Crain's Detroit Business - 2011 Book of Lists - (Page 7)

December 27, 2010 CRAIN’S DETROIT BUSINESS Page 7 10 things to watch Hope for the economy T he local and state economies will continue to be stressed in 2011, but there are glimmers of hope. University of Michigan economists predict the state will add around 25,000 jobs next year for the first time in 11 years. While that will hardly offset the 285,600 jobs it lost in 2009 alone, unemployment is projected to fall from 12.8 percent to 12.4. The service sector will add the most jobs, and manufacturing jobs will increase modestly, though government jobs will continue to be lost as local units of government struggle with declining property tax revenues. Robert Daddow, deputy Oakland County executive, sees more gloom than glimmer. He describes the shrinking tax base as a looming fiscal crisis and says there will be “numerous government units (facing) an emergency financial manager or worse.” 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, private health insurance costs are expected to rise 1 percent to 3 percent for the next several years, primarily because of the insurance mandates. At the center of the reform bill is an effort to give 32 million uninsured people access to health insurance. By 2014, greater numbers of lower income people will become eligible for Medicaid, and states will create insurance exchanges to foster competition in the private market. Management, which in 2009 scuttled everyday circulation in an attempt to cut costs and bolster online readership, says the papers continue to work toward profitability and that advertisers want two newspapers in Detroit. The Gannett-dominated Detroit Media Partnership, which manages the joint advertising, delivery and printing of The News and Free Press, sought concessions from the newspaper staffs, including pay cuts, as it continues to try to staunch continuing financial losses. Ilitch won’t say where he intends to build an arena, but the likely sites are on land he owns in the Foxtown area or between Grand River and Cass avenues south of I-75. The Ilitches have been acquiring land for about a decade in those areas. Insiders say that the time is nearing — possibly in 2011 — when Ilitch will make a grand announcement about his plans, including the location of an arena. How it will be paid for — likely by some sort of blend of public and private funding — is something less likely to be known for a while. New leaders, old problem New Lansing leaders, but the same problem of a big budget hole for the state. And with Michigan facing a deficit estimated at more than $1.5 billion for the next fiscal year, some say revenue sharing — important to Southeast Michigan and elsewhere — is an area of state spending that may be increasingly vulnerable. The question is how revenue sharing will fit into Gov. Rick Snyder’s new “value for money” budgeting approach that is performance- and outcome-based, and the priorities of Republican majorities in the state House and Senate. During the campaign, one aspect of revenue sharing Snyder discussed is to provide base funding for it and use an additional amount as an incentive to encourage local governments to share and consolidate services using best practices. At the same time, Snyder has emphasized the importance of the vitality of central cities like Detroit to the state’s future and has said the state needs to help core cities revitalize and thrive. Electrified economy A sporting future The future of the Detroit Lions appears to be hitched to quarterback Matthew Stafford, who went down with another major shoulder injury in 2010 and sparked another round of questions about his durability. They’re actually a pretty good team when he’s on the field. He’s just not on it enough. Still, the Lions have been competitive in their losses and have a young, talented roster, which bodes well for 2011. Also, they cut down on television blackouts this year. The Detroit Tigers went into their offseason able to trim payroll and still add new players — a trick made possible by contracts of former players coming off the books. Detroit also inked free-agent pitcher Joaquin Benoit and re-signed two of its own free-agents, Brandon Inge and Jhonny Peralta. The struggling Detroit Pistons are young and suffer from the uncertainty of ownership in limbo. The team is expected to have a new owner by February, and that’s expected to give the team stability and a sense of where it’s going — which may eventually be to downtown Detroit. And the Detroit Red Wings continue to motor along as one of the NHL’s elite teams and are expected to return to the postseason. Building wishes With very few construction projects under way in downtown Detroit at year’s end, hopes are high that projects will be fully funded and under construction in 2011. Topping the downtown wish lists are a new sports arena by Mike Ilitch and the light-rail line in Detroit. Also to watch is Quicken Loans Inc., which purchased the former Madison Theatre building and is eyeing more downtown real estate — after moving its headquarters to Detroit in 2010. Founder Dan Gilbert’s next moves are a mystery but are expected to be exciting. Health care construction will be hot, with $850 million in improvements planned at the Detroit Medical Center pending the finalization of its acquisition by Nashville, Tenn.-based Vanguard Health Systems Inc. Henry Ford Health System is also planning a $500 million expansion, hoping to leverage another $500 million in private investment in the New Center area. Arena announcement due Detroit Red Wings owner Mike Ilitch for years has hinted at building a new downtown venue for the team to replace aging cityowned Joe Louis Arena. Ilitch is trying to buy the Detroit Pistons to eventually make them a co-tenant at a new arena, which is expected to help with financing a facility expected to cost more than $300 million. Effects of health reform One of the more controversial pieces of federal legislation in years, the Patient Protection and Accountable Care Act of 2010, was signed into law in March by President Barack Obama. Starting in January, employers that offer health insurance will be required to comply with insurance reform provisions in the landmark federal bill. For example, health insurers will be prohibited from imposing pre-existing conditions on participants under the age of 19, children will be allowed to be covered on their family policy up to age 26 and cost-sharing on preventive care services will be eliminated. While the $1 trillion cost of the bill is projected to reduce the Is no news good news? The fate of Detroit’s two daily newspapers is unlikely to be decided in 2011. Instead, they’ll likely continue as they have in recent years, yet the speculation is that ongoing advertising and circulation losses eventually will force one of them out of business. One rumor will suggest The Detroit News while the next predicts the end of the Detroit Free Press. A joint operating agreement between the newspapers’ owners, Gannett Co. Inc. (Free Press) and MediaNews (Detroit News) precludes an arbitrary shutdown, so any closure will be a complex process. The deal runs through 2025. A new generation of dorm room entrepreneurs blossomed in 2010, pushing the capabilities of the mobile technology to new heights. We saw these young entrepreneurs create wildly successful mobile smart phone applications, including Ann Arbor’s Mobiata LLC — which generated $1 million in 2009 and was acquired by Expedia Inc. in November. Expect automakers and suppliers to put an increased focus on vehicle connectivity and an increased functionality between the mobile Web and drivers. As plug-in electric cars zip through the streets and orders rise, we’ll see new plug-in electric charging stations and more companies trying to capitalize on An artist’s rendering of the passenger ship a new market. terminal for the Port Authority. Empty factories that were filled in 2010 by new lithiumion battery joint ventures and upstarts, like SB Limotive and A123, Detroit Public Schools’ emerwill see a flurry of orders as automakers begin further produc- gency financial manager Robert tion of new electric models in 2011. Bobb continued to implement his Electronic medical records will stringent plan in 2010 to erase the also get into full swing in 2011 as district’s $327 million deficit. Bobb, in his two years in the more hospitals and medical care providers integrate new, more district, has implemented the closure of 59 seamless methods of care. schools, negotiated $105 million in union The dueling efforts to build concessions, new spans over the Detroit River eliminated are expected to be revived in $272 million in 2011. Michigan and Canada’s budget rejoint project to build a $5.3 billion quests and imspan known as the Detroit River In- plemented an ternational Crossing failed to get aggressive acaneeded legislative approvals in demic reform Bobb the state Senate, but backers plan plan that seeks a 98 percent gradto try again in the new session. uation rate by 2015. The project is opposed by AmHowever, at the end of the year bassador Bridge owner Manuel his efforts were sidelined by a Wayne County Circuit judge’s Some ruling, saying Bobb did not have observers the authority to make decisions expect an on curriculum and academics, announcement leaving those decisions to the Dein 2011 of a troit Board of Education. Bobb is apnew downtown venue for the pealing the decision and continDetroit Red ues to seek $400 million in Wings to tobacco revenue from state legisreplace the lators to aid the district. aging Joe In 2011, the district will considLouis Arena. er the closure of 20 schools. But Bobb doesn’t have much time, as his contract expires at the end of the 2010-2011 school year in June. Moroun, who views the DRIC as unneeded, illegal and unfair government competition. Both bridge efforts are entangled in litigation, as well, but some of the legal matters are expected to be untangled in 2011. A consortium of Canadian corporate and government investors has begun the environmental and regulatory process to construct a $400 million rail tunnel between Detroit and Windsor. The goal is to open the tunnel, which could handle the largest modern freight rail cars, by 2015. The Detroit/Wayne County Port Authority is spending $22 million to construct a 21,000-square-foot passenger terminal and offshore wharf along the Detroit River near the Renaissance Center to serve Great Lakes cruise ships and other deep-draft vessels. The project is expected to be completed by the end of 2010, with some landscaping work done in the spring. A grand opening will coincide with the annual opening of the St. Lawrence Seaway. Bobb’s contract winds down Of bridges, tunnels and ports THE BIG PICTURE

Table of Contents for the Digital Edition of Crain's Detroit Business - 2011 Book of Lists

Crain's Detroit Business - 2011 Book of Lists
The Big Picture
10 things to watch in 2011
10 things to remember about 2010
Private 200
Fastest-growing companies
Public school districts
Top-compensated CEOs
Top-compensated non-CEOs
Metro Detroit employers
Wayne County employers
City of Detroit employers
Livingston County employers
Washtenaw County employers
Macomb County employers
Oakland County employers
Publicly held companies
Hispanic-owned businesses
Native American-owned businesses
Asian-owned companies
Black-owned businesses
Woman-owned businesses
The Motor City
Airlines Serving Detroit Metro
Professional Sports Teams
Auto Suppliers
Auto Dealers
Aftermarket Suppliers
Divisions
Defense Contractors
New Economy/Health Care
Family-owned companies
IP law firms
Group health plans
Hospital companies
Physician organizations
Graduate business degrees
Engineering companies
Environmental companies
IT companies
Biotech companies
People/Awards
Salute to Entrepreneurs
CFO Awards
40 Under 40
Best Lawyers
20 in their 20s
Women to Watch
M&A Awards
Most Connected
Finance
Capital campaigns
Accounting firms
Banks and thrifts
Money managers
Business insurance agencies
SBA Lenders
Real Estate/Services
Office furniture dealers
Nonprofits
Meeting facilities
General contractors
Architects
Property managers
Residential brokers
Staffing companies
Logistics firms
Law firms
Classifieds
Index of Companies

Crain's Detroit Business - 2011 Book of Lists