Crain's Detroit Business - December 20, 2010 - (Page 1)

® www.crainsdetroit.com ©Entire contents copyright 2010 by Crain Communications Inc. All rights reserved DECEMBER 20 – 26, 2010 $2 a copy; $59 a year Page 3 When snow flies, it can halt supplies Road to success: Entrepreneur finds it with slot car tracks PAT Engineering overflows with 2022 World Cup work Inside Pontiac film studio nearly ready for ‘Action!’ Page 6 Hospitals predict they’ll take a hit if insurance mandate is removed, Page 7 International M&A key to law firms’ record year, Page 16 Most Connected Part II of Crain’s profiles of plugged-in civic leaders, Pages 12-13 t’s time to look in Crain’s rearview mirror at some of the biggest Southeast Michigan business news of 2010, from the mystery of a banker’s unsolved slaying, to auto suppliers revving up to meet increased demand, to tentative steps toward shrinking the city of Detroit. The recap is on Pages 10-11. I Kilpatrick era sparks reforms in contracting Procurement officer leads effort BY NANCY KAFFER CRAIN’S DETROIT BUSINESS TOP 2010 Stories of the Year nies that create jobs in the state. It’s been modified several times over the years by the Legislature and is very complex now, Main said. MEGA grants: 5 projects to share Companies “like $25M in tax the credit part, but credits, Page 7 they don’t like the administrative part of it … because the credits go on typically five to 10 years,” with requirements for lots of record-keeping during that time and audit requirements for the In 2004, rumors were rampant that businessman Bobby Ferguson, a friend of then-Detroit Mayor Kwame Kilpatrick who later served time for pistol-whipping an employee, was pressuring city contractors to give Ferguson’s companies a piece of the action. The Detroit City Council asked Detroit’s auditor general, Joe Harris, to investigate. But Harris was soon stymied. The city’s purchasing department didn’t keep central records of subcontractors, Harris wrote in Harris a report to the council, and all that was required to add a subcontractor to a councilapproved contract was the department director’s OK. Then as now, change orders — cost increases after a contract’s initial approval that sometimes doubled or tripled its value — were routinely used. Six years later, some things have changed. Kilpatrick and his father, Bernard Kilpatrick, Ferguson, exDetroit Water and Sewerage Department Director Victor Mercado and a former Kilpatrick aide, Derrick “ I think there’s a whole number of things that need to be done differently. ” Sheila Cockrel, Detroit City Council Miller, were indicted last week on federal charges that the quintet had conspired to rig contracts, netting millions in kickbacks for members of what the feds dubbed “the Kilpatrick Enterprise.” Now, the way the city handles contracts is changing under the guidance of Andre DuPerry, chief procurement officer, wrote Dan Lijana, a communications manager for Detroit Mayor Dave Bing, in an e-mail to Crain’s. With DuPerry’s 2009 hire — the first time the city has had a chief procurement officer — the city’s purchasing process is under scrutiny, city officials have said. But how effective are policies and guidelines when someone is intent on breaking the law? “No matter how many checks and balances we put in place, if someone has a criminal mindset, they will find a way to accomplish their goal,” said Gary Brown, Detroit City Council president pro See Contracting, Page 4 Outgoing CEO: MEDC should streamline incentive programs BY SHERRI WELCH CRAIN’S DETROIT BUSINESS MEDC, Main said. “I think it’s an essential part of our tool kit, but it needs to be streamlined” to reduce administrative burden, he said. Main didn’t want to disclose all the recommendations he made to incoming MEDC CEO Michael Finney, Finney former president and CEO of Ann Arbor Spark. Greg Main, the outgoing CEO of the Michigan Economic Development Corp., says he’d put the state’s MEGA tax credits program first on the hit list of priorities for his successor. He says he’d recommend an overhaul of the incentive programs. The Michigan Economic Growth Authority program, which began in Michigan about 15 years ago, provides tax credits to compaGreg Main REAL ESTATE But Main did talk about one or two other recommendations that he’s made to his successor. Over-reliance on the automotive industry has been an issue for the state’s economy for at least 50 years, Main said. Main believes the MEDC has made strides in diversifying Michigan’s economy in recent years by supporting the growth of new industries that didn’t previously exist or were nascent — batterSee MEDC, Page 4 http://www.crainsdetroit.com http://www.crainsdetroit.com http://www.crainsdetroit.com/assets/PDF/CD720561217.PDF

Table of Contents for the Digital Edition of Crain's Detroit Business - December 20, 2010

Crain's Detroit Business - December 20, 2010
Department Index
Keith Crain
Mary Kramer
Opinion
Calendar
People
Business Diary
Classified Ads
Briefly
Rumblings
Week on the Web

Crain's Detroit Business - December 20, 2010