Crain's Detroit Business - July 2009 Holiday Edition - (Page 3)

Holiday Edition CRAIN’S DETROIT BUSINESS Page 3 Home Federal lands hearing Bank holds off federal takeover BY TOM HENDERSON CRAIN’S DETROIT BUSINESS Inside TechTown program wants to link creatives with the business world, Page 8 Roseville, Lincoln Park join energy-efficiency coalition, Page 19 Company index These organizations appear in this week’s Crain’s Detroit Business: Altruis Benefit Consulting . . . . . . . . . . . . . . . . . . . 13 Atlas Tube . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Home Federal Savings Bank, which fought racial redlining in the mortgage industry in Detroit in the 1940s and 1950s, has won a preliminary victory as it now fights the federal government. The bank that in 1947 opened its doors as the first where African Americans could get a home loan, just weeks after Jackie Robinson broke the color barrier in baseball, was ordered in March by the U.S. Treasury’s Office of Thrift Supervision to find a buyer by April 15 or face federal takeover. On May 30, the bank filed a motion in federal court, asking for a hearing on a preliminary injunction against the federal government, the OTS and Timothy Geithner, the secretary of the Treasury, to forestall any takeover. Last Tuesday,U.S. Judge Corbett O’Meara granted Home Federal’s request, setting a hearing for July 23 in his Ann Arbor courtroom. According to a court filing by the OTS, it knows of “no prior case in which a financial institution subject to a directive has sought, much less obtained, judicial review.” At the very least, the bank has bought time as it continues talks with would-be buyers in its quest to find someone who will keep the bank’s name alive. Home Federal’s attorney, L. Fallasha Erwin, told Crain’s in March that the bank had declined offers from prospective buyers, including one area community bank, who wanted to take over the assets and its two Detroit branches but drop the name. The bank has about $15 million in assets and has been operating under cease and desist orders issued by OTS in July 2004 and October 2007 to improve its practices. According to the Federal Deposit Insurance Corp., the bank’s core capital ratio at the end of 2008 was 3.87 percent, less than the 4 perSee Bank, Page 4 Berg Muirhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Building Owners & Managers Assn. of Metropolitan Detroit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Strong reception Wireless Zone growing in Detroit by winning over small retailers BY DANIEL DUGGAN CRAIN’S DETROIT BUSINESS New York investor builds major stake in broadcaster Saga BY BILL SHEA CRAIN’S DETROIT BUSINESS Byrne Electrical Specialists . . . . . . . . . . . . . . . . . 15 Clayton and McKervey . . . . . . . . . . . . . . . . . . . . . 10 Comerica Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 CYJ Enterprises . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Detroit Micro-Enterprise Fund . . . . . . . . . . . . . . . . . 8 Detroit Regional Chamber . . . . . . . . . . . . . . . . . . . . 1 Detroit Renaissance . . . . . . . . . . . . . . . . . . . . . . . . 1 Detroit Tigers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 DTE Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Ebiz Technology . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Gursten, Koltonow . . . . . . . . . . . . . . . . . . . . . . . . 19 Henry Ford Hospital and Health Network . . . . . . . . . 1 Home Federal Savings Bank . . . . . . . . . . . . . . . . . . 3 David Gagnon got his start in the cellular industry in 1986 and prides himself on reading where the industry is going. With the current state of the industry, he COURTESY OF WIRELESS ZONE said, the life expectancy of a six-store chain of cell phone stores like his is short, due to consolidation. YOU HEAR THEM NOW? So when Wireless Zone, a Connecticut-based Connecticut-based Wireless Zone has been wireless retail franchise, came through town winning new franchises in the region: looking for takers, Gagnon got on board. In the past 18 months, Wireless Zone took “We wanted to grow, but we were having over 11 franchises in metro Detroit. trouble doing that,” he said. “All of a sudden, Two more stores are on the way by the end Wireless Zone is looking around in the area, of the summer. and they want to grow, as well. They were doSelling only Verizon service, there is still ing a lot of what we were doing, but doing it on plenty of competition: a much larger scale.” 55 stores in Michigan are operated by Gagnon is part of a group of local cell phone Verizon Communications Inc. retailers acquiring Wireless Zone franchises Another 114 “indirect” stores such as — which exclusively sell Verizon CommunicaWireless Zone sell Verizon service tions Inc. services, unlike firms such as Madiindependently in Michigan. son Heights-based Wireless Giant, which sell multiple services. In 18 months, Wireless Zone has started 11 vantage over being by himself. As a small chain, he said, Verizon’s rules franchises in metro Detroit, mostly by conprohibited him from using the company logo verting business owners such as Gagnon. Nationally, the chain has built its empire to in front of his store. As part of the larger Wire330 stores with $200 million in revenue for 2008 less Zone, he can use it. He also likes having Wireand $165 million in 2007. less Zone deal with Verizon “Detroit has become the foon a day-to-day basis, leaving cal point for our growth in the him to run his stores and Midwest,” said Sean Fitzgertrain his staff. ald, national vice president of Gagnon has always sold franchise development for Verizon service, formerly Wireless Zone. “We’ve had a selling Cellular One, then Airmultiplier effect as more peoTouch Communications — both ple are converting to our of which became consolidated stores.” under Verizon. Fitzgerald expects Wireless His six stores average Zone to have two more stores $20,000 per month per store. David Gagnon, Wireless Zone in metro Detroit by the end of In the past four months, some the summer. of his stores are up 80 percent in sales — someThe chain started in Middletown, Conn. It moved through New England, down to Florida thing he attributes to being part of the franand now through Michigan, with the idea of chise. “At the heart of it, I’m focusing on managing continuing west. and sales and letting them deal with all the In the world of cellular phone retail, where intricate rules govern service agreements, corporate stuff,” he said. Gagnon was a resource for Debbie Peterson, types of accessories that can be sold and placement of the carrier’s logo, Gagnon said being who signed a contract to convert her three See Wireless, Page 5 part of a large pool of retailers gives him an ad- CAN They were doing a lot of what we were doing, but doing it on a much larger scale. “ ” Although the radio market remains depressed, investor Daniel Tisch has been buying up shares of Grosse Pointe-based small-market broadcaster Saga Communications Inc. at a dizzying pace. The Tisch name is significant in media circles: He’s the second of four sons of former CBS Inc. owner and Loews Corp. co-founder Laurence Tisch, a billionaire who died in 2003. Towerview L.L.C., Daniel Tisch’s New York City-based personal investment company, has bought 480,000 shares in Saga over 51 separate purchases since Jan. 23, according to federal Securities & Exchange Commission filings. He bought 1,300 shares of Class A Saga stock at $5.10 each last week. That gives him about 12 percent ownership in Saga, about the same as Baltimore-based institutional investor T. Rowe Price. Saga CEO Ed Christian maintains more than 600,000 shares and all of the Class B shares, which gives him voting control of the company, radio insider reports say, meaning there’s no threat of a takeover. Tisch declined to comment. “I think he shows confiChristian dence in the industry,” Christian said. “He’s a long-term investor. I wish we had more like him.” Christian and Saga CFO Samuel Bush had lunch with Tisch in New York earlier this year to discuss his increased ownership stake, a meeting Christian called “affable.” Tisch previously had about 6 percent of Saga’s shares. Saga doesn’t own any Detroit stations among its 61 FM and 30 AM stations. Towerview has shares in several other media companies, including Cox Radio and Heart-Argyle, and in 2008 made a flurry of share purchases in Racine, Wis.,-based outdoor recreation equipment and clothing company Johnson Outdoors Inc., which is owned Johnson Family Enterprises (known for S.C Johnson Wax). Tisch’s aggressive pursuit of Saga stock See Saga, Page 5 L. Mason Capitani . . . . . . . . . . . . . . . . . . . . . . . . 19 Lightsource Studios . . . . . . . . . . . . . . . . . . . . . . . . 8 Max Broock Realtors . . . . . . . . . . . . . . . . . . . . . . 15 Metro Cars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Michigan Association of Realtors . . . . . . . . . . . . . . 8 Michigan Chamber of Commerce . . . . . . . . . . . . . 10 Michigan Lodging and Tourism Association . . . . . . . 1 Michigan Municipal League . . . . . . . . . . . . . . . . . . 4 Michigan Suburbs Alliance . . . . . . . . . . . . . . . . . . 19 Michigan Supreme Court . . . . . . . . . . . . . . . . . . . . 8 Michigan Townships Association . . . . . . . . . . . . . . . 4 Michigan Unemployment Insurance Agency . . . . . . 10 Nova Industries . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Oakwood Hospital and Medical Center . . . . . . . . . . 5 Online Tech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Pink Pump . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Real Estate One . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Saga Communications . . . . . . . . . . . . . . . . . . . . . . 3 Secure-24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Shanaman & Rheaume . . . . . . . . . . . . . . . . . . . . . 19 http://www.twitter.com/crainsdetroit http://www.crainsdetroit.com http://www.twitter.com/crainsdetroit http://www.crainsdetroit.com/getemail

Table of Contents for the Digital Edition of Crain's Detroit Business - July 2009 Holiday Edition

Crain's Detroit Business - July 2009 Holiday Edition
Contents
Isotope in Short Supply
Biz Groups Petition Drive Fails
Tourism-Marketing Funding Plan Opposed
Historic Black-Owned Bank Holds Off Federal Takeover
New York Investor Builds Major Stake in Radio's Saga
Cell Phone Chain Gains Ground in Metro Detroit
Bill would Nix Occupancy as a Factor in Setting Building's Taxable Value
Federal Funds to Overhaul Unemployment Insurance Computers
IT Company Made Most of Dot-Com Bust
Focus: Power Sellers

Crain's Detroit Business - July 2009 Holiday Edition