Crain's Detroit Business - December 19, 2011 - (Page 14)

Page 14 CRAIN’S DETROIT BUSINESS December 19, 2011 Bloggers on the beat TOM HENDERSON: Sometimes you see it coming, sometimes not the ground and pledges Here are some events $30 million to help grow in 2011 that no one saw young clean-tech compacoming: Joe Angileri joins nies here that can sell to Compuware Corp. in June the huge Chinese market. as president and COO, reHere. Southeast placing Bob Paul. That Michigan. Not Silicon Paul was, in turn, replacValley. Not Boston. ing founder Pete KarBefore they’d left, they manos as CEO wasn’t a had signed memoranda surprise, having been of understanding with Tom Henderson anointed by Karmanos Spark and Sino Ambaslong ago. But Angileri resadors LLC, a Spark tenant placing Paul? that will head the investment fund. Henry Ford Health System creates Angileri, 53, had retired after having been managing partner of the Innovation Institute at Henry Ford, the Michigan region of Deloitte LLP a joint venture to create for-profit since 2007 and a 19-year partner of companies and improve medical the accounting and consulting equipment and hospital processes. Much more than lip service to firm. But Paul and Karmanos decided he was their guy and eventu- collaboration, this is the real deal, with enough startup funding for a ally convinced him he was, too. A Chinese real estate develop- gorgeous rehab of an Albert Kahn ment group comes to Southeast building on the hospital campus Michigan and asks Ann Arbor Spark and partnerships with the College for help getting a tech incubator off for Creative Studies, the smart sensors group at Wayne State University, Carnegie Mellon University in Pittsburgh, the University of Chicago and Universidad Complutense de Madrid. And then there were some more predictable things: That Arboretum Ventures LLC would raise its biggest fund and that it would be oversubscribed. The Ann Arbor-based venture capital firm has had some great exits in recent years, including the sale of HealthMedia Inc., HandyLab Inc. and Accuri Cytometers Inc. for an aggregate sum approaching $600 million. Its second fund of $73 million didn’t have much dry powder left when I asked Managing Director Tim Petersen whether he was raising a third fund of $125 million. Worried about U.S. Securities and Exchange Commission rules prohibiting fund managers from seeking publicity, he refused to comment. I went with the $125 million as an educated guess for his target in several Crain’s stories, because it only made sense that he and partner Jan Garfinkle would want something substantially larger after all their success. In September, they announced that they had indeed been looking for $125 million but ended up topping out at $140 million. That in April, Jeff Williams would be named CEO of a UM spinoff called Life Magnetics Inc. I told him in March I figured that would be his next gig, and he agreed to let me know if it became official. Life Magnetics earlier had gotten $1 million in seed funding from Arboretum. Williams had been CEO of HandyLab before it was sold in 2009, then was Accuri’s CEO before it was sold last February. Let’s see: Arboretum has a new portfolio company and Williams is out of a job? That Energy Conversion Devices Inc. would spend 2011 in deep doodoo. The maker of solar photovoltaics had put all its eggs in one basket: selling solar roofing material to huge construction projects in Europe that were propped up by government subsidies. When the recession hit, construction projects couldn’t get bank funding, and countries like Spain and France suddenly had no appetite for subsidizing anything except more meetings to try to figure out how to salvage the euro. Sure, ECD said it would now concentrate on other markets. Hey, Canada is right there across the river. And there’s always South America. But with its major market having blown up, did it really need two factories in Greenville? And two in Auburn Hills? Or that new factory in Battle Creek? No. No. And no. Reporter Tom Henderson’s blog about accounting, banking, venture capital and high tech can be found at www.crainsdetroit.com/henderson NANCY KAFFER: Be merry now, for tomorrow isn’t looking so great Christmas is my favorite time of year in Detroit. Downtown looks great, and there’s that pre-holiday feeling of excitement in the air. It’s cold, sure, but it’s the exciting preChristmas, before-the-snow-isdirty-brown kind of cold. But this year, it’s a bittersweet Christmas. And the year ahead promises to be especially grim. A preliminary review being conducted by state Treasurer Andy Dillon should be complete before Christmas and is expected to result in a full financial review for the city of Detroit. Which is expected to result in the appointment of an emergency financial manager. What exactly this means for Detroit is unclear. One city dweller I asked said he feels like having an emergency manager in Detroit is like doing that intervention on your drunk brother: excruciating in the short term, but if all goes well, he becomes a viable human being again. At some point. (In 2005, when I started covering the city for another weekly publication, the city’s financial crisis was also the top story, and people talked about the idea of a state takeover all the time, only back then we called it “receivership,” a term that’s Nancy Kaffer inaccurate but much more succinct. Oh, how I long for the days of straightforward sentence construction.) The big question is whether an emergency manager can fix Detroit’s financial problems. The Detroit Public Schools don’t seem remotely close to fixed. And this is the second DPS state takeover in the last 10-ish years. There’s no question that many Detroiters would violently (rhetorically, if not literally) reject a state takeover. There’s always the chance that Mayor Dave Bing and the Detroit City Council will come up with an amazing cost-cutting plan, and the city’s unions will sign on. There’s also the chance that the city will enter into a consent agreement (not a consent decree, by the way, that’s something different) that would grant a city official some of the powers of an emergency manager. At any rate, it seems like the new year is going to be pretty bleak. I don’t see any way to fix Detroit’s budget without hard shortterm cuts to services. All of which will be good for my industry. Lots of conflict means lots of stories. But this time, y’all, I have no appetite for the stories that would arise. Detroit, I hoped it would never come to this. Merry Christmas, everybody. Reporter Nancy Kaffer’s blog on the city of Detroit and small business can be found at www. crainsdetroit.com/kaffer You Deserve to See All of Your Commercial Real Estate Options Real Estate Strategy Tenant Representation Buyer Representation Project Feasibility Before you make a move, let us uncover every commercial real estate option. As an unbiased, tenant representative, we bring more thought per square foot. pmcresa.com 248.223.3500 Construction Oversight Incentives Lease Administration http://www.crainsdetroit.com/henderson http://www.pmcresa.com http://www.pmcresa.com http://www.crainsdetroit.com/kaffer http://www.crainsdetroit.com/kaffer

Table of Contents for the Digital Edition of Crain's Detroit Business - December 19, 2011

Crain's Detroit Business - December 19, 2011