Business Section

Local governments are one step closer to knowing the impact of a tax appeal that Pfizer is pursuing – and while the news isn’t great, it could have been worse.

Last year, Pfizer contested the assessed value that the city of Ann Arbor set for the drugmaker’s former research campus here. Pfizer, which closed its massive local R&D operation last year, argued that its Ann Arbor properties should be given a dramatically lower assessment – less than half of the value assigned by the city for 2008 and 2009.

A settlement reached earlier this month between Pfizer and the city of Ann Arbor is a compromise that’s now being reviewed by the Michigan Tax Tribunal. It lowers Pfizer’s assessment for 2008 and 2009, but not by as much as Pfizer requested. If approved, it will represent a total loss of roughly $10 million in tax revenues over the tw0-year period for all local entities that received taxes from Pfizer, including the city, Washtenaw County, Ann Arbor Public Schools, Washtenaw Community College and the Ann Arbor District Library. The tribunal is expected to make a ruling in the next few weeks, and is expected to approve the deal. [Full Story]

The handful of business people who attended a Washtenaw County budget forum on Tuesday morning stressed the importance of local investment, and heard a preview of areas targeted for cuts as the county grapples with falling revenues and a potential $26 million deficit over the two-year period beginning in 2010.

County administrator Bob Guenzel gave the small group, which also included several elected officials and department directors, a preview of budget recommendations that will be released later this week and formally presented to the board of commissioners at their June 3 meeting. Though he didn’t provide details Tuesday morning, he said the recommendations will include layoffs and a change in compensation for non-union employees. Meanwhile, union leaders from 17 different bargaining units are being asked to renegotiate contracts in talks that will continue through July. The county employs about 1,300 people – roughly 80% are union employees.

Guenzel outlined four general areas identified to close the $26 million budget deficit: 1) revenue generation, $3 million to $5 million; 2) department reductions, $7 million to $10 million; 3) employee compensation and benefits, $12 million to $14 million, and 4) structural changes, $3 million to $7 million.

He also laid out a wide range of possible cuts, including selling county-owned facilities – he noted that the Zeeb Road building was only half occupied, for example – and even the possibility of not opening the jail expansion when it’s completed in 2010. That expansion, which would provide an additional 112 beds, would cost at least $1 million extra per year to staff. He said that though governments in general are good at finding one-time solutions, “what we need going forward is primarily structural savings.”

Guenzel cited the Wall Street Journal in characterizing the economic crisis as the worst since the 1930s, with no end yet in sight. He said that though this area had the lowest unemployment rate in the state, the magnitude of the problem was dire. “We haven’t hit bottom,” he said. [Full Story]

In 1976, when Ernie Perich was a feckless youth, he and two buddies from college decided to travel to art fairs around Michigan selling “I Love America” T-shirts, tapping into the nation’s bicentennial celebration. More than 30 years later, Perich – now with the trappings of adulthood, including his own Ann Arbor ad agency and a bank directorship – is back in the T-shirt game.

Perich says that over the years he’s owned “every one of the fancy Ann Arbor German cars,” but about a year and a half ago he got a Cadillac CTS and loves it. He’s tired of hearing people dis the U.S. auto industry – plus, General Motors is one of his firm’s clients. He wanted a way to celebrate American cars and generate a little buzz, so he spent about $2,000 on T-shirts intended to do just that.

The T-shirts say  ”I ♥ My (American Car)” with the last two words rendered in Japanese characters. The idea, Perich says, is to get people to wonder what the heck those Japanese words mean. A website address – IHaveChosen.com – is printed on the sleeve. On that site, you can upload photos of yourself with your car, or buy the T-shirt for $17.76 – get it? [Full Story]

An eclectic mix of speakers at Wednesday’s Morning Edition breakfast talked about healthcare in developing countries, commercials promoting tourism in Michigan, computer security, the upcoming Ann Arbor Restaurant Week and an update on the venture that will replace the Ann Arbor News.

Russ Collins, the event’s emcee and executive director of the Michigan Theater, also noted that they were now installing a state-of-the-art 3D projector, just in time for the May 29 opening of Disney-Pixar’s animated film “Up” – which features, he noted, “a hyperactive nine-year-old named Russell.”

David Canter, former head of Pfizer’s Ann Arbor research campus, kicked things off with comments about the University of Michigan’s acquisition of that site. [Full Story]

More than 250 people from academia, business, government and nonprofits packed the auditorium Monday afternoon at the Partnership for an Innovation Economy forum, hosted by the University of Michigan at its newly renovated art museum.

Throughout the two-hour event, The Chronicle learned, among other things: 1) which former Pfizer executive is a rugby referee, 2) which local power couples have relied on each other for advice, 3) who hosts one of the best holiday parties in Ann Arbor.

Of course, there was also much talk of UM’s role in economic development. [Full Story]

On Monday, May 4, 2009, the question to Michael Flynn from the city of Ann Arbor building inspector was: “What line of work are you in?” Flynn’s answer: “I invent things.”

In Flynn’s backyard, the inspector had just signed off on the packed sand for a concrete pour that will become the floor of Flynn’s new laboratory space.

So what sort of stuff does Flynn invent? And is there any money in that?

From now through Mother’s Day, visitors to Ann Arbor’s Hands-On Museum can have a look and touch for themselves. That’s where Flynn’s Magnetoscope will be on display. The Magnetoscope exhibit illustrates how ferrofluid – oil, plus iron oxide particles, plus a surfactant – interacts with the forces of magnetic fields and gravity to create spiky columns out of an black pool of liquid. Visitors can manipulate the magnetic fields by cranking a red or a blue magnet closer or further away from the pool of ferrofluid. [Full Story]

On Friday, May 8, the renovated Ypsilanti storefront that houses SPARK East will be open to the public for a look at the business services offered there. The event is part of a larger economic development effort on Washtenaw County’s east side, an effort that’s getting a boost from federal stimulus funding – or what one county official called “Obama bucks.”

Last Thursday, about 40 members of the Eastern Leaders Group got an overview of the 2009 Recovery and Reinvestment Rapid Response Strategy Business Plan, which had been approved by the ELG executive committee in mid-April. Held at the brick-walled SPARK East office on Michigan Avenue, the meeting covered a lot of ground, from neighborhood revitalization efforts to a plan for microloans to businesses.

The Chronicle dropped by to hear about the plan too. Though the meeting was decidedly forward looking, there was an element of history at SPARK East as well – more on that later. We’ll start with a look at the three main topics covered on Thursday: 1) business development and employee training, 2) microloan programs, and 3) community revitalization and stabilization plans. [Full Story]

Walking home in the drenching rain last week, soaked to the bone and feeling a little sorry for myself, I noted that at least I wasn’t cold – it finally felt like spring. And spring marks the third season of the year for The Ann Arbor Chronicle, another milestone as we check in with our eighth monthly update to readers.

This month we have a few things on the horizon, plus a reminder and some thank yous. [Full Story]

It was not anything personal, said Stephen Rapundalo to Skip Simms, who was sitting across the U-shaped configuration of tables from Rapundalo. He had just voted against Simms’ appointment to the Local Development Finance Authority board.

But over Rapundalo’s objection, shared also by his colleague on the board, Rob Risser, the body voted to add an ex-officio, non-voting seat to the LDFA board, which was filled by Simms. The occasion of the vote on Tuesday morning, held at the SPARK Central Incubator on Liberty Street, was the LDFA board’s regular meeting, which was also billed as a retreat – a facilitator was on hand to lead the group through an exercise to reflect on the organization’s purpose.

As Rapundalo’s assurance to Simms reflected, the new seat on the board was not created for Simms personally, but rather was specified as the designee of “the accelerator’s CEO,” who in this case was Michael Finney of Ann Arbor SPARK. Finney had designated Simms. SPARK contracts with the LDFA to provide services to high-tech start-up companies, and Simms is SPARK’s managing director of business acceleration as well as manager of the Michigan Pre-Seed Capital Fund.

Simms already had a seat at the physical board table when the board’s deliberations took place on the creation of the ex-officio position. So why were Rapundalo and Risser opposed to the expansion of the board in this way? [Full Story]

“This has been a challenging year – you’ll hear that word a lot,” Debbie Beuche told about 300 people who attended Tuesday evening’s annual meeting of the Ann Arbor Area Community Foundation. Beuche, the nonprofit’s board chair, said AAACF gave out $2.2 million in grants and scholarships in 2008 – a year in which their annualized investment return was -31%.

The meeting highlighted AAACF’s accomplishments during 2008, and recognized volunteers who were stepping down from their work with the organization. The event also included a presentation on a project funded by the foundation called The B-Side: The Business Side of Youth, a program to encourage entrepreneurship for youth.

But first, the finances. [Full Story]

By the time The Chronicle arrived at Yourist Gallery on Broadway Street last Wednesday, the temperature had cooled from its maximum of 2300F° to around 170F°.  The owner of the gallery, Kay Yourist, had donned giant leather gloves to open the door to her new kiln after its first complete firing the previous night.

The door to the kiln is actually a wall of un-mortared bricks that gets opened and closed by stacking and unstacking the wall brick by brick. The top few rows of bricks, which were sourced through Schad Boiler Setting Company in Detroit, are custom shaped to match the arch of the kiln’s roof, and labeled to prevent the door-closing task from evolving into a puzzle-solving exercise.

Even though we were there to see the opening, we got a chance to see a bit of the closing process, too – Yourist had actually begun the opening process before we arrived. But she indulged us by first re-stacking the bricks into a solid wall, so we’d have a clearer idea of how it worked.

Unstacking the bricks was slow going at first, but once Yourist had un-wedged the top row, the pace picked up. It wasn’t long before the top front layer of pottery pieces became visible. The kiln has three tiers and a front and a back, so the volume of art work we saw was about a sixth of the kiln’s total capacity. [Full Story]

At its regular meeting on April 21, Ann Arbor’s planning commission voted 6-3 to recommend to city council that it approve the City Place project proposed along Fifth Avenue. It was the fourth time that developer Alex de Parry had brought the project before the planning commission. The first proposal was a conditional rezoning, while the second two proposals were planned unit developments – which are also rezoning proposals. The proposal sent to city council on Tuesday night did not require any changes or variances from the property’s current R4C zoning – it’s thus what’s commonly referred to as a “by right” project.

No one in the room on Tuesday seemed particularly fond of the project, from neighbors to planning commissioners. Even the developer emphasized that it was not his preferred project to build. If planning commissioners were unenthused about the project, why did a majority of them vote for it? Conversely, if it’s a “by right” project, how could three commissioners vote against it, instead of following Tony Derezinski, city council’s representative to the commission, who stated flatly: “I feel constrained to follow the law.”

On Tuesday evening, commissioner Eric Mahler couched the answer to the first of these questions in terms of chickens – the kind that come home to roost. As for the second question, the legal basis of dissenting commissioners could be playfully paraphrased as this: All those chickens that come home to roost will have no place to park their cars. [Full Story]

In our travels through downtown Ann Arbor this week, we saw a cupcake-shaped sign outside Cake Nouveau on Fourth Avenue, urging passers-by to cheer for Courtney Clark on Food Network this Sunday. Being the curious sort, we popped inside to see what there was to cheer.

Turns out it’s been a busy week for the owner of Cake Nouveau. On Wednesday, Clark appeared on ABC’s The View, one of three bakers who made birthday cakes for co-host Sherry Shepherd. (Shepherd picked Clark’s cake as her favorite.)

And on Sunday, Clark will be a finalist on Food Network’s Last Cake Standing – the winner of that competition gets a $50,000 prize. Sarah Mayfield, who works in the shop, told us the Food Network show had been taped in January. They know the outcome, of course, but are sworn to secrecy. [Full Story]

Some facts that students learned about former Ann Arbor mayor Ingrid Sheldon on Saturday: 1) She spent the first part of her schooling, through 7th grade, in a one-room schoolhouse on Earhart Road, 2) she thinks a large part of the mayor’s job entails cheerleading for the city, 3) she doesn’t take herself too seriously. This last fact was demonstrated as she pulled items out of a large “gift box” she’d brought, full of things she said would be useful for students in leadership roles – including a pair of yellow pompoms. And yes, she gave a little cheer.

Sheldon was keynote speaker at a leadership conference held Saturday at Huron High School. The event was organized by the school’s Interact Club, a service organization for  teens that’s affiliated with Rotary International. (Sheldon is a member of Ann Arbor Rotary, which sponsors Huron’s Interact Club.) About 40 students attended from Huron, Pioneer High, and several other local schools. [Full Story]

When former University of Michigan football coach Lloyd Carr arrived Thursday evening at the Zingerman’s Raucus Caucus fundraiser to benefit the Peace Neighborhood Center, he had no linemen blocking for him.

So Michael Hedin – whose Townie’s Two Step team was competing in the fundraiser’s sandwich design contest – wheeled around from his conversation with us to pitch to Carr the virtues of his team’s two-meat sandwich. The coach was there to help judge the sandwich design contest at the heart of the fundraiser – and he was wise to Hedin’s angle: “Yeah, I always used to talk to the officials before the game, too!”

A few minutes later, Gov. Jennifer Granholm delivered remarks that kicked off the event, which raised around $18,000 for the neighborhood center, according to Rick Strutz, a managing partner of Zingerman’s Deli.   Located on Maple Road near Miller Avenue, Peace Neighborhood offers after-school programming and tutoring for elementary and middle school students.  [Full Story]

“We need more data, let’s go launch something!” George Albercook of Rocks and Robots was talking about a reconfigured trebuchet beam. He and his colleague Katie Tilton had reinforced a PVC pipe with Kevlar thread, after a failed first attempt at the A2 Mech Shop open house Saturday afternoon.

But Albercook’s enthusiasm for the empirical applies equally well to any number of the enterprises grouped under the umbrella of A2 Mech Shop, LLC, which is housed in around 3,500 square feet of space on Parkland Plaza, just south of Jackson Road. They’ve had the keys since November 2008, and set up in January.

One example of an A2 Mech Shop enterprise is REVolution Electric Vehicles, a subsidiary of Electric Vehicle Manufacturing, which expects to begin producing electric maxi-scooters as soon as July 2009 at a not-yet-finalized Scio Township location. That location will also serve as a retail storefront, explained EVM’s chief engineer, Erik Kauppi, while the A2 Mech Shop space will continue to serve as a research and development facility.

The A2 Mech Shop can be loosely described as a co-working space with shop tools. It encompasses more than just research and development on electric scooters, but that’s where we’ll start. [Full Story]

Washtenaw County Board of Commissioners Administrative Briefing (April 8, 2009): Hefty funding from the federal stimulus package means as many as 1,000 local youth will get summer jobs and hundreds of adults will get job training and employment services, county commissioners were told at their Wednesday administrative briefing. Of the $3.6 million awarded to Washtenaw County, $1.95 million will be used to fund jobs for low-income youth between the ages of 14 to 24. The county now needs to find employers with suitable job openings, said Verna McDaniel, deputy county administrator.

Commissioners also discussed their plan for this Saturday’s retreat, which will focus on setting budget priorities. [Full Story]

Collaboration – and the need for more of it – was a common theme Tuesday night at a meeting to discuss Ann Arbor’s arts and cultural future. Hosted by the Arts Alliance, it’s part of a series of forums aimed at developing cultural plans for seven communities in Washtenaw County, under a broader plan for the entire county.

Several people spoke about the urgency of supporting local groups, as the economy continues to batter both businesses and nonprofits. Elaine Selo, co-owner of Selo/Shevel Gallery on Main Street, said she’s seen ups and downs for 27 years, and now “all of us are just trying to survive.” [Full Story]

Silvio’s Organic Pizza, at 715 N. University, is donating a percentage of their sales to earthquake relief in Italy on Thursday and Friday of this week. As Silvio says in a letter that appears on their website: “As a former volunteer of the Red Cross, which in Italy is always called in cases of natural disasters, my first instinct was to go there to help dig by hand every inch of the debris. The best I can do from here is to start fundraising amongst the great community of Ann Arbor.” Silvio hails from the Abruzzo region of Italy, where the earthquake struck. [Source]

In the old days, downtown was divided into three parts: Main Street (called Downtown), State Street (called Uptown), and South University (called Campus). Each area was different, but all were part of downtown Ann Arbor.

During my early days while attending Angell School on South University, I remember my mother giving me money so I could go have lunch at the Dugout restaurant on South U, owned by the Klepac family (their daughter was in my class), then pick up some ice cream at Miller’s before returning to school. As I grew up I used to hang out at Beaver’s Bike and Hobby on Church Street (owned by Fred Beaver), learning how to repair bicycles from Bill Loy (now owner of the Student Bike Shop).

I remember when the students left at the end of the school year in April, the local business owners wanted more people to come into the campus area during the summer, so Joan Beaver and a couple of her art friends invented the “Art Fair.” Wow, that really worked. Just look what everyone else in town has done with it! [Full Story]

Maybe it was pre-FestiFools roaming, or maybe it was spillover from the NCAA tournament in Detroit – whatever the reason, crowds were bigger than on any previous opening day at Ann Arbor’s Sunday Artisan Market, according to the group’s vice president, Joan Hutchinson. It wasn’t clear whether those people were actually buying, though – vendors we talked to had mixed experiences.

Kate Kehoe, whose notebooks made from old video box covers are the reporter notebooks of choice for The Chronicle, said she was having a pretty good day. Some of the people who’d passed through included a group decked out in Tar Heels regalia, she said. (The University of North Carolina team beat Villanova on Saturday and faces Michigan State University in Monday’s championship game.)

Mike Grady, who makes wood-turned objects, said he’d sold exactly one corkscrew all day. The cold weather, the economy – who knows what makes people spend their money, or not? He hopes next Sunday will be better. [Full Story]

Here’s what Phil Power believes: “There is nothing in life that is more challenging or more of an art form than being an entrepreneur.”

The former UM regent and newspaper publisher was talking to a group of University of Michigan students on Friday afternoon, giving them some insights on his own experiences founding Hometown Communications Network as well as his newest venture in social entrepreneurism, the Ann Arbor-based Center for Michigan. His talk was part of a series hosted by MPowered, a student entrepreneur group.

Power said he’d read Friday’s Detroit News article reporting that more than half of UM’s graduates leave the state after graduation. People have told him there’s nothing here for them in Michigan, he said, “which I think is a load of bull.” [Full Story]

Our dinner group was chowing down at the home of former City Council member Steve Kunselman, who wandered over as I discreetly nibbled on a chicken leg.

“This afternoon I was in Village Corner and saw they had a great wine selection,” Steve said. “I wanted to try something new, but it seems like whenever I look for a bottle around ten bucks, I always end up buying brands I already know – Glen Ellen, or sometimes Meridian, because I don’t know which others are good.”

I’m convinced that refrain is hard-wired into the Y-chromosome. Males are constitutionally incapable of advice-seeking for snippets of “guy knowledge” we don’t innately possess. The same guy who drove around lost in pre-GPS days instead of asking for directions feels Y-shamed to walk into a wine store and own up to an inability to intuit which bottle among the hundreds on display he should purchase.

Even flying solo, Steve probably didn’t risk beverage purgatory. In today’s hyper-competitive wine marketplace, thousands of labels from around the world scramble for scarce shelf pace. Truly vile bottles rarely make the cut at credible wine stores. [Full Story]

I held back submitting this monthly column until the end of March to see what latest theatrics would wash over the auto industry. I wasn’t disappointed. The Obama administration looked over the homework submitted by GM and Chrysler – homework designed to demonstrate how they were going to get out of their collective messes – and sent them back to detention to do it over again.

On top of it all, long-time CEO at GM Rick Wagoner was summarily dismissed, as if one lone auto executive had been responsible for creating an unworkable fiscal structure and a corporate culture developed over decades of booms and busts in the auto business. And just for good measure, the government is insisting that Chrysler and Fiat hook up – something they were bound to do anyway – making this requirement the equivalent of forcing children to eat dessert. [Full Story]

For nearly two hours on Thursday afternoon, three people leading the new online venture formed to replace the Ann Arbor News fielded questions at a public forum, trying to assuage concerns over news that shocked this community when announced last week.

“Community” and “local” were two words frequently repeated by Matt Kraner, Laurel Champion and Tony Dearing of AnnArbor.com, which is gearing up for a late July launch. “Local journalism is not dead in Ann Arbor,” said Champion, current publisher of The News who’ll be executive vice president for the new company. “We’re just serving it up in a very, very different way.” [Full Story]

Downtown Development Authority board meeting (April 1, 2009): The board of the Ann Arbor Downtown Development Authority held its regular monthly meeting on Wednesday and passed  a resolution – with some dissent – recommending that city council eliminate the character districts from the A2D2 zoning proposal.

The board also authorized spending around $75,000 to help start a business district in the Main Street area – an idea mentioned in our report on the board’s December 2008 meeting.

Additional spending, totaling around $25,000, was authorized for bicycle parking – some of it on-street.

The board also heard a report from its ad hoc committee on the discussion of the parking agreement with the city of Ann Arbor. Initial indications are that there was clear (but not unanimous) sentiment on the committee against renegotiating the existing agreement, but for exploring other alternatives.

Accessibility was a theme that came up in the form of DDA meeting material as well as real-time parking data. [Full Story]

It’s my turn to write the monthly milestone – an update about The Chronicle. Here’s a nuts-and-bolts outline, with a longer version after the break.

• Events: List them yourself on The Chronicle by registering for an account on Upcoming and creating the event listings there. Let us know when you’ve done that, and we’ll add them to our “watch list,” which will make them appear on The Chronicle’s event listing. It’s free.
• Emailed updates: Shoot us an email saying you’d like to receive weekly story summaries, and we’ll send them to you – with links to the complete story.
• Advertising crew: As part of our ongoing effort to increase revenues to support expanded coverage in The Chronicle, there’ll be some folks out there in the community earning commissions by convincing advertisers to place ads in The Chronicle. If you think you’ve got what it takes to sell ads into The Chronicle, let us know.
• Print and thoughts on newspapers: Printing off a page from The Chronicle should look a bit better than it used to. Regarding the contrast between news on-screen versus printed on paper, Del Dunbar’s column that we ran back in September 2008, our first month of publication, is a better read than ever. [Link to Del Dunbar's column.]

[Full Story]

Jim Woolliscroft was Harlan Hatcher’s personal physician, and near the end of the former University of Michigan president’s life, Woolliscroft made house calls to check in on him. That gave them time to talk. And one of the things they talked about was UM’s purchase of the property that became North Campus.

Hatcher told Woolliscroft that when UM leaders decided to buy the 800 acres of farmland north of Ann Arbor, they didn’t know exactly how they’d use it – but they knew it would transform the university.

Woolliscroft, dean of the UM Medical School, told that anecdote Tuesday afternoon to the 100 or so people gathered at a forum on the future of the Pfizer research campus, which UM is in the process of acquiring. This purchase isn’t quite as bold as the one made in the early 1950s, Woolliscroft said, but its potential to transform in unimaginable ways is great: “That opportunity is phenomenal.”

The forum was one of three held this year for faculty to talk about how the university will use the former Pfizer facility. Tuesday’s hour-long session focused on process, with administrators outlining just how they’ll go about deciding what academic research or other activities are located at the site. [Full Story]

As part of the change in delivery of the Detroit News and Detroit Free Press, which began today, Washtenaw News Co. has gotten a boost – the first good news this local business has seen in several years, according to its CEO, Nick Genova.

Starting today, Washtenaw News – an Ann Arbor-based distributor of newspapers and magazines – will be delivering the New York Times to home subscribers throughout most of Washtenaw County, Genova said. The papers were previously delivered under an agreement with the Detroit Media Partnership, which manages the Detroit papers.

The three-year contract with Washtenaw News also includes delivery of USA Today and Investor’s Business Daily. In addition, Washtenaw News is a distributor locally for the Wall Street Journal, Financial Times and the Ann Arbor News, among other publications. The deal means that Washtenaw News now uses about 20 independent contractors to deliver the papers, Genova said – about double the number they used before.

The Chronicle heard about this news on Sunday morning, when the following note slipped out of the New York Times delivered to Chronicle Central: [Full Story]

On Monday evening, March 23, several Ann Arbor residents took advantage of an entire city council session devoted to public comment on the recent A2D2 zoning revisions. The  zoning revisions apply to an area that  coincides almost exactly with the Downtown Development Authority district. We thus take the opportunity to focus on this district, and how taxes are collected in this geographic area, in light of recent community discussion on the topic.

The Chronicle has previously reported a remark by made by Mayor John Hieftje at a recent Sunday night caucus, in which he stated that the parking agreement between the DDA and the city was renegotiated in 2005 due in part to the fact that the DDA area represented a disproportionately greater burden on city services. Also previously reported, Kyle Mazurek, vice president of government affairs for the Ann Arbor Area Chamber of Commerce, posed several questions to the DDA board at its meeting on March 4, including one about the possibility of disproportionate use of city services in the DDA district: [Full Story]