When Securities and Exchange Commission filings revealed that Old Kent Bank had courted Fifth Third as a partner, and not vice-versa, a ripple of questions and concerns strung its way through the Grand Rapids community.
Why throw away 140 years of local ownership? Why quit when you’ve had 41 consecutive years of increased shareholder dividends?
The point, however, was that year 42 might not have been forthcoming. Certainly not year 45. According to SEC documents, Old Kent’s overhead was high and its investment in technology might or might not pay off in the short term.
CEO David Wagner did what CEOs of public companies do. He ensured the investment of his shareholders by cutting a deal with Fifth Third President GeorgeSchaeferJr
Wagner’s payoff? Millions of dollars from stock options. A nice job with Fifth Third in Grand Rapids. And full-time security guards.
That’s right, the CEO of Grand Rapids’ largest locally headquartered bank (remember, the deal’s not done yet) feels the need for security right here in West Michigan. Wagner has had security help before, but never to this extent, according to people familiar with the situation.
Face it, Wagner could afford to buy a private island right next to David Ondersma‘s, but that’s not what he wants to do.
Yes, the effect on 1,400 West Michigan families will be terrible. And, yes, the loss of local control will erode West Michigan’s business community, not to mention the damage to the nonprofit community that counts on corporate support.
But for a bottom-line business decision, Wagner did the right thing. He doesn’t deserve to be a prisoner in his own office.
- Look for some positive fallout from the Old Kent merger, too. Expect JerryJohnson and Mike Price at Mercantile Bank and Chuck Stoddard and Tom Wesholski at Grand Bank to lead the pack of smaller banks that are stepping up local expansion plans in the wake of a suddenly fertile employment pool. Macatawa Bank’s Benjamin Smith says the same thing in a story for today’s Business Journal.
- Many things change, but a few don’t.
Remember a year ago when then-CEO Bill Gonzalez first announced the Spectrum Health System proposal for a cardiac care hospital? The new facility was to be nine stories high and it would cost approximately $66 million.
And it would add only about 2 percent to rates that patients must pay at the hospital.
Then cost estimates on the cardiac tower rose to $80-odd million and the tower lost one story. But, despite the rise in cost, the project would add only about 2 percent to Spectrum’s patient rates.
Now the state has given the go-ahead on the scaled-down project that will cost just more than $88 million.
Moreover, Spectrum now says the project will add less than 2 percent to patient rates.
Hmmm. Must be the “new math” they’re teaching in schools these days.
- In discussing the value of science and math education in which he believes the country needs to improve on a grand scale, Congressman Vern Ehlers, R-Grand Rapids stressed that such training has great value to nonscientists as well.
For instance, the Grand Rapids scientist said, the value of his nuclear physics knowledge in Congress is limited, but the rigor of the training behind it has given him a unique role in committee hearings.
“The scientific knowledge is important,” he said, “but the analytical skills I’ve learned from it are extremely important. Sometimes I think my main role in committee hearings,” he added, chuckling, “is to serve as the BS Detector when we hear from people who are arguing illogically.”
In Congress, that must be a very important role.
- The more things change, the more they stay the same. A case in point is the North Monroe Business District. The area north of Michigan Street is booming, with new business ventures and housing units popping up all over the place. With that expansion comes a need for parking, however.
City officials are attempting to secure space for a parking ramp on surface lots near Trowbridge and Monroe, but are meeting with resistance. The surface area is owned — and used — by The Grand Rapids Press, Kent County and Quality Auto Service.
A certain newspaper would be amenable to giving up its land for parking, as long as 600 of the 800 spaces in a projected ramp would be available for company employees’ use.
“We’re no closer than we were three years ago in getting parking,” said Jim Zawacki, president of the business association and GR Spring & Stamping.
The problem, of course, is that this certain newspaper is threatening (again) to move out of town if it’s not allowed to retain room for expansion.
Maybe it’s time for GRMAYOR John Logie to dial up Steve Heacock at the county and start parking negotiations in a new direction.
- What do Las Vegas, Louisville, Nashville, Indianapolis, Cleveland and Grand Rapids have in common? They are, in order, the top six most cost-effective meeting sites in the United States, according to the results of an online survey from GetThere, a corporate travel planner that used its own DirectMeetings software to conduct the survey.
Factors used for the ranking include three-, four- and five-star hotel rates, estimated food and beverage expenses, meeting room rental rates and airfares.
- Some of those visitors might want to make a swing over to Rogers Department Store, where executives recently had a chance to mark a first-ever milestone. Steve Britton became the store’s first salesperson to reach $1 million in sales for a year.
“We’re amazed by Steve,” said Rogers President Dan Hurwitz. “You might see retail salespeople hit a million dollars in larger markets like Chicago or L.A., but in West Michigan it’s exceptional.”