Mark Sanchez: I prefer to use the word threatened in terms of the federal research funding. You know, over the last two decades, there's been a lot of money invested in this town to develop this research cluster up on the hill and at the bottom of the hill. Michigan State moved their medical school here. We've got the Grand Rapids Innovation Park, the Doug Meijer Medical Innovation Building. And there's some research, a lot of it going on up there on Michigan Street. Now the new Trump administration has been...well, a week ago, it was cut, not necessarily cut, but limit exactly how some of these funds, these research grants could be used. When researchers apply to the NIH, National Institutes of Health, they work out the deal, they work out the funding, and some of that funding goes to their, what's known as indirect costs. This is basically paying for overhead. When you have a research institute, a facility, I.T. systems, and all of that, there are fixed costs that go into these projects. And so, they work out how much of that grant goes to the direct research, how much goes to indirect costs. Well, the Trump administration with the NIH as the new president seeks to get a better control on federal spending came out here a couple of weeks ago with an idea that we're going to limit the indirect costs to 15% of the grant. Now for your large research institutes such as University of Michigan, Michigan State, and others, those indirect costs are significantly higher. I think MSU is at 57%, U of M 56%. In a couple of stories we did at crainsgrandrapids.com last week, when I talked to some of the researchers, including the Dean of the Michigan State Medical School, and others issued statements, they talk about if this goes through, and it's on hold right now, there's a lawsuit in Massachusetts, a federal lawsuit by 23 Democratic state attorneys general, including Dana Nessel here in Michigan, and they did get a temporary injunction against this last week in the federal court out east. But if this goes through and the court does not strike this down but upholds it, your researchers are saying this is going to put a huge dent in their ability to conduct these research studies, these clinical trials and others doing this early, early discovery that the NIH funds. So, we're going to have to keep an eye on this, that temporary injunction is in place as that case goes forward. And there's quite a bit of opposition to this in the research community that a lot of folks are worried. What is this going to mean for this biomedical research that occurs in this country? And in this country, the U.S. is really a destination in biomedical research. We have researchers coming from all over the world to conduct their research here and do these breakthroughs.
Patrick Center: What is the risk to the broader industry and the impacts on Grand Rapids?
Mark Sanchez: This is an industry. One of the concerns folks raised with me in our conversations last week is, well, these research teams, these high-level researchers, they may take their work elsewhere. I saw one post by a gentleman on social media last week who's in the research community said this is going to be great for biomedical research in China. They do a lot of this research in Europe too, with the EU and some of the countries there, and do these researchers decide to take their projects elsewhere? Or do the researchers who are overseas and see this opportunity in the U.S., do they decide to no longer come here to do their research? So, it has some real long-term ramifications that folks in the research community are quite concerned about. Well, what's this going to mean over the next several years, the next generation? Will we have the ability to attract this high-end talent to do these research studies, or will the talent we have here, will they decide to go elsewhere?
Patrick Center: We're talking with Crain's Grand Rapids Business, staff writer Mark Sanchez. Northpointe Bank shares are now trading publicly.
Mark Sanchez: Yeah, we have another publicly traded company here in Grand Rapids. You know for months the big speculation has been that Acrisure is going to do an IPO, and the company has talked about that, but last week it was a bit of a surprise Northpointe Bank shares. It's got the one office in town over on the Beltline by the freeway. This is primarily a residential mortgage lender that operates across the country out of Grand Rapids, and it did an IPO last week $151 million and an IPO 10.4 million shares opened just last Friday at $14.50 a share. And that put the market cap for the company about $480 million. It's the parent corporation of Northpointe Bank and its shares are now trading on the New York Stock Exchange under the ticker symbol NPB. So, folks want to invest in a local corporation. There's North Point Bank shares now going forward as a publicly traded company.
Patrick Center: And I'm hoping you can keep us up to speed on, how should I put it, the soap opera that is taking place in Lansing. Get us up to speed on the tipped wage hike. Where are we now with this?
Mark Sanchez: Yeah, and I'm glad you put it that way because there's certainly no apprehension or anxiety among all those operators for restaurants out there in the world in Michigan today with this law. This is the law that takes effect here this week, guys. The background is that it was passed by the legislature after a petition drive. The legislature then in 2018 amended the law to kind of weaken it down. Last year, the state Supreme Court ruled that unconstitutional, put into effect the law that the legislature originally passed. So, the Michigan Senate just last week, late last week, Thursday, voted to advance legislation that would significantly scale back the pending increase in the state's tipped wage law. And it's a bipartisan deal, and talks continue on some legislation that would soften the new paid sick leave requirements. And again, these take effect this week on February 21st. So, the one bill that passed the Senate would phase in an increase in the lower wage for servers and bartenders. That's now at 38% of the general minimum wage until it reaches 50% by 2031. And it would accelerate a boost in the regular minimum wage currently at $10.56 an hour to $15 now by 2027. And this is working its way through the legislature now. Governor Whitmer did say last week that if a package cannot get worked out in the legislature by the 21st, by this week, then she's all for delaying implementation of the law. So, there are proposals out there. This one has passed the Senate, and it passed with 20 to 12 votes with 8 Democrats and 12 Republicans in favor, 10 Democrats, 2 Republicans voting ‘no.’ And it's a bipartisan measure that now goes to the Republican controlled State House to see if they can take this up this week. And again, the governor said she's all in favor. If they can't get this through and can't get some kind of fix, or at least the fix that a lot of folks in that industry are saying this law will hurt their business. If they can't get this resolved this week by the time the law takes effect, she's all for delaying the implementation. So that's the latest. It's going to be, you know, stay tuned for more. There's more to come. But there is indeed movement in the legislature on this issue.
Patrick Center: We had the Michigan Supreme Court getting involved in this. Can the governor delay the implementation legally?
Mark Sanchez: I'm not particularly sure on how exactly that's going to work legally, whether they can just not enforce the law, put it on hold, or whether that takes legislative action. But again, there is at least some consensus that something needs to get done because you've got a lot of loud voices out there in the business community in this industry that's saying this is really going to hurt business. and it's not going to do as intended. There are obviously advocates that say, no, it will do exactly as intended. It will put more money in the pockets of workers. But the general consensus, at least strong consensus in the businesses, the Restaurant and Lodging Association is that this is not going to be good for business.
Patrick Center: Crain’s Grand Rapids Business, staff writer Mark Sanchez, thank you so much.
Mark Sanchez: Thank you, Patrick.