Year brought some growth, setbacks and challenges
2009 saw West Michigan
plod headfirst into a full-blown
Economic headlines in West Michigan mirrored those seen throughout the recession-plagued U.S. and world markets in 2009. West Michigan companies and organizations used the region’s familiar ingenuity and grit to continue to focus on future growth amid the challenging financial climates. Here’s a rundown of some of year’s top local business headlines.
- X-Rite Inc. announced a new profit improvement plan to better align its 2009 sales expectations and cost structure. As part of the plan, X-Rite reduced its workforce by 90 positions. X-Rite also completed the sale of its former headquarters and manufacturing facility in Grandville to CWD Capital LLC for a purchase price of $7,225,000.
- Wolverine World Wide Inc. announced a strategic restructuring plan early in the year designed to create operating efficiencies, improve its supply chain and create a stronger global brand platform. In April, Wolverine was presented with the World Trader 2009 Award by the West Michigan World Trade Association.
- The $17.4 billion in federal bailout loans promised to GM and Chrysler generated a collective sigh of temporary relief among West Michigan automotive suppliers earlier this year, although the long-term fallout is still being awaited.
One West Michigan auto parts manufacturing executive believes there is a strong, long-term future in global auto production, and he plans to make sure his company is part of it.
Patrick J. Thompson, president of Trans-Matic in Holland, said his company is constantly trying to diversify into other markets. Fifty-five percent of its production goes into automobiles, while the remaining 45 percent is in 30 non-automotive industrial markets.
However, Thompson does not believe diversification into other industrial markets is the ultimate solution for the success of Trans-Matic. Thompson said he emphatically believes that "the long-term trend for auto manufacturing globally is strong."
- The RCMA-zing convention held at DeVos Place early in the year got off to a rousing start as the Grand Rapids/Kent County Convention and Visitors Bureau warmed up the 2009 Religious Conference Management Association group visiting this freezing city with a carnival that had a ferris wheel and was dotted by a bunch of pink flamingos.
CVB Executive Vice President George Helmstead figured the RCMA meeting added roughly $1.3 million to the local economy. But the big payout could happen in coming years when a number of those meeting planners book the city for their organizations’ conferences. Helmstead said that payout could reach $15 million.
- Amway’s parent company, Alticor Inc., reported record sales of more than $8.2 billion for the year ended Dec. 31, 2008, a 15 percent increase over 2007 sales. Two-thirds of the company’s 58 affiliates recorded sales increases in 2008, including strong growth in the China, Russia and India markets.
President Doug DeVos and Chairman Steve Van Andel acknowledged that Amway bucked downward economic trends in 2008, but cautioned that current global economic forecasts would challenge all companies in 2009.
- Celebrations were held marking the opening of Saint Mary’s Health Care’s Hauenstein Center, which provides new quarters for critical care and emergency services, as well as bringing together neurosciences programs under one roof.
The 145,000-square-foot, five-story, $60 million building at 220 Jefferson St. SE was born of a $2 million gift from retired businessman and World War II hero Ralph Hauenstein. The hospital’s Doran Foundation raised more than $15 million for the project.
- The Michigan government's strategy to lure movie productions here with the highest incentives of all the states has worked. But critics of the incentives are pushing attempts to put a cap on the total amount of money available to movie producers each year in Michigan.
"I personally believe we have to put some kind of cap on it, somewhere in the $50 (million) to $100 million range, so we know what it's going to cost us in the next budget cycle," said Sen. Mark C. Jansen, R-Gaines Township.
- The legal community noted in March the volume of lawsuits being filed and the likelihood of collecting past-due fees are among the factors that law firms were closely watching during the recession.
"I think that's a sign of the poor economy and lack of cash flow" in the business world, said Tania E. (Dee Dee) Fuller, of Fuller Law and Counseling in Coopersville and vice chair of the business law section of the State Bar of Michigan. "I think the slowdown has touched most lawyers," she said.
- Rockford Bergé, a partnership that combines wind farm construction with comprehensive logistical services, will bring much to the West Michigan region, but jobs are not the most notable aspect.
The new joint venture between Rockford Construction and Spain-based Bergé Logística Energética creates marketability for West Michigan as a leader in the wind turbine industry, said Birgit Klohs, president and CEO of The Right Place Inc. Klohs spoke about the new company at an alternative energy conference in Berlin, Germany, on April 1.
- Meijer Inc. is in its 75th successful year despite the major challenges the locally grown company has had thrown its way from large national retailers like Wal-Mart.
Hank Meijer, company co-chairman and CEO, was keynote speaker at February’s West Michigan Alliance Program presented by the International Council of Shopping Centers and held at DeVos Place. Meijer opened his address by noting that this was a daunting time to live in Michigan and talk about commercial real estate and business growth in the same breath. “But we’re not moving to Texas,” he said.
Meijer said his stores have seen strong sales growth in the metro Chicago area, where there are 11 Meijer stores. He sees sales growth for the company’s brands, but worries about the domestic auto industry because southeast Michigan is Meijer’s largest market.
- Greg Golembiewski spent an afternoon in April saying good-bye to nearly 600 employees leaving work for the last time at the General Motors Corp. Stamping Plant outside Grand Rapids.
“It was a very sad day,” Golembiewski, president of UAW Local 730, the last and the largest UAW union in West Michigan representing GM workers.
- Representatives of some of the hundreds of small automotive suppliers in West Michigan were demanding that any deal with the automakers must take into account the entire auto industry supply chain, not just the big Tier 1 suppliers.
"I am pro-bailout of GM and Chrysler. There are too many people around the country that depend on the jobs that are involved. People just don't realize what is at stake," said Jim Pleune, owner of Philips Machining Co. in Coopersville, which employs 19.
- Business travel had all but dried up since last fall when the financial crisis surfaced during the already-in-place recession. Hotel operators have traditionally been able to charge business travelers full market rates for a room, which lifted their average rate.
“Most hotels out there are just dying with the business traveler. The business traveler is where they make their rate,” said Doug Small, president of the Convention and Visitors Bureau, who added that the occupancy percentage has been in the low 50s for years. “Even with the convention groups, most of the time the attendance is down a little bit. You can bring in a convention group, but it is a highly negotiated business,” he added.
- Grand Rapids Community College purchased the Davenport University campus on East Fulton Street as the business college consolidates at its new Lettinga Campus in Caledonia Township. GRCC’s move saves the taxpayers millions of dollars, providing capacity for 3,000 additional students to meet demand, and quells neighbors’ fear about development on the site. The purchase price of $9.5 million and planned renovations put the price tag for 152,000 square feet, plus a 540-space parking structure, at $14.5 million. That makes it a better buy than the $35 million GRCC was considering for a new health education building of 139,000 square feet.
- According to a report compiled by the Grand Rapids office of commercial real estate firm CB Richard Ellis, the retail vacancy rate reached 19 percent at the end of March. Total square footage of the unoccupied space was 2.2 million. At the end of the third quarter of last year the vacancy rate was 12.7 percent, for about 1.5 million empty square feet.
- A new $8 million customer call center for Gerber Life Insurance was constructed in Fremont, housing about 240 employees. According to Nestlé Nutrition of New Jersey, which now owns the Gerber brands and baby food production facilities, including Gerber Life, the new construction is a reflection of the partnership between Nestlé with Newaygo County and the state of Michigan.
Nestlé Nutrition, which is part of Swiss global conglomerate Nestlé, Gerber employs 1,225 people, which includes 350 Gerber Life employees. Nestlé is committed to investing $75 million and adding 200 jobs over the next 10 years in Fremont, in return for the Agricultural Processing Renaissance Zone designation.
- L. William “Bill” Seidman died in Albuquerque, N.M., at the age of 88. The former chairman of the Federal Deposit Insurance Corp. was born in Grand Rapids and became a high-profile icon in global business affairs. He began his career at Seidman & Seidman, his family’s local accounting firm. He later founded BDO Seidman and was a board member of Old Kent Bank. He became a key player in the development of Grand Valley State University in the early 1960s and established the F.E. Seidman College of Business. A memorial honoring Seidman’s life was held Sept. 11 on GVSU’s Allendale campus.
**Anne Marie Bessette, a development specialist with the Downtown Development Authority, filed a report in May that showed 14 new businesses had opened in the sector since September 2008, while seven have closed or moved. "To have a net growth of seven downtown businesses is great," said Mayor George Heartwell, especially in light of the current economic conditions.
- When the doors swung open at Grand River Bank at the beginning of May, that event ended nearly a three-year effort to get the business going. It also marked the start of a new community bank that proposes to give its commercial and retail customers the friendly, localized service that the mega-banks can often fall short of doing. President and CEO David Blossey said it was good news and not just for the region but also for the entire state.
- A legal decision could cost Bridgewater Condos LC, the development company of the River House condominiums owned by Robert Grooters, up to $7 million in sales revenue and deposit refunds. The decision was to be appealed to the state Court of Appeals.
Circuit Court Judge Donald Johnston granted the defendants’ motion to dismiss 15 of the lawsuits brought by Bridgewater Condos because the firm did not fully comply with a portion of the state’s condominium act, a 1978 statute. The law requires that a purchase agreement contain the name and address of the escrow agent, but the agreements contained only the name of the agent: Metropolitan Title Co.
- The National Organization of Black Law Enforcement Executives will hold its annual training conference and exhibition at DeVos Place in July 2014. The organization had narrowed its site choices for the 2014 meeting to Grand Rapids and Philadelphia. The Convention and Visitors Bureau, which hosted a site visit for NOBLE executives here in May, expects about 2,000 delegates to attend the annual meeting. The convention will mean roughly 5,000 room nights for the city’s hotels and about $3.8 million to the local economy.
- "This is going to be a very transitional NeoCon," said Mike Dunlap of Michael A. Dunlap & Associates of the NeoCon World’s Trade Fair that took place in June. Dunlop operates a business consulting service with a specialty in the office furniture industry. "What I mean by that is, we're in a kind of a dark period of business, because the business has been hit by a very rapid recession. What was perceived as high demand six months ago is taking on a different view today."
- Michigan State University signed a cooperative agreement with the U.S. Department of Energy for the Facility for Rare Isotope Beams project. The deal clears the path for the Department of Energy Office of Science to provide financial assistance to MSU to design and establish the new facility on its East Lansing campus.
The FRIB project is expected to cost approximately $550 million to design and build and is projected to create hundreds of jobs in mid-Michigan and generate more than $187 million in new state tax revenue, according to an economic impact study by the Anderson Economic Group of East Lansing.
- Kentwood-based Roskam Baking Co. and Farmers Insurance Group of Companies in Caledonia Township both secured Michigan Economic Growth Alliance approvals that will allow each to nearly double their employment.
Farmers Insurance is investing $84.4 million in two new buildings equaling 275,000 square feet. The expansion includes a distribution center, call center growth space and a training facility. In conjunction with the building investment, Farmers Insurance will bring in 1,600 new jobs.
Roskam Baking will add 1,500 new jobs with a $60.5 million expansion to its facility. The majority of the investment will go into machinery and equipment to make croutons, cereal, snack mixes and other dry mix products.
- Nearly 1.8 miles of I-196, from Fuller Avenue west to the Grand River, will be rebuilt in two stages starting this winter. The $41.6 million project will replace the existing concrete pavement in both the eastbound and westbound portions of the expressway. The work will also add a concrete median barrier, a third through-lane, and merge lanes at the interchanges of Fuller, College and Ottawa avenues. Bridges over Coit, Eastern and Lafayette avenues will be replaced.
- Grand Rapids city commissioners adopted the smallest budget for general operations in more than a decade. The $115 million spending plan is the lowest since at least the mid-1990s. But despite the city’s clamp on spending this year, revenue to the budget is projected to fall $2.86 million short of meeting expenses for the fiscal year that began July 1. The budget forecast for 2011 has a deficit of $12 million, which would wipe out the projected general operating fund balance of $5.7 million. The shortfall is expected to rise to $17.2 million in 2012, $20.9 million in 2013 and $24.1 million in 2014.
- A $10 million federal stimulus grant through the American Reinvestment and Recovery Act has been awarded for a major wetland and wildlife habitat restoration project on Muskegon Lake. The project will improve aquatic habitats for fish and other species by removing more than 180,000 tons of degraded lake bottom sediment and restoring 10,000 feet of Muskegon Lake shoreline now characterized by deposits of foundry slag, broken concrete and sheet metal.
- Shareholders of the largest doctors’ group in West Michigan agreed to join Spectrum Health as a subsidiary. The for-profit Michigan Medical PC became part of the area’s largest nonprofit health care system as of Aug. 1. The Spectrum Health Board of Directors approved a resolution, while MMPC’s 169 shareholders also considered the agreement. The plan calls for MMPC to integrate into the Spectrum Health Medical Group over the next five years.
- By a 4-3 vote, city commissioners chose Greg Sundstrom over Eric DeLong as the city's next manager. The slim margin enabled Sundstrom to replace the retired Kurt Kimball as the city's top executive. Sundstrom first joined the city in 1986 as an administrative assistant in the streets and sanitation department and has served as the acting deputy city manager and chief services officer since Kimball left his post at the end of December.
- Although the Grand Rapids Rampage couldn’t resurrect its season and eventually became non-existent with the purchase of the Arena Football League assets by a new league, the city’s other two minor league teams continued to enjoy success.
As the West Michigan Whitecaps headed into the home stretch of their 16th regular season of single-A baseball, CEO and Managing Partner Lew Chamberlin told an audience at a Rotary Club of Grand Rapids luncheon of the key business changes the partners have made over those years to the home field in Comstock Park.
Although the Grand Rapids Griffins didn't win the Calder Cup last season, the American League Hockey franchise did capture two significant business-service awards for the 2008-09 campaign. The AHL cited the Griffins as first in the Western Conference for overall ticket sales and for community service.
- Citadel Communications Corp. debuted a new radio format for its 1340 AM station in Grand Rapids. WJRW — “We’re Talking West Michigan” is a news and talk format that features “live local regional issue-based programming.” The new format replaced the WBBL Sports programming that was moved to Citadel’s high-power FM frequency at 107.3. Citadel Broadcasting Corp.
Citadel operates several other radio outlets in Grand Rapids. Citadel Broadcasting Corp., the nation's third-largest radio broadcasting company, filed for Chapter 11 bankruptcy protection on Dec. 20 in an effort to restructure its hefty debt load as it continues to face declining advertising revenue.
- The Rapidian, a nonprofit, Web-based experiment in citizen journalism in Grand Rapids, was launched. With seed money from the John S. and James L. Knight Foundation, the Grand Rapids Community Foundation and the Grand Rapids Community Media Center have joined forces to create the venture at a time when mainstream media faces tectonic shifts in advertising support and information delivery methods.
- The Rapid CEO Peter Varga told county commissioners that his transit service was on pace to top the 10-million ride mark before the fiscal year ended Sept. 30. Varga also said work on the $35 million expansion of the Interurban Transit Partnership Wealthy Street operations facility was getting under way, roughly two years earlier than first thought. Varga indicated that ITP will ask voters again to approve a millage for the Silver Line, a rapid transit service that would run along Division Avenue from 60th Street to downtown, and may do so as early as next year. Earlier this year, voters defeated the proposal, and without a millage in place, ITP can't capture the $40 million in federal and state funds that would build the 10-mile route.
- Haworth Inc. was awarded a Michigan Economic Growth Authority tax credit valued at $22,437,419 over 13 years as an incentive to move its operation in Calgary, Alberta, to West Michigan. Haworth plans to complete the move in 2010 and create 649 new jobs over the next five years. The office furniture manufacturer expects to fill 500 of those jobs by the end of the first year.
- The recession has been good for Perrigo Co.’s generic and store brand drug business. Despite the gloom and doom economy, the Allegan company reported revenues up 16 percent to a record $2 billion. Adjusted income from continuing operations increased by 13 percent for fiscal 2009 to 1.87 per share and could be between $2 and $2.12 per share for fiscal 2010, Perrigo CFO Judy Brown told.
The public company expects $120 million of revenue growth in new products in 2010.
- Grand Rapids Community College will again seek voter approval for a millage, its new president said. But GRCC trustees won't turn to the ballot until President Steven C. Ender can tell them he is satisfied that every possible measure has been taken to streamline spending. GRCC trustees in the spring picked Ender, who had been president of Westmoreland County Community College near Pittsburgh since 2005, to replace Juan Olivarez, who became CEO of the Kalamazoo Community Foundation.
As five big vaccine makers rushed to finish clinical trials and launch H1N1 flu vaccine production, businesses were urged to plan ahead to deal with the specter of swine flu, a state epidemiologist said.
“The message we’ve been emphasizing in the workplace … is stay at home if you’re sick,” said Bridie Kent, community relations coordinator for the Kent County Health Department. The department was poised to begin a marketing campaign in the fall to boost awareness of the impending H1N1 virus, Kent said.
- Leaders of the Gun Lake Tribe of Pottawatomi Indians broke ground on the construction of their long-delayed casino in Wayland Township on Sept. 17. The casino will now be approximately half the size of original plan, but expanded as the economy improves in years to come. Phase one will be a $157 million investment in an 83,000-square-foot casino with 1,200 slot machines, 36 table games, an entertainment lounge and a restaurant seating 300.
Tribal officials said the casino will directly employ 600 people — at least 550 of them will not be tribal members — with the average job worth $40,000 in wages and benefits. They said the economic impact of the casino will lead to another 1,000 new jobs in the area, with its spending on vendor goods and services being about $30 million annually. The original casino plan would have created an estimated 1,800 direct jobs.
- The overall vacancy rate in the industrial real estate market rose by a tad more than a point during the first half of the year. According to CB Richard Ellis/Grand Rapids, the unoccupied space in Kent County reached 11.1 percent at the end of June — up from 10.0 percent at the end of 2008. Despite the increase, vacancy here was below the national average of 12.4 percent at the year's halfway mark. The overall vacancy rate includes owner-occupied and leasable space.
The CBRE/GR report said leasing activity remained slow. The report, compiled by CRBE Economic Advisors, also predicted that vacancies will continue to rise slightly next year and a few large owner-occupied facilities will soon become available.
- Detroit Renaissance changed its name to Business Leaders for Michigan, with an expanded organization and a broader focus that now includes West Michigan CEOs and a plan for returning Michigan to a competitive state that attracts investments and jobs.
- Davenport University's new president, Richard "Rick" Pappas, promised to make sure the private nonprofit college means business.
"Our relationship with business should be really close," said Pappas, who spent the early part of his tenure visiting DU's 14 campuses and meeting with community leaders."
Davenport’s move to the 53-acre Caledonia Township site, which was expanded earlier this year by a 16-acre gift from the Meijer family, has allowed Davenport to develop a more traditional college campus with two dormitories and 14 National Association of Intercollegiate Athletics Division II sports.
- It's going to take grassroots support throughout the state, regardless of political affiliation, to pull Michigan out of its economic bind and make it friendly to business, according to the leaders of the West Michigan Regional Policy Conference.
They gave a report at the Economic Club of Grand Rapids on progress made since the first Policy Conference took place in September 2008. The comments by Doug DeVos of Amway Corp., Jim Dunlap of Huntington Bank, Peter Secchia of SIBSCO LLC, and Jeff Connolly of Blue Cross Blue Shield revealed strategies that have evolved over the year to better reach lawmakers in Lansing. The next Policy Conference is in September next year.
- The Michigan State University College of Human Medicine announced an infusion of medical research funding into Grand Rapids: a $6.2 million grant for Parkinson’s disease research to be shared with investigators at the University of Cincinnati. The National Institute for Neurological Disorders and Stroke, part of the National Institutes of Health, has awarded a Morris K. Udall Center of Excellence for Parkinson’s Disease research grant to MSU researchers who will share the grant with University of Cincinnati researchers.
- The Right Place Inc., in partnership with Heat Transfer International of Kentwood and Sietsema Farm Feeds in Howard City, commissioned West Michigan's first commercially-based biomass gasification system at the feed mill in Montcalm County. The system built and installed by HTI is now turning 70,000 pounds of turkey manure from the Sietsema Turkey Farms into 12,000 kilowatt hours of electricity and 206,400 pounds of steam each day, which is used in the production of turkey feed.
- The dismal investment year of 2008 reduced assets by millions and will impact grant-making into 2013 and beyond, West Michigan community foundation officials say. Assets for Grand Rapids Community Foundation dropped by $49 million in fiscal year 2008-09, for example. Others also saw setbacks in total assets for fiscal 2008, according to their annual reports: Fremont Area Community Foundation, $76.2 million; Kalamazoo Community Foundation, $74.5 million; Community Foundation for Muskegon County, $35.7 million.
- While many have called it a parking ramp project the last two years, officials at the Gerald R. Ford International Airport describe the work as a terminal area improvement project that features a new, four-level covered parking facility. Work on the $118 million project was recognized at a dedication ceremony Dec. 1. Of the total construction cost, $70 million was spent on the 4,900-space parking garage that connects to the terminal building with covered skybridges. The remaining $48 million has gone to upgrading the terminal itself.
- Agriculture has been taking on a larger role in the economy of Michigan by default, a result of the shrinking manufacturing sector. But just how big that role is in West Michigan is revealed in a report called West Michigan Agriculture: The Status and Conditions. The 50-page report presented jointly by the West Michigan Strategic Alliance, the Land Policy Institute of Michigan State University and MSU Extension measures changes in economic data about agriculture from 1997-2007, including number of farms, crop sales and acres of farmland.
- Steven A. Van Andel is leading a group that is applying to the Federal Reserve Board to acquire a significant share of Macatawa Bank Corp. Late last year the bank reportedly received a $20 million cash infusion from a group controlled by David Van Andel as part of an effort to increase its capital level. The board of directors of Macatawa Bank selected Richard L. Postma to be the new chairman of Macatawa Bank Corp. Postma pledged in a written statement to lead initiatives to raise capital in order to return the bank to profitability.
- Sequenom Inc. invested $400,000 in 2009 into the Grand Rapids laboratory that is the focal point of its nascent molecular diagnostics business, according to the company’s third quarter filing with the Securities and Exchange Commission.
The money was put into “higher rent, communications and general facilities” for the Sequenom Center for Molecular Medicine, the filing disclosed. Sequenom also attributed $800,000 of increased depreciation primarily to the SCMM. The San Diego company said it plans to launch two new tests in early 2010 that also would be handled by its Grand Rapids laboratory.
- The Michigan Economic Growth Authority board was expected to approve tax credits for Steelcase Inc. and Consolidated Resource Imaging, LLC in support of a total of $21 million in investments the two companies are planning to make in Grand Rapids and Walker.
CRI sought a MEGA High-Tech Tax Credit in return for adding 50 new jobs to the region and investing $3 million in the company's expansion at an undisclosed location in Walker. Steelcase worked with The Right Place Inc. and the MEDC to assist in the company’s consolidation and job retention plans involving the Corporate Development Center located in Gaines Township, according to the Right Place announcement. The Right Place also said 350 white collar employees at the CDC will be transferred to the company’s headquarters at 44th and Eastern in Grand Rapids. Steelcase will invest $18.2 million at the Grand Rapids location for building renovations and infrastructure upgrades for the retained employees.
- The final price tag for the Helen DeVos Children’s Hospital under construction in Grand Rapids is expected to be $292 million, Spectrum Health officials told a local health care planning agency. As originally proposed in 2006, the cost was estimated at $190 million. The amount is within the $27.3 million allowable variance on the $272.5 million cost that was approved two years ago by the Michigan Department of Community Health, said Lody Zwarensteyn, president of Alliance for Health.