Focus and Economic Development

West Michigan’s economy rebounds in 2013

December 27, 2013
| By Pat Evans |
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Dick DeVos Southwest
Dick DeVos, chair of the Regional Air Alliance of West Michigan, helped land Southwest Airlines as a tenant at Gerald R. Ford International Airport. Photo by Michael Buck

West Michigan’s economic fortunes took a turn for the better—finally!—with some hard work and fiscal perseverance on the part of many business leaders throughout the region.

Below are some of the key events that occurred during 2013 in several categories that contribute significantly to the area’s overall fiscal well-being.

MANUFACTURING

There was a lot of big news for Wolverine Worldwide throughout 2013, from earning more than $55 million in the first three quarters, to pairing singing superstar Taylor Swift with its Keds brand, to its plans to shed 90 jobs at the end of the year. Wolverine also brought a global conference for all 12 of its brands to Grand Rapids.

Most importantly, however, further growth defined the company’s year.

“The acquisition of the Performance & Lifestyle Group has been transformational for our company and has created many new opportunities for global growth, brand building and operational excellence," said Blake Krueger, Wolverine's chairman and CEO, when announcing in January that the footwear maker would separate into three divisions. “Today, we are taking important steps to better align the team and realize our vision of having the best brands, products, operating platform and consumer experiences in the industry.”

Early in the year, CEO and President Joseph Papa announced Perrigo would merge with Ireland’s Elan Corp. and would incorporate the company in Ireland. Record numbers for the company’s fourth quarter and entire 2013 fiscal year — $441.9 million — were reported in August. In November, the pharmaceutical company donated $275,000 to organizations in its hometown of Allegan.

“This strategic transaction aligns with Perrigo’s acquisition strategy and our previously stated intentions to grow our international business,” Papa said of the Ireland deal. “We expect New Perrigo to create tremendous value for our shareholders.”

Expansion is on the horizon for Firstronic LLC. CEO John Sammut said the electronics manufacturer plans a $2.45 million expansion that will add 110 jobs in West Michigan.

“This expansion will allow us to add both capacity and equipment to keep up with our growing business and customer demand.”

The northeast side business also picked up nearly $290,000 from the state to help train its new workers.

“This transition helps to make our operation more competitive in the long run. The more our employees are trained, the more productive they are, and this more than offsets the increased cost of the wage appreciation,” Sammut said. “We believe that our training program is an integral part of our success in the global marketplace.”

REAL ESTATE and DEVELOPMENT

Derek Coppess is doing big things at 616 Development, completing several projects in Grand Rapids, including 616 Lofts at the Kendall and announcing he has plenty more up his sleeves, including a $16.2 million Lofts on Michigan. But not everything on the docket was a homerun.

“We’re looking at some really large projects that we’ll be announcing … and these are going to have a huge impact for the city of Grand Rapids,” Coppess said. “But these smaller infill projects are so important for our city to have developed, and it’s always going to be part of our DNA, I think, at 616 to take on what we call singles and doubles — good, nice little base hits.

“We’ll always take the singles, doubles and triples. We don’t care about homeruns or strikeouts.”

Sleek new digs highlighted the year for CEO Mike VanGessel and Rockford Construction, and also included near completion of the Morton House and the start of a residential development near its new headquarters.

VanGessel said he hopes Rockford’s new facility just across the Grand River will spur other development on the city’s west side. To get that plan in motion, Rockford has proposed putting up four multi-story residential buildings with a total of 18 market-rate apartments on a contaminated site at the southwest corner of Douglas Street and Seward Avenue, just a block south of Bridge Street NW. The apartments total 15,000 square feet.

Orion Construction had a big year, starting a real estate arm and getting involved in the proposed Arena Place in downtown Grand Rapids. The builders also started projects in Port Huron and Lansing, partnered with a storied Detroit builder and announced Eastown Flats.

“I’ve been doing this for 37 years, and this was the most complicated deal I’ve ever done in my life,” said John Wheeler, Orion’s business development director, of the waterfront project in Port Huron.

RETAIL

Gerald R. Ford International Airport saw its first arrival of a Southwest Airlines plane in August, which put a smile on the face of Dick DeVos, founder and chairman of the Regional Air Alliance of West Michigan.

“When people travel through the Gerald R. Ford Airport now, they have more options for more flights at less cost, with friendlier service and more customer awareness than they’ve ever had before,” DeVos said of the long-time effort to land Southwest. “That is opening up what was a huge restrictor for us, economically, by not having the commercial air travel.”

The airline offers six daily nonstop flights to Denver, St. Louis, Orlando and Baltimore.

A sigh of relief washed over West Michigan as the newly merged Spartan Stores and Nash Finch Co., which is based in Minnesota, announced its headquarters would be in the area, keeping 620 jobs and possibly adding another 300.

“This merger brings together two highly complementary organizations to form a leader in the grocery wholesale, retail and military commissary and exchange channels,” said Dennis Eidson, president/CEO of Spartan Stores. The name SpartanNash is expected to be adopted by shareholders in May 2014.

Dave EngbersandMike Stevens were close to bankruptcy a few years back, but beer is flowing faster than ever in Grand Rapids, aided in part by the completion of Founders Brewing Co.’s latest expansion. The addition almost doubled the brewery’s seating capacity at the facility on Grandville Avenue SW, while increasing the brewing capacity to nearly 320,000 barrels a year.

The brewery substantially upgraded its taproom space, adding 40 percent more floor space, a larger porch and an outdoor beer garden with a bar.

The outdoor area has features to help it through at least three seasons, including gas heat and extensions for free-standing heaters, as well as two built-in fireplaces.

“Orders aren’t slowing down,” Stevens said. “There is great demand for our product, and we have to answer.”

HEALTH CARE

A new Brain & Spine Tumor Center, an exclusive MBA program with Grand Valley State University, West Michigan’s first heart-and-lung transplant and several mergers are just the tip of the iceberg when it comes to Spectrum Health’s big year, according to CEO Rick Breon.

Spectrum Health also was ranked among the best hospitals in the nation in three medical specialties by U.S. News & World Report in its 2013-14 Best Hospitals rankings. Additionally, Spectrum Health is recognized as high performing in nine medical specialties.

Metro Health didn’t stand pat this year, either, as it made plans for a $13.8 million surgical center and joined Community Health Systems, a publicly held health care system with 135 hospitals in the United States.

“Metro Health is a strong and progressive health care organization, and like many other community hospitals and health systems aligning with partners, we can see the potential advantages of scale, access to national resources and the sharing of best practices,” said Mike Faas, Metro president and CEO.

A $54 million expansion and renovation project doubling its patient space is in the works for Mary Free Bed Rehabilitation Hospital.

The three existing buildings will be renovated, and a new 190,000-square-foot structure will be built and in use by fall 2014.

“This is a transformative project, enabling us to serve more patients and provide even greater specialized care. It is the linchpin to our vision of becoming one of the top five rehabilitation hospitals in the country,” said Mary Free Bed President and CEO Kent Riddle.

LAW

A milestone birthday and a significant verdict put Varnum Law in the spotlight this year.

However, Tom Kyros, the firm’s executive partner, said while Varnum celebrated its 125thanniversary and a big verdict when a federal judge ordered Blue Cross Blue Shield of Michigan to pay back $5.1 million in hidden fees, its best years are yet to come.

“We certainly know we want to grow the Detroit area,” Kyros said. “We have an office in Novi that has been really successful, has been a real driver for us. In 10 years we went from two or three lawyers to about 25 lawyers there. We hope in the next three years to go to 50 lawyers in southeast Michigan, probably through opening a second office down there.”

Thomas M. Cooley Law School made inroads on several fronts this year. Dean Don LeDuc, along with Western Michigan University President John Dunn, announced a formal collaboration between the Kalamazoo-based university and the Lansing-based law school, both of which have significant presences in Grand Rapids.

Cooley also earned recognition for its pro bono work and for leading the nation in minority graduates. The school also unveiled a new Homeland Security degree in April, and professors filed an amicus brief in a marriage equality case.

Ric Roane and his partners at Warner Norcross and Judd kept busy during the year. Roane, the newly elected chair of the LGBT/alternative family committee of the American Academy of Matrimonial Lawyers, found himself right in the middle of Michigan’s Defense of Marriage Act debate this summer.

Roane said he is particularly concerned with how the various gay marriage laws and bans are affecting same-sex couples and their children across the country.

“If we have marriage equality, you are not going to have kids that were adopted ending up in two or three years of litigation with their parents, and that’s good for children. … You are not going to have the guy who survived his partner’s death and then got kicked out of the house he’d been in for 20 years.”

Warner also celebrated its 75thanniversary by opening an office in Midland and re-electing Douglas Wagner as managing partner for a fifth term.

TECHNOLOGY

Open Systems Technologies and its CEO, Dan Behm, looked at Detroit and saw opportunities. The Grand Rapids-based firm this summer opened an office in downtown Detroit with seven employees and hoped to double staffing in the near future. OST also spent a good part of the year educating West Michigan companies on the threats of computer hacking and how to prevent potentially devastating results from such activities for their businesses.

Aaron Schaap, organizer of The Factory, a startup hub in downtown Grand Rapids at 38 W. Fulton St., saw his first coLearning class, Intro to Ruby, graduate 20 tech students. The Factory also hosted the fourth annual Startup Weekend, a three-day sprint for entrepreneurs to build the most marketable business, and collaborated on several other start-up initiatives in and around the city.

“It is very difficult to find space as a small business,” Schaap said of the company’s offices in the Grand Rapids Collaborative, or coLab. “I think The Factory is probably one of the greatest assets the building has because it offers that co-working flexibility, but eventually people need a place for some ‘head-down’ space.”

A local platform for high school sports websites will expand across the nation as Varsity News Network won the $500,000 grand prize in the Accelerate Michigan Innovation Competition. Founder and CEO Ryan Vaughn said athletic directors can be overwhelmed by keeping up communication with the various stakeholders of high school sports, especially when everybody is using so many different types of social media, but Varsity News Network simplifies that process.

“We’re also in the process of a national expansion,” said Vaughn. “Right now, we’re in about 13 states, and our goal in 2014 is to expand our reach across the country. The award plays into our overall state expansion. It was on our roadmap, and now we have the resources.”

SPORTS/ARTS & ENTERTAINMENT

Wyoming’s Elite Baseball/Softball Training will open a 48,000-square-foot facility — roughly twice the size it was — in July when its current expansion project is complete. It will help make Elite the premier training center in Michigan with more than 1,000 athletes.

“There will be nothing like this in the state of Michigan,” said Bryan Baar, a Zeeland native and former pro baseball player who also manages the Art Van Sports Complex for the West Michigan Sports Commission. “Even in the Midwest, there are some similar facilities that do what we do, but they’re not necessarily baseball and softball specific.”

The Calder Cup came to town when the Grand Rapids Griffins beat the Syracuse Crunch in six games. The Calder Cup win was the first professional hockey championship for the city in the 27 years the game has been played here. The Griffins also started the new season on a hot streak, setting several team records.

Dan DeVos, who along with wife Pamella DeVos and David Van Andel formed parent company West Michigan Hockey Inc., has stated that the organization’s objective was to “offer affordable family entertainment through the highest quality hockey possible.” Consider that mission accomplished.

International headlines were made again this year as Rick DeVos’ ArtPrize took off on its fifth year of hosting the world’s largest global arts competition. More than 1,800 artists from 47 countries took part in the event. Ann Loveless’ art quilt “Sleeping Bear Dune Lakeshore” won the $200,000 grand prize in the public-voting portion of the event, while Spanish artist Carlos Bunga took home the juried grand prize of $100,000 for “Ecosystem.”

The International Downtown Association also recognized ArtPrize with its 2013 Pinnacle Award, the organization’s highest honor.

NONPROFITS/PHILANTHROPY

Local First took to the streets, seeking 200 million impressions when it launched its first ad campaign spotlighting local businesses and the goods and services they provide. The nonprofit also ran its 10x10 pledge, asking people to spend $10 a week on local food for 10 weeks, and held its 10th annual Local First Street Party.

“The 10x10 Pledge is important to take whether you are new to the local food movement or a pro at eating local,” said Elissa Hillary, executive director of Local First. “Having 2,000 people take the pledge helps us prove what we already know: that our West Michigan community is deeply connected to its farmers, brewers and producers, and that we care about the relationships we make when we purchase food locally.”

Since 2002, Kids’ Food Basket has grown from an annual budget of $20,000 to almost $4 million, and from serving 125 kids daily to providing sack suppers for nearly 6,000 each day with the help of more than 175 volunteers. Now, the nonprofit is receiving requests from out-of-state organizations to spread the initiative across the United States. It also opened a Muskegon wing to further its impact in West Michigan.

Executive Director Bridget Clark Whitney is at the forefront of the movement to feed food-insecure children, and was recognized with this year’s Young Athena Award from the Grand Rapids Area Chamber of Commerce.

“The amazing volunteer involvement and organizational growth at Kids’ Food Basket is a remarkable testament to Bridget’s leadership and a great example of how people and their ideas can powerfully impact our communities and our businesses,” said Rick Baker, chamber president.

Jay Leno, Lily Tomlin and Chris Tucker are three of the headliners announced in November for the 2014 LaughFest. In 2013, the comedy festival that is a fundraiser for Gilda’s Club of Grand Rapids generated 20,000 unique visitors to Grand Rapids, inducing a $4 million spending boom. Local businesses have signed on en masse, creating a philanthropic synergy that benefits the entire community.

“Last year, we saw phenomenal success with our High Five campaign,” said Wendy Wigger, president of Gilda’s Club Grand Rapids and LaughFest. “This year, a stellar group of local companies has generously given us another matching grant for this campaign.”

GOVERNMENT

The Downtown Development Authority had a banner year, including a single day with more than $100 million in downtown investments with Rockford Construction, Orion Construction, Brookstone Capital and 616 Development all announcing huge projects.

“We’ve got a lot of good stuff going on,” DDA Chairman Brian Harris said at that August meeting.

The Right Place Inc. topped some of its five-year goals a year early, including surpassing its $500 million capital investment and 5,000 new and retained jobs goal with numbers of $635 million and 8,654 jobs. One 2013 project was bringing 500 jobs to West Michigan with Paris-based Teleperformance Inc. through a partnership with the Michigan Economic Development Corp.

Retention also plays a significant role in the organization’s mission, and The Right Place scored a huge victory when Spartan Stores opted to keep its headquarters in West Michigan following a merger with Nash Finch Co.

“The retention and expansion of our West Michigan companies, like SpartanNash, is at the core of our mission,” said Birgit Klohs, Right Place president and CEO. “Retaining their corporate headquarters in West Michigan is critical to our region’s long-term economic growth. Spartan has been an incredible economic asset to our region for nearly 100 years — and it is our job to ensure they remain an asset for the next hundred years.”

The city’s Brownfield Redevelopment Authority planned six projects, including the first 616 Development project to start from scratch on Michigan Avenue NE. The six projects from Brookstone Capital, Rockford Construction, Third Coast Development and G.A. Haan Development will result in investments of $108 million, according to Kara Wood, the city’s economic development director who also joined the state’s new Association for Brownfield Redevelopment Authorities this year.

Wood said her office has been working with an array of “entrepreneurial service organizations” to develop new gardening models.

“These outcomes include the number of retention visits conducted, the number of connections made for technical assistance through referrals to other ESO partners, number of businesses improving operations and adding employees due to assistance provided, as well as neighborhood business district occupancy and vacancy rates,” she said.

EDUCATION

A merger with the Urban Institute for Contemporary Arts and a $1 million gift to its fashion program highlighted a big year for Kendall College of Art and Design of Ferris State University. The school also teamed up with Grand Rapids Public Schools and the Grand Rapids Public Museum to start a school.

“We are delighted with the continued growth of our partnership efforts with UICA,” said David Eisler, FSU president. “This merger reflects the commitment of Ferris State University and Kendall College of Art and Design to the arts in West Michigan. The synergy of this new relationship will strengthen the contemporary arts in our region.”

Big downtown plans are in store for Grand Valley State University, which announced its intentions to spend $18.9 million to purchase and expand on 18 acres of land near the Medical Mile. It would allow GVSU to serve 1,000 more students.

“This is transformational for our university, for our region and for the future of health care in Michigan,” said GVSU President Thomas Haas. “This plan is part of our vision and long-term strategy as a key player in health education. We’re obligated to anticipate and produce the health care providers our state needs for the future.”

Entrepreneurial success is at the heart of Starting Gate, Western Michigan University’s business accelerator program. WMU also is developing a degree in entrepreneurship to connect with the program.

“If we can help these students create local businesses that can help the economy, that’s one thing,” said Robert Landeros, who heads up WMU’s entrepreneurial program. “The other goal is to give the students an opportunity to learn and to grow. Businesses do fail, and sometimes that first idea will mutate into something else — or, as the entrepreneurs call it, pivot. This is their first try at it.”

The Business Journal will recognize its 30 nominees for Newsmaker of the Year during a breakfast meeting Jan. 29 at Frederik Meijer Gardens, at which time a winner in each category will be announced, and an overall Newsmaker of the Year will be revealed. The Business Journal’s Impact Award winner, Rick DeVos and Start Garden, also will be honored at the event for the organization’s long-term economic impact.

A special supplement to the Jan. 27 Business Journal will publish complete profiles of all the nominees in each of 10 categories.

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