vol. 22, no. 8 february 20 – 26 ...poi25-… · 20/2/2006 · general development co. and...

BY SHERRI BEGINCRAIN’S DETROIT BUSINESS

While president of the State Uni-versity of New York-Potsdam, JohnFallon III said he had “Technicolornightmares” about the universi-ty’s need for new revenue.

The New York school was get-ting just 18 percent of its $40 mil-lion budget from the state when heleft last summer.

Fallon, 59, dreamed up a planwhere the university would investin new businesses that would, inturn, create long-term revenue forthe institution.

He didn’t see his dream become

a reality in NewYork. But heplans to do so atEastern MichiganUniversity, whichgets roughly 35percent of its$204.2 millionbudget from thestate.

“Compara-tively speaking, (EMU) is betteroff, but it doesn’t make it any easi-er to deal with any of these re-source questions,” said Fallon,EMU’s president since July.

http://www.crainsdetroit.com Vol. 22, No. 8 F E B R U A R Y 2 0 – 2 6 , 2 0 0 6 $1.50 a copy; $59 a year

THIS JUST INTHIS JUST INDevelopers drop plans forSilverdome project

General Development Co.and Schostak Bros. & Co.Inc., the Southfield-basedcompanies that were work-ing on a redevelopmentproposal for the Pontiac Sil-verdome site, no longer planto pursue the project, leav-ing the city of Pontiac withno proposals for the site.

The partners notified thecity last week that theyplanned to remove theirproposal for a $300 millionmixed-use project fromconsideration, said asource familiar with theproposal. The other final-ist, Etkin Equities L.L.C.,dropped out of considera-tion in June.

The city began evaluat-ing proposals for the Silver-dome in 2002. Crain’s wasunable to reach Pontiac of-ficials before press time.

— Jennette Smith

Political parties seek bids from Detroit

Detroit is in demand tobid on either the Democrat-ic National Convention or theRepublican National Conven-tion for 2008.

Positive Super Bowl buzzis among the factors behindrequests to bid on hostingboth events, said LarryAlexander, president andCEO of the Detroit Metro Con-vention & Visitors Bureau. Butit’s not yet clear if the citywill pursue either event.

“There’s a lot of researchthat goes into these bids,these proposals, to deter-mine what the costs wouldbe, what the return is,”Alexander said. “A lot ofwork has to be done to de-termine what the nextsteps are.”

Alexander said he didn’tknow when the bureau,city, corporate partnersand others involved in thedecision would decidewhether to pursue eitherconvention.

“We’re feverishly work-ing right now,” he said.“It’s quite an honor to beincluded on the list.”

— Jennette Smith

NE

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PA

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©Entire contents copyright 2006 by Crain Communications Inc. All rights reserved

®

See This Just In, Page 2

EMU chief wants school to create its own revenue

BY JENNETTE SMITHCRAIN’S DETROIT BUSINESS

When Visteon Corp. signed a leaselast year to become a lead tenant ina new office project in downtownDetroit, the move puzzled somereal estate observers.

The deal to move into the OneKennedy Square building madesense for the troubled auto supplierat the time, Visteon said, because itoffered a cost-efficient way to con-solidate information-technologycontract workers. The workers, pri-marily IBM Corp. employees, wereworking in Dearborn in buildingswith expiring leases.

Now that Visteon is a smallercompany, the company’s down-town real estate strategy hasscaled down accordingly: Visteon

and the landlord and developer ofthe One Kennedy Square building,Redico L.L.C., said Friday that thecompany is not going to need all —or perhaps any — of the 108,000

square feet orig-inally leased forthe IT workers.

“They will belooking to sub-lease somespace,” saidDale Watchow-ski, presidentand CEO ofSouthfield-based Redico.

“It could be some; it could be all.”The company is set to begin pay-

ing rent April 1. Its real estate ad-

Visteon maysublet officesin Detroit

BY BRENT SNAVELYCRAIN’S DETROIT BUSINESS

Collision shops in metro De-troit say the work available inthe auto-repair business hasbeen declining for several yearsand say many shops are barelysurviving.

“Everyone is at risk,” saidMichael Auger, owner of Auger’sAuto Body Collision Inc. in Clawson.

“We’ve found over the last sev-eral years, pretty much since2002, that there are less vehiclesto repair and we have found thatclaims have been down,” Augersaid. “It makes us highly compet-itive. Everybody is fighting forthe same customer and it’s sup-pressing the market as far asrates.”

See Collision, Page 29See EMU, Page 29

See Visteon, Page 28

JOHN F. MARTIN

Sales at Larry Smith’s Autometric Collision fell 8 percent in 2005.

SMALL BUSINESSFocus

SMALL BUSINESSMinimum wage, big debate, 1. Leading SBA lenders, Page 14.

��

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MORE MILES, FEWER CRASHES

��

��

People are traveling more:

But getting in fewer collisions:

Source: Criminal Justice Information Center

Miles per year, in billions

Total crashes per year

More repair shops, fewer crashesput crimp in business profits

Collisioncourse

Supplier scales back plan

Fallon

Watchowski

DETROIT BUSINESS MAIN 02-20-06 A 1 CDB 2/17/2006 6:17 PM Page 1

Workers’ comp rates to fallWorkers’ compensation rates

for Michigan employers are inline to drop again this year, theMichigan Department of Labor &Economic Growth said last week.

The average “pure premium”rate established by the state isdropping by 6.5 percent in 2006,compared with an 11.2 percentdrop in 2005. The rate is the annu-al yardstick against which pri-vate insurance carriers can com-pare their rate structure forworkers’ compensation.

The department said the dropin 2006 is due in part to safety pro-grams that have led to fewerwork-related injury claims; a re-duction in manufacturing jobs,which have higher rates of in-jury; and a medical fee scheduleadopted by the state.

— Amy Lane

Checker gets airportluxury-sedan contract

The Wayne County Airport Author-ity on Friday awarded its luxury-sedan service contract to Detroit-based Checker Sedan, an affiliateof Soave Enterprises.

Checker will pay the authority

$8.7 million over three years forexclusive rights to provide curb-side pickup sedan service at De-troit Metropolitan Airport, saidMichael Conway, authority direc-tor of public affairs and environ-ment.

The contract had been held byTaylor-based Metro Cars for about15 years but was put up for bid inOctober in anticipation of a Juneexpiration date.

— Michelle Martinez

North Troy Corporate Center set to be sold

Real estate sources say theNorth Troy Corporate Center, aneight-building office center atCrooks and I-75, is under contractto be sold.

The 1.2-million-square footcomplex is to be sold by theFlorham, N.J.-based Gale Co. toTranswestern Investment Co. ofChicago, sources say.

The properties are expected tosell for about $100 a square foot,or about $120 million.

Calls to a Gale representativewere not returned. Dan Deuter,vice president of acquisitions forTranswestern, declined comment.

— Jennette Smith

Signature Associates acquires west Michigan brokerage

Southfield-based Signature As-

sociates-Oncor International has ac-quired a west Michigan commer-cial brokerage.

Signature acquired NexcomL.L.C., which has offices inMuskegon and Grand Rapids and13 employees. Nexcom executivesJeff Tucker, Jim Olsen, BryanBench and Roger Schmidt are tobecome Signature principals.Terms were not disclosed.

The deal doubles the size of Sig-nature’s Grand Rapids operationand adds a Muskegon presence,said Mark Woods, Signature vicepresident and managing directorof operations.

— Jennette Smith

Adderley still in critical conditionKelly Services Inc. CEO Terence

Adderley continued to be listed incritical condition Friday atWilliam Beaumont Hospital, accord-ing to Ilene Wolff, media-rela-tions specialist for Beaumont.

Adderley’s condition remainedunchanged from Crain’s last re-port Feb. 13.

Jim McIntire, vice presidentfor public affairs for Troy-basedKelly Services, said the companyhad no further comment.

Adderley was hospitalized Feb.9 after suffering a “cardiac inci-dent,” according to a statementfrom Kelly Services. Presidentand COO Carl Camden was then

named acting CEO.— Anjali Fluker

Ypsilanti Marriott sold;renovations planned

The Ypsilanti Marriott at EagleCrest has been sold and the newAtlanta-based owners plan about$5 million in renovations.

Jeff Long, president of Atlanta-based Long & Cox Properties, saidhis company closed on the pur-chase just before the Super Bowl.Terms were not disclosed. The236-room hotel was sold by Hart-ford, Conn.-based CornerstoneReal Estate Advisers.

Long said the extensive reno-

vations would be completed overthe next year.

The broker on the deal was O’Connell Hospitality Group.

— Jennette Smith

Harmony House name goneThe Harmony House music store

brand is officially gone after thelast store, on Woodward Avenuein Berkley, changed its name toFYE on Feb. 8.

Troy-based Harmony HouseRecords & Tapes Inc. sold the storeto Albany, N.Y.-based Trans WorldEntertainment Corp. in October 2003.Trans World owns more than 800music and video retail stores.

— Sheena Harrison

THIS JUST INTHIS JUST IN

CRAIN’S DETROIT BUSINESS February 20, 2006

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CORRECTIONS■ A story published on Page 1 of the Feb. 13 edition inaccurately de-scribed Dura Automotive Systems Inc.’s restructuring plan.The plan will affect more than 50 percent of the company’s worldwideoperations, either through product movement or plant closures. Theplan will include the closure of five to 10 of the company’s 60 plants.Crain’s also incorrectly reported Standard & Poor’s corporate creditrating of Dura. On Feb. 9 Standard & Poor’s reduced Dura’s corpo-rate credit rating from B to B-. (See related story, Page 4.)■ An item about an upcoming nonprofit seminar on Page 26 in theFeb. 13 issue contained an incorrect e-mail address for registration.The correct address is [email protected]. (For com-plete details, see story on Page 10.)■ Due to a production error, Mary Kramer’s column on Page 11 ofthe Feb. 13 issue ended in midsentence. The last paragraph of thecolumn should have read, “People will use buses or other types oftransit to reach a desirable destination. Or even go to work. SuperBowl week proved it.”


BY RICHARD TRUETTCRAIN NEWS SERVICE

A recent e-mail from Mary AnnWright to a colleague ended like this:“Now stop bugging me. I have a com-pany to save.”

That company is Collins & AikmanCorp., the bankrupt supplier of instru-ment panels, convertible tops andplastic trim. Troy-based Collins &Aikman has been in Chapter 11 reor-ganization since May, when it ran outof cash because of high materialcosts, lower revenue and a seniormanagement team that had little autoindustry experience.

Late last week, U.S. Bankruptcy

Judge Steve Rhodes approved em-ployment contracts for Wright’s andseveral other open positions.

Wright, 44, executive vice presi-dent of commercial and programmanagement, will be paid $425,000 ayear and get an annual 50 percentbonus, according to court documents.

Until she resigned from Ford MotorCo. in November, citing personal rea-sons, Wright was Ford’s director ofsustainable mobility technologiesand hybrid vehicle programs. She ledthe team that saved the Ford EscapeHybrid and turned it into a successstory. She was the vehicle’s high-pro-file champion.

To help save Collins & Aikman,

Wright will need many of the skillsshe honed during her 17 years atFord. She will need to straighten outmultilayered problems and build astrong team, said Jim Hall, an analystat AutoPacific in Southfield.

“She understands the car side ofthe business and can help smooththings over,” he said. “Collins & Aik-man having someone who’s been onthe OEM side will help.”

As a reporter was interviewingWright in her office recently, her as-sistant knocked on the door, stuckher head in and said a purchasingmanager from a customer had re-turned a call with the terse message:

BY MICHELLE MARTINEZCRAIN’S DETROIT BUSINESS

Competing hospital systems, busi-ness groups and insurers are readyto raise the heat in the normallystaid offices of the state’s Certificateof Need Commission.

At issue is whether the 15-membercommittee will find that high-growthareas in Michigan require more hos-pital beds.

“It will definitely be lively,” saidSherry Mirasola, vice president and

corporate-communications officerfor the Michigan Health and HospitalAssociation in Lansing.

Hospitals have lined up proposalsfor new hospitals and medical cen-ters to woo the more affluent pa-tients of Oakland and Macomb coun-ties, drawing concern from payersand competing health systems whosay a proliferation of unneeded ca-pacity will only serve to raise costsand weaken existing providers.

“We’ve always been supportive ofthe (certificate of need) process it-

self,” said Helen Stojic, director ofpublic relations for Blue Cross BlueShield of Michigan. “But in generalwe’re always concerned about poten-tial duplication of services because itcould result in overcapacity of ser-vices and drive up health care costs.”

Under state law, hospitals have toprove that new medical capacity isneeded before transferring or addinghospital beds through a “certificateof need” application.

Michigan does appear to beoverbedded, said Larry Horvath, sec-

tion manager for the certificate-of-need program. But what isn’t knownis whether the beds are distributedwell enough to serve growing popu-lations, he said.

Health system plans rest on howthe committee answers the questionduring the next six months.

Among the systems looking to buildin Oakland and Macomb counties areFlint-based McLaren Health Care Corp.(see story, Page 24) and Royal Oak-based William Beaumont Hospitals.

McLaren has proposed a sprawl-ing health care “village” in Indepen-dence Township off I-75 at Sashabaw

CRAIN’SINDEX

Riverfront dreams:Conservancy estimatesRiverWalk could generate$1B in spinoff. Page 5.

Headed to Georgia:Company featured inPatterson’s SBT speechseeks lower taxes. Page 6.

Visits via computer:Henry Ford Health todebut “e-doctor” program. Page 7.

CRAIN’SINDEX

BANKRUPTCIES. . . . . . . . . 25BRIEFLY . . . . . . . . . . . . . . 24BUSINESS DIARY. . . . . . . . 18CALENDAR . . . . . . . . . . . . 19CAPITOL BRIEFINGS . . . . . 25CHRISTOPHER CRAIN . . . . . 8CLASSIFIED ADS . . . . . . . . 22EARNINGS. . . . . . . . . . . . . 27LETTERS . . . . . . . . . . . . . . . 8OPINION . . . . . . . . . . . . . . . 8OTHER VOICES . . . . . . . . . . 9PEOPLE . . . . . . . . . . . . . . 20RUMBLINGS . . . . . . . . . . . 31SMALL BIZ SOLUTIONS . . . 16WEEK IN REVIEW. . . . . . . . 31

These organizations appear in thisweek’s Crain’s Detroit Business:

American Axle & Manufacturing . . . 24Auger’s Auto Body Collision Inc. . . . . 1Auto Service Association of Mich. . 29Autometric Collision Inc. . . . . . . . . 29AutoPacific . . . . . . . . . . . . . . . . . . . . 3Bagley Acquisitions Corp. . . . . . . . . 28Bettis/Betters Development . . . . . . 5Bing Group . . . . . . . . . . . . . . . . . . . . 5Blue Cross Blue Shield . . . . . . . . . 3, 7BOMA of Metropolitan Detroit . . . . . 3C&B Scene Inc. . . . . . . . . . . . . . . . 15Carlisle Wortman Associates Inc. . . 24Cass Community Social Services . . 15CB Richard Ellis . . . . . . . . . . . . . . . 28Center for Michigan . . . . . . . . . . . . 28Certainty of Opportunity Foundation 15Collex Collision Experts Inc. . . . . . 29Collins & Aikman Corp. . . . . . . . . . . . 3Comerica Bank . . . . . . . . . . . . . . . . 12Compuware Corp. . . . . . . . . . . . . . . 11Country Preacher Foods Inc. . . . . . . 15DaimlerChrysler Corp. . . . . . . . . . . . . 3Detroit Newspapers Partnership . . . 28Detroit Riverfront Conservancy . . . . . 5Detroit/Wayne Port Authority . . . . . . 5Downtown Detroit Partnership . . . . . 5Dura Automotive . . . . . . . . . . . . . . . . 4Eastern Michigan University . . . . . . . 1Engineering Society of Detroit . . . . . 3Fischer Body Refinishing . . . . . . . . 29Ford Foundation . . . . . . . . . . . . . . . . 5Ford Motor Co. . . . . . . . . . . . . . . . . . 3Garden Fresh Salsa Co. . . . . . . . . . 24General Motors Corp. . . . . . . . . . . . . 5Gentech L.L.C. . . . . . . . . . . . . . . . . 24Grandview Construction Co. . . . . . . 24Health Alliance Plan . . . . . . . . . . . . . 7Henry Ford Health System . . . . . . 7, 30Image One Corp. . . . . . . . . . . . . . . . 16Inalfa Roof Systems . . . . . . . . . . . . 24Inforum . . . . . . . . . . . . . . . . . . . . . . 30Innovative Learning Group Inc. . . . . 13Knape & Vogt Manufacturing . . . . . 28LaMont Title Corp. . . . . . . . . . . . . . 24Landtec of Macomb L.L.C. . . . . . . . 24Matt Prentice Restaurant Group . . . 15McLaren Health Care Corp. . . . . 3, 24MEDC . . . . . . . . . . . . . . . . . . . . . 6, 24Mich. Health and Hospital Assoc. . . . 3Michigan Box Co. . . . . . . . . . . . . . . 11Mich. Bus. & Prof. Association . . . . 24Nat. Assoc. for Business Resources . . 16Nemeth Burwell P.C. . . . . . . . . . . . . 16NFIB . . . . . . . . . . . . . . . . . . . . . 11, 13Online Technologies Corp. . . . . . . . 24POH Medical Center . . . . . . . . . . . 24Redico L.L.C. . . . . . . . . . . . . . . . . . . . 1SBAM . . . . . . . . . . . . . . . . . . . . 11, 13Silent Call Communications . . . . . . . 6Society of Manufacturing Engineers 30Southern Hospitality Restaurant . . . 13Spingarn Development L.L.C. . . . . . . 5St. John Health . . . . . . . . . . . . . . . 30TEAM Inc. . . . . . . . . . . . . . . . . . . . . 16Tiffany’s Building Services Inc. . . . . 11TwentyFirst Century Development . . 24UM Health System . . . . . . . . . . . . . . 7Umicore . . . . . . . . . . . . . . . . . . . . . 24University of Michigan . . . . . . . . . . 29Victor International Corp. . . . . . . . 24Visteon Corp. . . . . . . . . . . . . . . . . . . 1W.K. Kellogg Foundation . . . . . . . . . . 5William Beaumont Hospitals . . . . 3, 24Wind Point Partners . . . . . . . . . . . . 28Woodward Restaurant . . . . . . . . . . 13Zervos Equities Inc. . . . . . . . . . . . . . 24

February 20, 2006 CRAIN’S DETROIT BUSINESS

The battle over hospital bedsPopulation shifts compete with overcapacity

Turnaroundby design

JOHN SOBCZAK

Engineering Society of Detroit Executive Vice President Darlene Trudellhas managed to nearly double membership in the group since 2003.

New C&A exec ‘full steam ahead’ on rebuilding

See Hospitals, Page 30

Engineering Society exec sweats the right details in fixing membership declinesBY SHERRI BEGIN

CRAIN’S DETROIT BUSINESS

Darlene Trudell is the first to tell youthat she’s no engineer.

But that’s a strength for her as executivevice president of The Engineering Society ofDetroit.

Trudell, brought in three years ago to re-verse declines, could see the detail-orient-ed association was focusing on too manythings — and not always the right ones.

ESD membership had peaked at morethan 5,500 but declined to 2,077 by 2003,when Trudell took over the top manage-ment position. Since then, it has nearlydoubled to 4,083.

The group reported total revenue of $1.8million and an operating excess of $412,806in fiscal 2005, up from revenue of $1.27 mil-

lion in 2004 and an operating loss of morethan $6,000.

Under Trudell, Southfield-based ESD isworking to understand what the membersneed and how to deal with them more effi-ciently than anyone else, said DonaldGoodwin, past president of the ESD andvice president, scientific labs and provinggrounds for DaimlerChrysler Corp.

“It doesn’t matter if you’re in the profes-sional society business or the car business;the rules are the same.”

Trudell, 52, came on board after a suc-cessful turnaround of the Building Ownersand Managers Association of Metropolitan De-troit, where as executive director she near-ly quadrupled its budget during five yearsto $750,000 and increased membership to

See ESD, Page 30

See Wright, Page 30Mary Ann Wright has 17 years ofexperience at Ford Motor Co.


TAKING STOCK

BY BRENT SNAVELYCRAIN’S DETROIT BUSINESS

The restructuring program an-nounced recently by Dura Automo-tive Systems Inc. (Nasdaq: DRRA) isambitious both in its size andscope, according to automotive an-alysts, but also will be challengingto achieve.

“It’s more comprehensive thanmany people thought or mighthave imagined,” said Martin King,credit analyst for Standard & Poor’s.“They are trying to shift theirmanufacturing footprint in such ameaningful way in a pretty com-pact time frame and in a difficultoperating environment.”

The plan calls for the possibleclosure of between five and 10plants and the relocation of about2,000 jobs. Details of the plan werereported incorrectly by Crain’s inlast week’s issue. (See correction,Page 2.)

Rochester Hills-based Dura em-ploys 17,000 at 60 plants and tech-nical centers in 13 countries, in-cluding four Michigan plants andtechnical centers.

“This restruc-turing plan isthe largest ini-tiative Dura hasever taken on,”said Dura Chair-man and CEOLarry Denton ina conferencecall with ana-lysts on Feb. 9.

Last week,Sean McGuire, vice president ofglobal marketing, declined to saywhich plants would be closed orwhen those decisions would be an-nounced. A fact sheet issued byDura says final decisions haven’tbeen made. Dura makes automo-tive parts such as parking brakes,gear shifts, hood and tailgate latchsystems.

In the conference call, Dentonsaid the plan will affect more thanhalf of the company’s worldwideoperations, either through prod-uct movement or plant closures.Dura hopes to complete the planby the end of 2007. Dura said plantsin Mexico and eastern Europe willbe expanded.

Dura also may sell manufactur-ing operations in Lage, Lippstadtand Rotenburg, Germany, and hashired W.Y. Campbell & Co. to solicitbids.

King said it will be tricky forDura to complete the restructur-ing plan without slipping a bit onquality and performance duringthe transition.

“Why wait? We feel it is impor-tant that we take the necessarysteps today,” Denton said in astatement e-mailed to Crain’s lastweek. “Dura has demonstratedthat we have the capability to exe-cute this type of plan. … You caneither ride the curve or directyour efforts on getting ahead. Our

TAKING STOCKNEWS ABOUT DETROIT AREA PUBLIC COMPANIES

Analysts: Dura restructuring plan is comprehensive, but difficult

plan is designed to position Duraahead of the curve.”

Like many North American sup-pliers, Dura is dealing with laborcosts that are higher than those ofsome competitors, raw-materialprices that have skyrocketed andproduction declines from domesticautomakers.

“It’s very ambitious. Whetherit’s enough is another question,”King said. “They had to do this.They weren’t going to get any re-lief from their customers or themarket.”

In addition, King said Dura’srevenue has declined because thecompany wasn’t winning enoughnew contracts several years agoand now is suffering the conse-quences. Recently, Dura has wonsome new contracts but the compa-ny won’t begin to see those salesgains until next year, King said.

Credit Suisse analyst ChristopherCeraso, in a report issued Feb. 9,said Dura’s restructuring plan islikely driven by pricing demandsby Dura’s customers.

“Dura may be getting pressed byits customers to either become alow-cost-country supplier or watchits business re-sourced to low-cost-

country suppliers,” Ceraso said inhis report. “In either case, theOEMs are going to pay the low-cost-country price.”

In the conference call, Dentonsaid price pressures from cus-tomers are not increasing and in-stead Dura is looking to shift addi-tional work to Mexico and EasternEurope since it already has a sig-nificant presence in both regions.

In its earnings statement re-leased Feb. 9, Dura said fourth-quarter sales decreased by $18.4million, in part, because of lowerNorth American production by thedomestic automakers.

For the fourth quarter, whichended Dec. 31, Dura reported netincome of $10.3 million or 55 centsa share on revenue of $564.4 mil-lion. For the same period last year,Dura reported net income of $1.9million or 10 cents on revenue of$582.8 million.

The company’s stock closedThursday at $2.51, up 19 cents fromits close of $2.29 on Feb. 8, the daybefore the restructuring an-nouncement.

On Friday, Dura’s stock closedat $2.49.

Standard & Poor’s on Thursdaysaid Dura is among a group of sup-pliers with the most exposure toFord Motor Co. and General MotorsCorp. as Novi-based Tower Automo-tive Inc. and Troy-based Delphi Corp.work through labor negotiationsthat would disrupt those domesticautomakers if they resulted in astrike.

Brent Snavely: (313) 446-0405,[email protected]

STREET TALKTHIS WEEK’S STOCK TOTALS: 51 GAINERS, 25 LOSERS, 5 UNCHANGED

Detrex Corp. $5.95 $5.05 17.82Credit Acceptance Corp. 23.25 20.50 13.42UnitedAuto Group Inc. 43.45 39.15 10.98Noble International Ltd. 16.66 15.04 10.77Caraco Pharmaceutical Labs Ltd. 12.96 11.81 9.74Taubman Centers Inc. 40.20 37.93 5.99BorgWarner Inc. 57.04 54.35 4.95Masco Corp. 31.22 29.85 4.59Somanetics Corp. 23.73 22.73 4.40Rofin-Sinar Technologies Inc. 50.81 49.10 3.48

Syntel Inc. $20.18 $21.65 -6.79Asset Acceptance Capital Corp. 17.45 18.66 -6.48Catuity Inc. 8.20 8.75 -6.29ProQuest Co. 22.43 23.31 -3.78TechTeam Global Inc. 10.60 10.93 -3.02Dearborn Bancorp Inc. 23.28 23.87 -2.46Energy Conversion Devices Inc. 45.02 46.04 -2.22Oxford Bank Corp. 50.05 50.75 -1.38Origen Financial Inc. 6.95 7.04 -1.28Perceptron Inc. 7.85 7.92 -0.88

Source: Bloomberg News. From a list of publicly owned companies with headquartersin Wayne, Oakland, Macomb, Washtenaw or Livingston counties. Note: Stocks tradingat less than $5 are not included.

CDB’S TOP PERFORMERS

CDB’S LOW PERFORMERS

2/17 2/10 PERCENTCLOSE CLOSE CHANGE

2/17 2/10 PERCENTCLOSE CLOSE CHANGE

1.2.3.4.5.6.7.8.9.

10.

1.2.3.4.5.6.7.8.9.

10.


Denton

It’s morecomprehensive thanmany people thought

or might haveimagined.

Martin King, Standard & Poor’s”

“


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Conservancy: RiverWalk could spur $1B in projectsBY SHERRI BEGIN


The Detroit Riverfront ConservancyInc. expects the $250 million publicand private investment to date inthe Detroit RiverWalk to spurmore than $1 billion in economic

developmentalong the eastriverfront.

“When westarted this, wesaid we didn’tjust want to cre-ate public spaceon the river-front; it was al-ways done inthe context of

creating economic development,”said Matthew Cullen, co-chair ofthe conservancy and general man-ager of economic development andenterprise services at General Mo-tors Corp.

“You can begin to see momen-tum on the riverfront is for real.”

The conservancy updated itsplans for the RiverWalk onWednesday at an Ideas BeforeDawn business presentation at theMichigan Technical EducationCenter in Warren. The DowntownDetroit Partnership and Crain’s De-troit Business sponsor the monthlybreakfast series about downtownDetroit issues.

Significant development pro-jects already begun or planned forthe areas touching the east river-front include:

■ The $42 million Tri-Centenni-al State Park.

■ GM’s mixed-use developmentplans east of the Renaissance Cen-ter.

■ $41 million worth of housingand retail developments an-nounced last week by Spingarn De-velopment L.L.C., led by Dave Bing,CEO of The Bing Group.

■ A $25 million condominium,retail and restaurant project un-der development by retired Pitts-burgh Steeler Jerome Bettis andPittsburgh developer C.J. Bettersthrough Bettis/Betters DevelopmentL.L.C.

■ Mixed-use development byBettis/Betters Development of the44-acre former Uniroyal site at thebase of the MacArthur Bridge,which leads to Belle Isle.

The W.K. Kellogg Foundation inBattle Creek and the New YorkCity-based Ford Foundation, whichtogether provided $6 million tohelp pay for the RiverWalk, havemade additional grants for eco-nomic revitalization in adjacentareas.

The Ford Foundation in Decem-ber granted $5 million and Kellogg$10 million to support redevelop-ment in the neighborhoods thattouch the east riverfront.

The Detroit Economic Growth Corp.this year plans to begin construc-tion of a greenway, or pedestrianand bicycle path, along the De-quindre Cut, an abandoned rail-road right-of-way that extendsfrom the Detroit River near the Re-naissance Center north to EasternMarket, said Faye Alexander Nel-son, president and CEO of the De-troit Riverfront Conservancy.

The new pathway will run fromthe edge of Tri-Centennial State

Park to EasternMarket, con-necting neigh-borhoods withthe riverfront,she said. Whencomplete, theRiverfront Con-servancy willmaintain thepathway.

The conservancy has begun con-struction on two of four plannedplazas and on a sizable portion ofthe RiverWalk, said Nelson, 52.

It has nearly completed work on

the abandoned ferry docks in theBates Street area. Once those arerepaired, the Detroit/Wayne CountyPort Authority can begin building itsportion of the RiverWalk, a newterminal and a new dock that willallow the city to receive largecruise ships right in the heart ofthe city, she said.

By the end of 2006, the conser-vancy expects that more than 75percent of its east riverfront pro-jects will be completed, with theremaining RiverWalk construc-tion and two more plazas on theagenda for 2007, Nelson said.

The conservancy is now begin-ning to map out a plan for the westriverfront walkway.

The nonprofit in 2005 received$40 million in federal appropria-tions for the walkway, $37 millionof which was designated to thewest riverfront, Nelson said. But itwill need to secure additionalfunding.

The conservancy plans to beginmeeting with community leadersto identify specific plans and part-ners for the west RiverWalk. It hasyet to develop a timeline for the

west portion of the project, Nelsonsaid.

When done, the RiverWalk willspan more than five miles, fromthe Ambassador Bridge to east ofthe McArthur Bridge.

The landscaped pathway, whichincludes seawalls, boardwalks andmore natural walkways, will even-tually accommodate pedestrians,bicycles and in-line skaters alongits full length. It will include direc-tional and donor-recognitionsigns.

Sherri Begin: (313) 446-1694, [email protected]

Cullen

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Silent Call moving to Georgia for lower tax burdenBY SHEENA HARRISON


George Elwell doesn’t want toleave Michigan, but he says hemust if he hopes to keep Silent CallCommunications Inc. in business.

Fed up with paying up to $15,000for the single-business tax eachyear and state legislators he sayswere unresponsive to his needs,Elwell is moving his company toGeorgia by summer.

“I saw the property values, I saw

the tax struc-ture and Ithought, ‘It’scrazy for me tobe here,’ ” El-well said.

WaterfordTownship-basedSilent Call wasfounded by El-well in 1987, andmakes and sellswholesale and retail alert systemsfor the hearing-impaired. The

company generated revenue of $2million last year, up from $1.4 mil-lion in 2004, and has eight employ-ees.

In addition to wanting to lowerhis company’s tax burden, Elwellsaid he is frustrated with state leg-islators who he believes haven’tbeen responsive enough to his re-quests for help in a dispute with theU.S. Food and Drug Administration.

Silent Call used a federal taxcredit to spend more than $100,000last year on new equipment that

has allowed it to stop outsourcingits manufacturing to Taiwan andstart manufacturing in-house.

After Silent Call began manufac-turing locally, the FDA said itqualified as a medical-device man-ufacturer that needs to registerwith the administration. Elwell ar-gues that his products don’t fit un-der the FDA’s classifications formedical devices, and that SilentCall shouldn’t have to register.

Elwell said he contacted severalstate legislators, and Gov. Jennifer

Granholm’s office, to find out ifthere were other avenues he couldpursue, but did not receive any re-sponses.

“That wassort of the strawthat broke thecamel’s back,”Elwell said.

Silent Callwas featured inOakland CountyExecutive L.Brooks Patter-son’s State ofthe County ad-

dress earlier this month. Elwellwrote a letter to the county statinghis frustration with paying thesingle-business tax and his inten-tions to move south.

Patterson is using Elwell’s storyto illustrate his case for repealingthe single-business tax and calledfor businesses to contribute$800,000 by last Saturday towardan effort to put the repeal on theNovember ballot. As of Fridaymorning, he had gathered $400,000and was planning a Tuesday pressconference to extend the deadline.

Patterson said Oakland Countyprobably receives about a dozencalls annually from companiesthat are moving because Michi-gan’s cost of business is too high.He says immediate action must betaken to keep companies such asSilent Call in town.

“We’re going to have to do a to-tal restructuring if we hope to becompetitive with the Sun Belt,”Patterson said.

The single-business tax is sched-uled to expire in 2009. Heidi Wat-son, communications specialistwith Granholm’s office, said thegovernor wouldn’t support Patter-son’s plan because it doesn’t in-clude a way to restore lost revenue.

“The governor isn’t opposed torestructuring the single-businesstax, but she wants to make surethat there’s a way to replace thatmoney and that the burden’s noton taxpayers,” Watson said.

Watson said she wasn’t aware ofSilent Call’s attempts to reach thegovernor. But she said Granholmand state agencies, such as theMichigan Economic DevelopmentCorp., work to provide incentivesand create a business-friendly en-vironment for companies such asSilent Call.

“She’s working around the clockand going anywhere at anytime tokeep jobs in Michigan and to lurecompanies here,” Watson said.

Elwell said he’s searching for a10,000-square-foot building to helphis company expand from its cur-rent 4,000 square feet. He expects abuilding in Georgia will cost hiscompany about $465,000 and $500 amonth in taxes, compared with$850,000 and $1,000 in taxes for asimilar building in Michigan.

Although Elwell said the bene-fits of moving outweigh the rea-sons to stay, he said the decision tomove hasn’t been easy, Elwell said.

“I’m 67,” Elwell said. “My wholelife is in Michigan. I’m leaving alot of friends behind and some ar-eas that have a lot of meaning tome.”

Sheena Harrison: (313) 446-0325,[email protected]

Elwell

Patterson

Firm was featured in Patterson’s speech against SBT



Henry Ford to begin ‘e-doctor’ program in JulyBY MICHELLE MARTINEZ


Henry Ford Health System patients tired ofdoctor’s office waiting rooms and music-on-hold soon may be able to connect with a doc-tor with a few clicks of their computermouse.

In a move to improve service and controlcosts, the four-hospital system, along with itsinsurance subsidiary, the Health Alliance Plan,in July are rolling out a six-month “e-visits”pilot to patients at its medical centers inNovi, Southland and Detroit’s Harbortown.

“We’ve got an aging population that re-quires more care and you’ve got a shortage ofdoctors and nurses,” said Matt Walsh, projectdirector of purchaser initiatives at HAP.“We’ve got to look for new ways to delivercare with a mind toward cost-effectiveness.”

The new service will allow existing HenryFord patients to bypass office visits andquery doctors about symptoms such as sorethroats or back pain through structured, se-cure online interviews. Doctors will be ableto bill insurance companies or patients asmall fee for replying online within onebusiness day.

“This is not just a conversation,” saidPamela Landis, new-media services manag-er at Henry Ford. “This would be a true of-fice visit.”

The system would be particularly usefulfor chronically ill patients that make fre-quent doctor visits to comply with long-termtreatment regimens, she said.

Elsewhere, the service not only has in-

creased patientand doctor satis-faction, Landissaid, but anecdo-tally, also has decreased thenumber of unnec-essary patientvisits to emer-gency roomsand doctor’s of-fices.

“It was reallyclear to us thatwe could use theInternet to createa better connec-tion with our pa-tients so theydidn’t have togo to their doc-tor for every lit-tle thing,” saidTed Eton, med-ical director ofhealth informat-ics and Web ser-vices at Group Health Cooperative in Seat-tle.

The $2 billion health system increased itsonline doctor-patient exchanges to morethan 204,000 in 2004 from its launch in 2000,Eton said. And the service has now becomean important differentiator for patients.

A recent Group Health survey indicatedthat having Web access to a doctor influ-enced the choice of more than 95 percent of

the patients. “The satisfaction with

the service is off thecharts,” Eton said.

But insurancecompanies still needto be convinced.While the online ex-changes are reim-bursed by some in-surers in Californiaand Massachusetts,Michigan insurersremain skeptical.

“We are very inter-ested in the concept,but we don’t know if itwill cost more or lessfor our customers,”said Helen Stojic, me-dia-relations directorfor Blue Cross BlueShield of Michigan.

A 2002 study of a pi-lot program between BlueShield of California and Re-layHealth, an Emeryville,Calif.-based technology

provider, said that Relay-Health’s e-visits system reduced health carespending by about $3.69 per patient, permonth.

But a solid base of good studies on the is-sue has yet to be produced, said ThomasHandler, a physician and research directorat the Stamford, Conn.-based technologyconsulting firm Gartner Inc.

“For e-visits it comes down to how you de-fine what it really is. And, if you save a pa-tient the time and trouble, what’s the realvalue of that?” Handler asked.

Providing patients with a time-savingconvenience may be a “soft benefit,” he said,but that doesn’t necessarily translate to sav-ings for the patient, or the hospital.

Walsh said that online visits appeared tobe a less-costly way for doctors to delivercare in theory, but that there was not goodresearch to validate that hunch.

“We’re piloting it to test that out,” he said.Meanwhile, other systems are slowly

catching up.The University of Michigan Health System is

building an online patient-doctor communi-cation program as part of a massive systemsupdate, said Steven Katz, a professor in thedepartment of health management and poli-cy at UM.

Ted Daniel, chief medical information of-ficer for St. John Health said that a few of itsoffices have “rudimentary” doctor-patientonline consultation systems for prescriptionrefills and similar requests. The Warren-based system is considering an upgrade, butthe lack of reimbursement in Michigan hasput the plans on hold, Daniel said.

A successful Henry Ford and HAP pilotcould change that, he said.

“There’s the potential there. If they showthat there is a cost-effective model or a tollthat improves patient care … that’s a signifi-cant patient satisfaction model.”

Michelle Martinez: (313) 446-1622, [email protected]

GETTY IMAGES


Editor:Now that the Super Bowl is over,

I have this question: What hap-pens now that the party’s over?Will the energy created by the Su-per Bowl continue, or will we fallback into the same malaise? WillDetroit be transformed for its resi-dents or go back to business asusual? Why do we need events likethe Super Bowl and the All-Stargame to clean up downtown? Themessage that’s sent is this was allfor the visitors and that “familiari-ty breeds contempt.”

Thomas Wilson Jr.Detroit

Detroit glows proudlyEditor:

From my little apartment win-dow facing the Detroit River anddowntown Detroit and only a blockfrom Crain’s Detroit Business of-fices, I beheld a breathtaking sight.

From my window at night, nev-er have I seen my native-bornhometown look so gloriously col-orful and vibrantly exciting! It ri-valed New York City.

The Super Bowl is the catalystthat is putting Detroit on the worldmap big time. It is finally on itsway to the top after a long andhard haul. Wonderful.

I gratefully thank the Ford fami-ly, Roger Penske, Michael Ilitch,our most honorable mayor andCrain’s Detroit Business for help-ing bring it all to fruition. All ofour merchants and volunteers alsodid a fabulous contribution. I ambursting with joy and pride for allof them.

Andrew AnthosDetroit

Detroit needs slow,steady progressEditor:

The Super Bowl is over and notonly can we all get around down-town again but there is so muchmore to write about. Ideas arecoming out of my ears in droves.

My spin on the Super Bowlagrees with what your publicationsaid in the Feb. 6 Opinion, “Detroitneeds a BID to keep momentum”:that it’s a tremendous short-termboost for the city but that we mustmake it last. The city’s financialstatus is difficult and precarious —much like a patient brought in theER whose heart has stopped andneeds a shock to come back to life.

I sincerely hope that the SuperBowl serves as an “economic defib-rillator” to jump start the city’smoribund economic heart. Thecity really needs incremental, con-tinuing economic progress. Big-time positive jolts are certainlygood, but steady growth is a lot

OPINION

School proposaldoesn’t fix problem

ov. Jennifer Granholm is proposing a $200-per-pupil in-crease in K-12 funding for the fiscal 2007 year.

And the K-16 Coalition for Michigan’s Future plansto present signatures this week to lock in inflationary increas-es in state funding for all levels of public education: K-12, com-munity colleges and universities.

We can’t support either proposal because they don’t ad-dress the skyrocketing health care and pension costs that aredevouring the budgets of public school districts throughoutthe state.

The Michigan Education Association, the powerful teach-ers’ union, appears to be in the driver’s seat on both proposals.The MEA would like to sell this as just a simple campaign “forthe kids,” but we see it as self-serving for its own members.

Early in 2005, Tom Watkins was fired as superintendent ofK-12 public education because he pointed out that nearly two-thirds of every new dollar coming to K-12 schools is consumedby health care and pension costs. He called for a restructuringof education, including possible district mergers, collabora-tive programs and other cost-saving measures, in addition torevising retirement guarantees.

No extra money should go to any school district that hasnot tackled these issues. Auto companies have curtailed re-tiree benefits and defined benefit pension plans; it’s time for K-12 to do likewise.

Doing Lansing’s jobBallot initiatives earmarked for November’s general elec-

tion are growing by the week, many of them touting issues thatare better served by legislation than by popular vote.

The problem is the Legislature and governor can’t agree onmuch of anything, especially in a highly contentious guberna-torial election year.

That’s why L. Brooks Patterson is wading in to try and forceaction on business-tax reform. Patterson wants to raise $800,000for a ballot campaign to eliminate the single-business tax in 2007— two years earlier than state law already mandates.

If successful, Patterson’s drive would force the Legislatureand governor to agree on a replacement for what long has beenconsidered a job-killing payroll tax. At press time last week,Patterson had about $400,000 in cash and pledges and was ex-pected to extend his self-imposed deadline to reach his $800,000goal. (See story, Page 6.)

Replacing the SBT should have been Job One for the gover-nor and Legislature three years ago. Politics got in the way.

Patterson deserves credit for forcing the issue and gettingthe two branches of state government to finally act.

Why do we need an event?LETTERS

OPINION

LETTERS


The Super Bowl is over, the me-dia circus has long left town andDetroit was the envy of every bigcity in the country, if only for aweekend.

In the past 10 days, I’ve heard thewords “momentum,” “opportuni-ty” and “hope” bandied about to de-scribe Detroit’s current position inrespect to economic development.

Our community leaders are talk-ing about what our regional agendashould encompass. It is not surpris-ing that most of them seem to agreeon what needs to happen next.

At the same time, I’ve gotten a

sense that we’re waitingbreathlessly for the nextsuper announcement,the next national eventto come calling to bringuntold riches to the“New Detroit.”

But if you hadn’theard already, the next“big thing” to hit Detroithas actually already hap-pened. It’s the $250 mil-lion being invested in the Detroitriverfront project through the col-laborative efforts of the DetroitRiverfront Conservancy, General

Motors Corp., the city ofDetroit, the KresgeFoundation and manysmaller contributors.

A respectable-sized in-vestment on its own,these dollars are be-lieved to be a catalyst foran estimated $1 billionin additional private-sector investments in aconcentrated area.

The significance of this develop-ment, which includes hundreds ofhousing units, and Detroit’s ascentto the top of the housing-start list

in the region in 2005, should not belost on national retailers. Thesecompanies make plans and invest-ments based on housing densityand average household income.

Early dividends are being paid.Last week, Detroit businessmanand auto supplier Dave Bing andformer Pittsburgh Steeler JeromeBettis announced projects worth acombined $66 million. The projects,Chene East and Chene West, will bebuilt on the sites of the old cementsilos. The projects include 172 town-houses, retail and restaurant spaceeast of the Renaissance Center.

This is in addition to the mixed-use development Bettis and hispartner Charles Betters an-nounced on the old Uniroyal sitenear Belle Isle.

These announcements representthe first of what will hopefully be aseries of similar investments madeby both local and out-of-state devel-opers and retail chains.

They’ll add tax revenue to citycoffers while increasing propertyvalues north of Jefferson Avenue.Perhaps riverfront success will spurdevelopers to give other promisingareas of the city a second look.

Crain’s Detroit Businesswelcomes letters to the editor.All letters will be considered forpublication, provided they aresigned and do not defameindividuals or organizations.Write: Editor, Crain’s DetroitBusiness, 1155 Gratiot Ave.,Detroit, MI 48207-2997.E-mail: [email protected] boards: Share yourviews in our online community.forums.crainsdetroit.com.

See Letters, Page 9

G

CHRISTOPHER CRAIN:CHRISTOPHER CRAIN: ‘Next big thing’ is already here


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Petition drive foreshadows school-funding fightLANSING — Backers of

a proposal to guaranteeannual funding increasesfor K-12 schools, commu-nity colleges and universi-ties this week plan to filesignatures to put the planon the ballot — fueling animpending fight overMichigan school funding.

On one side is the K-16Coalition for Michigan’s Fu-ture, which includes edu-cational interests such as theMichigan Education Association, AFTMichigan, the Michigan CommunityCollege Association and the Presi-dents Council, State Universities ofMichigan.

The coalition has about 300,000signatures to put on the ballot aproposal that would provide annu-al funding increases equal to therate of inflation. The plan wouldalso require the state to reduce thegap between low- and high-spend-ing K-12 districts, assume some ofthe cost of funding school pen-sions, and provide some fundingprotection for districts with de-clining enrollments.

“What we’re really looking for isstability in funding over the longterm,” said Tom White, chair of thecoalition and executive director ofMichigan School Business Officials.

But ready to do battle is anothercoalition, led by the Michigan Cham-ber of Commerce. The Coalition toStop the K-16 Spending Mandate in-cludes business, health care asso-ciations and government groupslike the Michigan Municipal Leagueand Michigan Association ofCounties.

A key concern of the opponentsis that the guaranteed funding in-creases would be at the expense ofother state-funded programs andservices, and would also pose a“cost to taxpayer wallets,” saidTricia Kinley, the Michigan cham-ber’s director of tax policy and eco-nomic development.

“There’s only two ways to payfor this proposal,” she said. “It iseither going to come from cuts tostate programs and critical ser-vices, and/or tax increases on in-dividuals, working families andjob providers.”

The group also objects to puttingfunding decisions outside the dis-cretion of the Legislature and ad-ministration. “We absolutely sup-port adequate funding foreducation, and we think educationis critical to the state’s economicsuccess,” Kinley said. “It’s not themessenger that we’re opposed to,it’s the message.”

The House Fiscal Agency esti-mates that total cost of the K-16proposal would be some $906 mil-lion above current-year spending,and about $564 million above Gov.

Jennifer Granholm’s pro-posed fiscal 2007 budget.

The opposing coalitionsays that the proposalwould provide fundingwith no ties to results, stu-dent achievement, gradu-ation rates or other educa-tion-quality measures.

But White said schoolsface heavy scrutiny, byboth the public and gov-ernment, in academic ex-

cellence and performance. Studenttest scores are one example, hesaid.

“It’s true that we don’t have an

accountability aspect of this pro-posal, but the state Legislature andthe federal government have spentthe last decade giving us new mea-sures of accountability, vis-à-vistest scores. I think we’re a veryhighly regulated industry at thispoint, and very highly scrutinized,by the public and the Legislature.Schools are out there workinghard to change things, constant-ly,” White said.

He said the additional fundingwould be a cost-of-living increasethat would, among other things,help schools deal with increasingexpenses, such as health care ben-efits and utilities. The funding

would also help pay for programand instructional costs associatedwith higher standards for highschool curricula, he said.

Granholm press secretary LizBoyd said the governor is “verysupportive of funding education”and will work with lawmakers, butGranholm does not support the K-16 proposal.

“You have a proposal with noway to fund it,” Boyd said. “Itwould prohibit the state from anyflexibility in tough economictimes, and you’d have to make dif-ficult choices.”

But Mike Boulus, Presidents

Council executive director, saidMichigan needs to reinvest inhigher education. He saidGranholm’s proposed 2 percent in-crease in higher-education fund-ing in fiscal 2007 is a step in theright direction, but said higher-edspending nationally is growing by6 percent in 2006.

With the ballot proposal, hesaid, “hopefully, we’ll force the de-bate lawmakers should be havingabout our budget.”

Amy Lane: (517) 371-5355,[email protected]

CAPITOL BRIEFINGSAmy Lane



Urban strategist hired for Detroit push

Advertising veterans form agencyBY TOM HENDERSONCRAIN’S DETROIT BUSINESS

Gary Topolewski, whose most fa-mous Jeep television ad didn’t showa Jeep, is back on the local ad scene.

Topolewski announced last weekthat he has joined forces with twoad-agency veterans to form Evil Ge-

nius L.L.C., an ad agency and mar-keting and consulting firm.

Last November, Topolewski re-signed as chief creative officer ofOmnicom Group’s BBDO Detroit inTroy, saying at the time: “I haven’thad a vacation in years. Rightnow, I’m just going to chill out.”

The vacation never happened.Soon after, he met with DouglasVan Andel and Matt O’Mara, whowanted him to join a new firm.They formed it in November butdelayed an announcement.

“It was like you get your housein order before you invite guestsover,” said O’Mara, the firm’spresident. Evil Genius is tem-porarily based in St. Clair Shoreswhile Topolewski and O’Mara lookfor space in Detroit. It employs 11and has offices and production fa-cilities in Venice, Calif., andFranklin, Tenn.

Topolewski, whose title at the

new firm is “creativeguru,” is best knownfor a 1993 BBDO ad forJeep, which showedsomething tunnelingwith ease under adeep layer of snow.

The ad won the 1993Grand Prix award inCannes, consideredthe top award in theworld of advertising,and in December washonored as the 10thbest TV, radio or printad in the 100-year his-

tory of the Detroit Adcraft Club in aspecial shown on WXYZ-Channel 7.

He also coined “Hockeytown”for the Red Wings.

O’Mara said Evil Genius willbridge the gap between small agen-cies and large agencies. “Typical-ly, small agencies can’t afford toptalent. Big agencies have the tal-ent, but they handcuff them. Wehave the best of both worlds. We’rea creative think tank but we canbring in partners from the outsidewhen we need them.”

O’Mara said Evil Genius al-ready has a contract through a LosAngeles agency to work on a pro-

ject with the city of New Orleans,filmed a 30-minute infomercial fora builder in Colorado and will beproviding creative services for aloft development in Ferndale, in-cluding logo and Web site design.

O’Mara spent 13 years at Saatchi& Saatchi Worldwide, including astint in the former Detroit office,where he worked on the Jeep/Eagleaccount. In 2002, he was named toSaatchi’s worldwide board, thenquit in 2004 to start his own firm,O’Mara & Associates Inc., which hesaid had billings of more than $10million its first year. With the addi-tion of Van Andel and Topolewski,it morphed into Evil Genius.

Van Andel, who will run theVenice office and has the title of“chief creative,” was creative di-rector at Saatchi’s Los Angeles of-fice in 2003 when he oversaw thesuccessful launch of the ToyotaPrius campaign.

Why the name Evil Genius? Ac-cording to the company’s Web site,www.thisisevilgenius.com, it’s be-cause the company is so good, itscompetitors will think it has an un-fair advantage — so unfair it’s evil.

Tom Henderson: (313) 446-0337,[email protected]

BY ROBERT ANKENYCRAIN’S DETROIT BUSINESS

Community and business leaders have hired a na-tionally known urban land-use strategist to help inwhat local leaders have dubbed a “clean, safe andbeautiful” campaign for downtown Detroit.

Christopher Leinberger is a visiting fellow at theBrookings Institution in Washington, and a facultymember for a University of Michigan graduate real-es-tate development degree program.

He led the public-private Historic District Improve-ment Co. in Albuquerque, N.M., for a decade beforemoving last year to Brookings and UM.

Leinberger’s work as a planning consultant will in-clude coordinating discussion and planning sessionsto include such groups as downtown businesses, prop-erty owners, and city officials, said Matt Cullen, gen-eral manager for economic development and enter-prise services at General Motors Corp. and a boardmember of the Downtown Detroit Partnership.

A small group of these leaders met Feb. 8, and fol-low-up meetings are to be held to further develop con-cepts and proposals. No date has been set for the nextmeeting.

The Kresge Foundation has hired both Leinbergerand consultant Mark Neithercut, former program

vice president for the Community Foundation of South-east Michigan, to guide the planning process.

Leinberger will be the keynote speaker March 16 atthe Downtown Detroit Partnership’s annual meetingin the Detroit Marriott at the Renaissance Center. His top-ic: “The National Trend of Downtown Revitalization:How Detroit Can Catch Up, Move Ahead, and Set aNew American Standard.”

Proposals discussed so far include creating a busi-ness improvement district, in which properties aretaxed to raise money for sidewalk and street cleaning,landscaping, graffiti removal and even roving ambas-sadors, such as those who greeted Super Bowl visitors.

Also under discussion is creating an endowmentthat would provide income for beautification, preser-vation and cleanup that city business and govern-ment leaders want downtown.

George Jackson Jr., president of the Detroit Econom-ic Growth Corp., said he supports the concept of endow-ments and an improvement district to preserve andexpand on progress that Detroit made while prepar-ing for the Super Bowl.

But Jackson said that decision-making about down-town improvements should include all of those affect-ed, including both large- and small-business owners,property owners and especially city leaders.

Robert Ankeny: (313) 446-0404, [email protected]

Matt O’Mara, Douglas Van Andel and GaryTopolewski have formed ad agency Evil Genius L.L.C.


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EARNINGSEARNINGSAastrom Biosciences Inc. Nasdaq: ASTM

2nd Quarter Dec. 31 2005 2004Revenue ..........................$117,000 $374,000 Net income ................($4,142,000) ($2,453,000)Earnings per share: ..............($.04) ($.03)

6 months:Revenue ..........................$297,000 $561,000 Net income ................($7,630,000) ($5,102,000)Earnings per share: ..............($.07) ($.06)

Arcadia Resources Inc. OTC BB: ACDI3th Quarter Dec. 31 2005 2004

Revenue ....................$33,298,557 $28,090,534 Net loss ........................($813,283) ($718,232)loss per share: ......................($.01) ($.01)

9 months:†Revenue ..................$96,702,889 $67,223,593 †Net loss ..................($3,543,073) ($995,190)†Earnings per share: ............($.04) ($.01)

†- Arcadia Resources was created on May 10,2004, through a reverse merger of RKDA Inc. Figureslisted for the nine months ending Dec. 31, 2004,actually cover May 10-Dec. 31.

DTE Energy Co. NYSE: DTE4th Quarter Dec. 31 2005 2004

Revenue ....................$2,710,000,000 $1,910,000,000 Net income ..................$382,000,000 $113,000,000Earnings per share: ................$2.14 $.65

12 monthsRevenue ....................$9,022,000,000 $7,071,000,000Net income ..................$537,000,000 $431,000,000Earnings per share: ................$3.05 $2.49

Energy Conversion Devices Nasdaq: ENER2nd Quarter Dec. 31 2005 2004

Revenue ....................$24,285,000 $95,674,000 †Net income ..............($5,735,000) $67,137,000Earnings per share: ..............($.19) $2.44

6 months:Revenue ....................$47,532,000 $117,766,000 †Net income ............($12,201,000) $68,485,000Earnings per share: ..............($.42) $2.61

†- ECD received a $79.5 million one-time non-cash license fee in 2004 related to one of its jointventures, Cobasys L.L.C.

Masco Corp. NYSE: MAS4th Quarter Dec. 31 2005 2004

Revenue ....................$3,146,000,000 $2,975,000,000 Net income ..................$173,000,000 $105,000,000Earnings per share: ..................$.41 $.23

12 months:Revenue ..................$12,642,000,000$11,850,000,000 Net income ..............$940,000,000 $893,000,000Earnings per share: ................$2.19 $1.96

Meadowbrook Insurance Group NYSE: MIG4th Quarter Dec. 31 2005 2004

Revenue ....................$76,138,000 $70,897,000 Net income ..................$4,925,000 $2,757,000Earnings per share: ..................$.17 $.09

12 months:Revenue ..................$304,017,000 $270,278,000 Net income ................$17,910,000 $14,061,000Earnings per share: ..................$.60 $.48

Michigan Heritage Bancorp OTC BB: MHBC4th Quarter Dec. 31 2005 2004

Revenue........................$2,894,000 $3,084,000

Net income ......................$338,000 ($132,000)Earnings per share: ..................$.22 ($.09)

12 months:Revenue ....................$12,797,000 $11,323,000 Net income ..................$1,071,000 $679,000Earnings per share: ..................$.69 $.44

PSB Group Inc. OTC BB: PSBG4th Quarter Dec. 31 2005 2004

Revenue........................$8,976,000 $7,637,000 Net income ......................$790,000 $1,185,000Earnings per share: ..................$.26 $.39

12 months:Revenue ....................$33,807,000 $28,459,000 Net income ..................$4,005,000 $4,218,000Earnings per share: ................$1.32 $1.39

Ramco-Gershenson Properties NYSE: RPT4th Quarter Dec. 31 2005 2004

Revenue ....................$35,356,000 $34,565,000 †Funds from operations..$11,823,000 $12,249,000Funds from operations/share: ..$.60 $.61

12 months:Revenue ..................$141,623,000 $122,741,000 †Funds from operations..$47,896,000 $41,379,000Funds from operations/share: $2.42 $2.07

†- Funds from operations is an accounting stan-dard used by real estate investment trusts that re-flects net income plus adjustments such as depreci-ation and amortization.

Syntel Inc. Nasdaq: SYNT4th Quarter Dec. 31 2005 2004

Revenue ....................$62,279,000 $49,036,000 Net income......................($98,000) $10,354,000Earnings per share: ..................$.00 $.26

12 months:Revenue ..................$226,189,000 $186,573,000 Net income ................$30,321,000 $40,974,000Earnings per share: ..................$.75 $1.01

Taubman Centers Inc. NYSE: TCO4th Quarter Dec. 31 2005 2004

Revenue ..................$132,152,000 $120,283,000 Funds from operations $31,842,000 $27,744,000FFO per share: ........................$.62 $.56

12 months:Revenue ..................$473,438,000 $431,453,000 Net income ..............$110,578,000 $103,070,000FFO per share: ......................$2.17 $2.07

UnitedAuto Group Inc. NYSE: UAG4th Quarter Dec. 31 2005 2004

Revenue ....................$2,457,237,000 $2,286,475,000 Net income ....................$30,121,000 $26,115,000Earnings per share: ..................$.64 $.56

12 months:Revenue ..................$10,190,284,000 $8,948,498,000 Net income ..................$118,973,000 $111,687,000Earnings per share: ................$2.53 $2.45

Valassis Communications Inc. NYSE: VCI4th Quarter Dec. 31 2005 2004

Revenue ..................$309,247,000 $302,298,000 Net income ................$20,326,000 $26,849,000Earnings per share: ..................$.42 $.52

12 months:Revenue ....................$1,131,043,000 $1,044,069,000 Net income ....................$95,396,000 $100,747,000Earnings per share: ................$1.90 $1.93

6 state funds sue over AOL Time Warner lossesSix institutional investment

funds in the state of Michigan areamong more than 100 seeking a to-tal of about $3.3 billion in losses re-lated to the merger between TimeWarner and America Online Inc., nowcalled AOL Time Warner.

In addition to AOL Time Warn-er, several AOL Time Warner ex-ecutives, accountants and invest-ment banks are named asdefendants. The merger was firstannounced in 2000.

The Michigan-based funds arethe Wayne County Employees’ Retire-ment Systems, the Municipal Employ-ees Retirement System of Michigan,the Clinton Township Police and FireRetirement System, the Roseville Em-ployees Retirement System, the

Southfield Fire and Police RetirementSystem and the Monroe County Em-ployees Retirement System.

The suits were filed separatelybecause in each case the plaintiffsopted out of a tentative $2.4 billionsettlement related to a class-actionsuit.

The plaintiffs seek unspecifieddamages that allegedly resultedfrom being misled by representa-tives from AOL Time. The compa-ny reported a loss of $100 billion in2002.

San Diego-based Lerach, Cough-lin, Stoia, Geller, Rudman & RobbinsL.L.P. is the lead attorney on thesuits.

AOL has said that it plans to de-fend the suits vigorously.

— Andrew Dietderich


BY ROBERT ANKENYCRAIN’S DETROIT BUSINESS

Demolition of the former Statler Hilton Hotel has lefta huge vacant lot bordering Grand Circus Park thecity of Detroit hopes to mar-ket for redevelopment.

But in the midst of theblock stands a forlorn, five-story building — now theonly structure standing onthe first block of Bagley Av-enue south of the park.

The five-story office build-ing at 139 Bagley Ave. has be-come an object of curiosityfor those who get an up-closelook when riding the PeopleMover.

The building, says ownerAnthony Pieroni, presidentof Bagley Acquisitions Corp., ispoised for a comeback.

The 90-year-old buildingonce was headquarters forDearborn-based AAA Michigan. AAA ended its 99-yearlease earlier this month, said Nancy Cain, public-rela-tions manager. AAA leased the building in 1916, theyear it was built, and the year that AAA was formed.But it has been mostly empty for the past decade, shesaid, and used only for storage for many years beforethat.

The structure is a “great little building,” Pieronisaid. “It’s got a two-story atrium lobby.” But it took abeating while the 18-story vacant hotel loomed over it,

and during the Statler demolition, he said.“With the Statler looking like it was falling down,

no one wanted to sublet,” Pieroni said. And tres-passers who dropped in from the unguarded hotelvandalized the interior.

The city of Detroit never ac-tually made Pieroni an offerto buy the building, said De-troit Economic Growth Corp.President George Jackson Jr.“We would have liked to clearthe entire block, but we un-derstood Tony was not inter-ested in selling,” Jacksonsaid.

The DEGC plans to marketthe Statler site to developers,and Pieroni, whose companyalso owns the Michigan Build-ing on Bagley near Grand Riv-er Avenue, said he’s ready toget 139 Bagley back in shape.“I’ve been here 25 years andthings are finally starting tohappen downtown,” he said.

But renovation and redevelopment plans await res-olution of a damages lawsuit Pieroni filed last Augustin Wayne Circuit Court against Homrich Wrecking Inc., thecity of Detroit and AAA.

That lawsuit, scheduled for trial in October, allegesthat steel beams from the hotel were allowed to crashinto the east parapet wall of the building and a fire inthere on May 5, 2005, was caused by Homrich’s negli-gence.

Robert Ankeny: (313) 446-0404, [email protected]

Page 28 CRAIN’S DETROIT BUSINESS February 20, 2006

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Building’s owner optimistic nowthat neighbors are torn down

viser, CB Richard Ellis, is workingon finding sublease tenants, andrecently was named the listingbroker for the building, Watchows-ki said.

Jim Fisher, director, corporatecommunications for Visteon, saidbecause Visteon is a leaner compa-ny than when it initially signedthe lease, it intends to sublease atleast some of the One Kennedyspace. The company recentlytransferred 23 plants, warehousesand tech centers to a Ford MotorCo.-managed business entity.

Fisher said Van Buren Town-

BY ANJALI FLUKERCRAIN’S DETROIT BUSINESS

Wind Point Partners, a South-field private-equity firm, hasmade an offer to buy GrandRapids-based Knape & Vogt Manu-facturing Co., which designs andmakes kitchen and bath storageunits and office accessories.

According to a Feb. 10 filingwith the U.S. Securities and Ex-change Commission, Wind Pointwill pay $19 a share and Knape &Vogt (Nasdaq: KNAP) will be-come a wholly owned subsidiary.

Knape & Vogt posted revenueof $157.4 million for the year end-ing July 3.

Knape & Vogt last October re-tained Detroit-based investment-banking firm W.Y. Campbell & Co.to evaluate alternatives, includ-ing a possible sale. The sale pricerepresents a 47 percent premiumto the average share price overthe 30 days preceding the Octo-ber announcement. Knape &Vogt shares closed at $16.07 Feb.9 and then closed at $18.27 follow-ing the Feb. 10 announcement.

Wind Point is working to se-cure financing to close the deal,Cummings said. Knape & Vogt’sboard of directors has approvedthe deal and intends to recom-mend approval to shareholders.

Wind Point makes offer onKnape & Vogt Manufacturing

LAURA BOMMARITO

The one-time AAA Michigan headquarters in Detroit.

Visteon: May sublet■ From Page 1

ship-based Visteon hadn’t deter-mined exactly how much spacewould be subleased downtown.

“We’re going to market thespace and see what kind of re-sponse there is,” he said.

Mark Collins, first vice presi-dent of CB Richard Ellis in South-field, said the incentive packagesavailable at the building alongwith its design and amenities aredraws to potential tenants.

“We have some interest,” hesaid. “It’s a brand-new class Abuilding downtown. It’s in theheart of the city.”

One Kennedy Square is in a Re-naissance Zone. Property ownersand businesses located within thezones are eligible for multiple taxwaivers, such as the Michigan sin-gle-business tax, personal-incometax, Detroit property taxes and cityincome tax.

Watchowski said he’s pushingfor the building to have a nice,white-tablecloth restaurant on thefirst floor. The broker on the retailspace at One Kennedy Square isDetroit-based Bieri Co. The $54 mil-lion building includes 250,000square feet on 10 floors. The othermajor signed tenant so far is ac-counting firm Ernst & Young L.L.P.,set to move from the One DetroitCenter building and the global au-tomotive center in Troy.

Jennette Smith: (313) 446-0414, [email protected].

Former publisher to host event on Michigan’s future

Detroit Newspapers fires 25 At least 25 employees were

fired last week from the DetroitNewspapers Partnership L.P., aspokesperson for the companysaid.

Meghan O’Meara, director ofstrategic marketing and com-munications for the DNP con-firmed Friday that 25 peoplewere involuntarily laid off. Oth-ers took early retirement, shesaid, but she did not want to dis-close those numbers.

The Detroit Newspapers Part-nership manages the businessoperations of The Detroit Newsand Detroit Free Press.

O’Meara said the layoffs werethe result of identifying and re-ducing expenses.

Lou Mleczko, president of theNewspaper Guild of Detroit AFL-CIO,said that the International Brother-hood of Teamsters Local 372 lost 39full- or part-timers. The employ-ees included district managers,truck drivers and truck loaders,he said. It was not clear if the 25people O’Meara said were firedwere part of the 39 Teamsters.

Mleczko said the unions did-n’t believe the layoffs were nec-essary.

The recent layoffs were in ad-dition to 48 pressroom andnewsprint union workers whosepositions were eliminated in Oc-tober. Of the 48, Mleczko said, 25were laid off and 23 took early re-tirement. Those workers wererepresented by the Graphic Com-munications International Local 13-N, Mleczko said.

— Andrew Dietderich

Detroit area power brokershave been invited by Phil Power,former newspaper publisher andfounder of the newly creatednonprofit Center for Michigan, to adaylong brainstorming sessioncalled “Where Do We Go FromHere? An Agenda-Setting Confer-ence for the Economic IssuesFacing Michigan.”

Michigan is in the midst of “se-rious structural economic trou-

ble,” Power says in invitations tothe event.

The invitation-only eventMarch 14 is co-sponsored by theSchool of Public Policy and theCenter for Local, State and UrbanPolicy at the University of Michiganand will be in Ann Arbor.

More information is at clo-sup.umich.edu/mi-econ-conference.html.

— Michelle Martinez



www.crainsdetroit.comEDITOR-IN-CHIEF Keith E. CrainPUBLISHER Mary Kramer, (313) 446-0399 [email protected] PUBLISHER Christopher Crain,(313) 446-1645 or [email protected] EDITOR Cindy Goodaker, (313) 446-0460 or [email protected] EDITOR Jeff Karoub, (313) 446-0402 or [email protected] GENERAL MANAGER Bob Allen, (313)446-0403 or [email protected] MANAGING EDITOR Michael Lee,(313) 446-0416 or [email protected] SECTIONS EDITOR Shawn Selby, (313)446-1654 or [email protected] EDITOR Nancy Clark, (313) 446-1608 or [email protected] EDITOR Vic Doucette, (313) 446-0410 or [email protected] EDITOR Anne Marks, (313) 446-0418 [email protected] EDITOR Dan Eizans, (313) 446-0473 [email protected] SUPPORT Anita Duncan, (313) 446-0329; Joanne Scharich, (313) 446-0419NEWSROOM (313) 446-0329, FAX (313) 446-1687 TIP LINE (313) 446-6766

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EMU: Chief looks to create university’s own revenue■ From Page 1

Collision: Fewer repairs put a crimp in profits■ From Page 1

While widespread closures ofbody shops haven’t begun yet,

Auger expectsthat “there arebody shops thatwill be goingout” of businessthis year.

The shrink-ing repair workis due to a num-ber of factors,ranging from adecline in traffic

accidents to a decrease in insur-ance claims, pressure from insur-ers on collision shops to keep re-pair costs down and an increase inthe average insurance deductible.

On Jan. 30, State Farm an-nounced plans to lower its overallauto insurance rate level by 4.1percent in Michigan, citing the de-cline in claims as the primary rea-son for the rate drop. State FarmMutual Automobile Insurance Co. saidit had 110,500 claims filed in 2005, a4.3 percent decline from 2004.

Meanwhile, AAA Michigan saidits accident claims have droppedfrom 312,592 in 2000 to 242,355 in2005 — a 23 percent decline.

Ray Fisher, vice president of theAutomotive Service Association ofMichigan, said Michigan drivershave been increasing their de-ductibles in recent years.

Just five years ago, Fisher saidthe average deductible in Michi-gan was about $250. Now, Fishersaid, the average is about $500 andmany have increased it to $1,000.

State Farm’s most common de-ductible in Michigan is $500 for col-lision and full comprehensive cov-erage, said Angie Rinock, publicaffairs specialist for State Farm.

Now, Auger said, “A lot of peo-ple cannot afford to pay out of

pocket to get these minor acci-dents repaired.”

To survive, many shops, includ-ing Auger’s, are throwing in ex-tras such as oil changes or align-ments as a courtesy.

“Every single shop I know hasbeen cutting costs,” Auger said.

Even some of the larger playersare feeling the pain.

Pontiac-based Autometric Colli-sion Inc. saw sales fall to $22 mil-lion in 2005, down 8 percent from$24 million in 2004, said PresidentLarry Smith.

In 2004 and 2005, Smith investedmore than $300,000 on the equip-ment needed to become certified toconduct structural repairs on alu-minum-bodied Mercedes-Benzmodels and Jaguar’s new alu-minum-framed XJ8 and XJR cars.That makes Smith the only non-auto dealer in Michigan authorizedto fix Jaguar’s aluminum frames.

But even for Smith that kind ofcapital investment is risky.

“I wouldn’t recommend thatsomebody makes a business deci-sion to do this because they will beupside down for a long time,”Smith said. “Insurance companiesdon’t recognize that ‘Hey, youbought more equipment, so we willpay more.’ They don’t do that.”

Smith, who opened Autometricwith $2,000 in 1975, said the indus-try requires far more capital nowthan ever before.

“To open up a properly equippedcollision center is easily in the sev-en figures,” Smith said. “Backthen, any guy with a hammer anda can of Bondo and a can of paintcould open a body shop.”

John Gagliano, President andCEO of Collex Collision Experts Inc.in Clinton Township, said the in-dustry is overdue for an overhaul.

Gagliano, who opened his firstbody shop in 1975, opened his 10thCollex location last year.

“The collision repair industryhas been an inefficient industryfor a long time,” Gagliano said.“And the push is coming from in-surance companies wanting us todo our jobs better.”

Gagliano said he is seeing an in-crease in business from peoplewho are paying out of pocket,rather than filing a claim.

Last year Gagliano said 29 per-cent of his revenue came from cus-tomers who paid out of pocket, upfrom 17 percent in 2003.

Gagliano said Collex repairedabout 20,000 vehicles last year andsaid the average collision claim isless than the statewide average of$2,000.

Fisher said it is becoming morecommon for automobiles to be to-taled by insurers — which allowsdrivers to replace their cars ratherthan fixing them — in part becauseof the cost of repairing air bags.

Typically, Fisher said, it costsbetween $3,500 to $4,000 to replacetwo air bags. When that expense isadded to the rest of the needed re-pairs the total repair bill often ex-ceeds 75 percent of the car’s totalvalue, allowing insurers to totalthe car under state law.

Kevin Byrnes, general managerof Fischer Body Refinishing, which ispart of Troy-based auto dealer Sub-urban Collection, said that as theamount of work has declined, in-surance companies have increasedpressure on shops to lower repaircharges, especially those that arepart of insurance companies’ pre-ferred body shop networks.

“The insurance companies havestarted to really press for (price)concessions,” Byrnes said. “There

are definitely more collision shopsthan there is re-pair work, andthey have usdown on theground.”

Rinock saidState Farm sur-veys collisionshops to find outwhat averageprices are fordifferent kinds

of repairs and bases its reimburse-ments on those averages. In addi-tion, Rinock said, State Farm al-lows collision shops to explainwhy the average rate might not ap-ply to a specific repair.

Byrnes said Suburban Collec-tion’s group of five body shops inmetro Detroit is in a better posi-tion than most auto dealership col-lision shops because of the volumeof repairs it does. This year,Byrnes projects that FischerBody’s two locations and Subur-ban Collection’s three collisionshops will reach about $25 millionin revenue. But, Byrnes said,many dealers with collision shopswill struggle as pressure from in-surers increases.

Byrnes compares the collisionrepair industry to the health in-surance industry. Like health insurers, auto insurers have estab-lished relationships with accred-ited repair shops and also reim-burse body shops based on averagestandardized repair costs.

“You have guys out there hang-ing on by a thread,” Byrnes said,“and now that there are these con-cessions, there could be a weeding-out going on.”

Brent Snavely: (313) 446-0405,[email protected]

Based on Gov. Jennifer Granholm’s recentbudget recommendations, EMU is in line for arevenue increase of just under 2 percent for thenext academic year, he said.

“But we’re in a labor-intensive business thatrequires significant investment in people,” Fal-lon said. “We know we can’t just increase ourtuition by double digits each year.”

Fallon envisions a nonprofit subsidiary, akinto the Eastern Michigan University Foundation, todevelop revenue-producing enterprises.

The university would come up with businessideas, help fund them, and provide them withmanagement expertise from its faculty andstaff. The management consulting could bethrough contracts that also would bring in rev-enue, “but my guess is in the very early stageswe would make these things available at no orlow cost to the new ventures,” Fallon said.

When the new enterprises become self-suffi-cient, they would provide a new revenuestream for the university.

“We would likely embrace concepts thathave access to other conventional sources offunding,” Fallon said.

One such business could be a retirement vil-lage for faculty and staff looking to remainclose to the university, he said.

The initiative would have two groups guid-ing it: an innovation council composed of facul-ty and staff, and a council of alumni who wouldadvise the new ventures, Fallon said.

He hopes to pay for the plan initially with $2million in private support, solicited separatelyfrom any capital-campaign fundraising.

“If given the opportunity to have a conversa-tion with a strong donor, I would much ratherhave their donation benefit the university’sstudents directly, rather than encouraging aninvestment in something like this that’s goingto take time,” he said. The president and EMU’sboard of directors have had “casual conversa-tions” about the revenue-creating plan, andthey are still at that stage, he said. Neither isrushing forward.

“This has got to be good, and done well,” Fal-lon said.

While publicly funded research universitieslike the University of Michigan invest seed moneyin startup companies aimed at commercializ-

ing research taking placethere, there are no otherstate-funded universities inMichigan creating new com-panies strictly for the pur-pose of attaining new rev-enue, said Michael Boulus,executive director of thePresidents Council, State Uni-versities of Michigan.

“The board is going tohave to look at the role of the

university and decide if this fits within(EMU’s) mission,” Boulus said. “But I applaud(Fallon) for coming up with creative ideas; thisis what everyone needs.”

Granholm is recommending revenue in-creases of 1 percent to 2 percent for public uni-versities for the upcoming year. They add up toabout $28 million in new revenue and are a step

in the right direction, but proposed increaseshardly offset the $300 million higher educationhas lost over the last five years, Boulus said.

“We’re very limited in revenue; we’re allscrambling,” he said.

To further increase EMU’s revenue, Fallonsaid he plans to increase the amount of coatingsresearch EMU conducts for the military and tolaunch a comprehensive capital campaign.

The university has yet to identify what pro-jects the campaign will fund, its total goal or atimeframe for the effort, Fallon said, but he ex-pects to have the details worked out “by mid-night” on June 30, the end of EMU’s fiscal year.

“This is something I committed to during myvery first interviews with the Board of Regentsat Eastern,” Fallon said. “I promised we wouldbe fully in capital-campaign mode by the end ofmy first full year on campus.”

Fallon also is reviewing the organization andstaff of every department on campus. He does-n’t have a specific financial target in mind forcutting costs but said he is looking to improveefficiency without compromising quality.

Fallon has eliminated the vice president andassociate vice president positions for universi-ty relations and a related clerical position.

He reassigned several of the services the uni-versity relations office had handled andlaunched a search for a new chief government-relations officer.

Most, if not all, of the organizational reviewsshould be concluded by June 30, Fallon said.

Sherri Begin: (313) 446-1694, [email protected]

Auger

Byrnes

Boulus



“Don’t call us. We’ll call you.”Wright just smiled.Those who worked with Wright at Ford say

they have no doubt she can straighten out themess at Collins & Aikman. “She has onespeed. And that’s full steam ahead,” said oneformer co-worker.

And despite having been on the job just afew days, Wright already has earned a nick-name: “The Blonde Blur.”

She has been known to get up at 3:30 a.m.,work out, and then put in a 16-hour day, work-ing nonstop from dark to dark.

“I didn’t come to Collins & Aikman to be aloser. I came to get them out of Chapter 11, geta viable plan going forward, and I want tolearn,” Wright told Automotive News. “I’venever been in sales. But I am now a salesman.I am learning about restructuring. I am learn-ing a whole new side of the business.”

Wright said her top priority is to repair thedamaged relations between Collins & Aikmanand its customers.

“Mary Ann is a respected, proven and rec-ognized industry leader,” CEO Frank Machersaid in a statement. “She brings a thoroughunderstanding of our customers’ needs interms of product development processes, and

program management.”Hall said that will be essential. “Collins &

Aikman is in the position of having to earn itsbusiness all over again,” he said.

Wright said she had needed time off to con-sider what she wanted to do with her career.She had numerous offers from suppliers, andfrom schools and universities. One reason shechose Collins & Aikman, she said, is that shebelieves she has a shot at running the compa-ny someday.

Collins & Aikman plans to emerge fromChapter 11 by September, either as an inde-pendent business or as part of another compa-ny, company spokesman David Youngmansaid.

Late Friday, Collins & Aikman had extend-ed job offers and was finalizing terms with po-tential hires to lead manufacturing and tool-ing, and plastics and human resources, and tobe the company’s chief technology officer.

From Automotive News

340, in part, by creating new onsite pro-grams at local businesses.

At ESD, she found that membership in-voices were not going out on time becausethere was no system to track them, Goodwinsaid. Some members hadn’t been invoiced orasked to renew their memberships for a cou-ple of years.

The board cut staff toseven from 14, as Trudellcontracted out functionsmany associations typical-ly don’t, including humanresources, accounting andinformation technology.

“The philosophy here(now) is we hire managersand directors and bring incontractors to help withspecific projects on an as-needed basis,” Trudell said.

The concept was a shockto the 111-year-old associa-tion, said Goodwin, 56.“For us to outsource the re-sponsibility for managingthe details, that was a sig-nificant emotional eventbecause engineers are typi-cally into the details.”

Through new executiveand board training fromthe American Society of Asso-ciation Executives, the boardrealized it had been guilty of micromanag-ing, he said. “We trust each other, now, andwe do what we’re each good at.”

ESD’s remaining staff began holding focusgroups with members to find out what theywanted from the association. Members saidoutreach to budding young scientists andengineers was important to them. So thestaff began including in ESD’s newsletter anannual list of all of the state math and sci-ence summer programs for K-12 and distrib-uting it to some area schools.

Staff also developed a competition to chal-lenge middle school students to design a cityof the future and have fun doing it.

Professional development had also be-come increasingly important to members, sothe association set up a young engineers’council to provide networking and social op-portunities for those under 35, an annual ca-reer fair and a bimonthly networking eventfor more experienced members.

Trudell invested more than $50,000 to up-grade the ESD’s software programs, hard-ware and database and improved its

newsletter. A $35,000 grant from the Ford Fund pays for

a resource center on ESD’s Web site to linkorganizations and teachers with expertspeakers on engineering and scientific ca-reers.

Inforum, formerly the Women’s EconomicClub, also has used surveys to establish

what is most important toits members and to fine-tune its programming, CEOand President Terry Bar-clay said.

Timing also is importantin membership growth, shesaid. “The timing is rightfor organizations that focuson professional women. … Ithink the time is right for(ESD), too.”

Inforum’s membershiphas doubled during the pastthree years to nearly 2,200.

During the same periodthat ESD has grown, Dear-born-based Society of Manu-facturing Engineers has seenits membership drop byabout a third to 31,000 mem-bers, said Alex Yovanovich,manager of public relationsand advertising.

He attributes the loss toolder members retiring, a factor the SME be-lieves will contribute to a shortfall of engi-neers by 2010, both locally and nationally.

SME’s membership has stabilized duringthe past nine months, Yovanovich said, inpart because of its efforts to reach out toyoung engineers — much like ESD is doing.

SME holds camps for high school studentsto spur interest in engineering and offersscholarships for college engineering stu-dents.

The association also has started technicalcommunities, each with a unique focus suchas lean manufacturing, to serve as a forumfor educational interchange between SMEmembers and nonmembers, Yovanovichsaid. About 12,000 people, mostly nonmem-bers, take part in those.

“We’re serving more than our member-ship, and that’s how we’ve tried to evolve toaddress declining membership,”Yovanovich said.

Sherri Begin: (313) 446-1694,[email protected]

Road that would include medical offices,an ambulatory surgery center, health-re-lated retail and eventually, a $600 million,300-bed hospital.

Population growth in the area is “morethan sufficient” to support the systems’plans, said Kevin Tompkins, McLarenvice president of marketing. But the sys-tem can’t move forward under currentregulations.

Henry Ford Health System and Warren-based St. John Health broke ground late lastyear on more than $500 million in hospitalprojects in western Oakland County afterdefending special legislative exemptionsagainst five hospital systems all the way tothe Michigan Supreme Court.

The two systems had said that the hospi-tals would not only fill a need in WestBloomfield Township and Novi, but wouldalso help subsidize the systems’ Detroit-based hospitals, where many patients arepoor or uninsured.

A loosening of hospital-bed standardswould make it easier for other hospital sys-tems to compete to build more capacity.

“I think that all of the hospital systemswill appreciate the fact that if there is aneed, they could apply to fill it,” saidRobert Asmussen, vice president of strate-gic planning at St. John.

At least some of that need is expected tobe met with new medical centers.

St. John is building a 200-bed hospital inNovi, and in October broke ground on a$20 million medical center in MacombTownship.

Beaumont last week penned a deal withthe Commerce Township Downtown Develop-ment Authority to buy 35 acres on MapleRoad between M-5 and Welch Road for a$47 million medical center and surgerycenter slated for completion in 2007. Twomore are planned for Macomb Townshipand Independence Township.

The plans, which still require approvalunder separate state regulations, will shifthealth care capacity toward outpatientcare, where its patients have been movingfor the past several years, said Mike Killian, vice president of marketing andpublic affairs at Beaumont.

That’s different than systems buildinghospitals “simply (to move) into new mar-kets,” he said. “And that’s the concern:Hospitals as revenue generators versusserving people that are already coming tous.”

It’s not clear whether all the hand-

wringing is justified.The committee has six months to review

and recommend changes to the regula-tions before sending it on for public com-ment and to the state Legislature. And,historically, changes to hospital bed regu-lations have been very conservative, As-mussen said.

Some say that’s just the way it ought tobe.

“In the last quarter-century therehaven’t been any completely new hospi-tals (except) as the result of consolidationor downsizing of existing capacity,” saidLarry Horwitz, president of the EconomicAlliance for Michigan. “That’s a tribute tothe Certificate of Need Commission.”

Michelle Martinez: (313) 446-1622, [email protected]

Hospitals: Growth debated■ From Page 3

ESD: Exec sweats the details■ From Page 3

Wright: Collins & Aikman exec pushes full steam ahead■ From Page 3

THE WRIGHT FILE■ Name: Mary Ann Wright■ Age: 44.■ Education: B.A., economics and internationalbusiness, University of Michigan; M.B.A.,Wayne State University; M.S., engineering,UM.■ Recent experience at Ford Motor Co.:director of sustainable mobility technologiesand hybrid-vehicle programs, 2004-05; chiefengineer for the Ford Escape Hybrid, 2003-04;chief platform engineer for the Lincoln LS andFord Thunderbird, 2000-03.■ New job: Executive vice president ofcommercial and program management, Collins& Aikman Corp.

HOSPITAL BED STANDARD

ADVISORY COMMITTEE■ Robert Asmussen, vice president ofstrategic planning, St. John Health.■ James Ball, independent consultant.■ Barton Buxton, CEO, Lapeer RegionalMedical Center.■ Wayne Cass, outstate districtrepresentative, International Union ofOperating Engineers Local 547.■ Connie Cronin, vice president of patient-care services and chief nursing officer,Henry Ford Health System.■ Douglas Edema, vice president and COO,St. Joseph Mercy Livingston Hospital.■ James Falahee Jr., senior vice presidentof legal and legislative affairs, BronsonHealthcare Group.■ Gary Kushner, president and CEO,Kushner & Co. Inc.■ Michael LaPenna, principal, The LaPennaGroup, and member of the business groupon health for the Alliance for Health.■ Mark Mailloux, senior health systemplanner, University of Michigan HealthSystem.■ Patrick O’Donovan, director of planning,William Beaumont Hospital.■ Patricia Richards, senior vice presidentand COO, Health Alliance Plan.■ William Rietscha, vice president offacilities, Spectrum Health.■ Dale Steiger, project leader in clinicalprogram development, Blue Cross BlueShield of Michigan.■ Mary Zuckerman, executive vicepresident and chief of business operations,Detroit Medical Center.

C&A MAY MOVE TO SOUTHFIELDCollins & Aikman Corp. says it hasn’tmade a final decision on a possibleheadquarters move, but real estatesources say a move to the TravelersTower in Southfield is in the works.David Youngman, vice president ofcommunications, said the companyhas sought court approval to reject itsleases on its Stephenson Highwayheadquarters in Troy. The companyleases space at 150, 250 and 350Stephenson Highway.The company filed for Chapter 11bankruptcy May 17. Getting out ofleases early and moving elsewhere ata cheaper rate would reduce costs.Youngman said the company hasn’tmade a final decision on itsheadquarters. The company saidpreviously that it would need to leaseabout 150,000 square feet.

— Jennette Smith

For us tooutsource the

responsibility formanaging the

details, that was asignificant

emotional eventbecause engineersare typically into

the details.Donald Goodwin,

DaimlerChrysler Corp., andpast president, ESD

”

“



WEEK IN REVIEWRUMBLINGS

Detroit topsregion inresidentialdevelopment

etroit led the regionlast year in new resi-dential development,

based on building-permitdata collected by the South-east Michigan Council of Gov-ernments.

Detroit’s 1,039 housingunits permitted for 2005represent an 11 percent in-crease over 2004. FollowingDetroit was Macomb Town-ship with 814 units andCanton Township with 805.

Tower wants out of leaseAuto parts supplier Tower

Automotive Inc. has askedthe U.S. Bankruptcy Court toreject the lease on its globalheadquarters in Novi.

Company spokesmanJoel Weiden would not com-ment on the Feb. 10 motionbut said, “There are noplans at all to move theheadquarters.”

The lease is scheduled torun through Oct. 2, 2007.Tower pays $6,596.54 amonth on the property.Bankruptcy Court docu-ments list Harrison PropertiesL.L.C. of Corydon, Ind., asthe lessor. The rejection be-comes effective Feb. 28 un-less an objection is filed.

Channel 20 sale failsThe proposed sale of

WDWB-TV Channel 20 has fall-en through in the wake ofthe announcement lastmonth that the WB Networkand the UPN Network aremerging into a new net-work, the CW, which will be-gin operations this fall andbe carried on WKBD Channel50. The merger left WDWBwithout a network affilia-tion and worth less than the$97.5 million the Washing-ton-based AM Media HoldingsL.L.C. had agreed to pay sta-tion owner, Granite Broad-casting Corp. of New York.

In September, AM Mediahad agreed to buy bothChannel 20 here and KBWB-Channel 20 in San Franciscofor a total of $180 million.

Granite CEO Don Corn-well said that he will shopChannel 20 to other buyersand may yet sell it to AMMedia at a reduced price.

ON THE MOVE■ Tommi White, president

and COO of services for De-troit-based Compuware Corp.,has left the company. No re-placement has been named.

■ Rich McCorry to presidentof North American opera-

tions for Auburn Hills-basedGKN Sinter Metals. He hadbeen a vice president of theBarnes Group, serving as pres-ident of the Farmington,Conn.-based Associated Springbusiness unit. He replacesthe retiring Richard Best.

■ Tim Trenary to executivevice president and CFO ofTroy-based Collins & AikmanCorp. from vice president.He remains treasurer. Tre-nary replaces CFO BryceKoth who left the companyafter it entered bankruptcy.

■ Brad Bradley to chair-man of Warren-based AssetAcceptance Capital Corp., ef-fective March 1, remainingpresident and CEO. Bradleyreplaces the retiring Rufus“Bud” Reitzel Jr.

■ Til Levesque to marketmanager for the Detroit re-gion for Clear Channel Com-munications Inc. He had beendirector of sales. Levesquereplaces Dave Pugh, whohad been regional vice pres-ident and market managerand will have the same po-sitions in Rockville, Md. Areplacement vice presidenthas not been named.

■ H. Perry Driggs Jr. tochairman and CEO of Michi-gan Heritage Bancorp Inc. andits primary subsidiary,Michigan Heritage Bank. Hehad been vice chairman.Driggs replaces RichardZamojski, who resigned topursue other interests, astatement said.

BRIEFLY

■ The Thompson Education-al Foundation has told GrandValley State University that itintends to apply as a singleapplicant for at least onecharter high school in De-troit.

■ Northwest Airlines Corp.’sunionized pilots on Feb. 13began a 15-day voting peri-od that could end in a strikebeginning Feb. 28. Also, U.S.Bankruptcy Judge AllanGropper on Thursday grant-ed Northwest and its pilots’and flight attendants’unions a seven-day exten-sion so the two sides couldcontinue negotiations.

■ The Michigan Senateapproved legislation pro-hibiting regulation changesto adult foster care that crit-ics said gave preference tohomes that had unionizedworkforces. The legislationnow moves to the House.

■ Detroit law firmVanoverbeke Michaud & Timo-thy P.C. has filed a class-ac-tion suit in U.S. District Courtin Detroit against ProQuestCo. (NYSE: PQE) of Ann Ar-bor, in response to a compa-ny announcement Feb. 9that an internal audit haddiscovered misstated in-come and royalty amountsrequiring a restatement ofearnings in the 1999-2005 fis-cal years. Other class-actionsuits were filed by Okla-

homa City law firm Feder-man & Sherwood and Radnor,Penn. law firm Schiffrin andBarroway LLP.

■ Pontiac-based MichTelCommunications, which willown, operate and maintainthe Wireless Oakland Internetproject, said that San Jose-based Cisco Systems Inc. willbe its underlying technolo-gy provider and RF Connectof Farmington Hills will actas technical designer, TheDetroit News reported. TheDykema law firm of Detroitand Bloomfield Hills, South-field-based accounting firmUHY Advisors, SMZ Advertisingof Troy, and WaterfordTownship-based civil engi-neers Johnson & Anderson Inc.will also be partners.

■ Lee Wells, ex-presidentof Southfield-based MCA Fi-nancial Corp., was sentencedto five years in prison andordered to pay $242.6 millionin restitution for his role ina securities scandal, the De-troit Free Press reported.

■ Charles G. Mady Jr., aNorthville lawyer and realestate broker, pleadedguilty Thursday in U.S. Dis-trict Court to charges of em-bezzlement fraud in connec-tion with a commodities-trading scheme. He faces 57-64 months in federal prisonunder a plea agreement butcould receive credit for thetime served.

■ The Detroit Institute ofArts has received artworkvalued at $15 million fromthe estate of Josephine Ford.

■ Troy-based Delphi Corp.agreed to continue talks withthe United Auto Workers andGeneral Motors Corp. until nolater than March 30 ratherthan ask a judge to terminateits labor agreements in U.S.Bankruptcy Court, Automo-tive News reported.

■ Standard & Poor’s RatingsServices affirmed an AA- rat-ing and upgraded its outlookfrom “negative” to “stable”for Royal Oak-based WilliamBeaumont Hospitals.

OBITUARIES

■ George Blake, founder ofNorth Tool and ManufacturingCo. in Eastpointe, died Feb.8 after complications from astroke. He was 88.

■ LeRoy Daggs II, whofounded an insuranceagency and a law firm in De-troit, died of cardiopul-monary arrest Feb. 2. Hewas 83.

■ Thomas Dreisbach, for-mer owner of Dreisbach andSons Cadillac in Detroit, diedFeb. 7. He was 81.

■ Eric Holiday, founder andvice president of Detroit-based security-productscompany InvisaGuard L.L.C.,died Feb. 4. He was 43.

■ Charles Kelly, founderand publisher of the Michi-gan Citizen newspaper in De-troit, died of cancer Feb. 5.He was 73.

asinos in Detroitwere busy leadingup to the Super Bowl,

but profitable slot trafficwas down, presumably asregulars stayed home toavoid crowds.

Greektown Casino setrecords for food and bever-age sales during the week,and, on Friday and Satur-day nights, also set recordsfor table games, said RogerMartin, media and public-af-fairs consultant for Greek-town Casino L.L.C.

“On Friday night, we hadto stop letting folks in forabout 90 minutes when thecasino hit capacity,” saidMartin, a principal in Lans-ing-based Martin Waymire Ad-vocacy Communications. ButSuper Bowl Sunday was oneof Greektown’s worst slotdays on record, he added.

MGM Grand and MotorCityCasino also reported highervolumes for food and bever-age but slower slot-machineplay. Casino Windsor said thecasino had record atten-dance on Feb. 4.

Mulhern crosses borderfor consulting job

Last week Canadian offi-cials borrowed the first gen-tleman Dan Mulhern.

Mulhern on Feb. 13 aideddiscussions at a strategicplanning session betweenthe Windsor City Council andWindsor Mayor Eddie Francis.

Francis first met Mulh-ern during Super Bowl XLplanning and has been areader of Mulhern’s weeklye-mails on leadership, saidNorma Coleman, Francis’chief of staff.

Mulhern’s wife, Gov. Jen-nifer Granholm, is amongleaders studying the loca-tion of a new border cross-ing. But Coleman said Mul-hern was brought in on hisown merits.

Liz Boyd, Granholm’s presssecretary, said there was noconflict in Mulhern’s role.“No transportation issueswere discussed,” Boyd said.

Mulhern was paid about$2,610 (U.S.) for pre-meetingwork and the five-hour ses-sion, comparable to whatother consultants have beenpaid, Coleman said.

Movie on Paralympian to debut March 2

Local two-time Para-lympian medalist Cheryl An-gelelli will make her big-

screen debut in a March 2premiere of “UntoldDreams: The Cheryl An-gelelli Story.”

The documentary chroni-cles Angelelli’s training onthe way to the 2004 Para-lympics inAthens,where shewon twobronzemedals.Those gamesdraw the topathletes withdisabilitiesfrom aroundthe world.

Angelelli ispublic-rela-tions andmarketingmanager forthe Rehabilita-tion Institute of Michigan anda competitive swimmer.She suffered a spinal cordinjury from a 1983 divingaccident that left her para-lyzed from the chest down.

Showtime is 6:30 p.m. atAndiamo’s Banquet Centerin Warren at 14 Mile andVan Dyke. Tickets are $10.

The $50,000 film was fi-nanced and produced byRIM and the Athletes with

Disabilities Hall of Fame.

Two local journalists to be honored

Two metro Detroit jour-nalists are to be inductedinto the Michigan JournalismHall of Fame on April 22 atthe Kellogg Hotel and Con-ference Center at MichiganState University.

John (Jack) Teahen is a 50-year news veteran ofCrain’s sister publicationAutomotive News, where henow is a senior editor.

Mary Lou Butcher is credit-ed with opening newsrooms

for a generation ofwomen reportersby her victory in asex-discriminationlawsuit against TheDetroit News in themid-1970s. Butcherand her husband,Jack Casey, soldtheir PR firm,Casey Communica-tions Inc., to U.K.-based Shandwick in1987, and she hasdone independentconsulting andteaching since.

Call (517) 353-6430 for tickets.

BITS AND PIECES■ The GM Agency All-Stars,

a hockey team made upmembers of Leo Burnett De-troit, Campbell-Ewald, McCannErickson and GM Planworks,will take on the Red WingsAlumni at 4:30 p.m. Saturdayat Troy Sports Arena. Pro-ceeds will benefit the Band ofAngels Foundation and theJudson Center.

RUMBLINGS WEEK IN REVIEW

Super Bowlweek a mixedbag for casinos

F R O M W W W . C R A I N S D E T R O I T . C O M , F E B . 1 1 - 1 7

C D

Cheryl Angelelli at the2004 Paralympics inGreece.

This is the point, aweek after theweek after theSuper Bowl, whereall that talk aboutbuilding on themomentum of theSuper Bowl isstarting to die off.Maybe we’restarting to driftback to the same-old-same-old. Notso fast, folks.If you haven’t really thoughtabout your answer to thequestion “What’s next forDetroit?” consider visitingwww.crainsdetroit.com andclicking on “Detroit Agenda”under the Resources sectionof the navigation bar. That’sthe gray bar that goes downthe left side of the home page. Here you can look at what yourfellow readers — or, to bemore precise, your fellowDetroiters — have to sayabout the topic. We askedthem about their vision forDetroit, the resources needed,what we need to stop doing tomake it happen, what theyexperienced during Super Bowlweek and what they thought

about it. If youhaven’t submittedyour thoughts, here’syour chance. I mean,Roger Penske asked.You’re not going toignore Roger, areyou?Also, consideranswering our Webpoll question:“Should Detroit makea bid to host anOlympic Games?”

Look for the “Tell us what youthink” box, on the lower leftside of the home page. So far,a bit more than 60 percent ofthe respondents think Detroitshould make a bid.And of course, if you have aWeb poll question you’d liketo suggest — maybe whetherthe state should eliminate thesingle-business tax andreplace it with … well, it’syour question. You tell us.Just e-mail your ideas [email protected].— Bob Allen’s BusinessCasual column arrives daily inthe Crain’s Detroit Businesse-mail alert. E-mail him [email protected].

Web of words

Bob AllenWeb General Manager

Envisioning visions


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