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VOL. 37, NO. 4
JANUARY 25 - 31, 2016
Business of Life
FINANCE: Ancora adds on Big acquisition is Cleveland firm’s first
Different breed
P. 4
Reptile show brings wide variety of attractions
TECHNOLOGY: Still stalled Invacare inspection is problematic
P. 22-23
P. 6
CLEVELAND BUSINESS
FOCUS: RNC Could the city get lost in the shuffle? P. 15-21
The List Largest commercial property sales P. 27
Service cuts put Akron-Canton on an uneven flight path Airport sticks to renovation plans as officials still see positive future BY JAY MILLER
United Airlines’ decision to end its hub operation at Cleveland Hopkins International Airport may be hitting operations at Akron-Canton Airport nearly as hard as it has hit the Cleveland airport. United’s decision in February 2014 to steeply cut its service out of Cleveland Hopkins set off a chain of airline service decisions that has seen several carriers trim their offerings from CAK, as the city of Green airport is known in the industry. CAK management, though, remains upbeat. In a joint interview in a conference room overlooking the airfield, Richard McQueen, the airport’s president and CEO, and Kristie VanAuken, the airport’s senior vice president for marketing and communi-
CONTRIBUTED PHOTO
SEE AIRPORT, PAGE 12
Bioscience loses luster Sector employment falls by 10%; industry groups still see promise BY CHUCK SODER csoder@crain.com @ChuckSoder
Northeast Ohio’s bioscience sector isn’t doing quite as well as you might think. Local employment in that sector dropped by 10% between 2011 and 2014. New company formation fell over the past few years, too. Investors are still pumping money into young biomedical companies in
Northeast Ohio, but that was probably the most positive piece of news about this region in a recent report from BioOhio, a membership organization that aims to grow the state’s bioscience industry. Granted, the “bioscience” category leaves out hospitals and doctors’ offices. It also doesn’t include the red-hot health care software industry — which includes fast-growing local companies like Explorys and OnShift. But the category does include a few high-tech industries that eco-
Entire contents © 2016 by Crain Communications Inc.
nomic development groups have long touted as key to the future of Northeast Ohio. Industries like medical devices, pharmaceuticals and research and development. Those industries held their own elsewhere in Ohio, but in this region they shrank during a period when the nation as a whole was emerging from a recession. Why? For one, a few large medical device companies in town have run into trouble with U.S. Food and Drug Administration over the past few years. FDA problems pushed one of those companies, Ben Venue Laboratories, to shut down a massive drug manufacturing complex in SEE BIOSCIENCE, PAGE 26
Hotel arrangements for RNC is tricky task NEO has been ‘welcoming’ to committee BY JAY MILLER jmiller@crain.com @MillerJH
Did you ever have to make hotel arrangements for a group traveling out of town and thought you had developed a plan that would satisfy every traveler who requested a bathroom that met the requirements of the Americans with Disabilities Act or who demanded that their room wasn’t too close to the elevator? But it didn’t, and you heard about it. Imagine, then, if you had been in charge of housing for the Republican presidential nominating convention in 2012 and you heard from Steve Munisteri, the Texas GOP chairman who found that his assigned hotel was 25 miles from the Tampa Bay Times Forum, the convention site. He didn’t just complain to the Republican Committee on Arrange-
ments, the organization with the hotel plan. He complained to every reporter who would listen, telling them that he would have preferred to be closer, as he had been since the days when Texans George H.W. and George W. Bush topped the ticket. “If I weren’t state chairman, if I were a delegate, I probably wouldn’t go,” Munisteri told the Dallas Morning News after the assignments were announced April 30, 2012. News reporter Christy Hoppe wrote about speculation that the demotion was a consequence of former Texas Gov. Rick Perry’s challenge to eventual nominee Mitt Romney. That’s one of the challenges the 2016 Republican Committee on Arrangements, or CoA, hopes to avoid. It has to juggle hotel rooms for 50,000 people who will be staying in 135 hotels. And every state delegation has its own preferences — being as close as possible to the convention site, of course, but also making SEE RNC, PAGE 24
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z JANUARY 25 - 31, 2016 z CRAIN’S CLEVELAND BUSINESS
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For The Ancora Group, the recent acquisition of Beachwood investment adviser Inverness Holdings punctuates several years of growth of revenues and market share. And some experts believe these kinds of combinations could become more common in the future as firms compete for business. The merger creates the new, dedicated family wealth practice Ancora Inverness, which joins Ancora Advisors and Ancora Securities to comprise The Ancora Group. Financial terms of the deal, which marks the first acquisition for Ancora since its founding in 2001, were not disclosed. Inverness, which according to managing principal Rick Renner had about $675 million in assets under management prior to the merger, places the combined company at more than $4 billion in total assets under management. Ancora Advisors, notably, is the fourth-largest money manager in Cleveland in terms of assets, according to Crain’s 2015 Book of Lists. All 15 Inverness employees are making the transition. And the company, based in Beachwood, will eventually move to Ancora’s Cleveland headquarters. The Ancora organization now includes just fewer than 60 employees. Ancora chairman and CEO Fred DiSanto will continue overseeing the institutional investment business. But Renner, who has joined Ancora’s executive committee, now oversees Ancora Inverness, the family wealth division, as managing principal. That business’ combined client base now consists of about 500 families — more than double the previous value for Ancora — and $1.3 billion in assets. And the overall company will retain its indepen-
RICK RENNER
FRED DISANTO
dent, employee-owned structure. “This adds a lot of talent and ability on the family wealth side that I believe is going to enhance what we do for our clients,” DiSanto said. While all combining firms tout cultural likenesses, both DiSanto and Renner have known each other for the past 20 years and are quite familiar with one another’s businesses. Those provided the catalyst that helped seal the deal for Inverness, Renner said, which had been approached a few times before by other companies looking to acquire them, but declined. Both firms were performing quite well prior to the merger. Ancora saw organic growth around 10% last year, while Renner reports Inverness’ growth was 15% to 20%. The combination, Renner said, will enable that business to grow even more with Ancora’s resources now behind it. “It does give us the capacity to grow,” Renner said, adding the firm will be looking “upstream” to draw additional clients. “We’ll be looking to hire more of the right type of people. This will also give us more of a marketing presence throughout the Midwest.” McDonald Hopkins president Carl Grassi, who advised Ancora on the combination, described the company as “very opportunistic.” While this deal marks the first acquisition for Ancora, he said it’s “quite
possible” the firm might entertain another deal in the future. There have been “rumors” of other money managers discussing a doubling down on their family wealth businesses, Grassi said. There’s a lot of business there right now, particularly with a graying generation of baby boomers, the transition of wealth and the necessity for financial planning that the money creates. What’s more, with the volatility and uncertainty in the stock markets, firms increasingly may be driven to deepen their host of services for clients to bolster revenues as returns on investments see more fluctuation. Offering a full suite of services could also attract new clients who want to work with a singular adviser. “So you’re hearing more and more there’s some interest among various money managers to look at these potential alternatives,” Grassi said, referencing interest in acquisitions. “I would not be surprised to see more going on in Northeast Ohio and across the country.” And considering that, this particular deal could motivate others considering an acquisition to pull the trigger in order to maintain competitiveness. “For those businesses who have been evaluating this,” Grassi said, “it just might accelerate their consideration of it.”
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Invacare Corp.’s quality control system still isn’t up to par. Federal regulators once again found a long list of problems during a lengthy inspection at the medical equipment company’s Elyria headquarters. None of those problems sound all that scary on their own. Together, however, they show that Invacare has yet to fix some of the issues that forced the company to shut down almost all manufacturing operations at its plant on Taylor Street three years ago, according to regulatory experts who spoke with Crain’s. The list of problems includes some “pretty big misses” that Invacare should have taken care of by now, according to Ray Ursick, principal consultant at Matrix Medical Devices in Cleveland. The problems noted by the U.S. Food and Drug Administration are fixable, but “it’s going to take a lot of work for Invacare to get out of this,” Ursick said. So what did the company miss? For one, the report starts by noting that Invacare deviated from the consent decree issued by the FDA in December 2012 — the one that forced the company to overhaul its quality control system. What did it do wrong? When the FDA inspection began in July, Invacare had yet to identify all the products that needed to go through a process called design remediation. On Aug. 28, it provided a list of 21 power wheelchairs and power beds that still needed to go through the process, which involves re-evaluating the methods used to design and test a product, as well as the documentation processes that ensure those methods are properly followed. Deviating from a consent decree might not look good from the FDA’s perspective, according to Stephanie Harrington, founder of Matrix Medical. “You’re not doing what you told us you would do. How do we have any confidence that you’re going to be able to fix the rest of it?” Harrington estimates that it would take three to six months to fix the violations listed in the report, which fills just over 11 pages. And that doesn’t include the time it will take Invacare to prove to the FDA that these sorts of mistakes won’t keep happening. The inspection lasted 71 days, stretched out over five months. Its goal was to determine whether Invacare was living up to changes it said it would make following two third-party audits it completed in 2013. Even if Invacare had aced the inspection, the FDA still wouldn’t have lifted the consent decree: The company has spent a few years trying to pass a third audit designed to analyze its entire quality control system.
Once that audit is complete, the FDA will conduct another inspection before deciding whether to lift the decree — and give Invacare the goahead to ramp up manufacturing at its Taylor Street plant.
No. 1 priority The FDA issues have bogged down Invacare’s stock price since they started coming to light in 2011. They’re also bogging down profits. The company has been losing money since 2013. So it’s no wonder that CEO Matthew Monaghan said during an October conference call that establishing a strong quality culture is Invacare’s number one priority. Matthew Mishan thinks Monaghan, who was hired about a year ago, is serious about that. Mishan, an equity research analyst for KeyBanc Capital Markets in New York, said Monaghan appears to be “dotting all the i’s and crossing all the t’s” when it comes to Invacare’s FDA issues. He believes that Invacare’s team “probably got these observations and went straight to work on them,” he said. Mishan added that the observations shouldn’t be a big concern for investors, noting that the FDA hits a lot of medical device companies with violations. But two other consultants who help companies address FDA issues were more concerned. Glen Feye, who is president of Accurate Consultants Inc. of San Diego, said the first problem listed sounds serious. “These are major findings and should have been previously addressed by Invacare and their outside third party experts,” he said. Robert Takashi Gibson noted that the findings are “going to be a concern to the FDA,” especially since Invacare has been under a consent decree. “The bar for them is higher. They have to essentially be perfect,” said Gibson, a senior adviser on regulatory affairs issues for YourEncore of Indianapolis.
‘A hot button’ Gibson noted that the FDA inspection turned up problems related to how Invacare handles customer complaints, which has been “a hot button with the FDA for a number of years.” For instance, after reviewing a few hundred complaints about problems that could have been caused by two robotic welding machines, Invacare noted that it found “no systemic issues” with the machines. However, the FDA report notes that there was “no documented assessment of these complaints to support your conclusion.” Some observations in the report describe instances where Invacare didn’t properly test a product or confirm that it met the company’s design standards. Others criticize the company’s effort to evaluate the risks posed by a few of its products. For instance, Invacare did not have documents showing that it took proper steps to mitigate “unacceptable” risks related to a power wheelchair called the TDX-SP. Why did these problems occur? Invacare wouldn’t comment for this story, but during the October conference call Monaghan did say that the company is putting a “tremendous” amount of resources toward improving its quality system. So if it’s not a lack of effort, what could it be? Sometimes companies have trouble fixing quality control problems because they’re in too big of a rush or because employees who understand the problem leave and have to be replaced, according to Ursick and Harrington. If Invacare can show the FDA that it has strong momentum, it may not have to fix every single problem it faces to get the consent decree lifted. But Ursick says Invacare’s quality system doesn’t appear to have reached that point. “It’s just going to take a lot of time. That’s the bottom line. This is going to be work,” he said.
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Redevelopment could add spark to shopping center BY STAN BULLARD sbullard@crain.com @CrainRltywriter
More may be in store for troubled University Square Shopping Center than a new owner after the special servicer on loans, a Minneapolisbased unit of UMB Corp., recently secured ownership of the vertical mall and attached parking garage in University Heights. A search is on for a new owner who will redevelop the property at 14060 Cedar Road for its highest and best use — a slightly different approach than the typical sale to satisfy a mortgage — because another principal is involved in the process and needs to take a long-term view of the property. That group is Lapis Advisers LP, a San Francisco firm that invested in pass-through bonds that the Cleveland-Cuyahoga County Port Authority issued to finance the property’s parking garage. Lapis is working with UMB in the selection of what’s best — and who’s next — at University Square. Kjerstin Hatch, managing principal of Lapis, said the garage bondholders have an interest in successful redevelopment of the property because they are repaid by a portion of property taxes on the center. A $40 million bond issue financed by the property taxes was used to build the garage in 2001. “We’re really a partner on this project, whether we like it or not, for the next 20 or 30 years,” Hatch said. “That’s as opposed to the highest and best price at a sale and never thinking about it again. Like the city,
FIG. 4-B
we’re almost like a partner of the property owner.” She said Lapis and UMB are determining how to proceed in terms of selecting real estate professionals to handle the sale of the property — perhaps through a sealed-bid process — that produces the best bid for it, although not necessarily the highest price. Regional and local real estate developers already have approached Lapis, UMB and the city about how they might reinvigorate the property, Hatch said. She and University Heights Mayor Susan Infeld declined to identify the developers they have talked with, but several have mentioned adding housing to the property. “Mixed-use development is really exciting,” Hatch said, in terms of combining retail, residential and other uses. Infeld said the idea of housing, including perhaps senior citizen housing, on the site along with retail “sounds wonderful.” The route for the property’s next phase was cleared Jan. 6 when Judge Nancy McDonnell approved a settlement and dismissed a Cuyahoga County Court of Common Pleas case UMB filed in 2015 to foreclose on the property to protect a $12 million mortgage it held. The prior owner, University Heights Holding 4 LLC of Southfield, Mich., bought the multistory plaza in 2013 for $175,000 and assumed debt from an affiliate of Oakbrook, Ill.-based USA Management LLC. University Heights Holding was in technical default for failing to pay more than $10 million in property taxes on the center.
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The Week THE BIG STORY Steven Dettelbach, the U.S. Attorney for the Northeast District of Ohio, is stepping down. Dettelbach, 50, who was a partner at Baker & Hostetler when President Barack Obama appointed him to lead the Justice Department’s Northern Ohio office in 2009, said he plans to re-enter private practice at his former law firm. His resignation is effective on Feb. 5. Dettelbach will be forever linked with the federal investigation that ended in a 2015 consent decree that found that the Cleveland Division of Police violated the civil rights of citizens by engaging in a pattern of using excessive force and led to the appointment of a civilian police oversight panel. His office also handled the successful prosecutions for bribery and fraud involving the collapse of the St. Paul Croatian Federal Credit Union, the largest credit union failure in United States history.
CHANGE AT THE TOP Jones Day, the largest law firm in Northeast Ohio and one of the biggest in the country, named Heather Lennox as partner-in-charge of its Cleveland office. Lennox, a Cleveland native, succeeds Chris Kelly, who became partner-in-charge in January 2012. Kelly has joined the firm’s executive committee and returns as a co-leader of Jones Day’s global capital markets practice, a position he held prior to leading the
Cleveland office. Growing that practice in New York is something the firm is “keenly” focused on, Kelly said. Lennox, 48, joined Jones Day in 1992 and is a partner in the business restructuring and reorganization practice. Professionally, Lennox is possibly most well-known for her lead role in the firm’s representation of the City of Detroit in its landmark $18 billion municipal bankruptcy.
FOREVER YOUNG Cleveland ranks eighth nationally for its growth rate of college-educated millennial residents between the ages of 25 and 34, according to a new study commissioned by the Cleveland Foundation. Despite the influx, Cleveland remains one of the cities with the lowest concentration of millennials compared with top cities. “The Fifth Migration: A Study of Cleveland Millennials,” is the first of its kind and was conducted by The Center for Population Dynamics at Cleveland State University. Cleveland’s residents born between 1982 and 2000 are leading a rapid “fifth migration,” the term for the re-urbanization of metro areas. The growth of millennials from 2011 to 2013 tied Cleveland (with Miami and Seattle) for eighth place in the percent increase of college-educated millennials. The region gained 7,000 millennials with a college degree — a gain of 8.3%.
HOME RUN Northeast Ohio home sales may be on a plateau in the coming year after racking up a big gain in 2015 over the prior year. Figures from the Northern Ohio Regional Multiple Listing Service showed property sales kept humming in December, so sales for the entire year climbed 14% to 50,901 listings from 44,593 in 2014. The record warmth in December also kept property sales from cooling off, as 15% more listings, or 4,139 properties, traded this December, compared with 3,602 the prior year. Sales of single-family homes — the largest property sector tracked by Realtor listings — drove the activity last year, climbing 14.6% in 2015 over 2014 to, respectively, 42,273 listings from 36,872 listings.
A MATTER OF TRUST Forest City Realty Trust Inc. agreed to sell its portfolio of federally assisted housing apartments to Jonathan Rose Cos. for $80 million. The sale includes 47 apartment communities in nine states and the District of Columbia. Forest City said it will net about $65 million from the sale after closing and other costs. The portfolio includes a total of 8,000 units. Jonathan Rose Cos. is a New York City-based real estate developer and owner that has developed or updated $1.5 billion of properties since it was founded in 1989.
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ERIEBANK stakes claim in NEO Investment property market with Lake National buy sales rose 12% in ‘15 BY JEREMY NOBILE jnobile@crain.com @JeremyNobile
ERIEBANK is a mostly unfamiliar name in Northeast Ohio, but the bank’s Pennsylvania leadership intends to change that. For ERIEBANK, the acquisition of Lake National Bank — a small operation in Mentor — that was effectively a decade in the making, marks a new chapter for the company’s growth in the competitive Northeast Ohio market. Meanwhile, the deal points to an ongoing movement of Pennsylvania banks staking their claim in this region. CNB Financial Corp., the parent of ERIEBANK, announced its acquisition of Lake National Bank in late December. The all-cash deal is valued at nearly $25 million. ERIEBANK, headquartered in Erie, Pa., is a 10-year-old division of CNB, a Clearfield, Pa.-based company. The two offices and $152.2 million in assets at Lake National, which was also founded just 10 years ago by Lake County businessman and philanthropist Jerome T. Osborne, will be absorbed into ERIEBANK. In addition to ERIEBANK, CNB also operates CNB Bank in north/central Pennsylvania and FCBank in central Ohio. The deal, expected to close by the end of June, brings that operation close to $800 million in assets. CNB will grow to about $2.5 billion in assets and 40 offices spread across its Ohio and Pennsylvania footprint. It’s a relatively small, yet deeply
meaningful, acquisition for the company that David Zimmer, ERIEBANK president since its inception in 2005, said has been eyeing Northeast Ohio since day one. The region is geographically close and economically similar to the market in Erie, so the extension west made sense. But it wasn’t until the bank opened a small loan production office in 2014 in Ashtabula — which is now being developed into a full-service branch — that it planted a flag here. Now, Zimmer sees potential to focus on the smaller lending space flying under the radar of larger banks to grow organically. The lending limit for ERIEBANK is 10-times higher than Lake’s, for instance. The small business and commercial real estate lending portfolios, meanwhile, complement ERIEBANK’s. And the population of affluent businesses and manufacturers in the region bode well for drawing new customers and better serving prior Lake National clients, Zimmer said. “From Erie to Cleveland, that’s a huge market area that could keep us busy for a long time,” Zimmer said. It’s an area CNB president and CEO Joe Bower expects to grow “quite nicely.” He said the biggest challenge will be gaining name recognition in a region filled with banks both large and small. Notably, the Northeast Ohio expansion follows CNB’s true debut in the state through central Ohio with the acquisition of FC Banc Corp. in 2013. “This Lake National acquisition really firmly entrenches us across the southern area of the lake,” Bow-
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er said. “That market is full of large banks, and there are not too many in the middle where we play. We feel there is enough room in the market for someone of our size with the capabilities we have.”
The place to be ERIEBANK likely will add branches in the coming years, too, Bower said — which is running counter to the popular strategy by larger counterparts to shrink their networks in recent years. But for community banks, branches still appear to be as meaningful as ever despite customers overall increasingly opting for mobile and tech-based banking methods. In the past couple years, several out-of-state banks have bought up community banks to gain an entry to Northeast Ohio. Those include Northwest Bancshares Inc. buying Lorain National Bank in 2014, and F.N.B Corp. acquiring Park View Federal Savings Bank in 2013. “This (M&A) cycle, there is a significant push from Pennsylvania banks in eastern Ohio,” said Matthew Schultheis, an analyst with Boenning & Scattergood who advised CNB in its Lake National acquisition. “I think the rebound in the Ohio economy really made them look again at whether that’s a place they want to be.” But for today’s community banks, deals like these are less about spreading out the footprint and more about laying the groundwork for strategic growth in a more promising economy. For CNB, the deal should also spark modest balance sheet growth and provide a boost to earnings.
BY STAN BULLARD sbullard@crain.com @CrainRltywriter
Commercial property investment sales expert Alec Pacella knew sales of office buildings in Northeast Ohio had to rebound at some point. But even he is surprised by the category’s 2015 surge. “The investment market for office has been lagging the last few years, but I didn’t think it would account for a third of total volume in 2015,” said Pacella, managing partner of the Beachwood-based NAI Daus real estate brokerage, as he released his annual survey of commercial investment sales activity in Northeast Ohio exceeding $1 million. Almost $290 million in incomeproducing office building sales occurred in 2015, far surpassing the next largest category, shopping centers, where nearly $178 million of property changed hands. Office sales were the shocker in an otherwise solid year that Pacella described as “lots of singles and doubles, a few triples, but no home runs.” Total commercial property investment sales reached $800 million, a 12% increase from $714 million in 2014, according to the NAI Daus survey. That means 2015 was the strongest year in the last eight. However, it’s well below the $1.29 billion figure set in 2007, a record since Pacella began tracking such deals in concert with Real Capital Analytics of New York City. “In the go-go years we saw a lot of
$100 million deals,” he said. “We’re missing the blockbuster deals.” Part of the office surge came from the sale of not just one, but two downtown skyscrapers. Fifth Third Center, 600 Superior Ave., and Skylight Office Tower, 1660 W. Second St., were acquired by Santa Monica-based Hertz Group from, respectively, Dallas-based Tier REIT Inc. and Cleveland-based Forest City Realty Trust Inc. The two sales were the first mainstream downtown Cleveland office building sales since the 2008 recession. With $54 million paid for Fifth Third and $35 million for Skylight, Pacella said both have established values for downtown office buildings going forward. Several suburban sales did the same. However, Pacella conceded the region may never see 2007’s level again. “You had sellers ready to sell, buyers eager to buy, and lenders willing to lend,” Pacella said. “I really don’t see pricing getting to that premium again anytime soon.” Pacella predicts about the same level of activity in 2016 as last year. However, there are red flags. Activity may weaken because presidential election years create uncertainty for big-ticket property owners. And increasing interest rates may come into play in commercial property before they cause a ripple in residential mortgages. On the other hand, Pacella noted, “We have already gotten off to a fast start. There is a lot of capital chasing deals and lenders continue to be active.”
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Opinion From the Editor
Is there a better way to get to NYC?
Editorial
High time Last November, Ohio voters rightfully rejected Issue 3, which would have created a constitutionally sanctioned oligopoly and given 10 investors the exclusive right to grow and sell marijuana in the state for medical and recreational use. At the time, we were skeptical of the lofty predictions from ResponsibleOhio, the group behind the effort, that the state would garner $554 million in annual tax revenue from legalization. Most importantly, we weren’t fans of an all-ornothing approach to legalization that would largely benefit those bankrolling the campaign. Let’s be clear: We aren’t opposed to legalizing marijuana. However, we argued that it should only be done after a thorough discussion of what’s best for the state and its residents, perhaps first by legalizing it for medical purposes. That’s why we are encouraged by two Ohio lawmakers who are embarking on a statewide roadshow — the first stop being in Cleveland this week — with the goal of gauging the state’s residents’ attitudes toward medical marijuana. Plus, Ohio House leaders plan to launch their own hearings on the matter. This doesn’t appear to be mere politicking, but rather a genuine effort on part of lawmakers to understand an issue important to so many Ohioans. During a recent news conference, State Sen. Kenny Yuko, a Richmond Heights Democrat and supporter of medical marijuana, dispelled any notion that lawmakers were stalling on the issue. “I’m not quitting, I’m not stalling, I’m serious about it,” said Yuko, as quoted on Cleveland.com. “My hindrance in the past has been cooperation from my colleagues. I’m getting that cooperation now.” That’s a refreshing take, especially considering it’s been
only a few months since the heated — or “blazing,” if we’re playing the pun game — campaign that brought us Buddy, ResponsibleOhio’s smiling marijuana mascot. It would have been easy to put the marijuana issue on the backburner as voters largely turn their attention to the presidential contest. Simply put, ResponsibleOhio’s legalization plan was a disaster. Even the most ardent supporters of marijuana legalization saw flaws in the plan. The idea of changing the constitution in a way that would turn a small group of people into weed kingpins was flawed from the beginning. So, while still in its infancy, we’re hopeful this exploratory effort regarding medical marijuana is the foundation for eventual action that would result in the rest of the country looking toward Ohio and saying, “They did it right.”
A square deal Cleveland’s front lawn — also known as Public Square — is no longer a drab slab of concrete, but rather a muddy, snow-covered pit that we were promised would be transformed into a grassy oasis with a cafe just in time for the Republican National Convention in July. Civic leaders say $3.5 million more is needed to pull off the $50 million makeover, and it appears the state could kick in that final sliver. A capital re-appropriation bill introduced last week includes funds for the makeover, and we urge the Legislature to approve the measure. Cleveland’s business and foundation leaders have already committed more than $20 million for the project, and a little help from the state could go a long way in helping us impress 50,000 visitors this summer.
ACTING PUBLISHER AND EDITOR: Elizabeth McIntyre (emcintyre@crain.com)
CLEVELAND BUSINESS
MANAGING EDITOR: Scott Suttell (ssuttell@crain.com)
Last week, I wrote about a frustrating business trip I took to New York City in early December. The saga was filled with delays, barely made connections, rogue luggage and a late arrival at my business meeting. Hope could be on the horizon, however, for business travelers who want to get to New York in a more convenient way. I want to be clear before I continue, though, that I’m not hawking one service over another or writing off Cleveland Hopkins International Airport or Akron-Canton Airport. I realize how important robust airports are to our region and our business community. But I also am a big proponent of options and competition. And an option that can provide choice could be taking off soon from Burke Lakefront Airport. Ultimate Air Shuttle intends to expand its ticketed public charter services from Burke as early as this spring, starting with nonstop flights to New York City. Already, the North Canton-based company offers twice-daily weekday roundtrip air service from downtown Cleveland to Cincinnati. A one-way flight takes about 45 minutes and a roundtrip ticket costs $379. Elizabeth The addition of a New York route, which if McIntyre priced similarly as Ultimate Air’s Cincinnati to New York roundtrip flight would come in under $800, has the potential to be a game changer for Cleveland business travelers. I got a close-up look at the experience when I joined two dozen other passengers on an Ultimate Air demo flight to New York in mid-December, two weeks after my bumpy business trip to the Big Apple. I found that this is the way to travel. Even at my speculative price point, the productive use of time and avoidance of overnight hotel costs might make it cost effective. It’s definitely less stressful. I pulled up at Burke at 6:30 a.m. for a scheduled 7 a.m. departure and parked for free. Fog on the East Coast delayed us for an hour, and we finally departed at 8. But with no connection to make, the delay was no big deal. We landed about an hour after wheels up, just after 9 a.m., in Morristown, N.J., climbed aboard a shuttle bus (that would be an extra charge for travelers) and arrived in midtown Manhattan in time for a 10:30 a.m. appointment. By 4 p.m., we were back on the bus, headed to Morristown. Our return flight lifted off by 5:30 p.m. I hopped off the plane in downtown Cleveland shortly after 6:30 p.m., was in my car by 6:40 and home by 7. Contrast that with the trip I described last week, which got me home after 1 a.m., five hours later than expected, leaving me with extra stress and not enough sleep for the next day. Regular users of the Cincinnati service look forward to more public charter options. New York is the next planned route, but Ultimate Air — which operates a fleet of 30 planes — is seriously considering service to Chicago, too. Frank L. Gallucci III, a founding partner of Cleveland’s Plevin & Gallucci law firm, has taken the current Ultimate Air Shuttle flight from Burke to Cincinnati for work. “I can go from my desk in downtown and be up in the air in 30 minutes,” said Gallucci, who travels frequently for work and has had his share of frustrations since United Airlines drastically cut its service at Hopkins. “There are very few places I can go now without a layover,” he said. “I’m usually going the day before or staying the day after.” And he hears from travelers around the country about the difficulty getting to and from Cleveland. Richard DeCarlo, director of sales and region management at Ultimate Air, hopes adding public charter service to New York can alleviate that frustration for some travelers. I suspect the business community will appreciate having the option. But it might take a while getting used to free parking, no congestion, easy screening and no baggage fees.
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Personal View
B Corp allows profits with benefits BY TOD NORTHMAN
corporation legislation. Ohio is one of three states that have not introduced legislation to create a benefit corporation. From a standing start in 2010, the number of benefit corporations formed in the United States has exploded to an estimated more than 4,500 benefit corporations. Benefit corporations are predominantly small startups, but prominent businesses such as Etsy, Patagonia and Plum Organics have also converted to a benefit corporation form. Ohio’s proposed legislation differs from that adopted in other states in its flexibility. Some state laws require each “benefit corporation� to produce an annual “public� benefit report prepared against a third-party standard that describes how and to what extent the corporation has accomplished its beneficial purpose. Ohio’s proposed legislation gives shareholders the flexibility to determine what, if any, public reporting would be required. A certified B Corp is a designation developed by the B Lab. There are more than 1,350 B Corps and counting, from 41 countries and more than 121 industries. B Corps are certified by the B Lab to meet required standards of social and environmental performance, accountability and transparency. The goal of these certification standards is to engage businesses to redefine what “success� really means. B Corps are companies that measure their social and environmental performance against a third-party standard called the “B Impact Assessment.� Certification seeks to go beyond “green washing� — marketing sustainability to attract business. The certification process attempts to analyze the fundamental values of a company, which seeks to assess whether the company is just paying lip service to environmental consciousness. The assessment collects hundreds of pieces of information to “score� the overall impact of a company on its stakeholders. The legislation proposed by the Ohio State Bar Association could be the needed push to ensure that Ohio captures the energy and social benefits of the benefit corporation movement. Without legislation authorizing benefit corporations, Ohio risks losing social entrepreneurs and civically minded employees to businesses in other states. And existing businesses in Ohio may be foregoing large boosts in employee productivity and engagement.
The Ohio social enterprise movement could get a boost in the next year in the form of benefit corporation legislation. After several years of study, the Ohio State Bar Association endorsed legislation that would create a new form of corporate entity in Ohio — the benefit corporation. This designation would allow a corporation to simultaneously pursue social good and profit for the corporation’s shareholders. The benefit corporation movement traces its roots to the 1970s, with the Body Shop and the Triple Bottom Line, the first companies to commit to making a profit while benefiting people and the planet. The movement has two similar but distinct threads: the benefit corporation, a distinct corporate form; and the certified B Corp, a business that has received certification from the B Lab, the nonprofit organization that determines whether a company is meeting performance standards with respect to employee, community and environmental impact. “Profit is a business result, not a purpose,� says William Vogelgesang, one of the founders of Epoch Pi, a Cleveland-based investment bank that serves the “purposeful� companies across the United States. Epoch Pi has provisional status as a certified B Corp and hopes to obtain unqualified certification once it has completed the one-year waiting period. A benefit corporation blends a for-profit’s profit motive with a nonprofit’s social purpose. Its organizational documents authorize it to pursue one or more beneficial purposes in addition to the other legal purposes for which for-profit corporations may be formed. Benefit corporations have a duty to balance the benefit to shareholders, with one or more other stakeholders (such as employees or vendors), and the declared social or “beneficial� purpose of the entity. A “beneficial purpose� must have beneficial effects on people, entities, communities or interests (other than shareholders), including effects of an artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific or technological nature. Maryland was the first state to adopt a benefit corporation law, and it adopted the model act promulgated by the B Lab. Thirty more states and the District of Columbia have since adopted benefit
Northman is counsel with Tucker Ellis LLP in Cleveland. He practices in the areas of aviation, benefit entities and real estate.
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cations, were optimistic about the future and said they continue to move ahead on a $36.8 million renovation plan that they believe will be needed to accommodate future increases in passenger traffic. “We’re not thrilled we’re going to see a down year,” said VanAuken. “But we also think we’re prepared for the downturn and that we fully anticipate returning to growth.” AirTran Airways had dominated CAK, carrying 47% of the airport’s passenger traffic in 2012, averaging almost 34 flights a day. The airport had seen steep, uphill growth for nearly two decades, going from 500,000 passengers a year two decades ago to a peak of 1.83 million passengers in 2012. After that, the airport began to feel the effects of Southwest Airlines’ purchase of AirTran in 2010. Now, however, Southwest is consolidating its operations in the region at Cleveland Hopkins. By April 2016, CAK will have lost Southwest flights to Boston, Denver, Las Vegas, New York City, Orlando and Washington, D.C., leaving only service to Atlanta. For 2015, the airport is reporting 1.43 million passengers, 21.9% off
the peak year. By comparison, Cleveland Hopkins traffic is down about 11.4% over the same period. With the departure of Southwest, Allegiant Air, what the industry calls an ultra-low-cost carrier, saw an opportunity to step into the breach. It now has flights from the Akron-Canton market that are destined for tourist locations from Hilton Head Island, S.C., to Fort Lauderdale, Fla., though most routes offer less than daily service. VanAuken said 60% of the airport’s traffic consists of more priceconscious leisure travelers, and 40% are business travelers. She speculated optimistically that business travel may grow because CAK replaced the service of one airline, Southwest, which flew to New York City’s LaGuardia Airport, with the service of two — American Airlines, which flies to LaGuardia, and United Airlines, which flies to Newark Liberty International Airport. The trade-off, though, is that where Southwest flew a full-size Boeing 737, American and United are using smaller, regional jets. United also added service to Philadelphia. “By the time Southwest is finished with its reductions, we will still have 15 nonstop destinations out of
TAKING THE BUSINESS OUT OF BUSINESS BANKING
here,” said McQueen. “And, really, we have one-stop service to almost anywhere in the world through the major hubs. So as we continue to move forward, there is a lot there for customers to consider when they want to fly.”
Pittsburgh International Airport. McQueen and VanAuken concede, though, that because Cleveland Hopkins’ average ticket price includes higher-priced flights to the West Coast, those comparison gaps may not be as large on the same trips.
Business travelers are key
“We’re not thrilled we’re going to see a down year. But we also think we’re prepared for the downturn and that we fully anticipate returning to growth.”
Rob Turk, executive vice president of Professional Travel Inc., a business-oriented travel agency in North Olmsted, said attracting business travelers to CAK will be challenging. “Akron-Canton has been a great partner for the region,” he said. “It grew tremendously over the years and became a strong secondary option for people. On the corporate side it filled some needs, but (it had more advantages) on the consumer side.” Turk said his customers, largely business travelers, may stick with the airline whose loyalty program in which they are most heavily invested. But, he said, “I still think that people are looking for convenience married to cost.” Those factors, McQueen and VanAuken think, can work in CAK’s favor. “It’s important to know we still have lower fares, significantly lower than Hopkins and Pittsburgh and Columbus,” VanAuken said of the major airports whose service areas she and McQueen believe overlap that of Akron-Canton. U.S. Department of Transportation’s tracking of airfares shows CAK with an average fare of $322.46 in the second quarter of 2015, the most recent fare comparison available. That compares with $371.24 at Cleveland Hopkins, $409.27 at Port Columbus International Airport and $391.75 at
— Kristie VanAuken, senior vice president, marketing and communications, Akron-Canton AIrport
Akron-Canton, too, has long successfully marketed itself as more convenient to get to and get around in than Cleveland Hopkins.
Robert Kneen, president of Traveline Travel Services of Willoughby, said because travel time between his Lake County home and Akron-Canton is only a few minutes longer than to Cleveland Hopkins, he’s willing to swap the slightly longer travel time to CAK for its closer-in parking, faster passage through the terminal and security, and shorter walks to gates. “If more and more business travelers in particular discover CAK, they will see it is a really businessfriendly airport,” Kneen said. “It is really easy to navigate.” The airport is closing in on the end of its $150 million, 10-year CAK2018 master plan, and the CAK execs believe that convenience factor and the expected growth in air travel will continue to justify their renovation and expansion plans. The Federal Aviation Administration is forecasting the number of passengers domestic airlines will carry will grow an average of 2% a year between 2015 and 2035. Now underway are $36.8 million in upgrades, including a ticketing wing expansion that includes additional circulating space, new lighting and flooring; the reconfiguration of the entrance road and parking lots; the creation of 250 spaces of covered parking; and the replacement of several aging gates. McQueen believes this work, while it may seem expensive at a time when the airport is seeing a decline in passenger traffic, is important, even if the growth isn’t as large or doesn’t come at the pace of the overall growth in air travel. “For a lot of people this is their first impression of Northeast Ohio,” he said. “We want to make sure it’s a good first impression — or a good last impression.”
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Will they notice us? Some experts say Cleveland could get lost in the shuffle of a contested convention SEE PAGE 18 FOR STORY
GETTY IMAGES
COUNTDOWN TO THE RNC
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Businesses still unsure how RNC could affect operations Cleveland’s population will grow by an estimated 50,000 people for five days this July when the Republican National Convention comes to town. In preparation, downtown businesses are starting to think about how to accommodate their employees as more pedestrian and vehicle traffic descends on the region. However, it’s a bit of a waiting game, as businesses aren’t exactly sure yet how the influx of people could impact their operations. Heather Holmes, director of marketing and public relations for the Downtown Cleveland Alliance, said the organization is working with the city of Cleveland on a business impact committee to open communication lines about how local business will be impacted — or not — by the convention. “We are encouraging everyone to operate their business as usual,” said Holmes, adding that her organization also will work with the Secret Service to identify the best routes in and out of office buildings. “We are trying to find unique ways to engage everyone who lives and works downtown to be a part of this celebration and not have their dayto-day operation affected.”
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Holmes said the Secret Service will implement hard zones with absolutely no car or pedestrian traffic without credentials, soft zones and free zones about a week out from the convention. Downtown employers, particularly those near the action at Quicken Loans Arena, still are weighing their options. Jordan Fylonenko, public relations manager for Quicken Loans, said they are prepared to fully accommodate team members to ensure there is no interruption in the workday. “We’re in the process of determining any specific plans related to the convention,” Fylonenko said. “We’re looking forward to welcoming guests to downtown Cleveland.” Horseshoe Casino, Sherwin Williams and KeyBank have indicated they have no plans to change their operations at this point, indicating they will consider their options closer to the convention date. “We are taking a close look at our operations and potential operations,” said Drez Jennings, vice president of KeyBank’s external corporate communications. “We want to support Cleveland as the city makes the most of this great opportunity to showcase our hometown.” — Kimberly Bonvissuto
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Cultural institutions get ready to entertain BY JAY MILLER
If anyone who visits Cleveland during the week of the Republican presidential nominating convention in July sits around complaining about not finding anything to do, it will only be because no one came knocking on their hotel room door and offered to escort them to one of the many museum programs or other events that the area’s cultural organizations are planning to offer that week. All of the area’s key cultural destinations contacted for this story have something in the works that should be of interest to at least a few of the 50,000 delegates, guests and media when they have a little free time. All of these organizations see convention week as more than a way to boost traffic through their own buildings. Many people expressed the same sentiment as Todd Mesek, vice president of marketing and communications at the Rock and Roll Hall of Fame and Museum. “You’ve got this great product that is Cleveland, so to bring all of these people into town — media, decision-makers, opinion leaders and
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jmiller@crain.com @millerjh
other influencers — gives us a mass opportunity to show these people that it’s not your father’s Cleveland, it’s not your father’s Rock and Roll Hall of Fame,” he said. Even the Cleveland Public Library is making plans for its main library that week — not that the library should be on the bottom rung of anyone’s list of social or cultural op-
tions. It’s just that, well, it wouldn’t have been a surprise if a place renowned for hushed voices and even quieter contemplation hadn’t passed on the idea of attracting people who came to Cleveland for brass-band volume political hoopla. But with hotels and the media center for 15,000 reporters, producers and technicians surrounding the
main branch on three sides it might end up being a welcome oasis of calm. For a start, the library plans to have musical performances convention week in its outdoor Eastman Garden. “I think the garden is going to be a great place to hang, especially with music in there,” said marketing and communications director Cathy Poilpre. “It will be a nice, re-
laxing place.” And, Poilpre said, it just happens that several spaces in the Louis Stokes wing are being renovated that could be attractive to visitors. What is now a used book shop run by the Friends of the Cleveland Public Library at the entrance to the Stokes building is being turned into a welcome center. Across from that, a security station is being turned into to the Louis Stokes Room, honoring the late, 15-term congressman who was a fixture on the Cleveland and Washington political scene. The Western Reserve Historical Society is going all out for the convention with a number of projects — some of which were in the works before Cleveland won the right to host the Republicans — that focus on the role of Cleveland and Northeast Ohio have played in presidential politics. “Power and Politics” will be a video production, probably six, twoto-three minute videos, that will be used separately and together that, according to society CEO Kelly Falcone-Hall, “takes a look at the history of the Republican Party in Cleveland and Ohio that will provide the context about why the Republican convention is coming here.” The historical society is also asSEE CULTURE, PAGE 21
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A dramatic convention could impact the city Civic leaders are hopeful Cleveland is still more than just a backdrop to the nominating convention BY LEE CHILCOTE clbfreelancer@crain.com
The Cleveland 2016 Host Committee expects 15,000 credentialed journalists to descend on the city for the Republican National Convention in July, putting the city in the national spotlight. But how much of that coverage will go beyond the convention? Many local leaders are hoping the city will not just be a backdrop to the proceedings, which take place July 18-21, but will experience an image lift as a result of the increased coverage. Political conventions these days are often run-of-the-mill, scripted affairs, given that a clear-cut winner usually emerges from the primary process. In theory, that means journalists should have plenty of time to focus on other stories, like the revitalization of downtown, the city’s growing tech sector, or the brewery district in Ohio City. Yet this political season has been, well, different. The Republican Party is facing a full-fledged revolt from rank-andfile conservatives, who are gravitating toward hardline candidates like businessman Donald Trump and U.S. Sen. Ted Cruz of Texas. Pundits say it’s possible no candidate will amass enough delegates to secure
victory ahead of time, resulting in the first contested political convention since 1976. If this happens, it would certainly add drama to the event. The delegates at the convention would vote by secret ballot, and rounds of voting would keep taking place until a candidate wins the majority of the delegates. All the while, candidates and their staffs would be working to win over supporters. Some say a contested convention would bring more media attention to Cleveland, resulting in more coverage of the city. Others say the focus on the dramatic proceedings could actually result in fewer news stories outside of hard news from the convention. Yet there’s one thing that all observers agree on: If the convention is contested, a lot more people will be paying attention.
Stay awhile One possible outcome is that it could draw even more reporters to Cleveland and extend their stay in the city. “It could conceivably extend the length of the convention, and therefore journalists would be in town longer, under pressure to break news and report stories every day,” said Rick Batyko, senior vice president of marketing, communications
and development at Team Northeast Ohio, the business attraction nonprofit. He said the reporters he’s talked to want to base their stories in Cleveland. “There’s only so much you can report on from the convention floor,” he said. “If they’re doing a story on the economy or the middle class, the issues that are differentiating the candidates, they’re going to go out into the streets of Cleveland to find examples and do their reporting from here.” A contested convention also could result in the convention and the media expanding their footprint outside of The Q, said Jessica Thompson, senior strategic planner with Brokaw Inc. in Cleveland. “I can see heightened traffic through restaurants, breweries and hotels,” she said. “There will be more opportunities for Cleveland’s image to be broadcast to the outside world — whether through the media or word of mouth.” In addition, how Cleveland handles a contested convention could define the city’s image for years to come, said Benjamin Ginsberg, an attorney with Jones Day who served as national counsel to the Bush-Cheney campaign in 2000 and 2004. With more activity and more people, there will be additional logistical and security concerns.
“The city will have to have its Agame going,” he said. “You can earn incredibly good press nationwide by people talking about how smoothly things went.”
Locked away? Not everyone agrees that Cleveland will benefit from a contested convention. If reporters stay inside the security zone to cover breaking news, it follows that they may have less time to get out into downtown Cleveland and its neighborhoods and report on stories there. “My guess would be that coverage of Cleveland-centric things or stories would take a hit,” said John Znidarsic, senior director of social influence with The Adcom Group in Cleveland. “You’d probably have an influx of more politically minded reporters coming in, and you’d imagine they’re going to be spending the bulk of their time staying in the security perimeter where all the action is happening.” Znidarsic said the biggest gripe he’s heard from reporters is the time it takes to get in and out of security. That may create more of a bubble over that security perimeter,” he said. “People may be clinging to it, they won’t want to leave.” Heidi Modarelli-Frank, vice president for public relations and social
strategy for Marcus Thomas LLC in Cleveland, agrees that if there’s a contested convention, the media may have less time for feel-good stories about Cleveland. “There’s an upside and a downside,” she said. “The world will be paying closer attention, but they’ll just be focused a bit more on what’s happening inside versus what might be going on in our great city — especially the softer side of it.” A contested convention could also bring in more protesters, along with scrutiny of how the city handles this activity. “People feel their opinions or actions could make an impact, and that could result in more emotional protesting,” Modarelli-Frank said. “That could be a threat or an opportunity. If we’re prepared, then the world will applaud how we handle it.” Regardless of how Cleveland is portrayed during the convention, Batyko and his team are focused on influencing media representatives over the long term. “We believe there’s going to be a halo effect when people come here to cover the convention and experience the city as a whole,” Batyko said. “They’ll realize how easy it is to base a story here, how close we are to New York City and other media centers, and they’ll form a habit of reporting national stories here.”
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Q & A: Dr. Alfred F. Connors
CHIEF CLINICAL OFFICER, METROHEALTH
As the Republican National Convention approaches, the health care community is preparing for whatever issues — big or small — may come its way as thousands of people pour into the city. The city of Cleveland has been coordinating meetings for the past three months between representatives from The MetroHealth System, Sisters of Charity Health System, the Cleveland Clinic, University Hospitals, EMS, Cleveland’s Department of Public Safety, Cuyahoga County Department of Public Safety and Justice Services and other first responders. Crain’s talked with Dr. Alfred F. Connors, chief clinical officer at MetroHealth, about the health care community’s preparation for the convention. — Lydia Coutré How will this collaboration help with you response and care?
What kind of training does staff have to undergo?
Has Cleveland seen an event of this scale before?
When you’re talking about health care and providing health care to large groups of people with all kinds of various scenarios, there is a lot that you need to think about. Coordination is really important. What you want to do is figure out what those lines of communication need to be, have them all set up and working. That’s why you need everybody involved, because there can be public health issues; there can be acute care issues; there can be transportation issues; there could be injuries. There are all kinds of things that we need to think about and have a plan for how we’ll take care of it. It’s really part of what we’re required to do at hospitals: to be ready for emergencies that might present in an urban setting all the time. So we do this on a regular basis, and we were doing it before, but we’re actually now doing it specifically to make sure that we’re ready for the convention.
The training is about trying to simulate what might happen, and how we would deal with that. Who does what? How do we decide who goes where? And probably the most important thing is setting up those lines of communication, so you set up a central command center and each of the elements would have their own command centers. What we do is we actually set it up, we get the phones, we make the phone calls, so we simulate the whole thing. It gives everybody here a chance to set up that capability, actually take people through that process so when the real thing happens we’ve actually done it before. Obviously we all know it’s not the real thing, but that kind of preparation makes a big difference.
Not that I remember in my lifetime. There will be a lot of people coming in. I think we’re treating this as a very special event. Obviously, we have events coming in. We had the Gay Games a year or two ago and we had 20,000 people move in. That had an effect on the community — a very positive effect actually, I think. These people came in and had a good time, a surge of a little bit more traffic downtown. I think this is exactly what we want to happen in the community, right? We’re excited about it. The one thing is that it will get a lot of publicity nationally. I think it’s a chance to show off the wonderful things about Cleveland, and what we’re hoping is that one of the things we’ll show off is a very effective health care system that handles anything that’s thrown at it efficiently. So we’re determined to be ready and to shine — by “we” I mean all of the health care community.
How will MetroHealth be able to maintain normal operations and avoid disrupting the patients and the services that would typically be there, while also accommodating the people who will come for the convention? I think we’re concerned about that, although this is what we do every day. We have 4,500 trauma patients coming to MetroHealth each year. It’s not uncommon to have 20 or 25 traumas a day coming in during a busy time of the year for trauma, which is usually the warmer weather summer. And they don’t come in a scheduled way. They could come all at once. We have a number of people on call, ready to come in. We can open up additional operating rooms, so that kind of flexing up we are ready to do on a day-today basis. We’re pretty confident we can respond. We are building additional ICU beds on our critical care pavilion. We’re adding 85 ICU beds. The intent is for those to open July 1 prior to the start of the convention. Part of the reason we have that timing is we knew that would give us a situation where, since we’ll be moving
patients out of existing critical care beds into the new critical care beds, we’ll right away have about almost 70 critical care type beds that would be available if we needed to flex up or there’s an emergency or sudden increase in patients who needed health care. So, we think we’re ready for this. You said you’re treating this as a special event. How do these preparations differ from those? Usually when there are large events, there will be some kid of conference call, some kind of communication just so everyone’s alerted, and we’ve thought through what we might do in different scenarios. But I think we’ve done more training and preparation for this because of the scale. I think we’re kind of walking it through more than we would ordinarily do, but I think in away that’s appropriate for the importance of this, the visibility nationally and the number of people who are going to be in town. We don’t want to fumble this, you know. We want to do it really well, and I’m confident we will.
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If a politician is kidnapped during the 2016 Republican National Convention, or if a cyber terrorist compromises sensitive computer data, there’s a policy for that. At least, there ought to be. The convention is a massive, oneof-a-kind event for the city that takes an equally massive amount of time and capital to insure. And as the GOP spends the coming months paring down its pool of prospective presidential nominees ahead of this year’s convention, event planners will continue work behind the scenes to secure policies that protect the myriad people and places involved from costly expenses in the case of some unforeseen catastrophe. But while the city and host committee effectively began working on securing the bevy of one-time insurance policies associated with the event at least 15 months ago, only about half of the policies have been bound, estimates Jon Pinney, general counsel and treasurer of the Cleveland 2016 RNC Host Committee and managing partner at Cleveland law firm Kohrman Jackson & Krantz. Insurance falls under his purview. “It’s been a long process, but we feel we are in a really good place,” Pinney said. “There does seem to be good competition in the marketplace.” “But this is far more complicated than originally expected,” he added. “And I think that’s for everybody.” A committee overseeing the task of securing insurance has been meeting monthly since October 2014, he said. One topic of discussion at the January meeting was identifying exactly what the convention’s comprehensive footprint will be, including the welcoming event, and quantifying exactly how many parties and venues are touched in the process. There is an extensive portfolio involved, but Pinney said the host committee’s goal is to have all policies bound and set by the end of March partly because as the event nears, costs could be affected. Those one-time policies will likely include coverage protecting everything from police and safety forces to the slew of venues hosting people and events to kidnapping and cybersecurity breaches, according to experts and those familiar with the process. Exactly what will be covered and how much it all will cost, though, also remains unclear as bidding continues for the host committee and the city itself. Policies could be taken out by both entities independently, or one could be named to the other’s policy. That’s one of the items that remains unresolved. As such, neither will discuss their budgets for insurance coverage, what policies will be acquired, what those will cover and what they will cost as those details could compromise the bidding process. “The city will undertake a compet-
itive process to acquire the insurance coverages,” said Dan Williams, Cleveland’s media relations director, in response to a variety of questions asked of Valarie McCall, chief of government and international affairs who also oversees the city’s end of insurance coverage. “It is premature for the city to discuss either the process or the coverages at this time.”
Costing millions However, a look at past events sheds some light on what policies likely will be involved. All included, coverage will be in the millions of dollars, at least. But that’s somewhat of a given. “Based upon information uncovered from prior conventions, the risk management spend for premiums related to security forces, the work
lican conventions in St. Paul, Minn., and New York City reportedly saw some 800 and 1,800 arrests for civil disobedience, respectively. In the latter example, according to The New York Times, the city paid more than $8 million in damages and eventually settled with thousands of other individuals for nearly $18 million. For those historical reasons, Pinney said, that policy is a high priority. “If that policy gets hammered with claims — and it will — then it won’t have an ongoing effect on city of Cleveland programs we pay for with our tax dollars,” Kysela said. Regardless of Cleveland police history and other global unrest, Taylor asserts there haven’t been any issues finding coverage. “In this industry, there are some companies who don’t like some risk profiles,” he said. “So while we put
Those one-time policies will likely include coverage protecting everything from police and safety forces ... to kidnapping and cybersecurity breaches, according to experts and those familiar with the process. and efforts of the host committee … (etc.) that has been in the seven-figure range,” said Eddie Taylor Jr., president of Taylor Oswald, a partner of Oswald Cos. serving as an insurance consultant for the host committee. Generally, the policies covering an event of this size fall into three buckets, said Jerry Kysela, executive chairman and managing director of the North-Central Ohio region for Aon, one of the world’s largest insurance brokerages. Those are police and professional liability; general liability; and risk management. Aon has provided coverage of similar conventions in the past including the 2012 Democratic National Convention, the 2008 Republican National Convention and a variety of other large-scale public events, including the FIFA World Cup. Kysela said Aon is one of the companies competing for RNC-related policies, but they’ve yet to be retained by anyone. “It’s challenging (to discuss) because I don’t know what format the city will use,” Kysela said. Arguably the most significant policy, though, will be a police and security professional liability policy, which is loosely referred to by some as protester insurance. Protests are to be expected given the political nature of the event, and this policy would cover possible liability claims that could arise from those kinds of activities. That could carry a very large deductible in general, but that could be even higher in the city’s case considering the police department’s documented history of excessive force — a variable that will be factored into the policy, Kysela said. Notably, the 2008 and 2004 Repub-
this out in a broad way, we know there is someone who would not want to take on an event like this, but we want to make sure we are exhaustive in our work. We haven’t had any challenges finding organizations willing to party with us or offer coverage.” The general liability policy, which would cover the usual accidents like slips and falls but doesn’t include safety forces, will also likely be quite extensive. That could also include directors and officers liability coverage. A risk management policy would likely include training security forces, temp workers and volunteers putting the event on. And there’s property insurance that will cover damage to facilities themselves like Quicken Loans Arena and the convention center in addition to accidents that could occur during temporary build-outs at those locations and others. Other specialty policies also come into play, including those for terrorism — which could be an endorsement on the property policy — cybersecurity and what’s become more commonly known as KRE insurance (kidnap, ransom and extortion). However unlikely, kidnapping, ransom and extortion are possible. The most likely event would be extortion, Kysela said. That policy would come to play if, say, someone affiliated with a terrorist faction claimed to place a bomb at one of the venues they would detonate unless they received some massive sum of money. “It’s going to be very complicated,” said Kysela of the insurance process. “And the cost will depend on how they structure it, retention on major programs and how much limit they buy.”
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ADVISER: Lynde Vespoli
Show off more than just our museums A few years ago, I was honored to be hired as the tour director for several dozen Australian dairy farmers and their wives as the group toured the United States from coast to coast. They flew into Los Angeles, rented a motorcoach, and spent a month traveling across the country, eventually departing from New York. I organized and ran a variety of excursions for them for the few days they spent in this part of the Midwest. To kick off their visit, we toured the city of Cleveland and the surrounding area, driving through the spectacular fall foliage in Northeast Ohio. We stopped at the usual tourist highlights: the West Side Market, Public Square, the Rock & Roll Hall of Fame, Playhouse Square, the Cleveland Museum of Art, Little Italy and Lakeview Cemetery. The Australians liked the city, the lake and the countryside. The monuments and the buildings were all fine. But what really caught their attention — what they were fascinated with, and peppered me with questions about at Lakeview Cemetery — were the squirrels. You see, Australia has no squirrels. It took me a minute to adjust my tour narration. I am used to customizing tours for groups based on their particular interests and preferences. We can tour lighthouses, traverse Amish country and visit wineries. But this was new to me: they were interested in a rodent. So, I told them everything I knew about the furry beasts, all the while wondering, “Why are they so interested in these squirrels, anyway?” Then it dawned on me. If I were traveling in their country — if I were touring Australia — sure, it would be nice to see the Harbor Bridge and the Sydney Opera House, but I definitely wouldn’t want to miss the kangaroos. This is the mindset I believe we should have as we prepare for the thousands of visitors who will be arriving in Cleveland in July for the Republican National Convention. Yes, we all are aware of the highlights of the city and the surrounding areas. We each have our own idea of which sights and locations should be on every tourist’s “Must See” list. But we should also be ready for them to ask about something out-ofthe-ordinary, or want to see something off the beaten track.
Lynde Vespoli is director of destination management for Discover My Cleveland. If a nature-lover wants to see unique views in the area, suggest hiking to the waterfalls in Brandywine Falls in the Cuyahoga Valley National Park (the only National Park in Ohio), or strolling along the Canopy Walk at Holden Arboretum. Talking to a sports addict who has seen it all? Show them the Historical Marker at the corner of West 29th and Bridge streets in Ohio City, which marks the birthplace of John Heisman, inventor of football’s forward pass, center snap and the quarterback’s “hike,” among others. Or send them to League Park, where Cy Young of the Cleveland Spiders pitched in the first game played there, on May 1, 1891. Perhaps a history buff would like to see the oldest building in Cleveland still on its original foundation — that would be the Dunham Tavern at 6709 Euclid Avenue. How about a music buff who has already toured the Rock Hall? Invite them to visit the Cleveland-Style Polka Hall of Fame at 605 E. 222nd Street. After all, who can resist the sounds of Frankie Yankovic? It would be wonderful if the stories that the conventioneers and delegates take home with them at the end of July mention how kind the people of Cleveland are, how much we love our hometown, the pride we have in showing it off to visitors, and the knowledge we have of the interesting tourist sites. We may not have the most exotic animals in the world, but if you’re lucky enough to spot a black squirrel, be sure to point it out.
CULTURE CONTINUED FROM PAGE 17
sembling exhibits that will highlight its collection of political memorabilia and costumes, including gowns worn by First Ladies. In conjunction with Cleveland Hopkins International Airport, the historical society is putting together displays that highlight the role of Cleveland in the creation of the aviation industry that will hang in the airport’s baggage claim area. And all of its projects will have a life beyond convention week. “Whether or not people that are in town for the convention come over to University Circle, that remains to be seen,” Falcone-Hall said. “But we want to make sure that the (Northeast Ohio) community has an opportunity to explore all of this wonderful stuff.” Other University Circle institutions also will attract convention goers and their umbrella organization, University Circle Inc., plans to make it easy for out-of-towners to get to Cleveland’s arts and cultural center. Chris Ronayne, president of UCI, said his organization will use convention week as a pilot for a perma-
nent discount program he’s calling “Circle Pass,” a smartphone app that will offer people discounts when they visit more than one museum. The Rock Hall also is going all out. “It’s safe to say that something will be happening at the Rock and Roll Hall of Fame and Museum every day of the convention and also probably in the weeks leading up to the convention,” Mesek said. The centerpiece of its effort will be “Louder than Words: Rock, Power and Politics,” an exhibit that explores the power of rock to change attitudes about patriotism, peace, equality and freedom. Along with Destination Cleveland, the travel and tourism bureau, the Rock Hall is creating Rock Box, a series of permanent installations — seven sculptures with clusters of speakers — placed along East Ninth Street that will periodically pump out rock music.
Even the little ones The City Club of Cleveland expects its dining rooms to be booked by state delegations or interest groups during
the week, said CEO Dan Moulthrop. On its own, though, he said the speakers’ forum is hoping to bring speakers to other venues. “It would be hard to sell tickets and get people to come downtown for luncheons that week,” Moulthrop said. “We are holding out hope that with so many political people in town there will be the possibility we could do events in some other places. “ Smaller organizations will also be playing a role in making convention week more than non-stop politics. Karen Gahl-Mills, executive director of Cuyahoga Arts and Culture, the county agency that helps fund nonprofits, said she’s following the efforts of a number of organizations looking for ways to get involved. Her group also will promote its events calendar, which can be accessed at www.cacgrants.org, to convention goers who are looking for things to do. “We’ll be working with the 200 organizations we fund to make sure that anything they’ve got going during July 18-21 is prominently featured (on the event calendar),” she said. “That way, visitors will have a quick and easy way they can connect to all the great arts and cultural events we’ll have here.”
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Business of Life OFF THE CLOCK: Hobbies and interests Crain’s occasional look at unique and interesting activities happening in Northeast Ohio. Tell us what you do in your spare time: clevedit@crain.com
Reptile genetics aren’t just for show BY DAN SHINGLER They gather once a month at the UAW Hall in Brook Park — a few hundred people, mostly from in and around Cleveland but also from other Ohio cities and other states. But it’s no union meeting. It’s the regular All Cleveland Reptile Show and Sale, and along with the people, you’ll find a wide variety of snakes, lizards, amphibians and insects — and just about anything you might need for their care and feeding. If you’re looking for 15-foot-long pythons, or venomous cobras and rattlesnakes, you’ll be disappointed. “No venomous reptiles, and nothing indigenous to Ohio,” said Shay Hamper, the show’s organizer. Those at the show tend to be far more interested in genetics than in the size or potential danger of an animal, he said. Vendors at the show are a mix of full-time business people, and hobbyists looking to help offset the cost of their own animals and breeding programs. For example, Casey Willoughby is the full-time sales manager for Indiana-based Rodent Pro. He doesn’t sell snakes, lizards or other pets; instead, he sells the mice and rats that they eat. They’re sorted by size, frozen and pre-backed in bags that the company will ship to a buyer’s home. Or, customers can come to the show and buy direct from Casey. “We supply more than half the zoos in the United States, too,” said Willoughby, adding that his company sells more than a million rodents per month to a variety of customers. Then there’s Peter Rushton of Columbus, who has a day job in the jewelry industry but also sells snakes with his dad’s company, P.T. Reptiles. Rushton deals in the show’s hot item: genetics. He sells mostly ball pythons that don’t get much bigger than four or five feet long, but he has rare genetics that produce snakes with wild patterns and amazing bright colors. While a common ball python can be had for less than $100, Rushton’s albino and piebald snakes are more than $400, and a “caramel albino with hypo” costs more than $1,200. “I’m at the show every month, and I also do the Columbus and Cincinnati shows,” Rushton said. Rushton said he has met many new friends at the show. He even found love. His girlfriend, Brittani Castrovinci, also a snake lover, was with him at the Jan. 17 show. Yep, he won her over with genetics — as nature intended. “I got my first snake when I was 3,” Castrovinci said, draped in a Dumeril’s Boa as she spoke. And then there’s Dave Groning of Cleveland, better known to the show’s regulars as “Billy Goat,” or simply “The Bug Guy.” Groning is a full-time hobbyist and part-time vendor, selling tarantulas, scorpions and other bugs, along with things like cricket food for the lizard keepers who need to feed their supply of live food. Groning’s mostly just continuing his lifelong fascination with bugs, which started before he can even remember, he said. “My mom was always afraid to do my laundry,” Groning said with a smile. “She was afraid of what would come out of my pockets.” Hamper said he gets about 50 to 100 vendors per show, and about 400 visitors. He’s being doing it for 10 years now, and there’s no apparent slowdown in the show’s popularity. It’s a mix of business, science, hobby and camaraderie found in few other places, said Hamper and many snake show vendors and attendees.
We don’t just see people for who they are; we see
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In the past nine months,
94% DAN SHINGLER PHOTOS
of individuals served in United Way-funded healthy food access programs have increased their fruit and vegetable intake. Peter Rushton, above, comes to the All Cleveland Reptile Show every month from Columbus. Snakes such as the hypomelanistic “caramel albino” Ball Python, below, represent the pinnacle of what breeders can create with years of work. The snake will grow to about four feet in length and will continue to get brighter as it ages.
them for who they can become.
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FOR COMMERCIAL LEASING INFORMATION, CONTACT: DYANN DAVISON | 216.781.4828 ddavison@KandD.com www.KandDRealEstateServices.com
RNC
CONTINUED FROM PAGE 1
sure the whole delegation is booked into the same hotel and making sure the hotel has a meeting room large enough for the delegation to gather for breakfast. It shouldn’t be surprising that not every one of the 50,000 people coming to Cleveland for the July convention will be happy with their sleeping arrangements. A distant hotel, beyond walking distance of the convention site, means party leaders must figure out transportation to and from the convention for their delegation. It also suggests, of course, a lack of political clout of the state party and its leaders. But putting together the jigsaw puzzle for this convention may be harder than usual. The Cleveland convention is earlier, and closer to the primary season, than recent past conventions.
No word yet
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35th Anniversary
35th Anniversary
CLEVELAND BUSINESS VOL. 36, NO. 47
NOVEMBER 23 - NOVEMBER 29, 2015
ALLYSON O’KEEFE, 37 Partner; Porter Wright
35th Anniversary
CLEVELAND BUSINESS
VOL. 36, NO. 47
NOVEMBER 23 - NOVEMBER 29, 2015 Allyson O’Keefe started her legal career at Porter Wright in 2004 after completing a summer internship there as a Case Western Reserve University law student. Since then, she has worked on many significant deals across Cleveland, including Flats East Bank, The Metropolitan at the 9, Uptown in University Circle and Steelyard Commons, and has been promoted to real estateALLYSON partner. O’KEEFE, 37 “Young professionals who live downtown are so excited about the city,” said O’Keefe, a Partner; Porter Columbus native who lived downtown forWright 10 years before moving to Rocky River. “The ones who aren’t from here are often more excited about it. When you move here from somewhere else, you don’t for granted.” VOL. 36, NO. take 47 it Allyson NOVEMBER 23 - NOVEMBER 29, 2015 O’Keefe started her legal career at Porter Wright in 2004 after completing a sumWhen O’Keefe is not working or spending time with her husband and two children, she can mer internship there as a Case Western Reserve University law student. Since then, she has be found volunteering on the boards of nonprofit organizations and watching college football. worked on many significant deals across Cleveland, including Flats East Bank, The Metropolitan at the 9, Uptown in University Circle and Steelyard Commons, and has been proWHAT INSPIRES YOU ABOUT YOUR WORK? moted to real estateALLYSON partner. O’KEEFE, EEFE, Just seeing what Cleveland has gone through in the time that I’ve 37 been here, there’s obvious“Young professionals who live downtown are so excited about the city,” said O’Keefe, a ly a lot of excitement around real estatePartner; development. I started in 2004 when we were crazy er Porter Columbus native who lived downtown for Wright 10 years before moving to Rocky River. “The ones busy with development. That was sort of the boom from ’04 through ’08. I saw it go through who aren’t from here are often more excited about it. When you move here from somewhere the downturn, then I saw it rise again, even stronger than before locally. else, you don’t take it for granted.” Allyson O’Keefe started her legal career at Porter Wright in n 2004 04 after afte completing p ng g a sumsum s m When O’Keefe is not working or spending time with her husband and two children, she can ereMIXED-USE y law la law student. stu udent. ud dent. Since S nce then, then the , she she e has ha has mer internship as a Case Western Reserve University MANY OF THE PROJECTS YOU WORKED ON there ARE URBAN PROJECTS. IS be found volunteering on the boards of nonprofit organizations and watching college football. ignificant deals across Cleveland, including includin ng Flats Flat F s East ast Bank, The worked on many significant THAT AN AREA OF EXPERTISE? e 9, Uptown Stee ely yard Commons, C Co ommons, and has ha as been been propro p pr Metropolitan at the in every University and Steelyard Yes, definitely. Real estate is extremely interesting because deal Circle is differWHAT INSPIRES YOU ABOUT YOUR WORK? ate moted to real estate ent. You can never get bored because there’s so partner. much variety there, from tax Just seeing what Cleveland has gone through in the time that I’ve been here, there’s obviousonals abou out the th he e city,” city,” said O’Keefe, O’Ke O’Kee ee efe, e a “Young who live downtown so excited about credits to historic renovations, from professionals ground-up development to rehab, are from ly a lot of excitement around real estate development. I started in 2004 when we were crazy moving g to to Rocky River. “The “T “The The ones mixed-use to residential. Columbus native who lived downtown for 10 years before moving busy with development. That was sort of the boom from ’04 through ’08. I saw it go through who aren’t from here ere are often more excited about it. When n you you move move here from somewhere so some mewhere the downturn, then I saw it rise again, even stronger than before locally. else, you LEADERSHIP don’t take granted.” ke it for HOW WOULD YOU DESCRIBE YOUR STYLE?
CLEVELAND BUSINESS
O’KeefeI expect is not working or spending timeI work, with her husband hus sban nd and and d two tw children, childre children n,, she she can an I definitely believe in leadingWhen by example. the people with whom MANY OF THE PROJECTS YOU WORKED ON ARE MIXED-USE URBAN PROJECTS. IS be found volunteering on the very boards of nonprofit college ringworking organizat tio ons and a an nd watching watching tc colle colleg ge football. footbal all. my associates, to work hard, and they see me hard. For me, it’sorganizations all THAT AN AREA OF EXPERTISE? about working hard and doing good work. Yes, definitely. Real estate is extremely interesting because every deal is differWHAT INSPIRES YOU OU ABOUT ABOUT YOUR YOUR WORK? WORK? ent. You can never get bored because there’s so much variety there, from tax Just WHAT seeingWAS whatITCleveland has gone the time that tha at I’ve I’v ve been been ee en here, there’s there s obviousobviou usWHAT OTHERS ARE SAYING: LIKE TO WORK WITHthrough O’KEEFEinON credits to historic renovations, from ground-up development to rehab, from ent around real estate development. I started sta arted in in 2004 20 004 04 when we were were crazy cra azy ly a lot of excitement THE FLATS EAST BANK PROJECT? mixed-use to residential. busy with development. of the boom from ’04 ment. ’0 04 through throu ou ugh ’08. ug ’08 I saw it go go through throug gh “Allyson is extremely bright and quick witted, butThat whatwas trulysort distinguishes her the downturn, then rise again, even n I saw itpeople beffore ore locally. llo ocally. y. from most successful attorneys is her exceptional skills. Shestronger has an than before HOW WOULD YOU DESCRIBE YOUR LEADERSHIP STYLE? uncanny ability to encourage the ‘adversaries’ in her negotiations to work in I definitely believe in leading by example. I expect the people with whom I work, Y OF OF THE Tto HE PROJECTS PROJECproblems,” TS YOU YOU W WORKED ORKED ON ON ARE ARE MIXED-USE MIXED-USE URBAN URBAN PROJECTS. PROJECTS. IS IS concert with her to achieve win/win MANY solutions difficult said my associates, to work hard, and they see me working very hard. For me, it’s all THAT A AN N AREA ARand EA OF Oco-developer F EXPERTISE? EXPERTISE?of the Scott Wolstein, CEO of Starwood Retail Partners about working hard and doing good work. interes sting g because be bec cause u every deal dea deal is is differdiffe ifferYes, definitely. Real estate is extremely interesting Flats East Bank project. because there’s so om uch variety there e, fr rom tax ent. You can never get bored much there, from — Lee Chilcote WHAT OTHERS ARE SAYING: WHAT WAS IT LIKE TO WORK WITH O’KEEFE ON ts to historic renovations, from ground-up p development deve evelo opment ment to rehab, reha rehab b, from fro credits THE FLATS EAST BANK PROJECT? ed-use to residential. mixed-use “Allyson is extremely bright and quick witted, but what truly distinguishes her
PROMOTE. Why not?
successfulInc. attorneys is her exceptional people skills. She has an Reprinted with permission from the Crain's Cleveland Business. © 2015from Crainmost Communications HOW W WOULD WAll OURights LD YOU YOreserved. UD DESCRIBE ESCRIBE YOUR YOUR LEADERSHIP LEADERSHIP STYLE? STYLE? ability to encourage the ‘adversaries’ in her negotiations to work in Further duplication without permission is prohibited. Visituncanny www.crainscleveland.com. #CC15040
I definitely with whom finitely believe in leading by example. I expect exp pect the th he people pe w wh hom I work, w concert with her to achieve win/win solutions to difficult problems,” said my associates, to work hard, and they see m me working For ew orrkin ng very v hard. F Fo or me, me, it’s it all Scott Wolstein, CEO of Starwood Retail Partners and co-developer of the out working hard and doing good work. about Flats East Bank project.
— Lee Chilcote WHAT HAT OTHERS OTHERS ARE ARE SAYING: SAYING: WHAT WHAT WAS WAS IT IT L LIKE IKE TO TO WORK WORK WITH WITH O’KEEFE O’KEEFE ON ON THE EF FLATS LATS E EAST AST BANK BANK P PROJECT? ROJECT? “Allyson llyson is extremely bright and quick witted, witted d, but what what truly distinguishes disting distingu uishes shes her h exceptional people om most successfulInc. attorneys her exce eptio ona al p eople skills. She She has has an a Reprinted with permission from the Crain's Cleveland Business. © 2015from Crain Communications All Rightsisreserved. ‘adversaries’ her work ncanny ability to encourage the ‘adversari ies’ in h er negotiations tto ow ork k in Further duplication without permission is prohibited. Visituncanny www.crainscleveland.com. #CC15040 oncert with her to achieve win/win solutio on ns s to o difficult diff fficult problems,” problem ms,” said said concert solutions Scott Partners cott Wolstein, CEO of Starwood Retail Par rtners and and co-developer off the Flats lats East Bank project. — Le LLee ee Chilcote
Reprinted with permission from the Crain's Cleveland eland Business. © 2015 Crain Communications IInc. nc.. All R Rights ig gh hts ts reserved. r Further duplication without permission www.crainscleveland.com. ion is prohibited. Visit www.crainscleveland.com m. #CC15040 #CC15 5040 0
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Melinda Stell, director of hotels and venues for the CoA, said the group doesn’t expect to make those hotel assignments until mid-April or early May. One of the reasons is that a half-dozen primaries, including the sometimes influential California primary, aren’t until June 7. And, as every cable news commentator is saying, even then, the Republicans may not know who their presidential nominee is. In fact, the Democratic Party parceled out hotel assignments to state delegate contingents in December. For now, Stell is glad to have a good working relationship with the local 2016 Cleveland Host Committee and the 135 hotels that have agreed to have more than 16,000 hotel rooms at her disposal for convention week. That’s locking up roughly 90% of the hotel rooms within a 40minute ride radius from Quicken Loans Arena, the convention site. “All the hotel people have been great to work with,” she said. “It’s been a welcoming city.” Typically, the presumptive candidate might expect to get rooms booked for his or her campaign contingent and state delegation at the hotel closest to the convention site, along with top party leaders. But whom that candidate will be for the Republicans may not come into focus when the CoA starts parceling out hotel rooms so those hotel assignments are on hold. Stell is coy about the hotel allocation process. She would only say that the presumptive nominee can expect to be in a hotel close to Quicken Loans Arena. “There are several nearby,” she said, agreeing with a reporter that the Renaissance and Ritz-Carlton hotels, which have an underground connection to The Q; and the stillunder-construction Hilton Cleveland Downtown, connected to the convention media center at the Cleveland
Convention Center; would be at the top of everyone’s preferred list. The host Ohio delegation might also expect preferential treatment, but its assignment will also wait. “I’m not aware of any hotel preferences,” said Ohio GOP spokeswoman Brittany Williams in an email. “We also are not aware of any special preference because of being the host delegation.” Williams said the Ohio delegation will include 66 delegates and 66 alternates, along with party leaders and guests. In 2012 in Tampa, Ohio brought about 500 people, Williams said. All in the contingent will be offered hotel rooms, though some from Northeast Ohio will be staying at home. But the number of hotel rooms the Ohio party will need won’t be known until after the delegates are selected in the March 15 primary. Stell said the committee will attempt to keep state delegations together at the same hotel. The CoA is also handling media requests for hotel space. A December website posting said each room reservation required a five-night minimum stay beginning July 17 and running through July 21. Actually, there won’t be many hotel rooms available downtown for the week before the convention, Stell said, since the Republican Party and its platform and rules committees will be meeting that week to lay the foundation for the campaign. In Tampa in 2012, the Ohio delegation stayed at the 360-suite Mainsail Suites Tampa Hotel and Conference Center, 10 miles, and a 20-minute bus ride, from the Tampa Bay Times Forum. That year’s CoA also had 16,000 hotel rooms under its control. Official state delegations were assigned to 36 of the 100 hotels available with media and other visitors lodging in the rest, according to a story in the Tampa Bay Times on April 30, 2012, when the assignments were announced. That year, the host state party delegation got the short end of the stick. The Florida group ended up at a hotel 32 miles from the convention site. The Republican National Committee, the Times reported, was punishing the state party for the Republican-controlled state legislature’s decision to move the Florida primary to January, a violation of party rules. The CoA denied any punishment, saying assignments were based on delegation sizes and requirements for rates and meeting space. The Florida party didn’t buy that. “I’m pissed off,” Florida Republican Party chairman Lenny Curry told the Times. “We’re one of the most important swing states, if not the most important swing state, and our activists and donors are going to be punished for something they had nothing to do with.” Massachusetts, home of presumptive nominee Mitt Romney, was just steps from the Forum, and Wisconsin, home state of Republican National Committee chairman Reince Priebus, was nearly as close.
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CRAIN’S CLEVELAND BUSINESS z JANUARY 25 - 31, 2016 z PAGE 25
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BIOSCIENCE CONTINUED FROM PAGE 1
Bedford at the end of 2013, eliminating more than 1,000 jobs. That closure accounts for a large majority of the job losses in the local pharmaceutical industry. But Ben Venue only accounts for about half of the job losses in the region’s broader bioscience sector. It employed 21,810 people in 2014, down from 24,147 in 2011. Employment also fell at medical device companies, medical and testing laboratories, and medical product distributors. The only bioscience industry that grew during that time period was agricultural biotechnology. That sector includes companies that make organic chemicals, fertilizers, pesticides and plant-based materials, among other products. It’s unclear what caused all of the job losses, but investors nationwide have been putting less money into medical technology companies in recent years. Instead, they’ve been pumping cash into health care software companies, which tend to grow faster and face fewer regulatory hurdles. Entrepreneurs see those same ad-
Contact: Phone: Fax: E-mail:
vantages. Thus, the trend could also be restraining the formation of new bioscience companies. BioOhio was only able to identify 27 new companies that were formed in 2014 — the lowest number in a decade. One caveat: The new number could rise, since BioOhio doesn’t always discover new companies immediately after they’re formed, said John Lewis, CEO of the Columbus-based nonprofit.
Busting the funk So the numbers aren’t great. But Lewis believes the bioscience industry still has the potential to be a significant job creator in the future. He noted that Ohio’s numbers are better than the numbers for Northeast Ohio, suggesting that there is still opportunity in the bioscience sector. “Overall, it’s a rock solid base,” he said. Both Lewis and his counterpart in Cleveland — Aram Nerpouni, the CEO of BioEnterprise — noted that the sector could come out of this lull. That could happen if tech companies gain a better understanding of how to meet today’s FDA require-
Denise Donaldson (216) 522-1383 (216) 694-4264 DDonaldson@crain.com
ments. Plus, BioOhio and other industry groups are encouraging the FDA to lower the barriers that medical technology companies face. Another reason for hope: Northeast Ohio’s bioscience companies raised $239 million from private investors in 2015, one of the highest numbers on record. That figure includes money raised by health care software companies, but it also includes companies like ViewRay of Oakwood, a cancer technology company that went public last year. That $239 million is “going to feed
company growth over the next year or two,” Lewis said. But it’s unclear how much of that venture investment will translate into significant, lasting job creation — even if the companies that raise the capital end up succeeding.
Still maturing Given the large regulatory hurdles medical technology companies face, many of them aim to get acquired by a larger company as soon as they can prove that their products work and that a market for them exists.
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That’s good for the founders and the investors. But it could be bad from an economic development perspective: If startups get bought out too soon — before they’ve planted deep roots here in town — the buyer could easily decide to take the technology and close the local office. That happens a lot to startups in the pharmaceutical industry, where regulatory barriers are particularly high. Even so, Northeast Ohio shouldn’t put all of its medical eggs into the health information technology basket, Nerpouni said. Even though local research institutions and economic development groups have been pouring resources into biomedical startups for well over a decade, the local medical startup scene is still maturing. As local entrepreneurs and executives can experience, opportunities for growth will improve, Nerpouni said. He gave another reason why the region should work to grow all different kinds of medical technology companies: At some point, the trends could change and other medical technology industries could come roaring back. “There will be very few times when you’re running on all cylinders,” he said.
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20160125-NEWS--27-NAT-CCI-CL_--
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CRAIN’S CLEVELAND BUSINESS z JANUARY 25 - 31, 2016 z PAGE 27
The List BUILDING THIS ADDRESS YEAR CITY, ZIP
LARGEST COMMERCIAL PROPERTY SALES 2015 Ranked by Price
PROPERTY TYPE
TRANSACTION PRICE ($)
SQUARE FEET OR # OF UNITS
PRICE PER SQ. FT. OR PER UNIT ($)
DATE
BUYER
SELLER
1
Fifth Third Center 600 E. Superior Ave. Cleveland, 44114
Office
53,433,333
508,397
105.10
4/7/2015
Hertz Group
Tier REIT
2
Skylight Office Tower 1660 W. Second St. Cleveland, 44113
Office
35,400,000
320,793
110.35
9/17/2015
Hertz Group
Forest City
3
Village at Avon 36550 Chester Road Avon, 44011
Apartment
29,022,700
312
93,021.47
8/7/2015
Brookfield AM
Associated Estates
4
Creekside Commons 9579 Mentor Ave. Mentor, 44060
Retail
28,300,000
201,879
140.18
5/7/2015
Inland Real Estate Corp.
First Interstate Properties
5
Barrington 226 Barrington Place W Aurora, 44202
Apartment
27,411,102
288
95,177.44
8/7/2015
Brookfield AM
Associated Estates
6
3800 Embassy Parkway Akron, 44333
Office
24,800,000
117,217
211.57
4/17/2015
Alexander Scharf
3800 Embassy LLC
7
Williamsburg at Green Village 6636 Deerfield Drive Northfield, 44067
Apartment
24,185,583
260
93,021.47
8/7/2015
Brookfield AM
Associates Estates
8
Richmond Park 444 Richmond Park East Richmond Heights, 44143
Apartment
22,500,000
736
30,571
11/16/2015
Consolidated Management
Tritex Real Estate Advisors Inc.
9
Majestic Steel 5300 Majestic Parkway Bedford, 44146
Industrial
22,400,000
324,752
69.98
7/24/2015
Majestic Steel
Majestic Steel Properties Inc.
10
925 Building 925 Euclid Ave. Cleveland, 44115
Office
22,000,000
1,300,000
16.92
4/7/2015
Hudson Holdings
Optima International
10
Tallmadge Town Center 75 Northeast Ave. Tallmadge, 44278
Development site
22,000,000
361,548
60.85
2/25/2015
Testa Cos.
Joseph R. Scaccio
12
FedEx Ground Package 3201 Columbia Road Richfield, 44286
Industrial
21,764,000
229,972
94.64
3/11/2015
Gramercy Property Trust
Dividend Capital Diversified Property Fund
13
Shoregate Town Center 30320 Lakeshore Blvd. Eastlake, 44095
Retail
20,900,000
313,776
66.61
10/7/2015
Phillips Edison Grocery Center REIT II
Shoregate Properties LLC
14
Saks Fifth Avenue 26100 Cedar Road Beachwood`, 44122
Retail
20,886,676
NA
NA
8/7/2015
Simon Property Group
HBC
15
Renaissance Cleveland Hotel 24 Public Square Cleveland, 44113
Hotel
19,325,000
491
39,358.45
10/28/2015
Mishorim Development Group
New World Development
16
The Gardens at Westlake 27569 Detroit Road Westlake, 44145
Senior housing
18,967,367
97
195,539.87
1/16/2015
Ventas
ARC Healthcare Trust
17
East Point I & II 6089-6095 Parkland Blvd. Cleveland, 44124
Office
18,500,000
187,735
98.54
7/28/2015
Founders Properties
Piedmont REIT
18
Great Wolf Resort 4600 Milan Road Sandusky, 44870
Hotel
18,000,000
271
66,420.66
11/23/2015
Centerbridge Partners
CNL Financial Group
19
Mallard's Crossing 4004 E. Normandy Park Drive Medina, 44256
Apartment
17,860,123
192
93,021.47
8/7/2015
Brookfield AM
Associated Estates
20
Hampton Inn Cleveland 29690 Detroit Road Westlake, 44145
Hotel
17,180,512
123
139,678.96
2/27/2015
ARC Hospitality Trust
Goodman Sachs
21
Walmart 6600 Mayfield Road Cleveland, 44124
Retail
17,100,000
137,133
124.70
11/5/2015
6594 Mayfield Road Chuck LLC; 6594 Mayfield Road Urban LLC
Carter Properties
22
The Gables of Hudson 5400 Darrow Road Hudson, 44236
Senior housing
16,750,000
112
149,553.57
4/1/2015
Sentio Healthcare Properties Inc.
Wojno Development
23
Hilton Garden Inn Cleveland Downtown 1100 Carnegie Ave. Cleveland, 44115
Hotel
16,597,500
240
69,156.25
6/29/2015
Starwood Capital Group
LNR Property Corp.
24
Sheffield Crossing 5231 Detroit Road Sheffield Lake, 44054
Retail
16,192,808
112,000
144.58
12/22/2015
Phillips Edison Grocery Center REIT II
Silverman Realty Group
25
Corporate Circle I & II 30050 & 30100 Chagrin Blvd. Cleveland, 44124
Office
16,000,000
120,420
132.87
2/9/2015
Joseph Greenberg
LNR Property Corp.
26
Portside Apartments 100 Mariners Circle Sheffield Lake, 44054
Apartment
15,500,000
232
66,810
4/2/2015
NA
NA
27
Cedar Center North 13967 Cedar Road Cleveland, 44118
Retail
15,414,943
61,400
251.06
4/2/2015
Inland Real Estate Corp.
DeVille Developments and The Coral Co.
(1)
RESEARCHED BY DEBORAH W. HILLYER Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. (1) Source: Real Capital Analytics Inc., headquartered in NYC, is an independent data and analytics firm focused on the investment market for commercial real estate. RCA offers comprehensive data on commercial property transactions that take place around the world. Visit www.rcanalytics.com. Additional information from Alec Pacella, managing partner, senior vice president, NAI Daus.
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JANUARY 25 - 31, 2016
THE AKRON EDITION
WORKFORCE: A Diverse Mix Bhutanese refugees bolster Akron P. A1
Business of Life Different breed Reptile show brings wide variety of attractions
DRILLING: Nexus fight Opponents seek an ally
P. 22-23
P. A5
The List
TECHNOLOGY: Solar power
CLEVELAND BUSINESS
Project creates unique partnership P. A6
Largest commercial property sales P. 27
Service cuts put Akron-Canton on an uneven flight path Airport sticks to renovation plans as officials still see positive future BY JAY MILLER
United Airlines’ decision to end its hub operation at Cleveland Hopkins International Airport may be hitting operations at Akron-Canton Airport nearly as hard as it has hit the Cleveland airport. United’s decision in February 2014 to steeply cut its service out of Cleveland Hopkins set off a chain of airline service decisions that has seen several carriers trim their offerings from CAK, as the city of Green airport is known in the industry. CAK management, though, remains upbeat. In a joint interview in a conference room overlooking the airfield, Richard McQueen, the airport’s president and CEO, and Kristie VanAuken, the airport’s senior vice president for marketing and communi-
CONTRIBUTED PHOTO
SEE AIRPORT, PAGE 12
Bioscience loses luster Sector employment falls by 10%; industry groups still see promise BY CHUCK SODER csoder@crain.com @ChuckSoder
Northeast Ohio’s bioscience sector isn’t doing quite as well as you might think. Local employment in that sector dropped by 10% between 2011 and 2014. New company formation fell over the past few years, too. Investors are still pumping money into young biomedical companies in
Northeast Ohio, but that was probably the most positive piece of news about this region in a recent report from BioOhio, a membership organization that aims to grow the state’s bioscience industry. Granted, the “bioscience” category leaves out hospitals and doctors’ offices. It also doesn’t include the red-hot health care software industry — which includes fast-growing local companies like Explorys and OnShift. But the category does include a few high-tech industries that eco-
Entire contents © 2016 by Crain Communications Inc.
nomic development groups have long touted as key to the future of Northeast Ohio. Industries like medical devices, pharmaceuticals and research and development. Those industries held their own elsewhere in Ohio, but in this region they shrank during a period when the nation as a whole was emerging from a recession. Why? For one, a few large medical device companies in town have run into trouble with U.S. Food and Drug Administration over the past few years. FDA problems pushed one of those companies, Ben Venue Laboratories, to shut down a massive drug manufacturing complex in SEE BIOSCIENCE, PAGE 26
Hotel arrangements for RNC is tricky task NEO has been ‘welcoming’ to committee BY JAY MILLER jmiller@crain.com @MillerJH
Did you ever have to make hotel arrangements for a group traveling out of town and thought you had developed a plan that would satisfy every traveler who requested a bathroom that met the requirements of the Americans with Disabilities Act or who demanded that their room wasn’t too close to the elevator? But it didn’t, and you heard about it. Imagine, then, if you had been in charge of housing for the Republican presidential nominating convention in 2012 and you heard from Steve Munisteri, the Texas GOP chairman who found that his assigned hotel was 25 miles from the Tampa Bay Times Forum, the convention site. He didn’t just complain to the Republican Committee on Arrange-
ments, the organization with the hotel plan. He complained to every reporter who would listen, telling them that he would have preferred to be closer, as he had been since the days when Texans George H.W. and George W. Bush topped the ticket. “If I weren’t state chairman, if I were a delegate, I probably wouldn’t go,” Munisteri told the Dallas Morning News after the assignments were announced April 30, 2012. News reporter Christy Hoppe wrote about speculation that the demotion was a consequence of former Texas Gov. Rick Perry’s challenge to eventual nominee Mitt Romney. That’s one of the challenges the 2016 Republican Committee on Arrangements, or CoA, hopes to avoid. It has to juggle hotel rooms for 50,000 people who will be staying in 135 hotels. And every state delegation has its own preferences — being as close as possible to the convention site, of course, but also making SEE RNC, PAGE 24
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SHANE WYNN
HUDSON’S BROADBAND PLAN - P. A2 z PIPELINE FOES WANT TO BE HEARD - P. A5 z DOWNTOWN SOLAR PROJECT - P. A6
Naresh Subba opened Family Groceries in Akron’s North Hill in 2008 so that Bhutanese refugees could have access to ethnic food from their homeland.
Putting out the welcome mat As the world wrestles with refugee crisis, Akron sees community, economic benefits from its Bhutanese population BY BRIAN LISIK Among the myriad issues facing European nations and the United States regarding how – or whether – to grant refugee status to a growing number of displaced people worldwide, the potential drain on public services and the economy overall is among the greatest concerns. But for the past decade or so, Akron has become a beacon of sorts for Bhutanese refugees, according to Elaine Woloshyn, executive director for the International Institute of Akron. The institute is a nonprofit agency that each year provides services to over 8,000 immigrants in Northeast Ohio and resettles over 500 refugees. It is one of the largest of its kind in Ohio, Woloshyn said, and 80% of the organization’s clients are from the tiny Himalayan nation of Bhutan.
In fact, a growing number of Bhutanese refugees located in other U.S. cities have begun relocating to Akron in recent years. “The biggest reason is that there is a very high quality of living, a low cost of living and a welcoming community,” she said. “We also work diplomatically with countries, and right now the world is seeing the biggest number or refugees since World War II, so it is a crisis.” The result of this crisis locally, however, has been a shot in the arm for Akron.
Entrepreneurial spirit After living for more than a decade in a Bhutanese refugee camp in Nepal, Naresh Subba arrived in the United States as a college student in 2002. By that time, Subba was already in his mid-30s and far from the typical refugee.
After earning a doctorate in nuclear physics from Kent State University and teaching for a time, Subba saw a need — and an entrepreneurial opportunity – right in his new American backyard. He and his family opened Family Groceries, which carries Bhutanese cuisine. The store has remained a staple to residents of Akron’s ethnically diverse North Hill neighborhood, which is home to the city’s largest population of Bhutanese refugees. While the terms immigrant and refugee are often used synonymously, the primary difference is the reason the person has left his home country. Refugees are defined as people who are forced from a nation or region because of political or ethnic persecution. A January 2015 study by the American Society/Council of the Americas and the Fiscal Policy Institute found that while immiSEE BHUTANESE, PAGE A4
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Hudson moving quickly on the rollout of its Velocity Broadband network BY DAN SHINGLER
Economic driver
dshingler@crain.com @DanShingler
For Howington and the city, though, the issue is far more important than one business. Offering faster Internet service is a linchpin of the city’s economic development plan. The Velocity service is already speeding up the city’s plan to buy land and buildings to double the size of its downtown business district with more office and commercial space, as well as other development plans, Howington said. Hudson might be ahead of many other cities in Northeast Ohio, but it’s not alone in looking at how it can improve its economy with Internet infrastructure. Fairlawn, for example, has proposed its own broadband network, and Fairlawn Mayor Bill Roth reportedly promised in his recent state of the city address that Fairlawn “will be Ohio’s first Gigabit city.” Hudson already claimed that mantle last fall, but time will tell which city can offer the service to all of its residents first. Expect more communities to follow suit. Cities across the country are looking at their available Internet service, and many are realizing that it’s a key to current and future economic development. “It’s interesting that all of these cities across the country are taking this on, because it’s a pretty expensive and arduous process to lay the entire city with fiber,” said Jan Gusich, CEO of the Hudson-based public relations firm Akhia. “It’s not just Hudson. It’s a pretty big deal across the country. Even the president is encouraging cities to do this.” Gusich, who represents the city, said her firm is already a Velocity customer. Not that the new network is going to speed up everything in Hudson, of course. The city, known for its tranquil setting, slow pace and even slower traffic through its downtown, won’t lose its character, officials promised. “When you get to Hudson, you can’t go anywhere fast,” joked Comeriato. “But while you’re sitting in traffic, you can really go fast on the Internet.”
Most days, a funny thing happens in Hudson just after 3 p.m. Internet connections slow down as school kids get out of class and onto their phones, tablets and computers, sending photos, streaming media or downloading big files like movies. It might not get noticed by someone surfing the web or sending an email, but for businesses working with data-heavy applications or downloading big graphic files, it’s a problem. It’s become such a problem, city officials said, that businesses were complaining. That’s why Hudson is going into the Internet service business — and more quickly than even the city first envisioned. Last fall, Hudson launched its Velocity Broadband service, offering businesses Internet bandwidth of up to a gigabyte with a service the city promises will prove both faster and more reliable than existing offerings from cable, phone and wireless companies. The service so far is only available in a few business parks and small sections of the city – most notably a business complex on Executive Parkway and most recently the Milford Road/Acme Plaza. Officials said it will spread to downtown and along the Ohio Route 91 corridor in 2016 before going citywide by the middle of 2017. What was expected to take up to five years to install will instead be ready in a little more than two years, largely because of the demand city officials said they’re seeing. It was either build a better Internet or lose businesses to places that had it, said city manager Jane Howington. “As technology is increasing, more and more people are getting online all the time,” she said. “When school lets out, half of these
businesses are either kicked off or they see the little wheel spinning around and around on their computers … We have a lot of small local businesses in Hudson, and we found that a lot of our businesses were having to displace their workers, to their homes, to get Internet.”
Plugging in The city’s project is quite an undertaking. It requires running new fiber optic lines virtually everywhere the service will be provided, said assistant city manager Frank Comeriato. Fortunately for the city, its public services employees can handle much of the work, and there are existing poles above ground and underground routes so the work will cost less than it would in an undeveloped area. The city has so far budgeted about $800,000 for its initial capital costs and about $1.2 million to continue installing and maintaining the system, Comeriato said. So far, both the city and its initial customers appear happy with the new system. Of the roughly 600 businesses in the current service area, about 50 already have signed up for Velocity. They can buy as much or as little bandwidth as they need, up to a full gigabyte, Comeriato said. Some have already increased their bandwidth, and last fall the city itself increased
the amount of bandwidth it purchases for resale. That’s as planned, Comeriato said, noting that both the city and its customers likely will buy more and more bandwidth as technology needs increase. So, how fast is the city’s service? If a business pays for the full gigabyte, it’s faster than most people have ever seen. “At a gig you can download one full-length, (high-definition) movie in about three to five seconds,” Comeriato said. “The average (home) Internet connection is about 30 megabytes – this is a thousand times faster.” Geoffrey Pope uses the new service as director of compliance and technology for Millennium Capital and Recovery Corp., a repossession-service company in Hudson that deals with a lot of financial and other data. The company began using Velocity in November and pays for 100 megabytes of bandwidth, Pope said. So far, it’s worked as advertised. “Thus far, it’s been excellent,” Pope said. “We’ve experienced no downtime with the process, so we’ve been very happy with that, and the speed is wonderful. Prior to moving over, we had some issues with network speeds that we had to correct … The issues that I had before, with people coming to me and saying ‘What’s going on? Why is this so slow?’ — I don’t have that anymore.”
ENTREPRENEURSHIP: Tobin Buckner
Diversity is a competitive advantage for new ventures No matter where you live or work, it is well documented that diverse teams and organizations routinely outperform those dominated by one race or gender. In the 21st century, industries ruled by sameness simply will not be as innovative and competitive as they could and should be. Increasingly, the entrepreneurial world is realizing that diversity and inclusion are not about charity — in fact, they are actually a strong tactical advantage for growing businesses and local economies. Yet there remains a critical gap in support for women and minority-led ventures. To understand why, you must first understand that minority entrepreneurs have historically had great difficulty connecting with ecosystems that ostensibly exist to nurture and support them. Much of this has to do with the inherent lack of diversity in industries like venture capital and financial services.
However, some of the disconnect also stems from the lack of cultural connectedness — recent immigrants are often hesitant at first to reach out to those outside of their circle, and many minority groups have grown accustomed to expecting little support. Overall, there is also a pervasive belief in diverse communities that opportunities for investments, loans and other forms of support are somehow “reserved” for others and will not be worth the time and effort to pursue. This keeps many minority groups off of the playing field. Thankfully, the game is starting to change. Right here in Akron, the Akron Urban League, Akron SCORE and Kent State University have joined forces to create the Partnership for the Minority Business Accelerator (PMBA). Launched in 2007, the intensive, 15month program provides education,
mentoring, business planning and many other resources to AfricanAmerican and Hispanic-owned businesses in Summit, Medina and Portage counties. “Hands down, the networking with business professionals and other entrepreneurs has heavily influenced my business plan,” said Ron Moore, African-American owner of ProCon Technologies, a client company of both PMBA and the Akron Global Business Accelerator. “(Through PMBA and AGBA), I’ve been introduced to several individuals, organizations and business leaders that have led to both state contract awards and increased loan amounts. “The information exchanged and learned from other successful business mentors has been paramount to our success.” Going forward, programs like PMBA will be joined by programs like JumpStart’s Core-City initiative.
Funded by the Cleveland Foundation and the U.S. Small Business Administration, the project is intended to help entrepreneurs and small business owners in Cleveland’s core grow their businesses and create good jobs within their communities. The initiative is just one of a growing number designed to expand the reach of Northeast Ohio’s entrepreneurial service organizations to better serve a broader crosssection of the community. Northeast Ohio is a large region with a wealth of racial and ethnic diversity, particularly among students and young people. Only by fully embracing this diversity and using it to our advantage will we lay the groundwork for a strong economic future. It’s not about charity. It’s about acknowledging that diversity is what makes a community smarter, more creative and ultimately more successful than the sum of its parts.
Tobin Buckner is JumpStart’s Akron entrepreneurial community manager and contributes a monthly blog about entrepreneurship in the region.
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grants make up 13% of the U.S. population, 16% of the labor force and 18% of business owners overall, they represented 28% of “main street” business owners in 2013. “Main street” businesses are retail, accommodation, and food- and neighborhood-service operations that tend to cater to a smaller customer base and market area, the report states. Hem Rai moved to Akron in 2015. The Bhutan native opened the Nepali Kitchen, also located in North Hill, shortly after arriving. Rai, 26, said he sees the Nepali Kitchen as more than a place that serves authentic ethnic cuisine. It is a community gathering place – for both fellow Bhutanese refugees and the city as a whole. “I want to do something that is good for us and good for everyone,” he said, adding that he has plans to add music and pool tables in the near future. “A lot of our people – even younger people – think, ‘I should go out to a bar or something.’ But they don’t know the language, so they go to their job, come home and watch TV.”
Already risk-takers In its August 2012 report “Open For Business: How Immigrants Are Driving Small Business Creation In The United States,” the Partnership for a New American Economy stated that nationally the rate at which immigrants start new businesses grew by more than 50% between 1996 and 2011, while the businessformation rate for the native-born declined by 10%. “Immigrants are more than twice as likely to start a business as the native-born,” the report states. “Leaving one’s home and immigrating to a new country to start a new life is itself an entrepreneurial act, so it is perhaps unsurprising that immigrants are disproportionately entrepreneurial.” Adele Dorfner Roth, deputy director of planning for economic development for the city of Akron, couldn’t agree more. “I have seen it,” said Roth, herself the daughter of immigrants from Brazil. “They are people who are already risk-takers. They come to this country; they don’t know the language. But they do it so that they can make a better life for themselves.” However, immigrant-owned small businesses – and the relatively thin profit margin often experienced because of a limited customer base – is a small part of the overall impact Bhutanese refugees in particular have had on Akron’s economy and community, Roth said. But with its largest economic driver being the professional, polymer research and biomedical fields, Akron is not able, nor particularly interested, in competing for companies looking for cheap labor. “Akron is not a cheap labor city like some. We are a management and skilled labor force,” Roth said. Though their work experience might not fit perfectly with Akron’s workforce needs, immigrants and refugees still are good for the city, Roth said. The New American Economy study found that the average immigrant who moves to a
Frascella called the company’s decision to hire from among the Bhutanese refugee population a “shot in the dark” initially. “The International Institute approached us, and it seemed like the right time to try something different,” Loebick-Frascella said. “We were experiencing growth and needed to hire additional employees. Currently, we have 30 Bhutanese refugees working at Main Street Gourmet — that’s 22% of our workforce.” There have been challenges along the way, she said, but the benefits have far outweighed them. “Both the two refugees that we hired in 2008 are in leadership roles today,” LoebickFrascella said. “We find that not only are these people hardworking and intelligent, they do have a desire to advance and take on additional responsibility.” Sandridge Food Corp. is a fresh-food manufacturing company based in Medina. Human resources director Dale Fortner said the company began hiring refugees in early 2014 to staff its busy spring season. “We currently have 32 Nepalese working at Sandridge Food Corp. on first and second shift as mixers, operators, or packing/skidding material,” Fortner said. “One individual has advanced to a leadership role in a department and others have success in our third-shift sanitation as we clean the machines and rooms prior to the next day’s production.” A higher than expected turnover rate among those early hires, however, was an issue, Fortner said. “Since last year, we have had 27 others come and go, so the turnover is higher than we like,” he said. “I think some ran into transportation issues, some were able to secure other jobs and, of course, some did not work out.”
“The biggest reason is that there is a very high quality of living, a low cost of living and a welcoming community.” — Elaine Woloshyn of the International Institute of Akron on why the city attracts refugees
The future
Clockwise, from top: a citizenship classroom at the Internatioal Institute of Akron; Elaine Woloshyn, executive director; and clothing available to refugees. (Shane Wynn photos) community nationally raises the total value of house wealth by $92,800. That certainly has been the case in Akron, according to Roth. “One of our fastest growing housing (markets) is in North Hill, and our largest immigrant population is in North Hill,” she said.
Fitting into the workforce Despite the fact that Akron’s economic engine is not exactly fueled by immigrant and refugee labor, business owners like Subba and Rai do represent an important and growing piece of the city’s business landscape. Still,
most Bhutanese refugees are filling less-demanding job categories, Woloshyn said. “Much of the employment is entry level in light industrial and food processing,” she said. “And a lot of that has to do with their ability to speak English.” Being able to tap into that entry-level workforce has been a great advantage for a number of area businesses though. Main Street Gourmet is a Cuyahoga Fallsbased bakery manufacturer that provides dessert items for national restaurant and grocery chains. Since 1987, the company has grown to 138 employees. Human resources director Kelly Loebick-
Bishnu Gajmer, 45, opened Everest Family Jewelry in the North Hill neighborhood in 2015. While the business has thrived, Gajmer said, the majority of his clientele is made up of fellow Bhutanese, and Everest Family has strong ties to its homeland. “We order all our (raw material) from relatives (in Bhutan), who then send it over,” he said. “Our customers are mostly Bhutanese people, but in our country, gold is so expensive – something $60,000 there you can buy for $500 here.” Meanwhile, as one of Akron’s first Bhutanese transplants, Subba said his concerns for his own family neighborhood are much the same as any Akron resident. He called North Hill a “very welcoming neighborhood” but said he still worries about broad issues, like education, as well as specific ones, like increasing local crime. According to Woloshyn, Akron’s Bhutanese population continues to face a number of challenges – employment and English language skills chief among them. And refugee-owned businesses continue to struggle with establishing a consistent customer base outside the Bhutanese population. But Roth remains hopeful. “I think the trend is going to continue (in Akron), and it is a benefit you can’t necessarily measure in dollars,” she said.
Contributed photo
SPOTLIGHT ON: Bhutanese Business Owners Business name: Nepali Kitchen When it opened: 2015 Owner: Hem Rai Country of origin: Bhutan When he came to the U.S.: 2009 Family, background: Rai came to the United States with his wife and his brothers, settling first in Dayton before moving to Akron. Why he opened his business: “Akron is a simple place to live. I used to work in a restaurant in Nepal, so I thought, ‘Why don’t we do it here?’ The challenge is wondering if anyone will help you – but I knew my food would be good.”
Business name: Family Groceries When it opened: 2008 Owner: Naresh Subba Country of origin: Bhutan When he came to the U.S.: 2002 Family, background: Subba came to the United States in 2002 as a student and earned a doctorate in nuclear physics from Kent State University in 2010. He opened Family Groceries with his brother and nephew. Why he opened his business: “Bhutanese refugees (in the neighborhood) were looking for typical food like they used to get back home, so we set up the store.”
Business name: Everest Family Jewelry When it opened: 2015 Owner: Bishnu Gajmer Country of origin: Bhutan When he came to the U.S.: 2011 Family, background: Gajmer came to the United States with seven other relatives. He lived in Texas and Oregon before moving to Akron in 2015 and opening Everest Family Jewelry in February of that year. Why he opened his business: “My father and grandfather used to make jewelry in Bhutan.”
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Nexus pipeline opponents seek ally in Sherrod Brown BY DAN SHINGLER dshingler@crain.com @DanShingler
Those opposed to the Nexus pipeline that developers hope to install across parts of Summit, Stark and Medina counties might have a new ally. Some opponents have been talking with staffers from U.S. Sen. Sherrod Brown’s office, including a conversation on Jan. 14 that has left them hopeful. “It went great,” said Paul Gierosky, a leader of the opposition and a Medina County landowner, following the meeting. He said the Cleveland Democrat’s staff has promised to help get his group in front of federal regulators. “We want a meeting with the Federal Energy Regulatory commissioners,” he said. “We want to sell them our plan to have this thing rerouted.” After the meeting, a spokeswoman for Brown confirmed that the senator plans to bring up the matter with Federal Energy Regulatory Commission and request that at least some of the commissioners hear out his Ohio constituents. In the meantime, both sides are digging trenches along Nexus’ proposed route. Not for the pipeline itself — but for the war over whether it will be built as planned. Those opposed to its construction are digging in for what they say is a long fight, while the line’s developer continues to pursue its approval with federal regulators. “Think of us like the Energizer bunny — because we are not going to go away,” vowed Jonathan Strong, a Medina County businessman, landowner and a member of the Coalition to Reroute Nexus (CORN).
Growing opposition It’s already been a long fight. It began around September 2014, when Gierosky and a few others took offense that a pipeline company — Texas-based Spectra Energy — presumed it could cross their land with a huge 42-inch, high-pressure natural gas line to Canada. Since then, the once-retired Gierosky has gone from quiet to quite active. He not only helps lead CORN, but now he’s running in the upcoming primary for a spot as a Medina County commissioner — in part because he doesn’t think the existing commissioners listen to or advocate for county landowners. “We must become the change that we seek,” Gierosky said, when asked why he’s running. Opposition has been growing since Gierosky and Strong first became involved. CORN is a loosely knit group of people connected largely by Facebook — about 600 of them, Strong said, though some of the posts on the group’s page have gotten more than 20,000 visits in the past.
“We’re pretty knit together. If something goes on in Wayne County, I get a call. If something goes on in Summit County, I get a call,” Strong said. By “something,” he’s referring to actions by pipeline developers and survey crews, which have been fighting for access to land along the line’s proposed route. Local governments along the pipeline’s route have also taken note, and many of them are opposed. In Summit County, Green and New Franklin have both raised concerns, as have many others. “I think it’s in the neighborhood of almost 20 governments now — 15 to 20, somewhere in between there,” said David Mucklow, a Green attorney who is representing many of the landowners and working with governments opposed to the line.
Most support Green’s proposed reroute, which would take the line south of its current route and away from populated areas of Summit, Medina and Stark counties before it turns north toward Canada. But Spectra so far has not budged. It has said Green’s plan would be unfeasible, because it would add almost 10 miles and millions of dollars to the cost of the $2 billion, 250-mile line now proposed. The last word from Spectra came at the end of November, when it announced: “The NEXUS Gas Transmission project reached a significant milestone Friday, November 20, 2015 as it formally applied to the Federal Energy Regulatory Commission (FERC) for a Certificate of Public Convenience and Necessity to construct and operate an approximately 255-mile interstate natural
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Green has gone so far as to oppose the pipeline and propose a new route. City officials there have been concerned that the pipeline will interfere with their economic development plans, especially along I-77, where the pipeline could create nogo zones for construction in an area targeted for development by the city.
Goal is rerouting No one is really expecting to defeat the pipeline entirely — and that’s not even a goal of Gierosky, Mucklow and most others opposed to it. “It’s 100% guaranteed that FERC will approve this pipeline. Our goal is to reroute it,” Gierosky said. Mucklow agreed — and the more he has worked on the Nexus issue, the more he’s convinced that it will be tough for landowners to get a fair hearing in front of FERC. “I’m always going to remain optimistic that it can be rerouted. What I’m disappointed in finding as I go down this path is that the FERC seems to be an agency that brags that they’ve never declined a pipeline and that they’re funded 100% by (energy industry) applicants,” Mucklow said.
gas pipeline. The NEXUS project provides critically needed Appalachian Basin natural gas to growing markets in Ohio, Michigan and the Dawn Hub in Ontario, Canada.” If FERC grants that certificate of need, without requiring any route changes, the deal is probably done. A part of the process that Mucklow, Gierosky and others have been complaining about is that a FERC approval essentially will give Spectra eminent domain to build the pipeline on land whether landowners want it or not. FERC probably will rule at the end of the year, Mucklow said. If it does require a reroute, it might be the first time it’s done so, he said. But Gierosky said his group hopes Brown’s intervention will help them set a precedent. If not, he and others still will fight as long as they can, with as many tools as they can find, he said. “We’re fighting for change, because this process needs to change … If we can affect the way FERC handles pipelines, maybe we can help the next community,” Gierosky said. “If this was a local ordinary or normal business, they would have gotten the message a long time ago.”
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Downtown solar project is shining a light on smart-battery builder Design Flux BY JUDY STRINGER Battery management could be called the Achilles’ heel of solar power. Anthony Margida prefers the term “missing link.” With capacity on the rise and prices falling, solar panels are becoming more appealing to consumers and businesses. The problem is, of course, the sun is not always shining. And conventional battery systems used to store sungenerated energy and make it available at night — or during dreary Northeast Ohio winter days — are not very efficient. “If you take that energy and put it in a battery, you lose some of it. And then when you take it out of the battery, you lose some of it also,” Margida said. “Ultimately it affects the cost, and when it comes right down to it, there is a business decision to use this type of energy.” Margida hopes the city of Akron — specifically the city’s business incubator, the Akron Global Business Accelerator, which he runs — will play a key role in making the business case for green energy through the demonstration of locally engineered smart-battery technology. This spring, 17 solar modules, manufactured by Prism Solar Technology of Highland, N.Y., will be mounted on the roof of the accelerator’s offices in Canal Place, the former B.F. Goodrich Tire plant on Main Street. Those modules annually will collect 8,260 kilowatts of solar energy, which will be stored and regulated with a novel battery-management system being commercialized by one of the accelerator’s resident companies, Design Flux Technologies. The panels will power LED lights throughout the 19th-century building. Electricity cost savings, projected between $30,000 and $40,000 per year, will cover the city of Akron’s $173,000 investment in equipment and installation in roughly five years. “We are enabling our client to advance [its] technology, a pretty sig-
Hold the AC
nificant technology, in a way that ultimately we would still get a payback on and a return on our investment,” Margida said.
Game changer University of Akron electrical engineering students Courtney Gras and Tom Vo founded Design Flux in 2011. At the time, the duo was working in partnership with Tallmadgebased Meyers Motors to improve the performance of battery packs in its electric vehicles. Inconsistencies in the operation of individual cells — the degree to which each cell is charged, discharged, balanced or equalized (or lack thereof) in a given cycle, for example — reduces battery life. They came up with a microcontroller that uses software to balance each cell, optimizing battery performance and longevity. Kent Kristensen joined the company as chairman and CEO in 2012. The serial entrepreneur had served as an outside adviser and business consultant to Design Flux through the nonprofit JumpStart Inc. Once inside, he challenged the engineers to take the technology to the next level, primarily by reducing the number of components involved in large-scale battery systems and rethinking how electronics interact with long-lasting lithium batteries. “The fundamental challenge is how you manage power going into and coming out of the battery, and we address that at the cell level within the entire pack or battery,” Kristensen said. Design Flux’s energy storage system integrates charging and discharging capabilities into the microcontroller, eliminating the loss of energy between disparate “boxes” and enabling real-time cell-level management. That is particularly attractive in clean energy applications, according to Bill Hagstrand, senior director of cluster acceleration for the regional economic development
Anthony Margida (left) of the Akron Global Business Accelerator and Kent Kristensen of Design Flux Technologies. (Shane Wynn) group Team NEO. Every inch of efficiency gained means solar – or wind energy, for that matter — becomes a more viable option to fossil fuels. “The ability to manage energy storage in a power management system like that really helps maximize the value of the renewable energy,” he said. By reducing the need for parallel components and enabling system functionality through embedded software, the technology can also address the demand for more uni-
versal battery solutions, which Kristensen said is especially important for the electric vehicle industry. Currently, every company has its own battery technology; each update requires many of components to be redesigned. This adds to the overall cost of electric vehicles. “A battery is an advanced material device, and what we are talking about here is making it a programmable battery,” Kristensen said. “That technology does not even exist today.”
Design Flux has drawn interest from the likes of BMW, but given that it can take four to seven years to roll out a new automobile — electric or not — its more immediate plans are to premiere the technology with a little help from the sun. This is where the Akron Global Business Accelerator comes into the picture. Design Flux’s smart battery will manage and optimize solar energy from panels perched atop the incubator’s downtown digs. Rather than feed the power into the building’s existing electricity infrastructure, however, low-voltage transmissions will be sent directly to new LED lights through a microgrid network. Jerry Hughes, Prism director of sales and marketing, sees two distinct advantages to this approach. First, solar systems produce DC, or direct current electricity. Typically, the DC has to be converted to AC, or alternating current, used in homes and businesses. As luck would have it, LEDs need DC power, so there’s no energy loss in the conversion. The second advantage is the proect’s scope. The 8,260 kilowatts of annual production is just about the amount of energy used in the average home. If the technology is successful here, the company would have a strong case in the residential electricity market, Hughes said. The solar project has big-picture benefits as well. For Design Flux, Kristensen said, it is demonstrating its innovation in a space that welcomes guests to see the technology at work. For the accelerator, Margida said, it’s a chance to bolster a promising client company, save money on future utility costs, add to its technology ecosystem and reduce its carbon footprint. He and Hagstrand agree the project is also an opportunity to showcase Akron as a forerunner in clean energy. “It has the potential to change a lot of the way we look at energy availability today,” Hagstrand said.
Stark County angel fund prepares for takeoff after shaky start BY JUDY STRINGER After more than three years getting off the ground, Impact Angel Fund, an investment group designed to help technology-based startups in Stark County and surrounding areas, is ready to take flight. Chairman Jon Elsasser said the 34member fund is finalizing due diligence on two technology ventures and hopes to dole out the first chunk of its $1.8 million pot this quarter. “Hopefully [we make] another one in the second quarter,” said Elsasser, a former Timken Co. executive. “We think with the size of our fund, we will be able to invest in about five companies. … Our objective would be to get those invested in the next
two years.” It has been a less-than-smooth takeoff. After Impact had failed twice to secure a grant from the Ohio Third Frontier economic development program, Third Frontier in June 2014 awarded the investment group a loan of up to $1 million, which would match the anticipated $1 million investment on the part of its members. The actual terms of the loan, however, did not arrive until early in 2015. And, Elsasser said, “they were quite unattractive.” “We and all the other award-winning angel funds got together, and we went back and worked with the state to come up with a set of terms that was satisfactory with us and our in-
vestors, as well as to them.” When all was said and done, the delay meant that Impact did not finalize placements with its own members until late summer. The fund sold 36 units, raising $900,000, which – as it makes investments – will be matched by the Third Frontier loan. Since then, Impact has been meeting formally as a fund and heard presentations from three companies during the second half of 2015. Another five to six companies, Elsasser said, are on the fund’s radar for future meetings. “We will be looking at them this year,” he said, adding that Impact’s screening committee meets the third Thursday of every month at Stark State College.
Among the current investment hopefuls are a cybersecurity company, two startups with wastewater treatment technologies, a health care technology venture and a battery storage firm. Impact is also eyeing two startups in the biomedical space. The fund will consider early-stage companies anywhere in Ohio, although it prefers those in Northeast Ohio. It’s even better if they are in the central to southern portions of the region. Along with making money, Elsasser noted, one of the goals of Impact is to “grow some new businesses in our backyard.” Momentum in the next 18 months will help determine the likelihood of an Impact II, which is something El-
sasser, as an investor himself, would like to see to diversify the fund’s portfolio. The 10,000-feet view of a successful fund (or funds), however, would be disproving naysayers who doubted Stark County communities or their neighbors had much to offer, according to Steve Paquette, president and CEO of the Stark Development Board. “We feel like between the AkronCanton area and companies like Timken and Goodyear and others, there are a lot of entrepreneurs sitting here, probably working out of their houses,” Paquette said. “Our aim is to prove it can be successful and to continue to go after financing for new ventures down the road.”
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Nightlight helping spark Akron’s Historic Arts District BY BETH THOMAS HERTZ To Kurtiss Hare, good films can be transformative — and not just for the viewer, but, just maybe, for a whole city. Hare runs The Nightlight, a nonprofit cinema in Akron’s burgeoning Historic Arts District, a funky dynamic arts, culture and dining scene that is attracting a diverse crowd along a northern corridor in downtown. Hare, 33, sees The Nightlight as something more than a great place to see a great movie. “We are advancing cinema and community in tandem,” he said. “This ecosystem is pretty impressive for a downtown, but it’s just the beginning of something bigger. We want people from across Northeast Ohio to come and realize downtown Akron is cool.” In addition to The Nightlight, that ecosystem brings together live music venues, restaurants and retailers from Main Street to High Street just before the All-America Bridge, known to locals as the Y Bridge. A Canton native, Hare stepped into his role as Nightlight executive director in September. He’s been with the organization since 2013 — when it was known as Akron Film+Pixel — starting as film programmer and communications officer, and later serving as program and operations director. At the time of Hare’s appointment to executive director, his predecessor, Steve Felix, praised Hare’s impact on the young nonprofit. “Kurtiss has been instrumental in establishing the high caliber of films at The Nightlight, and in making the venue run well behind the scenes,” Felix said at the time. The Nightlight opened in July 2014, with funding from many local sources, including the John S. and James L. Knight Foundation, the GAR Foundation, the Akron/Summit Convention & Visitors Bureau and the Margaret
Clark Morgan Foundation. The nonprofit had an annual budget of $260,000 in 2015, according to Hare. It has drawn more than 20,000 moviegoers since it opened, with 16,000 attending in 2015.
At the movies The 52-seat theater shows independent and foreign films, as well as some revivals, that audiences can’t always find at other theaters, said Hare. Many people who attend films at the theater come to the downtown district for a drink or a meal before or afterward, he said. Kyle Kutuchief, Akron program director for the Knight Foundation, said The Nightlight has been a great demonstration on the impact an arts venue can have on an area. “It is near other destinations, but it is also a destination in and of itself,” he said. He said the foundation has invested in the theater to help bring diverse films to Akron, and it is pleased The Nightlight is helping grow the arts district, calling it the density that downtown needs. The Nightlight tries to make movie-going an experience. Each film starts with a brief synopsis from a staff member (often Hare) about what makes it unique to help audiences appreciate it better. “We love to talk to people about movies, and we think our audiences enjoy the dialogue. We never offer any spoilers though!” he said. Hare, who lives in Cuyahoga Falls, is such a film lover that he often attends films at places such as the Cedar Lee Theater in Cleveland Heights on his days off. He does not feel The Nightlight is duplicating other theaters’ efforts. “We are here to fill in the gaps, and the gaps in Northeast Ohio are pretty big, especially for people who live far from Cleveland,” he said. The Nightlight was one of the sites open for
Akron’s First Night on New Year’s Eve; Hare estimates that about 400 people visited that evening. “It was standing-room only,” he said. To further its role in the community, The Nightlight often partners with other venues, such as facilitating neighborhood screenings in conjunction with the Cleveland International Film Festival. Films were shown at The Nightlight, the Akron-Summit County Public Library and the Akron Art Museum. The theater also has been a venue for Akron Art Prize entries. The Nightlight employs five people (some part time) and has another handful who help out as needed, Hare said. “Some were customers who are fans of art movies who asked if they could work here,” he said. Forty-five people applied for one recent job opening. No doubt many of the 45 folks applied because they love movies, but others might have just wanted to work in what is turning into an on-the-rise downtown district. Blu Jazz+ club is a major draw in the area, as are restaurants and bars such as Crave, Uncorked Wine Bar, 3 Point Restaurant and Urban Eats cafe; live music spaces such as Musica; and retailers such as Rubber City Clothing. A new hotel at the corner of Main and Market streets, The United 1: A Blu-tique Hotel, is planned to join the mix lwithin a year. The hotel — and many of the buildings in the district — are owned by Akron developer Tony Troppe. Troppe’s theory is that “you are not a real city unless you celebrate your arts.” “Arts fuel cities of the future,” he said. He has turned many vacant buildings in the area into usable space. He has renovated many of the buildings, then leased them to operators at favorable rates until they are successful.
Kutuchief of the Knight Foundation, which has helped fund some of the district’s growth, said Troppe’s “energy and ability to bring people in have been transformative.” And it’s not just the new places that are bringing in the people. Long-time assets in the vicinity that are also a draw include the Akron Art Museum, Akron-Summit County Public Library and the John S. Knight Center. Downtown Akron Partnership president Suzie Graham called the area an exciting combination of arts and cultural opportunities, and having them clustered together encourages pedestrian traffic. “That builds character in a district,” she said. Kutuchief said that other vendors are opening in the area via “pop-up leases” through which they can open a space with reduced rent, increasing the chances they will succeed.
Looking ahead Keeping the momentum going in the district and its surrounding areas is the order of the day for those invested in their success. Troppe has incorporated housing into the area and hopes to add even more. “People want to live where they work and play,” he said. Not far from the district, he is converting a 45,000-square-foot warehouse built in 1904 into 24 apartments and a brew pub near North and Howard streets. Ten units are already leased, he said. As for The Nightlight, Hare also sees lots of room to expand. He would like to add more screens, do more dinner-and-a-movie promotions with nearby restaurants, offer private rentals and host artist-in-residence and filmmaking workshops. “There are so many ways to grow and meet our mission,” he said. “We are just beginning.”
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