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VOL. 37, NO. 26
JUNE 27 - JULY 3, 2016
Business of Life
Source Lunch
StartupBus sparks ideas, collaboration
Thomas Schorgl, Cuyahoga County’s guru of arts and culture
Vehicles have rolled from cities all over the world since 2010. Page 27
CLEVELAND BUSINESS
The List
NEO’s largest nonprofits Page 31
Page 28
SPORTS BUSINESS
‘The End’ of ‘The Curse’ By KEVIN KLEPS kkleps@crain.com @KevinKleps
Every gut-wrenching Cleveland professional sports event always gets a title. Now — in the dreamlike wake of the Cavaliers’ improbable, championship-clinching rally in the NBA Finals — there are different, oddly positive, themes dominating the conversation. You could call it The End — the Cavs breaking a 51½-year, 146-season, 18,802-day championship drought with a seven-game victory over the record-setting Golden State Warriors. But most — again, in a strangely upbeat manner — seem to think it’s just the beginning. “The way I look at it is the woe is me is done,” said Bob DiBiasio, the Indians’ senior vice president of public affairs. “Whoever was going to be the first — us, the Browns or the Cavs — we were gonna erase that unfortunate woe is me as a Cleveland sports fan mentality.”
East Ninth Street from the bl imp Goodyear photo
SEE END, PAGE 29
For more Cavaliers celebration pictures, see pages 12-15 THE REPUBLICAN NATIONAL CONVENTION IN CLEVELAND
Hospitals are ready, TV stations will focus on NEO will work together By JAY MILLER
jmiller@crain.com @millerjh
By LYDIA COUTRÉ lydiacoutre@crain.com @LydiaCoutre
As Cleveland braces for the thousands of people expected to flood the region for the Republican National Convention, area hospitals hold the same mantra that many Northeast Ohioans are likely following: prepare for the worst, hope for the best.
The health systems have been collaborating and preparing for well over a year in hopes of a smooth mid-July week. Officials with Cleveland Clinic, MetroHealth, St. Vincent Charity Medical Center and University Hospitals have been meeting regularly with city and county officials and Cleveland’s Division of Emergency Medical Services. “We’re cooperating as systems SEE HOSPITALS, PAGE 30
Entire contents © 2016 by Crain Communications Inc.
When Donald Trump and other Republican luminaries take their turns at the podium next month at the Republican National Convention, the reporters and producers of hundreds, maybe thousands, of television news organizations will focus their efforts on the messages emanating from the Quicken Loans Arena stage. The exception, though, will be the handful of hometown broadcast sta-
tions, whose cameras will be trained elsewhere. “We’ll show the flag at The Q,” said Fred D’Ambrosi, news director of WOIO-TV, Channel 19 and WUAB-TV, Channel 43. “But our primary coverage will be on the effects on the people of Cleveland, and how (the city is) being seen by the rest of the country and how it’s perceived by the rest of the world.” WOIO and WUAB, which are jointly owned and operated by Raycom Media Inc. of Montgomery, Ala., like the other local stations, will let their affiliated networks — ABC, CBS, Fox
and NBC — focus on the official goings-on. But they all will have anchors suites in The Q and videographers and reporters on the convention floor. Most of their reporters, camera crews and video uplink trucks assigned to convention coverage, though, will roam the streets looking for interesting people and compelling stories. D’Ambrosi and news directors from the other local commercial stations — WEWS-TV, Channel 5, WJWTV, Channel 8, and WKYC-TV, Channel 3 — said they have been SEE TV, PAGE 8
WHO TO WATCH
Meet eight of the best and brighest in the regional finance industry FOCUS, Pages 19-25
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Learn how connecting with us in Cleveland can help you grow anywhere. Contact John Masters at john.masters@baml.com and Sam Prentis at sam.prentis@baml.com
All figures based on 2015 Bank of America Corporation Ohio data. “Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed. ©2016 Bank of America Corporation. ARLRHXNF 06-16-0394
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CRAIN’S CLEVELAND BUSINESS z JUNE 27 - JULY 3, 2016 z PAGE 3
Sequoia is ‘doubling down’ with RAV buy By JEREMY NOBILE jnobile@crain.com @JeremyNobile
Sequoia Financial Group’s acquisition of RAV Financial Services plants a flag in Cleveland proper for the growing Akron-based wealth and financial management firm. It also signals a future passing of the torch for Bob Valente, RAV’s founder, who established the business 34 years ago. Valente will not immediately retire when the acquisition is effective Oct. 1. He’ll stay with the company as a client and transition specialist, maintaining the various relationships he’s cultivated over the decades as dust of the merger settles. This deal illustrates financial planners truly practicing what they preach — planning for the future. “Philosophically, every business owner seeks a vital successor that will continue its mission statement — and we have found that in Sequoia,” Valente said. “RAV has always focused on our clients’ needs and successes, and those objectives are intrinsic with our combined company cultures.” Valente said he doesn’t plan to retire for at least another five to seven years. “We want to see the fruits of our labor through another generation of clients,” he said. Terms of the June 17 deal were not disclosed. RAV comprises about $500 million in assets under advisement and a staff of 12, all of whom are joining Sequoia. The merger of both fiduciaries will bring Sequoia to about $3 billion in assets under advisement with 60 employees spanning offices in Akron; St.
“Philosophically, every business owner seeks a vital successor that will continue its mission statement — and we have found that in Sequoia.” — Bob Valente, RAV founder and CEO
Clair Shores, Mich.; Tampa, Fla.; and now Beachwood, where RAV is based. The merger will create additional economies of scale. Sequoia president Tom Haught said that will translate into additional investments in new technology, research capabilities and compliance, which is expected to become stricter in the wake of the U.S. Department of Labor’s fiduciary rule expected to result in more rigorous documentation for work on retirement accounts. Another attractive feature of the merger is the acquisition of veteran principals. Both firms tout similar cultures, and each report that the climate for acquiring the best talent in this field is particularly competitive right now. So the merger just felt right, said Haught, who founded Sequoia 25 years ago.
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Tom Haught founded Sequoia 25 years ago.
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“Our teams coming together will help both talent pools play at a higher level, which is helpful for the client service experience,” Haught said. “We also think this will give opportunities for those people to specialize in areas they’re passionate about.” The specialization factor is becoming increasingly common in the financial planning sector today — and other financial disciplines, for that matter. It’s a way for firms to differentiate themselves in a competitive market and signals another way Sequoia is eyeing a long-term path to viability as a business. Sequoia has had a fiscal office in Cleveland, but having another physical location in Beachwood is valuable in terms of service. Keeping that Beachwood office is important to existing clients, Haught said, and means clients in the upper end of the Northeast Ohio market won’t have to travel as far to meet with an adviser. “There’s a good nucleus of exiting clients and team members there,” Haught said, “and we also think that is a growing location.” Sequoia’s last acquisition prior to RAV came in a 2012 merger with Hammerman & Strickland, a Florida outfit that expanded the firm’s presence to the South. Balancing organic with acquisitive growth remains the firm’s focus as it achieves additional scale. However, there aren’t any intentions currently to push Sequoia into a massive company, Haught said. In fact, any future acquisitions at this point would most likely come in existing markets in Ohio, Michigan and Florida — not new regions. “We see all this as a doubling down on our commitment to planning,” Haught said, “which is the foundation for client engagements.”
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z JUNE 27 - JULY 3, 2016 z CRAIN’S CLEVELAND BUSINESS
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“Shaker LaunchHouse” no longer exists. LaunchHouse moved from Shaker Heights to Highland Heights last week, and a long list of tenants who rented desks and offices at the former Shaker LaunchHouse building are in the process of making that move as well, said CEO Todd Goldstein. As for the building itself, it now has a new name, new management and a modified mission. The former car dealership is now simply called “The Dealership,” and on June 13 the city of Shaker Heights finalized a controversial plan to turn the building’s lease over to the Shaker Heights Development Corp. Like LaunchHouse, the nonprofit community improvement corporation still aims to provide affordable space and services to entrepreneurs, small businesses and anyone else who needs a place to work. But it also aims to put a greater focus on persuading its tenants to stay in Shaker Heights as they outgrow the Lee Road building. That didn’t happen while LaunchHouse was running the facility. During that five-year period, at least five businesses left the facility, but none stayed in the city, according to Shaker Heights Mayor Earl Leiken. “The important point is that this facility connect well with the broader goal of redeveloping Shaker, particularly this Lee Road area,” he said. Though Goldstein wasn’t happy about the decision to transfer the lease — he had hoped to work out a new deal with the city — he has moved on, at least in the physical sense. LaunchHouse signed a lease on a 6,000-square-foot space in Alpha Park, a Highland Heights industrial park, on Friday, June 17, and it opened the new space on Thursday, June 23. “There’s already, like, seven people working out of the space,” Goldstein said on June 23. “We’re up and running.” A total of 28 former Shaker LaunchHouse tenants have told LaunchHouse that they will be renting space at the new facility. Five plan to take private offices, which cost $500 a month, and 23 plan to rent desks, which cost $125 per month, Goldstein said, adding that two completely new office tenants also are coming on board. Back in Shaker Heights, The Dealership has received commitments from eight office tenants and roughly 10 desk tenants, said Nick Fedor, executive director of the Shaker Heights Development Corp. Neither facility has signed final leases with all of the tenants mentioned above. LaunchHouse took its furniture — desks, tables, bookshelves, whiteboards, etc. — to Highland Heights. So in the interim, The Dealership’s tenants are relying on “temporary desks and chairs,” Fedor said on Thursday, June 23. But he noted that
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Workers remove the Shaker LaunchHouse name. (Alex P. Michaels) the building would be receiving furniture left over from the redevelopment of the former Huntington Bank building, thanks to a donation from Welty Building Co. LaunchHouse has cooperated during the transition. Thus, the city of Shaker Heights plans to release the company from its noncompete agreement this week, said Tania Menesse, the city’s economic development director.
Same ol’, same ol’ Though LaunchHouse is in a new location, on the second floor of 675 E. Alpha Drive, Goldstein stressed that many things will remain the same. It’s still run by the same four people, and it will still offer educational events and investment capital for the most promising companies that use the space. The Dealership plans to host events as well, with the help of other organizations that work with entrepreneurs and small businesses, Fedor said, citing the Small Business Administration and the Economic Community Development Institute. In addition to the 6,000 square feet that LaunchHouse has already leased, the company could end up taking another 14,000 square feet on the same floor if it needs more room. And if it wants to host a large event, there’s room on the Alpha Park campus to do so. The owners of the industrial park tried to recruit LaunchHouse to Highland Heights six years ago, before the company moved to Shaker Heights, said Evan Klotzman, vice president of Alpha Park Inc., which manages the 550,000-square-foot park from an onsite office. Not only does Klotzman feel that the Highland Heights area needed more office space for solo entrepreneurs and small businesses, but he said he personally enjoys helping small tenants become large ones. He plans to help connect them with other tenants in the park, which houses machine shops, software companies, recruiters and a bank, among other businesses. His father, Kerry Klotzman, owns Alpha Park, as well as other properties, through a company called Derf Limited. “Whatever it is, we like connecting people,” Evan Klotzman said, declining to provide details about LaunchHouse’s rental agreement. LaunchHouse did not pay rent in s Cleveland Bus sines ss Volume 37, Number 26 Crain’s (ISSN 0197-2375) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 441131230. Copyright © 2016 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s s Cleveland Bus sines ss, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 212-2 210-0 0750
Shaker Heights. Neither will Shaker Heights Development Corp.: The 18month lease agreement that goes into effect on July 16 will cost the nonprofit $1. But the development corporation will be tasked with finding a more sustainable way to run the facility.
Path to self sufficiency Though city officials have credited LaunchHouse with helping create an entrepreneurial vibrancy in Shaker Heights, they have argued that the partnership wasn’t sustainable. They’ve said that LaunchHouse hasn’t kept up with repairs on the aging structure, forcing the city to bear too much of the maintenance burden. Plus, some of the services at Shaker LaunchHouse were paid for using money from fundraisers and donations — money it receives through the Shaker Heights Development Corp. But that funding stream has weakened in recent years. A few outside organizations that had provided donations stopped doing so, plus the development corporation is now interested in contributing capital toward other projects in the city. The Dealership will still in some ways be subsidized by the city. In addition to providing the development corporation with free rent and paying the building’s taxes, the city will help with maintenance should major repairs be needed. But Fedor suggests that the development corporation should be able to handle most maintenance without city assistance. Fedor and members of the nonprofit’s board have real estate experience, he said. Plus, the development corporation has hired FASS Real Estate Services — another business on Lee Road — to manage the building. FASS was chosen because it had “good experience with managing commercial properties” and “great reference checks,” Fedor said. The development corporation is hunting for an organization that would manage The Dealership’s desk rental operation as well as its events. The plan is to have that company and Fedor himself work out of The Dealership. Together, they should be able to handle front desk duties, Fedor said. Under that structure, the building should eventually become self-sufficient, he said. “We feel we’ve developed a model that can be sustained over the long term,” he said. Subscriptions: In Ohio: 1 year - $64, 2 year - $110. Outside Ohio: 1 year - $110, 2 year - $195. Single copy, $2.00. Allow 4 weeks for change of address. For subscription information and delivery concerns send correspondence to Audience Development Department, Crain’s Cleveland Business, 1155 Gratiot Avenue, Detroit, Michigan, 48207-9911, or email to customerservice@crainscleveland.com, or call 877-824-9373 (in the U.S. and Canada) or (313) 446-0450 (all other locations), or fax 313-446-6777.
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Cleveland attorney Daniel Lindner started trying to rent out his office at the Sincere Building, 2077 East Fourth Street, on the day after he heard Cleveland was anointed as the host of the 2016 Republican National Convention. But it’s been no bonanza. After posting a sign in his huge windows overlooking convention site Quicken Loans Arena, calling on real estate brokers to help him find prospects and personally pursuing leads, Lindner has one tenant that he won’t identify occupying about half his office for the convention. However meager it may be, Lindner’s efforts landed an RNC-connected tenant for the convention. That’s more than many downtown landlords can say. Janice Parham, executive vice president of the Building Owners and Managers Association trade group, said that aside from K&D Group’s full-floor deal at Halle Building, 1228 Euclid Ave., all she’s hearing about are facilities being taken over by delegations for events. “I’ve talked to a few people who were being asked about office space. I haven’t heard since that anything was done,” Parham said. Brokaw, the prominent advertising and digital marketing firm, wanted to lease its Warehouse District office at the 425 Lakeside building for the RNC. The agency had advertised on Facebook. Advertising Age also wrote about the firm offering its sleek modern offices for RNC. The result? “We got one offer from members
of the Michigan delegation,” said Tim Brokaw, co-CEO and co-owner, “We did not accept it because they also wanted to camp out. We decided it was not worth it.” Similarly, Lindner notes members of the firm he leased space to have sleeping quarters in a residential condo in the mixed-use building. Doug Price, CEO of Willoughbybased K&D Group, said aside from leasing 40,000 square feet for the GOP’s Committee on Arrangements at the Halle Building, 1228 Euclid Ave., the firm has not gotten any additional temporary office leases associated with the convention. Housing’s another story. K&D has leased corporate suites with 30-day minimum stays at its downtown apartments to people working with the RNC, with some coming in as early as December and the number increasing to 60 as the year passed.
Mostly a party Rico Pietro, a principal at the Independence-based Cushman & Wakefield Cresco brokerage, said he did “a massive amount of advertising, reached out to the campaigns and to D.C. firms, but we did not get a lot of traction.” “Honestly, I haven’t found firms that have signed for office space for RNC,” Pietro said. “I’m kind of surprised it has not come in. We understand in the past pools of clients have come in for conventions.” While leasing of restaurant and event space for RNC has been vigorous, Pietro said he believes local companies making space available to customers needing space, and law firms providing conference rooms to clients, have satiated the demand.
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CRAIN’S CLEVELAND BUSINESS z JUNE 27 - JULY 3, 2016 z PAGE 7
for RNC office rentals “Most people come to the convention to go to the convention hall and party. If they need to do some regular office work, they do it in a coffee shop or hotel.” — Matt Cox, a manager for Convention Strategies LLC
d success in leasing out his second-floor C next month. (Stan Bullard)
One new tenant in town leased space for seven years with the idea of serving RNC needs. Matt Cox, a manager for Convention Strategies LLC, said he leased 3,000 square feet at the Hanna Building, 1422 Euclid Ave., for his Ohiobased Capitol Partners LLC to open a Cleveland office. He designed the 3,000 square feet to accommodate the influx of staffers Convention Strategies, a concierge-type firm that pops up to serve convention will have and serve clients, such as Fortune 500 companies, that might need to stop at an office. He’ll use the office for Capitol Partners postRNC. “Most people come to the convention to go to the convention hall and party,” Cox said. “If they need to do some regular office work, they do it in a coffee shop or hotel.” Pietro said short-term arrangements suit such locations better because the lead times of outfitting an office with WiFi and putting cubicles in place are significant. “It’s much easier to leverage relationships with people you know who have an open office,” Pietro said, than to lease it.
The Trump effect Lindner said he experienced telltale swings of interest in his space associated with what was happening in the GOP primaries. “For a period of time, there was so much demand. The day after (Gov.) Kasich won the primary, the phone rang off the hook,” Lindner said. “I talked to two Fortune 500 companies about space. When Trump started winning, no one was committing. All the brokers heard was that people were looking for restaurants for events or that if companies come they don’t want their products associated with the convention,” he said. “Once Trump became the nominee, no one was interested. How else is it there is no activity 40 days before the convention and no one is calling me for space?” Others privately agree that some big-name companies dropped space hunts when Trump became the standard bearer. Regus, the global provider of short-term office space, has experienced a surprise change in appetite to the suburbs for tenants that usually roost downtown to stick to business as usual. Regan Carver, area vice president for Regus based in Independence, said although the firm has had interest downtown for its convenience, the RNC prompted some local and out-of-town customers to look at its four suburban sites, which they can use interchangeably for the week. Regan noted Regus already has had some customers opt for the suburbs that week to avoid “any traffic concerns” associated with the RNC, but he did not respond to an email asking for specifics.
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TV
CONTINUED FROM PAGE 1 planning convention coverage for more than a year. Several of the stations sought advice from stations in cities that had previous conventions. The other news directors, like D’Ambrosi, were reluctant for competitive reasons to say too much about their stations’ plans. They described strategies similar to D’Ambrosi’s, though most would not even say how large a news team and how much equipment they will have available. “We are constantly reminding ourselves that we are the news source for the people who live here in Northeast Ohio and we want to be here for the audience that’s going to be here long after the RNC is gone so we want to cover everything from a local perspective,” said Brennan Donnelan, news director of WKYC. Andy Fishman, WJW’s news director, said he will have reporters and crews scattered around downtown covering the city and its people. But, he said, his station will be using its space at The Q extensively. “We’ll broadcast every day from the suite,” he said. “We won’t be covering the podium. It will be in the newscast but our emphasis needs to be on Cleveland, how the people here are affected by this thing being in our town, whether its protests or traffic or highway shutdowns or how businesses are affected. Our overall theme is flexibility. I think we have a system in place that will allow us to react and be flexible.” Jeff Harris, news director of WEWS, described his station’s coverage plan similarly. “The main thrust of our coverage is the ripple effect out The Q and into the city and the neighborhoods.” He said. “We’ll have crews stationed all over the city.” Because of increasingly sophisticated technology, the stations will be
able to cover live events happening anywhere conventiongoers gather. The stations will have reporters with backpacks that will allow them to send live video back to their stations using cellular networks. In addition, the local stations are all owned by multi-station operators and will have their own staffs and equipment supported by assets from their sister stations and, in some cases, by their networks or affiliated cable news operations. D’Ambrosi said WOIO will supplement its local team’s work with coverage from cable news’ CNN.
A matter of time The stations also will expand their on-air news programs. Fishman said WJW will anchor all of its 11.5 hours of regular news programming daily, starting at 4 a.m., from its suite high above the convention floor. And he expects, for example, that WJW’s 10 p.m. newscast will run past 11 p.m. if convention activities run past that hour. The other stations, too, expect to extend their newscasts. Donnellan said WKYC will add a 5 p.m. newscast during convention week and will extend its half-hour 7 p.m. program to an hour. It will also extend coverage on the weekend before the convention begins on July 18. The station also expects to extend coverage on the week before the convention. “We really see full-scale coverage beginning a week before the convention starts because there will be so much to report locally — Are we ready? How are we getting ready?” he said. Extended airtime means the stations need to be at full staffing. News directors made it clear months ago that mid-July vacations were out of the question and that work time would be extended. “Everybody knows they’ll be working extra hours and the story will sort of determine what those hours are,” said Andy Fishman, WJW’s news di-
rector. “They’ll go home when we know we’re good to go.” D’Ambrosi said WOIO will expand airtime as well. “We’re confident things will happen that will justify additional coverage,” he said.
Logistical exercises Jeff Harris, news director of WEWS, said his local team will be bolstered by what he described as “major assets” from station owner The E.W. Scripps Co. of Cincinnati, which owns 33 stations in 24 markets, including WCPO in Cincinnati. Though he wouldn’t be specific, Harris said WEWS plans to expand its on-air newscasts during the convention. Also, it will station broadcast crews around the city to follow events and go live at any time. Donnelan said his station group, Tegna, is trying something different. Tegna is a public company recently spun off from media giant The Gannett Co., which operates 42 television stations. He said the station group is bringing a number of journalists, story tellers and digital journalists who will provide unique content for the entire Tegna group. “Rather than each station bringing anchors to stand in the arena doing traditional coverage, Tegna’s idea is to send teams of multi-skilled journalists who can really tell the human, emotional stories behind the politics and around the convention,” Donnelan said. While the news directors described grand plans that they hope they can execute, they also said their first priority was to make sure that their crews on the streets will be safe in the event protests escalate, that the crews can move around the city efficiently and that they can keep in touch with those crews. “My biggest concerns are some of the logistics that you can’t know until you get into it; there’s no way of knowing that until the first day,” Fishman said.
Clinton trumps rival in Ohio ad spending As Republicans start drifting into Cleveland for next month’s party meetings and then the convention, when they turn on the local news in their hotel rooms they are likely to be bombarded by ad spots either plugging their Democratic presidential opponent, Hillary Clinton, or running down their candidate, Donald Trump. The Clinton campaign is committing at least $1.2 million to local TV time over the next six weeks, while the Trump campaign, at least so far, has not bought a single spot. A tally of filings at the local television stations for presidential political advertising through June 22 shows that the ad firm for the Hillary for America campaign, Washington, D.C.-based Greer, Margolis, Mitchell, Burns & Associates, has begun airing a flight of more than 1,000 ad spots that will run on Northeast Ohio’s four major broadcast television stations between June 14 and July 25. The Federal Communications Commission requires broadcast television stations to maintain publicly accessible files — available at https://stations.fcc.gov — of all political advertising purchases. That imbalance is about how presidential campaign advertising has gone this cycle. Earlier this month, Advertising Age, a sister publication of Crain’s Cleveland Business, reported on campaign spending, using data from the Campaign Media Analysis Group (CMAG) of media buyer Kantar Media. Ad Age reported that between April 2015 and June 7, the Clinton campaign spent $25.1 million on television advertising in Ohio, while Trump spent only $1.5 million. More recently, CMAG has report-
$25.1 million Amount the Clinton campaign spent on TV advertising in Ohio between April 2015 and June 7.
$1.5 million Amount the Trump campaign spent on TV advertising in Ohio in the same period. ed that Clinton’s campaign has booked about $7.8 million in airtime over the next six weeks in key states, including Ohio, while Trump has no campaign ads planned for the summer. The Republican candidate still has time to buy ad time since, said Micki Byrnes, general manager of WKYC-TV, Channel 3, “election buys tend to come quickly and late, depending on what other people are doing.” How much is Clinton paying for an individual ad? The cost varies widely, depending on the rating, or the anticipated rating, of the time slot when the ad runs, though federal regulations require stations to charge political candidates the lowest available rate, typically that paid by a high-volume, longtime advertiser. The top price the Clinton campaign is paying for the next six weeks is $16,000 for a 30-second ad scheduled to run June 26 during the “Big Brother” show on WOIO. The lowest? The Clinton ad firm has ordered three spots that will run during the week of the convention, July 18-21, between 4 a.m. and 4:30 a.m. on WJW’s wake-up news for $150 each. — Jay Miller
UPCOMING CUSTOM SUPPLEMENT
Crain Content Studio-Cleveland, in partnership with the Ahola Corporation, takes a look at some of the top issues, challenges and opportunities facing Northeast Ohio’s family businesses. Issue date: 10/17 • Ad close: 8/18
PRESENTED BY:
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Contact: Nicole Mastrangelo • 216.771.5158 • nmastrangelo@crain.com
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After extended struggle, Within3 is now profitable Software company survived by focusing on the drug industry By CHUCK SODER csoder@crain.com @ChuckSoder
There’s a reason why Within3 CEO Lance Hill drinks out of a coffee mug that bears the name of another company. At one point, Within3 was among the many startups that more or less aimed to create a LinkedIn-like tool designed to serve the entire health care industry. And if it had continued to pursue that goal, Hill admits that the Cleveland company probably would be out of business by now. Today, however, Within3 is generating a profit. And it should remain profitable in future months, given the amount of orders that are already on the books, Hill said. How did that happen? In 2012, Within3 temporarily moved away from the idea of building custom social networking sites for hospitals, medical associations and other health care-related organizations. Instead, it focused on drug companies — the vertical where the company had gained the most traction. It was a tough transition. Within3, which once had 45 employees, bottomed out at about 20 employees in 2013. But the move paid off. Now 18 of the 20 largest pharmaceutical companies in the world use Within3’s platform to host private conversations with their medical advisory boards and other health care professionals. Revenue grew by 40% in 2014 and 2015. From that base, the company, which had 25 employees and three open positions as of June 16, is once again starting to move into other parts of the health care sector. The Sermo mug in Hill’s office reminds him to be realistic while pursuing those bigger goals. He got it at a 2007 conference where Sermo’s former CEO stood up on a table and told everyone about the tens of millions in venture capital the medical social media company had just raised. Sermo ended up getting acquired in 2012 after enduring layoffs and watching its growth taper off, according to media reports from that time. “I remember at the time thinking to myself, ‘Man, I hope it’s not just about capital,’ ” Hill said. Back then, Within3 was also “pursuing this shiny object up in the sky, like, ‘Hey, we want to be Google,’ ” Hill said. “I think as a tech company you can get drawn to that. And you can start making decisions and thinking about life in terms of ‘What if we were five times bigger than we are right now — what would we do next?’ … I think for us, it became pretty clear at that time that that was just unrealistic.” These days, however, Within3 can afford to reach higher.
The time zone challenge Within3’s platform does share at least one trait with sites like LinkedIn or Facebook. Its interface is designed to spark conversations in a familiar post-and-reply format. But Within3’s sites are customized
for each client, and they’re typically used for highly specific purposes. For instance, its most popular product is a tool that pharmaceutical companies use to communicate with their medical advisory boards — doctors who give them scientific advice and help them gauge market demand. Not only does Within3 provide a private forum for those conversations, but it structures them so that they don’t run afoul of laws that limit the interaction that drug companies can have with doctors. For instance, a conversation between a drug company and its medical advisory board might take place over a limited period of time. Maybe two or three weeks. Within3’s platform also can be customized for steering committees, speaker programs and clinical trials. Granted, the people who use it could also get together on a webinar, via phone or in person. However, an online forum lets people respond when it fits their schedule, Hill said. “If your trial is global, good luck, because now everybody is in 10 different time zones,” he said. Using an online forum also reduces the chance that a few people will dominate the conversation, said Blake Morrison, who runs venn5 BioConsulting LLC, a San Franciscoarea consulting firm that serves oncology-focused companies.
‘Less intimidating’ experience Morrison “stumbled upon” Within3 in late 2010, back when he led global medical research and the medical science liaison team for Onyx Pharmaceuticals, a San Francisco-area company that’s now owned by Amgen. At the time, Onyx was involved in a collaboration with Bayer, so Morrison was looking for a way to help liaisons from the companies communicate with their medical advisory boards. The platform worked well, so he introduced Within3 to Sunesis Pharmaceuticals when he joined that company in 2014. He described an instance where a Sunesis steering committee used the platform to discuss a clinical trial that failed to meet its primary target — even though the treatment in some ways still appeared to be beneficial. The company received wide ranging commentary even from junior members of the group, perhaps because an online environment that lets people think about their comments is “less intimidating,” said Morrison, who has done consulting work for Within3. “It really enlightened us to a diversity of opinion that you sometimes don’t get,” he said. Now Within3 is once again building platforms for organizations it previously would have turned away. For example, it’s working with NantHealth, a medical diagnostics company in Culver City, Calif., to build a community for health care professionals involved with an immunotherapy project called Cancer MoonShot 2020. Within3 also has plenty of room to grow within the pharmaceutical industry, domestically and overseas, Hill said. He noted that the Within3 platform has tools that drug compa-
nies can use throughout the lifespan of a product. And a drug company with many different products could use many different Within3 sites, he added. Though Within3 customizes those sites for each customer, “95% is standard,” Hill said. “We’ve built our business to be incredibly scalable on that front,” he said.
‘Achievable and believable’ Within3 has no plans to raise capital over the next year or two, Hill said, noting that the team “can derisk the company quite a bit” in the meantime. Within3’s existing investors did add capital to the business when it was in turnaround mode. Why did they stick with the company through such hard times? The investors are sophisticated enough to know that early stage companies will often start with a business plan that turns out to be flawed, according to Marc Morgenstern, who has been a director with the company since 2008. In Within3’s case, the investors believed that Hill had the skills to fix the company’s flaws, according to Morgenstern, who has invested in a long list of early stage companies through a firm called Blue Mesa Partners, which has offices in Ohio and California. “They said, ‘I want to back Lance.’ And they did,” he said. Hill knows how to attract capital, attract talent and execute a plan, Morgenstern said. He’s also a good listener — a skill that helped Within3 create a turnaround plan informed by the marketplace. “What he laid out was something that was both achievable and believable,” he said. Likewise, Hill said his investors have been “absolutely amazing.” “If we didn’t have the investors that we have, we’d have been dead … in 2012,” he said.
What’s your Broker’s 3-Year plan for your health insurance program? LEARN MORE J www.armadarisk.us/3yearPlan? or contact Ed Purcell, 216 350 5052
We Protect. You Grow. CLEVELAND
TAMPA
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Opinion From the Publisher / Editor
Cleveland delivers on and off the court
Editorial
Fill it up One of the many pleasures of the Cleveland Cavaliers winning the NBA championship was seeing downtown’s streets teeming — or maybe, in this case, teaming — with activity, both on the night the Cavs beat the Golden State Warriors and all day last Wednesday, June 22, for the celebratory parade and rally. Obviously, that kind of bustle on the streets is an anomaly, and we won’t be seeing hundreds of thousands of people downtown on a single day anytime soon. (Though if the Indians make another parade necessary this fall, we’re more than game.) It does, however, make it seem even more plausible and appealing that the city might one day reach a longterm goal of the Downtown Cleveland Alliance: 25,000 downtown residents. DCA sees that figure as a threshold level for establishing a consistently vibrant downtown. A recent report commissioned by the organization found the downtown residential population is about 14,000, up 79% since 2000. During an interview with Crain’s editorial board, DCA president and CEO Joe Marinucci said that based on residential redevelopment projects underway or soon to be developed, “that will take us over the 18,000 mark we’ve projected by 2018.” Predictions are hard, but if that pace kept up, a downtown population of 20,000 would be within reach by the end of the decade. The people who hit downtown’s streets last week were there because of the fun provided by a sports team, and Cleveland has done well in adding glitzy amenities — the restaurant- and club-filled Flats East Bank and East Fourth Street neighborhoods, and a remade Public Square among them — that make the city fun to visit. Those are important for attracting residents, too, but as the DCA report, “Downtown Cleveland: The Dynamic Engine of a Talent-Driven Economy,” found, it’s the availability of good jobs in or near the city center that can make downtown a complete “live, work, play” area.
A couple key findings from the report: ■ Downtown’s residential growth “is tied to emerging knowledge economy sectors. Over one-fifth (21%) of downtown residents are employed in health care, while 12% work in the high-skilled sector of professional, scientific and technical services (e.g., law, accounting, engineering and architecture, research and development).” ■ Downtown as a central business district “is pivoting toward higher-wage employment, while simultaneously experiencing total job losses. Total jobs in downtown declined from 113,248 in 2002 to 91,695 in 2011 before rising to 94,503 in 2014. Simultaneously, the number of higher wage jobs increased from 42,521 to 52,569, or by 24%. The concentration of downtown jobs earning over $40,000 annually went from 37.5% in 2002 to 55.6% in 2014.” Those are good trends in that they show the downtown workforce is trending up in skill levels — a major advantage as the economy shifts away from traditional jobs and toward more knowledge-based work. To keep downtown appealing to such workers, and to the next generation of such workers, the basic functions of wellmanaged cities are every bit as important as the fun stuff. DCA sets a good example by allocating 70% of its $4.1 million annual budget for the Ambassador program designed to keep downtown clean and safe, two critical components if growth is to continue. Public transit is important, too, as the study showed there is growing interest among University Circle health industry workers in living downtown. The HealthLine bus/rapid transit system is a major asset there, but given the Greater Cleveland Regional Transit Authority’s budget challenges, transit is a potential threat to downtown’s momentum. Downtown already is growing nicely, and an even stronger pace is within reach. We just have to make sure we don’t take it for granted.
PUBLISHER AND EDITOR: Elizabeth McIntyre (emcintyre@crain.com)
CLEVELAND BUSINESS
MANAGING EDITOR: Scott Suttell (ssuttell@crain.com) SECTIONS EDITOR: Timothy Magaw (tmagaw@crain.com)
I’m still in disbelief days after the Cleveland Cavaliers did the impossible, making a historic comeback to win the NBA championship over the heavily favored Golden State Warriors. I walked the streets of downtown Cleveland last Wednesday and marveled at the sea of humanity: A million strong gathered to celebrate the Cavs’ NBA championship with a parade and rally. Young and old, some in strollers and others in wheelchairs. Black and white, Hispanic and Asian. Blue- and whitecollar, a few in ties but mostly in T’s. All together, and all in. Any time there’s a crowd that big, you’ll hear about some bad actors. About skirmishes over prime position, rudeness and general nonsense. But what I saw was just the opposite. Random acts of kindness broke out around me. Bump into someone, and a contest would break out to see who could apologize first. Strangers eager to track down a police officer to help a distraught couple find Elizabeth their lost child. New-found friends laughing McIntyre and embracing. People who haven’t been downtown in years marveled at the changes – “Look! There’s the chandelier!” – and flooded restaurants and bars they’ve heard about but never visited. Seeing what they’re missing, they will hopefully return downtown when the confetti is cleared away. And why not? Cleveland should be proud of the relatively peaceful displays it put on last week in the wake of the epic victory and in the waves and waves of people who came down for the parade. Crowds were controlled. Could they have been contained better on the parade route? Would better-applied logistics have helped? Undoubtedly. But in Cleveland’s defense, it’s been 52 years since this city won a championship and 68 years since the city held a heroes’ parade. You try to deal with one million people flooding a roughly 40-block area with limited parking and a transit system not built to handle such volume. The good news is, we’ve been through it now, so we’ll be ready for the World Series parade in November. It’s a good problem to have. I’ve uttered those words many times since last Sunday night. Minutes after LeBron James fell to his knees on Father’s Day after fulfilling the promise he made to bring a championship home to Northeast Ohio, I realized Crain’s Cleveland Business had a problem — a big one. Our Family Business Forum we’d been planning for months was scheduled for Wednesday, June 22 — the likely date for the championship parade. The hundreds of attendees and panelists who signed up for the forum would most likely rather be at the parade than our event. A quick phone call the next morning to the event’s presenting sponsor, the Ahola Corp., proved we were on the same page: We clearly had to reschedule, which we did for Aug. 3. We weren’t alone in recognizing that last Wednesday was pretty much a holy day of obligation for any able-bodied Cleveland sports fan, whether they lived here or not. Out-of-towners, and even locals, filled downtown hotels to capacity. The Playhouse Square productions of “Phantom of the Opera” and “Steel Magnolias” were postponed, as well as countless business meetings and conference calls. People adjusted and made it work. Patience and kindness, for the most part, prevailed. And when Cleveland returns to the big stage again next month for the Republican National Convention, we will deliver again. It’s what we do in here Believeland.
WRITE US: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Cleveland Business, 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113, or by emailing letters@crain.com. Please include your complete name and city from which you are writing, and a telephone number for fact-checking purposes.
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WE ARE THE Personal View
On the road to another chance for some Cleveland neighborhoods By JOE ROMAN The challenging task of moving a major Cleveland economic initiative forward steadily continues in several neighborhoods on the city’s East Side. The effort is centered in what is certainly one of America’s more ravaged urban areas, pitted with vacant lots, abandoned buildings and surrendered hope. The disappearance long ago of tens of thousands of American factory jobs created many such areas throughout the nation’s industrial heartland. Far from the increasingly bright lights of downtown Cleveland and University Circle, the seemingly forgotten neighborhoods in these dimmed sections of Kinsman, Buckeye-Woodhill, North Broadway and Central offer up a somber testament to the sometimes devastating power of change. It is impossible to single out any one entity or event as the blame for what has amounted to decades of disinvestment. As the jobs left, so too did the rooftops that once populated these proud neighborhoods. And there is no easy fix. Indeed, it would be far easier to simply look the other way and bask in the brightness of our many successes in other parts of Cleveland. But we’re not looking the other way. Instead, we’ve assembled a deep, diverse and determined team of agencies and community leaders who are very focused upon giving this part of Cleveland the chance it deserves to succeed. This includes our community development corporations, which have already spearheaded millions of dollars of investment throughout these neighborhoods and business leaders who are committed to expanding their operations — and attracting new opportunities to the core city. The aptly named Opportunity Corridor will offer an efficient, long-planned connection between the highway system and booming, job-generating University Circle. This roadway will not be an unfettered, high-speed autobahn. Instead, painstaking efforts continue to appropriately integrate this 35 mph, accessible boulevard into the neighborhoods. There are many questions about the numerous benefits this project will offer: ■ Will the Opportunity Corridor’s improved access to University Circle help to stoke even further that area’s incredible and welcome job-creating growth? Yes. ■ Will the Opportunity Corridor offer vastly improved access in the aforementioned, downtrodden neighborhoods, thus offering up a huge enticement to businesses that value efficient transportation for their products and employees? Yes.
■ Is this multi-faceted project being done in large part with the sincere and significant hope that it will offer fresh economic opportunity to Cleveland residents in this long-neglected section of the city? Yes. Much of the work that is now being done on the Opportunity Corridor is not sexy. It is tough and intensive duty, performed by many dedicated people. Their efforts may not grab headlines, but it is big news in terms of the city’s future. And it’s already paying benefits, as the project now begins the second of its three construction phases. As of April 30, there have been 330 jobs created as a direct result of the Opportunity Corridor project or accompanying programs. Many of these jobs have been filled by Cleveland residents. We all expect that number to grow. The majority of properties needed for the boulevard construction have been acquired or are in negotiation. In every instance where an existing business is impacted by the project, efforts are being made to 1) keep the business in the same neighborhood or 2) keep the business elsewhere in the city of Cleveland or — if both of those first options fail — continue operations elsewhere in Cuyahoga County. In all such projects involving land acquisition, there will always be challenges and dissatisfaction. Change, as we know, is sometimes painful. But all the partners are working very, very hard to treat everyone fairly. The project is welcomed by many, including Joseph D. Miceli, CEO of the 160-employee Miceli Dairy Products Co. on E. 90th St. More than half of Miceli’s employees are Cleveland residents, and the company — which expanded in 2013 — is committed to growing in the future. “This roadway is going to be an asset for our business and the neighborhood,” said Miceli. “The Opportunity Corridor is going to enable our company to continue its growth, and it’s going to improve access throughout the entire area. We are optimistic that Opportunity Corridor will attract more businesses here.” The path to progress is never easy or perfect. But for all of the initiatives that I have been involved with in Cleveland during the past 20 years, I can proudly say that rarely does a project offer so much promise and hope for our city as does this one.
Roman is CEO and president of the Greater Cleveland Partnership, one of the nation’s largest chambers of commerce.
Web Talk Re: Cavs win it all (The title) is a great moment for Cleveland. … I don’t think anyone really knows what to say. It’s like cave dwellers seeing sunlight for the first time. — Donald Templeman Thank you, LeBron! Thank you, Kyrie! Thank you, Dan (Gilbert) and David (Griffin)! CLEVELAND!!! — pjj16
Re: Ohio Supreme Court seeks comment on commercial dockets The commercial docket was a very good idea for businesses. In the Court of Common Pleas, in Cuyahoga County, anyway, the civil cases take a back seat to criminal cases — and there are a lot of criminal cases. Strictly for speeding up the timeframes and sharpening issues in a timely manner, the commercial docket was useful. Every
other area of law — heck, every area of our society — is becoming specialized. A general approach to the courts seems antiquated, especially in such a large county with so many actions going through the courts. — Michael Chase
Re: Browns to scrimmage in Columbus Who in their right mind cares what the Browns do regarding their practice schedule? The Indians and Cavs run professional organizations with good results and a minimum of player scandal, misbehavior, trouble with the police or coaching staff chaos. The Browns are guilty on all counts of these issues. The Browns are now serving up their ongoing annual Road Apple dessert. It is a Road Apple covered in whipped cream. It looks and tastes great for the first few bites, but when you dig a little deeper, you get your annual stinking mess. Don’t fall for it anymore. Put your support behind professional organizations like the Cavs and Indians. — Jim Daniloff
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No drought about it
Cavs, Cleveland find a million ways to celebrate NBA championship
C
leveland waited 52 years for a major sports championship, then threw a party so big it took the Cleveland Cavaliers more than four hours to get there. With a crowd estimated at more than one million, the city celebrated the Cavs with a parade on Wednesday, June 22. When the parade culminated with a rally at a packed Mall B, LeBron James — who earlier in the day said he has “no intentions of leaving” as a potential free agent this summer — made it clear it was time to “get ready for next year.” Huge crowds packed the downtown streets for the celebration, which started with the Cavs’ players and other members of the organization riding in cars from Quicken Loans Arena and making the short drive to East 9th Street before parking outside the Huntington Convention Center of Cleveland.
Fans hang out downtown
View from the bl imp
Jason Miller, Getty Images
Goodyear photo
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LeBron James Jason Miller, Getty Images
Kyrie Irving
Iman Shumpert J.R. Smith
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Kevin Love
Larry O’Brien Trophy
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THE DISH: Lee Chilcote
New venture crafts a winery with a big-city vibe Destiny Burns spent 13 years as a business development executive for large defense companies in Washington, D.C. Then the retired military servicewoman reached an inflection point in her career a few years ago and decided to do something different. “I turned 50 and decided that I needed to take a different path, to get out of the corporate world and follow my passions,” Burns said. “I knew I wanted to do it in my home.” Now the Euclid native is set to open CLE Urban Winery in a 4,400square-foot garage on Lee Road in Cleveland Heights. The venue plans to open to the public in mid-July. The lofted space has been extensively renovated and now boasts painted concrete floors, brick walls, a rollup garage door, a large bar, a rear space that can be reserved for events, and a wall of windows overlooking the winemaking room. Burns said she wanted to create a place where visitors could enjoy a glass of bold cabernet sauvignon or crisp chardonnay, meet their neighbors, and learn about wine in a relaxed setting. “This is good wine made fun,” she
Lee Chilcote is a freelance writer and editor who has written for Vanity Fair, Next City, Belt and other publications. He is cofounder of Literary Cleveland.
said. “We really want it to be a community space where people can come, hang out and talk.” Burns’ business model is based on storefront wineries she saw popping up in the D.C. area while living there. Like those businesses, CLE Urban Winery will make its own wine using grapes sourced from California, Oregon and other parts of the country. This approach allows Burns to open a winery in the city without owning a vineyard. “Wine people like to say, ‘The best way to turn $5 million into $1 million is to buy a vineyard,’ ” Burns said. “Owning a winery is a tough business. This turns that on its head and makes it more accessible.”
3.95%
Dave Mazzone and Destiny Burns of CLE Urban Winery. (Lee Chilcote) CLE Urban Winery will build on Northeast Ohio’s growing thirst for craft beverages. With the BottleHouse Brewing Company located down the street and Boss Dog Brewing Co. set to move into the former Lemon Grass restaurant, the winery will have good company in the immediate neighborhood. Despite outsourcing grape production, CLE Urban Winery has been a significant investment. Burns secured a $288,000 small business loan from KeyBank and plowed her own equity into the business. Now, after a year of work, she’s waiting on the federal government to approve her final labels so she can start selling wine. Dave Mazzone, an experienced wine professional who has worked in Napa Valley as well as venues across Northeast Ohio, will serve as head winemaker. Currently, he also works as a sales representative for R.C. Distributors.
CLE Urban Winery’s first batch of wine was made offsite by taking advantage of some of Mazzone’s connections in the wine world. However, the plan is to make future batches onsite. “Because of my history in the industry, I have relationships that I can leverage for great produce,” Mazzone said. “I can call up my buddy and say ‘I need five tons of cab this year,’ and he’s got it for me.” He stressed that the produce will be very fresh, citing a scenario where the grapes are picked at 5 a.m., placed on a refrigerated truck, and delivered to the winery three days later. Mazzone’s wine list includes a range of varietals. White wine offerings will include chardonnay, riesling, pinot grigio and viognier, while reds will include cabernet sauvignon, pinot noir, merlot and syrah. He also plans to make a raspberry rose, peach chardonnay and black-
berry chardonnay. Ice wine production will start this winter. “I take a minimalist approach to winemaking,” Mazzone said. “I filter wine when it’s needed, but then allow the rest to happen naturally. Good wine is grown in the vineyard, and it’s my job not to mess it up.” CLE Urban Winery will have a modest menu featuring small plates like hummus dip, creamy cashew spread, and truffled popcorn. It will also offer shared plates like a charcuterie and cheese board and a bruschetta board. Wine flights will be available, too. Finally, Burns is planning to serve red wine slushies — known as frappe vino — by the glass or carafe. Wines by the glass will range from $6 to $8. Bottles will start at $15 and go up to $25, and they’ll also be available in batches. Other programs include a wine club called the “UDub Wine Club,” a donation program where nonprofits can use the space for events and earn a percentage of sales, and group winemaking classes. Burns said she chose the Cedar-Lee neighborhood because it’s a walkable, family-friendly area chock-full of independent businesses. She’s also a resident who appreciates the area’s focus on arts and culture. “I took 50 years of my life and career and put it into this new business, including a pile of cash that I’m turning into something that I’m passionate about,” she said. “I’m going to do this for the rest of my life.”
Email Chilcote at clbfreelancer@crain.com or follow him on Twitter @leechilcote.
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Fiduciary rule brings ‘worst-case’ hurdles By JEREMY NOBILE jnobile@crain.com @JeremyNobile
The U.S. Department of Labor’s fiduciary rule has left many financial advisers, even those already doing business by a fiduciary standard, confused about exactly how their firms may be impacted. And while larger outfits, which have more resources at their disposal and connections to some of the countries biggest broker-dealers that are actively investigating the nuances of the rule themselves, may take some solace at this point in knowing clarity will come over time, smaller operations may be feeling a little more anxiety about how the ways they do business could change. “The reality is, these are very vague, general rules,” said Jim Reed, president and founder of Reed Financial Services in Beachwood. “This could potentially set the industry completely on its ear. But I think the issue at this point is it’s still too early in the game to define exactly how this affects us.” The fiduciary rule imposes a higher standard on advisers working on retirement accounts. A driving purpose of the rule is to require advisers collecting commissions on feebased investment products to disclose those to clients by holding them to the fiduciary standard. It’s expected — designed, really — to
drastically alter the commissionbased business. Despite some tough opposition by industry groups on Capitol Hill, many advisers — particularly those already acting as fiduciaries, which in the industry means an adviser is making investment decisions strictly to the benefit of the client, as opposed to investing in a vehicle because they would collect a commission — say the change is good because of the transparency it forces into the industry. Yet, there is a litany of other effects that could come to pass, even for existing fiduciaries. That uncertainty is what has some firms leery about what could happen next. For one, the rule will make it easier for clients to sue their advisers if they believe they didn’t receive beneficial advice, notes Scott Matasar, a Cleveland attorney specializing in the retail securities industry. So what depth of coverage is necessary? And could the sheer potential for more lawsuits lead to a jump in premiums for errors and omission insurance, the professional liability insurance advisers protect themselves with? It’s certainly possible. But the answer is unclear at this point. Meanwhile, how to properly employ a best interest contract, which is an exemption that would still allow advisers to use complex investment products like annuities that the heightened standard seem to preclude, is another catalyst.
“This could potentially set the industry completely on its ear. But I think the issue at this point is it’s still too early in the game to define exactly how this affects us.” — Jim Reed, president and founder of Reed Financial Services
Those contracts, Reed said, seem like they could be an “administrative nightmare.” There seem to be more questions than answers right now. Joe Kean, chief compliance officer at Vantage Financial Group in Independence, said these are the types of issues on his mind. He said he’s currently waiting to hear from the firm’s broker-dealer, Cetera Advisor Networks, on how it intends to implement the new standards. Cetera handles the E&O in-
surance for any business Vantage conducts through them. Say there was some change made on an IRA platform, and there was some compensation an adviser would receive that pushes them into implementing that best interest contract exemption — do the terms of the agreement between an IRA, the firm or the client shift who’s liable for those changes? Does that open up the potential for more unexpected lawsuits? The rule does provide for class-action suits. And while that seems like it would be rare, Kean said, the concern may require firms to increase their levels of insurance. Those are some of the myriad other convoluted and unforeseen effects that are yet to be understood. “If you have some type of umbrella policy, you have to look at that policy and determine if your firm was somehow subject to a class-action lawsuit with punitive damages. You have to look at that coverage and see if that’s sufficient,” Kean said. “In most cases, it probably won’t be.” David Kulchar, executive vice president at Oswald Cos. and director of retirement plan services, said little changes because the firm already acts as a fiduciary other than some tweaks to paperwork. IRA rollovers, for instance, are other items targeted by the rule. Not only might that come with a commission that must be disclosed under the fiduciary standard, advisers
must prove that the move truly benefits the client. Oswald already does that, Kulchar said. But it’s not yet clear if the forms the firm currently uses still will meet the new regulations. If not, that’s a change that will need made. And even if it’s not a major change, it’s still something the firm may need to address to be compliant. Oswald’s broker-dealer is LPL Financial, the largest organization of independent financial advisers in the country. Their IRAs are managed through the similarly massive Global Retirement Partners. Like Vantage, Kulchar said Oswald is waiting on feedback from those partners to understand some of the uncertainties. Granted, these are complex issues, and the theme remains that much of the law remains open to interpretation. While firms have until next April to implement changes, that doesn’t mean some aren’t still worried about what the future holds and how their businesses could be affected. “As a compliance person, I’m looking at worst-case scenarios,” Kean said. “So how long is it going to be before there’s an understanding in the industry where we can direct our advisers on what to do? I do worry a little bit about all this coming down to the last minute where we’d have to scramble to come up with how we’re going to work in this new world.”
Your Financial Harmony Align your personal and professional plans today. For Jeff, managing personal and business finances on his own was challenging. But with the support of his FirstMerit Bank team of advisors, he was able to use their Treasury Management services to optimize his cash flow, Retirement Planning services* to benefit his employees, and Succession Planning services to ensure his company’s future. So now, Jeff has the support he needs to reach his maximum potential—both personally and professionally.
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Sean Richardson, President and CEO, FirstMerit NorthCoast Region, at 216-802-6565 or sean.richardson@firstmerit.com. Tom Anderson, Senior Vice President, PrivateBank, at 216-694-5678 or tom.anderson@firstmerit.com. Follow the latest market trends @firstmerit_mkt
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FirstMerit Bank, N.A. offers products and services through various departments, including the Trust and Treasury Management Divisions of FirstMerit. *Non-deposit trust, as well as certain non-deposit treasury management products, are not insured by the FDIC, are not deposits or other obligations of FirstMerit, or any of its affiliates, are not guaranteed by FirstMerit or any of its affiliates, and are subject to investment risks, including possible loss of principal invested. Member FDIC Jeff reflects a composite of clients with whom we’ve worked; he does not represent any one person.
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The ACE Report AHOLA. CRAIN’S. EMPLOYMENT Crain’s Cleveland Business has partnered with The Ahola Corp., a payroll and human capital management firm in Brecksville, and local economist Jack Kleinhenz to provide monthly data — and clarity — about a key factor in business decisionmaking: the size of Northeast Ohio’s workforce. Seasonally adjusted employment numbers, Northeast Ohio JANUARY: 1,165,273 FEBRUARY: 1,166,961 MARCH: 1,167,019 APRIL: 1,168,968 MAY: 1,173,511 1,150,000
1,160,000
1,165,000
1,170,000
Northeast Ohio job growth paces ahead of state The increase in the number of people employed in Northeast Ohio between April and May — 4,543 jobs — was greater than the employment growth between April 2015 and April 2016, when the region added 3,780 jobs, as tracked by the Ahola Crain’s Employment (ACE) Report. The accelerating growth in May, an increase of 0.39% in the regional
workforce, might not be a onemonth blip. Jack Kleinhenz, the Cleveland Heights economist who created the ACE Report model, said that it “portends an acceleration in regional economic activity.” Kleinhenz’s analysis showed that the employment growth came, in raw numbers, more from the service sector than the manufacturing sector, since 80% of the region’s jobs are classified as service. But on a percentage basis, more were created in the goods-producing sector. The region added 3,538 service jobs, a 0.37% increase, and 1,006 goods-producing, or manufacturing jobs, a 0.47% increase. Strong growth in new manufacturing orders and modest gains in production and exports, Kleinhenz said, helped account for the growth in goods-producing jobs. Employment growth in Northeast Ohio, the seven-county ClevelandAkron area, outperformed on a percentage basis the growth in employment statewide. In Ohio, nonagricultural employment increased 9,200 in May over April, from 5,477,600 to 5,486,800, a 0.17% increase, according to the Ohio Department of Jobs and Family Services, compared with Northeast Ohio’s 0.39% increase. The growth in jobs and the declining unemployment rate — metro Cleveland’s unemployment rate is down to 4.8%, while Akron’s is 4.7% — hides a concern among economists about the declining participation of so-called prime-age men — males ages 25 to 54 — in the workforce. A study released earlier in June by the White House Council of Economic Advisors found that only 88% of the men in that key age group are either working or looking for work. That’s down dramatically from a peak of 98% in 1954. The study concludes, not surprisingly, that the demand for the labor of lower-skilled men is an important factor in the decline and reflects changing technology and automation and the globalization of the U.S. economy. This decline in the prime-age male labor force participation rate, the study found, is particularly troubling since workers at this age are at their most productive. “(B)ecause of this, the long-run decline has outsized implications for individual well-being as well as for broader economic growth,” the study found. “A large body of evidence has linked joblessness to worse economic prospects in the future, lower overall well-being and happiness, and higher mortality, as well as negative consequences for families and communities.” The economic advisers recommend increasing investment in public infrastructure, creating construction jobs, would help boost prime-age male labor force participation. It also suggests reforming community colleges and other job-training systems. — Jay Miller
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Focus Joseph Boehm
Leah Luzier
J. Burner Crew
Ancora
Magnolia Management Group
Nirvana Analytics LLC
Who to watch in finance
Michael Jeans Growth Opportunity Partners Inc.
They’re not just number crunchers. They’re strategic thinkers and trusted advisers. They have a passion for their work, their clients and the Northeast Ohio community. In Crain’s latest “Who to Watch” feature, we’re highlighting some of those up-andcomers and innovators in Northeast Ohio’s finance sector. These individuals might fly under the radar, but many of them are already disrupting their fields for the better. Stories begin on Page 20.
Amanda Lisachenko Reed Financial Services Inc.
Matt Nipper
Wendy Eldridge
Eamon Larkin
KeyBank
Aurum Wealth Management Group
Budget Dumpster
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WHO TO WATCH: FINANCE If you weren’t working in finance, what would you be doing and why? I really love working with people, so probably some sort of counseling, something in that vein, or working with the older generation.
Amanda Lisachenko Chief operating officer, Reed Financial Services Inc. Every financial adviser talks client service, but Amanda Lisachenko takes it to a new level. As chief operating officer of Reed Financial Services Inc., she’s an upper-level executive who still has to devote a significant amount of her time to strategic issues. The idea of focusing on day-to-day client needs may be foreign to C-suite executives at larger firms. Yet, seeing clients excel financially in their own lives is what motivates her more than anything. And she talks the talk. It’s why she’s made it a priority to stay heavily involved as an adviser after leaving a large brokerage house to work at Reed.
“The most rewarding part of the job is working with the clients and helping them,� she said. “They often don’t know if they can retire, or go on vacation, or leave a job. When you tell them they can do all that, you see pure relief in their faces. That’s inspiring to me.� Her colleagues say she’s wholly devoted to any project she gets in to. Reed president and founder Jim Reed credits her with leading projects and initiatives that have helped double the size of the business since 2011. Among a variety of initiatives Lisachenko started at Reed are appreciation days for staff and some
THERE’ S ONLY ONE THING TO DO WITH A CROOK E D S TOCK BROK E R .
unique parties for clients. A Christmas party five years has turned into an annual event. But her spin was to encourage clients to bring their entire families, which can run four generations deep. The holiday events, which are just for fun and don’t focus on business, now draw hundreds of people each year — and that has led to a countless number of referrals, Reed said, in addition to happy families. Another brainchild of Lisachenko’s was a Valentine’s Day cocktail party specifically for single women. The one-off event was so popular that it has evolved into an annual affair
If you weren’t working in finance, what would you be doing and why? I think without a doubt I would have been a firefighter. The job is challenging, respected and stimulating. I believe the schedule would have allowed me opportunity to pursue some entrepreneurial endeavors.
Eamon Larkin
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Eamon Larkin’s career is in the Dumpster. In a good way, of course. As the top number cruncher at Budget Dumpster, he has helped orchestrate what has been an incredible period of growth for the Westlake-based company that contracts with haulers all over the county to take the hassle out of Dumpster renting. Processes that he’s implemented have provided the company the flexibility and stability to scale the business nationally and triple revenue growth since his arrival — reaching nearly $30 million in 2015. This year, the company is poised to do $40 million in business. “It just simply wasn’t scalable to the next level without him,� said Mark Campbell, one of the company’s cofounders. “Without a financial mind on our team, we wouldn’t have been able to get where we’re at. We needed somebody with his skill set.� Larkin — who had grown up in the Cleveland area with Campbell and the company other’s cofounder, John Fenn — joined Budget Dumpster in 2013 after having
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Matt Nipper Senior vice president and commercial market leader, KeyBank drawing dozens of partygoers. Again, no products are sold, and business isn’t discussed. “She’s brought the firm along in so many ways,” Reed said. “She’s a financial adviser as well as an administrator, but doesn’t take credit for a lot of these ideas. She’s doing far more than what a COO would typically do.” The growth in the client base more than pays for all those parties, Reed said. Lisachenko also spearheaded an advisory board at the firm that focuses specifically on women near retirement and the issues they face, carving out her own segmented niche.
Those efforts are in addition to her work as a mentor to younger staff. “We joke with her that she’s sweet talking her way through, but below the surface she’s incredibly competitive,” Reed said. “She follows through, sets things up and holds people accountable. But she’s also very personable. She wants people at the firm to feel involved, and treats both clients and employees like family.” “Really, it’s not just about helping clients, but also helping staff grow and learn and become the people they envision themselves to be,” she said. “That’s what’s important to me.” — Jeremy Nobile
Chief financial officer, Budget Dumpster done some project work for the company with his previous employer, Cohen & Co. “My goal coming out of college was to be a partner at a firm or a CFO of a company,” said Larkin, a graduate of the University of Dayton. “I thought being a partner at a firm was the path I was taking. After conversation with Mark and John, it seemed like stuff was getting over their head and I wasn’t able to put in the type of time (as a consultant). It was getting out the realm of just bookkeeping. They had same feeling.” And it’s turned out to be a good fit. “People look at him as a true leader because of the way he manages,” Fenn said. Since his arrival, Larkin has completely overhauled the accounting and billing processes. He grew his group from two employees to 11. In addition, he helped transition the sales team from compensation system based on hourly pay to one based on sales commissions — something Budget Dumpster’s top brass point to as having helped accelerate sales. He’s also helped the
company build an attractive benefits package for employees. “If we didn’t have all these things in order, we wouldn’t be able to attract that type of talent,” Campbell said. “We’ve been able to attract the talent we need to get to where we’re at right now and the next level.” So what’s it been like working with a group of guys he’s known since childhood? “It’s been nothing but great,” Larkin said. “The beauty of it is we are all extremely honest with each other.” Beyond his work at Budget Dumpster, Larkin enjoys spending time with his wife and kids. He also recently completed training to become a Court Appointed Special Advocate (CASA) of Cuyahoga County, a role in which he will support abused and neglected children involved in the court system. “The way I look at the CASA program is you could go out and try to change the whole world, or you could chip away at it by helping one kid at a time,” he said. — Timothy Magaw
KeyBank saw something special in Matt Nipper early on. At 27 years old, Nipper was named the youngest relationship manager in the country — a position more commonly populated by peers in their 40s and 50s. Needless to say, he felt some pressure, but wouldn’t let it get to his head. All eyes were on Nipper in the company at the time, not to mention those of clients twice his age who spent their careers building up their businesses. Nipper said a strong support network and mentors not only saw potential in him, but helped him succeed. But his colleagues will tell you that it still takes a special kind of person to excel at that position so early in their career. Confident and competitive, Nipper just kept his head down and pushed himself as hard as he could. “I love winning,” he said, “But almost more important than that, I hate to lose.” Dealing with customers, though, takes less drive and more nuance. “There were certainly people with more experience than me, but I just told customers they would never find a more responsive relationship manager,” he said. “What I lacked in experience, I’d make up for in hustle.” It apparently worked. Nipper started his career at Key at 21, was named a relationship manager at 27. Then, he was
If you weren’t working in finance, what would you be doing and why? I would love to be an athletic coach at the collegiate level, probably a college football assistant. I love the interaction in developing people, and I really like football. That would probably be my dream job if I wasn’t in finance.
named Key’s youngest commercial team lead in the country at 34. Today, at 39, Nipper is senior vice president and commercial market leader. Commercial bankers tend to be generalists in nature. But one of the initiatives the bank is currently working on involves creating more niche industry specialties among its bankers — something Nipper is leading the charge on within the wider community bank. “Matt is always looking for ways for us to differentiate ourselves and constantly looking for ways to grow as a person, a leader and to serve clients in better ways,” said Kip Clarke, Cleveland market president for Key’s Community Bank. “His younger bankers see him doing this and really start to get what he’s working at.” It also doesn’t hurt to be a bit charming. “He’s just so passionate, positive and enthusiastic,” Clarke said. “He’s as passionate about serving clients as he is being a leader.” To Nipper, there’s really not much of a trick to success besides working hard and being genuine. “I want people to know that I’d run through a brick wall for them,” Nipper said. “If you handle everything with integrity and honesty and work hard everyday, the little things tend to take care of themselves. But if I didn’t have great people working next to me and for me, I would certainly fail.” — Jeremy Nobile
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WHO TO WATCH: FINANCE
Michael Jeans President, Growth Opportunity Partners Inc., a JumpStart company
Joseph Boehm
Being at the helm of a new company or initiative often provides that rare opportunity to create and mold a vision from scratch. It also means only one person is accountable for failures, as well as successes. Michael Jeans welcomes both sides of the creation coin. “Over your career there are things that you experience that you think maybe could be done a little differently. You get to point a finger when someone else is making that call. Here, there is only one place to point that finger. That was attractive to me,� he said. “Any challenges that might surface down the road would be born out of my own doing.� Two years ago, startup investor JumpStart tapped Jeans to lead Growth Opportunity Partners, its new lending entity launched to support growing small businesses in low- to moderate-income neighborhoods. The first year was infrastructure building, according to Jeans, which included raising the money needed to operate, organizing the governance, applying for nonprofit status and establishing the appropriate organizational relationship with parent company, JumpStart. Growth Opps made its first loan in July 2015 and has completed roughly eight since. Jeans projected the company would have a total of $1 million in loans in the marketplace by the end of this month. Yet, he sees Growth Opps advisory role as important as the loans it places. “Small business and mid-sized alike — and even some of the larger ones — all need to have the right professional partners around them to achieve their goals, plan for market deviations, as well as react to market dynamics,� he said. “The
Parents often have mixed feelings when adult children boomerang home. Ancora Advisors chairman and CEO Fred DiSanto, however, is not at all ambivalent about having former intern Joseph Boehm back in Cleveland. The Rocky River native, now 29, earned a degree from Georgetown University in Washington, D.C., and spent five years working on Wall Street before returning home in April 2014, rejoining the company he interned with after his sophomore year in college. “He is what I call one of our ‘brain gains,’â€? DiSanto said. “He is very intelligent and very good at what he does. We were very fortunate to get him back.â€? Ancora hired Boehm two years ago as a research analyst in its alternative investment group, which focuses on hedge funds. Recently, it promoted him to portfolio manager for the Merlin Partner fund, which, according to Boehm, takes both long and short positions and has a “more event-driven bendâ€? than conventional portfolios. He is now responsible for developing and managing the investment strategy of the fund in addition to investment research. Boehm’s interest in the fast-paced world of stocks and bonds dates back to sixth grade when his grandfather, a local broker at Wells Fargo Advisors, challenged his class at St. Christopher to join a stock market competition with other Ohio schools. “It was the middle of the dotcom boom, and we bought AOL,â€? Boehm said. “That was the greatest thing ever, because it doubled or tripled during while we were doing it. ‌ We finished in the top five.â€? It was — and remains — a nice fit for Boehm’s competitive spirit.
small businesses we work with in low- and moderate-income areas are not exempt to that. They don’t all need debt, but many need help in operating more efficiently.� Growth Opps board chair Ndeda Letson said Jeans was a nice fit to shepherd the fledgling organization given his “deep commitment� to community-building and 20 years of financial expertise. Prior to joining JumpStart, he worked for financial service leaders KPMG, Morgan Stanley, National City Bank and KeyBank. “Not only did and does Michael’s technical background bode well for him as a candidate for that position, his personal passion and commitment to the space is bar none,� Letson said, adding that since he assumed the Growth Opps leadership role what’s been most impressive is Jean’s ability to blend strategic thinking with “boots on the ground� implementation. The father of two has been an active member of several civic and nonprofit organizations, including Our Lady of the Wayside, Cleveland Rape Crisis Center and the American Red Cross. Much like these nonprofits, which seek to give a voice to populations that typically lack a platform to advocate for themselves, he sees Growth Opps’ mission as giving disadvantaged business owners access to the same resources available in established communities. “It allows me to have advocacy and policy impact on how we approach community development, how we approach banking in challenged communities, as well as be on the ground and tie policies to implementation and execution,� Jeans said. “That’s a good culmination of the work that I have done to date.� — Judy Stringer
If you weren’t in finance ... If I were not in finance, I would likely work in a capacity that would support the education, growth and development of our youth. ‌ I can remember each person who cared enough to spend a moment to shape my thinking and development. As I get older, I realize their investment in me was intended to be an investment in the generations to come. I have a lot of work to do.
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Director, alternatives portfolio manager, Ancora
If you weren’t in finance ... I think that if I was not in finance, I would really enjoy teaching. I’m not sure what level that would be at, but I really did always enjoy the learning process and I’ve always been intellectually curious as far as learning more and understanding how things work. … My mom was a teacher.
“When you are working in and involved with the markets, they are telling you every day whether you are right or wrong. It is constantly challenging, constantly competitive,” he said. “You are always being judged versus everyone else in the market.” Boehm began his investment career in New York City in the midst of the financial crisis. Despite the lack of Wall Street jobs at the time, he landed a position in investment banking at Deutsche Bank and later at one of the largest equity hedge funds, SAC Capital Advisors. He said Ancora, which manages $4 billion in assets, represented a chance to move back to Cleveland, closer to family, while also moving his career forward. “Fred has built an extremely passionate, energetic and entrepreneurial culture and is really dedicated to growing Ancora,” Boehm said, noting that the firm’s commitment to investing in its alternatives platform “was a great opportunity to come join team here and help drive the growth that we are looking for.” Away from the office, Boehm now relishes the time he can spend with his close-knit family, which includes volunteering as an assistant coach for his brother’s lacrosse team. The team, made up of seventh- and eighth-grade boys from Rocky River, won the Ohio Middle School Lacrosse Association’s Division 1 state championship earlier this year. “It would have been extremely challenging to find the time or the right fit to be able to coach a team in New York,” said Boehm, who played lacrosse for Saint Ignatius and was on a club team at Georgetown. “It is one of the nice benefits of being back home in Cleveland.” — Judy Stringer
Leah Luzier President, Magnolia Management Group Leah Luzier’s affinity for entrepreneurship and nonprofits began when her parents founded Education Alternatives and REACH Counseling Services when she was a child. The two nonprofits, which provide special education services and mental health services, respectively, were a perfect fit for their backgrounds in education and mental health fields. What fascinated Luzier, though, was the business side of it all, which she said can often be difficult for people with backgrounds solely as service providers. “A lot of people, when they’re first starting off (with) these startup companies, they are coming from knowing the field, and not necessarily knowing business,” Luzier said. “So I think that’s where my interest in this specific area started.” After earning her bachelor’s in business administration and management from Kent State University, Luzier went on to earn a master’s in nonprofit organizations from Case Western Reserve University. During that time, she served as the director of business operations for EA and REACH. At the start of this year, REACH acquired C. J. Hendry & Associates Inc., a counseling center owned by Carol Ball, who said the transaction wouldn’t have happened without Luzier’s work. Ball was ready to transition from the company and into retirement, but wanted the firm to continue. Though Ball has known Luzier and her parents for years, “I don’t think it would have happened if Leah hadn’t had the vision to see that there was a need and she wanted to figure out what would be a good way to fulfill that need,” Ball said.
If you weren’t working in finance, what would you be doing and why? I think it’s the marketing piece that I definitely have a big interest in, as well. But more for me, especially here, as I worked more on marketing … it always comes back to finance to benchmark what you’re doing and see if what you’re trying to do is working.
That vision allowed Ball to shift from owner and president to working as an employed counselor. In preparation for the acquisition, Luzier founded Magnolia Management Group to contract her financial services to all three entities. Right now, Luzier, president of the group, only works with those three entities, but wants to expand her operations to help nonprofits and small businesses passionate about their work form strong business and financial practices. “It’s just something that if you’ve never experienced it before, it can be maybe more intimidating than other aspects of business,” she said. Luzier has been “the most incredible gift to me and my husband,” Ball said. The transition of C.J. Hendry to REACH has let her ease into retirement, given her comfort in knowing her firm is in good hands and allowed her and her husband to travel across the country to spend time with their grandkids. “I think in the future as she becomes aware of other circumstances in which there’s a need and there isn’t a plan, she would be likely to come up with a vision,” Ball said. Luzier hopes to do just that and said she thinks her marketing specialization at Kent State could help as she looks to branch out further. Her work at EA and REACH often crosses into other areas, from IT to buildings to marketing — but it always comes back to finances, the “life of the company,” she said. “You could do great work and you could have a great reputation and everything like that, but if you can’t keep your financials in line, you’re not going to be in business,” Luzier said. — Lydia Coutré
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WHO TO WATCH: FINANCE
J. Burner Crew Managing director, Nirvana Analytics LLC Reading pays, according to J. Burner Crew. When he was eight years old, he received a quarter each day he read the front page of The Wall Street Journal to his blind grandfather. When he graduated from high school, he had more financial knowledge than most and used that toward a degree in econometrics at Columbia University. His interest in the capital markets was supported and encouraged by his father, a postal worker and entrepreneur. But finding a job in finance in the late 1970s was difficult for minorities. So Crew used his skills to teach young people in his community about finance. He worked with churches and through after school programs to offer youth finance classes. His efforts paid off in several ways. In 1986, E.F. Hutton gave him a break and his first job in asset management. His extensive experience in the public funds sector and years of success in the financial markets led to his founding in 2008 of Nirvana Analytics, a full-service asset management and business consulting firm that focuses on helping early stage companies access capital. He also fueled excitement among
Cleveland’s inner city youth through his youth finance programs at Olivet Institutional Baptist Church, Fifth Christian Church and Beth-El AME Zion Church. In 2001, a group of 18 students from Fifth Christian Church took first place in the Stock Market Game sponsored by The Wall Street Journal and the New York Stock Exchange. The team beat out 3,500 participants by improving their portfolio by 92%. “Children realize what’s hot,” he said. “Young people are much more aware of trends and much more in touch.” Some of his first participants are now managing multibillion-dollar portfolios at some major capital market companies, including Merrill Lynch and Barclays Bank PLC. Crew said his philosophy on working with clients is based on listening to them and understanding what they are trying to achieve. “Ask where they need support or data to make decisions. Remain conservative when taking positions, and build position or subtract from them over time based on performance,” Crew said. “Stay balanced with risk and hold a reasonable cash balance.” His success in the field is based on
humility. “To the degree that I have experienced success, it can be attributed to hard work and understanding the capital markets teach you every day,” he said. “You must be willing to learn and believe there are opportunities created daily. Once you become overconfident, the market shows you something new and unanticipated.” Zeke Rodriguez, Nirvana Analytics’ senior vice president, said Crew’s “quiet brilliance” is the key to his success. “His depth and breadth of knowledge allows him to analyze a situation and decide on the best way to structure financing to get it done and give the deal the bet probability of closing,” Rodriguez said. “He has a fairly simple strategy that he executes extremely will because he does all of the homework.” For anyone considering a career in finance, Crew recommends an internship with a major financial firm. That, he says, will help anyone learn the language and the environment. He also recommends seeking out a mentor and remaining persistent. “Be ready to compete daily and minimize fear,” he said. — Kimberly Bonvissuto
If you weren’t working in finance, what would you be doing and why? I would be a college professor. I enjoy the exchange of the learning process.
HOW BAD IS THAT LEAK? Congratulations, Joe Boehm for being named one of Crain’s Who to Watch in Finance 2016
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Wendy Eldridge Partner, Aurum Wealth Management Group Wendy Eldridge said it was a bit of dumb luck that opened her eyes to the world of finance. Her original plan was to go into marketing. But following graduate school, a job at Cellular One (now Verizon) enlightened her to the possibilities of a career in finance. “I can’t say that I was always a ‘finance lifer,’” Eldridge said. “While it was definitely an industry that had to grow on me, I can now look back with hindsight that what I originally thought was dumb luck has turned into poetic justice.” Eldridge made her way to Aurum in Mayfield Village after working at a local pension consulting firm and leading the retirement plan practice at Capital Planners. Today, she is the partner-in-charge of Aurum’s corporate retirement plan practice, responsible for the practice’s client service initiatives, business development and strategic planning. She said her philosophy in working with clients is simple — know your clients better than they know themselves. “Anticipate their needs before they even realize it. This is accomplished by developing meaningful relationships with them, understanding their business, meeting their employees, making personal connections,” Eldridge said. “Given the nature of retirement plans, clients are inherently protective. They will not work with you unless you can show them why they should trust you,” she said. “But before they can trust you, they must know you and like you — and that starts with making personal connections.” Christopher D. Bart, managing director and partner at Aurum, said Eldridge has an innate ability to quickly develop trust with her clients and team. “This serves her well in fostering the sort of personal connections that are so vital in today’s business climate,” Bart said. “The respect she earns from clients and team members alike speaks to how invaluable a leader she is within our firm.” Eldridge attributes her success to passion and her ability to listen. “Careers are a marathon. If you are not truly passionate about your work, your work will be nothing more than a never-ending sprint to mediocrity,” she said. “If you don’t want to help your clients every single day and put their interests before your own, it is nearly impossible to succeed.” Bart said Eldridge’s energy and passion are contagious. “It’s clear that she believes strongly in the work she and her team do, and clients certainly feel that,” Bart said. Listening, Eldridge said, is one of life’s underappreciated skills. “The only way to understand a client’s needs is to actively listen,” she said. “Generally speaking, people love to talk about their business. If you take the time to listen to what they are saying, it’s fascinating what people are willing to share.” Her advice to anyone considering a career in finance is this: embrace change. Be adaptive. Learn how to handle rejection. The opportunities
available within the financial field are seemingly endless, she said, adding that anyone considering a career should go into it with their eyes and ears open. “You can learn a tremendous amount simply by observing and listening,” she said. Eldridge also encourages women to strongly consider the finance industry. “In what has traditionally been a male-dominated industry, I am continually amazed at the fantastic women I meet that are working to change the narrative,” she said. — Kimberly Bonvissuto
If you weren’t working in finance, what would you be doing and why? At the risk of sounding cliché, it’s very difficult to imagine myself in a different career. If there is a thread of commonality across all of my client interactions, it is their astonishment at the passion someone can have for 401(k) plans (of all things!). For me, that is the ultimate compliment. If I had to pick a different career, I likely would pursue a career in broadcast journalism. I realize that I enjoy communication and delivering messages to as many people as I can.
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Business of Life
Ray Lewis, co-conductor of the group that traveled from Akron to Colorado, uses a bus window as a whiteboard for a draft of DashPilot's business plan. (Contributed photos)
Start a business rolling — on a bus By CHUCK SODER The word “startup” makes Ray Lewis cringe. So why on earth would he ride the StartupBus? Four years ago, Lewis decided to take a ride on a bus traveling from Las Vegas to Austin, Texas, because he knew that he’d be sitting next to other people who had no interest in starting some flashy, hype-infused tech company — which is what comes to mind when Lewis thinks of a “startup.” They wanted to start a real, sustainable business. And they did. On that bus, Lewis and four friends started Wastebits, an Akronbased waste management software company that now employs about 35 people. His experience is not unique. Other viable companies — including the Instacart grocery delivery service — have emerged from the StartupBus program, which has launched buses from Cleveland, Akron and cities all over the world since 2010. But the program is “less about forming companies and more about forming people,” said Lewis, who served as co-conductor of the bus that drove from Akron to Boulder, Colo., this past May. There, they met riders from other buses and competed against them in a business pitch competition. Akron’s DashPilot team took second place in that competition. A few members of that team are now work-
Twenty-three buspreneurs, three mentors, two conductors and one bus driver are shown before leaving on a 72-hour drive to startup company competitions in Boulder, Colo. ing to create a dashboard-mounted device that would sound an alarm if the driver starts to fall asleep at the wheel. Yes, you can create physical prototypes while riding a bus. This year, the North American buses each adopted a theme. The 28 riders leaving from Akron were encouraged to create products related to the “internet of things” trend and the so-called “maker movement.” Thus, bus co-conductor Will Yaworsky and a few other riders brought along boxes filled with elec-
tronic components, computing equipment, soldering irons and other stuff that could be used to build
quick prototypes. The bus made a few stops at electronics stores along the way as well. The bus also stopped at Proto BuildBar in Dayton — which Yaworsky described as “a maker space crossed with a bar” — and other locations that attract entrepreneurs. Yaworsky decided to apply to be a conductor after riding the bus that left from Akron last year. He was a different person after that first ride, he said. Turns out, it’s pretty hard to start a company on a cramped bus with
spotty WiFi a thousand miles from home. It was an intense experience with very little downtime, but it helped Yaworsky realize what he’s capable of achieving. Today, he’s more outgoing and adventurous, he said. “I’m more willing to put myself at the front of the pack and lead,” he said. Other people experience similar changes, given how intense the event is, Lewis said. “It’s absolutely exhausting, but … you get so much energy and enthusiasm at the end of it and you create so many relationships and connections,” he said. Volunteers are charged with raising $25,000 to $30,000 for each bus, each year. The local group raised cash from the Burton D. Morgan Foundation, the Knight Foundation and other donors. Lewis said the group’s goal is to make sure the bus is funded each year. That’s one reason local volunteers are forming a network of StartupBus alumni in Ohio. Bring those alumni together also will give them a chance to work on projects together. It’s not unusual for riders to keep in touch years after they get off the bus, said Carl Shotwell, a software developer at LeanDog in Cleveland. He served as conductor of the Chicago bus last year and now serves as one of the directors of StartupBus North America. “StartupBus doesn’t end when the competition and the ride is over. It’s really just beginning,” he said.
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BUSINESS OF LIFE
Source Lunch Thomas Schorgl has worked for nearly 20 years to build arts and cultural programs in Cuyahoga County.
Schorgl is president and CEO of the Community Partnership for Arts and Culture, a nonprofit advocate for all manner of local cultural events. A Midwesterner who grew up in Missouri and Iowa, Schorgl came to Cleveland in 1997, charged by local foundations to ensure that Northeast Ohio would continue to have a thriving arts community. His work was the catalyst for public funding of the arts — a tax on tobacco products that first passed in 2006. That led to the creation of Cuyahoga Arts and Culture, a county agency that has financially supported hundreds of cultural groups, artists and programs throughout the county. When he won a Cleveland Arts Prize in 2007, the committee said, “It’s possible that Thomas Schorgl has saved the arts in Cuyahoga County — or at least many of the region’s arts organizations.” Arts prizes are given annually to artists, individuals and organizations that contribute to the quality of life in the community. — Jay Miller
You’ve spent a career in the arts, as someone who promotes the value of the work of artists and performers. But have you ever been on the artistic playing field? I have bachelor’s and master’s degrees from the University of Iowa and Miami University in drawing and printmaking. From there, I headed off to France for a printmaking workshop. I was interested in an obscure technique of printmaking that is called viscosity printing. You use ink of different viscosities to get a color print. But there was a woman I wanted to marry (his wife Liz) who was getting a master’s degree at University of Notre Dame (in South Bend, Ind.) So I came back and got a job illustrating Chicago phone books. That was fun. Then, as I was set to get married, a job I thought I had waiting for me in California managing a printmaking studio fell through. So, eventually, I got a job as a curator at an arts center in South Bend. When did you decide your career was in presenting the arts and advocating for the arts, rather than being an artist yourself? I had an epiphany when I was in France. I had some good skills, but I found a number of artists whose work I was really more impressed with. So on my way back to the United States I thought that I could probably, given my immersion in the visual arts, do
things that were supportive of artists and arts and culture. That’s what led to the curatorial job, and I don’t feel bad about it. How did you get to Cleveland in 1997? I was working in Dayton as executive director of an organization called Culture Works
“ On my way back to the United States (from France) I thought that I could probably, given my immersion in the visual arts, do things that were supportive of artists and arts and culture. That’s what led to the curatorial job, and I don’t feel bad about it.” that had just merged two nonprofits — an arts-funding organization, a kind of United Way for arts organizations, and a local arts council. I’d been there about two years when I was at lunch at an arts conference in Dayton and
Thomas Schorgl ARTS AND CULTURE
Kathleen Cerveny (then program officer for the arts at the Cleveland Foundation) and Deena Epstein (then arts program officer at the Gund Foundation) were asking how Culture Works worked. A few months later, I got a call from Kathleen, who said the two foundations were looking at creating an organization to do a strategic plan for the arts in Cleveland, and they thought I would be a good candidate. And that study led to the creation of the Community Partnership for Arts and Culture? Yes. We found there were three gaps. First, there was no organization in Greater Cleveland dedicated to research on arts and culture — that could gauge the economic impact of the arts and do polling (on the community’s artistic needs). We also found that there was no organization to integrate arts and culture into civic, municipal and county public policy discussions. And last, we found that there was a need to help artists with business practices. So we were incorporated in 2000. What kinds of tax did you consider before you decided to ask voters to approve a tax on tobacco products to support arts and cultural organizations? Dry cleaning, cell phones, video rentals — I’m glad we didn’t go with that.
THREE THINGS: FAVORITE NIGHT OUT WITH THE ARTS That’s so hard, there’s so many good things going. But I’d say the Cleveland Arts Prize awards dinner.
FAVORITE NON-ARTS ACTIVITY I go to flea markets to see what I can find. I look for old tobacco tins. The graphics are really colorful, and I make lamps out of them.
BESIDE THE ARTS, FAVORITE CLEVELAND THING The neighborhoods. They’re jewels. They have a real sense of authenticity. They all have their own personalities, their own cultures.
LUNCH SPOT Cowell & Hubbard 1305 Euclid Avenue, Cleveland
The meal One had the shaved Swiss chard salad with pickled rhubarb, toasted hazelnuts, serrano ham, dried apricot, white balsamic vinaigrette with ice water. The other had the Playhouse burger with paprikacaramelized onions, no cheese and pomme frites with a Diet Coke.
The vibe Restaurateur Zach Bruell used white walls and red banquettes to turn a space built in 1920 for the Cowell & Hubbard Co., the city’s leading jewelry store, into a sleek, 21st century eating place.
The bill $31.32 + tip
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END
CONTINUED FROM PAGE 1 DiBiasio, who has been with the Tribe since 1979, attended the first Cavs home game against the San Diego Rockets with his Lakewood High School basketball teammates on Oct. 28, 1970. Almost 46 years later, during the Cavs’ Game 7 win on June 19, he exchanged texts with a few of his former teammates. They told stories about the commemorative glasses they received that night, and how one said he would never take a drink out of the cup until the Cavs won a title. “Thankfully it happened, and we can just move on and say, ‘Of course it can happen here. Now I look at it in a whole different way,’ ” DiBiasio said. “You’ve heard it from Cleveland fans who have said, ‘I’m not going to get invested because I’m just gonna be disappointed.’ Hopefully that goofy mentality will stop now. Hopefully that is gonna be eliminated, and we’ll move on to, ‘Hell yeah that can happen here again.’ ” David Gilbert, the president and CEO of Destination Cleveland and the Greater Cleveland Sports Commission, is paid to promote the city and bring events that make an economic impact on the region. Case in
point: next month’s Republican National Convention, for which Gilbert is also serving as the leader of the Host Committee. Still, Gilbert believes that a successful sports team’s greatest benefit — even a squad featuring LeBron James — is the emotional lift it provides, not the temporary financial jolt that comes with extended playoff runs. “I really think that it may be different in a lot of ways than a championship won in other cities,” Gilbert said of the Cavs’ first title. “One, because we’ve waited so long and all that’s been written about that. But I also think we’re in this unique point in time where we’re seeing a major shift in the national perception of Cleveland, and more importantly, Clevelanders’ perception of themselves. I think this championship will give such a boost to that and help solidify it.”
‘The witch is dead’ Even Scott Raab — a Cleveland native who was so “insanely” angry after LeBron James made The Decision (one of our most dreadful titles) that he wrote “The Whore of Akron” in 2011 — is beaming these days. Raab was a producer and had a critical on-camera role in “Believeland,” the ESPN “30 for 30” documentary about Cleveland sports misery that first aired on ESPN five
Contact: Lynn Calcaterra Phone: (216) 771-5276 E-mail: CLBClassified@crain.com
A
weeks before the Cavs broke the city’s title drought. The former Esquire and GQ writer said he has friends who got so accustomed to being disappointed that they would say it would be easier if their favorite teams didn’t make the playoffs. “I do think the woe is me stuff is gone,” Raab said. “I don’t have any reason to think any more about The Curse. I never thought it was a curse, but whatever it was, over the years, it felt more and more profound.” Cavs CEO Len Komoroski has worked in Philadelphia, a city with a notoriously tough fan base, and Pittsburgh, where championships are expected. Here, he compared the fiveplus decade run without a title to “one big cloud” that hung over the heads of the Browns, Cavs and Indians. “If you want to look at this way: It sort of was the missing piece of finally helping to eradicate that stigma, that whole sense in Cleveland as a whole,” Komoroski said. “We’re on an amazing, remarkable run as a community. We’re going through a transition as a city. So many things are happening.” Komoroski cited the RNC, plus all of the investment and development downtown, as examples. Something that’s not as tangible is the effect the championship drought being lifted could have on the Indians and Browns. That, too, is significant,
Komoroski and DiBiasio believe. On the weekend the Cavs won the title, the Indians drew a combined 84,247 fans for a three-game series against the Chicago White Sox. That was the club’s largest attendance for a three-game set since June 2014, and the Tribe entered a lengthy road trip June 24 in first place and perfect in their last 11 games at Progressive Field. “I think there absolutely will be a carryover with the Indians,” DiBiasio said. “If we continue to play well, we are going to further energize people who are already energized by the Cavs’ championship.” Andy Billman, an Elyria native who directed “Believeland” for ESPN Films and is a rabid Cleveland sports fan, thinks “dormant Browns fans who have been jaded by all of the losing” could return in full force — not that the city’s most-watched sports team needs help generating attention. “All the teams benefit from this,” Billman said. “That’s the kind of thing these things do. They’ll be even louder when they come back (to the Browns). I think the Indians will get some of that, too. I think it will be a huge charge.” The Cavs’ championship packed downtown restaurants, bars, Quicken Loans Arena, Gateway Plaza and the streets for a Game 7 that was
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played across the country, at Oracle Arena in Oakland, Calif. But that was nothing compared to the millionplus fans who gathered for the championship parade on June 22. Cleveland’s always-thriving Tshirt economy was “insane,” said Tony Madalone, the owner of Fresh Brewed Tees. Competitor GV Art and Design had lines that extended for blocks around its Lakewood store, and Northeast Ohio’s Dick’s Sporting Goods locations had post-championship crowds that rivaled a Black Friday. Hotels were booked, the TV ratings were monstrous, and The Plain Dealer printed nearly 450,000 extra copies of the June 20 edition, which recapped the Cavs’ title-clinching victory. Clevelanders responded to an extremely rare championship as only they can. Watch out now, Komoroski said. “Being that sports is such a huge part of our identity here in Cleveland, it was the thing that was hanging over our heads,” the Cavs CEO said. “The witch is dead. Ding dong the witch is dead, right? As that missing piece of the puzzle, I think it sort of signals to Cleveland as a whole that there’s nothing holding us back. It’s sort of shedding that baggage and untethering us from that baggage. The sky’s the limit for this city.”
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HOSPITALS CONTINUED FROM PAGE 1 around public health, where none of us can solve the problems individually,” said Dr. Bob Wyllie, chief medical operations officer for the Clinic. “But we realize that sure, we’re competitors in medical care, but there are some things in terms of public health where the citizens of Northeast Ohio would be aided in us joining hands and seeing how we can work together.” From the 2013 Boston Marathon bombing to bombings in March in Brussels to the mass shooting in Orlando earlier this month, hospital officials cited other incidents in which hospitals had to deal with large numbers of patients in a short amount of time. They’ve been drilling together and with state and federal officials to prepare for any such event. They say they’re ready for anything. Each system has been tasked with responsibility of different venues. The Clinic, for instance, is in charge of staffing Progressive Field and Quicken Loans Arena, where the convention will be held. Normally, for such events, paramedics and/or nurses would be on hand. In mid-July, they also will staff the arena with a board-certified emergency physician, Wyllie said. They’ll have ambulances on site for quick transport, with an exit that avoids much of the foot traffic, he said. MetroHealth will staff entrances and, with the help of Cleveland EMS, the first aid village, Wyllie said. As the closest emergency department to the convention, St. Vincent is expected to see the bulk of walk-in appointments, he said. “We are collaborating to provide medical services under the guidance and direction of local, state and fed-
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eral partners,” according to a statement from St. Vincent. “We are working with the city of Cleveland on providing exceptional medical care to the visitors of the Cleveland area during the Republican National Convention.” University Hospitals has been tasked with staffing the Global Center for Health Innovation and the Cleveland Convention Center, as well as providing medical care for law enforcement. The systems also are providing delegates, media and visitors with a joint nurse triage line, where they can call in with questions about the nearest urgent care, forgotten prescriptions, medical advice and more. “We also think it’s a great way to show that health care in Cleveland is really robust and some of the best in the country, and quite frankly, that we collaborate together on important things like this,” said Dr. Michael Anderson, chief medical officer for University Hospitals.
Ready for anything Many MetroHealth staff members have been attending FEMA training in Alabama since 2014, even before the RNC host was announced. When Dr. Akram Boutros, MetroHealth president and CEO, attended the training a couple of years ago, staffers ran test scenarios including anthrax releases, Ebola, earthquake, a situation like the bombing at the Boston Marathon, a nuclear event and more, he said. Since then, in collaboration with local providers and officials, they’ve run mock events with various possible scenarios. “We feel very prepared,” Boutros said. During the RNC, MetroHealth staff will be at the heart of the event
“We also think it’s a great way to show that health care in Cleveland is really robust and some of the best in the country.” — Dr. Michael Anderson, chief medical officer of University Hospitals to support federal elected officials and their health care teams. Boutros said they’ve limited staff vacations and have additional supplies and resources available. The same rings true for other systems. The Clinic has cut back on vacation requests and has asked people to stay in town; many people are on call, including extra emergency physicians and anesthesiologists. For now, the plan is to operate just as they would under normal conditions and capacity for the patients who would be there in mid-July regardless of the RNC, Wyllie said. But they’re prepared to shift gears if something else happened. “At the Clinic we have adequate supplies for 96 hours of drugs, of beds, of linens, of you know all those type of things which we would need in an expanded emergency situation if it comes to that,” he said. “And we don’t think it will, but again, it’s better to be ready.” Even Akron providers have participated in some of the prep, Anderson said. They’re ready for any sort of surge in volumes that could mean sending patients to the Akron region. And everyone’s prepared for a general increase in volumes during the week. Wyllie said hospitals are planning to staff up emergency departments. Again, just in case. Wyllie said a lot of the collaboration between hospitals began with Ebola, when they coordinated possible responses with the city and county. Infrastructure problems MetroHealth faced in January 2014 when pipes burst on its main campus prompted a conversation about needing stronger collaboration with other area hospitals and accelerated discussions about the need for a new campus, said Elizabeth Allen, MetroHealth’s senior vice president of external affairs. MetroHealth’s new Critical Care Pavilion is slated to begin accepting patients about a week before the RNC. This is not a coincidence, Boutros said, noting that it will double MetroHealth’s intensive care unit capacity. “We view this as this is our core mission, and we want to be the absolute best at it,” Allen said. “We want Cleveland to be successful and for people to think that it was a wonderful experience.” Health care is a competitive landscape, no doubt, Anderson said, but when public health issues — potential or in reality — come into play, they come together. “The systems do the right thing,” Anderson said. “I think Cleveland should be very, very proud number one, obviously of getting the RNC. And from the health care perspective, I think the cooperation and collaboration is something that Clevelanders should be very proud of.”
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The List NAME THIS ADDRESS YEAR PHONE/WEBSITE
LARGEST NONPROFITS Ranked by 2016 Expenses EXPENSES 2016 (MILLIONS)
EXPENSES 2015 (MILLIONS)
TOTAL REVENUE 2015 (MILLIONS)
INCOME FROM PRIVATE SUPPORT
INCOME 2015 FUND FOR PROGRAM BALANCE SERVICES (THOUSANDS) PURPOSE
TOP LOCAL EXECUTIVE
1
Christian Healthcare Ministries Inc. 127 Hazelwood Ave., Barberton 44203 (800) 791-6225/www.chministries.org
$226.1
$128.9
$145.7
100.0%
85.0%
$29,940.2
To glorify God, show Christian love and experience God's presence as Christians share each other's medical bills
Howard S. Russell president, CEO
Hospice of the Western Reserve 17876 St. Clair Ave., Cleveland 44110 (800) 707-8922/www.hospicewr.org
$105.0
$96.1
$94.9
NA
83.6%
$69,496.0
2
Provides hospice and palliative comfort care for people with serious illness, support for their families and caregivers and community-wide bereavement support services
William E. Finn president, CEO
3
Catholic Charities, Diocese of Cleveland 7911 Detroit Ave., Cleveland 44102 (216) 334-2900/www.ccdocle.org
$96.2
$94.6
$95.2
47.6%
87.1%
$82,247.0
Providing help. Creating hope.
Patrick Gareau president, CEO
4
Greater Cleveland Food Bank 15500 S. Waterloo Road, Cleveland 44110 (216) 738-2265/www.greaterclevelandfoodbank.org
$87.4
$85.9
$84.5
64.2%
97.3%
$4,226.6
The Greater Cleveland Food Bank works to ensure that everyone in our communities has the nutritious food they need every day
Kristin Warzocha president, CEO
5
Jewish Federation of Cleveland (1) 25701 Science Park Drive, Cleveland 44122 (216) 593-2900/www.jewishcleveland.org
$80.0
$79.6
$69.5
99.0%
87.3%
$379,989.3
Allocates funds to social service, religious and educational organizations in Cleveland and worldwide
Stephen H. Hoffman president
6
Menorah Park Center for Senior Living 27100 Cedar Road, Beachwood 44122 (216) 831-6500/www.menorahpark.org
$75.3
$74.6
$72.7
47.5%
96.3%
$30,140.0
A not-for-profit Medicare/Medicaid-certified health care provider that operates residential and outpatient services
Steven Raichilson executive director
7
Playhouse Square Foundation 1501 Euclid Ave., Suite 200, Cleveland 44115 (216) 771-4444/www.playhousesquare.org
$57.0
$56.0
$77.7
97.0%
93.0%
$141,000.2
To operate the performing arts center and help restore and develop the Playhouse Square district
Art Falco president, CEO
8
The Centers for Families and Children 4500 Euclid Ave., Cleveland 44103 (216) 432-7200/www.thecentersohio.org
$56.4
$54.3
$54.3
12.8%
88.5%
$41,517.2
To give as many people as possible the opportunity to be healthy, educated, independent and connected
Elizabeth Newman president, CEO
9
Hattie Larlham 7996 Darrow Road, Suite 10, Twinsburg 44087 (800) 233-8611/www.hattielarlham.org
$54.7
$49.8
$52.0
1.0%
87.0%
$32,425.3
To provide care for children and adults with developmental disabilities in Northeast and Central Ohio
Dennis Allen CEO
10
OhioGuidestone 434 Eastland Road, Berea 44017 (440) 234-2006/www.ohioguidestone.org
$54.0
$51.1
$54.2
13.0%
85.0%
$39,310.8
At OhioGuidestone, our mission is to provide pathways for growth, achievement and lifelong success
Richard R. Frank president, CEO
11
Western Reserve Area Agency on Aging 925 Euclid Ave., Suite 600, Cleveland 44115 (216) 621-0303/www.psa10a.org
$53.8
$51.7
$55.4
27.0%
94.0%
$5,268.6
To provide choices for people to live independently in the place they want to call home.
E. Douglas Beach CEO
SOUND SOLUTIONS FOR NOT-FOR-PROFITS maloneynovotny.com + 216.363.0100 12
Volunteers of America of Greater Ohio 8225 Brecksville Road, Suite 206, Cleveland 44141-1362 (440) 717-1500/www.voago.org
$52.9
$43.3
$46.1
44.7%
84.0%
$36,047.9
Spiritually based human services organization providing social services that promote selfsufficiency and foster independence
Dennis J. Kresak president, CEO
13
Oriana House Inc. P.O. Box 1501, Akron 44309 (330) 535-8116/www.orianahouse.org
$52.7
$49.9
$48.4
1.0%
96.0%
$14,757.0
Community corrections programs and chemical dependency treatment
James J. Lawrence president, CEO
14
The Musical Arts Association 11001 Euclid Ave., Cleveland 44106 (216) 231-7300/www.clevelandorchestra.com
$52.6
$50.8
$50.9
96.0%
85.0%
$200,232.0
To provide inspirational experience by serving the art of music at the highest level of artistic excellence
AndrĂŠ Gremillet executive director
15
Judson Services 2181 Ambleside Drive, Cleveland 44106 (216) 721-1234/www.judsonsmartliving.org
$50.7
$49.7
$44.5
86.0%
90.0%
$15,176.3
Bringing community to life.
Cynthia H. Dunn president, CEO
16
The Cleveland Museum of Art 11150 East Blvd., Cleveland 44106 (216) 421-7340/www.clevelandart.org
$48.0
$60.9
$78.4
65.0%
6.0%
$963,991.4
One of the world's comprehensive art museums and one of Northeast Ohio's principal civic and cultural institutions
William M. Griswold director, CEO
17
United Way of Greater Cleveland 1331 Euclid Ave., Cleveland 44115 (216) 436-2100/www.unitedwaycleveland.org
$42.5
$43.3
$43.3
98.0%
81.7%
$17,058.7
Addressing community needs by generating resources and community support to invest in education, income and health
August A. Napoli Jr. president, CEO
18
Positive Education Program 3100 Euclid Ave., Cleveland 44115 (216) 361-4400/www.pepcleve.org
$40.8
$40.6
$40.7
2.0%
90.0%
$25,729.2
PEP helps troubled and troubling children learn and grow
Frank A. Fecser CEO
19
Montefiore One David N. Myers Parkway, Beachwood 44122 (216) 360-9080/www.montefiorecare.org
$40.5
$36.9
$35.1
10.0%
89.0%
$29,945.0
To provide a comprehensive system of health care and wellness services to aging seniors on two campuses and throughout the community
Seth Vilensky president, CEO
20
The Village Network 2000 Noble Drive, Wooster 44619 (330) 202-3802/www.thevillagenetwork.org
$40.4
$35.9
$41.0
10.4%
89.6%
$15,772.8
To work in partnerships that will empower youth and their families to build brighter futures
Richard Graziano president, CEO
21
Coleman Professional Services 5982 Rhodes Road, Kent 44240 (330) 673-1347/www.colemanservices.org
$40.2
$35.4
$38.9
3.4%
87.7%
$10,155.4
Behavioral health, rehabilitation and residential programs that improve the lives of individuals, families and businesses
Nelson W. Burns president, CEO
22
Visiting Nurse Association of Ohio 2500 E. 22nd St., Cleveland 44115 (877) 698-6264/www.vnaohio.org
$36.7
$44.5
$41.5
1.9%
97.3%
$11,000.0
Provide high quality comprehensive home health and hospice care to patients and their families
Claire M. Zangerle president, CEO
Goodwill Industries of Greater Cleveland and East Central Ohio Inc. 408 Ninth St. SW, Canton 44707 (800) 942-3577/www.goodwillgoodskills.org
$32.1
$27.6
$27.9
2.9%
83.0%
$15,024.3
23
To improve the quality of life and employment opportunities for people in the communities we serve
Ken Weber president, CEO
Breckenridge Village 36855 Ridge Road, Willoughby 44094 (440) 954-8364/www.breckenridgeohio.org
$29.3
$28.9
$30.6
45.0%
7.0%
NA
To provide older adults with caring and quality services toward the enhancement of physical, mental and spiritual well-being consistent with the Christian Gospel
David Schell, executive director; Lisa Mansour, associate executive director
24
RESEARCHED BY DEBORAH W. HILLYER This list of 501(c)(3) status nonprofit organizations is an approximate compilation of the largest organizations in Northeast Ohio. Universities, colleges, foundations and hospitals were excluded. Source: Information is supplied by the organizations unless footnoted. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. (1) Information is from the 2014 990 for fiscal year that ended 6/30/15.
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VOL. 37, NO. 26
JUNE 27 - JULY 3, 2016
Business of Life
Source Lunch
THE AKRON EDITION
StartupBus sparks ideas, collaboration
Thomas Schorgl, Cuyahoga County’s guru of arts and culture
Vehicles have rolled from cities all over the world since 2010. Page 27
Page 28
The List
CLEVELAND BUSINESS
NEO’s largest nonprofits Page 31
SPORTS BUSINESS
‘The End’ of ‘The Curse’ By KEVIN KLEPS kkleps@crain.com @KevinKleps
Every gut-wrenching Cleveland professional sports event always gets a title. Now — in the dreamlike wake of the Cavaliers’ improbable, championship-clinching rally in the NBA Finals — there are different, oddly positive, themes dominating the conversation. You could call it The End — the Cavs breaking a 51½-year, 146-season, 18,802-day championship drought with a seven-game victory over the record-setting Golden State Warriors. But most — again, in a strangely upbeat manner — seem to think it’s just the beginning. “The way I look at it is the woe is me is done,” said Bob DiBiasio, the Indians’ senior vice president of public affairs. “Whoever was going to be the first — us, the Browns or the Cavs — we were gonna erase that unfortunate woe is me as a Cleveland sports fan mentality.”
East Ninth Street from the bl imp Goodyear photo
SEE END, PAGE 29
For more Cavaliers celebration pictures, see pages 12-15 THE REPUBLICAN NATIONAL CONVENTION IN CLEVELAND
Hospitals are ready, TV stations will focus on NEO will work together By JAY MILLER
jmiller@crain.com @millerjh
By LYDIA COUTRÉ lydiacoutre@crain.com @LydiaCoutre
As Cleveland braces for the thousands of people expected to flood the region for the Republican National Convention, area hospitals hold the same mantra that many Northeast Ohioans are likely following: prepare for the worst, hope for the best.
The health systems have been collaborating and preparing for well over a year in hopes of a smooth mid-July week. Officials with Cleveland Clinic, MetroHealth, St. Vincent Charity Medical Center and University Hospitals have been meeting regularly with city and county officials and Cleveland’s Division of Emergency Medical Services. “We’re cooperating as systems SEE HOSPITALS, PAGE 30
Entire contents © 2016 by Crain Communications Inc.
When Donald Trump and other Republican luminaries take their turns at the podium next month at the Republican National Convention, the reporters and producers of hundreds, maybe thousands, of television news organizations will focus their efforts on the messages emanating from the Quicken Loans Arena stage. The exception, though, will be the handful of hometown broadcast sta-
tions, whose cameras will be trained elsewhere. “We’ll show the flag at The Q,” said Fred D’Ambrosi, news director of WOIO-TV, Channel 19 and WUAB-TV, Channel 43. “But our primary coverage will be on the effects on the people of Cleveland, and how (the city is) being seen by the rest of the country and how it’s perceived by the rest of the world.” WOIO and WUAB, which are jointly owned and operated by Raycom Media Inc. of Montgomery, Ala., like the other local stations, will let their affiliated networks — ABC, CBS, Fox
and NBC — focus on the official goings-on. But they all will have anchors suites in The Q and videographers and reporters on the convention floor. Most of their reporters, camera crews and video uplink trucks assigned to convention coverage, though, will roam the streets looking for interesting people and compelling stories. D’Ambrosi and news directors from the other local commercial stations — WEWS-TV, Channel 5, WJWTV, Channel 8, and WKYC-TV, Channel 3 — said they have been SEE TV, PAGE 8
WHO TO WATCH
Meet eight of the best and brighest in the regional finance industry FOCUS, Pages 19-25
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Entrepreneurship Important lessons from Akron’s past P. A8
Main Course
Pinnacle of polymer
Bomba Tacos & Rum brings Latin flavor P. A7
Akron continues to nurture industry P. A2
After a year as a minority investor, Cleveland Clinic last summer exercised an option to take on full ownership of Akron General Health System. (Shane Wynn for Crain’s)
Smooth transition lasts after leader’s exit By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre
Though his retirement at the end of May was sudden and effective immediately, it wasn’t exactly a surprise to colleagues of Dr. Thomas “Tim” Stover, former CEO and president of Cleveland Clinic Akron General Health System. “He’s always said it’s not about him; it’s not about us necessarily; it’s about our patients. And I think that’s what he was doing when he left the way he did,” said Alan Papa, chief operating officer at Cleveland Clinic Akron General, who has helped lead the system integration. “He empowered us to do our job. And he was always encouraging us — whispering criticism and shout-
ing encouragement.” Now, several months into Akron General’s transition into the Cleveland Clinic, the system is looking for a new leader. For now, Janice G. Murphy, chief operating officer for Cleveland Clinic Regional Operations, is at the helm and said the transition has continued to move forward. Stover’s retirement came as “bittersweet” news to staff members who’ve known him for years, she said. Stover was not made available for an interview. “The beauty is… we’re all committed to carrying out what his dream was, and that is to put patients first, to make sure that we have the highest quality and safety, and it was his vision to have this integration with the Cleveland Clinic,” Murphy said.
Akron General is Summit County’s second-largest employer.
She last spoke to Stover prior to his retirement during a weekly integration phone call in which the big thing on his mind, she said, was the new $43 million emergency department, which Akron General broke ground on last fall. The facility is slated to open by the end of 2017. “He knew how critical that was to the hospital and to the community, and he wanted to make sure that we were moving that forward and getting that finalized,” Murphy said. Murphy hasn’t spoken to Stover since his retirement in an effort to be respectful of his decision to leave his position, but she emphasizes that his legacy is with the leadership team continuing to work through the transition. “Really the sign of an excellent leader is does the organization run SEE HOSPITAL, PAGE A8
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AKRON
Akron is nation’s ‘Silicon Valley’ of polymer science By DAN SHINGLER dshingler@crain.com @DanShingler
Akron. In Latin, it means “pinnacle of polymer science.” OK, that’s a lie. But for much of the past century and continuing today, the city’s name has been synonymous with rubber, plastics and the science behind the polymers that make such materials effective, cheap and abundant. It’s a field of science the city continued to nurture, decades after the tire-making jobs that put Akron on the map were gone. The old rubber industry left Akron with some substantial assets in terms of world-leading companies and tire research and development centers that call the city and region their home. Plus, two major universities with expertise in polymer science — the University of Akron and Case Western Reserve University in Cleveland — draw students from around the globe. Some say the region is the Silicon Valley of polymer science. “That’s exactly the reference I make all the time — Silicon Valley,” said Chris Murphy, vice president
and chief innovation officer for the specialty polymer materials company PolyOne, located about an hour from Akron, just west of Cleveland. Murphy and others say that the region achieved its prominence in the polymer science field similar to the way that Silicon Valley developed its reputation in computer science – by having a core group of companies that worked closely with universities to develop not just the science itself, but a critical mass of knowledge, business endeavors and technical people who provide the workforce that drives it all forward. Luis Proenza knew of the region’s strength in the field when he took over in 1999 as president of the University of Akron, a school long known around the world for its expertise in polymer science. But when Proenza first got to UA, local and state policymakers needed an education, he said. And the university gave it to them. One of the first things the school did under Proenza, who left his role as university president in 2014, was to take stock of the region’s and state’s polymer science assets. “We calculated the annual shipment of polymer products at about
$50 billion, and Ohio was, I believe, the largest employer in terms of polymer-related jobs in the country,” Proenza said.
Opening eyes Not to mention some 1,800 other companies working in plastics and related fields. “Nobody realized that, prior to that,” Proenza said. The school’s research helped convince those in the state government to fund efforts aimed at developing the polymer science field, he said. It spurred the formation of entities like the industry group PolymerOhio, and it got existing state economic development efforts more focused on the sector, Proenza said. But is Akron and the “polymer valley” region around it holding on to its position as a world leader in polymer science? There have been setbacks, most notably at the University of Akron. UA has seen troubles in recent years and is bracing for a 23% drop in overall student enrollment in the fall. But like many schools with a technical specialty, UA has a bit of a split personality. It’s largely a commuter school for most of its general programs but draws students inter-
Goodyear Tire & Rubber Co. works closely with the University of Akron in the field of polymer science. The company sponsors the Goodyear Polymer Center, which opened on UA’s campus in 1991. (Shane Wynn for Crain’s)
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nationally for its vaunted polymer science degrees. “Whenever I’m in Korea, they know about the University of Akron – and it’s the same when I go to China,” said Eric Amis, dean of UA’s College of Polymer Science and Polymer Engineering. “So we have a large graduate program – about 350 students.” About 125 of those people are master’s students, with the rest doctorate students, Amis said.
A hotbed for tech jobs The companies that work with the university say they have seen no reduction in output from the school, in its number of graduates, the quality of their education or the research that the university conducts. “I don’t know what the future holds, but at this point in time it has not impacted our ability to get qualified folks,” said Joe Zekoski, Goodyear Tire & Rubber Co. senior vice president and chief technical officer. “We’re fortunate to have an early indicator with the interns and co-ops … and so far I have not seen (a negative impact.) Our co-op program is still strong and we feel good about that” Other companies, including PolyOne and Akron-based A. Schulman, echoed those sentiments. But Goodyear might know better than most how the school is doing – it sponsored and works closely with the University’s Goodyear Polymer Center, which opened in 1991. Students don’t just come to the
school for the education, either. Some come, in part, because they also know that Northeast Ohio is a hotbed for technical jobs in polymer science and related fields. Amis said his students have little to no problems finding jobs, especially in Northeast Ohio. “Certainly, this spring, we’re not having any trouble with students getting offers,” Amis said. “They’re getting four or five offers — which they like, because it gives them a lot of choices. I always say that we have ‘essentially’ a 100% placement rate — because I know if I just say 100%, someone will find somebody … but our students continue to do very well.” That mix of students and available jobs is the chicken-and-egg relationship that most say makes the region’s polymer science continue to succeed. “There’s research institutes, government agencies, associations; there really is a great network here. And it makes a lot of sense to be here if you’re in the polymer industry,” says A. Schulman president and CEO Bernard Rzepka. That’s why when Schulman built a new headquarters in 2013, or when it consolidated many of its corporate services this year, it didn’t even consider another location. “We’ve made a very conscious decision to stay in this area and to reinvest in this area, primarily because of Akron U. But not just because of Akron U … there are so many benefits to being here, I could talk for
probably an hour about that,” Rzepka said. Like his counterparts at Goodyear, PolyOne and other companies, Rzepka said the region is the best place for his company because of the available technical workforce, the opportunity to conduct research at both the University of Akron and Case Western Reserve University, and because there are so many other companies located in the region that can be potential partners on technical and business initiatives.
Rich in tire R&D centers Such attitudes don’t surprise Goodyear’s Zekoski. “We see that a lot of competitors starting R&D organizations in this area – even those that aren’t headquartered here – we assume for these same reasons,” Zekoski said. In the past 10 years, Hankook Tire America, Nexen Tire America Inc., American Kenda Rubber, Giti Tire and Triangle Tires all have opened technical facilities in and around Akron. Bridgestone Americas made one of the biggest investments of all when in 2012 it opened its new $100 million R&D center in Akron. All of them are here for the region’s technical talent, Zekoski said. But what about the future? The U.S. tire and rubber business is not known as a high-growth industry, and much of the U.S. plastics industry has clustered around the Gulf Coast region, where many of its raw materials are produced. SEE LEGACY, PAGE A4
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Research is king: Akron is home to many tire R&D centers When tire manufacturers stopped making their products in and around Akron, the companies’ presence was completely lost. With its strong polymer science community and the University of Akron’s expertise in the field, Greater Akron is home to several tire company research and development centers. Below are snapshot listings of the area’s tire tech centers. The information was collected through a survey of the company, unless otherwise noted. In those cases, information was gathered from published reports.
American Kenda Rubber Ind. Co. Ltd.
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Hankook Tire America Corp.
Location: 5801 Mayfair Road, North Canton Website: www.kendatire.com/en-us Year opened: 2015 Size: 50,000 square feet Manager/director: Thomas Williams Number of employees: 25 — including two chemists/ chemical engineers, 18 mechanical/dynamic property, engineers and five other employees Capabilities: Computer-aided design, physical tire testing, raw materials/chemical testing Projects: Original equipment homologation (a process companies must go through to get certified as an OE supplier), replacement market products, consumer tires, off-road
Bridgestone Americas
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Location: 10 E. Firestone Blvd., Akron Website: www.bridgestoneamericas.com Year opened: 2012 (new building opened in 2012; in operation since 1900) Size: 260,000 square feet Senior vice president of technology: Steve Shelton Number of employees: Fewer than 1,000 Capabilities: Computer-aided design, physical tire testing, raw materials/chemical testing, prototype tire production Projects: OE homologation, replacement market products, consumer tires, commercial tires, off-road
Giti Tire (USA) Ltd.
Accounting | Technology | Advisory Services 877.279.1900 | www.sikich.com
Location: 3755 Boettler Oaks Drive, Uniontown Website: www.giti.com Year opened: 2013 Size: Not available Manager/director: Hamid Aboutorabi Number of employees: six Capabilities: Computer-aided design, physical tire testing Projects: OE homologation, replacement market products, consumer tires, commercial tires
Goodyear Location: 200 Innovation Way, Akron Website: corporate.goodyear.com Year opened: 1978 (structure originally opened in 1916 as a tire plant; re-engineered in 1978 as Innovation Center; upgraded in 2013-15 with new headquarters) Size: 813,000 square feet Manager/director: Joe Bellissimo Number of employees: 1,100 Capabilities: Computer-aided design, physical wheel testing, raw materials/chemicals testing Projects: OE homologation, replacement market products, consumer tires, commercial tires, off-road tires, aviation tires, race tires
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LEGACY CONTINUED FROM PAGE A3 At the same time, the industry’s technical needs have increased – medical devices, aerospace applications and vehicle manufacturers seeking to make cars and trucks lighter and more efficient are constantly demanding more from the plastics industry, said Bruce Fawcett, executive director of PolymerOhio. While Houston might lead the na-
Location: 3535 Forest Lake Drive, Uniontown Website: www.hankooktire.com/us Year opened: 1996 Size: 48,000 square feet Manager/director: Thomas Kenny Number of employees: About 40 Capabilities: Compound development Projects: OE homologation, replacement market products *No survey returned
Kumho Tire USA Inc. Location: 711 Kumho Drive, Fairlawn Website: www.kumhotire.com Year opened: 1990 Size: 20,000 square feet Manager/director: David Klekamp Number of employees: 18 — including one chemist/chemical engineer, six mechanical/dynamic property engineers, 11 other employees Capabilities: Computer-aided design, physical tire testing, raw materials/chemical testing Projects: OE homologation, replacement market products, consumer tires, commercial tires
Nexen Tire America Inc. Location: 4150 Highlander Parkway, Richfield Website: www.nexentireusa.com Year opened: 2008 Size: Not available Manager/director: George Kamvouris Number of employees: Not available Capabilities: Computer-aided design, physical tire testing, raw materials/chemical testing Projects: OE homologation, replacement market products, consumer tires
Triangle Tires USA LLC Location: 411 Wolf Ledges Parkway, Akron Website: www.a3tllc.com Year opened: 2011 Size: Not available Manager/director: Edward Montgomery Number of employees: Nine Capabilities: Computer-aided design Projects: Replacement market products, consumer tires, commercial tires, polymer
tion in plastic production, Akron remains a hotbed for his industry’s research and development, he said. Akron’s polymer and plastics industry might be getting a new boost as well, thanks to a shale-gas drilling boom that’s erupted in eastern Ohio. Royal Dutch Shell announced in June that it will build a $4 billion ethane cracker about an hour’s drive to the east – something many say will spur more plastics and specialty chemical companies to locate operations near the newfound cheap supply of raw materials.
If the cracker is built and attracts the plastics and chemical industry as promised, it could be Akron’s second boom in the field of related manufacturing and material science. PolyOne’s Murphy is also optimistic that the cracker will give his industry another boost in the region. “It (the cracker) continues to solidify that this is a center for the industry,” Murphy said. “The more infrastructure you put in the region, the stronger the industry gets. And it will help to continue to attract new talent as well.”
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Giti Tire Kumho has high hopes for tech center plans R&D center expansion By WILLIAM SCHERTZ TIRE BUSINESS
By KATHY MCCARRON TIRE BUSINESS
Giti Tire Group’s North American research and development (R&D) center, which opened a couple of years ago in Uniontown, plans to likely double in size to support the tire maker’s first North American tire plant under construction in South Carolina. “We are going to be expanding the capabilities of our center. Once the plant goes into operation (by 2017), our complex will change somewhat in order to support the production there and introduce new tires,” said Hamid Aboutorabi, director of the R&D center. The Uniontown facility is one of five R&D centers the Singaporebased tire maker operates — the others are in China, Indonesia, United Kingdom (testing center only) and Germany. Despite being scattered around the world, there is a lot of coordination between the Giti R&D centers, Aboutorabi said. “Our challenge has been so far to build a unified global R&D center for Giti Tire where we can draw on resources from each R&D center to bring to the same project, and we have done a fairly good job in that area. … We have put an infrastructure of communication for technology sharing that has essentially unified our approach in our technology,” he said. The Uniontown R&D center handles product development and application of advanced design technologies, testing support for North American programs, and technical and logistical support for the marketing activities of Giti Tire USA and Giti Tire Canada, the company said. “We are actually a marketing-driven organization for market demand,” Aboutorabi said. “The intelligence is gathered by a marketing team and then, collaboratively with R&D and marketing, we sit down together and define the targets for our program … There is very close cooperation between marketing and R&D, so that at the end of the cycle we have exactly the product that the market demands,” he said, noting that the development cycle can range from six months to two years, depending on the complexity of the project. The center uses computer-aided design technologies and has tire testing capabilities. Soon, more testing equipment will be added at the center and the staff will be increased, Aboutorabi said, declining to give an employment figure but noting that the center will be “growing very rapidly, probably more than doubling in size.” The Uniontown center also will expand its indoor test capabilities, and the facility may become more involved in original equipment tire development after the U.S. plant opens. Aboutorabi said the R&D’s location near Akron — a tire industry hub for R&D centers, equipment manufacturers and materials suppliers — has provided advantages for Giti.
As Kumho Tire USA Inc. positions itself for an expanded presence in North America after the recent opening of its first U.S. plant, the tire maker’s Kumho American Technical Center (KATC) in Fairlawn will continue to play a big role in its growth. Kumho’s $450 million plant in Macon, Ga., gives the firm an annual capacity of 4 million passenger and light truck tires and will serve as a foundation to enhance its original equipment market share in North
America. With that in mind, KATC is looking to expand its staff of about 20 and add to its testing capabilities to accommodate new projects. “As we add different OE customers, they may require a certain test, so we may add equipment here and there,” said David Klekamp, general manager at KATC. Though the company is not physically expanding KATC, it is looking for new engineers and technicians as it expands its workforce, Klekamp said. Kumho transitioned to its current U.S. technical center, a 20,400square-foot facility, in 2001 from its
previous location, a 2,500-squarefoot center it opened less than a mile away in 1991. The tire maker spent approximately $2 million to build the Fairlawn facility. For its part, the facility handles a variety of product development and testing procedures, working at times independently from and in cooperation with Kumho’s other technical centers, in Yongin City, South Korea; Frankfurt, Germany; and Tianjin, China. KATC has had a role in developing a number of recent Kumho product additions, including the Road Venture all-terrain tire, Solus grand tour-
ing all-season tire and Solus standard touring all-season tire. Ed Cercek, a tire engineer at KATC, said the location of the facility has come with a number of benefits. “You’ve got (the University of Akron) here; you’ve got the polymer center here,” he said. “Even though the manufacturing has left, everyone still views Akron as sort of the think tank of the industry.” In addition to its own tire development, Kumho contracts out some testing locally through Akron Rubber Development Laboratory Inc. and Smithers Group Inc.
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City to spark long-delayed Main Street project By JENNIFER CONN clbfreelancer@crain.com
A project to redevelop a blighted block in downtown Akron’s central business district that has been stagnant for more than eight years and has racked up over $150,000 in delinquent property taxes must commence construction in early July or be terminated by the city. According to Akron mayor Dan Horrigan, the city is laying down some new stipulations as a way to create the best conditions to see the project come to fruition. “The city assumed a lot of risk over the years in acquiring these properties, and now it’s time to develop them,” he said. “If someone cannot or will not, we’re going to move to the next step and give somebody else a shot.” Known to city officials as the Lock 4 redevelopment, the project has been beleaguered by missed deadlines and amended contracts since it was conceived in March 2008 by the city and Main Street Partners LLC of Kent. The lease agreement outlines two parcels: Parcel 1 includes the properties at 164-186 S. Main St., a stretch of five buildings between the Akron Civic Theater and the historic Landmark Building. Parcel 2 is the Landmark (the former Akron Savings & Loan) at 156 S. Main St. Stage Left, which sat to the south of the Civic and was recently demolished, was included in the original agreement. The developer purchased Parcel 1 for $1 per building. The Landmark sale price is $1,299,990. The contract stipulated improvements for the combined parcels to total no less
Before being demolished in May, the Stage Left building next to the Akron Civic Theatre was part of the proposed plan. (Shane Wynn for Crain’s) than $9,750,000. The development project launched under a 2008 agreement with thenmayor Don Plusquellic’s administration, but the economic recession spurred extensions for funding and a new contract was signed in 2013, said former Akron deputy mayor Dave Lieberth, who oversaw downtown development during his 10-year tenure with the city. Work, however, continued to stall, and on March 17, 2015, the city is-
sued a letter to Main Street Partners outlining deadlines that had to be met to avoid termination of the project. However, Plusquellic resigned not long after issuing those terms, and the project again languished. Akron Mayor Dan Horrigan’s administration now has inherited the project.
Setting a plan Through a public records request, Crain’s obtained several documents about the project. A June 1 missive from Horrigan to Main Street Partners gave the developer 60 days to purchase the Landmark to avoid termination of the project. An April 1 letter from the mayor to the developer detailed a final series of cures for the retail buildings. To avoid default, Main Street Partners also must pay all past due property taxes within 120 days (Aug. 1); begin construction within 90 days (July 1); and complete construction within 180 days (Oct. 1). In meetings following the April 1 letter, the mayor and Main Street Partners agreed to reduce the number of buildings in the project from the Landmark and the five retail spaces to only the Landmark and the two buildings just south of it. The remaining three retail buildings will be put out for bid to other developers, the mayor said. Jack Crews, Main Street Partner principal, said he anticipates the project will move but could not yet disclose the contractor for the project nor details of its funding. Crews said under the project, the Landmark will be redeveloped to provide 76 one- and two-bedroom, marketrate residential units, while phase two of the project would create 30 additional residential units in the retail buildings.
Push for downtown living The project has been watched closely by Akron business leaders who want the Rubber City to catch up with other cities that offer downtown residential housing. “People want to live in an urban core, and Akron is the economic engine for the area,” Horrigan said.
Akron’s Landmark Building will become one- and two-bedroom residential units. (Shane Wynn) “Young professionals, empty nesters and families want the amenities living downtown provides. That’s all part of a vibrant, thriving city.” According to Gary Rickel, vice president at CBRE and a Downtown Akron Partnership board member, Akron’s lack of downtown residential properties is affecting business occupancy, too. Downtown Akron is currently at its highest office vacancy rate since Rickel started charting vacancies in the 1980s, with 23.5% of offices empty, he said. “We’ve got so much going for us, and this is the one thing lacking in what’s going on downtown,” Rickel said. “We need market-rate housing for the people that want to live downtown. When that happens, you’ll start seeing others things happen as far as retail goes, and vacancy rates will drop in office buildings.” To spur activity on the Lock 4 project, Rickel said he continually spoke about it at DAP and city meetings over the years. “I kept trying to keep it on the front burner, but the burner never got turned on,” he said.
Focus on the core Greater Akron Chamber president Dan Colantone said accelerated
growth downtown would positively impact the chamber’s efforts to attract talent, innovation and leadership to Akron. “Like other cities, we absolutely need a balance of living downtown, retail and business, and the urban core and central business district is our highest priority,” Colantone said. “Whether it’s Lock 4 or any other opportunity for urban core development, the chamber will be an advocate and play a lead or supportive role where it’s required.” With the Civic Theater in the thick of the stalled project, executive director Howard Parr, too, has anticipated getting the project underway. With the Civic’s national acts drawing 60% of attendees from outside Summit County and 80% from outside Akron, the theater sitting on a blighted block is disconcerting. “For many of [theatergoers], this is their first experience with downtown Akron, so obviously having that block undeveloped is unfortunate,” Parr said. “We want to see that block vibrant and comfortable for people, with all those things that make the entire theatrical experience enjoyable. They’re not just looking for a ticket; they’re looking for an evening out.” Even the recent demolition of Stage Left, which had served as a storefront for theatrical novelties, Parr viewed as positive movement. And, like Colantone, Parr said his organization is willing to be supportive of the block’s development. “Bottom line is we are more than ready to be supportive of whatever’s going on or be a partner in whatever’s going on to the highest extent we’re able” he said. “Hopefully, we’ll see the redevelopment of that block. That’s what we want, and I think that’s what everybody wants.” According to Horrigan, the developer will be held to the dates outlined in the recent communications. “All points in the development agreement are in place,” he said. “It’s been my stated goal from beginning: The city owns a lot of properties; I want to get rid of them and turn them into assets that are performing.”
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THE MAIN COURSE: Jennifer Conn
Bomba Tacos & Rum brings sophisticated Latin tastes Bomba Tacos & Rum does not fit into a standard restaurant category. When you think of tacos, you likely think Mexican food. And when you think of rum, the Caribbean might come to mind. But Bomba is neither. It’s what founder and CEO Andy Himmel calls an interpretation, not an imitation, of Latin American cuisine from across the continents. And even with that, the dishes and cocktails are inspired by those regions, not dictated by them. Himmel, who grew up in Beachwood as the son of a restaurateur, opened the flagship Bomba Tacos & Rum in Rocky River a couple of years ago and operates another in Hallandale Beach, Fla. The Copley location opened in May. Of course, Bomba features a huge array of rums, whose origins and flavor profiles are explained in the menu. But you also can comfortably take your kids in and let them build their own grilled fish taco or chow down on chicken fingers and fries. Bomba offers a robust menu, and Himmel takes pride that 99% of the dishes and drinks are scratch-made — from the sauces, relishes and salsas, to the sour mix, juices and flavorings behind the bar. “Rum is an old spirit, and the rum
Bomba Tacos & Rum, at a glance
(Shane Wynn for Crain’s) Where: 3900 Medina Road, Copley Hours: 11 a.m.-10 p.m. Sunday-Thursday, with bar open until 11 p.m.; 11 a.m.-11 p.m. Friday-Saturday, with bar open until midnight. The vibe: Fun, casual and family-friendly, with a full bar. The spacious dining room seats 220, and the outdoor patio seats 25. Specialties: Tacos that feature a wide variety of flavors and ingredients, and build-your-own guacamole. Drink specialties include mojitos and rum drinks from spirits distilled around the world, with a handful from Cleveland. Menu: Scratch-made dishes that reflect sweet and savory notes and flavors from across Latin America. Many gluten-free, vegetarian and vegan offerings, as well as many meat and fish dishes.
drinks in the Caribbean and other places in Latin America are strong and festive with celebratory taste,” he said. “When it’s done right, with rich rums and fresh juices, it’s spectacular.” The interior of the restaurant is vivid, too. Two dramatic murals on opposite walls of the entry are done in colors – magenta, turquoise, green and gold – that speak of tropical climes. The L-shaped dining area, under a high industrial-style ceiling, affords a view of the spacious bar area, with its dropped tin ceiling, high-top tables and bar-to-ceiling wall of bottom-lit rums. Himmel developed the concept for this convergence of Latin American flavors and themes from the Bomba, a drum rhythm and dance with origins in the Puerto Rico’s sugar cane fields. The rhythms were played out on empty, overturned rum barrels. “It was a release from everyday life, a way to live in the moment,” Himmel said. And he wanted Bomba Tacos to have the same feel – an easily accessible, fun and casual place to try something a little different. The challenge, he said, was that when most people choose a restaurant, they ponder location and the type of food they want, such as Italian, Mexican or Thai. That’s not so easy with Bomba, because it crosses so
many geographic lines. But tacos resonate with many palates, and the ingredients can be extremely versatile. The centerpiece of the menu, developed by head chefs Joe Tis and Josh Bierman, is, of course, tacos. Choose from charred kale and corn tacos with spicy chile sauce; the eight-hour, slow-braised pork al pastor taco with pickled onion and pineapple slaw; or a taco with the spicy cauliflower, orange-soaked raisins and spicy chile sauce. Other taco ingredients include slow-braised duck or beef, crispy or spicy shrimp, and chipotle mushrooms. A variety of sauces and flavorings — such as jalapeno remoulade, lime crema and cilantro pesto — top tacos. Bomba also offers a selection of Peruvian rice bowls with toppings such as pineapple pork with pineapple balsamic aioli or guajillo chicken with poblano peppers, caramelized onion, and plantain and peanut crumble. Another featured menu item is the build-your-own guacamole. Diners can choose from 13 different ingredients, including candied pumpkin seeds and shrimp, and select from four-house-made salsas. As far as special requests go, if it’s in the kitchen, it will be accommodated, Hopkins said.
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AKRON ENTREPRENEURSHIP: Tobin Buckner
Three important lessons to be learned from the entrepreneurs of Akron’s past Akron has been dubbed the rubber capital of the world—and as Jeff Hoffman of the University of Akron’s EXL Center says, “it’s not because we make the most tires, but because we bounce back; we are resilient.” Our entrepreneurial spirit in Akron is made of the strongest stuff on earth. There are so many elements to starting and running a company, and we have a long history of finding new ways to create products and founding companies that have grown into some of the largest in the world. Here are three ways the entrepreneurs of the past blazed a trail we still can follow today as we work to build the economy of the future.
They solved problems In 1898, Frank A. Seiberling founded Goodyear Tire & Rubber Co. with
his brother Charles W. Seiberling because of their desire to participate in an enterprise that afforded a large “opportunity for invention.” But F.A. Seiberling did not invent the technology behind modern rubber tires (that was Charles Goodyear, who actually died penniless). Instead, he figured out how to apply this technology to the infant automobile industry at an industrial scale, turning Akron into a true world player in the process. Across town, German immigrant Ferdinand Schumacher, aka the Oatmeal King, built his empire on what most people at the time considered horse chow. His German Mills American Oatmeal Co. began by marketing oats to families looking for a cheaper alternative to breakfast pork. The company grew massively during the Civil War, when the U.S. government
looked to his oats to help feed thousands of famished Union soldiers. The company later merged with several others into the Quaker Oats Co. conglomerate.
They leveraged diversity As the center of African-American culture in Akron during the mid-20th century, Howard Street was home to many of the city’s black-owned business and entertainment establishments, and provided a rare atmosphere in which minority-owned businesses could truly thrive. Attracted to the vitality of the neighborhood, entrepreneur George Matthews in 1920 established a barbershop in Akron and in 1925 went on to open the adjoining Matthews Hotel. The Matthews Hotel quickly became the anchor of the Howard Street district. From the 1930
through the 1950s, Howard Street was in its heyday as a vibrant cultural center. The neighborhood became a regular stop for popular AfricanAmerican entertainers, artists such as Cab Calloway, Ella Fitzgerald, Louis Armstrong and Count Basie, all of whom, in turn, helped make Akron a national destination for live entertainment.
They didn’t follow the rules Do you ever wonder why Akron’s East Avenue is actually located in West Akron? I’ve heard a few stories, but it’s still officially unclear as to why this is. I like to imagine that the builders of the city just wanted to establish a certain quirkiness to our town—a sort of brand awareness that says we don’t always follow the rules, we don’t always conform to norms and
we are perfectly comfortable deviating from traditional ways of doing things. So, if you are embarking on this trip called entrepreneurship, use these stories and others as a way to Tobin Buckner is JumpStart’s Akron entrepreneurial community manager and contributes a monthly blog about entrepreneurship in the region. maintain grit, resilience, strength and perseverance. Remember, in Akron we have a history of solving problems, we embrace diversity and we don’t let barriers or old ways of doing things deter us. And perhaps, above all else, in Akron, we bounce back.
HOSPITAL CONTINUED FROM PAGE A1
well in your absence?” Papa said. “And I can tell you it does.” The Cleveland Clinic became a minority investor in Akron General in the summer of 2014. At the end of the year, Stover signed a three year contract with the goal of seeing the system through that integration. A little more than a year later, the Clinic took full ownership of the health system in early November 2015. In the several months since then, officials say, the transition has been smooth — even easy, thanks to a culture fit. “There’s just a whole host of things we’ve accomplished pretty easily, actually,” said Ann Huston, the Clinic’s chief strategy officer. “We have tremendous respect for each other. We have very strong aligned values.” Papa said the integration has come with some hurdles, but nothing big. Since the initial affiliation less than two years ago, Murphy said Akron General has saved about $3.6 million in operating expenses through joint purchasing and filled 615 new jobs in response to growth in volumes the system has seen. Huston said she sees community support as a primary driver of that growth. The Clinic brand has also helped volumes, Papa said. Right now, the system is in the middle of rolling out Epic, the electronic health records system the Clinic uses, throughout the system. About 66% of the 207 Akron General Partners Physician Group providers have switched to the system, which Papa said is “huge — you can’t underestimate that.” The system, he said, will collect medical records in one place, simplify records for patients, allow physicians to communicate better and, all in all, provide better quality and safe care. Akron General has also seen $1.3 million in new equipment, Murphy said.
Akron General has saved about $3.6 million in operating expenses since the initial Clinic affiliation less than two years ago. (Contributed photo) New IV equipment, monitors and ventilators have provided caregivers a better environment to provide excellent care, Papa said. The previStover ous equipment was functional, but this is state of the art. Papa said the goal is to find “on ramps” for integration, rather than takeovers. They’re working to inte-
grate various institutes. So far, the Clinic’s Taussig Cancer Institute and Akron General’s McDowell Cancer Institute are furthest down the line with ambulatory infusion centers already established. He expects to see heart and vascular institutes integrate pretty quickly as well, with others to follow.
Ongoing journey Though the “heavy lifting” of the transition should be done within 18 to 24 months, Murphy said the integration will be an ongoing journey.
Capital investments, recruitment of hard-to-get specialists and other factors will remain in play, Papa said, but most of the integration will be done within a year or two. In retirement, Stover is “doing great,” said Papa, who’s spoken with him since the announcement. “He’s playing with his grandkids, and playing golf and relaxing,” said Papa, who also noted that there aren’t any immediate health concerns. The search for a permanent replacement for Stover is underway.
“The key will be that we find a physician leader that is a fit for the community and a fit for Akron, and we know that’s critically important,” Murphy said. “We definitely want a physician that will be able to connect in a special way to everyone and to the community.” Huston, who’s texted Stover since his retirement, said that if she had to bet, he’s “probably driving his motorcycle home from the golf course right about now, very much looking forward to spending time with his family.”