Crain's Cleveland Business

VOL. 38, NO. 4

JANUARY 23 - 29, 2017

Decent exposure

Source Lunch

ESPN3 could prove to be valuable recruiting tool for MAC. Page 2

Jerry Fiume discusses Akron’s commercial real estate market.

The List

CLEVELAND BUSINESS

Commercial property sales Page 19

Page 16

BUSINESS OF BEER

Is Cleveland overserved by breweries?

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

For even the state’s largest and oldest beer brand, the seemingly straightforward goal of company growth is more complex than ever as more competitors flood the craft beer scene.

The surge of breweries, whether in Cleveland, statewide or across the country, is great for the craft beer drinker, of course — a generally disloyal customer drawn more to variety and certain beer styles than any one brand.

And although businesspeople in the tight-knit craft brew community tend to support one another over a love of libations, more breweries simply means more brewers are jocking for a finite number of tap handles, shelf

space and their share of customers’ thirsts.

At Great Lakes Brewing Co., the largest brewer in Ohio with production close to 160,000 barrels annually, that all means the brewery has to look at the market with ongoing creativity.

Even a craft brand as big and popular as Great Lakes can’t simply coast by on its name or the familiarity of beers like Dortmunder Gold.

New brewers, meanwhile, can’t as easily carve out a name for themselves among an exploding number of peers as they did years ago.

“The last few years, we’ve been bumping our head on capacity issues,” said Great Lakes CEO Bill Boor. “Yet, I think we have tremendous market potential beyond what we’re selling right now. It’s time for adding capacity in the market, and I completely believe we can do it.”

SEE BREWERIES, PAGE 14

Inside Thirsty Dog: This Akron brewery is on a noble quest to quench America’s thirst. Page 10

Pairings: Wine is out, beer is in. Page 11 Q&A: Lager Heads Brewing Co. Page 12

No stops with hops: The craft brewing bonanza has given rise to a new industry in Ohio. Page 13

Crain’s photo illustration by David Kordalski

HEALTH CARE

Clinic’s holistic center is on rapid ascent

By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre

From floor to ceiling, every bit of the new space for the Cleveland Clinic’s Celia Scott Weatherhead Center for Functional Medicine is very intentional: Carpets to unify the space;

fine art and light wood in reference to nature; noise reduction tools; hidden charting alcoves; soothing natural light; air and water filtration systems.

“When you talk about thinking about the holistic approach and really looking at the entire body and looking at optimal health, you have to think about all of these features that affect that, so that’s what we did

Entire contents © 2017 by Crain Communications Inc.

in this space,” said Tawny Jones, the center’s administrator and designer of the new space The Center for Functional Medicine, which the Clinic has said is the first of its kind at an academic medical center, focuses on a holistic treatment of the root causes of health problems. Functional medicine is based on the evidence that lifestyle

factors, such as nutrition, sleep, exercise, stress, relationships and genetics, contribute to disease.

The new 17,000-square-foot space, located in the heart of the Clinic’s main campus in the Q building, aims to evoke a sense of healing for the thousands of patients the center expects to see in 2017. In December, providers began seeing pa-

tients in the new location, which is more than double the size of its previous space.

In its first two years, the center has seen explosive growth. Despite little advertising, it was full on its first day in September 2014 and only went up from there, quickly outgrowing the six exam rooms dedicated to it.

SEE CENTER, PAGE 4

Akron << Bond between InfoCision, Cleveland Sight Center grows. Page 17 Data firm Segmint looks to new markets. Page 17

PA G E 2

|

J A N U A RY 2 3 - 2 9 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

ESPN3 is a valuable tool for MAC schools

By KEVIN KLEPS

‘Tremendous’ opportunities

kkleps@crain.com @KevinKleps

ESPN says its live, multi-screen sports network is available to the more than 99 million homes that have a high-speed internet connection or video subscription from an affiliated service provider. Steinbrecher, the MAC’s commissioner since 2009, said the ESPN3 broadcasts represent “a great merging of the education and athletic realms” at each school.

Once a year, there’s “an all-handson-deck seminar” with ESPN, in which Steinbrecher said issues and concerns are raised.

“They set the standards, and we live up to them,” the commissioner said.

Bowling Green already had a production room in the Stroh Center, but the school did have to upgrade some of its equipment, Knavel said.

The $10 million in annual rights fees would, depending on how the funds are divided, equal more than $800,000 per school. Though the ESPN deal has been lauded for its prescient nature, the per-school revenue is still a drop in the bucket for MAC athletic departments that require tens of millions in school funding to break even each year.

For example, Kent State’s athletics budget for fiscal year 2015 showed $950,000 in media rights revenue and $891,139 in ticket sales. More than 74% of the Golden Flashes’ $25,908,848 budget was paid for by school funds and student fees.

According to USA Today’s online database, between 57.6% and 80.4% of the MAC’s athletic budgets are paid by school funds, and half of its dozen members check in above 72%.

MAC universities can sell ads for their respective digital sports networks — IMG College has sponsorship and marketing deals with seven of the 12 institutions, including Akron and Kent — but the consensus seems to be that the largest benefits won’t immediately show up on a balance sheet.

“It’s certainly something that provides more exposure to the university,” Knavel, BG’s assistant AD, said.

“It’s a tremendous educational opportunity for students. There aren’t many schools that can say if you enroll in the school of media communications, you get the chance to produce national broadcast events through ESPN3.”

When the University of Akron launched its Zips Digital Network by streaming its men’s basketball game against Bowling Green on Jan. 3, the Zips brought out a familiar voice — former Cavaliers play-by-play broadcaster Michael Reghi — for the ESPN3 production.

Akron’s high-definition broadcasts on ESPN3 — the Worldwide Leader’s online streaming service — are produced by Classic Teleproductions and originate from a production room in which the university invested about $500,000 on a studio and new equipment.

It’s a costly endeavor for an institution whose budget problems have been well-documented, but one Akron feels is necessary because of its obligations to ESPN and the Mid-American Conference. The Zips, like their MAC peers, also believe streaming athletic events is a way to increase the school’s exposure and add to its appeal with athletes and wanna-be broadcasters.

“Yes, we’ll be able to reach a bunch more constituents, but I think the primary benefit is probably the opportunity to partner with the School of Communication to have a center for broadcasting on this campus and eventually attract students,” said Larry Williams, the Zips’ director of athletics.

When the Cleveland-based MAC and ESPN agreed to a new rights deal in August 2014, the contract stipulated that each of the conference’s 12 institutions would produce a minimum of 35 ESPN3 broadcasts annually, beginning with the 2017-18 school year. That marks the start of the final 10 years of the ESPN deal, which reportedly pays the MAC $10 million annually during that span.

MAC commissioner Jon Steinbrecher said the original goal was to get three members to add ESPN3 productions to their schedules each year, beginning in 2014-15. But the MAC is well ahead of that pace, with all but Kent State now producing their own ESPN3 broadcasts. (The Golden Flashes will join the club in

Akron hired Classic Teleproductions to produce its ESPN3 broadcasts. (Contributed photos)

2017-18, director of athletics Joel Nielsen told Crain’s.)

For Akron, that has meant converting unoccupied space in the School of Communication building, which is adjacent to James A. Rhodes Arena, into a production room and studio.

The Zips then hired Classic Teleproductions to produce the broadcasts, and Williams said the Twinsburg company brings in Akron students as part-time help.

Any men’s and women’s basketball game that isn’t shown by a national or regional network is streamed on ESPN3. This spring, the Zips will broadcast some of their softball games, and Williams said they’ve tried to come up with a way to showcase their successful women’s swimming program, but the length of the meets complicates live-streaming efforts.

“What we’d like to do is offer more than just our events,” Williams said.

“We want to offer content in terms of coaches’ shows and feature shows.

We’ll have to step up and start thinking more broadly with this asset we have invested in.”

On-campus ‘learning labs’ Steinbrecher, who finalized the 13year ESPN extension a year before Disney ordered the company to trim hundreds of millions from its 2016

Jacki Windon and Michael Reghi are calling Zips hoops games.

and 2017 budgets, says the high-quality ESPN3 broadcasts have “become an expectation for many of our events.”

ESPN produces all of the MAC football broadcasts on ESPN3, unless it sublicenses games to CBS Sports, Time Warner or another network.

Basketball games that fall to what Williams calls the “third tier” — contests that aren’t shown on ESPN or a regional sports network — become part of each school’s self-productions.

The majority of the MAC’s 12 members produce the ESPN3 broadcasts in-house, with faculty and students running the show. “Ultimately,” Akron hopes to do the same, Williams said. For the time being, though, the Zips are going with Classic to ensure that the broadcasts are top-notch.

Bowling Green, which started producing its own ESPN3 broadcasts in 2015-16, is showing about 40 events per year, said Jason Knavel, the Falcons’ assistant athletic director for athletic communications.

Men’s and women’s basketball are ESPN3 staples for the MAC. After that, each school can configure its broadcast schedule however it wants, as long as it reaches the 35-event minimum. This year, Bowling Green showed two men’s and two women’s soccer matches, and it produced volleyball broadcasts in each of the last two seasons.

BG pays WBGU, the campus-run TV station, to produce the broadcasts, which Knavel calls “moving money from one bucket to another.”

Ohio University, meanwhile, will be “right around” the 35-event minimum this year, said Michael Stephens, the school’s senior associate AD for external relations. In addition to men’s and women’s hoops, the Bobcats aired some volleyball and wrestling matches in 2016, and the “goal is to extend to some outdoor sports next year,” Stephens said.

A 2016 PowerPoint touted OhioBobcatTV’s ability to produce a national platform that would enhance the school’s brand, aid recruiting and provide a “learning laboratory for current and future” students.

Region’s industrial market is ‘remarkably strong’

By STAN BULLARD

Cleveland industrial market, all classes

sbullard@crain.com @CrainRltywriter

Average rent per square foot and availability

Northeast Ohio’s industrial real estate market executed a rare juggling act last year that puts it on good footing for 2017.

Massive industrial buildings were built and opened last year, yet they quickly gained tenants and added little vacancy regionally.

The appetite for manufacturing, office/warehouse and distribution space throughout the region was such that vacancy fell to 6.8% at the end of 2016 from 7.4% a year ago, according to just-released data from the Newmark Grubb Knight Frank real estate brokerage’s Cleveland office.

NGKF reports developers and manufacturers are putting up 437,600 square feet of industrial space as of the end of 2016. A year ago, that figure was 922,620 square feet.

“Remarkably strong,” is the way Terry Coyne, NGKF vice chairman,

$4.25

11.2% 11%

$4.00

10.8% $3.75

10.6% 10.4%

$3.50

10.2% $3.25

10%

$3.00

9.8% Q4 2014

Q1 2015

Q2

Q3

Rent (price/sf)

Q4

Q1 2016

Q2

Q3

Q4

Availability (%)

Source: Newmark Grubb Knight Frank

described the region’s industrial market in an email. “And resilient. (It) doesn’t seem to be slowing down.”

He noted this year’s crop of big buildings — each several football fields in size — was primarily speculative in nature, meaning real estate developers

put them in without having a tenant committed to occupy the space.

“The warehouse space is being absorbed at a reasonably normal pace,” Coyne said. “All of them have been put up on pure speculation with no tenants.”

Coyne did not identify examples, but Amazon occupied a building at Cornerstone Business Park in Twinsburg by the holidays, filling most of a 248,000-square-foot structure that started going up earlier in the year without a tenant committed to it. Federal Express also set up shop last year at Twinsburg’s Cornerstone in a 303,000-square-foot building planned a year earlier.

Even with such big buildings hitting the market, demand for space was such that in the southeast suburbs, which includes Twinsburg, the vacancy rate fell to 8% from 8.8% a year ago.

That area, which surrounds I-77 and the eastern end of I-480, absorbed more than 1 million square feet of such space last year, NGKF data said.

That is more than the rest of the region combined. NGKF estimates the balance of the region absorbed another 874,000 square feet of space last year.

Warehouse and distribution center space is such a dynamic submarket that NGKF also tracks it separately from traditional manufacturing space. In the southeast suburbs, the

vacancy rate for warehouse and distribution space fell to 5.4% at the end of 2016 from 5.8% at the end of 2016.

In the region as a whole, vacancy for warehouse and distribution buildings fell to 6.8% at year-end 2016 from 6.9% in the like 2015 period.

However, even with such big deals attracting the bulk of public attention, Coyne said most activity within the regional industrial market, now 297 million square feet in size, was in the range of 60,000 to 80,000 square feet.

Regardless whether prospective tenants are titanic or tiny, NGKF said rising occupancy rates of industrial properties means industrial landlords are able to command higher rents for space in their buildings.

The average asking rental rate in the region climbed a little over 4% to $4.11 per square foot at the end of the year from $3.94 at the end of 2015, the NGKF report said. Rents on individual properties may vary greatly from the regional averages, however, depending on the size of the space being rented and its location.

Specialization â&#x20AC;˘ Expertise â&#x20AC;˘ Results

The Best of the Best Marcus & Millichap proudly honors its top commercial real estate investment professionals in Cleveland who provided superior service to clients by helping them meet their investment objectives. Through their leadership and dedication, the Cleveland office closed 205 transactions in the past 12 months valued in excess of $900 million.

We look forward to being a part of your success in 2017.

Congratulations to our Top Investment Professionals of 2016

Jonathon McClellan

Kyle Baskin

Alexandre Duong

Scott Wiles

First Vice President Investments Manufactured Housing

First Vice President Investments Manufactured Housing

Vice President Investments Hospitality

First Vice President Investments Retail

Craig Fuller

Michael Barron

Dan Burkons

Josh Wintermute

First Vice President Investments Retail

Senior Vice President Investments Multifamily

Senior Vice President Investments Multifamily

First Vice President Investments Multifamily

To access the investment market, contact the market leader.

Michael L. Glass First Vice President/District Manager (216) 264-2000 michael.glass@marcusmillichap.com

Offices Throughout the U.S. and Canada

Data is for transactions dated 12 months trailing 3Q2016

www.MarcusMillichap.com

PA G E 4

|

J A N U A RY 2 3 - 2 9 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

FOR LEASE 175 GHENT ROAD, FAIRLAWN, OHIO

• Uniquely designed three-story 89,510 square foot office building • Excellent location in heart of upscale Fairlawn community; across the street from Summit Mall • Ideal for corporate headquarters • Awarded Energy Star label for operating efficiency • Ample parking • Close proximity to I-77

Visit

TerryCoyne.com Or call Terry at

216.453.3001 The Cleveland Clinic’s expanded functional medicine center could have 14,000 visits in 2017. (Lydia Coutré)

1350 Euclid Ave., Suite 300 Cleveland, Ohio 44115

CENTER CONTINUED FROM PAGE 1 Thanks in large part to the added efficiencies and space of the new location, as well as the providers they began adding in preparation for the move, officials with the center expect to more than triple the number of physician and nurse practitioner visits in 2017 — which should come as good news to the roughly 3,000 patients currently on the waiting list.

Last year, there were 4,200 visits.

This year, they anticipate 14,000.

“I think people are understanding that there are limits to drugs and surgery for treating chronic diseases,” said Dr. Mark Hyman, director of the center and a well-known wellness expert.

“People are understanding there are causes that are really driving the chronic illness that we need to deal with.

Long Term Fixed Rates, Without the Agony of a SWAP!

LOCK IN TODAY! Contact Jonathan A. Mokri 440.526.8700 • jmokri@cbscuso.com www.cbscuso.com Providing Commercial Loan Financing in Partnership with Area Credit Unions SM

HERE WE GO AGAIN. The health insurance tides are changing once more.

PROTECTED? CALL US. 216 350 5052

Capacity for care The center sets no requirements or restrictions on who can seek its services, Jones said. Though many are individuals who have seen multiple specialists and long suffered from chronic disease, some patients are perfectly healthy but want to figure out how to optimize their health.

Treatment plans focus on environmental, behavioral and especially lifestyle changes. Though providers sometimes refer patients to alternative medicine services — such as acupuncture, yoga, Chinese herbal medicine and others — the focus is on managing chronic disease or maintaining the status of healthy patients.

“I think that we are actually beginning to really understand that the consumer and the patients want a different kind of care,” Hyman said.

In the new 17,000-square-foot space — about twice as large as its old spot — the center has 16 patient rooms as well as two offices for the two behavioral therapists who joined the team in 2017.

Each patient room, two of which are bariatric, combines a consult space and a traditional exam room. Across from the familiar exam bed is a desk that allows the patient to sit across from various providers as they discuss health history and treatment plans.

CLEVELAND BUSINESS

We Protect. You Grow.

LEARN MORE J

www.armadarisk.us

700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113 Phone: 216-522-1383 www.crainscleveland.com Customer service and subscriptions: 877-824-9373

Prior to the first meeting, patients spend three to four hours filling out a medical history questionnaire.

During their first visit, patients will spend an hour with a physician, an hour with a nutritionist and 15 to 30 minutes with a health coach. A medical assistant will recap the meeting, navigate them to the lab and explain the next steps.

The patient rooms are along a U-shaped hallway, which surrounds a large space where providers work. The providers’ space is largely open, with five areas sectioned off. Each has space for a physician, medical assistant, nurse, health coach and nutritionist.

Before, and in many other spaces, Jones said, multidisciplinary teams are spread out, with physicians in one space, nurses in another, nutritionists elsewhere, and so on.

“In fostering collaboration, we took away the hierarchy between physicians and medical assistants and nutritionists,” Jones said. “Let’s put everybody in an environment where they can seamlessly speak to each other, hand off information (and address) their questions.”

The new space, which was previously shell space, also features its own laboratory, telemedicine suites, meeting rooms, a room for patients to go through self-led educational programming and spaces for shared medical appointments where patients can learn from one another about their approach. Jones said some adjacent space remains if they decide to expand.

Shifting the conversation Based on the growth thus far, more expansion seems likely. The center has seen patients from 17 countries and 42 states. About 25% of the patients who come through are new to the Clinic entirely. In 2016, the center saw 1,400 new patients. This year, Jones said they anticipate 4,000 new patients.

Upon the recommendation of a friend, Kreis Beall came to the Clinic from Walland, Tenn., for an appointment at the center, for which she had waited five months.

Beall said she is a “very healthy 63-year-old,” but internally, she was hoping to address some concerns. A couple of years ago, her wellness doctor diagnosed her with “leaky gut synVolume 38, Number 4 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 441131230. Copyright © 2017 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00.

POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912.

1-877-824-9373.

Reprint information: 212-210-0750

drome,” which means that her body doesn’t fully absorb all nutrients as it should. She feels fine — not good enough to call herself sick — but not great. She came to the Clinic in the hopes of finding a long-term approach.

Beall was thrilled with her first appointment in mid-December: the welcoming environment, the detailed discussion of her history, the dietary and lifestyle plans going forward — and the easy phone or email access to providers when she has questions.

“It’s a huge commitment. You have to change the rest of your life — everything, your whole lifestyle to gain good health,” Beall said. But she’s excited to begin her path and hopeful for the future.

Right now, physician visits at the center are covered by most insurance plans. Coverage for nutritionists and some tests vary. The center has a financial counselor to help patients navigate this.

In the future, though, center leaders hope to prove value and drive changes in reimbursement.

Over time, the approach is less costly, Jones said, but she recognizes they have to prove that, making research into the cost-outcome equation of functional medicine the “linchpin” of the practice.

Looking forward, Hyman hopes to expand services and build community-based programs for population health “where we can scale this not just in the Clinic, but in the community providing access to thousands, even hundreds of thousands of patients in the community.”

The center helps to lead the way for new thinking about how to solve chronic disease and helps make the Clinic more of a leader in health care.

“Right now, we’re paying for volume in health care instead of value,” Hyman said. “That’s shifting, and we believe we’re a key part of the solution.”

Correction The board of Cuyahoga Arts and Culture last month approved a 2017 budget that includes funds to support individual artists. An editorial on Page 8 of the Jan. 16 issue incorrectly stated the Cuyahoga County agency that allocates cigarette tax revenue to the arts would no longer provide financial support to artists.

Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 48207-9911, or email to customerservice@crainscleveland.com, or call 877-8249373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777.

CRAIN’S CLEVELAND BUSINESS

|

J A N U A RY 2 3 - 2 9 , 2 017

|

PA G E 5

Hillcrest Food Service has hearty appetite Company plans $7.9M expansion on East 55th St.

“Thank God we’re growing, and so we needed the Ohio Farmers building. ... Without the city’s help, there was no way to expand, except to go on to their land.”

By JAY MILLER jmiller@crain.com @millerjh

— James Romano, Hillcrest chief financial officer

Hillcrest Food Service is planning a $7.9 million expansion on Cleveland’s East Side that will create a 193,000-square-foot distribution center for the locally owned restaurant supplier.

The company, which now operates from two buildings nearby on East 40th Street, has purchased the former Ohio Farmers Foodservice building at 2700 E. 55th St. and is in the process of purchasing the adjacent, city-owned vacant lot at the corner of East 55th and Woodland Avenue.

Hillcrest chief financial officer James Romano said the company plans to renovate the 113,000-squarefoot Ohio Farmers building and then build a new, 80,000-square-foot addition on the vacant land. It made more sense than to just renovate the Ohio Farmer’s building and keep the existing properties.

“Thank God we’re growing, and so we needed the Ohio Farmers building,” Romano said. “And so, like any distribution company, it would be better to have one large box as opposed to multiple boxes. Without the city’s help, there was no way to expand, except to go on to their land.”

In December, Cleveland City Council approved the sale of the vacant land and a 10-year, 60% tax abatement on the purchase and renovation of the Ohio Farmers property. Hillcrest Foodservice estimates its investment in the purchase and ren-

Hillcrest Food Service purchased the former Ohio Farmers Foodservice building. (David Kordalski)

SALT • SALT • SALT • Water Softener • Industrial • Food • Ice Melt • Sea Salt

Call For Pricing!!

Minimum Delivery:1Pallet

1-800-547-1538 Salt Distributors Since 1966

ovation will be $1.9 million. With city council approval, the Jackson administration will negotiate the sale of the vacant land at fair market value.

Cuyahoga County values the 3.5-acre piece of property at $63,800.

The purchase of the Farmers Supply property was completed in June.

No sale price appears on the deed, but the county values the property at $973,000. Romano said it was particularly attractive because it included commercial refrigeration and freezers. The plan is to fill the vacant eyesore property at the southwest corner

of Woodland and East 55th with a one-story warehouse building by 2019.

In 1984, the company, then known as Hillcrest Egg & Cheese Co., won a $200,000 low-interest loan from the city for a $900,000 purchase and renovation of its current building at 2695 East 40th, according to a Plain Dealer report. At the time, the company had 11 employees and pledged to add 12 to 14 more.

Romano said Hillcrest now employs 125 people. In its agreements with the city, the company pledges to

create at least 25 new jobs within three years, though Romano hopes the company’s growth will push that number up. A private company, Hillcrest does not disclose its financial results.

The land sale includes a restriction that the buyer may not operate a retail grocery store that would compete with the nearby Dave’s Supermarket at Arbor Park Place shopping center.

The company stocks more than 6,000 items, Romano said, which are available only for bulk purchase.

The Jackson administration also liked the deal because it will bring good-paying jobs to the busy Woodland-East 55th intersection.

“From the city’s perspective, it’s a hot corner for a gas station or fastfood restaurant. The city wanted something that brought more than minimum-wage jobs,” Romano said.

“We’re a union shop, and our drivers, pickers, forklift guys are making well above minimum wage.”

Part of Hillcrest’s growth is a function of the rise of chef-run restaurants.

“One of the advantages of Cleveland is Cleveland is very much an independent restaurant city, and they take pride in their independence,” Romano said. “Part of our mission is to educate them that, not only can we be competitive on price, but we sell only to independents. Why would you want to go to a company that is supplying Cheesecake Factory, because they obviously are giving Cheesecake Factory way better pricing than they are independents in Cleveland.”

Hillcrest now distributes to a territory that stretches west to Sandusky, south to Canton and east to Youngstown.

“Our growth will still be restaurants, but we’re hoping to go into newer markets,” he said.

PA G E 6

|

J A N U A RY 2 3 - 2 9 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

For Sale - 45,080 SF Industrial Building Excellent Manufacturing Facility

Bus operators like what they see in Cleveland stop

By JAY MILLER jmiller@crain.com @millerjh

2002 Joseph Lloyd Parkway, Willoughby, OH • 45,080 SF Total Area Located on 2.86 Acres • 4,140 SF Office Area / 40,940 SF Shop Area • 22’ Clear Height / Air Conditioning throughout • 4 Drive-in Doors & 2 Docks • Wet-Sprinkler System throughout

• Masonry Construction, Built in 1989/1995 • Ample Parking - 138 Spaces • 240 Volt / 1600 AMP / 3-Phase Power / Buss Duct • 5-Ton Overhead Crane; 1-Ton Crane; (2) 1/2-Ton Cranes • Convenient Access to Route 2

David R. Stover, SIOR

216.839.2012

DavidStover@HannaCRE.com

HannaCRE.com

Timing may not be everything, but it is important. Bringing the annual American Bus Association convention to Cleveland six months after the Republican National Convention meant that 800 bus-tour operators — people who will decide which cities and national parks thousands of travelers will visit in the next couple of years — got a firsthand look at the city in top condition.

The ABA is a 4,000-member Washington, D.C.-based trade association for motor coach operators and tour companies in the United States and Canada. It held its annual meeting at the Huntington Convention Center of Cleveland from Jan. 14 to 17.

Convention and visitors bureaus (CVBs) from around the country come to this annual January show to see if they can woo tour operators to their locales. The CVBs brought displays, brochures and videos to show off their towns and they made pitches to the tour operators to add their cities to itineraries — the association boasts that 140,000 appointments were made to pitch cities to the 800 tour operators.

But the host city gets the best opportunity to show itself off.

“The effect is going to be in the years and years down the road, when people put Cleveland on their maps,” said Melanie Hinton, the ABA’s director of communications and media relations.

Mike Burns, senior vice president of convention sales at Destination Cleveland, the local CVB, said that most of the 50,000 visitors who came for the Republican National Convention saw only their hotel, Quicken Loans Arena and a bit of downtown.

And while their word-of-mouth praise of the city is valuable, the 3,300 people who were here for the bus association convention — 25% of whom, he said, have never been to Cleveland — will have a greater impact.

“When we talk about how much the RNC meant to us, this piece of business reaches much further out,” he said. “(Attendees go out) into Amish country, they go to the lake, wineries, and other assets.

“Historically, cities that have hosted this group in the past have seen an uptick in group tour business into their market over the next five years a minimum of 15%,” he said. “In many instances, particularly if you are an undiscovered city, it’s going to be higher.”

He added that the ABA convention was a nice booking in January, a typically slow convention month. He said he expected the group will have used between 8,500 and 9,000 hotel room nights over the run of the convention.

The handful of tour operators who spoke to Crain’s Cleveland Business were impressed with the look, cleanliness and the feeling of safety they got as they toured downtown and went on familiarization bus trips around the region.

Even Tish Losure, tour and product development manager of Brilliant Edventures, was impressed once she vented her frustration with the way the Indians narrowly missed winning baseball’s World Series.

“I still can’t believe they lost that,” she said.

Although Losure’s firm has

The American Bus Association met for four days recently at the Huntington Convention Center of Cleveland. (Jay Miller)

brought tour groups to the area in recent years for stops at Cedar Point and the Rock and Roll Hall of Fame, the city looked better to her this time around, in part, she believed because of the press of getting downtown in shape for last July’s Republican National Convention.

“It’s very cleaned up,” she said.

“Especially being in the business we’re in, we look at stuff like that.”

She also has been impressed by two of the city’s ethnic restaurants.

On this trip for the first time she went with coworkers to Sokolowski’s University Inn in Tremont. “That place was awesome,” she said.

She also expressed her approval of

“Historically, cities that have hosted this group in the past have seen an uptick in group tour business into their market over the next five years a minimum of 15%.”

— Mike Burns, senior vice president of convention sales at Destination Cleveland

downtown’s Hofbräuhaus , a restaurant she has in the past sent her groups to. “Either that, or we send them off to East 4th Street for dinner on their own,” she said.

The look of the city also impressed Ronda Dotts, a product manager for Group Voyagers Inc., who led a four-person team at the convention.

“It’s very much not what we anticipated, but we adjusted,” she said, expecting a more drab second-tier city.

“Your neighborhoods are great. The Flats is wonderful. We really liked that area.”

Group Voyagers runs dozens of tours around the country under its Cosmos and Globus brands. Dotts said her firm puts together 23-day cross-country tours, primarily for British tourists. The tours run from New York to Los Angeles and back.

“We’re trying to find a way we can work Cleveland in (to the itinerary),” she said.

Bernie Dever, vice president of Curran Travel Inc. of Blue Bell, Pa., whose firm runs tours all around the eastern United States, reaching as far west as Mackinac City, Mich., also is looking for itineraries he can add Cleveland to.

“It seems to me it’s awfully easy to get around,” he said. “You’ve got a nice array of hotels that are reasonably priced for a major city.”

Dever said that his audience, like that of most bus tour operators, is largely the 65-plus crowd, and that the local hotels that he saw in the $150-$175 a night range downtown, and $99 a night in the suburbs, would be a good fit for his tours.

Sam Nhairy, general manager of Hospitality Marketing Services in Herndon, Va., was visiting the city for the first time. He, too, was impressed with the look of the city. His firm is a wholesaler, helping tour operators and travel agencies develop itineraries and make hotel and restaurant reservations.

“The condition of the city is beautiful,” he said. “This is my first visit. I might have to come back again.”

All of the tour planners put the same place at the top of their lists of local sites that will attract customers to tours that include Cleveland.

“Of course, the Rock and Roll Hall of Fame,” said Curran. “Most of our groups are senior citizens, and it’s the music of their era.” Burns said that the city will get a second chance to show itself off to travel planners March 15-17, when Experient EnVision comes to town. That’s a meeting of key meeting planners who work for Experient, formerly Conferon, the Twinsburg-based firm that is one of the country’s leading meeting planning and event management groups.

Burns said the event will attract 600 people, some meeting planners and some executives from CVBs across the country. Attendees will talk about and book future meetings.

Again, as the host city, Cleveland has a chance to shine.

“They drive north of hundreds millions of dollars of room revenue annually, and a lot of their people will be coming to the city for the first time,” Burns said. “It’s not a huge meeting, but it’s a really important meeting because we hope we’ll see significant increase in large convention bookings from their customer base.”

CRAINâ&#x20AC;&#x2122;S CLEVELAND BUSINESS

The Dish: Susan Condon Love

Elizabeth McIntyre Scott Suttell Tim Magaw David Kordalski Damon Sims Sue Walton Kevin Kleps Stan Bullard Real estate/ construction Reporters Jay Miller, Government Dan Shingler Energy/steel/auto Rachel McCafferty Manufacturing/ energy Jeremy Nobile, Finance Lydia CoutrĂŠ, Health care Data editor Chuck Soder Cartoonist Rich Williams *** Events manager Ashley Martin Events coordinator Megan Lemke Integrated marketing manager Michelle Sustar

Publisher/editor Managing editor Sections editor Creative director Web editor Associate editor/Akron Assistant editor Senior reporter

|

J A N U A RY 2 3 - 2 9 , 2 017

|

PA G E 7

CRAIN COMMUNICATIONS INC.

CLEVELAND BUSINESS

Chairman President Treasurer CIO CFO Group publisher Senior Executive VP Exec. VP/director of strategic operations Exec. VP/director of corporate operations VP of production and manufacturing

700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 www.crainscleveland.com @CrainsCleveland Managing editor custom/special projects Advertising director Senior account exec.

Account executives

Amy Ann Stoessel Nicole Mastrangelo Dawn Donegan Lindsie Bowman John Banks Laura Kulber Mintz Office coordinator Denise Donaldson Digital strategy/ audience development director Nancy Hanus Production director Craig L. Mackey Billing Peter Iseppi Credit Rod Warmsby

Keith E. Crain Rance Crain Mary Kay Crain Anthony DiPonio Bob Recchia Mary Kramer William A. Morrow Chris Crain KC Crain Dave Kamis

*** G.D. Crain Jr., Founder (1885-1973) Mrs. G.D. Crain Jr., Chairman (1911-1996) *** Reprints: 212-210-0750 Krista Bora kbora@crain.com Customer service and subscriptions 877-824-9373

Cru Uncorked, which is expected to open this spring, will have the feel of a French chateau. (Contributed rendering)

Cru Uncorked owners create â&#x20AC;&#x2DC;dreamâ&#x20AC;&#x2122; concept A list of things are beginning to align â&#x20AC;&#x201D; a name change; the start of hiring nearly 40 employees; and the naming of John Stropki, executive chef for eight years with Eaton Corp., as the new executive chef â&#x20AC;&#x201D; that mean a spring opening of a new high-end French-American restaurant in Moreland Hills is on track.

Cru Uncorked, previously planned to be called Cru Cuisine, is set to open in April at the intersection of Chagrin Boulevard and SOM Center Road. Designed by two firms â&#x20AC;&#x201D; Kawalek Architects and Larsen Architects Inc. â&#x20AC;&#x201D; Cru Uncorked will resemble a French country chateau, according to Bill Cutler, co-owner along with his parents, Sandy and Sarah Cutler. Sandy Cutler is the retired chairman and CEO of Eaton Corp.

Bill Cutler, who studied culinary arts in Italy for a year and at the International Culinary Arts and Sciences Institute in Chesterland, brings to the project more than 10 years of education and work experience at such restaurants as the Baricelli Inn and the Blue Point Grille. Cru Uncorked, he said, â&#x20AC;&#x153;is a unique concept that is being custom-built to bring our dream alive.â&#x20AC;?

The experience will start, he said, with the building itself. â&#x20AC;&#x153;When people pull in, they will see exposed aggregate in a roundabout with a large, focal-point fountain. We will have complimentary valet service, but spaces if people prefer to park their own cars.â&#x20AC;?

The point, he said, is to provide a feeling of being pampered from the minute of arrival.

Inside, the â&#x20AC;&#x153;modern/rusticâ&#x20AC;? interior is being designed by Barbara Gisel Design of Philadelphia and will include a long foyer, a focal-point fireplace and a vaulted ceiling. Four themed dining rooms in the 95,000-square-foot facility will seat 108 guests. The dining areas will be separated by curtains â&#x20AC;&#x201D; an â&#x20AC;&#x153;open conceptâ&#x20AC;? with limited table-to-table visibility for privacy, said Bill Cutler.

There also will be an additional 32 outdoor seasonal seats. Flooring, to continue the French chateau feel, will be parquet, and the ceiling will feature intersecting archways. The restaurant also will include a banquet hall and bar area. â&#x20AC;&#x153;The bar will be open only to those with dinner reservations,â&#x20AC;? said Bill Cutler. â&#x20AC;&#x153;They can come a bit early and have a pre-dinner cocktail, take

Susan Condon Love is a freelance writer who was an editor and writer at The Plain Dealer, The Las Vegas Review-Journal, the Savannah (Ga.) Morning News and The Annapolis Capital.

â&#x20AC;&#x153;We want people to take time to enjoy the food and the atmosphere.

We do not want the customers to feel rushed.â&#x20AC;? â&#x20AC;&#x201D; Bill Cutler, Cru Uncorked co-owner

time and relax over dinner, and then go back to the bar for dessert or cheese plate. Itâ&#x20AC;&#x2122;s very European-style.â&#x20AC;?

The cuisine will be â&#x20AC;&#x153;more refined, not as rustic.â&#x20AC;? Dubbed French/New American, the menu will emphasize fresh local ingredients and draw from French influences. Some 6,000 bottles of wine will be on hand, with 1,400 bottles in a temperature-controlled wine cellar.

To continue the â&#x20AC;&#x153;unique experience,â&#x20AC;? Cru Uncorked will have only two seatings per day: 5:30 and 8:30 p.m. â&#x20AC;&#x153;We want people to take time to enjoy the food and the atmosphere,â&#x20AC;? said Cutler. â&#x20AC;&#x153;We do not want the customers to feel rushed.â&#x20AC;?

He added, â&#x20AC;&#x153;Tables will have 3½ feet between them, and the entire restaurant is handicapped accessible. No steps at all.â&#x20AC;?

While not sharing financial details, Cutler said construction is running on time and doors at Cru Uncorked will open in April, if the weather cooperates. â&#x20AC;&#x153;Overall, weâ&#x20AC;&#x2122;ve stayed true to our concept,â&#x20AC;? he added. â&#x20AC;&#x153;I received great (business) advice once to not take on too much at once, and you wonâ&#x20AC;&#x2122;t be overwhelmed, and it will all get done.â&#x20AC;?

DONâ&#x20AC;&#x2122;T YOU WISH YOU HAD A BEACHWOOD ADDRESS? â&#x20AC;˘ Notable Corporate Community â&#x20AC;˘ Superior Real Estate Values â&#x20AC;˘ Skilled Workforce â&#x20AC;˘ Low Taxes â&#x20AC;˘ Responsive Government â&#x20AC;˘ Unparalleled Services â&#x20AC;˘ Business Development Assistance

25325 Fairmount Blvd â&#x20AC;˘ Beachwood â&#x20AC;˘ Ohio 44122

James A. Doutt Economic Development Director James.Doutt@BeachwoodOhio.com

(216) 292-1915

Fax (216) 292-1989

Join the bestâ&#x20AC;Ścontact us to discuss your future address

MAYOR MERLE S. GORDEN â&#x20AC;˘ COUNCIL PRESIDENT MARTIN S. HORWITZ â&#x20AC;˘ JUSTIN BERNS â&#x20AC;˘ ALEC ISAACSON MEL JACOBS â&#x20AC;˘ BARBARA BELLIN JANOVITZ â&#x20AC;˘ BRIAN LINICK â&#x20AC;˘ JAMES PASCH

WWW.BEACHWOODOHIO.COM

FACEBOOK.COM/BEACHWOODOH

@BEACHWOODOH

Need a customized solution for your real estate development financing?

Weâ&#x20AC;&#x2122;ll be there for you, every step of the project. )URP FRQVWUXFWLRQ WR SHUPDQHQW ÂżQDQFLQJ ZHÂśOO ZRUN ZLWK \RX WR ÂżQG WKH ULJKW VROXWLRQ IRU \RXU SURMHFW <RX ZRUN KDUG WR HQVXUH HYHU\ GHWDLO LV FRYHUHG DQG FRQVWUXFWLRQ LV FRPSOHWHG RQ WLPH :H WDNH WKH VDPH DSSURDFK WR \RXU ÂżQDQFLQJ <RX FDQ FRXQW RQ XV WR SURYLGH WKH ÂżQDQFLQJ SDFNDJH \RX QHHG DQG WR VHH \RXU SURMHFW WKURXJK WR FRPSOHWLRQ

Call your local lending team today.

Ken Goetz: 330.748.4632 | Gary Wimer: 330.748.4631 Managing Directors, Real Estate Industries Division HomeSavings.com

PA G E 8

|

J A N U A RY 2 3 - 2 9 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

Listing toward buying local

Editorial

The new CEO President Donald Trump has taken office with historically low approval numbers from the general public. However, the business community large and small, partly out of self-interest and perhaps a bit out of self-preservation, is more optimistic about the new administration and sees room for progress in areas including health care, corporate tax reform and regulatory relief.

We don't know all the details yet about what President Trump will mean for business, but this much is clear: It's going to be an eventful few years, marked by a lot of corporate-friendly legislation from a Republican Congress and a fair amount of browbeating (not all of it factual) from the president, on Twitter or in front of a camera, about trade deals, large companies' hiring practices and their international strategies.

Smaller businesses, meanwhile, are looking mostly for action on regulations, on issues including rules affecting overtime and sick leave. In a survey released Jan. 18 by the National Small Business Association advocacy group, federal regulations were cited as the most burdensome kind by 58% of small business owners, while 23% cited state regulations and 12% pointed to local rules. (The remaining 7% didn't identify a single source.)

Surveys taken since the election have found CEOs in an upbeat mood about 2017 and beyond with a business executive in the Oval Office. Pretty reflective of that tone is Lourenco Goncalves, the head of Cleveland-based Cliffs Natural Resources Inc., who told Bloomberg recently that Trump's focus on infrastructure building and a crackdown on unfair trade were reasons his company and the steel industry are poised for growth.

"If Mr. Trump implements a portion — he doesn't need to implement everything — of what he is promising, not only will the country be a lot better after these things are implemented, but businesses like Cliffs and all steel mills in the United States will benefit very much," Goncalves said.

A central complaint of the business community during the Obama years, with some justification, was the lack of clarity on key corporate policy issues resulting from fights between the Democratic administration and the Republican Congress. That

won't exist now — at least for two years — so it's critical that Trump and his economic team provide details quickly that help corporations set their priorities and put themselves in the best position to grow and add jobs.

Trump as a candidate and as president-elect hasn't been a model of clarity or veracity on much of anything, including, for instance, what would be in an big infrastructure bill, or how he would go about cutting the business tax rate to 15% from 35% and eliminating the corporate alternative minimum tax. On the tax cut, the vast majority of small business owners pay business taxes on their individual tax returns; can Trump pull off a big cut in both corporate and individual income taxes while maintaining budget discipline?

Trump as president will need to be a much better communicator, with legislators and the public, than he has been over the past year.

Similarly, businesses need quick action on Trump's position as it relates to an Obama administration plan to make 4.2 million salaried workers eligible for overtime. (A federal appeals court blocked implementation of this just before it was to take effect Dec. 1.) The government is appealing the injunction, which came in a lawsuit brought by 21 states, but will the Trump administration continue that appeal?

Trump has made job creation one of his signature issues, which has led to a flurry of corporate pledges to hire more workers. A lot of those pledges have been previously announced plans repackaged by companies and the media-savvy Trump to win public support for the new administration. These announcements of individual projects, welcome as they might be, are no substitute for a sustained effort by the Trump administration to create a balanced tax and regulatory environment that encourages job growth.

The new president is a polarizing figure, to be sure, but we all should hope that Republicans and Democrats can find a way to work together for common benefit. They should remember that while the economy has come a long way from the depths of the recession, many citizens are still hurting, and they need a more vibrant economy to lift themselves up.

Publisher and Editor: Elizabeth McIntyre (emcintyre@crain.com)

CLEVELAND BUSINESS

CLEVELAND BUSINESS

Managing Editor:

Scott Suttell (ssuttell@crain.com)

Sections editor:

Timothy Magaw (tmagaw@crain.com)

Contact Crain’s :

(216) 522-1383

I am a compulsive list-maker. I’m nothing without my lists.

Before I leave work, I chart out the next day’s to-do list, prioritizing by task. This column, in fact, was on today’s list.

How addicted am I to list-making? I put the same item at the top of every lineup I create: “Make list,” because it gives me the satisfaction of checking off the first task as soon as I finish my agenda.

I’m no different with stuff at home, and my list-making really goes into overdrive around the holidays.

My holiday folders (yes, I’m a folder filler, too, because you can’t have lists without folders) contain lists from many years. The lists include gifts purchased and for whom, the amount spent, where I shopped; recipes, menus, grocery items and minElizabeth ute-by-minute schedules for food prep, McIntyre tasks and cooking times; and inventories of holiday decorations complete with photos.

Yes, I know how to use a computer. Yes, I know my phone has a list app. There’s just something about paper lists and physical folders that make the past tangible and the present doable.

Part of the pleasure when I pull out my holiday lists is revisiting who was at our holiday tables over the years, what was served and the evolution of gift purchases for family and friends, but especially our kids. We’ve gone from Mozart Musical Blocks and Harry Potter books to the Xbox and vinyl records.

This year, though, I was struck by the changes in my shopping patterns. In 2016, for the first time in more than a decade, my shopping list included none of the major bricks-and-mortar retailers, other than Target. No longer did I venture store-to-store, from malls to big boxes. Ten or 15 years ago, I took two to three vacation days to hopscotch from store to store, especially if a hard-to-find toy was eluding me. (I eventually bagged that platypus Beanie Baby.)

But in 2016, more than 80% of my shopping was done online, usually late in the evening when it was convenient. Some of the usual national retailers were included, of course, but online instead of in the store – often with free shipping and deep discounts.

Turns out I’m not alone. MarketWatch reports that internet stores, such as Amazon, saw a 13.2% increase in sales in 2016, while department stores experienced a 0.6% drop in December with an 8.4% overall decrease in 2016.

The woes of traditional retailers are growing. The Limited recently shuttered its stores. J.C. Penney, Macy’s and Sears, the long-standing anchors at malls across America, all announced store closings earlier this month.

But there is a place for brick and mortar shopping. And it’s important – despite the growth and convenience of online retailing – to support it. The future of our communities may depend upon it.

My list shows that the other 20% of my holiday shopping was done locally at small independent retailers that offer unique items and superior customer service. These small specialty shops have the edge because they can deliver a personalized experience for consumers that the big boxes can’t. They also contribute to the vibrancy of our neighborhoods and towns.

We recently wrote about several small local retailers in the pages of Crain’s Cleveland Business. Cleveland in a Box and Fount Leather were indicative of an encouraging trend: They went from online-only businesses to opening storefronts – and they have watched their businesses thrive. What these local retailers have found is that consumers want to interact with their products. They want to touch, see and experience them before they buy.

Yes, it is convenient to shop from the comfort of your couch. At the same time, nothing can replace the experience of shopping at a local store and keeping money in your own community.

My list may contain a lot more .coms on it these days, but “shop local” will always be on it, too.

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Cleveland Business, 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113, or by emailing letters@crain.com. Please include your complete name and city from which you are writing, and a telephone number for fact-checking purposes.

Sound off: Send a Personal View for the opinion page to emcintyre@crain.com.

Please include a telephone number for verification purposes.

CRAIN’S CLEVELAND BUSINESS

|

J A N U A RY 2 3 - 2 9 , 2 017

|

PA G E 9

Help us

Personal View

New House bill strips some power from local jurisdictions

By HEIDI GOROVITZ ROBERTSON

Through the recently passed House Bill 463, the Ohio Legislature has made it even more difficult for local jurisdictions to use ballot measures to influence the use of hydraulic fracturing.

The new law, which Gov. John Kasich signed on Jan. 4, gives county boards of elections (BOEs) and Ohio’s secretary of state two important decision-making powers. First, the new law gives them power to decide whether efforts to place an initiative on the ballot have followed the required procedures for earning a spot on the ballot.

Presumably, this is something BOEs are already doing. Also, even if the new power makes BOEs more vigilant, or encourages them to impose more procedural requirements, local jurisdictions could learn to follow the rules and not be barred from the ballot on procedural grounds.

The second decision-making power is potentially more harmful to local efforts to influence oil and gas decision-making. It hands the BOEs and the Ohio secretary of state the power to deny access to the ballot if the BOE or secretary decides that the potential ballot measure would assert for a local jurisdiction a power the state reserved for itself.

This new law was a reaction by the oil and gas industry to local efforts to retain a modicum of involvement in oil and gas decision-making affecting their cities and towns. Local efforts have already been constrained by the Ohio legislature (through its ever evolving and constraining pre-emption language in the Ohio oil and gas law) and by the Ohio Supreme Court (through its ex rel. Morrison decision striking down certain local Munroe Falls ordinances that would impose local requirements on drillers).

But the legislative and judicial constraints seem not to have been sufficient assurances for Ohio’s oil and gas lobby. The industry wanted to take all question of local involvement off the table, perhaps making it easier for local BOEs to do its bidding.

It packaged the first piece of HB 463 neutrally. It makes sense for local BOEs to make sure local jurisdictions follow procedures when placing an initiative on the ballot? It’s their job. This new authority shouldn’t make a big difference, except that it may deter jurisdictions from trying.

The second piece is more troubling. It legislatively validates actions taken in the last two years by Ohio Secretary of State Jon Husted. Husted evaluated the substance of several proposed ballot measures that aimed to adopt new county charters. The proposed charters, if adopted, would have purposed to limit or ban the use of hydraulic fracturing in several Ohio counties.

Husted refused to place them on the ballot.

His decisions were grounded in two rationales.

First, he decided the measures could not be on the ballot because, if adopted, they would be illegal. Specifically, he decided that a county may not limit or ban hydraulic fracturing (here by adopting a charter

Web Talk

that would include a ban) because the state has allowed hydraulic fracturing through the Ohio oil and gas law. His rationale included the additional argument that the offered ballot measures, which proposed county charters in jurisdictions that do not have them, did not address appropriate charter-related issues (e.g., government structure or operations).

The Ohio Supreme Court has addressed Husted’s actions, finding him wrong to refuse to include the ballot initiatives on the substantive oil and gas-related grounds. The court said he didn’t have the authority to decide whether the initiatives, if adopted by the voters, would be illegal. A court, not an executive branch administrator, should make that decision. The court found that Husted did, however, have the authority to bar the initiatives from the ballot on the grounds that they didn’t address appropriate charter-related issues.

Even though Husted succeeded in blocking the ballot initiatives — on the charter-related grounds rather than the substantive oil and gas grounds, the oil and gas lobby seems to have wanted him to have broader authority. HB 463 appears neutral. It applies to any situation where a proposed county charter would, if approved by voters, give a local government power the state reserved for itself. Still, it aimed at, and reacted to, local jurisdictions seeking a tool through which they might influence oil and gas decisions.

Now BOEs may refuse to place a proposal on the ballot if the BOE or the Ohio secretary of state determines that, if adopted, the proposal would grant a local jurisdiction power the state reserved for itself. My concern is this: Why should the legality of local authority granted in a citizen-adopted charter be determined by the Ohio secretary of state or by a local BOE? This is a home rule interpretation question under the Ohio Constitution and HB 463 seems to be a legislative grab of judicial responsibility. Courts, not BOEs or secretaries of state, generally interpret the constitutional validity of legislation.

If citizens adopt a charter granting more authority to a local jurisdiction than is allowed under the Ohio Constitution or statutes, that’s a matter for a court.

More specifically, if citizens adopt a charter purporting to ban hydraulic fracturing, the county would get sued. The challenger would allege that the charter exceeds the county’s home rule authority under the constitution because the Ohio oil and gas law is a general law of the state and a local law can’t frustrate its purpose.

A court would decide.

If the BOE and/or the secretary of state can bar the measure from the ballot, voters can never decide. If the voters were right, they’d have lost their opportunity to have a legal charter of their choice. If they were wrong, a court would tell them so.

Gorovitz Robertson is the Steven W. Percy Distinguished Professor of Law at Cleveland-Marshall College of Law and Professor of Environmental Studies with the Levin College of Urban Affairs at Cleveland State University.

Re: Cleveland 2.0

Re: Small businesses and crowdfunding

Thanks for a great column by sections editor Tim Magaw, “Tell the whole story about Cleveland 2.0.”

Cleveland has always been a tale of two cities, and I think he pointed to part of that. Poverty leads to several other symptoms like a poor education system and higher crime rates. We need to tackle those head on if Cleveland is to truly have a renaissance. — Matt Wallenhorst

Tom Lix, founder of Cleveland Whiskey, sounds pleased with his outcome. The downside of crowdfunding is, with that number of stockholders, the stock must be registered, generating tons of government paperwork and oversight. That can be an expensive burden on a young company.

— Robert Salmon

Block Pediatric Cancer AND SUPPORT

CLEVELAND CLINIC CHILDREN’S

UOT ZNK cMNZ elkandelk.com/weakstuff

ADVISORS ad-vahy-zers [plural noun]

SIMPLY DEFINES MANCHESTER RBG. We are a full-service management advisory firm that works with you to improve business performance and maximize overall value. We offer insight & help execute the strategies in the areas of financial, human resources, sales & marketing, and technology.

www.ManchesterRBG.com/crains | 216-302-4769

Congratulations To Our

2016 TOP

PRODUCERS

Jeffrey Calig, CCIM

David Hexter, SIOR

Senior Vice President

Partner

Robert Brehmer, SIOR, CCIM Partner

Commercial Real Estate Services, Worldwide

naidaus.com | 216.831.3310

Office | Industrial | Retail Investment Services | Multi-Family Consulting | Property Management Tenant Representation

PA G E 10

|

J A N U A RY 2 3 - 2 9 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

Focus

BUSINESS OF BEER

Kegging for more Thirsty Dog Brewing Co.’s Brandon Benson, head of brewing operations, and John Najeway, co-owner, stand atop full kegs in their brewery in Akron. (Tim Harrison for Crain’s)

Thirsty Dog Brewing Co.’s appetite for growth is hardly pint-sized

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

Little did John Najeway know that as the man who ushered in the start of a Kentucky beer festival while dressed as a Trappist monk clutching pitchers in either hand and flanked by some 300 Domino’s pizzas, that he would one day be running a successful brewery of his own.

He had long hoped to, even well before this event at Fort Mitchell in 1995 billed as a “beer camp.” But it was then, as the beer began to flow and his friends and future business partners gathered around, that Najeway realized he was never more certain about getting into the beer business.

Today, Najeway, 47, is co-owner of Akron’s Thirsty Dog Brewing Co. The business has changed a bit since its founding 20 years ago, but grown steadily through the years despite ownership changes and a few locations that have come and gone.

With its original mascot still on the label (known as Micro Mutt), and sales only continuing to climb, to-

A pint of Citra Dog at Thirsty Dog’s taproom on Grant Street; Sean Pocock fills kegs of the seasonal Irish Setter Red; the brewery’s sign.

day's typical customer would never know how much the business has both changed and stayed the same.

Positioning itself among the largest brewers in the state, Thirsty Dog is now on the cusp of a new taproom on a stretch of Akron’s Grant Street the brewery calls home — working out of a space once used by Burkhardt Brewery of the mid 1800s with ties to German immigrants and some of the region’s first beer brewers.

Meanwhile, a new restaurant and

taproom for the East Bank of the Flats is in the works, though there are still terms of that deal in progress and a review underway by the city of Cleveland.

And that’s all on top of a growing distribution network that currently covers 15 states, touching nearly everyone from Maine to Florida. West Virginia just recently came online.

Chicago is the next market Najeway would like to target.

“I didn’t really think we’d be at this

point,” Najeway said.

“But you have to believe in what you’re doing, and you have to have solid business principles and good margins. Otherwise, you’ll stay a homebrewer.”

Humble beginnings In 1997, Najeway’s friends, including one of his beer camp pals, wanted to bring the brewpub idea to fruition That same year, Najeway had started

his own marketing agency, Southpaw Graphics (he’s left-handed). Naturally, he found a role in the business alongside his partners in doing marketing and brand design.

“I was instantly on board,” Najeway said. "I loved marketing. And I loved beer.”

Of course, being 1997, there wasn’t a craft beer scene like there is today.

The term “craft beer” was hardly even a part of the industry lexicon.

SEE BREWERY, PAGE 18

THE ART OF PAIRING - Page 11 | LAGER HEADS BREWING - Page 12 | HOPPING SUCCESS - Page 13

CRAIN’S CLEVELAND BUSINESS

BUSINESS

More than a Bud and some grub. There’s an art to this.

One can’t be expected to report the art and business of food and beer pairings without indulging herself, right? Here are five combinations I tried, orchestrated

by Nikolaos Atheneos, who’s general manager of Forage Public House in Lakewood. The chef of Forage is his brother, Demetrios Atheneos. — Michelle Park Lazette The pairing: Sesame crusted calamari (wasabi honey, apricot infused chile gastrique, green onion) + 3 Floyds Zombie Dust (American pale ale) The flavors: The light freshness of the beer accentuated the sweetness of the calamari, which was melt-inyour-mouth tender.

Why it works, according to Niko: Fried foods tend to pair well with American pale ales, which are not as hoppy as India pale ales.

The pairing: Devils on horseback (house crafted chorizo, house maple syrup cured pork belly, medjool dates, emulsion verde, sriracha, micro greens, garlic chives) + Fat Head’s Pimp My Sleigh (Belgian strong ale) The flavors: The devils, complete with crisp pork belly, packed a nice kick toward the end, and the heavier sweetness of the Pimp My Sleigh balanced that spiciness.

Why it works, according to Niko: That’s exactly it: The beer mellows out the heat of the chorizo.

The pairing: Rainbow trout (pistachio green garlic crumb, toasted orzo pilaf, hydroponic watercress, Ohio maple syrup emulsion) + Ommegang Gnomegang (Belgian blonde ale)

|

J A N U A RY 2 3 - 2 9 , 2 017

|

PA G E 11

OF BEER

Modern pairing menus offer little to wine about

By MICHELLE PARK LAZETTE clbfreelancer@crain.com

Move over, wine. There’s increased interest in food and alcohol pairings, and increasingly, it doesn’t involve you.

So say restaurateurs across Northeast Ohio who are hosting pairing events such as brewmaster dinners and seminars that highlight how craft ale complements food, and vice versa.

“We do see a growing interest in our guests (in) enjoying the interplay between our beer and our food,” said Sam McNulty, co-founder of Bar Cento, Market Garden Brewery, McNulty’s Bier Markt, Nano Brew Cleveland, and Speakeasy, all in Cleveland. “Up until more recently, wine was considered the true proper pairing beverage.

Now you’ll see craft beer taking the lead as beer has much more complexity than wine and often is found to be friendlier with foods.”

McNulty’s restaurants’ chefs and brewmasters teach classes occasionally and host beer dinners frequently.

Hosting pairing events with local chefs is one way for small breweries to draw crowds, said Mary-Ellen Jones, director of sales and marketing for Goldhorn Brewery, which opened in July in Cleveland.

“We are not a huge tourist beer city, so we have to get local people to come out and keep on coming back,”

McNulty

Jones

she said. “You have to get yourself out there, work with these chefs, collaborate where people are already lining up outside the door, and get your beer on the table.”

Both McNulty and Jones expect interest in tastings to keep brewing.

“It’s much more a personal experience being at an event, getting to ask, ‘Why do I love this stout so much with this brisket,’ finding out what those nuances are versus blindly drinking what you’re supposed to like,” she said.

The best beer and food pairings, from her point of view, are like well coordinated outfits: They go together without matching exactly.

“The food should complement the beer, not compete with it,” Jones explained.

But there are no hard and fast rules as to what works with what, restaurateurs say.

“The variety and possibilities are pretty much endless,” said Bob Voss, brewpub manager for Great Lakes Brewing Co. in Cleveland. He is certified cicerone, a qualification earned following an exhaustive

exam about beer and brewing.

“So, depending on what you’re looking for, there’s really a lot of different possibilities for each menu item,” Voss continued.

Voss “You want to match intensities. You don’t want something that’s going to overpower and clash with each other.”

If he is serving a double India pale ale, for example, he’ll seek something that will stand up to the hops, such as spicy wings. A salad calls for a lighter pairing partner — think, pilsner. Decadent dessert is paired well with porters and stouts, rich ales that have coffee and chocolate undertones. And in keeping with the generally appreciated pairing of citrus and seafood, witbier works with fish.

Once a month, Great Lakes serves a brewmaster menu. Events like these, Voss asserted, are the best way to experience beer and food pairings because it presents the opportunity for people to pick up on what others observe, too.

“Chefs know food, but nowadays chefs are starting to know about the beer,” he said. “That will make food and beer pairings more important.

As the number (of beers) grow, we’re going to have to set ourselves apart by having the knowledge and pushing the envelope.”

The flavors: The fish was well balanced, not only by the crunch of the watermelon radish, but also by the very bright ale, which has undertones of fruit. Side note: The maple emulsion was exquisite.

Why it works, according to Niko: “I like citrus with my fish,” he said, noting that this ale is brewed with Citra hops.

We work with you to provide the right technology for your business.

That type of service has earned us high marks from our customers.

Switch today for maximum Internet download speed options up to 10 Gigs.

The pairing: Single origin Belgian chocolate crème (bourbon caramel dust, brûlée, amarena cherries) + Dark Horse Tres Blueberry (stout) The flavors: The crunch plus the rich yet light center of the crème brûlée make the dessert, but the way the cherries and the beer complemented each other made the pairing: Take a bite of the cherries, then a sip of the beer, and the cherry taste deepens.

It’s all backed by our responsive, 24/7 business-class customer support.

Ranked “Highest in Customer Satisfaction with Very Small Business Wireline Service”

Why it works, according to Niko: Generally, you cannot go wrong in pairing a stout with chocolate.

The pairing: Creamy s’more (graham crumbs, Belgian chocolate, marshmallow crema) + Off Color Dinosmores (imperial stout) The flavors: The deep, rich beer both precedes and follows the dessert well and plays up the smoke of its charred marshmallows.

Why it works, according to Niko: Similar flavors complement similar flavors. S’mores and s’mores beer simply work.

15 Mbps Internet

69

$

99 mo*

for the first 12 months with a 2 or 3-year agreement

CALL (877) 903 -7884 OR VISIT COXBUSINESS.COM TO SWITCH TODAY *Offer ends 4/30/2017. Minimum service term, equipment, installation, fees, taxes, and other restrictions may apply. See coxbusiness.com.

For J.D. Power award information visit jdpower.com. © 2017 Cox Communications, Inc. All rights reserved.

PA G E 12

|

J A N U A RY 2 3 - 2 9 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

BUSINESS

OF BEER

Q&A: Matt Kiene and Tom Robbins Lager Heads Brewing Co.

Lager Heads Brewing Co. has quietly built a strong following in Northeast Ohio’s craft beer world since its owners began brewing their own libations as frosty complements to their Medina restaurant’s popular barbecue in 2010. The growing business now works out of a combined brewery and taproom that opened in the spring of 2015 in addition to its nearby flagship restaurant.

As an expanding, yet still relatively young craft brewer, Crain’s decided to sit down with Lager Heads co-owner and Medina native Matt Kiene, 45, and brewmaster Tom Robbins, 30, to talk about how they got into the craft beer scene, the process of designing new recipes and their overall approach to the business of brew. — Jeremy Nobile Lager Heads is Medina County’s first craft brewer, but it all started with the smokehouse, right?

Matt Kiene: Before that, I was in sales in upstate New York. My brother Jon owned a drywall business. So we did a 180, bought this place we grew up with and had it rehabbed for the restaurant. That was 13 years ago. But we really enjoyed craft beer and started to sell a lot of it at the restaurant. So fast-forward to 2010, we had this back room we didn’t utilize much.

We bought some used homebrewing equipment from California and we had a friend, who did some brewing and got us going. It eventually became too much for him because he had a full-time job and family. So that’s when we found Tom, who had cut his teeth for years at Thirsty Dog. Tom, you actually began your career as a pipe fitter, right? So how did you end up here?

Tom Robbins: Thirsty Dog approached my former boss, who owned their building, about putting a brewery in there. I did some pipefitting and demolition there. I’d work all day, then at night, I’d be there taking

out pipes, breaking up floors, walls, concrete, replacing floor drains, that kind of stuff. I did that for about a year straight, got to know the owner and got inspired to do some homebrewing — and I didn’t even really drink. But I bought a bunch of books, got some old homebrewing equipment and just went gangbusters after that. I was probably brewing two to four times a weekend. A job opened up there as a brewer’s assistant two weeks before I was about to take the union pipefitters test. But I decided to go with Thirsty Dog. And I was there about four years before I came over to these guys.

That background is actually probably quite useful when it comes to working with the equipment.

TR: Yes, in fact I like building homebrew systems and have made probably three or four. Brewing is a lot of fluid movement, and that’s basically what plumbing is.

So what’s your output look like today?

MK: We like to keep the numbers close to the vest, but this facility doubled what we were doing before.

We first hit beer shelves in 2010, but we were doing mostly 22 oz. bombers then, which can be a hard sell. Then we moved to bottles to make it easier for the distributor to sell.

TR: And we have six different barrel-aged beers and counting.

MK: Today, we bottle nine different styles. Three styles are all-year round: Bed Head Red (red ale), Barnburner Lager (a German-style lager) and High Five IPA. But these guys brew 18-20 different styles throughout the year.

What’s your bestseller?

MK: The IPA in the bottles and the red in the draft.

What’s a major influence in designing new beers?

TR: A lot of times they’re just ideas that have been floating around in my head for a while, styles I wanted to do as a homebrewer I never got to or recipes I did do as a homebrewer I pull out and scale up. But a lot of it just comes from trying new beers, reading articles and stumbling across things that will spark ideas.

Lager Heads Brewing Co.’s Matt Kiene and Tom Robbins said their facility has doubled its output since 2010. (Jeremy Nobile) MK: We were just talking about what we wanted to do this summer. But one thing that always comes up is where are we going to put it? You’ve got your regulars plus seasonals. If I know those things are filled with X, how do we fit this in? For example, if you’re a Northeast Ohio brewery, you’ve got some kind of holiday version. When you have those, not much new can happen because you’re jammed up trying to get that out. So it’s often just a question of: What can I put this beer in to make it and meet other demands?

And then there are just the variety of factors in each brew, right?

TR: There is an enormous amount of styles out there. And there are so many kinds of hops, grains and yeast. Part of the fun is deciding which hop variety might pair with what yeast strain. There are a wide variety of grains and malts. But there are over a hundred types of hops that all carry different profiles.

American hops tend to more citrusy, with some pineyness. Citra is one of the big name ones right now. English hops are more earthy. German or European are called a more noble hop, which is more spicy and floral.

It’s a lot of fun, but it can be a bit overwhelming, too.

IPAs seem to be hot trend right now. Do you see that changing?

TR: IPAs have just been growing and growing and growing. It’s an insane fad right now. It’s all people want.

And that’s fine. I love an IPA. MK: But we’re really hoping the lager comes back strong.

TR: Yeah, the lagers, the porters.

Maybe some English bitters.

MK: There are just so many great styles out there and we want some variety.

When you’re trying out new beers, how do you determine what stays or goes?

MK: We are in a unique situation in that we have the restaurant to test through. And that works. We have a

new beer this year, a Belgian quadruple we’re doing partially because the alcohol limit has been taken off us. That’s looking about 13.5% (ABV) right now and should be out near the end of the month.

That’s a style maybe the general public won’t want to devour. But we have the taproom and the restaurant to sell that without worrying about the commercial viability of it and lets us test the market.

What’s the last beer to pass the test phase and move to shelves?

MK: Smokie Robbins, a smoked beer.

We brewed it on draft, and it went over really well, so we put it on draft for our distributor.

Have you ever tried any particularly weird brews or unique ingredients?

MK: We played around with alcoholic root beer years ago. People kind of liked it, but I remember we didn’t move forward with it because it was kind of gimmicky. We didn’t think that was us. And from what I’ve read and see, that fad kind of ran itself dry quickly.

TR: And I don’t really like to use weird things, or do fruit beers. It’s not where my expertise is. I try to brew as classic a style as possible.

MK: And there’s probably a reason why those classic styles are still so popular today.

So have you ever actually tried a fruit beer?

TR: We did actually try one before. It was a Belgian dubbel with plums.

That style has a lot of dark-fruited flavors, like stone fruits, like fig or plum or cherry. So we threw some plum in there and it was underwhelming, just there to accent some fruitiness. It actually did really well and sold out pretty quick on the taps, though I think we preferred it ourselves without the plum. We entered that into the Great American Beer Fest this past year, but without the plum. It went to the final round, but didn’t medal. That was one I was skeptical about at first. We’re going to brew it again.

CRAIN’S CLEVELAND BUSINESS

BUSINESS

|

J A N U A RY 2 3 - 2 9 , 2 017

|

PA G E 13

OF BEER

Craft beer boom ignites Ohio’s hop market

By MICHELLE PARK LAZETTE clbfreelancer@crain.com

When it’s time to harvest the 1.5 acres in Medina County that Jenny Wagar Napier and her husband plant, it smells like hoppy beer.

“It definitely smells like an IPA,” Jenny said of the Cascade hops Mike and she grow at Barn Talk Hops farm in Sharon Center. “That’s how you know they’re ripe.”

Attracted to hop growing because their acreage is limited (hops grow tall) and because they enjoy beer, the Napiers planted their first hops in 2013. In 2016, they sold their harvest to three breweries.

Decades after disease and prohibition wiped out hop production in this corner of the country, Ohio’s hop acreage is making a comeback, rising to 200 acres from roughly 10 to 15 acres five years ago, according to Brad Bergefurd with the OSU Extension in Piketon, which will host The Ohio Hops Conference and Trade Show on Feb. 24 and 25.

“It’s just so cool,” Jenny Napier said, “to think it was here in Ohio and to bring that back.”

The drivers of the growth are as clear as a pilsner to anyone who’s tasted the countless ales poured by Ohio’s multiplying breweries, which now number more than 200.

“Surveys with breweries over recent years show the breweries in Ohio want to buy local,” Bergefurd said. “If they can put that they’re buying hops and barley from Ohio farmers, that’s just a big selling point.”

The state presently counts roughly four or five hop growers who’ve planted two to five acres, 15 to 20 growers who’ve planted an acre, and a remainder that grow less than half an acre, said Dave Volkman, who’s planted an acre of them — so far — at Ohio Valley Hops in Maineville in Warren County. And a recent survey’s preliminary results indicate that nearly every grower in the state intends to plant more hops this year.

To advocate for and educate the state’s hop farmers, roughly 50 growers have joined the Ohio Hop Growers Guild. Recently, the guild formed a committee that drafted standards for a seal of quality for growers, according to Volkman, who in February becomes chair of the guild’s board.

“You’ve got to have a quality product,” he said. “If a brewer has a bad experience with poor quality hops, if people just jump in thinking they’re going to make easy money, it hurts hop growers in general just like someone who makes lousy beer taints the whole industry.”

Hop production is no get-richquick endeavor, industry insiders stress. It costs more than $10,000 — more than $20,000, even — per acre to plant them, and the crop doesn’t produce a full crop until year three.

Bergefurd is a horticulture specialist well known to those planting hops in Ohio. An OSU Extension office coworker and he started hops research about five years ago.

“We saw the growing market,” he explained. “As with any farming, if there’s a market to be had, we want to teach our farmers to be aware of the opportunity and see if it fits their farming operations.

“There’s a lot of infrastructure and

Hops grow on large trellises made of cable, so they must be harvested by hand or with a picker. (Barn Talk Hops) Barn Talk Hops farm in Sharon Center harvested its first hops in 2013.

Last year, it sold its harvest to three breweries. (Barn Talk Hops)

Ohio’s hop acreage has risen to 200 acres from about 10 to 15 over five years. (Ohio Valley Hops)

Hops can cost $10,000 or $20,000 per acre to plant, experts say. (Ohio Valley Hops)

upfront costs before you get the first dollar back,” Bergefurd added. “I always warn those interested: Do not underestimate the hand labor.”

Hops cannot be harvested with a tractor. They grow on large trellises made of cable, so they must be harvested by hand or with a picker. Plus, hops require precisely timed harvesting.

“They’ll go from not being ready to too far gone within a matter of three or four days, weather-dependent,” Bergefurd explained. “Farmers get caught off guard by not having the labor to get it done.”

supply and undersupply. It’s very easy to hit that oversupply mark, and that’s when people can go out of

The local push Hops acreage is expanding in nearby states, too, including Michigan, Pennsylvania and Illinois, Bergefurd said.

Basically 75% of the U.S. hop crop is grown in the Yakima Valley in Washington state, thanks to its desert conditions and the melt from the snowpack of the Cascade mountains, explained Jaki Brophy, communications director for Hop Growers of America. The new hop growers in regions such as Northeast Ohio don’t squeeze the Yakima Valley, Brophy said, as large-scale brewers are still buying their hops from traditional growing areas.

Where burgeoning hop growers in regional areas do have a foothold in selling to those who are brewing and marketing beers with hops grown in local soil, growers agree.

What lessons might the multigenerational West Coast hop growers impart to those just now sowing the perennial crop?

“The hop market has been pretty volatile in the past,” Brophy began.

“It’s a very thin line between over-

business because prices have switched.

“Farming hops can be quite expensive … so something a lot of growers do here is they make sure they have contracts so when they do take out a loan to get the proper equipment, they have that in place so they’re not planting something hoping to sell it,” Brophy said.

It’s estimated Ohio breweries a few years ago were buying more than $30 million in hops from the West Coast, Bergefurd said.

“There’s 30 million bucks we could keep right here in the state,” he said.

And the buzz of activity flows beyond the hop growers to the suppliers of their fertilizer, pesticides, and infrastructure, Volkman said. In fact, there’s a real need for more equipment in the state for pelletizing and otherwise preparing Ohio hops for the marketplace, he added.

“A number of growers have purchased harvesters and pelletizing outfits,” Volkman said.

The Napiers of Barn Talk Hops are among them: They’ve invested in a pellet mill where other growers will be able to process and package the hops they harvest.

“We could use more of them throughout the state,” Volkman said.

“To do it, people need to be convinced there’s money in it. We’re on the way to getting there.”

By all accounts, the demand for hops is expected to continue to grow.

So long as the brewing industry keeps pouring, bottling and canning more craft ale, there should be a market for Ohio-grown hops, Bergefurd said.

“If the brewing industry would happen to go south, that would hurt us,” he said. “Hopefully we keep that brewing industry strong.”

Said another way? Bottoms up.

What’s Your Competitive Advantage?

In business today, often the only advantage over your competition is the talented people who work for you. At Nesco Resource, we put over 60 years of experience into our work with companies to understand their needs and find the right talent to meet their goals.

From tech startups to industrial giants, we’re matching talent with opportunity to grow business. And with some of the highest satisfaction ratings in the industry, Nesco Resource is working for both the companies and talent we serve.

Let Nesco Work For You www.nescoresource.com/works

A Nesco, Inc. Company

Nesco Resource is a wholly owned subsidiary of Nesco Inc., a privately held diversified holding company focused on sectors including manufacturing, human resource services, and real estate.

PA G E 14

|

J A N U A RY 2 3 - 2 9 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

CRAIN’S CLEVELAND BUSINESS

BUSINESS

BREWERIES CONTINUED FROM PAGE 1 The market is certainly there, Boor said.

“But it’s a more complicated question than it was for breweries who looked at this even five to 10 years ago,” he said.

In craft beer, is there a bubble poised to pop like the cap on an over-carbonated stout? Or does the market have potential to further mature?

“It’s a very competitive market today. Is there a bubble? There could be,” said Mary MacDonald, executive director of the Ohio Craft Brewers Association. “But look at how many restaurants there are out there. Do we have room for more breweries? I don’t know. But we’re still experiencing tremendous growth in the craft brewing industry.”

Growing thirst The craft beer industry has surged in recent years for a variety of reasons, not least of which, experts surmise, is a growing affinity by consumers for artisanal, locally made products sought out in a do-it-yourself culture.

According to the Brewers Association trade group, retail sales of craft beer in the United States grew to $22.3 billion in 2015. (Figures for 2016 won’t be out until spring).

That’s about 21% of the $105.9 billion U.S. beer market, reflecting growth of 16% from the prior year.

Volume, meanwhile, topped 24.5 million barrels, making craft beer more than 12% of the entire U.S. beer market.

A midyear report from the Brewers Association showed craft breweries numbered a record 4,656 in July — that’s 417 more from the like point a year prior — with about 2,200 more being planned.

That already was a solid increase from the 4,225 craft breweries logged in 2015, a growth pace of about 10%.

And those figures all came as overall beer production dropped by 0.2% in 2015.

With craft beer growing, that means the industry is chipping away at the dominant macrobrew business.

Those indicators alone suggest that

if 2016 wasn’t a banner year for the craft beer industry, amazing growth continued to be realized that any other industry would be envious of.

That growth has been equally strong in Ohio itself.

According to the Ohio Craft Brewers Association, craft beer production surpassed 1.385 million barrels in 2015. That’s 40% more craft beer brewed than in 2012, when MacDonald said the state had 52 breweries.

Ohio is approaching 190 craft breweries today, MacDonald said, adding that about 40 breweries have opened annually the past few years.

Comparatively, only two closed last year.

The pace of growth is bound to slow somewhat.

But this all shows a growing thirst for craft beer.

Maturation, not saturation In the Northeast Ohio market where small brewpub openings are becoming increasingly common, it may feel like the scene could be reaching a saturation point. However, Ohio is actually well behind other states like Vermont or Oregon in terms of breweries compared to population.

According to the Brewers Association, Ohio ranked 27th in terms of breweries per capita in 2015, at 1.7 breweries per 100,000 adults. That was with 143 breweries.

Comparatively, Vermont had 44 breweries in 2015, which comes out to about 9.4 breweries per capita — the highest density of any other state.

Markets surrounding — and more similar to — Ohio have a higher density, too. For example, Michigan had 2.9 breweries per capita (205 in total) in 2015, and Pennsylvania had 1.9 breweries per capita (178 in total).

Those figures are promising in terms of growth potential here, and for the wider U.S. market at-large, as far as the Brewers Association is concerned.

“While the craft brewing industry is entering a period of maturation, most markets are not near saturation,” said Bart Watson, Brewers Association chief economist in a statement about the association’s July 2016 midyear data. “As craft’s base gets larger, as with any industry, it becomes more difficult for it to grow

|

% D AY_ O F_ W E E K _ D AT E %

|

PA G E 9 9

OF BEER

ready feeling the squeeze for shelf and tap space. And it isn’t always just local brewers moving into the territory.

“We have consumers religiously loyal to our Many distributors are feeling presportfolio of beers. But you still have to come to sure to expand their portfolios of beers because they don’t want to market with new beers and be innovative and miss the next big thing, said Joe McHenry, executive vice president at show an ability to brew a lot of different beers.”

Superior Beverage Group.

— Bill Boor, Great Lakes CEO That gives chances to new breweries, even if distributors aren’t picking up the new guys quite as quickly as they did even a year or two ago.

But it also makes life a touch harder on the established brewers.

“We do go out and seek popular craft beers doing well in other markets,” McHenry said. “And we entertain all the craft brewers that call us.”

Accommodating more beers makes work more complicated and costly on the distribution front. But it also creates other opportunities to sell other items to retailers.

“So it’s worth our investment to take on these added expenses to make sure that ultimately, the consumers can satisfy their choice,” he said.

However, that puts pressure on brewers who often are left reminding how important of a player their most popular beers are on shelves and in bars.

“We’ll say that if you’re a retailer and you have Great Lakes in place, that’s going to turn over," Boor said.

"Don’t forget about that."

Competition also reinforces the importance of innovation, Boor said, so customers, even potentially brand McKinley Wiley for Crain’s loyal ones, stay interested.

Thank that trend for more brewerat the same percentage rate.

Yet Room to grow there is still tremendous dynamism ies getting into seasonal releases, reflected in eight percent growth for barrel-aged and sour programs.

Ohio ranked 27th nationwide in the “We have consumers religiously craft.” number of breweries per capita in loyal to our portfolio of beers,” Boor 2015. The state earning the number said. “But you still have to come to Brewers staying frosty one ranking: Vermont. market with new beers and be innoBreweries per 100,000 adults Paul Benner opened Platform Beer vative and show an ability to brew a Co. to the public in Ohio City in July lot of different beers.”

9.4 Vermont So is the market truly near its satu2014, in the thick of this craft brewery ration point? explosion.

Th e brewery closed out 1.7 Ohio It’s not something new or estabthat year with about 100 barrels of beer brewed in about six months. In lished brewers in Ohio are losing Number of breweries in 2015, 2016, the brewery produced around sleep over — at least not yet.

Ohio vs. neighboring states “At the end of the day, the con10,000 barrels, he said. It also recently 205: Michigan sumer will dictate what goes on the opened a new taproom in Columbus.

“We didn’t expect to grow at this taps,” Benner said. “If we’re at a lo178: Pennsylvania pace,” he said. “But we were also very cation and people are buying us, 143: Ohio that’s all we really have to worry careful about it.”

CRAIN'S CLEVELAND BUSINESS μ JANUARY 23, 2017 μ PAGE 15 Source: Brewers Association Nonetheless, Benner said he’s al- about.”

CLASSIFIED

Phone: (216) 771-5276 Contact: Lynn Calcaterra E-mail: CLBClassified@crain.com

PROFESSIONAL SERVICES Licensed Commercial Kitchen Now Offering Lunch Time Contract Catering (Schools, Child/DayCare, etc.)

OR Catering on an as needed basis (seminars, training, etc.)

Boxed Lunches, Hot or Cold Meals. Price, Menus & Service Based On Your Needs.

Monday thru Friday.

Delivery and staff available.

Far SW Cleveland area.

330-225-1995

DiamondEventCenter.com

Copy Deadline: Wednesdays @ 2:00 p.m.

All Ads Pre-Paid: Check or Credit Card

BUSINESS SERVICES C.W. JENNINGS INDUSTRIAL EXCHANGE Global Industrial Consulting Construction • Acquisitions Exporting • Financing (855) 707-1944

FLYNN

Haul-My-Mess.com Full Service Junk Removal and Mini Dumpster Rental "We haul away your unwanted stuff"

CALL TODAY 216-799-9911

EXPERTS IN MOBILE APP

BUSINESSES FOR SALE

Solutions for Businesses on Apple, Android & Windows Platforms.

THINKING OF SELLING? FREE MARKET ANALYSIS

Please contact:

No Upfront Fees See our listings at: www.empirebusinesses.com mike@empirebusinesses.com 440-461-2202

Viztek Software 440-972-0157 www.vizteksoft.com

BUSINESS SERVICE OWNERS!

ENVIRONMENTAL

Submit your business card to promote your service.

UST REMOVALS • REMEDIATION DUE DILIGENCE INVESTIGATIONS (800) 690-9409

To find out more, contact Lynn Calcaterra at 216.771.5276

Looking to fill a position on your staff?

Place an Executive Recruiter ad in Crain’s

Call 216-771-5276

CRAIN’S CLEVELAND BUSINESS

|

J A N U A RY 2 3 - 2 9 , 2 017

|

PA G E 15

ADVERTISING

Weatherhead Executive MBA Develop transformational leadership skills for immediate growth in your career and life. Now offering a healthcare track in affiliation with the Cleveland Clinic.

The space you need to learn.

The power you need to lead.

Learn more at weatherhead.case.edu/emba.

Crain’s People on the Move promotional feature showcases Northeast Ohio job changes, promotions and board appointments.

Guaranteed placement in print, online and in a weekly e-newsletter can be purchased at www.crainscleveland.com/peopleonthemove.

Please call Lynn Calcaterra at 216-771-5276 for more information FINANCE

FINANCE

LAW

LAW

Melissa Haber

David DeMichael

Komlavi Atsou

Jeffrey Gallup

Vice President, Commercial Relationship Manager

Vice President, Commercial Relationship Manager

Shareholder

Full-equity Shareholder

Home Savings

Home Savings

Cavitch, Familo and Durkin

Cavitch Familo and Durkin

Home Savings is pleased to announce that Melissa Haber has joined the Bank as Vice President, Commercial Relationship Manager serving the Cleveland market.

Haber brings with her over 20 years of banking and sales experience, and most recently employed as a Vice President of Private Banking for a regional bank. She earned a Bachelor of Science degree in Business Administration from Bowling Green State University.

LAW

Home Savings is pleased to announce that David DeMichael has joined the Bank as Vice President, Commercial Relationship Manager serving the Cleveland market.

DeMichael’s 30 years of experience in commercial banking gives him great knowledge of middle market companies engaged in the aerospace, plastics and trucking industries. He earned a Bachelor of Arts degree in economics from The Ohio State University, and is active in the community.

LAW

Brad Sobolewski

Anne Strassfeld

Partner

Counsel

Ulmer & Berne LLP

Ulmer & Berne

Brad is promoted to partner from counsel in Ulmer’s Complex Business Litigation Practice. He represents clients in state and federal courts throughout the U.S., defending companies in class actions and other complex commercial, banking, insurance, and trade secret and non-compete litigation.

Kenneth Zirm

Anne returns to private practice at Ulmer, where she previously practiced from 1994-2002, as counsel in the firm’s Health Care Practice Group.

She brings years of experience working in executive leadership and senior counsel positions with large, integrated health care systems, including University Hospitals and the Cleveland Clinic. Her practice focuses on advising health care industry clients on a full range of issues with emphasis on strategic responses to health care reform initiatives.

Partner, General Counsel Ulmer & Berne LLP Ken was named Ulmer’s General Counsel in 2016, having previously served as Professional Development Director. His client work focuses on advising clients in the media and communications space. He has defended reporters whose unpublished work product has been subpoenaed in criminal and civil trials, and litigated numerous major news access and defamation cases involving First Amendment rights. Ken has also defended major media corporations in copyright infringement litigation.

MANUFACTURING Jim Tennant

Cavitch, Familo and Durkin is proud to announce the promotion of Komlavi Atsou to Shareholder.

Komlavi came to the firm as an Associate Attorney in 2011. Komlavi is a top rated business litigation attorney by Super Lawyers. He focuses his practice in Employment and Labor Litigation, Business Litigation, General Civil Litigation, Class Action and Appellate Practice. Komlavi was admitted to the Ohio Bar in 2008.

Daniel Gottesman Partner

George Hicks

Ulmer & Berne LLP

Counsel

Previously an associate in Ulmer’s Business Law Practice Group, Daniel represents public and private companies on a wide variety of corporate law matters, including mergers & acquisitions, private placements, equity financing, securities law and regulatory compliance, joint ventures and general corporate matters. Daniel also represents buyers and sellers in various commercial real estate acquisitions and sales, including multifamily, office, mixed use and skilled nursing facilities.

Richard T. Hamilton, Jr.

Ulmer & Berne LLP George focuses his practice primarily on commercial litigation, particularly for clients operating in the consumer finance, commercial banking, and commercial business sectors. He has substantial experience resolving consumer and commercial litigation and complex commercial foreclosure matters for clients in federal and state courts throughout the country. A retired U.S. Navy Captain, George began his legal career as in-house counsel at First Energy.

Jennifer Monty Rieker

Partner

Evelyn Holmer

Counsel

Ulmer & Berne LLP

Counsel

Ulmer & Berne LLP Jennifer focuses her practice on consumer finance litigation and financial compliance matters. She successfully defends and resolves cases including alleged violations of the Telephone Consumer Protection Act, the Fair Debt Collection Practices Act, the Truth in Lending Act, and the Real Estate Settlement Procedures Act. Jennifer also provides in-depth compliance services to her clients.

PUBLIC RELATIONS

Ulmer & Berne LLP Previously counsel since joining Ulmer in 2013, Rick chairs the firm’s White Collar Practice. As a former federal prosecutor, including more than 20 years with the U.S. Department of Justice’s Antitrust Division, Rick regularly advises clients on matters ranging from antitrust and competition-related issues, including cartel enforcement, to FCPA and myriad white collar criminal matters.

STAFFING & SERVICES

Bob Berry OEC

Executive Recruiter

RBB

Director of Legislative Affairs and Civic Partnerships

Direct Recruiters, Inc.

The Cleveland Museum of Art has announced the appointment of Michael Ferry as Director of Legislative Affairs and Civic Partnerships. Ferry will handle all aspects of legislative relations on the local and state level. He continues to enlist and retain corporate members and sponsors for the Cleveland Museum of Art while creating and developing resource partnerships with external organizations.

TECHNOLOGY General Counsel

Michael Ferry

Cleveland Museum of Art

Evelyn had been an associate in Ulmer’s Mergers & Acquisitions Practice before her promotion to counsel. She represents clients on a variety of corporate law matters, including mergers and acquisitions, general corporate law, private placements, and equity financing transactions.

Leo Golubitsky

President

Wooster-based RBB, a specialty manufacturer of recurring small batch electronic assemblies, promoted Jim Tennant from general manager to president on Jan. 3. In Tennant’s three years as GM, he implemented forward-thinking strategies that improved the company’s customer relations, interdepartmental processes and overall financial health.

Tennant has over 28 years of experience in electronic manufacturing and engineering. As president, he oversees sales, operations and corporate services.

Cavitch, Familo and Durkin is proud to announce the promotion of Jeffrey Gallup to Full-equity Shareholder. Jeff joined Cavitch in 2003 as an Associate Attorney and in 2015 was promoted to Non-equity Shareholder.

Jeff practices in the areas of General Corporate and Business Law, Mergers and Acquisitions, Real Estate Law, and Corporate and Commercial Finance. Jeff acts as General Counsel for many closely-held businesses and represents both privately-held and publicly-traded companies.

Leo Golubitsky has joined Direct Recruiters, Inc. as an Executive Recruiter in order to expand their Consumer Technologies where there’s a growing demand for top tech talent in smart devices such as Smart Homes, Control Systems, Audio, Video, Home Theater, Wearables, and other IoT devices.

Leo brings 20 years of successful, award winning experience in the Consumer Electronics Industry including Crain’s Top 20 in their 20’s and #1 Weatherhead 100. For more info: leog@directrecruiters.com.

Joining OEC as General Counsel, Bob will provide guidance on corporate governance, contract negotiations, compliance issues, software licensing, trademark protection and other legal matters surrounding ecommerce development for OEC. From 2001 - 2016, Bob served as OEC’s outside General Counsel as a partner of Critchfield, Critchfield & Johnston.

PA G E 16

|

J A N U A RY 2 3 - 2 9 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

BUSINESS OF LIFE

Source Lunch There probably aren’t a whole lot of real estate professionals who know Akron’s commercial market as well as Jerry Fiume.

At 53, Fiume has been at it for 30 years, working in both real estate sales and development. He knew the market long before that, though.

Fiume is a Summit County native — Cuyahoga Falls class of 1981, thanks.

He’s still at it, now with his own firm for the second time in his career. Fiume opened SVN | Summit Commercial Real Estate Group in Fairlawn late last year. Fiume is managing director of the local firm, which is a franchise of Boston-based SVN International Corp.

For the previous seven years, Fiume was an account executive for Akron-based NAI Cummins, but before that he was a founding partner of Medina’s Pride One Real Estate. So, calling the shots is not new to Fiume, and he says he’s focusing his new firm on work in Medina, Summit, Portage and Stark counties.

— Dan Shingler

You say you’re a salesman first and foremost, and one who believes that selling is a craft.

How did you get started?

I was working at Summit Reprographics when I was still in high school. I told the owner I had to go to college, so either get me a job in sales and I’ll go to school at night, or I’ll have to just quit to go to school.

So, he made me a salesman. I was 18, I had a company car and I was calling on General Motors.

You majored in real estate finance for both your bachelor’s and master’s degrees. Did you always know you wanted to get into real estate?

The gentleman I used to work with at Summit Reprographics, my mentor, was involved in real estate quite a bit. He made a lot of money in the real estate industry, in addition to his regular business. He taught me what to do and what not to do. I saw the potential.

Why be an owner instead of just selling?

Ever since I was 8 years old, I’ve always worked for myself and been in charge. I had three paper routes when I was a kid. I worked for people off and on, but even at Summit Reprographics, I became the sales manager and then I was eventually president of that company for a couple of years. One reason I do what I do is when I was 19 or 20 years old, I was calling on Republic Steel in Lorain, Ohio. I saw my guy, George, on a Thursday. He said, “I need rollers, paper” or whatever it was. I said, “OK, I’ll bring it out Monday.” This was a

“Some guy on the 27th floor decided that department was closing on Friday, and none of those guys even had a clue. That’s when I decided it’s going to be up to me, and if I screw it up, it’s going to be on me.” brand new drafting facility with 50 draftsman working in it. I got there Monday, and in that room where there were 50 guys working Thursday, they were all gone. They shut it down. I stood there for probably 15 minutes, just looking. Some guy on the 27th floor decided that department was closing on Friday, and none of those guys even had a clue. I was impressionable; it was a poignant moment for me. That’s when I decided it’s going to be up to me, and if I screw it up, it’s going to be on me.

Do you still like selling?

I do, very much, actually. I think of it as a gift that I have. And it’s communications. I like that today’s commercial broker has to be even more consultative. The days of chasing a commission check are almost gone. Some people accuse me of killing more deals than I make, but I can’t look at someone and advise them to do something if it doesn’t make sense.

Jerry Fiume

COMMERCIAL REAL ESTATE

Why is now a good time to start a commercial real estate firm?

I wanted to be an owner again, and the opportunity came along with the SVN franchise that allows us to get the data tools that we need.

Those are very, very critical. They are very much a technology-driven company, and that’s what attracted me. You need to have that today. I also just didn’t want to spend the next 20 years working for someone else. I’m in the prime earning years of my life.

You’ve done this before, in terms of being an owner. Why did you stop the first time?

The Great Recession. We were developers (at Pride One), and we had an entire, diverse line of real estate products. That worked out well, because when one sector was down, another would be up. But we didn’t have a plan for the Great Recession. Then my partner wanted to be in construction. I didn’t want to be as much in construction, so I sold it to him. We still do a lot of projects together, though.

If you weren’t in real estate and you weren’t in sales, what do you think you’d be doing?

Good question. No one’s ever asked me that before. I’m not really sure. I think I would be a good coach or a teacher. But I’d probably be in some sort of entrepreneurial business.

Any regrets? You’ve spent more than half your life in real estate.

None whatsoever. It’s been a great run already!

Five Things: FAVORITE THING TO EAT: Fish

FAVORITE MOVIE: “I hate to admit it. Fine. It's ‘The Godfather.’ ”

THE FAVORITE OF YOUR TWO CHILDREN? “Ha! If you ask Matthew, he'll say it's Marissa. But if you ask Marissa, she'll say it's Matthew. If you ask me, they're both great.”

FAVORITE PIECE OF NORTHEAST OHIO ARCHITECTURE? The Schofield Building on East 9th Street in Cleveland. “I just think that's a beautiful building.”

FAVORITE PLACE TO TRAVEL? Italy. “I try to go to Europe every year, and that includes going to Italy every other year.”

Lunch Spot Valley Cafe 1212 Weathervane Lane Akron 330-865-0101 www.valley-cafe.com

The meal

One had a deluxe BLT with home fries and tea, the other had a triple-decker turkey club sandwich with homemade fries and a soft drink.

The vibe

If your mom opened a restaurant, it might look like this. Clean, simple and comfortable, Valley Cafe is a favorite lunch spot in Merriman Valley on Akron’s northwest side.

The bill $29.01

CRAIN’S CLEVELAND BUSINESS

|

J A N U A RY 2 3 - 2 9 , 2 017

|

PA G E 17

AKRON

Segmint’s use of big data adds up to large growth

By DAN SHINGLER dshingler@crain.com @DanShingler

Manuel Moreno, a customer service representative, works at the Cleveland Sight Center’s call operation. (Contributed photo)

Partnership evolves to bring more work to visually impaired

By JUDY STRINGER clbfreelancer@crain.com

When InfoCision Management Corp. chief of staff Steve Brubaker pledged to hire 25 vision-impaired people to work for the Akron-based telemarketer in 2012, not even he had the foresight to imagine how a unique partnership with the Cleveland Sight Center would grow.

Today, the nonprofit sight center owns and operates a call center at its University Circle base, where 60 employees, using InfoCision’s contact software platform, answer incoming calls or reach out to Ohio residents on behalf of local and state agencies.

Customers include Cuyahoga County, TourismOhio, the state’s education and health departments, and secretary of state Jon Husted’s office.

Call center director Jassen Tawil estimates his employees, most of them blind, managed $2 million worth of government contracts in 2016.

“In the beginning, (the sight center was) supporting InfoCision employees who had vision disabilities and training people, and InfoCision was hiring lots of them,” Tawil said. “Over the last five years, it really transformed into more of a social enterprise business right here at the sight center.”

Part of the transformation is courtesy of the niche role the sight center can play in contracting certain call center projects. Nonprofits employing people with disabilities — like women-owned or minority-owned businesses — often get preferential treatment in bids for state projects.

“These are contracts that InfoCision likely would not qualify for on our own,” Brubaker said. “The fact that we have this joint venture enables the sight center to acquire the contract, and then we can work in partnership to deliver the services.”

When, for instance, the sight center needed 500 people on the phones for a few days in November to handle voter calls for Husted’s office, it subcontracted with InfoCision, which has nearly 3,000 call center “communicators” in 12 locations, to manage the volume.

“The calls are handled in the same manner, with Cleveland Sight Center taking ultimate responsibility for the call,” Tawil said. “We then pay InfoCision for the calls they handle.”

Along with the ongoing B2B part-

nership, it was InfoCision’s investment and expertise that helped create a site capable of competing for and fulfilling state contracts, according to Tawil. Just before Brubaker and InfoCision announced plans to hire 25 call center employees with visual impairments, the Akron company donated about $50,000 to buy office furniture and computer equipment to expand call center operations at the sight center.

“The same technology we use in our call centers is provided to the call center in the sight center, and we support that through our technology team,” Brubaker said.

Prior the updates — which occurred alongside a major renovation effort at the sight center’s 60-year-old headquarters — the organization had a smaller and less sophisticated call center that was used primarily to train clients so they could land jobs and become more self-sufficient.

Tawil said about 70% of people with disabilities are unemployed. He estimates close to 200 visually impaired people have gotten a job as a result of the five-year partnership. InfoCision itself has hired 35.

“If more companies did what InfoCision did, we could really make a dent in that 70%,” Tawil said, “and more people who want to work could find jobs.”

If you ask Tawil, he would likely say motivation is the final ingredient in the partnership’s success formula.

People with visual challenges tend to be highly motivated when it comes to employment opportunities, he said.

That work ethic, combined with InfoCision’s technology, often means the sight center can deliver “measurably better results” when compared to agency-based call centers, Tawil said.

After Husted moved incoming calls from the secretary of state’s office to the sight center in January 2016, the average hold time fell from more than 10 minutes to 54 seconds, and the center’s reps answered 20% more calls than the agency, according to Joshua Eck, a spokesman for the secretary. He said that once the books are closed on 2016, the secretary’s office expects to save “several hundred thousand” dollars by contracting the call services.

From InfoCision’s perspective, the center’s success is a happy outgrowth of its own mission to make the workplace friendlier for people with disabilities.

Big data is turning into a big business in downtown Akron, where the data-mining firm Segmint just moved into new offices in the cityowned Hamlin Building.

The 9-year-old company, which moved Jan. 20-21 from One Cascade Plaza, provides data analytics, primarily to banks, savings and loans, and credit unions. CEO Rob Heiser says business is brisk as more banks realize both the value of customer data and his firm’s expertise when it comes to using it.

“We tripled our revenue last year,” Heiser said.

It was a slow year, he joked.

“Revenues quadrupled the year before,” he said.

But as a young company, Segmint can’t keep increasing its revenue fourfold, and Heiser said he’s more than pleased with how it has begun to grow after gaining traction in the past few years.

He didn’t say what those revenues total, or comment on the privately held company’s profitability. But Heiser said banks increasingly turn to his company to help them understand what their customers need and when they need it.

More than 50 banks use Segmint’s services, Heiser said, and customers range in size from $250 million community banks to national and super-regional banks with more than $300 billion in assets.

Banks, to no one’s surprise, have a lot of information about their customers.

Segmint’s expertise is in taking that data and turning it into usable information, including important marketing triggers.

When Segmint gets data from banks, it doesn’t receive names, Social Security numbers or other identifiable information, only a coded ID along with transaction data. And the data does not include specific purchases. Segmint might know that someone shopped at Staples but not what they purchased.

From the data it mines, Segmint can tell a bank something along the lines of, “Customer FR3449YRT02 has likely just opened a business.”

Or maybe they had a baby, got married, purchased a home, got sick, shopped for credit, wrecked a car, need a vacation, had a death in the family, got a divorce. You get the picture.

Then the bank can use the code to get the customer’s name from its own database.

It’s not that we necessarily tell our banks all this stuff outright, but we leave clues, lots of them. And with a little expertise and perhaps the right algorithm, those clues can tell a bank a lot about us and when to offer us, say, a car or student loan.

Someone who suddenly started using their debit card at office supply stores might be a good candidate for a business loan, for example. If they also just paid a filing fee with the secretary of state, they might be an even better candidate.

This is not news to the banking in-

Segmint CEO Rob Heiser said he’s pleased with how the 9-year-old data company has gained traction in the past few years.

(Contributed photo)

dustry. Banks, including Cleveland’s former National City Corp., now part of PNC Bank, began working with data mining at least as far back as the 1990s.

Since then, banks have only increased their zeal to capitalize on more information as their customers increasingly do their transactions in a digital world. There are multiple national conferences each year where bankers gather to discuss the latest strategies to exploit their data.

Some banks are also making big investments to handle the task inhouse. Fifth Third, for example, told American Banker that it's decreasing its investment in branches in favor of data analytics and said last year it was hiring 200 additional developers and engineers to help advance those efforts.

Like other banks, Fifth Third is seeing more customers at its digital platforms and fewer in its branches.

Those are the trends Heiser is

counting on to continue to build Segmint.

It was, admittedly, a slow start, said company investor and co-founder Tom Tyrrell, who is not complaining.

“It’s taken a long time to jell, but most startups take longer than you ever think. I’m very pleased,” Tyrrell said.

Heiser said he shares that sentiment, but also knew it would take time to gain traction in the banking sector. Banks build new relationships slowly, and the approval process for any new vendor working with the bank’s data should be, and certainly is, a long one, he said.

But growth has come. Segmint is smaller in terms of people than it was a year ago. It’s down from about 50 employees to 40, but that’s because it narrowed its service offerings while still growing its customer base, Heiser said.

Now it’s out looking for new technical employees and hiring again, he said.

Toward that end, the company hopes its new digs will help it to attract talent.

Its old offices at One Cascade Plaza were nice but not necessarily in keeping with the culture of a young, fast-growing tech company.

Its new offices are right on the Ohio & Erie Canal Towpath Trail and next to Akron’s Canal Park ballpark and other downtown attractions, Heiser said.

That extra allure might come in handy, too, since Segmint will begin expanding its business this year to work not only with banks, but also with insurers and retailers.

That said, Heiser thinks banks will long be, and may always be, Segmint’s primary customers. Their business, circumstances and opportunities are ideal for Segmint’s skill set, he said. And, he added, there is still plenty of growth to do yet among the banks.

“We’ll double our revenues again this year,” Heiser said.

Your Complete News Coverage Tune in to 89.7 or download the WKSU app for in-depth local, national and world news.

WKSU, an equal opportunity, affirmative action employer, is committed to attaining excellence through the recruitment and retention of a diverse workforce. 16-UR-00310-118

PA G E 18

|

J A N U A RY 2 3 - 2 9 , 2 017 |

AKRON

CRAIN’S CLEVELAND BUSINESS

BUSINESS

OF BEER

Dogbone-shaped tasting room taps are functional art at Thirsty Dog Brewing Co. on Grant Street in Akron. (Tim Harrison for Crain’s)

BREWERY CONTINUED FROM PAGE 10 Najeway recalls grabbing only the 12th or 13th brewing license in the entire state at the time.

By 1999, there were combined 15-barrel brewhouses and restaurants in Canton, Akron and Dayton.

But there was still a sense that they were making quite a gamble.

“Back then, 20 years ago, the first craft brewers were only five to 10 years ahead of you: the guys like Great Lakes, Sierra Nevada, Anchor Steam,” he recalled. “So you had these guys and a lot of people looked at us like we were nuts in 1997 with that brewpub, especially in Dayton.”

A production facility came online in 2003 so beers could move beyond Thirsty Dog’s own taps.

By the mid-2000s, some of the original business partners had dis-

agreements about running the business. Partly because of that, Najeway said, and despite consistent sales, the three original Thirsty Dog brewpubs were closed by 2005.

“When (Dayton) closed in 2005, it was still ahead of its time,” Najeway said. “Now you look at Dayton and they have 15 breweries down there.”

Around that period, ownership shifted, and Najeway took control alongside a couple new partners.

In 2006, Thirsty Dog opened a fresh Akron production facility. They did some contract brewing in Maryland between the ownership transition.

Upgrades would soon come to the brewery and packaging operations as craft beer grew in popularity.

Even in 2007, Thirsty Dog was one of just 26 licensed Ohio brewers.

“And as we sit here today in our 20th year, there are 155 licenses in the state and another 20 pending,” Najeway said.

The brewery now produces about 20,000 barrels of beer a year. An upgrade this March should grow that to about 30,000 barrels annually. The 30,000 to 40,000 barrels per year production range is where Thirsty Dog wants to be, Najeway said, calling that size range the "sweet spot."

Brewer Kyle Darrah cleans spent mash out of one of the tanks in the process of making Labrador Lager.

Another round, please Thankfully for Thirsty Dog, the brand was already well-known in the local scene as consumer interest exploded a few years back. A lot of that came around 2009 and 2010, he recalls, which was about the time the brewery made a big push for new beers to keep the brand-disloyal craft beer drinker interested.

A portfolio of about 14 Thirsty Dog beers at that time has grown to include about 60 today.

“Now that I never thought I’d see,” Najeway said. “It’s sort of crazy when you think about it.”

As a business, that takes more groundwork besides designing recipes and having tank and fermentation space. Each new style takes work in inventory, packaging, labels, caps, six packs, cases and so on.

A capped bottle of Citra Dog IPA.

But it had to be done.

“Back then, you had to be nimble,” Najeway said. “We went from 14 beers to 60 to stay relevant with the everyday consumer who was looking for something new from the 50 other breweries that started selling in Ohio.”

Because customer loyalty is hard to get, variety is a key to the business model. But that's measured against a push by breweries to focus on core items as more beers flood the market.

To Najeway, that loyalty is someone making three out of every 20 six packs they buy a Thirsty Dog brand.

“That’s loyalty, because craft drinkers aren’t loyal to the brand, they’re loyal to the craft,” he said.

“And that sucks for building a business.”

On the other hand, the huge population of devoted Budweiser drinkers is where Najeway sees potential to nab more consumers. And that makes sense. According to The Brewers Association, craft beer has grown to 12% of the overall beer market in terms of volume, showing that the industry is chipping away at the dominant control of that nation's largest commercial brewers.

“If we can get those guys to try our beers, if we can get in front of them, we can win the battle,” he said.

As far as the secret to success? Najeway said it’s a simple recipe.

“The secret is simply to fill the bottles with the highest-quality liquid,” he said. “All brewers can make porters, lagers and stouts. Brewers will leave one place, go to another, change a profile a little bit and call it their own. You just have to make sure what you put out every day is the best.”

CRAINâ&#x20AC;&#x2122;S CLEVELAND BUSINESS

The List THE LIST

J A N U A RY 2 3 - 2 9 , 2 017

|

PA G E 19

LARGEST COMMERCIAL PROPERTY SALES 2016

Largest Commercial Property Sales 2016

Ranked by Price

Ranked by Price (1)

THIS PROPERTY YEAR ADDRESS

|

PROPERTY TYPE

PRICES/ESTIMATES PRICE QUALIFIER (2)

SQUARE FEET OR # OF UNITS

PRICE PER SQ. FT. OR PER UNIT

DATE

BUYER

SELLER

1

North Point office complex 1001 Lakeside Ave. E., Cleveland

Office

$95,000,000 confirmed

873,335

$108.78

8/29/2016

Hertz Group

Equity Commonwealth

2

The Vue 23220 Chagrin Blvd., Beachwood

Apartment

$84,305,000 appraised value

348 units

$242,256.75

8/18/2016

Strategic Properties of North America

NRP Group LLC; Munsell Realty Advisors

3

The Avenue at Tower City Center 230 W. Huron Road, Cleveland

Retail

$56,050,000 confirmed

367,000

$152.72

3/23/2016

Rock Ventures LLC

Forest City Realty Trust Inc.

4

Terminal Tower 50 Public Square, Cleveland

Office

$38,500,000 confirmed

576,620

$66.77

9/15/2016

K&D Group

Forest City Realty Trust Inc.

5

45 Erieview Plaza Cleveland

Office

$35,000,000 estimated

463,992

$75.43

12/12/2016

Somera Road Inc.

Highlands REIT

6

Westgate Shopping Center 3211 Westgate Mall, Cleveland

Retail

$29,635,894 (3) allocated

474,000

$73.56

3/30/2016

DRA Advisors; PGIM Real Estate (4)

Inland Real Estate Corp. (4)

7

1 Park West Blvd.

Akron

Office

$25,672,228 estimated

93,328

$275.08

8/31/2016

Montecito Medical

Testa Cos.

8

Pat Catan's headquarters 13000 Darice Parkway, Strongsville

Industrial

$19,500,000 confirmed

381,528

$51.11

4/20/2016

AIC Ventures

Pat Catan's

9

Former McGraw-Hill distribution center 1250 George Road, Ashland

Industrial

$16,398,850 confirmed

602,378

$27.22

4/26/2016

Mid-America Management

Trident Capital Group

10

Corners and Village at The Cascades of Brimfield 3975 Cascades Blvd., Kent

Retail

$15,800,000 approximate

116,044

$136.16

12/2/2016

Benchmark Group

Fillmore Capital Partners

11

Synchrony Financial 4500 Munson St. NW, Canton

Office

$15,750,000 confirmed

146,468

$107.53

5/18/2016

Envision International Properties

GE Munsod Ltd.

12

Post Office Plaza 1500 W 3rd St., Cleveland

Office

$14,700,000 approximate

476,000

$30.88

3/23/2016

Rock Ventures LLC

Forest City Realty Trust Inc.

13

Lakewood Town Center (Marc's plaza) 14833 Detroit Ave., Lakewood

Retail

$12,300,000 confirmed

66,874

$183.93

3/10/2016

PE Grocery Center REIT II

The Coral Co.

14

3925 Embassy Parkway Akron

Office

$12,250,000 approximate

61,999

$197.58

2/4/2016

Crystal Clinic Orthopaedic Center

Munsell Realty Advisors

15

LA Fitness 4908 Tiedeman Road, Cleveland

Retail

$12,127,500 confirmed

45,402

$267.11

3/30/2016

Realty Income Corp.

Bruce Karberg

16

Gates Mills Club 6759 Mayfield Road, Cleveland

Senior housing and care

$12,000,000 approximate

120 units

$100,000

1/6/2016

Gates Mills Assisted Living LLC

Everest Properties

16

Staybridge Cleveland Mayfield 6103 Landerhaven Drive, Cleveland

Hotel

$12,000,000 confirmed

123 units

$97,560.98

1/21/2016

Arbor Lodging Partners

Mercantile Capital Group

18

261 Southwest Ave. Tallmadge

Industrial

$11,917,585 estimated

222,900

$53.47

6/15/2016

AIC Ventures

The Schipper Group

19

Laurels of Canton 2714 13th St. NW, Canton

Senior housing and care

$11,788,700 approximate

97 units

$121,532.99

2/3/2016

Omega Healthcare

Laurel Health Care

20

Raintree Industrial Park 5201 Naiman Parkway, Solon

Industrial

$11,500,000 confirmed

559,867

$20.54

7/28/2016

Titan Realty Co.; Lowell Mintz; Geoffry Brouman

Equity Commonwealth

21

30301 Carter St. (5) Solon

Industrial

$11,392,547 allocated

219,574

$51.88

3/30/2016

Dalfen America; NorthStar

Hackman Capital

22

1842 Enterprise Parkway (5) Twinsburg

Industrial

$11,105,063 allocated

197,565

$56.21

3/30/2016

Dalfen America; NorthStar

Hackman Capital

23

Fresenius Cleveland 2429 Martin Luther King Jr. Drive, Cleveland

Office

$10,790,000 appraised value

$344.01

10/27/2016

Capital Square Realty Advisors

COP Cleveland East LLC

24

Pat Catan's distribution center 12850 Darice Parkway, Strongsville

Industrial

$10,611,496 confirmed

170,550

$62.23

4/20/2016

AIC Ventures

Pat Catan's

25

Severance Town Center 3460 Mayfield Road, Cleveland

Retail

$10,500,000 confirmed

644,501

$16.29

5/19/2016

Namdar Realty Group

CWCapital

26

Rockside Medical Center 6701 Rockside Road, Independence

Office

$10,375,000 confirmed

49,336

$210.29

3/31/2016

Community Healthcare Trust

Dennison Development Group

27

800 W. St. Clair Ave. Cleveland

Office

$10,000,000 confirmed

40,000

$250

8/31/2016

St. Clair Erie Investors LLC

Jacobs West St. Clair Acquisition LLC

28

ECS Tuning Inc. 1000 Seville Road, Wadsworth

Industrial

$9,950,000 approximate

86,850

$114.57

8/26/2016

Capstone Ltd.

James Doyle

29

Kmart Plaza 3301 Center Road, Brunswick

Retail

$9,764,953 allocated

171,223

$57.03

2/4/2016

Select Strategies Realty

Garrison Investment Group

30

Home Depot 2406 Lincoln Way E., Massillon

Retail

$9,588,100 confirmed

132,394

$72.42

7/5/2016

Realty Income Corp.

PWREI Massillon LLC; Brag Massillon LLC

Holiday Inn: Cleveland East 7701 Reynolds Road, Mentor

Hotel

$9,400,000 confirmed

132 units

$71,212.12

9/16/2016

Kiran C. Patel, Raman B. Patel, Virendra S. Patel, Bhikhu D. Patel

Alliance Hospitality

32

13675 & 13325 Darice Parkway (5) Strongsville

Industrial

$9,323,175 allocated

179,690

$51.88

3/30/2016

Dalfen America; NorthStar

Hackman Capital

33

Ridgewood Healthcare Center 3558 Ridgewood Road, Akron

Senior housing and care

$8,690,000 approximate

123 units

$70,650.41

8/26/2016

Ridgewood Acres Realty LLC

Fairlawn Propco 3558 LLC

34

Chapel Hill Mall 2000 Brittain Road, Akron

Retail

$8,600,000 approximate

666,203

$12.91

1/14/2016

Kohan Retail (KRIG)

LNR Property Corp.; U.S. Bank

35

3875 Embassy Parkway (6) Akron

Office

$8,424,280 approximate

94,213

$89.42

1/6/2016

Group RMC

Rubenstein Partners L.P.; Mark Munsell

31

31,365

(1)

RESEARCHED BY CHUCK SODER The online version of this list includes 49 properties and can be purchased at crainscleveland.com. Crain's does not independently verify all information and there is no guarantee these listings are complete or accurate.

(1) Source: Real Capital Analytics Inc. Headquartered in New York City, RCA is an independent data and analytics firm focused on the investment market for commercial real estate. The company offers data on commercial property transactions that take place around the world. Their website is www.rcanalytics.com. Additional information from Alec Pacella, managing partner, senior vice president, NAI Daus. (2) Definitions from RCA: A)

Approximate - Price is from qualified source (ie, title records or industry publication). B) Allocated - Property was part of a portfolio sale; price is estimated based on gross deal price and market averages. C) Estimated - Price is based on market averages. (3) The price reflects the 85% stake acquired by the buyers. (4) Inland was acquired by funds managed by DRA Advisors in March 2016. Inland is now known as IRC Retail Centers. (5) These were among 11 local properties that Dalfen and NorthStar purchased from Hackman. (6) Group RMC paid $30 million for a total of seven local properties owned by Rubenstein and Munsell.

DECISIONS Tackling the tough choices of caring for your aging loved ones LL LAST CA FOR ING S I T R E V AD

This custom publishing section will examine all the issues that come with becoming a caregiver or even with planning for your own future.

Issue date: March 27 • Ad close: January 27 ADVERTISING INFORMATION: Nicole Mastrangelo • 216.771.5158 • nmastrangelo@crain.com