Crain's Detroit Business - December 20, 2010 - (Page 11)

December 20, 2010 and Michigan Economic Development Corp. tax credits, lithium-ion battery manufacturers started production in Michigan this year. Watertown, Mass.-based A123 Systems LLC dominated headlines with the opening of more than 600,000 square feet of manufacturing space in Livonia and Romulus. Ann Arbor-based Sakti3 Inc., a startup spun off from the University of Michigan, received $11.2 million in 2010 from General Motors Ventures, Itochu Technology Ventures of Japan, Kosla Ventures of California and Farmington Hills-based Beringea LLC. Entrepreneurs and conglomerates also created a new industry around vehicle electrification by manufacturing plug-in charging stations. Livonia-based architect Jim Blain, CEO of James Blain & Associates Inc., created his own startup, PEP Stations LLC, to design charging stations. Roseville-based Shocking Solutions LLC inked a contract in October with Walker-based Meijer Inc. to supply a total of six charging stations to Meijer stores in Allen Park, Warren and Holland. Waterford Township-based ChargeNow LLC will install two charging stations at each store. — Dustin Walsh CRAIN’S DETROIT BUSINESS grams federal transit dollars for long-term planning, is seeking $10.5 million in federal funding, with a $2.25 million local match, to do mass-transit studies in 2011 on the Gratiot and M-59 corridors. In aerial transit, Detroit Mayor Dave Bing’s administration is expected to have by spring a business plan in place for Coleman A. Young Municipal Airport. — Bill Shea Page 11 Shrinking the city: If only it were this easy. From Previous Page Physical work will finally begin in 2011 on the region’s highest-profile mass transit project: a lightrail line on Woodward Avenue. U.S. Transportation Secretary Ray LaHood announced on Aug. 2 that the Woodward project has been approved to begin an environmental study required for eventual federal funding for what’s expected to be at least a $450 million project funded with a mix of public and private money. After the 12- to 18COURTESY OF LEAR CORP. month study, construction would begin Jeneanne Hanley of Lear Corp. plugs the company’s in late 2011 or early charging station into a car mock-up that shows the parts Lear offers for electric vehicles. 2012, and the line would be completely operational by 2016. New York City-based engineering firm Parsons Brinckerhoff has been hired to manage the environVehicle electrification became mental impact study process for the the hot topic in the auto industry city. The firm has a Detroit office. in 2010 ahead of the end-of-theNo money has yet been earyear release of the plug-in hybrid marked to extend the line beyond electric Chevy Volt and the electric-only Nissan Leaf. the city limits. Backed by loans and grants Also, the Southeast Michigan from the U.S. Department of Energy Council of Governments, which pro- Southeast Michigan, regardless of their politics, were happy to hear Barack Obama’s promise in 2008 to overhaul the nation’s health care financing and delivery system if he became president. It was a bold campaign pledge, given that presidents going back to Teddy Roosevelt in 1912 have fallen short on their promises to provide universal health coverage to citizens. But in March, Obama beat back stiff Republican opposition and signed into law the Patient Protection and Accountable Care Act of 2010. The heart of the 1,000-page bill seeks to provide near-universal coverage by increasing health care access for 32 million of the estimated 50 million uninsured people. The $1 trillion bill is projected to reduce the deficit by $140 billion over 10 years because of savings in the Medicare program and additional health care industry and higher wage earner payroll taxes. But private health insurance costs are expected to rise 1 percent to 3 percent for the next several years. Opponents also have criticized the bill for having too few provisions to reduce health care costs, which have been rising four times faster than hourly wages the past decade, or 6 percent to 10 percent annually. The bill has provisions to improve health care delivery, including a pilot project to encourage patient-centered medical homes. It will also fund research into best medical practices that could lead to lower costs and higher quality by improving procedures and drug therapies. — Jay Greene 8. Finding new owner for Pistons no slam dunk Karen Davidson’s announcement in January 2010 that she intended to sell the Detroit Pistons and Palace Sports & Entertainment set off a flurry of speculation about who would buy the pro basketball team. Reports said she wanted $500 million, but bids were $50 million or more under that. Excitement among fans reached a boil when Mike Ilitch, cofounder of Detroit’s Little Caesar Enterprises Inc. pizza chain and owner or coowner of the Detroit Tigers and Detroit Red Wings said he wanted to buy the team Ilitch as part of his effort to build a new downtown arena. Public enthusiasm cooled slightly after a 30-day exclusive negotiating period for Ilitch and Davidson expired in early November, and the bidding was reopened and included out-of-towners. Rumors swirled that L.A. private-equity billionaire Tom Gores, who has Michigan roots, may buy the team or partner with Ilitch on a joint bid. In early December, it emerged that a sale, including approval by the National Basketball Association’s other owners, would be done by mid-February. — Bill Shea JEFF JOHNSTON/CDB 9. Mayor’s team takes steps to shrink Detroit An artist’s rendering shows one vision for light rail along Woodward Avenue. The project gets off the drawing board in 2011. 7. Mass transit gains traction, step by step 6. Plug-in vehicles spark interest in electrification It’s been almost a year since owner Karen Davidson (right) announced she intended to sell the Detroit Pistons and Palace Sports & Entertainment. A sale now appears to be closer, possibly involving Little Caesar Enterprises Inc. co-founder Mike Ilitch. The idea of consolidating Detroit’s residents in the most viable, densely populated parts of the city’s 139 square miles has been batted around for more than a decade. Now, Detroit Mayor Dave Bing’s team is starting to talk specifics. The idea is that grouping residents in densely populated areas will offer them a better quality of life, in part by making it more affordable for the city to provide services, such as garbage pickup and police patrols. In the fall, the mayor’s team rolled out a series of community meetings as part of the Detroit Works Project, to start a dialogue around the idea of shrinking the city. And in December, Bing said that the city would begin offering incentives to persuade residents to move into nine to-be-identified core areas. But, city officials noted, the incentives the Bing cash-strapped city is able to offer might not be financial — an improved quality of life in a more prosperous neighborhood may be the biggest draw. Those residents who choose to remain in failing neighborhoods will receive a lower level of city services, Bing said. Bing said that the areas his team will identify comprise about twothirds of the city, leaving COURTESY OF THE DETROIT PISTONS about 45 square miles vacant. In most versions of a neighborhood consolidation plan, newly vacant areas would be repurposed as green space, green corridors or zones for urban agriculture. The plan has its detractors — some have evoked memories of Poletown and Black Bottom in criticizTHE ASSOCIATED PRESS ing neighbor- hood consolidation. Some level of federal funding will be necessary for the project, which has thus far been bankrolled by the philanthropic community. — Nancy Kaffer THE ASSOCIATED PRESS Detroit Symphony Orchestra musicians picket outside the Max M. Fisher Music Center in October after going on strike. 10. Discord at Detroit Symphony Orchestra The Detroit Symphony Orchestra’s labor strife ended the year on a dissonant note. And orchestras around the country watched negotiations between management and musicians for their precedent-setting potential. The musicians’ strike, which began in October and continued into mid-December, was held up by national media as yet one more symbol of Detroit’s struggles. In the contract negotiations, DSO management blamed a broken operating model and fixed costs, many of them tied to the musicians’ salaries and work rules and its debt service on the Max M. Fisher Music Center. Management claimed those costs exceeded the symphony’s declining revenue and were draining its unrestricted endowment and reserves, and its position was unsustainable. The DSO board drew a line in the sand, supporting management’s position and saying it could not support spending more money each year than the DSO raises through ticket sales, donations, grants and its endowment draw. Musicians argued that management and staff hadn’t done enough to raise new revenue and had gone through four development directors in five years. They also said that the pay cuts and work rule changes the DSO proposed would decrease the orchestra’s national stature and its ability to attract top-notch talent. During the strike, the musicians held concerts at various locations around metro Detroit, and the DSO continued its educational programs and to hold performances by other artists. — Sherri Welch

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