction modeling softwareBy Elijah Brumback | MiBiz “The concept is essentially what they’ve beenebrumback@mibiz.com doing in AutoCAD for 15 years now,” said Jon Laureto, vice president of business development WEST MICHIGAN — While a technology for Grand Rapids-based Wolverine Buildinghas promise to help speed construction projects Group. “It’s getting more user-friendly, but notand better control costs, it has yet to make it into everyone is on board with it yet.”widespread use at West Michigan firms. As materials costs rise, teams are focused on The reason: A high cost of entry and a learn- driving every bit of efficiency and cost savingsing curve to using the program have many firms into a project because that means completing aputting off adopting it. project on time and on budget. Building Information Modeling (BIM) is “(BIM) can increase productivity to a pointnothing new to the construction industry, said right now,” Veine said. “Traditionally, you doScott Veine, project manager and director of all your layouts in the field. When interferencesustainability at Grand Rapids-based Pioneer comes up, you fix it out in the field.”Construction. While Pioneer started using BIM The streamlined input process is expectedtechnology about three years ago, many firms to guard against information loss and provideare slow to embed the technology into their more extensive information as the projecteveryday business, he said. bounces from each of the teams involved. BIM is a software program that enhances a “Team building happens right out of theproject’s visualization, productivity, document gate,” Veine said. “There is a lot of professionalcoordination, speed of delivery and ultimately liability when the model is changing hands socan lead to reduced costs. The program helps lines of communication are laid out right away.”project teams before a project is built to study the However, for all its power BIM isn’t seeingspatial relationships, light analysis, geographic that much use in West Michigan, at least on manyinformation, and quantities and properties of medium and smaller sized projects, sources say.building components. For an industry that has long used tangible docu- What BIM technology does is identify poten- mentation and operation plans, the move to a fullytial problems early in the design-and-build pro- computer-based system is a slow gallop at best.cess and allows a lot of prefabrication to be done At the same time, BIM often only makesoffsite, Veine said. sense and is cost-effective on large-scale projects “It makes us more efficient and accurate in the that require a number of different teams andfield,” he said. “The biggest question from clients is: subcontractors.‘How much has BIM saved you on change orders?’ “It saves us money when we can use it, butThe answer is I don’t know because we’re able to avoid it needs a large complex project,” Laureto said.change orders altogether. That’s been critical.” “Otherwise, you usually have to hire an addi- The system also incorporates time and cost tional technician to run the program.”as dimensions in addition to spatial dimensions Still, both Viene and Laureto agreed that STATEMENT OF OWNERSHIP, MANAGEMENT AND CIRCULATIONof height, width and depth. BIM enables a vir- eventually BIM could become ubiquitous on 1. 2. Title of Publication: MiBiz Publication Number: 017-099tual information model to change hands easily all job sites as information-sharing technology 3. 4. Filing Date: 9/28/2012 Issue Frequency: Bi-weekly (every other week)from the design team to the main contractor, the pushes companies to adapt or die. 5. 6. Number of Issues Published Annually: 26 Annual Subscription Price: $46/yr.subcontractors and the owner/developer. Each Big institutions like Western Michigan 7. 8. Mailing Address of Known Office of Publication: 4927 Stariha Dr., Suite B, Muskegon, MI 49441-6253 Mailing Address, Headquarters: REVUE Holding Co., 65 Monroe Center, Suite 500, Grand Rapids, MI 49503professional adds discipline-specific data to the University and Spectrum Health actually 9. Publisher & Editor: Brian Edwards (publisher & editor), Joe Boomgaard (managing editor), 65 Monroe Center, Suite 500, Grand Rapids, MI 49503 10. Owners: REVUE Holding Co., Inc. - Brian Edwards, Remos Lenio, Scott McLean, Gietzen Entertainment, Jay Kleiman, 65 Monroe Center, Suite 500, Grand Rapids, MI 49503single shared model. require construction managers to use BIM, 11. Known Bondholders, Mortgagees, and Other Security Holders Owning or Holding 1 Percent or More of Total Amount of Bonds, Mortgages, or Other Securities: None At a time when construction costs are spik- Veine said. 12. 13. n/a Publication Title: MiBizing, many firms are looking to be as efficient as At Ferris State University, where Veine serves 14. 15. Issue Date for Circulation Data Below: October 1, 2012 Extent and Nature of Circulation: Requester Average # of copies each issue during preceding 12 months # of copies of single issues publlished nearest to filing datepossible with time and materials to maximize on the advisory board for the construction man- a) Total # of copies: (net press run) b) 1. Outside County Paid/Requested Mail Subscriptions: 11,583 5,846 11,367 5,771their returns, sources say. Modernizing opera- agement program, he said BIM is heavily estab- 2. In-County Paid/Requested Mail Subscriptions: 3. Sales Through Dealers and Carriers, Street Vendors, Counter Sales 0 0 0 0tions will eventually become a matter of compet- lished in the curriculum and runs through the and Other Paid or Requested Distribution Outside USPS: 4. Requested Copies Distributed by Other Mail Classes Through the USPS: 44 51itiveness, but in the meantime, some companies architecture technology and facilities manage- c) Total Paid and/or Requested Circulation: 5,890 5,822can continue to get away with performing some ment departments. He said construction firms’ d) Nonrequested Distribution: 1. Outside County Nonrequested Copies: 5,480 5,363aspects of the business the old-fashioned way. next generation of clients will be more educated 2. In-County Nonrequested Copies: 3. Nonrequested Copies Distributed Through the USPS by Other Classes of Mail: 0 0 0 0 “Our industry doesn’t move that quick,” said in the process and will demand BIM. 4. Nonrequested Copies Distributed Outside the Mail: e) Total Nonrequested Distribution: 25 5,505 25 5,388Veine. “Every now and then we need that nudge.” “At some point (BIM) is going to be the norm f) Total Distribution g) Copies Not Distributed: 11,395 118 11,210 157 Veine said many firms still have to overcome a on every project in the future,” Laureto said. h) Total: 11,583 11,367 i) Percent Paid and/or Requested Circulation: 51.7% 51.9%learning curve to implementing BIM, not to men- “BIM is like an add-on service for many contrac-tion that the program’s cost remains a hurdle to it tors to offer clients. You can get away with not 16. Publication of statement of ownership for a Requester Publication is required and will be printed in the October 15, 2012 issue of this publication. 17. I certify that these statements are correct and complete: Brian Edwards, September 28, 2012becoming part of firms’ standard practice. having or using it right now.”
  • 22. 22 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com Health BizIndie hospitals feel increasing pressure to align, mergeBy Mark Sanchez | MiBizmsanchez@mibiz.com LUDINGTON — In exploring a potentialpartnership, the Ludington-based MemorialMedical Center of West Michigan may join agrowing consolidation movement that’s drivenby major changes in the health care industry. Tightening Medicare and Medicaid reim-bursements, reforms in the payment system,costly information technology investments andaccess to capital are among the factors drivingindependent hospitals to explore affiliations ormergers. Add on top of those forces a physicianshortage that makes it harder to recruit doc-tors, and Brian Peters of the Michigan Health& Hospital Association sees the trend onlyintensifying. “As we attempt to read the tea leaves and look Ludington’s Memorial Medical Center of West Michigan currently sits in good financial shape, and its boardat all the pressure points out there, the trend is wants to leverage that strong position to explore its options for partnering or aligning with other health caregoing to accelerate and there’s no turning back,” systems in the region. COURTESY PHOTOsaid Peters, the MHA’s executive vice presidentfor operations. “You’d be hard pressed to find a Grand Rapids, sees more for-profit involvement model,” he said. “We’re talking about how are wehospital in Michigan where the board hasn’t at coming in the consolidation trend, through pri- going to serve future generations.”least teed up this question.” vate equity investments and for-profit systems The 87-bed hospital will issue a letter of offer- The number of small, community hospitals seeking to expand. ing that seeks ideas from interested prospectsin Michigan has steadily declined for years, Although buyers tend to commit to the mis- on how they would fashion a potential partner-Peters said. About 100 of the MHA’s 137 mem- sion of an institution it acquires, how the migra- ship, Vipperman said. He expects to see “a prettybers are now part of a multi-hospital system. tion of for-profit entities into the mix may affect extensive list of systems we’ll reach out to.”He said he expects small, community hospitals the charitable missions and outreach of not-for- Directors at Memorial Medical Center go Burns Vippermanto become a “very small minority” in the years profit providers “remains to be seen,” Burns into the process without any preconceivedahead. said. notions about how it may end, Vipperman said. in 2011, up from 75 in 2010 and 55 five years The West Michigan marketplace alone has “The need to satisfy your shareholders and Potential scenarios range from an acquisition or earlier.seen a number of consolidations in recent years, turn out a profit becomes a big deal,” Burns said. merger, to a joint venture or affiliation, and even Although the trend is accelerating, there’s nobeginning with the 2008 merger of Hackley “How it meshes with a nonprofit mission is hard maintaining the status quo as an independent guarantee a hospital seeking a suitor will find anHospital and Mercy General Health Partners in to tell.” hospital. easy go of it.Muskegon to form Mercy Health Partners. Burns said the present industry dynam- The board of directors intentionally left the Just as directors at the small hospitals need Zeeland Community Hospital and Gerber ics are making it much harder for hospitals to process broad to “explore all the possibilities for to go through an extensive due diligence, healthMemorial Hospital in Fremont in 2010 became remain independent and not at least look at our community,” Vipperman said. systems also need to assure that any organiza-part of Spectrum Health in Grand Rapids. Last some form of affiliation with a larger system, “There’s a whole continuum of relationship tion they’re picking up is a good fit based onyear, Bronson Healthcare Group acquired a although they do not necessarily need to merge opportunities. We’re not limiting our thinking their potential expansion into a geographic mar-majority stake in Battle Creek Health System. or sell. right now,” he said. “We don’t want to miss an ket and their financial position, Peters of MHACommunity Hospital in Watervliet merged into “Boards that are doing their jobs are going opportunity by narrowing our thinking on the said. Small hospitals that offer both to a poten-St. Joseph-based Lakeland HealthCare in 2010. to look at these kinds of opportunities,” he said. front end.” tial partner may have better options from which Outside of the region, Flint-based McLaren “They will need a partner to help them stay via- The move comes as Memorial Medical to choose and the ability to get better terms fromHealth System bought the bankrupt ble and on the cutting-edge as best they can.” Center’s finances remain in good shape, board an acquirer.Cheboygan Memorial Hospital in May and In weighing its future, Memorial Medical chair Al Deering said in a statement. Given the “There’s a similar vetting process that’s goingMarquette General Hospital in June signed Center retained Juniper Advisory in Chicago changes that are driving consolidation, direc- on on the other end of this as well,” Peters said.an acquisition agreement with Duke LifePoint to serve as an adviser on possible partnerships. tors decided now was the best time to examine a Spectrum Health, which has grown its foot-Healthcare, based in Brentwood, Tenn. Juniper Advisory will present options to direc- possible partnership while the hospital is in good print through alliances and acquisitions, gener- The largest deal in the state came at the end of tors during 2013. financial shape. ally views any potential deal from the perspec-2010 when Vanguard Health Systems acquired Given the pressures the industry dynamics “To do so if we were in trouble would not be tive of what it brings to the system.Detroit Medical Center. now place on hospitals, especially small facili- advantageous for the hospital or the commu- “We only consider these kinds of partner- The DMC and the Marquette deals both ties, directors at Memorial Medical Center felt nity,” Deering said. ships and strategic alliances when they makeinvolved for-profit acquirers in what has tradi- the need to examine a potential partnership, Nationally, the consolidation trend among strong sense for both parties. We never shut thetionally been a not-for-profit state, a scenario President and CEO Mark Vipperman said. hospitals has been occurring for several years door on anything, but we’re not looking to havethat Peters calls a potential “game-changer.” Directors are “doing our due diligence to see and accelerated in the last few. Data compiled by anybody join our organization for just growth’s Attorney Larry Burns, a partner and chair- if we can best serve the community as an inde- Deal Search Online shows 590 takeovers between sake,” Spectrum Health spokesman Bruceman of the health care practice at Varnum LLP in pendent hospital or as part of an integrated 2002 and 2011. There were 86 deals for hospitals Rossman said. Call the professionals at CGR. • tax planning & preparation • QuickBooks set-up & training • accounting & bookkeeping services • payroll services • compilations, reviews & audits • business consulting • strategic planning • business start-ups
  • 23. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 23 Health BizSpectrum broadensneuroscience specialtiesBy Mark Sanchez | MiBiz Spectrum Health plans to house a “signifi-msanchez@mibiz.com cant portion” of the neurosciences program at a new medical office building planned at GRAND RAPIDS — The expansion of an East Beltline Avenue and Three Mile Road.inpatient unit to monitor epilepsy patients at The 100,000-square-foot Spectrum HealthButterworth Hospital is part of a broader, long- Northeast Beltline Facility, targeted to open inrange plan by Spectrum Health to growth medi- mid-2014, would house neuroscience, women’scal services in the neurosciences. health, urgent care and primary care offices Citing growing patients volumes in recent and consolidate six leased offices that areyears that are projected to continue to increase, nearby.Spectrum Health is planning significantexpansions in its capacity to treat patients Spectrum Health has a “significant five-year plan”with Parkinson’s or Alzheimer’s disease, ALS, for developing a neurosciences practice headed bydementia, stroke, brain and spinal cord injuries, Brien Smith, left, and Kost Elisevich, right.and other neurological disorders. COURTESY PHOTO Dr. James Tucci, CEO of the SpectrumHealth Medical Group, likens what’s ahead inneurosciences to the growth in medical servicesin heart care over the past several decades. “During the second half of the last century,we saw tremendous advance in our understand-ing of the functioning of the heart and mecha-nisms of health ailments, as well as many newhighly effective evaluation and treatmentapproaches,” Tucci said. “Many believe that thenext era of medicine will be ‘the century of thebrain’ — a time of intense research in which wewill unlock many of the mysteries of how thebrain works, the nature of the diseases afflictingit, and approaches to successful treatment.” At Butterworth Hospital, the remodeledeight-bed inpatient epilepsy unit enables medi-cal staff to continuously monitor patients todetermine the type of seizures they’re havingand decide on a treatment. Patients typicallystay there for five to seven days. Spectrum Health also runs a six-bed pediat-ric epilepsy unit at the Helen DeVos Children’sHospital, and Saint Mary’s Health Care has aunit at the Hauenstein Center that has seen itspatient volumes double in seven years to morethan 200 annually. Saint Mary’s also experienced a near dou-bling of neurosciences cases in four years.Between the 2009 fiscal year and FY 2012that ended June 30, outpatient visits at theHauenstein Center grew to 28,000 from 15,000. For the future, Spectrum Health plans togrow medical services in five disciplines of neu-rosciences: psychiatry, neurology, neurosur-gery, physical medicine and rehabilitation, andcomprehensive pain. “We have a significant five-year plan fordevelopment here for neurosciences,” said Dr.Brien Smith, co-chair of clinical neurosciencesand chief neurology division at the SpectrumHealth Medical Group. “We have a lot of recruitment and develop-ment going on,” Smith said. The epilepsy team alone has doubled in thelast year, Smith said. In addition to the expan-sion to the monitoring unit, Spectrum Healthjust formed a comprehensive spine program andhas been working on deep-brain stimulationsurgery for Parkinson’s patients, neurologicaloncology and expanding treatment for demen-tia and stroke, he said. The Medical Group at one point lacked aneurosurgeon and has since recruited five, saidSmith, who joined Spectrum Health two yearsago from Henry Ford Hospital in Detroit. Whenhe came to Grand Rapids, Smith found a marketthat he believes was underserved for neurosci-ences — especially in specialty and subspecialtyareas — at a time when an aging population isdriving up the incidence rates of neurologicaldisorders, he said. “There’s plenty of business that has not got-ten addressed,” Smith said.
  • 24. 24 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com Food BizWest Michigan wineriesexcited for 2012 vintageBy Carl Dunker | MiBiz said. The grapes that were hit by frost did notcdunker@mibiz.com greatly affect the crop yield. Vintners plan for these types of years by leav- WEST MICHIGAN — Those wine enthusi- ing more buds on the vines so that, in the eventasts that immediately pass on Michigan wines in of poor spring weather conditions, they will stillfavor of more complex quaffs may want to give have enough yield to maintain production, Harrthe state’s 2012 vintages another look. said. While many people complained about the “This year, maybe 80 to 90 percent of thesummer’s sweltering heat, vintners were not grape buds were burned, but grape farmersamong them. Not only did the warm, dry sum- always leave twice as many buds on the vine asmer help curb the impact of disease on wine are needed,” he said. “The secondary buds pro-grapes, it also worked to improve the quality duce about 50-percent of the yield of the pri-and complexity of the wines produced from the mary buds.” grapes, said Linda Jones, Additionally, the hot and dry weather executive director at the tamped down the incidence of disease in the Michigan Grape and crop this year, giving an added boost to the crop This year’s warm, dry summer should result in more complexity for the wines in the 2012 vintage, experts Wine Industry Council. yield, sources said. Surface crops such as corn, say. Here, a worker at Chateau Grand Traverse checks on the quality of a wine. PHOTO: JEFF GREENBERG As a result, wine enthu- which lack a strong root system, didn’t fare as siasts are already begin- well. ning to ask questions “Grapevines have a very established root sys- about how the 2012 vin- tem that goes down maybe eight to ten feet, so tage will stack up, Jones in drought conditions they could thrive and get said. water that surface crops like grains are unable to Jones “Because wine is a shelf- reach,” Harr said. “With the early spring and hot stable product, people inter- summer, we got a three-week head start on theested in wine will be curious,” she said. “People harvest this year and wound up with a bumperare already interested in this vintage. They want crop.”to see what happened with the weather.” The wine makers’ strong year played into While many fruit growers suffered cata- the overall marketing plan of the Michiganstrophic crop losses this year, West Michigan’s Grape and Wine Industry Council, Jones said.wine industry is looking toward a spectacular The council has been trying to generate national2012 vintage due to the bizarre weather condi- and international interest in Michigan wines bytions in March and during the summer. promoting the region through its four American While the tree fruit growers may be having Viticultural Areas: Leelanau Peninsula,their worst year since 1945, wineries should actu- Old Mission Peninsula, Fennville and Lakeally have a bumper crop for the 2012 vintage, Michigan Shore. These AVA distinctions allowJones said. vintners to market their products with the “We expect an excellent year for wines, espe- added weight of regional recognition.cially reds and richer whites,” said Jones. The council also has tapped into the Pure Vineyards, like the one shown from Willow Vineyards in Suttons Bay, didn’t have to worry much about plant The reasons wine grapes were not as affected Michigan marketing campaign through devel- diseases this year, which helped drive up harvest. PHOTO: JEFF GREENBERGby the heat wave and subsequent freeze are part oping and airing commercials in state and inbiology and part good farming techniques. regions immediately around Michigan, includ- events as well as running vineyard tours and oper- that. With the conditions we have, what we growAaron Harr, sales executive at Fenn Valley ing in Grand Rapids, Toledo, South Bend and ating tasting rooms for walk-in customers. is much more like old world wines, with higherVineyards Inc., says the biological defenses Fort Wayne. The goal is less to get national dis- “The hardest part is getting people to know acidity, so we’re marketing against Europeanwine grapes have are related to the way the bud- tribution for the wineries and more to increase that you’re there,” Harr said. “Then once you wines,” Harr said. “We have a four-season grow-ding cycles of wine grapes differ from other wine tourism in the region and develop loyal have them in there, you can get their contact ing cycle, which means that the vines go into afruit, especially tree fruit. Michigan wine enthusiasts. information and send them regular newsletters period of dormancy every winter. Over on the “Tree fruit, like cherries and apples, have “Our main theme is drawing people to the and updates on the vineyard.” West Coast, they have a three-season growingonly one bud cycle,” said Harr. “Grapes tend to wineries. We want to build loyalties to wine from Fenn Valley’s Harr said the company sends cycle. They still have a period of dormancy, butbud out later and have secondary and tertiary this area so people keep coming back,” Jones said. out a quarterly newsletter to around 10,000 it’s not like over here and in Europe.”bud cycles.” “Our marketing materials guide people more people, and it also self-promotes through email Oenophiles will have to wait to find out the When the heat wave hit West Michigan in toward agritourism.” newsletters and social media. When asked if this results of 2012’s unusual weather, but Harr isMarch, virtually all the tree fruit buds came out The council also accomplishes this through aggressive marketing stance is geared toward confident the wines will perform well.of dormancy while wine grapes remained rela- the promotion of the state’s four wine trails. These competing with prominent American growing “Once we draw them into the fold with thetively dormant, so wine grapes dodged the worst trails act as local associations of wineries that pro- areas like Napa, Calif., Harr flatly said no. tasting room...we can hopefully market the wineof the subsequent freeze later in the spring, he mote their region by holding regular, publicized “You really don’t market against regions like on the merits of the wine itself,” Harr said.
  • 25. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 25 Expected Sweaty weight room guy. Unexpected Rewards for getting and staying healthy. The local gym may have its drawbacks, but it’s worth it. Our HealthbyChoice® plans reward good health with lower out-of-pocket costs. Consider it the safe-driver’s discount for the body. Healthy, productive employees—It’s one more way Priority Health is meeting your unexpectations.
  • 26. 26 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com Small BusinessPlanning, communication key to crisis management PR tips for a crisisBy Carl Dunker | MiBiz The most important thing a company can do, The next important step is to inform the media. Do:cdunker@mibiz.com according to both Powers and Ginny Seyferth, According to Powers, the crisis team should care- ■ Consider proportionality of response president at SeyferthPR, is have a plan on the fully consider the proportionality of the company’s ■ Listen to lawyers, advisers GRAND RAPIDS — Every company’s night- books for such an occurrence. Seyferth likens response to the situation and listen to the compa- ■ Be proactivemare scenario is a media firestorm centered on a this plan to just another part of a business plan: ny’s legal team, bearing in mind that lawyers typi- ■ Remember that perception is more impor-product recall, but according to experts, a public rela- It should be written out clearly and effectively. cally act in defense of the company while a PR crisis tant than realitytions crisis doesn’t have to cause permanent damage “The really best companies have procedures is not helped by “hunkering down.” ■ Take an integrated, consistent approach ■ Maintain PR protocolsif it’s handled properly and clearly communicated. in place to deal with that sort of situation,” Powers said the worst-case scenario for any ■ Be aware of social media conversation, Business people shudder at the thought of Seyferth said. “It’s a part of your business plan size company can cause serious harm to its repu- listen and respond appropriatelytheir companies replicating what happened to like anything else.” tation, both internally and externally, and can ■ Plan ahead for likely scenarios and reviewPeanut Corporation of America in 2009. The Powers recommends developing a plan that be more devastating than simply losing a lawsuit plan annuallycompany’s product recall and subsequent crimi- clearly identifies a “crisis team” that involves in court. ■ Acknowledge the problem and take actionnal investigations and bankruptcy are a text- employees from all areas of the company so the “Losing in the court of public opinion is to resolve the situationbook example of a crisis gone awry. company can develop a unified response that much more damning for your company because, Given that the U.S. Food and Drug is integrated into the entire organization. The if you don’t protect your reputation and you Don’t:Administration recalled more than 9,000 prod- task of that group is to identify the appropriate don’t get sales back, then your company will suf- ■ Try to spin the situationucts in 2011, those PR crises happen on a some- response and to quickly inform employees of fer,” Powers said. “One option for companies is to ■ “Circle the wagons”what frequent basis. exactly what is happening and the appropriate try to ride out a crisis, which will ultimately end ■ Say, “No comment” “Recalls happen now all the time,” said Steve action to take. badly. The other option is to turn the crisis into a ■ Penalize reportersKluting, corporate and food law attorney at Varnum “The consumer is accepting that things triumph, and that is just another case of when a ■ Take cold calls from the mediaLLP. “Some of them big time, some small time.” happen. They are not accepting of it taking good defense is a good offense.” SOURCE: AON RISK SOLUTIONS, “RECALL PREPAREDNESS & BRAND PRESERVATION” (SEPTEMBER 2012) Kluting attributes this uptick in recalls to seven weeks to address the problem,” Seyferth This offense takes the form of a clear informa-increasing sensitivity to allergens, the rising said. “The best product recalls are the ones that tion dissemination plan that begins with inform- for each scenario and reviewing the plan annu-impact of social media on businesses, more strin- quickly identify the problem and scope, and ing employees, business peers and customers, ally to keep it up-to-date.gent product testing procedures and an increase effectively communicate to the consumer the then continues on to web and social media chan- “We can’t live in a real world that produces asin media airtime dedicated to product recalls. action that is being taken.” nels and culminates in a general press release and, many foods and medicines and not expect prob- With all these factors in play, it is becoming For companies subject to recalls, part of if need be, a press conference. For each audience, lems,” Seyferth said. “The most important thingincreasingly important that companies, espe- their action must go to ensure that the employ- the message should be customized to meet the that businesses forget is to talk about it ahead ofcially in the food and pharmaceutical indus- ees understand who is the designated company needs of its recipient, be clear and succinct, and time. Don’t wait ’til it shuts you down.”tries, manage the impact that crises like product spokesperson so they can direct any media focus on known facts and not speculation. According to Seyferth, the same basic principlesrecalls can have on their brand. inquiries to that individual instead of answer- “Contrary to what some might think, a crisis also apply to any small businesses. For example, According to Tara Powers, managing director ing questions themselves. Also, at this time, is not a time for spin,” Powers said. Seyferth sees organic, “farm to fork” restaurants asof Lambert, Edwards & Associates’ consumer Seyferth recommends bringing regulatory Sources tell MiBiz the most important action being inherently susceptible to the issue of productpractice, companies ought to have their public rela- agencies into the loop. a company can take is planning for the unex- recalls. Her recommendations to those businessestions person on speed dial for such a circumstance. “You need to call the regulatory agency pro- pected. They recommend planning for potential are the same: develop a plan in advance, proac- “If you have a situation that requires you to actively and bring them in as a partner, imme- crisis scenarios by establishing general guide- tively call appropriate regulatory agencies and havecall a lawyer, then you should (also) call ... some- diately,” Seyferth said. “Immediacy of getting to lines for responses, designating and training a backup sourcing for raw materials like ingredientsone like me,” Powers said. the root of the problem is crucial.” spokesperson, laying out “if-then” procedures that may turn out to be contaminated. ONE HUND NG R TI ED RA CELEB YE 100 ARS Comfort Luxury ECO- LEGROOM FRIENDLY
  • 27. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 27 Talent DevelopmentSummit shares best practicesin employee retention FORECAST? RAIN AND SHINE.By Stephanie Allen | MiBizminion@mibiz.com Eliminating Barriers Summit ■ Intent: to help employers and job devel- GRAND RAPIDS — In an ever-tightening opers identify, better understand andrace for talent, businesses that learn how to man- address common barriers to employeeage through on-the-job problems can have a leg retentionup on the competition. ■ 8 a.m.-noon, Friday, Oct. 19 The reason: Whether an employee leaves or is ■ Grand Rapids Community College Appliedlet go, businesses incur costs related to employee Technology Center, Grand Rapidsturnover. ■ Cost: Free, but registration required Because life is unpredictable. According to the Society for Human Resource ■ Workshops discussing common employeeManagement, the average cost of replacing an $8 issues, including transportation, child-an hour worker is about $3,500 after all related care, housing and soft skillscosts were added up. That’s a cost that could be ■ Target audience: Employers, HRavoided in many cases, if businesses can learn professionalshow to properly handle non-traditional employ- ■ More info: www.michiganworkska.org/ees. There are plenty of personal obstacles that summitemployees can face, which affects their perfor-mance at work. In partnership with several West Michigan will map out bus routes in relation to theirbusinesses, the Kent County Essential Needs employee’s ZIP codes to visually understandTask Force and the Heart of West Michigan challenges, and work with The Rapid to possiblyUnited Way, Michigan Works! of Kent and alter routes.Allegan counties is hosting the “Eliminating “We’re hoping to find out what kind ofBarriers Summit” on Oct. 19 to help local busi- transportation barriers are encountered by pro-nesses learn ways to overcome common reten- spective employees, and work to provide viabletion problems. solutions that will translate into sustained The program will feature several workshops employment,” Bill Kirk, public outreach coordi-to give employers a chance to work through nator at The Rapid.real-life situations related to childcare, housing Other workshop topics include childcare,and transportation that their employees face housing and soft skills — issues that Kreha saidon a regular basis, said Jane Kreha, marketing are hard for employers to manage. An employee 616.459.1171 | www.lawweathers.comand communications coordinator at Michigan might want to go to work, but circumstances justWorks! for Kent and Allegan counties. won’t allow it to happen. “We want to make them aware of those Osmun has seen a change in the role ofissues overall, but also let them know what par- human resource departments over the pastticular resources we have in our community decade, which could be a cause for poor reten-because there are quite a few that can help them tion rates. Developing a trusting environmenthelp their employees,” Kreha said. “And a lot of between the human resources department andemployers are finding out that it’s really worth employees is a way he said businesses could helpthe time and effort to take care of these things keep well-trained, or eager employees.before it begins to become a problem, and they “Many of the HR staff are no longer trainedlose good employees.” on how to deal with personal issues,” he said. “It’s One of those local resources is The SOURCE. risky to go to your HR staff if you need help.”The organization’s executive director, Randy For some employers and HR professionals,Osmun, will open the summit with a discussion the summit could be an important learningof critical issues related to employee retention. tool to understand that not everyone is an “ideal The SOURCE is a support service that has employee,” and that with proper techniques,specialized caseworkers on staff to help employ- they can increase productivity and satisfactionees work through issues they might be having at within the company.work before a problem escalates into a situation “It’s important to realize that people comethat could potentially cost them their jobs. to work with messy lives that prevent them “There’s a business argument that taking from doing the jobs that they really want to do,”good care of your people actually creates more Osmun said.profit for your organization,” Osmun said. Planners urge employers and HR person- During hands-on workshops, businesses will nel to attend the free event, which runs from 8learn retention techniques that have worked for a.m. to noon at the Applied Technology Centerseveral West Michigan companies, including at Grand Rapids Community College in GrandButterball Farms and Cascade Engineering. Rapids. Workshop leaders include The Rapid Representatives from The Rapid, the greater and the Salvation Army Booth Family Services.Grand Rapids transit authority, will lead one of Space is limited, and interested employersthe workshops discussing transportation issues should register online at michiganworkska.org/pertaining to employee retention. Participants summit. Promote your company with reprints If your company has been featured in MiBiz, the exposure you received reached nearly 50,000 business executives in Western Michigan. Now you can share news about your company by ordering MiBiz reprints. For more info, call MiBiz today: 231-798-4669.
  • 28. 28 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com LOGIST IC SState looks to bolsterlogistics capabilitiesBy Elijah Brumback | MiBizebrumback@mibiz.com WEST MICHIGAN — As a state of peninsulas, many peoplemight not associate Michigan with being a logistics hub. But that’s exactly what the state’s business leaders hope tocreate, especially building off the existing, extensive manufac-turing supply chain already in place. • Talent — An across- As companies source more parts from widespread suppliers, the-board issue for employers in thebusiness leaders and policymakers have started to focus on logis- state.tics issues as a key piece of the state’s competitiveness. Sources • Marketing — EssentiallyMiBiz talked to for this report said there is room for exponential doing a better job of selling what thegrowth in the shipment of goods and services in the state. They state excels at already based on manufacturingalso said Michigan, despite being a peninsula, can increase its supply chains.stock as a major logistics player. • Policy development — Examining “If you have The trouble is that there are a lot of moving parts to deal with, barriers at the local, state and federal impediments in informa-no pun intended. Logistics comes with the baggage of complexity, level that hinder companies from link- tion sharing, you are puttingand sources acknowledge coordinating any effort to enhance the ing to the global market. clients at a disadvantage,” Hall said.sector isn’t going to happen overnight. • Organizational structure — More and more companies are realizing the Still, organizations like Business Leaders for Michigan and Investigating whether the state true cost and risk factor of extended supply chainsThe Right Place Inc. are coordinating with stakeholders and the should form an advisory body to and the disruptions that can affect the flow of business.Michigan Economic Development Corp. to develop plans and help manage implementation The auto industry, for one, is making an effort to bring someto identify the niche areas where the state can excel. and emerging issues. production back to the United States due to supply chain worries, The MEDC, in collaboration with the Michigan Department • Access to capital — he said.of Transportation and the Department of Agriculture and Rural Research how projects are getting done elsewhere and identify Bringing supply sources closer translates into a more respon-Development, is in the midst of defining the state’s assets and possible funding resources. sive environment, Hall said.where it can best leverage existing infrastructure, said Peter “The message we want to give companies right now is that “I’m a big believer in clusters,” he said. “On the west side ofAnastor, director of policy for the MEDC. (logistics) is a priority for the governor,” Anastor said. “We have the state, in disciples like design and furniture manufacturing, “As a part of Governor Snyder’s redirection, the MEDC will a focus on helping businesses export more to help them grow and there is a pretty sophisticated support structure, which plays intolead a statewide initiative to build on the work a lot of stakeholders gain from value-add services.” attracting more companies to the area.”have done,” Anastor said. “We want to have one strategy and one The state doesn’t want to create yet another governmentvision to support logistics and the supply chain.” program, and the logistics steering committee wanted to avoid Playing catch up Part of that strategy outlines seven focus areas that relate to reinventing the wheel in the process, Anastor said. A new potential trade crossing isn’t the only thing the state isimproving the state’s connectedness: “In our next steps, the first is fixing the barriers,” he said. “The banking on to improve Michigan’s economic potential via logis- • Infrastructure — The physical roads, rails, bridges, water- big infrastructure projects are another level tics. The state’s large manufacturing base isways and air links. down.” essentially a well-established foundation on • Business development — The knowhow for increased which to build, sources said.exports and supply chain knowledge. A new information highway “The highest priority is figuring out how Logistics isn’t just an issue of having do we better use our existing infrastruc- well-maintained roads, bridges and rails. ture,” said Rick Chapla, vice president of LOGISTICS, AT A GLANCE Information sharing and efficiencies business development for The Right Place stemming from technology are equally Inc. “Can we use it as an element of business ■ The largest industries active in the Midwest freight market important. attraction?” are gravel, cereal, grains and coal “Logistics is a broad term and doesn’t Many sources pointed to marketable ■ Michigan is unique in its concentration of motor vehicle and include just water, rails and roadways,” Hall Chapla assets such as the rail lines, new intermodal related products industry said Craig Hall, president of Lee Shore stations and air cargo hubs like Detroit ■ Other major product groups: waste/scrap, nonmetal mineral Enterprises Ltd. and founder of Holland-based Lean Logistics. Metro, Grand Rapids and Lansing, which could increase the products, base metals “It includes technology and bandwidth, too.” capacity for exports. ■ Truck is the leading mode followed distantly by rail In today’s market, companies have to operate quickly and the The Michigan competitive logistics and benchmarking study ■ Canada is the foreign market for goods key is to get more accurate information faster up and down the done by Business Leaders for Michigan forecasts total freight SOURCE: BUSINESS LEADERS FOR MICHIGAN supply chain, he said. moving through state by 2015 via Detroit could exceed $600 Specializing in: • Food industry transportation and distribution • Time sensitive freight • Temperature sensitive freight • Great Lakes and East Coast • FDA registered warehousing and distribution in Paw Paw, MI • Multi-item hot shrink packaging/club wraps
  • 29. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 29million. By 2035, the study projects almost $1.2billion in freight could be moving through thecity. For Grand Rapids and the I-69 corridor, CARGO MOVEMENT FORECASTS THROUGH 2035the numbers are obviously nowhere near the Total freight in Million USDamount of freight potentially moving throughmetro Detroit, but both channels are predicted $1200,000to surpasses $200 million each by 2035. (See ■ Detroit ■ I-69 Cooridor ■ Grand Rapidsgraph “Cargo movement forecast through $1000,0002035” on this page.) However, the study also points out the $800,000strength of the state’s legacy industries arethreatened by regional competitive markets. If $600,000the state’s current industrial bases aren’t pro-tected other logistic markets could steal some $400,000of Michigan’s capacity, said Doug Rothwell, president of Business $200,000 Leaders for Michigan. The study points $0 to the increased use of 2007 2015 2020 2025 2030 2035 plastics and composites in favor of steel and other basic materials SOURCE: BUSINESS LEADERS FOR MICHIGAN as a potential risk to economic activity in the state. Rothwell In relation to imme- diately competitive mar-kets in Columbus, Indianapolis and Chicago,Michigan hasn’t focused on logistics for as longas the other major hubs have. “They’ve been working in this longer thanwe have,” said Rothwell. “To some degree, thereis a geographic advantage that we don’t have,but the biggest uphill battle is those places arewho people are used to doing business with. It’svery hard to get people to change their ways.” Competing on cost with other logistics hubsis also an issue as those locations have specificembedded industry sectors, which could be thenext step for Michigan, according to Rothwell. Using several cost and quality data points,the BLM study ranked Grand Rapids andDetroit in a comparative analysis againstother Midwest logistics hubs using four coreindustries. (See graph “Dashboard qualitativecategory scores” on page 31.) Companies looking at how they can becomemore competitive might benefit from workingthrough a third-party handler, said Jill Bland,VP of Southwest Michigan First. “Using a third-party handler for storage offinal assembly can really reduce costs,” she said.“Some companies require a lot of storage space,which can be expensive to house on their own.Cold storage is even more expensive.” Bland said she is noticing an uptick in thenumber of companies using third-party han-dlers, partly related to the high cost of fuel, andof logistics company expansions. Kenco Logistics, located in the MidlinkBusiness Park near Kalamazoo, is one companyalready expanding its operation. The companyis leasing an additional 100,000 square feet toaccommodate a food-industry manufactur-ing client — a sector that could be a catalyst forincreased logistics development. “Just going out and telling everyone theyshould do business with us isn’t going to get thejob done,” Rothwell said. “We have to translateto the proper sectors.” Agriculture, automotive, biotech and lifesciences are all attractive areas, but the follow-up study from the MEDC should drill down tosee how viable those options are to build infra-structure improvements around, Rothwell said. Ultimately, the effort to support any invest-ment is going to take increased public, privatecollaboration, sources say. The fifth and finalNext Michigan Development Corp., co-runby The Right Place, is one tool Chapla saidthe organization could use to bolster existinginfrastructure. “It’s not about building new at this point,”he said. “Where we are striving to be better isintegrating our systems.”
  • 30. 30 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com LOGIST IC SMICHIGAN FREIGHT DYNAMICS TONNAGE BY MODE 2010 TOP COMMODITIES ■ Coal 3.1% ■ Coal n.e.c. 0.02% 2.1% ■ Base metals ■ Motorized vehicles ■ Base chemicals 4.5% ■ Gravel 4.03% ■ Nonmetal minerals SOURCE: BUSINESS LEADERS FOR MICHIGAN 9.25% ■ Air ■ Multimodal TOP DOMESTIC ■ Other WEIGHT TRADED ■ ■ Pipeline Rail 436,290 kTons ■ Truck SOURCE: BUSINESS LEADERS FOR MICHIGAN 77% ■ Water SOURCE: BUSINESS LEADERS FOR MICHIGAN TOP TRADING PARTNER STATES EXPORT TO: IMPORT FROM: ■ Ohio ■ Wyoming ■ Indiana ■ Ohio ■ Illinois ■ Texas ■ Wisconsin ■ Indiana SOURCE: BUSINESS LEADERS FOR MICHIGAN MARYWOOD TRANSPORTATION PARTNERS Through Landstar and its network of more than 8,000 trucks and 28,000 contract carriers, we can offer a variety of equipment and innovative technology solutions to help ensure safe, reliable and cost-effective supply chain solutions. Call us today. Todd Howe Agency Manager Battle Creek, MI Serving all 50 states, Canada & Mexico todd.howe@landstarmail.com 269-441-3304 www.marywoodtranspartners.landstaragent.com
  • 31. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 31 LOGIST IC S Governor, biz leaders nearCOMPETITIVE unanimous in bridge supportBENCHMARK By Carl Dunker | MiBizMichigan’s position in cdunker@mibiz.com DETROIT — While debate continueslogisitics compared to in the public forum about the merits of constructing an additional inter-selected competitive cities national bridge between Detroit and Windsor, for Governor Rick Snyder and(Scored 1-9, 9=best) West Michigan business owners, it’s a “no-brainer.” The existing private Ambassador Bridge is more than 80 years old and in need of constant upkeep. The span han- dles all commercial truck traffic between AUTOMOTIVE Detroit and Windsor, and the bridge lets CHICAGO COLUMBUS DETROIT GRAND RAPIDS INDIANAPOLIS the truck traffic out onto surface streets in Windsor, creating a bottleneck that Time in transit 7.3 6.0 6.7 5.7 6.5 slows down traffic. Current proposals Reliability 5.6 6.4 6.4 6.2 6.3 will eliminate these bottlenecks by tying Infrastructure 6.5 6.0 6.1 5.7 7.1 the bridge directly into freeways on both ends. CONSUMER GOODS Additionally, Canada has agreed to pay to construct the $2 billion bridge, CHICAGO COLUMBUS DETROIT GRAND RAPIDS INDIANAPOLIS including the bridge approaches on Time in transit 6.5 6.9 6.9 7.2 7.0 the Michigan side. Still, the owners of Reliability 5.7 6.5 6.4 6.3 6.5 the Ambassador Bridge, the Detroit International Bridge Company, vehe- Infrastructure 6.7 6.0 6.3 5.7 7.0 mently oppose the construction of a second span in Detroit, unless it is built OFFICE FURNITURE/SYSTEMS by them. CHICAGO COLUMBUS DETROIT GRAND RAPIDS INDIANAPOLIS According to Roy Norton, the Consul Time in transit 6.8 7.6 7.3 7.4 7.4 General of Canada based in Detroit, hav- ing a link between Michigan and Canada Reliability 5.8 6.8 6.6 6.8 6.8 is crucial for the continuing prosperity of Infrastructure 6.2 5.8 5.7 6.6 6.6 both the United States and Canada. “Michigan is by far the most economi- MEDICAL DEVICES cally accessible link between Canada and CHICAGO COLUMBUS DETROIT GRAND RAPIDS INDIANAPOLIS the United States heartland,” Norton said in remarks at the West Michigan Policy Time in transit 7.6 7.6 6.9 6.9 8.3 Forum in Grand Rapids last month. Reliability 5.5 7.2 6.9 6.7 6.7 “Michigan is the single biggest trade partner for Canada except the United Infrastructure 7.2 6.2 6.5 4.7 5.1 States.” SOURCE: BUSINESS LEADERS FOR MICHIGAN While there is an additional crossing at Port Huron, that bridge is out of the way for most truck traffic, sources say. Blake Krueger, CEO of Wolverine World Wide Inc., told attendees that he sees the construction of the new bridge as crucial to both his business and the state of Michigan. “A lot of money is poured down the drain due to bottlenecks and lack of state- of-the-art connections,” said Krueger. Matty Moroun, owner of the Ambassador Bridge, begs to differ. In a massive statewide media campaign, Moroun and the Detroit International Bridge Company have attempted to sway public opinion away from the building of a new bridge. They argue that, while Canada has offered to foot the bill for the new international trade crossing, it would end up costing Michigan taxpay- ers money in the end, an assertion bridge proponents say is not backed up by the facts. One major concern for both the gov- ernor and business owners is that other states might beat Michigan to the punch. For example, Buffalo, New York, is con- sidering building its own bridge. Such a crossing could draw trade away from the current Detroit-Windsor corridor. “If we don’t do it, there are people in line behind us,” said Krueger.
  • 32. 32 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com Technology Four West Mich. firms vie for Accelerate Michigan prize By Mike Brennan | MiBiz The mobile application, mbrennan@mibiz.com which is used by the child, delivers medica- GRAND RAPIDS — ENRG Power Systems tion reminders, displays CEO Milton Roye hopes the third time is the progress toward adher- charm for his company. ence incentives and encourages the child to enter In each of the two previous years, his company other observations. grabbed $25,000 as the winner of the Advanced More than 22,000 doses of asthma medication Transportation category of the Accelerate have been delivered using Abriiz since January Michigan Innovation Competition, one of 2011. nine sub groups in the contest. Ideomed has received more than $1 mil- ENRG Power Systems makes an advanced lion in investments from Spectrum Health ignition system technology, which will increase Innovations, Brophy said, although he declined the fuel economy of light- and medium-duty to be more specific. The company has not yet fleet vehicles from 14-21 percent. It also reduces received other investments, but Brophy hopes to BREAKFAST EVENT greenhouse gas emissions from 15-55 percent. “I’m hoping to advance beyond sector winner this year,” Roye said. “The first two years was our roll change that with the Accelerate Michigan com- petition. The company employs 15 people at its Grand Rapids headquarters in the Brass Works out. Now we’re building brand among investors.” Building and a satellite office in Ann Arbor. ENRG moved from West Bloomfield to Brophy said Abriiz is targeted at self-insured Grand Rapids in February, a region of the state employers, insurance companies and medical Roye described as “start-up friendly.” ENRG was providers. Current customers include Spartan Join MiBiz and other West Michigan employers given $5,000 in August by Start Garden, the lat- Motors and Metro Hospital. Additional prod- est entrepreneur incubator program developed ucts aimed at monitoring heart-failure patients for a free healthy breakfast event spotlighting by Rick DeVos. Roye hopes to garner some follow and women’s health are also in development. on investments from Start Garden when his 60 Eventually, Ideomed would like to offer a portfo- best practices in workplace wellness when we to 90 day evaluation period ends. lio of six to eight products, he said. celebrate Michigan’s Healthiest Employers. This Other investors, including the Michigan Pre- Seed Micro Loan Fund and the Michigan Business Micro LAM 90-minute education and awards event will feature Accelerator Fund and an unnamed California Micro LAM is the brainchild of John Patten, investor, have provided about $100,000, he said. Ph. D., the chair of the manufacturing engineering speakers and a panel of experts who’ll discuss: He’s also received free legal help from Varnum department at Western Michigan University. The LLP through the MiSpringboard program. company, operated by Deepak Ravindra, Ph.D., its Roye’s company is one of three Michigan chief technical officer, is based at WMU’s Business • Award-winning programs created by technology startups from Grand Rapids and one Technology and Research Park. The company also businesses and nonprofits of all sizes from Battle Creek that have been named semi- has a second office in Battle Creek. finalists in the $1 million Accelerate Michigan Micro LAM’s patent-pending technology • How to create a wellness program that fits Innovation Competition. uses a laser source coupled to a diamond cut- Accelerate Michigan, now in its third year, is ting tool to thermally heat and soften hard and your budget an international business competition designed brittle materials to render them more ductile, to bring together later stage entrepreneurial easier to machine and fabricate — in the process • Strategies for getting employees engaged companies with local, national and interna- reducing tool wear — all of which leads to higher • What you need to know about HIPAA tional investors. Top prize is $500,000 in cash. productivity in the manufacturing process. Targeting entrepreneurs with mid-to-late seed- The system in general consists of a fiber laser • The ROI of workplace wellness entrepreneurial businesses, the competition is that passes through an optically transparent designed to have an immediate and positive impact diamond-cutting tool and emerges at the cutting on Michigan’s economy and help create jobs. edge between the tool and piece being machined. This year, 300 applicants were narrowed Patten said the company got its legs in July to 53 semifinalists, of which four are from 2012 by receiving about $175,000 from the West Michigan. The prizes will be awarded at federal government via a National Science Wednesday, Oct. 31, 2012 Orchestra Hall in Detroit on Nov. 15. Foundation SBIR grant — and another grant 7:45 a.m. to 9:15 a.m. The prize money comes from the 21st from the WMU Technology Development Fund. Century Jobs Fund of the Michigan Economic “The funding goes through December, and The Goei Center Development Corp. The competition is reputed pays us to operate,” Patten said. “We hope to have 818 Butterworth Street SW to be one of the largest business-plan competi- sales by then. We’re looking for additional funding tions in North America. sources, including the Accelerate Michigan Fund.” Grand Rapids, MI 49504 This year, submissions were in the categories of information technology, alternative energy, TigerLAB This event is free (with registration) for companies, advanced materials, next generation manufac- TigerLAB, a sister company to Tiger Studio in nonprofits, educational institutions, government entities and turing, life sciences, medical devices, advanced Holland, is privately funded through company transportation, and products and services. chairman Luciano Hernandez, who holds degrees other organizations with 5 or more employees. It’s made The West Michigan semifinalists are: ENRG in industrial design and technical illustration. possible through a generous sponsorship by Priority Health, Power Systems LLC, Grand Rapids; Ideomed TigerLAB, run by Alison Keutgen, is an Inc., Grand Rapids; Micro-Laser Assisted early stage respiratory device company. In 2012, with media sponsors MiBiz and Crain’s Detroit Business. Machining Technologies, Battle Creek; and TigerLAB launched the Oxygen Flow Diverter, TigerLAB, Grand Rapids. its first FDA-approved respiratory device, into the market. Commercialization efforts for the Register online at www.mibiz.com/special/mhe Ideomed Diverter are ongoing, paving the way for a pipe- or call 616-608-6170. Ideomed CEO Keith Brophy, a well-known line of respiratory devices. The company’s sec- West Michigan serial entrepreneur, has been ond internally developed respiratory device is working closely with Spectrum Health expected to be available for sale in early 2015. Innovations LLC to develop personalized man- Beyond 2015, TigerLAB aspires to continue the aged health solutions, starting with the Abriiz growth of its respiratory products. The company asthma management platform. Abriiz is a website has two employees and is working closely with a and companion mobile application tool designed manufacturing partner, Keutgen said. to increase adherence to asthma treatment plans. “We’re privately funded now,” she said. The website is used by a parent or caregiver to “That’s why we entered the Accelerate Michigan define medication schedules, establish incentives competition: to help solidify money for future and rewards, request alerts if doses are missed, development. It takes a lot of money to develop record observations and monitor adherence. Class One medical devices.”
  • 33. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 33 PEOPLE Email people news to: people@mibiz.com DATEBOOK Email business events to: editor@mibiz.com October 23 ■ Allegan County Economic Development Commission: “Export Promotion” will focus on industrial and agricultural exporting, followed by a networking lunch sponsored by the Foreign-Trade Zone 43. Presenters from varying companies will discuss tech- niques to help small businesses gain Czeranna Lilly Riegel Betz Lievense October 17 access to government funding, strate- gies for Canadian markets, and how to ACG Annual Gala: “An utilize Foreign-Trade Zone benefits. 9 Evening with Blake Krueger” a.m.-1:30 p.m., Allegan County Human The Association for Corporate Services Building. Cost: Free, but Growth of West Michigan and Barnes registration required. Contact: young@ and Thornburg LLP present ACG’s bcunlimited.org or (269) 441-1667. Annual Gala featuring Blake Krueger, ■ PTAC Workshop: “Government the CEO of Wolverine World Wide Inc. Contracting Orientation” will cover fed- Krueger’s presentation will discuss eral government and state of Michigan Wolverine’s journey to becoming the contracting, laws and regulations, small- third largest footwear company in business goals, and the bid process. Luy Kramer Calcagno Dugan Konwinski the world, thanks to solid growth and Cost: Free, but registration required. 3-5 a series of successful acquisitions. p.m., Kalamazoo Chamber of Commerce.Marketing responsible for grant writing, advancement and alumni The event runs from 6-8 p.m., Oct. Contact: (269) 381-2977 ext. 3210. ■ Roberta Tepper was hired as the marketing relations. Luy previously worked as the vice president of 17 at Wolverine’s headquarters inspecialist for Allegra Marketing in Grand Rapids. Before alumni and development at Millikin University in Illinois Rockford. Cost: $50 for members, October 25coming to Allegra, she owned her own consulting business, and is a member of the Council for the Advancement $75 for nonmembers and $900 for a ■ Western Michigan University:worked as the creative director for WZZM and was a senior and Support of Education and the National Council on corporate package. Register on the “The Election and Our Divided Politicalproducer for J.W. Messener. Planned Giving. ACG website at www.acg.org or by Heart” is a kick-off to the University ■ Alexander Marketing added Jon Czeranna as the ■ Greg Meyer was promoted as the vice president for calling (616) 732-7149. Center for the Humanities speakeragency’s creative director. A graduate of Kendall College institutional advancement at Aquinas College after being series. Washington Post columnistof Art and Design, Czeranna previously worked with Ford with the school since 2010. He previously worked with the E.J. Dionne Jr. will discuss politicalMotor Co. and as an adjunct professor at Kendall College. University of Michigan. October 18 polarization in the U.S. and the effects ■ FranNet of West Michigan: “Meet the on this year’s presidential election.Banking Health care Franchisors” introduces ways of becoming Cost: free. 6 p.m., Dalton Recital Hall, ■ Macatawa Bank hired Jim Lilly as the commercial ■ J. Michael Kramer was named as Spectrum Health a franchise owner with presentations by WMU, Kalamazoo. Contact: Markteam leader for the bank’s lakeshore area. Lilly has nine System’s senior vice president and chief quality officer. He current national franchise owners. The event Schwerin, (269) 387-8413 or wmich.years of experience in commercial banking and will be has worked for Spectrum Health since 2011 and previously is aimed to help prospective owners looking edu/humanities.leading the team of commercial lenders. served as the vice president and chief medical information for more specific information about owning ■ Builders Exchange: “West officer. a franchise. Cost: Free. 1-3 p.m., Northwood Michigan Design and ConstructionConsultancy University, Grand Rapids. Seating is limited Expo” offers six AIA approved continu- ■ Anderson Economic Group promoted Alex Rosaen Nonprofit to 50 people. Contact: (616) 891-1374. ing education classes and dozens ofto senior consultant and named him as the director of ■ Goodwill Industries of Greater Grand Rapids presentations by area contractors,public policy and economic analysis. He has been with promoted Tony Calcagno to vice president of talent October 19 architects, suppliers, engineers andAEG since 2007. development. His responsibilities include overseeing the ■ WMU: “Entrepreneurship Forum” facility managers. The networking talent development within Goodwill Industries, where he’s is a breakfast speaker series to discuss event also features the We Can BuildReal estate worked for 11 years. entrepreneurial successes. Presenter: competition, which supports local ■ Bradley Hartwell II joined NAI Wisinski of West Jen Randall, president of Maestro, a schools and food banks. Cost: freeMichigan as a service provider specializing in investment Legal developer of communications and sales with pre-registered tickets. 1-7 p.m.,sales. A graduate from Central Michigan University with ■ Attorneys Conor Dugan and Kyle Konwinski training programs. Cost: Free, but registra- at the DeltaPlex Arena, Grand Rapids.a degree in corporate finance and real estate development, joined Varnum LLP’s Grand Rapids office as part of the tion required. 7:30 a.m., Room 2150 of Contact: www.grbx.com.he has five years of experience in commercial banking, Litigation and Trial Services Practice Group. Konwinski Schneider Hall, WMU, Kalamazoo. Contact:property management and investment analysis. joined as an associate and holds a J.D. from the University (269) 387-6059. October 26 of Michigan. As a trial and appellate law attorney with a ■ Start Garden: “Lunch and Learn — ■ Business for Breakfast:Pharma focus in commercial litigation, Dugan joined the firm as Human Centered Design Basics” teaches “Resources For Small Business” ■ Perrigo hired Derric Riegel as an IS system a counsel with experience in handling federal trial and basics about the use of HCD for creative features Gerald Moore, the Michiganengineer and Mark Betz as a senior corporate industrial appellate court matters. innovations that give businesses an edge district director of the U.S. Smallhygienist. The company also promoted Rob Lievense to over other companies. Presenter: Sudakar Business Administration. He willformula research and development statistician. Manufacturing Lahade, the business development man- discuss the SBA’s small business ■ With more than 30 years of experience in supply ager at Steelcase. Cost: free for members, programs. Cost: $16 for members, $26Education chain and manufacturing, Tom Weiss joined Supply $5 for nonmembrs. 11:30 a.m.-1 p.m., Start for nonmembers, registration required. ■ Davenport University hired Peg Luy as the school’s Chain Solutions as the manufacturing practice leader for Garden offices, Grand Rapids. Contact: 7:30-9 a.m., Holiday Inn, Muskegon.executive vice president for advancement, making her its iCap consulting group. hello@startgarden. Contact: (231) 722-3751. Is your web developer holding your URL hostage? It should never happen, but it does. We don’t get it. At <engine/>, we give you complete control of your website and digital assets, but will help you manage them to make sure they’re current and accessible. It should be that simple. 100 Stevens SW Grand Rapids, MI 49507 616.457.0300 - www.runengine.com
  • 34. 34 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com Q&A In the NewsBrian M&A ■ Allegan-based Perrigo Co. (Nasdaq: PRGO; TASE) successfully closed on the acquisition of the Transaction ■ Benton Harbor-based Benton Harbor Pharmacy LLC acquired the freestanding WalgreensRyks privately held Omaha, Neb.-based Sergeant’s Pet Care Products Inc. for about $285 million in cash. Sergeant’s manufactures over-the-counter pet Pharmacy property at 875 East Napier Avenue for $4.92 million, according to a report from CoStar Group. Brokers from Chicago-based Quantum RealExecutive Director, health care products. The acquisition gives Perrigo Estate Advisors represented the buyer and theGerald R. Ford its first entry into the pet care market. ■ Grand Rapids-based restaurant opera- seller.International Airport tor Meritage Hospitality Executive change Group Inc. announced it ■ Stryker Corp. (NYSE:When Brian Ryks decided to relocate from acquired three Wendy’s SYK) named Kevin A. LoboMinnesota to Grand Rapids and take on restaurants in the as its new president andthe the challenges of leading Gerald R. Charlotte, N.C. designated CEO. Previously, LoboFord International Airport, he inherited a market area. Meritage said served as group presidentwell-established local commercial airport. the acquisitions would be of Stryker Orthopaedics.That doesn’t mean he’s kicking back and accretive and would add His 25-year career includesletting the operation run itself. Ryks likes approximately $4 million executive positions atto keep his finger on the pulse of opera- in annual sales. Meritage reported net income from KPMG, Unilever Canada,tion, even reviewing the airport police re- continuing operations of $2.7 million on sales of Kraft Canada, Johnson Loboports on a daily basis. Ryks wants to turn $91.9 million in fiscal 2011. The company employs & Johnson, Ethiconthe airport into an efficient, cost-effective approximately 3,000. Endo-Surgery and McNeil. He also worked forairport that serves the entire West Michi- ■ Grand Rapids-based Star Truck Rentals Inc. Rhone-Poulenc in North America and Europe. Lobogan region and can compete with the likes acquired Michigan Fleet Services, a Roseville-based permanently fills the CEO position after the depar-of Detroit Metro and Chicago O’Hare. truck maintenance firm with nine employees. Star ture of Stephen MacMillan in February for “familyRyks sat down with MiBiz to describe how Truck Rentals, which employs about 330 people and reasons.” Later reports suggested he steppinghe aims to accomplish this goal. has annual revenues around $60 million, will immedi- down because of accusations of an affair with an ately add revenue of $1.5 million with the acquisition, ex-employee.Upon arriving in Grand Rapids, did you run into any unwelcome surprises with regards to said Thomas Bylenga, the company’s president.the airport? Warner Norcross & Judd LLP and Plante Moran PLLC ESOP Not really. I think coming here I knew the airport was in excellent condition from an infrastruc- advised Star Truck Rental on the transaction. ■ Grand Rapids-basedture standpoint. There’s been $312 million dollars worth of upgrades made in the past 12 years. So we ■ Byron Center-based M&K Quality Truck Axios Inc. announcedwere poised to grow from an airline standpoint. There was good air service, but we have opportuni- Sales Inc. expanded into the Chicago area with the the company was soldties to grow that. acquisition of four businesses: Chicago Mack Sales to employees through an & Service, Mack of Joliet, Chicago Truck Sales & employee stock owner-How have you been pursuing those growth opportunities? Service and Truck Lease Chicago. The acquisition ship plan. The move to an We’ve been working with Southwest Airlines. They’re committed to the market. They’re inter- places M&K among the five largest Volvo and Mack ESOP will make about 70ested, and we hope to see Southwest here sometime in 2013. That will bring a lot of excitement to dealer groups in the nation, the company stated in to 80 corporate employeeswhat we’ve got going on. a release. the 100-percent owners ■ The William L. Bonnell Company Inc., a of the 25-year-old firm, BarcheskiHow has the makeup of air travel changed in Grand Rapids over the years? subsidiary of Richmond, Va.-based Tredegar Corp. which began as a supplier That’s a good question. I’ve actually looked back to five years ago to what we had for air service (NYSE: TG), acquired Elkhart, Ind.-based AACOA of temporary staffing to area manufacturers andversus what we have today. Five years ago it was Delta, United, American, Continental, Midwest. Inc. – a manufacturer of aluminum extrusions – for service companies. Axios, which reported salesThey made up the market. What’s happened now is those mainline carriers have actually lost market $50.8 million. AACOA has about 500 employees and of $110 million in 2011, co-employed nearly 2,500share. Delta’s down to 42 percent, American’s still out there with 11 percent. United and Continental operates production facilities in Elkhart and Niles, full-time and 4,000 part-time people, making itcombined are at 20 percent, and they used to be at 27. This is the key here: Allegient, AirTran and Mich. one of the largest privately held employers in theFrontier are taking up 27 percent of our market. So what do we need to do? We need to continue to ■ Lansing- West Michigan region.grow that pie, and that’s where Southwest can help. based Neogen Corp. (Nasdaq: BankingWhat does this diversification mean for consumers? NEOG) acquired ■ Battle Creek-based Inspire Community What I’ve seen in some articles that have come out recently is that airfares have increased nation- the stock of Fort Development Federal Credit Union, with assetsally, and we’ve obviously been part of that, but our fares have not increased to the extent that the Collins, Colo.-based Macleod Pharmaceuticals, a of about $431,000 and about 430 members, onnational average has. So I think that’s good and it results in competition, but again our focus is to family-owned animal health company. Neogen will Sept. 17 merged with Parchment-based Firstgrow that competition and hopefully make some more progress there. continue to operate Macleod’s facility. Macleod’s Community Federal Credit Union, which has revenues for its most recent 12 months were $685 million in assets and 72,000 members,Where do you see Gerald R. Ford Airport in its goal of becoming a regional facility? approximately $4 million, the company reported. according to a report from Credit Union Times. I think we’re closer. I think the fact that the county appointed a board member from outside the ■ Hudsonville-based Royal Technologies Corp. Inspire was chartered in May 2010, but ran into acounty, David Slikkers from Holland, is an excellent step in the right direction because it does need signed a letter of intent to acquire Mission, Texas- string of delays, setbacks and other issues lead-to be recognized as a regional facility. When we look at the region, there’s about 2.7 million people in based Hi-Tech Plastics, a plastic injection molding ing up to the merger, the publication reported.that, and that number of people can support a strong level of air service and air service competition. I manufacturer, according to a statement. Royal plans Inspire’s fiscal sponsor, Guardian Finance andthink we need to do more to reach out to the region, and that needs to be a continuous focus. to close the deal by the end of the year. The two Advocacy Services, received word from the companies had formed an alliance more than a year National Credit Union Administration earlier thisWho has been the biggest advocate for the airport in West Michigan? ago. The acquisition strengthens Royal’s business month that its plans to charter another credit The Regional Air Alliance of West Michigan played a tremendous role. If it were not for in the southern states. Royal employs 850 people in union in Kalamazoo were approved. Communitythem getting AirTran in there when they did, I don’t know what this picture would look like Hudsonville and in Promise Federal Credit Union, the third newtoday. I think Allegiant would be here, Frontier would be here, but this AirTran piece would be Cullman, Ala. credit union chartered this year by the NCUA,questionable. If it would have been any later, then Southwest wouldn’t come into the market as plans to open in November with a low-incomewell. So, the regional air alliance has played a huge role in that. As an airport director you want Expansion designation.a group like that that is engaged, and we need to continue to build on the momentum that’s been ■ Grand Rapids-established here. based Heeren Bros. Health care Inc. plans to consolidate several existing locations to a ■ The Michigan Office of Financial andWhat is the biggest challenge facing the airport moving forward? new $22 million 170,000-square-foot facility in Alpine Insurance Regulation selected Priority Health’s People tend to drive to the airports where they can get the best fare, and the more service you Township, which will house its corporate headquarters, HMO as thehave, the better fares you’re going to end up having as well. We feel our competition is Chicago and warehouse and distribution center, and storage and benchmark essen-Detroit, and one of our messages is to think about the cost of driving and parking before you make packing operations. Dixon Architecture designed the tial benefit healththe decision to purchase airfare out of there. new facility, which will be built by First Companies. plan for a state ■ Kalamazoo-based Sigma Machine Inc. has health exchange that is supposed to launch Jan.How can you compete with such large and well-established airports? leased nearly 22,000 square feet at Midlink Business 1, 2014. In selecting the plan, OFIR said Priority The airport can deliver the facilities, and it’s critical for us to establish relationships with the Park in Comstock Township, according to a state- Health’s HMO “achieves the best balance betweencarriers and maintain those relationships, but the bottom line is that it’s the business community ment from Midlink. The machining manufacturer has comprehensiveness and cost-effectiveness forthat really drives the decisions and that’s where the regional air alliance that Dick DeVos started is options to expand up to 74,000 square feet. Michigan consumers.” The federal Affordable Carecritical. It was critical in bringing AirTran in here because they want to hear from the business com- ■ Source One Digital of Norton Shores, an affili- Act requires each state to have a health exchangemunity, they want to know that the business travelers are going to use their airplanes. ate of Muskegon-based RC Productions Inc., invested operating by 2014 where small businesses and more than $5 million in new digital printing equipment individuals can shop for health coverage and com-Interview conducted by Joe Boomgaard and Carl Dunker and condensed by Carl Dunker. Photo by Joe Boomgaard that will result in the creation of six new jobs. pare plans.
  • 35. Visit www.mibiz.com MiBiz • OCTOBER 15, 2012 35
  • 36. 36 OCTOBER 15, 2012 • MiBiz Visit www.mibiz.com Reliable, modernized grid Energy is essential to the way we live, work and play. ITC operates, builds and maintains the region’s electric transmission infrastructure. We’re a Michigan-based company working hard to improve electric reliability and increase electric transmission capacity throughout the Midwest. We’re ITC – your energy superhighway. www.itctransco.com