Mark Sanchez: We need more homes. We've talked about this topic for quite a while on this program. And for more homes, we need more home builders. This is a story that comes to us this week by coworker Nick Manus from our sister publication, Crain’s Detroit Business, talking about at a time where we need more homes in Michigan. We've seen this in Kent County, Ottawa County. Well, home builders, just like everywhere else in the economy, they're aging out.
This so-called ‘silver tsunami’ as we've got this wave of retirements coming through the economy with the baby boomer generation getting to retirement age and as Nick writes the looming generational turnover comes as Michigan already confronts a housing shortage driven by aging housing stock owners who are reluctant to move out when they have a good mortgage rate locked in and then there are regulatory hurdles and population growth but amid all that we need more homes.
Ideas in here, and this is data that's coming from the Home Builders Association, about the average age of folks working in the home building industry, or at least the companies, small and large home building companies. The average age is 56 or older. These folks are nearing the retirement age, and for everyone who's coming into the industry to work in the industry, there's four exiting. That points to, again, where we've heard so much of this across the economy, this kind of skilled worker shortage.
We need more people for this particular sector at a time when more is needed. There's the silver tsunami taking some talent pipeline out of the system and out of the economy.As folks retire, who's going to replace those workers? What will this do for that particular sector? It's going to make home builders bigger.
The bigger companies are going to get bigger as the guys running the smaller companies retire. There may be a tendency to sell. And the National Association of Home Builders reported at the end of July that the number of home builders reporting that they've been approached about a potential acquisition has peaked in less than a year. And the survey found that in August 2025, about 14% of respondents said they were seeing more mergers and acquisition activity in their local markets. And that's about twice the rate of just a few months earlier. So again, we're seeing this dynamic that we're going through right now with this generational change. There's one more industry that it's affecting.
Patrick Center: And lack of competition means what?
Mark Sanchez: Lack of competition if you follow the economic principal means higher costs. So, in that scenario, what are some of the solutions? It's a workforce development issue and we've seen this play out in other areas.
We've seen it in manufacturing. We've seen it, especially remember a lot of talk many years ago, 10, 15, 20 years ago in the tool and die industry. Folks weren't coming into that. Your apprenticeships had kind of gone away. So, we've seen more apprenticeships formed and we've seen a big, big push over the last several years within manufacturing tool and die to bring more people into that field, starting getting into the high schools and showing the potential careers and then how well you can do in your compensation.
We've seen it in healthcare. So, we've seen the health systems respond with especially for nurses, signing and recruitment bonuses, retention bonuses. We've seen the apprenticeships form, positions such as medical assistants and therapists and other areas in healthcare to help bring more people into that field and fill those talent gaps.
My guess is you'd have to see something similar for the home building industry. You can make a very good living at this. The industry's got to get to work and start promoting itself a little more as a career field and career destination for the younger folks coming out of high school.
Patrick Center: We'll stick with construction and a proposed development, a casino in Muskegon County.
Mark Sanchez: The idea for a casino in Muskegon has been around a long, long time. This would be, for you folks old enough to remember, the old harness racing track there in Muskegon, actually in Fruitport Township near US-31 and I-96 as it comes together on East Hile Road. This is a site a little bit north of the Lakes Mall there in Muskegon County.
The Little River Band of Ottawa Indians is now pursuing a development opportunity. It's for 170 acres of land it owns there in Muskegon County and has long wanted to do a casino. The idea for a casino is still in Limbo. The governor has yet to sign on to the project and work out an agreement with the tribe and the U.S. Department of Interior has advised the tribe to not develop any of its about 230-acre swath of land until the proposed casino site was placed into a trust. So, the 60 acres, just where the casino was put into a trust back in February, now that opens up about 170 acres for a separate development.So, the tribes are looking at that. It's a big parcel there that's been vacant for quite a while since the Great Lakes Downs racetrack closed quite a few years ago. So, the tribes looking at it and at some point eventually will put out a request for proposal to develop that site that again was the Great Lakes Downs racetrack that the tribe purchased back in 2008.
Patrick Center: We're talking with Crain’s Grand Rapids Business staff writer, Mark Sanchez. Let's switch gears to healthcare. Couple of items here. One is the construction of Corewell Health's new patient tower along the medical mile.
Mark Sanchez: A number of weeks back, three, four weeks ago, Corewell Health publicly announced a $1.34 billion project there on the Butterworth Hospital Campus. Hopes to start construction next year in 2027, have it ready for 2030 to open. It would add some new beds, add capacity to the Butterworth Hospital Campus, which runs at a high occupancy rate.
Part of the process has been getting together with the neighbors, the Heritage Hill Association and presenting their ideas and presenting their concepts and how's this going to work? How's this going to work? And there was one of the neighborhood meetings just last week. Part of what came out of that is in addition to this 11-story inpatient tower that covers about 750,000 square feet, there's going to be about a 650-space parking deck next door to accommodate obviously all the folks that go there for work each day, the patient volume. And that would be located just south of where the patient tower is going up, which would be just next to the Meijer Heart Center. Corewell will have to go obviously through a city planning review and zoning review. And there's also the state regulatory review.
Michigan is a Certificate of Need state.Certificate of Need is a regulatory review process when health systems hospitals wish to take on a large capital project that meets certain thresholds and needs a little bit of review. And in fact, this week on Monday, the first initial filing to the state came in from Corwell Health to the Michigan Department of Health and Human Services, offering a few more details about the project and actually breaking down just kind of that $1.34 billion and what it all entails. It's a big project. We can tell it's just about the biggest construction project ever planned and ever proposed here in Grand Rapids.
Patrick Center: Can you get us up to speed on Neighborhood Pharmacies? The news came down a couple of weeks ago that a number of their stores were closing in Michigan.
Mark Sanchez: This is an issue we've written a few times about this year that we've got this breakdown going on in healthcare, urban versus rural. In first year, rural hospitals are really hurting. They don't have high patient volumes, but yet they still have the operating costs, the wages for new medical equipment, for technology. They have difficulty recruiting doctors because they don't have those high patient volumes. So, you need to keep them busy. And of course, earlier this year we saw Sturgis Hospital, south of Kalamazoo, close.
Now here in the last couple of months, we're seeing more talk among rural pharmacies in your small rural markets. And this came up again here two weeks ago, Hometown Pharmacy, based up in Oceania County, has closed four more stores. There's three in Traverse City plus on Harvey Street there in Fruitport Township in Muskegon County.
And basically, Hometown Pharmacy is saying it's just the reimbursements for the medications. And how this works is the pharmacies buy the medications through pharmacy benefit managers, PBMs, which buy the drugs from the pharma companies. And the PBMs have a lot of influence on pricing, and they have influence on what insurance companies will reimburse the pharmacies for filling a prescription. And your rural pharmacies are saying that the PBMs are basically pricing them out of the market, that the reimbursements in many cases are not quite keeping up with the cost of buying those drugs and the cost of dispensing those medications.
The state legislature has been taking a look at it. Lawmakers throughout this past summer have been holding a series of roundtables around the state with the owners of small independent rural pharmacies. And you may see some legislation coming out, whether later this year or perhaps in the next legislative session, because the fear is that if these independent pharmacies keep closing, especially in these rural markets, you create what's known as ‘pharmacy deserts’ where all of a sudden folks have limited options or no options, and where they can get their prescription medications filled.
Patrick Center: Crain's Grand Rapids Business staff writer, Mark Sanchez. Thank you so much.
Mark Sanchez: Thank you, Patrick.