New Ideas Alliances Developments

December 24, 2003
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Out with the old and in with the new.

That's an apt description for 2003 in West Michigan, which saw plenty of new ideas, partnerships and developments spring up over the past 12 months.

The opening of the new $212 million convention center, DeVos Place, capped off the year in December, but there were numerous events leading up to that crowning achievement that were not only newsworthy, but noteworthy in the region's continued growth and development.

So as Grand Rapids Business Journal's 20th year of reporting the area's business news draws to a close, here's what made news in West Michigan in 2003.


If there was one project that defined the year, it may well have been the struggle to put a convention hotel on Calder Plaza.

The year started with a consultant's report that a convention hotel at the site of the U.S. Post Office, rather than Calder Plaza — an idea that was being bandied about by downtown wags — would be quite detrimental to the city's tax base. Alas, a dozen months still wasn't enough time to resolve the plaza hotel issue as developer Jack Buchanan and Gallium Group LLC still were clinging to the dream of a 400-room downtown hotel.

January signaled new leadership on the Kent County Board of Commissioners, as well, with David Morren and Roger Morgan assuming the chairman's and vice-chairman's seats, respectively.

In Muskegon, the New Year started out right when Charter Development was picked to weigh options for the defunct Muskegon Mall property. By year's end, however, the plan had hit a snag and Charter was thinking of dropping out of the project.

The automotive industry took on a new look when Magna Donnelly tabbed Carlos Mazzorin as its chairman and CEO. Further inland, Steelcase Inc. hooked up with Johnson Controls Inc. to put its Leap office chair technology in the 2003 Jaguar S-Type, signaling a new venue for the world's largest office furniture maker. Herman Miller would find new technology uses later in the year by adapting its Aeron design to a new wheelchair being produced by a Swedish manufacturer.

But the year's economic news started on an uncertain note, with economists predicting either a "painfully slow" or, at best, a "balanced" recovery for 2003.

Mercantile Bank pooh-poohed those forecasts, however, by announcing a 57 percent jump in quarterly earnings. The bank would go on to post a record year for earnings.

More money changed hands during the month when Spartan Stores Inc. completed the sale of seven shopping centers in Michigan to a New York-based real estate investment trust for $46 million in cash. None of the centers contained Spartan retail stores, however, as all were anchored by D&W or VG's food centers.

January also marked awards on the Lakeshore, when the public-private partnership of Grand Valley State University, the city of Muskegon and Lakefront Development LLC picked up the Business Journal's Newsmaker of the Year honor for the development of Edison Landing, which was to feature an alternative-energy center, a business incubator for alternative-energy ventures, and a fuel-cell power station.

Lakeshore development wasn't limited to Muskegon, however, as Zeeland Community Hospital also unveiled plans for a new $36 million facility just northeast of Zeeland.

In another health-care-related matter, President Bush came to West Michigan the day after his State of the Union address to talk about Medicare reform, a prescription drug benefit for the elderly and the creation of a national medical liability law, all of which would make headlines over the next 12 months.


Not to be outdone, Gov. Jennifer Granholm came to town the day after her State of the State address to unveil the new Michigan Small Business Technology Development Center, only the second of its kind in the country.

February also marked the takeoff of the Muskegon Area Chamber of Commerce's "Fly Muskegon" campaign, which sought commitments from 100 area businesses to make more use of Muskegon County Airport. The hope was to entice Northwest Airlines to commence jet service at the facility. By year's end, that goal was much nearer to reality.

The Grand Rapids Area Chamber of Commerce had its issues, too, as the business advocacy organization weighed in with the Community Partnership for Economic Growth, a coalition that strongly opposed plans for a casino in Wayland Township. The chamber would carry its fight all the way to the Michigan Supreme Court by year's end.

Grand Rapids also motored ahead with plans to become the first city in Michigan to actually try out biodiesel fuel in the field, using fuel blends in selected diesel engines in its fleet. The project was deemed a success, but by year's end it was in limbo as funding and development questions were left unanswered.


The city was still digesting biodiesel technology when a report released by the Michigan Economic Development Corp. and the Michigan Business Roundtable stated that Grand Rapids — and all other Michigan cities except Ann Arbor — were not doing enough to lure high-tech, 25- to 34-year-old workers.

That report, along with Granholm's vocal direction, would give rise to the "cool cities" initiative at the end of the year.

One component often mentioned in cool cities was mass transit, and in March, ITP-The Rapid was grappling with budget deficits, cuts in service and fare hikes. After much soul-searching, the mass transporter opted to seek a small millage hike, which eventually was approved by voters in November.

Another part of luring high-tech workers to West Michigan included the Life Sciences Corridor, but the state's budget woes were taking a toll. Granholm said funding for the LSC would drop to $32 million, from $50 million, in FY04, and maybe even further in subsequent years.

But the funding news from the state didn't stop work at Van Andel Research Institute, which announced a partnership with several West Michigan hospitals and physician groups designed to gather tumor tissue samples for its ongoing cancer research efforts.

The world changed in March, when the war in Iraq finally got started after months of speculation and conjecture. The news got the stock market rolling upward, but the rally wasn't sustained for as long as many analysts expected. Meanwhile, local officials expected the war to have little effect on West Michigan companies looking to do business overseas or foreign businesses seeking to locate in the state.

Economic news of a different sort also forecast better times for West Michigan. Future development connected to Metropolitan Health Corp.'s new hospital and health care village in southern Wyoming could reach up to $1 billion, as commercial and health-related ventures tie into the project. By the end of the year, however, Metro was mired in a federal whistleblower fraud suit that had already cost the system $6.25 million, although plans for the development remained on course.


Six new inductees joined the Junior Achievement West Michigan Business Hall of Fame's 14th class. They were John Gordon Sr. of Gordon Foods; Paul Gordon of Gordon Foods; Erina Hanka of Suspa Inc. and Swoboda; Ralph Hauenstein of the Grand Rapids Herald and Werner Machinery Co.; Jack Miller of Howard Miller Co. and Heckman Furniture; and Leslie Tassell of Lescoa Inc.

American Seating Park, a $28 million mixed use project on a former manufacturing site, announced that 60 of 67 available apartments already were under lease, and that the next phase, a new 200,000-square-foot building, would be ready by July.

Property was hot throughout Kent County, as evidenced by the announcement that the equalized value for real and personal property in the county was $19.9 billion, up $1.3 billion from 2002.

At Cherry Street Landing, the DeVos family and Rockford Companies unveiled a $25 million project that would involve construction of one new building and the rehabilitation of five others, centering on the new Cooley Law School and a nightspot that would open in December called the Black Rose Irish Pub.

Also, Daniel's, the second retail operation from the Hurwitz family, announced plans to open right after Labor Day with a full array of specialty and contemporary clothing in a brand new store located on East Paris Avenue.

Not all the news was good, however, as city and county officials got their fiscal year forecast for the first seven months of operation of DeVos Place: $1.6 million in the red. The loss would largely be subsidized by profits from Van Andel Arena.

On the medical side, there was hope. VARI scientists working on cell structures uncovered a method by which cancerous tumors spread. Such discoveries undoubtedly played a role in attracting high-tech medical firms like Conduit Healthcare Solutions, which moved its headquarters from Florida to downtown Grand Rapids.

Another fiscal bright spot shone on Kent County, which had Moody's Investor Service and Standard & Poor's for the third consecutive year verify the county's long- and short-term bond ratings as AAA.


The announcement that Pfizer Inc. was transferring its research and development activities from Kalamazoo and Holland as it absorbed Pharmacia Corp. and reorganized sent shock waves through the local economy. As many as 1,500 jobs were at stake and local and state officials scrambled to sort out the effect on the Life Sciences Corridor.

The Spectrum Health Regional Hospital Network was created to leverage buying power and offer economies of scale for clinical services. Joining the alliance were Metropolitan Hospital, Holland Community Hospital, Zeeland Community Hospital, North Ottawa Community Hospital, United Memorial Health, Mary Free Bed Hospital & Rehabilitation Center, Pine Rest Christian Mental Health Services, Ionia County Memorial Hospital, Gerber Memorial Hospital, and Memorial Medical Center of West Michigan.

On the manufacturing side, Herman Miller prepared for the launch of its new Mirra chair at June's NeoCon. The goal was to provide a chair with Aeron-like comfort but at a mid-market price of about $640.

Steelcase and Federal Prison Industries foes were seething after FPI garnered a $6 million federal contract based on a bid it submitted after seeing — and mirroring dollar for dollar — Steelcase's bid. The move sent FPI reformers over the edge and, by year's end, important concessions would be won regarding FPI's virtual monopoly on federal contracts.

The month closed with the 71-year-old Welsh Auditorium closing its doors to make room for the third phase of DeVos Place construction.


Entertainment news moved to the forefront as summer heated up, with news that the Van Andel Arena and DeVos Hall were drawing plenty of out-of-towners to West Michigan for shows, and as Holland joined the fold, at least partially, for the West Coast tourism campaign and National City Bank landed the Blue Angels for the Muskegon Air Fair.

Jade Pig Ventures also was floating a plan to turn the former Jacobson's department store in East Grand Rapids into a library, but the plan would draw fire over the ensuing months and eventually cost Mayor Judy Frey her job in the city election.

Another real estate deal turned out sweet, however, when the Holland-based Landmark Group purchased the 77-year-old Hudsonville Creamery and Ice Cream Co. By December, the group, led by Lou Kincaid, would announce plans to move the facility to Holland from its longtime Burnips location.

Not everything was going smoothly for the Calder Plaza hotel project, however, as Kent County officials said they would "stay put" on Calder Plaza for up to another 15 years, thereby altering plans for a 400-room convention hotel.

The Ernst & Young Entrepreneur of the Year winners were announced in seven categories. They were: Michael Snodgrass of Brilliance Audio Inc., in distribution; John Loeks Jr. of Celebration Cinema, in consumer and business services; Scott Sanderson and Greg DeHaan of Allen Edwin Co., in real estate construction; Stanley Wisinski III of S.J. Wisinski Co., in real estate development; Lisa Wehr of OneUpWeb, in information technology; Richard Davis of Second Chance Body Armor, in manufacturing; and Donald Nugent of Graceland Fruit Inc., master entrepreneur.

Another firm recognized for growth was Lake Michigan Credit Union, which was honored as the No. 1 credit union in the nation for loan percent growth in 2002.

The region's entrepreneurial spirit kept moving ahead with the advent of the West Michigan Center for Family Health, which offered a new primary health care model for small businesses and individuals that had been priced out of the current coverage market. Later in the year, WMCFH would sign up its first firm and tout an annual savings of $42,000 for the company.

On a sad note, one of the construction workers involved with demolition of the Welsh Auditorium was killed when a wall collapsed on him.

Mass transit was back in the news when the Interurban Transit Partnership launched the "Great Transit, Grand Tomorrows" study in an effort to determine public transit needs 10 to 12 years down the road. The study would cover everything from shuttle buses to light rail.


Plans were sailing along for a cross-lake, high-speed ferry service by Lake Express LLC between Muskegon and Milwaukee, with marketing efforts gearing up for a June 2004 start. The $18.5 million, catamaran-style ferry can transport up to 46 cars and 250 passengers on each of its three daily roundtrips.

The Grand Valley Metro Council named Donald Stypula its new executive director, replacing Jerry Felix, who resigned to take a position in commercial real estate.

Part of Stypula's agenda would be to work with local and state officials to sort out tougher and more costly federal air pollution regulations that would affect Kent, Ottawa, Muskegon and Allegan counties. Local officials and legislators still were grappling with the issue at year's end, but some relief was in sight as lawmakers pushed for legislation that would allow the Environmental Protection Agency to recognize and deal with transport pollution from other states.

West Michigan felt the ripple effect of more national news as hospitals struggled with the announcement that, if approved, payments for adult Medicaid patients would be capped at $900 per admission, no matter how long a person stayed or what type of care they received. Saint Mary's and Mercy General hospitals stood to take a $2 million hit under the proposal, but the biggest loser would be Spectrum Health, which already was reporting losses of $30 million annually on Medicaid. Spectrum officials warned the business community that those losses likely would be made up for with higher costs in other areas.

Closer to home, Urban Institute for Contemporary Arts felt the pain of the state's budget woes and planned to shut its doors for the month of August in a cost-savings move.

Spectrum Health made a financial move, too, picking up United Memorial Health System, which included hospitals in Greenville and Lakeview.

On another economic-impact front, it was reported that a proposed $170 million zoo on land owned by Fred Meijer in Grand Rapids Township would be worth $37 million to the local economy annually. A survey commissioned by Kent County found that 56 percent of respondents favored development of the zoo.

Meijer Inc. also made news during the month with a plan to redesign its stores with help from the Rockwell Group architectural firm in New York City. The goal was to make the stores more shopper-friendly.


Rusty Merchant found a new home. The former vice president of public policy and government affairs for the GRACC signed on with McAlvey & Associates and would manage the lobbying firm's Grand Rapids office.

On the Lakeshore, North Ottawa Community Hospital abandoned plans for a $9.3 million facilities upgrade. Instead, hospital officials chose to re-think the plan and focus on patient care rather than "more cosmetic" changes.

Riviera Tool Co. made some changes too, announcing formation of a consortium of local tool and die shops that would work on the new Mercedes Benz M-class SUV production. Riviera lined up 10 local plants to do the work, which was valued at $40 million.

The movie business took root in Grand Rapids with the filming of "The Agent," put together by a team of filmmakers with local ties. The 18-minute short film was destined to play at festivals throughout the country in 2004.

While Kent County forged ahead with its PDR (purchase of development rights) program, Ottawa County decided that PDRs weren't the right fit for that region. Ottawa officials said the program simply would have been too costly, but were actively pursuing other measures to preserve farmland.

A new partnership locally promised to have worldwide implications. Saginaw-based Robertson Research Institute tabbed Sagestone Consulting to work on developing real-time medical diagnostic software — called Nx-Opinion — to aid physicians in the diagnosis of non-chronic illnesses. The product would be tested worldwide and would initially be distributed free to areas of the world where medical facilities and resources were scarce. The partnership hoped to inject $30 million into the local economy.

Economic news of a different sort saw Grand Haven State Bank lose its president and commercial lending department to Macatawa Bank, which later would open a new branch in Grand Haven. The local bank would end up all right, though, by hiring a new president, Tom Creswell, later in the year and replenishing its loan department.

In Muskegon, casino backers got an advisory vote placed on the Sept. 9 ballot. Voters at that time approved the measure, which at the end of the year had progressed to an agreement between the local backers and an Indian tribe "to explore further business options."


Help was proposed for the devastated manufacturing community in the form of a repeal in the single business tax on employee health benefits. Although not much in the way of actual dollars, proponents believed that such a repeal would be a step in the right direction toward curtailing health care costs for manufacturers.

Was it FPI Jr.? That's what local lawmakers feared when announcing plans to look into the business practices of Michigan State Industries. A subsequent hearing, however, showed MSI was well within its boundaries for producing goods and not competing with the private sector.

Bank One rolled out a uniform policy on attire that saw bank employees — from tellers, to loan officers to managers — dressed for success in matching togs. The policy was adopted for all 21,000 Bank One employees nationwide in August.

Zelenka Nursery in Grand Haven experienced bank problems when a consortium of four creditors pushed it toward bankruptcy liquidation. Tennessee-based Judkins Nursery would step in several weeks later and keep the business, one of the world's largest wholesale growers of nursery and ornamental plants, operational.

George Heartwell swept the primary election with more than 80 percent of the vote and was on track to become Grand Rapids' next mayor at year's end. A bout with prostate cancer would slow Heartwell, but he still promised to be ready for the Dec. 30 swearing-in ceremony.

While Heartwell was getting ready to take center stage, a longtime manufacturing executive slipped quietly into retirement. With little fanfare, former Donnelly Corp. CEO Dwane Baumgardner called it a career after 34 years at the auto supplier, which previously had been purchased by Magna International of Canada.

Another purchase hit home locally when Macatawa Bank acquired the Custer Building in downtown Grand Rapids and made plans to consolidate much of its operations there by next April.

More good news for downtown came in the form of Blue Cross Blue Shield of Michigan's decision to relocate 266 workers to the former Steketee's department store site.

The month closed on yet another positive note for downtown when Moch International announced plans to build a pair of 21-story residential towers in the Monroe North Business District. City planners initially toppled a request for several variances, but city commissioners eventually approved the plan as originally presented and demolition on the former Grand Rapids Foundry site started near the end of the year.


Beverly Wall opened the month by picking up the ATHENA award for her work with Languages International, a full-service foreign language translation and interpretation services company.

More news was made when the investment group Franklin Partners, of Oakbrook, Ill., purchased the former Bosch Corp. plant, a 915,000-square-foot facility on 44th Street, and promptly put it back on the market for lease.

One site not on the market was the land for the new Michigan Military Air, Land and Sea Museum at the Gerald R. Ford International Airport, which broke ground for its first two phases. The $14 million project was several years in the making.

Also on the southeast side of town, the DeVos family proposed a $17 million sportsplex for the corner of Burton Street and East Paris Avenue in Kentwood. City planners heard plenty of negative comments from nearby residents initially, but changes in plans — and minds — quelled some of those fears by the end of the year.

A pair of entertainment districts were being considered in downtown Grand Rapids. Joining the previously proposed location near Van Andel Arena was a second spot on the other side of the Grand River, near Bridge Street.

More big names locally received accolades when The Center for the Education of Women at the University of Michigan cited Tower Automotive, Herman Miller and X-Rite for developing women in leadership positions.

Genechip technology arrived in West Michigan in the form of a $355,000 grant for VARI. Researchers were using the new system to identify the genetic profiles of young cancer patients with different types of childhood cancers.

New blood showed up on the Grand Rapids City Commission when James White was tabbed to fill the seat vacated by Scott Bowen, who was named a Wyoming District Court judge.

The month ended with a bit of good news for employers, who learned that health care premium hikes would not be as painful as in previous years, but would still land in the double-digit range with an average of 12.4 percent.


The month began with good news from Howard Miller Clock Co., which announced production of its 2 millionth floor clock.

The news continued on the positive side when Varnum, Riddering, Schmidt & Howlett was recognized nationally as the best law firm for quality of life and work for its associates.

On the down side, office furniture makers got yet another gloomy forecast for 2004, with forecasts for shipments downgraded to just a 2.5 percent increase, rather than the 14 percent rebound forecasted in July.

West Michigan manufacturing took another hit when Tower Automotive announced it would move its headquarters from Grand Rapids to Novi.

But small businesses continued to thrive. The Neighborhood Business Alliance passed out several awards, including ones for grand-prize winner EQ3, and for Mayor John Logie, who received (appropriately enough) the first John H. Logie Neighborhood Business Champion Award.

Holland Hospital was thriving with the proposal for a $40 million expansion project that would upgrade the emergency department, relocate several medical services, beef up inpatient units and enhance technology.

It also was revealed during November that investment in downtown Grand Rapids projects and planned developments from 1990 to 2005 was nearing the $2 billion mark.

And that figure may not have included Mercantile Bank's plan for a new $10.4 million headquarters on a former brownfield site on Leonard Street NW.


The last month of the year got off to a memorable — and some would say historic — start with the opening of the new DeVos Place convention center, a $212 million structure on the banks of the Grand River.

On the manufacturing front, Steelcase intoned that it would embark on a global restructuring plan in January, the details of which were still fuzzy at year's end.

Another plan announced in December involved the Van Andel Institute's future economic impact on the life sciences in Michigan. The study was being done in conjunction with the University of Michigan and Michigan State and Wayne State universities.

The results of that study might mean good news for Kent and Ottawa counties which, according to the U.S. Bureau of Labor Statistics, ranked low for pay and job growth among the nation's largest 315 counties in 2002.

Finally, the manufacturing community got a shot in the arm at the end of the year when President Bush repealed his steel tariffs. But this scenario of out with the old and in with the new really was a case of too little, too late, as manufacturing jobs already were lost to overseas competitors.    

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