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Integrated Wellness Partners tops original projections, approaches $150 million in investments — P. 3 The NFL is emphasizing its roots, which is bolstering the league’s bond with Cleveland and Canton — P. 6

Cleveland has strong ties to gene therapy Local businesses are getting strong results in booming industry By CHUCK SODER csoder@crain.com

CONTRIBUTED PHOTO

Parker Hannifin Corp.’s RunWise hybrid drive system cuts the fuel consumption of heavy-duty vehicles by 50%.

On the move to efficiency New federal fuel economy proposal could prove to be beneficial for several local companies By RACHEL ABBEY McCAFFERTY rmcafferty@crain.com

26

A new set of federal fuel economy proposals for medium- and heavy-duty vehicles could lead to some technological advancements in the field. The “technology-advancing standards,” as they’re called in the proposal, are being put forth jointly by the Environmental Protection Agency and the National Highway Traffic Safety Administration as the second phase of the government’s efforts to lower carbon dioxide emissions and fuel consumption for these vehicles. The first phase was passed in 2011, taking effect for model years 2014 through 2018, and did not include trailers. The new proposal is a lengthy one, at more

cles was to ensure that already available technology made its way onto trucks, said Matthew Spears, center director for the EPA’s heavy duty diesel standards-setting programs. The long timeframe of the next phase, coupled with advanced manufacturing methods, would allow that to grow. “This is going quite a bit further,” Spears said. The proposal offers a variety of options companies could use to meet the standards, from improving a vehicle’s idle performance to making the design of a truck more aerodynamic. While fleet operators stand to save money from the proposal, manufacturers are the companies that will be driving the changes. And with Northeast Ohio’s strength in the vehicle supply chain, plenty of local companies would get the See EFFICIENCY, page 20

See THERAPY, page 22

MORE INSIDE A chance meeting proved to be quite beneficial for the founders of Abeona Therapeutics. Page 22

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ALSO INSIDE: NEWSPAPER

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than 1,300 pages. The proposed implementation period is relatively long, too: from model years 2021 to 2027 for medium- and heavy-duty vehicles (or Class 2b through 8), and beginning in model year 2018 for trailers. The proposal also includes a faster alternative time period. If passed as proposed, the agencies estimate that by 2027, fuel use and carbon dioxide emissions could be cut by 16% in vocational vehicles (such as delivery trucks or school buses), pickup trucks and light vans, compared with phase one’s standards. For combination tractors made to pull trailers that figure could go up to 24%. Overall, the EPA estimated the standards could lower CO2 emissions by about 1 billion metric tons. The first phase of the greenhouse gas-related regulations on medium- and heavy-duty vehi-

A new gene has been imbedded into Cleveland’s biomedical DNA. A few local companies are developing drugs that use viruses to insert new genes into people’s cells — a technique that has the potential to reverse a long list of fatal diseases. Among them is Abeona Therapeutics — Cleveland’s newest public company. In May, Dallas-based PlasmaTech Biopharmaceuticals bought Abeona in exchange for PlasmaTech stock that was valued at about $25 million as of last Thursday, June 25. Then PlasmaTech adopted the startup company’s name and hired Abeona CEO Tim Miller to lead the entire operation, which is now based in Cleveland. Why? Like many drug developers these days, PlasmaTech wanted to get into gene therapy. And Abeona looked like a good platform to build on, since it was already developing gene therapies for a fatal group of diseases called Sanfilippo syndrome. Since that deal closed, Abeona has licensed a few more gene therapy technologies and announced plans to establish its headquarters on the

LEGAL AFFAIRS Greater Cleveland’s law firms are struggling when it comes to diversity ■ Pages 11-17 PLUS: ADVISER ■ LGBT WORKPLACE POLICIES ■ & MORE

Entire contents © 2015 by Crain Communications Inc. Vol. 36, No. 26

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Small Business Matters i Want more information and resources on this week's topics, ideas and events? Go to www.cose.org/smallbizmatters.

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#26 – Flawless Communication Leads to Happy Clients Communication is the lifeblood of any business/client relationship, and poor comT\UPJH[PVU VM HU` [`WL PZ H Z\YLÄ YL ^H` [V damage that connection. No matter what type of business you are in, healthy communication skills are key to keeping clients happy. William Beachy, president of GoMedia, a full-service web, logo and graphic design studio located in Cleveland understands the importance of quality engagement with clients. “We communicate with many our clients on a daily basis,” says Beachy. “We want to make sure we are consistently communicating in ways that strengthen the relationship and provide value to the client.” Establish the details. Be sure to accuYH[LS` NH[OLY WYVQLJ[ KL[HPSZ HUK ZWLJPÄ JZ including deadlines, project scope and deliverables and payment terms. Although this seems elementary, many professional service providers don’t do a thorough enough job collecting all the details of a job. Err on

William Beachy, GoMedia the side of asking too many questions. Manage expectations. Clients appreciate punctuality. Take the lead in setting a schedule and be sure to honor the deadlines – no excuses. When you hit your deadlines you’re as good as gold to your clients. If you make a schedule only to miss all the deadlines you’ve set, you’ll only punctuate your failures. Keep it professional. Today, instead of picking up the phone or scheduling an

in-person meeting, client communication often takes place via a quick email. The convenience of this type of communication does not diminish the importance of keeping communications clear, professional and client-focused. Repost feedback. When responding to client feedback, include their original comments along with your responses to show them that you are listening and following direction. Over deliver. Along with delivering what `V\»]L WYVTPZLK V LY H SP[[SL ZVTL[OPUN L_ tra. It may be something as simple as advice or counsel at no extra charge. Make them laugh, or at least smile. If you can make a client smile or laugh, you’ve absolutely endeared yourself to them. Say thank you often. We’re all busy, but don’t forget to take the time to let your clients know you appreciate their business. Nothing is more powerful than a well-timed and sincere thank you.

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Signet’s wellness arm bulks up Integrated Wellness Partners is eclipsing estimates and has projects that total more than $145 million in investments By TIMOTHY MAGAW tmagaw@crain.com

Integrated Wellness Partners’ top brass would bristle at the company being characterized as a mere gym operator, and fairly so, given that its complex model for delivering health and wellness centers is the reason the company is gaining traction across the state and even country. The company, which is part of the Akron-based investment and development firm Signet Enterprises, launched quietly in 2011 but has since grown to include wellness center projects that boast more than $145 million in total investments. Within the last year, centers in conjunction with Northeast Ohio Medical University and Ohio State Wexner Medical Center went live. Also, in May, Signet broke ground on a $35 million facility in Bloomington, Ill., with Advocate Healthcare — the largest health system in Illinois — and other partners. And with membership growing at a steady clip at its live centers and beating projections, “It puts us in a position where we are getting a lot of inquiries about this concept from major hospital systems and other institutions across the country,” according to Mark Corr, Signet Enterprises’ president and chief operating officer. Leading the Integrated Wellness Partners’ effort is Jim Ellis, who arrived at the company in October 2013. Ellis, a triathlete, arrived with more than 25 years experience in the medically based fitness center space. Before joining the Integrated Wellness Partners team, he helped launch a center with the University of Colorado. “What attracted me to come here, as beautiful as Northeast Ohio is and to leave Colorado, was the opportunity to do something that was truly turnkey,” said Ellis, the company’s executive vice president and managing director. “I’ve spent most of my career in meetings with health care executives who love the model and the idea of adding health and wellness to their

CONTRIBUTED PHOTO

The Philip Heit Center for Healthy New Albany opened in February. The facility is operated in conjunction with the Ohio State Wexner Medical Center. continuum of care, but they had so many competing demands for their capital,” Ellis said. Integrated Wellness Partners’ value play, thanks to its close ties with Signet’s real estate and financing arms, is investing significant capital into these burgeoning projects and thus is taking on some of the risk. Integrated Wellness Partners also staffs and operates the fitness centers, which have close ties with local medical providers for rehab and other services. Health systems in particular find the model attractive given their

JOIN THE CLUB Since last August, Integrated Wellness Partners has been a part of three major wellness center projects — two of which have already gone live: ■ The Philip Heit Center for Healthy New Albany — 51,754 square feet; opened February 2015 ■ NEOMED Education and Wellness Center, Rootstown — 177,338 square feet; opened August 2014 ■ The Center for Integrated Wellness, Bloomington, Ill. — 105,000 square feet; scheduled to open in 2016 steady march toward embracing population health and redesigning their care system to focus on keeping people healthy rather than

treating them only when their sick. “They’re willing to put something in the operation,” said Dan Like, Ohio State Wexner Medical

Center’s executive director for ambulatory services. “The better it does and faster it starts making money, the quicker they get their return,” Like said. “We like that too because it took away from our capital requirements and shifted some of the risk.”

Community focus None of Integrated Wellness Partners’ projects is the same, and company leaders say its flexibility — largely due to its ties with See SIGNET, page 9

Developer’s ‘dream’ venture could be big for lakefront BY THE NUMBERS At look at downtown Cleveland’s lakefront development:

50,000 Square feet of retail space

80,000 Square feet of office space

1,000 Apartment units Source: City of Cleveland

Plan calls for retail, office and apartment structures to be built along North Coast Harbor By STAN BULLARD sbullard@crain.com

Thirty years ago, a young architect named Richard Pace was a staffer on an early planning study for developing downtown Cleveland’s lakefront at the north end of East Ninth Street. There was no Rock Hall, no Great Lakes Science Center and no pond-like inner harbor there. As of June 16, the same architect (now turned real estate developer) in a joint venture with Dallas real estate development firm Trammell Crow Co. executed an option with the city of Cleveland to go beyond the plans for the same strip of Lake Erie coastline and to build on it

retail, office and apartment structures. “This is fulfilling a dream,” Pace said last Wednesday, June 24, as he discussed business terms for one of the most long-awaited real estate developments in the city’s history. “We’re farther along than anyone else has gotten in the last 50 years.” In broad outline, the city’s terms allow the developers to pay up as they put up projects. City spokesman Daniel Ball confirmed the developers put no money down as they executed the option this month. Instead, the developers will be subject to payments as they lease each of six phases surrounding the city’s North Coast Harbor. The biggest cost they stand to have

to pay is a minimum of $22.4 million over 50 years to replace parking revenue the city receives from the properties on the west side of the harbor north of FirstEnergy Stadium. A market rent will be assessed for just two parcels on the east side of North Coast Harbor and southeast of the Rock and Roll Hall of Fame and Museum. Those rents are $9,634 and $23,124, respectively, each year, in addition to repaying $195,182 annually in parking revenue. However, those terms would only kick in for 50 years if the larger parcels north of the stadium are not developed. Another clawback the city put into the project if the developers

fail to proceed is that they will have to surrender architectural designs, engineering studies and other materials to City Hall. That would give the city ammunition to restart the effort anew, perhaps wooing another developer. Pace said his team had no problem agreeing to surrender the planning studies. “The number one thing is that we believe we are going to perform,” he said. The developers also paid an amount Pace declined to disclose for an appraisal they and the city used to set the market value of the property. He said the idea of replacing the city’s lost revenue from See LAKEFRONT, page 21

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The Geauga Savings Bank of seven years ago looks quite different from the institution regulators say is operating soundly today. A lot has changed since the bank was charged with unsafe banking practices in a 29-page cease-anddesist order issued by the Federal Deposit Insurance Corporation and Ohio Department of Financial Institutions in January 2009. The order alleged the bank operated with hazardous lending and collection practices, poor management and dangerously weak capital levels. It was replaced by a consent order in April 2013 outlining continued improvements expected of the bank, which agreed to the orders without admitting to or denying any charges. That 2013 order was released earlier this month. The bank’s executives say the removal of the consent order means the company can focus less on compliance and more on growing the business. For Allen Lencioni — who came to Geauga Savings from Chicago in December 2008 to turn around the bank as president and CEO when executives knew the FDIC was bearing down — it has been a long few years. But with a fresh strategy void of the bad habits that got the bank in hot water years ago, the once-struggling institution is feeling empowered and positioning itself for growth after years of fighting for survival. “The bank is definitely out of trouble,� Lencioni said, “and we feel great about it.� Last Monday, June 22, however, Geauga Savings board members replaced Lencioni with Jim Kleinfelter, who comes to the bank from Young & Associates Inc., a Kent-based firm specializing in consulting services for community banks. The firm worked with Geauga Savings during its recent turnaround. Bob Bloom, a longtime Geauga board member and current chairman, said the bank negotiated an amicable split with Lencioni considering a difference in perspective on how to move the bank forward today, and Kleinfelter’s expertise in community banking. “We want to get more aggressive in real estate loans, both conforming and nonconforming. I really think a community bank has to do more residential lending, and that’s what we

want to focus on now,� Bloom said. “The directors are also more interested in mobile banking, which we don’t really do now.� Lencioni “I’m glad (Lencioni) helped us get out of the order,� Bloom added. “But this is more about where we’re going in the future.�

‘This is Newbury, not Manhattan’ Being a small, rural bank that relied heavily on subprime mortgage loans, the recession hit Geauga Savings particularly hard. According to data reported to the FDIC, the bank had more than $8 million in 30- to 89-day past due assets in December 2008. By December 2012, that had been reduced to $1.8 million. “The government would come in and tell you we want you to make loans to people who need it,� Bloom said. “Especially in our area, you don’t have people with these high credit scores — this is Newbury, not Manhattan. We helped Amish people who didn’t have good credit scores because they don’t borrow money. We made a lot of what we thought were community minded loans.� But the bank’s books started to sour when loans started turning past due in droves. The FDIC directed Geauga Savings to reduce those problem assets quickly. The bank achieved that through a combination of collecting on loans while selling and restructuring others, Lencioni said. Many of the problem assets were commercial and residential real estate mortgages that weren’t delinquent but had terms that were too long or lacked proper covenants. Additional issues at the time exacerbated Geauga Savings’ problems. For instance, foreclosure times slowed significantly. And all the while, properties started to lose value. “We had properties valued at $250,000 that weren’t worth $50,000 by the time we got to them,� he said. “This was happening everywhere.� Meanwhile, with hands tied by the FDIC, the bank was restricted from raising deposit rates and could only offer an aggregate average rate based on other nearby institutions. As other banks raised rates significantly to draw deposits, Geauga Savings was stuck because that average level was still repressed in comparison. “I’m not sure I wanted to compete with them,� Lencioni said, “but I never even had the option before.� The bank bought CDs to capture some deposits. Still, according to the FDIC, Geauga Savings’ 2014 deposits fell nearly 28% since 2008.

To remain solvent, directors raised $6 million to inject into the bank, Bloom said. A bulk came from existing shareholders, and Bloom said that internal commitment helped draw additional investors. While the orders on the bank itself have been lifted, still in effect, Lencioni noted, is a regulatory order for Geauga Savings’ holding company, Maple Leaf Financial Inc., based on excessive debt. But payments to that debt are on deferment until 2019. “We have time and expect to achieve ability to pay dividends in that time,� Lencioni said. Last year, the bank — now at about $360 million in total assets compared with $403 million just three years ago — earned about $1 million, Lencioni said. But he projected that to double this year, pointing out the bank has been averaging about $2 million to $3 million in new loans a month.

A fresh start “A lot of the heavy lifting has been done (at Geauga Savings),� Kleinfelter said. “Now we want to work to restore the bank to a true community bank focus.� That means operating with a more traditional community bank model by balancing deposit growth and portfolio diversification with commercial and small business loans, deepening community relationships and developing a stronger retail presence. “We will eventually have more focus on making consumer loans and consumer residential loans as opposed to a predominant focus on investment real estate,� Kleinfelter said. Construction loans, new credit lines, home refinancing and mobile banking are some other areas Bloom said directors are interested in. Kleinfelter, 60, was president and senior consultant at Young & Associates, where he has spent the last 12 years. He’ll continue working there part-time through their transition period but is focusing his time on Geauga Savings. Kleinfelter worked in various roles with community banks prior to consulting, which most recently included 17 years with The Savings Bank and Trust (formerly known as The Orrville Savings Bank). He also worked with Society National Bank of Northwest Ohio and Bank One Wooster. But his consulting efforts through the years put him in hundreds of other banks where he often held interim positions — efforts he asserts makes him even better suited to lead a bank today. “I’ve missed community banking in my last 12 years,� he said, adding he’s tired of traveling and is “looking forward to being home at night.�

Editor’s note In a 5-4 decision issued last Friday, June 26, the U.S. Supreme Court legalized same-sex marriage nationwide, overturning state gay marriage bans. As a result, a story on Page 14 of this week’s issue, “LGBT workplace policies should become front-burner issue,� contains some outdated phrasing. The page was printed prior to the court’s decision.

Volume 36, Number 26 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230. Copyright Š 2015 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00. POSTMASTER: Send address changes to Crain’s Cleveland Business, Circulation Department, 1155 Gratiot Avenue, Detroit, Michigan 48207-2912. 1-877-824-9373. REPRINT INFORMATION: 212-210-0750

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Battle over Nexus pipeline shows little signs of slowing By DAN SHINGLER dshingler@crain.com

The fight over whether to put the very large, high-pressure Nexus natural gas pipeline under residentially populated portions of Stark, Summit and Medina counties, or through more rural counties to the south, continues to heat up. Developer Spectra Energy of Texas is taking Ohio landowners to court, demanding access to survey private property, while it continues to pursue approval by the Federal Energy Regulatory Commission. Landowners, meanwhile, continue to organize, draw support and prepare to raise money to mount as many legal hurdles as possible in front of the pipeline. Opponents of the plan — most notably residents of Medina County and the city of Green in southern Summit County — maintain that the pipeline is not only unnecessary, but dangerous. They have distribution-pipeline developer Dave Eigel, a member of the Ohio Oil and Gas Association and a former member of the OOGA board, citing what he says are dangerous risks the pipeline would create for him and others along its route. Meanwhile, Spectra Energy, the Texas company hoping to get the FERC to approve its preferred

northern route, says an alternative route proposed by Green is a nonstarter. It already has begun to take property owners to court, seeking injunctions that would force landowners to allow Spectra’s surveyors on their land along the company’s intended pipeline path. In recent email correspondence, Spectra said it has been granted temporary restraining orders, which give it access only to survey, against four landowners in Sandusky County and two in Columbiana County. It also has “reluctantly brought actions against 14 individual landowners in Erie County and NEXUS continues to work with them in hopes of arranging a voluntary agreement while the actions are pending,” said Spectra spokesman Arthur Diestel. Spectra has been able to file against multiple landowners at once, telling the courts that its proposed pipeline will “provide critical access to emerging natural gas supplies from the Marcellus and Utica” shales. It also has been emphasizing that it has an in-service date of Nov. 1, 2017, when it’s supposed to start taking gas out of Ohio and Pennsylvania, where it’s fetching about $1 per mcf, and delivering it to markets in Canada, Michigan — and possibly other places — that pay $2.50 or more.

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Worth the risk? Such a project would be a boon to drillers and big landowners in eastern Ohio, who would reap much of the benefit of those higher prices. Landowners to the north say they get that and are all for higher prices for Ohio gas, but they object to the current proposed route — loudly. Opponents argue the line would restrict economic development along its path and create a permanent source of danger. Far fewer people would be put at risk, they say, if the pipeline takes a more southerly path on its way from eastern Ohio to southeast Michigan. Eigel, a longtime oil and gas man who develops smaller distribution and interconnection pipelines in Ohio, has joined with those opposed to Spectra’s current route. “I’m not against these pipelines. They’re important. They’re important to our country, their important to business,” Eigel said. “But the regulations have not kept up with the size and the pressures of these lines.” Eigel said the public’s safety should be given more weight by federal regulators. “That’s the major concern I have. Look at the studies — if anything See PIPELINE, page 7

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When Pro Football Hall of Fame president and executive director David Baker spoke to two groups of NFL rookies who visited the Canton landmark last week, he gave the 20somethings a brief history lesson. The American Professional Football Association was launched in Canton on Sept. 17, 1920. Nearly 95 years later, the NFL — no matter how many hits it takes — is the most powerful sports league in the country. The league’s bond with its birthplace, and all of Northeast Ohio, “has never been better than it is right now,” Baker said. Last February, embattled NFL commissioner Roger Goodell spoke at the Canton Regional Chamber of Commerce’s annual dinner — a $100-per-ticket event that drew a record crowd of about 900. For the fourth consecutive year, the league’s annual Rookie Symposium, a week-long event that concluded on Saturday, June 27, was held at the Bertram Inn and Conference Center in Aurora. And then there is the Hall of Fame, whose annual enshrinement weekend, according to Baker, attracts more credentialed media than any NFL event aside from the Super Bowl. “As the NFL has become more and more successful in terms of finances and visibility, they’ve also made a commitment that they need to be more in touch with their heritage and values,” said Baker, a former Arena Football League commissioner who was named to his current post in January 2014. “And that’s really what the Hall of Fame stands for.” The AFC’s drafted rookies, including the Cleveland Browns’ 12member class, toured the Hall of Fame on June 24. Their NFC counterparts followed on June 27. The league organized a mandatory trip to the Hall of Fame for its rookies in 2008, but the extra costs and logistics resulted in that practice ending after one year. But once the NFL moved the Rookie Symposium to Northeast Ohio in 2012, those trips became a heck of a lot easier, and are now the norm for first-year players. Last week, Baker concluded his second year of talks to the more than 250 drafted players.

“The message for them is if you play one day in the NFL, you’re a resident of Canton, Ohio, for your entire life,” the Hall of Fame president said. The Hall of Fame has records of everyone who has played or coached in the league. “A guy can have his own archive,” Baker said. “We give them a lifetime pass here. I’ve been here when there have been NFL grandfathers with their grandkids.”

us,” Kimson said. The Heritage Development COO said the Bertram’s proximity to the Browns’ training facility in Berea (where the rookies spend time participating in youth clinics) and the Pro Football Hall of Fame was attractive to the league. “It’s also an opportunity in which they can take over the whole property,” Kimson said.

‘A great place to be’ Appetite for success Charles Way just completed his first Rookie Symposium since his 2014 appointment as the NFL’s director of player engagement. The former New York Giants fullback said the league’s relationship with the Hall of Fame “is one we’re trying to cultivate.” Way — who has spent his entire post-playing career in leadership roles for player engagement, including 14 years with the Giants — said having the Rookie Symposium in Northeast Ohio makes sense on multiple levels. “It’s a great opportunity for us to bridge the past and the future, and show these guys what type of foundation they have to build on and the guys who have come before them,” Way said. “Not only on the field, but off.” The players’ visits to the Hall of Fame occur on the last day of the annual symposium. The bulk of the rookies’ time is spent at the Bertram Inn, which the NFL occupies in its entirety for a week. There are seminars on such topics as transitioning to the league, managing finances, avoiding personal pitfalls and building a winning culture. And eating. Lots of eating. “They’re big eaters,” said George Kimson, chief operating officer of Heritage Development Co., an Iris Wolstein-owned real estate firm that operates the Bertram. “They told us that from the beginning — you have to prepare for these guys to eat more than a guest typically would.” Kimson said NFL rookies consume about 1½ times the food of a typical guest. The bill figures to be quite sizable as well. “It’s certainly a good event for

When the symposium ends, the league gets the rookies’ feedback on everything — the panel discussions, the topics and, of course, the hosts. “Everyone loves it,” Way said. “From what I’ve seen and read, everyone loves coming here because of the tradition and history of Canton. That’s why this is a great place to be.” Asked if the league was committed to keeping the Rookie Symposium in Northeast Ohio for an extended period, the NFL’s director of player engagement said, “That’s the plan. The plan is we’re here for the long haul.” That’s exactly what Baker wants to hear. Baker — whose son, Sam (a former Atlanta Falcons tackle), was part of the 2008 draft class that was required to visit the Hall of Fame — believes there is a real value that comes with turning back the clock. Last week, the rookies were given a guided tour of the hall that lasted 3½ hours. When it was over, Hall of Famers Anthony Munoz (who spoke to the AFC rookies) and Curtis Martin (who talked with the NFC group) met with them as their first NFL training camp drew closer. “It allows them to know the shoulders they stand upon,” Baker said of the visits. When next year’s rookie class takes a tour of the Hall of Fame, the facility will be in the midst of a massive renovation that eventually will include a new hotel, restaurants, retail stores, sports complexes and even a residential community for retired athletes. There will be more to see, but the message likely won’t change. Eight teams formed a league in 1920, and three of them were from Northeast Ohio. “From that has grown all of this history and heritage,” Baker said.

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Region loses 512 jobs in May By SCOTT SUTTELL ssuttell@crain.com

Northeast Ohio’s job-creation engine was in idle last month, as employment in the region fell by a little more than 500 jobs. The seven counties of the Cleveland-Akron metropolitan area employed 1,162,950 people in May, according to seasonally adjusted data in the latest Ahola Crain’s Employment (ACE) Report. That number was 512 jobs lower than April, when regional employment was 1,163,462. Regional employment for the year has barely moved — it’s up by 330 jobs from the 1,162,620 jobs in January reported by the ACE data. Service industries in the region last month saw a decline of 404 jobs, to 943,558 in May from 943,962 in April, according to the ACE Report data. Goods-producing employment fell by 108 jobs, to 219,392 in May from 219,500 the prior month. However, Jack Kleinhenz, the Cleveland Heights economist who created the ACE model, noted that

the May report “indicates the region realized an increase of approximately 9,500 more jobs than the same month a year earlier,” and that both the service and goodsproducing sectors are showing year-over-year gains. Kleinhenz said the May estimate of seasonally adjusted total employment of 1,162,950 “is above both the three-month and sixmonth moving average and augurs well for further job growth in the near term and suggests the regional economy is on an upswing in its trajectory.” Like much of the nation, he said, Northeast Ohio “experienced a soft patch in first-quarter growth,” driven to some extent by a particularly harsh winter. In addition, he said, U.S. manufacturing production in the last few months “declined as a number of headwinds have reduced output and probably impacted our regional goods-producing businesses.” The ACE Report is based on payroll data from about 3,000 predominantly small and midsize employers that is gathered by The Ahola

Corp., a Brecksville payroll and human capital management firm. Kleinhenz’s analysis includes other economic indicators including construction data and retail sales. The Cleveland-Akron region’s lackluster job production so far in 2015 is illustrative of a longer-term trend in Ohio. The state is one of 15 where the number of jobs as of May remained below the levels recorded before the Great Recession. The Economic Policy Institute, a Washington, D.C., think tank, on June 19 issued a report showing that total employment in Ohio in May was 5,407,000, down 12,600 jobs, or 0.2%, from December 2007. The report was based on data from the U.S. Bureau of Labor Statistics. Of late, though, Ohio is doing better, having added 22,000 jobs in the last three months. EPI said in the report that there are some positive signs nationally, including slight increases in state unemployment rates, which suggest that more workers are searching for jobs.

the company declined to take sides in the debate over which route the pipeline should take.

cide the matter of the Nexus route. Spectra, at the direction of FERC, recently investigated the possibility of using an alternative route proposed by Green and determined that it would not lessen the risk to health and safety, and would increase the cost and the time it would take to complete the pipeline. Spectra now will attempt to continue to survey its proposed route, using court orders when it has to, before submitting a final application to FERC at the end of this year seeking to get the project approved. If it does, FERC’s approval would make it possible for Spectra to build the line, even over the objection of landowners, using eminent domain.

PIPELINE continued from page 5

blows up, you’re talking about a blast zone 1,200 or 1,500 feet on each side of the rupture,” Eigel said. But Spectra says the northern route is needed, in part to service customers in places like Wadsworth, where economic developers hope a supply of highpressure, high-volume gas can help attract industry. Spectra has told FERC it needs to service customers in northern Ohio, as well as supply gas to Dominion East Ohio, one of the area’s largest natural gas distributors for residences and businesses. Dominion has come out in support of the pipeline, urging federal regulators to approve it. However

Feds may step in Then there’s the question of whether the pipeline actually is needed across northern Ohio, where Eigel said there already is more than enough natural gas delivery capacity, which mostly was built when the area had more heavy industry to supply with gas than it does today. People on both sides of the argument claim they want to get along and be conciliatory, but it appears federal regulators might have to de-

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PUBLISHER:

John Campanelli (jcampanelli@crain.com) EDITOR:

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Scott Suttell (ssuttell@crain.com)

OPINION

About time Time and compromise, it seems, are elusive when you’re plotting a two-year state budget. Maybe that’s why the final budget that must be approved by Gov. John Kasich won’t include a much-needed tax increase on oil-and-gas producers. Just two weeks before the June 30 budget deadline, state lawmakers opted to “restart the clock,” as House Speaker Cliff Rosenberger said, on negotiations to increase the tax rate on the horizontal drilling method known as hydraulic fracturing, or fracking. A bipartisan working group of lawmakers and members of the Kasich administration now will try to craft an acceptable severance tax compromise by Oct. 1. Call it what you will, but the General Assembly’s decision not to include a severance tax hike in the biennium budget sure feels like a stall tactic to us. They’re kicking the gas can down the road. Here’s why: For three years, Kasich has been urging state lawmakers to approve a much-needed boost in Ohio’s already low, volume-based tax on oil-and-gas extraction. And for three years, the oil and gas industry has successfully thwarted his attempts as Republican lawmakers have stripped the language from budget proposals. The industry’s argument came, of course, with industry money. For example, the oil and gas industry gave $1.4 million to the campaigns of legislators and other state officials in 2013-14, according to The Columbus Dispatch. And while the Ohio Oil and Gas Association and the American Petroleum Institute both praised the creation of the working group, they also have made it clear that they still don’t support any fracking tax increase. That doesn’t bode well for a compromise. This February, the governor proposed raising the severance tax on oil to 6.5% and upping the tax on natural gas to 4.5%. The current tax for Ohio’s oil and gas is 20 cents on every barrel of oil and 3 cents per 1,000 cubic feet of natural gas. Kasich’s proposed tax would have applied to fracking, while the rate for conventional drilling would have remained the same. The 6.5% tax would have put Ohio in the mid-range of oil-and-gas producing states. It wouldn’t have put drillers out of business and it was fair. Drillers are extracting a finite resource from our state. The state, and specifically communities directly impacted by drilling operations, ought to benefit more from it. Senate President Keith Faber said time was not an ally when he announced the tax would be cut from the budget and sent to the working group. But legislators have had years to do the right thing. Time isn’t the culprit. What lawmakers need to do in this case is to make good government an ally.

Lessons from the ‘doctor’s office’ Not many of us would like doing our jobs with someone watching our every move, but for some professions, that’s the best way to train people. And we can all learn something from the process. Northeast Ohio Medical University’s Wasson Center for Clinical Skills Training, Assessment and Scholarship puts students in a fishbowl of sorts, so that they can be evaluated on their clinical abilities and, just as important, their interpersonal skills. SUE The simulation curriculum is common at medical schools WALTON now, but when NEOMED’S Wasson Center was opened in 1997 as part of a pilot program with the National Board of Medical Examiners, it was among the first in Northeast Ohio, according to Holly Gerzina, NEOMED executive director of interprofessional educational services, stardardized patients and simulation. The Wasson Center consists of 16 exam rooms. They look just like the ones at your doctor’s office. But each has a

two-way mirror and is wired for video and audio recording. Every doctor of medicine and doctor of pharmacy student at NEOMED takes several classes that puts them in the simulation center, said Gerzina. Some of the classes deal with clinical procedures, but others deal with patient interaction and communication skills. “You want (medical professionals) to have a core body of knowledge and skills,” Gerzina said. During the training that deals with what goes beyond anatomy and physiology, each student sees a “standardized patient.” These are folks trained by NEOMED who role-play as patients; the school has a pool of 500. Patients talk about their symptoms but also divulge things that might give students an idea about their demographic, religious and socio-economic backgrounds. Raters, NEOMED faculty and retired physicians, watch through the mirror or view a tape to evaluate how each student

interacts with his or her patient. Patients offer their feedback when their “appointment” is over with, too. Students also can evaluate themselves by watching recordings on a Web-based system. The patients are a “type of educator,” said Gerzina, teaching students that treatment is more than just writing a prescription. Students learn to deal with the unexpected, such as religious beliefs that might stand in the way of the best line of treatment. NEOMED has offered the use of the center — which has space that is wired for video and can look like the interior of an apartment — to safety workers and police officers to run simulations that involve people with possible mental health issues. The first responders learn how to de-escalate situations and get people the help that they need. The next focus for the center is getting future health-care professionals to work in teams, Gerzina said. The push to population health is part of NEOMED’s focus on that, but it also just makes good sense. “The more you can prepare students

spire a group of young men who arguably were overmatched to do great things. Our future is bright, if we can attract these types of positive thinkers and doers to our town. — John Telesz

they’re overdue for one. — Michael Zell

See WALTON, page 9

TALK ON THE WEB Re: Salute to the Cavs First, let me thank Dan Gilbert. Second, let me thank the coaches. Third, let me thank all of the team’s players. And last, thanks to the fans. The performance in the playoffs was unbelievable. When LeBron said it would take four years to bring it (a title) home, I was disappointed, but to miss by only two games in the first year is amazing. We are all very proud of the performance! — Tim Kloos LeBron is a great role model for our future generation. He, like many of us, left to see and experience the world. And just like other famous Northeast Ohioans, he came back to share his newfound wisdom with the rest of us, who may not be as fortunate. He respects those great leaders that came before him, and at the same time is able to in-

Re: Cedar Point’s big 2015 How about doing something about the long lines? An efficiency expert would see right away the flaws in the loading platforms, number of trains in use, and the diligence of the park workers. They don’t care how long it takes to load/unload. Pay them by the rider, and you’d see those lines really moving. — T2 How about telling Cedar Fair to stop adding new rides to the other parks already? It’s been 5 years now since Kings Dominion (in Virginia) got a new coaster, so

Re: Ohio’s job levels still below start of recession Wait until our government passes the Pacific trade pact. That will be the final nail in the coffin for manufacturing jobs in Ohio. — Kingbee2013 As to jobs, the low unemployment numbers that the governor loves to throw out there really does not account for the simple fact of the thousands that left the state during this time thus lowering numbers. It also does not take into account that the figure probably is more than twice what is reported if the people who have stopped looking were counted. And even more important are the thousands in this state that are now underemployed. What does it take to get real on these numbers? — Neil Dick

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ABOVE: The $65 million NEOMED Education and Wellness Center debuted in February. BELOW: A rendering of the Center for Integrated Wellness in Bloomington, Ill. The $35 million facility is scheduled to open in 2016.

SIGNET

Keynote address, PREPARING FOR THE RNC, by DAVID GILBERT

continued from page 3

President & CEO, The Greater Cleveland Sports Commission, Destination Cleveland, and the 2016 RNC Host Committee

Signet’s other divisions — is what differentiates it from its competitors. The Bloomington effort is particularly intriguing because so many partners are involved, which in addition to Integrated Wellness Partners and Advocate, include an orthopedics practice and sports performance clinic. “They’ve demonstrated a management expertise and an approach to the market that doesn’t just come in like a traditional health club,� said John Hesse, the vice president of business development for Advocate BroMenn Medical Center and Advocate Eureka Hospital. “It targets healthy behaviors and specific disease states with all these partners.� Integrated Wellness Partners views these centers as community hubs of sorts. One way the company is driving more traffic into their centers is through workplace wellness programs that are intertwined with the fitness facility in each market. As part of that effort, Integrated Wellness Partners recently hired away from the Cleveland Clinic Melissa Hendricks, who had served

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as the health care giant’s manager of employee wellness. “Bricks and mortar are a platform to localize worksite wellness for employers in the community,� Ellis said. “Worksite wellness has grown up and become a distance-related thing. In some respects, it usually happens from call centers. What they don’t have and what we can provide are experts just down the street that can be there and have face-toface interactions.� Meanwhile, when Integrated Wellness Partners launched in 2011, it was a joint venture between

Signet and Akron General Health System. That partnership eventually unraveled just before Akron General agreed to sell a minority stake of its enterprise to the Clinic. Still, Akron General is pressing forward with commercializing its own wellness center concept — something for which it has earned national recognition — though it hasn’t announced any deals. A year ago, Akron General announced it teamed up The Boldt Co., a Wisconsin-based real estate development firm, to provide financing and construction services for any future projects.

just as important as the hard skills needed to do your job. Don’t take anything about your customers for granted. If your team works together, you’ll get better outcomes. It would be great — for new employees who want to excel and for employers — to engage in simulation learning, but for on-the-job

training, it just isn’t practical. Organizations still can emphasize those softer skills, though. In our busy, day-to-day rush to meet our quotas and get our products out, those skills can get lost, and they shouldn’t. They are imperative to the success of your business.

WALTON continued from page 8

to work together before they get into a clinical setting, the better (patient) outcomes you’re going to have,� she said. So, what can businesses learn from all of this? A lot. Communication, teamwork and knowledge of your customers are

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JOB CHANGES CONSTRUCTION ALL FAMILY OF COS.: Joshua Bacci to administrator, Crawler Crane Fleet.

CONSULTING FIVE LAKES PROFESSIONAL SERVICES: Jessica Skimin, Amanda Petersen and Brad Kelly to account representatives; Erica Entis to credentialing specialist; Casey Morse to credentialing team lead; Melissa Kovach to account representative team lead, large practice group; Andy Attina to account representative team lead, private practice group.

DISTRIBUTION MAROON GROUP: Michael DiFilippo to assistant controller. SEA-LAND CHEMICAL CO.: Jennifer Altstadt to director of marketing and strategic planning.

Vrhovac, Ivan Wyrsta, Gunnar Kephart, Karol Sosnowski, William Radwanski, Devin Sweeney, Christopher Traylor, Steven Joslin, Patrick Barry Jr., Timothy Steen, Matthew DeMarco and Robert Madison to associates; William Murray to IT director. SPERO-SMITH INVESTMENT ADVISERS INC.: Thomas Cohn to investment analyst.

MANUFACTURING MALISH CORP.: Aja R. Rendek to marketing manager; David J. Sternad to regional sales manager, Foodservice Division.

MARKETING SONNHALTER: Rachel Kerstetter to public relations architect.

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AWARDS BALDWIN WALLACE UNIVERSITY: Robin C. Cottingham (KeyBank), Ron Soeder (Boys & Girls Clubs of Cleveland) and Michael Weidokal (International Strategic Analysis) received 2015 Alumni Merit Awards. CLEVELAND FOUNDATION: John Zitzner (Breakthrough Schools) received the 2015 Homer C. Wadsworth Award.

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LEGAL AFFAIRS

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TIPPING THE SCALES OF JUSTICE Greater Cleveland’s legal industry isn’t nearly as diverse as region’s population By JEREMY NOBILE jnobile@crain.com

If Greater Cleveland looked like the people controlling its legal industry, it would consist almost entirely of middleaged white men. But the region’s population is quite diverse: about 20% African-American, 5% Hispanic, 2% Asian and about 52% female, according to census data. The diversity in Cleveland proper, where many of the region’s lawyers are clustered, is even greater, with a population that’s more than 53% African-American and 10% Hispanic. Yet, numbers recently reported to Crain’s show that Greater Cleveland’s legal market looks much different from its people. Based on data from 62 firms with more than 2,700 attorneys in and around Cleveland, the legal market here is 73% male. And out of 1,453 local partners, 18% are female, and just 3.8% are minorities. But Cleveland certainly isn’t alone.

According to figures from the National Association for Law Placement in Washington, D.C., women and minorities make up less than 34% and 14%, respectively, of all lawyers nationwide. Among all partners, about 21% are women and 7% are non-white. All those figures have just barely ticked up since data was first collected in 2009. Cognizant of the sector’s homogeneity and the business and societal benefits of diverse teams, there has been a push by firms to improve diversity through recruitment and retention efforts and initiatives designed to help women and minorities develop their skills and move up the professional ladder. But despite some improvements in diversity, there’s still a ways to go before law firms look more like the businesses and communities they represent — particularly here in Cleveland. “As long as I’ve been out of law school and been an associate with firms, this has been a problem,” said Craig Boise, dean of the Cleveland-Marshall College

of Law, who began practicing law in New York in the mid-1990s. “I think the real story is the fact this has been a stubborn problem that has not gotten better over a period of decades.”

Better serving clients Many Cleveland firms in recent years have added diversity and inclusion initiatives designed to retain as much as recruit. Those efforts vary between firms and tend to be more prevalent among the largest ones, but the goals remain the same. “When you have a less homogenized group, you’re going to be more productive, have more diverse thought and better serve clients,” said Barbara Lum, a Cleveland attorney and president of the Asian American Bar Association of Ohio. “We’ve had white males in the legal field for so long. We really do need to make a conscious effort to bring in a more diverse workforce.” Thompson Hine, for example, which is among the five largest firms in Cleve-

land, has both firmwide and Cleveland initiatives for women, minorities and those identifying as LGBTQ. Those include sponsor and mentor relationships, because “we feel they’re more likely to stay if they have these professional opportunities,” said Robyn Minter Smyers, partner-in-charge for Thompson Hine’s Cleveland office. Other programs include training in unconscious bias and cultural competency. “There is a trend line pushing for more law firm accountability when it comes to diversity and inclusion,” Smyers said, adding some of the push is coming from clients themselves. Jones Day, the largest law firm in Cleveland, has similar programs and partners with schools, like Cleveland’s Saint Martin de Porres High School, to offer exposure to young people. “Sometimes Jones Day can be intimidating,” said Patricia Eschbach-Hall, who heads diversity issues for Jones Day’s Cleveland office. “The more personal connection we make, the less See JUSTICE, page 12

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intimidating it will be. It’s a recruiting tool for Jones Day, but it’s also good community service.” Boise notes, however, that as an industry, firms seem to have more commonly outlined initiatives for women. He cautions that similar programs for other groups should not be overlooked. “The black male associate population is very small. And there’s no clear advocacy for minority males,” Boise said. “I think firms have done a better job when it comes to women, but I think in some cases that has been to the detriment of black males.”

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Boise points out that part of the legal world’s diversity issue begins with law schools, which are seeing enrollments drop across the country, and the population of minority students is falling even faster within that. According to the American Bar Association, total enrollment in the country’s 204 ABA approved law schools fell 7% in 2014 from 2013, and more than 18% since 2010. “We have fewer diverse students going to law school as a profession and fewer matriculating into Big Law. And we’re all competing for the same talent pool,” said Yvette McGee Brown, the first AfricanAmerican female justice to serve on the Ohio Supreme Court and the partner-in-charge of diversity, inclusion and advancement for Jones Day. “So it’s a challenge. We have to improve the pipeline if we want to improve the picture for law firms.” Diversity, particularly at the partner level, is also important because it helps young female and minority associates see themselves at a position of influence in the legal field, Boise said. Much like how STEM courses expose middle school students to those related careers in science and technology early on, the legal industry might consider additional similar programs designed to plant the seed of a possible profession in the legal field in young people’s minds. Competition for diverse talent complicates the issue further. An already small number of females and non-white individuals in law school means fewer will advance within law firms themselves. And as those people advance, they’re often likely to be poached by companies for general counsel as those businesses strive to meet their own diversity needs. “In my experience, I’ve seen many associates at the entry level for their first couple years … but some of them leave voluntarily because they’re taking that training and going to other environments,” said Renee Tramble Richard, vice

president and general counsel for Cuyahoga Community College. And that may be, in part, because mentoring and sponsorship isn’t always effective at law firms, Richard said, which can inhibit professional development for young associates and leave some questioning the direction of their career paths. With diversity numbers as low as they are, Boise said firms might be well served to question whether their own initiatives are truly adequate — and Richard agrees. “Lots of people use the buzzword ‘mentor,’ but it’s not always effectively implemented,” Richard said. “And that’s what leads to a lot of failures. It seems to me, to be successful, that mentoring should shift at some point once a craft has been honed to shift toward relationship building. We need more women and minorities in relationship building roles and interacting with the people making decisions and awarding contracts and engagements, and I think that’s where the pitfall is. I don’t see that happening.” With all the efforts currently in place, many would expect to see the needle move farther when it comes to diversity in law’s ranks. “It may be time to call into question how effective those efforts are,” Boise said.

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Female-owned firm has thrived with diversity, inclusion focus By JEREMY NOBILE jnobile@crain.com

When Karen L. Giffen and Kerin Lyn Kaminski started their own law firm in Cleveland in 2004 — a certified women-owned firm, meaning at least 51% of the firm is controlled by female attorneys — they were breaking into a male-dominated sector, particularly in the concentration of business law. A dozen years ago, the duo was enjoying success with Cavitch Familo Durkin & Frutkin Co. But a client was looking for a diverse law firm that better mirrored itself, and the two saw an opportunity to hang their shingle. “The concept of diversity and inclusion in the profession is central to the existence of Giffen & Kaminski,” Giffen said. “And it’s still who we are today. It’s fundamental to the nature of the firm itself.” At the time, the National Association of Minority & Women Owned Law Firms had fewer than 50 firms as members. Today, that’s around 160, according to the nonprofit Chicagobased trade association (Giffen & Kaminski is one of those). “Kerin and I bought into the myth that the only way you could be a successful lawyer in a business community is if you were a member of a medium or large law firm and you made equity partner and you had control a bunch of clients,” Giffen said. “We discovered you could create firms where you could get all of that and you don’t have to worry about pushing the rock up the hill, which is trying to break into the boy’s club.” While a smaller firm compared with some of their Big Law counterparts in Cleveland — it has 15 lawyers and seven partners, including four women and one minority — its business pitch centers on the benefits of a diversified bench. But, they say, it’s also the right moral position to take. “We as lawyers should care about our children and people entering the profession, how they feel about it and whether they feel there’s a possibility to be successful,” Giffen said. “We want them to feel like they have an equal shot at it. We need to care about (the issue of diversity) because it’s the right thing to do.” Kaminski called the numbers of

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women and minorities in Cleveland’s legal sector “abysmal.” “But it’s hard to run any kind of minority initiative when you don’t have enough minorities for it,” Kaminski acknowledged, referencing the pipeline issue with dwindling law school enrollments. When it comes to diversity, Giffen and Kaminski share the perspective of the overall legal community: It’s getting better, slowly, but there’s still a ways to go for firms to be more representative of the regions and businesses they represent.

Dialogue on the issue, they say, should never stop until diversity and inclusion become truly ingrained in the legal industry. The two also hope their personal story is motivating to young lawyers, particularly women, that they can be successful whether starting their own business or climbing the ranks within a firm. “We wanted to create something new and an environment where we could focus on diversity and inclusion,” Giffen said. “Miraculously, it’s worked out for 12 years.”

CONTRIBUTED PHOTO

Kerin Lyn Kaminski, left, and Karen L. Giffen launched their law firm in 2004.

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LGBT workplace policies should become ‘front-burner issue’ By LEE CHILCOTE clbfreelancer@crain.com

With the U.S. Supreme Court poised to hand down a historic ruling on same-sex marriage, lesbian, gay, bisexual and transgender issues are constantly in the headlines. The majority of Americans now are in favor of same-sex marriage, according to recent national polls, and an increasing number of states have enacted laws allowing gay couples to marry. Yet, under federal and Ohio law, sexual orientation and gender identity are not yet considered protected classes, like race, age, sex, disability or religion. There still are no federal or Ohio statutes specifically prohibiting job discrimination based on sexual orientation or gender identity in the private sector and many parts of the public sector. However, this doesn’t mean that employers should observe from the sidelines. The Equal Employment Opportunity Commission, the federal agency that administers and enforces civil rights laws against workplace discrimination, increased the number of cases relating to discrimination based on sexual orientation or gender identity by 40% from 2013 to 2014. Indeed, the agency has made “coverage of lesbian, gay, bisexual and transgender individuals under Title VII’s sex discrimination provisions, as they may apply, an enforcement priority for FY 20132016,” according to its website. “This enforcement priority is consistent with positions the commission has taken in recent years re-

garding the intersection of LGBTrelated discrimination and Title VII’s prohibition on sex discrimination.” Put simply, the EEOC is using existing laws as the basis for protecting LGBT workers. If a company fires a transgender employee because of sexual identity or an LGBT worker suffers harassment based on sex stereotypes, these individuals have the right to file a complaint through the federal sector EEO complaint process as claims of sex discrimination.

Be proactive According to Tom Green, an attorney at Kastner, Westman and Wilkins LLC in Akron and an Ohio State Bar Association-certified specialist in labor and employment law, employers large and small ignore this issue at their own peril. “If you’re an employer, you need to operate as if you’ll have to defend yourself against a charge of sex discrimination if you fire a homosexual employee or transgender employee,” Green said. “Be prepared to have a legitimate reason to make that decision that doesn’t have anything to do with homosexuality or transgender status.” Green also suggested that employers consider amending their Equal Employment Opportunity policies to state that sexual orientation and gender identity are protected categories. Finally, he recommended that employers incorporate policies for transgender employees, such as allowing access to the restrooms that correspond to one’s gender identity and adopting gender-neutral dress code policies.

He added, “This hasn’t become a front-burner issue for a lot of employers yet. They may be busy taking care of the day to day. I think the EEOC’s enhanced enforcement in this area, though, will make these issues hard to ignore for much longer.” Susan Keating Anderson, an attorney with Walter Haverfield LLP’s law and employment practice group, agreed. Beyond simply updating policies, employers need to implement training programs to ensure that frontline managers are putting policies into action.

“If you’re an employer, you need to operate as if you’ll have to defend yourself against a charge of sex discrimination if you fire a homosexual employee or transgender employee.” – Tom Green attorney, Kastner, Westman and Wilkins LLC Additionally, employers should be aware of local and state anti-discrimination laws. For example, the city of Cleveland prohibits discrimination based on sexual orientation or gender identity in public and private employment. If the EEOC decides to investigate your workplace, Anderson stated, the matter can be both costly and emotionally taxing for all involved, regardless of whether it ever goes to court. “Employers should look at the impact that employee conduct has on their job and how they’ve dealt

with other employees in similar situations,” Anderson said. “They should make sure that they’re looking at the behavior objectively versus because it’s an LGBT vs. nonLGBT employee.”

The right thing to do Alana Jochum, Northeast Ohio director of Equality Ohio, noted that protecting LGBT individuals from discrimination in the workplace not only is the right thing to do, it’s an important tool for attracting and retaining talent. “We’ve seen more and more Ohio businesses adding LGBT protections into their personnel policies,” Jochum said. “Business gets this. Business wants the best and brightest talent, to be able to attract the best and brightest workers.” Updating employment policies to protect LGBT workers from discrimination can prompt a larger discussion about values, said Michelle Tomallo, president and co-founder of FIT Technologies, an LGBT-owned managed IT services firm in downtown Cleveland. “It’s a chance for the entire organization to have a conversation around the values of diversity and inclusion,” she said. LGBT-friendly employment policies also are an important business consideration. “FIT answers (requests for proposals) to garner business, and more and more companies are saying to those of us who are suppliers, ‘What is your policy around supplier diversity? How do you hire around diversity?’” she said. “For small and medium-sized businesses, this is one way to differentiate ourselves.”

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The Cleveland Clinic has a nondiscrimination policy that covers all of its locations in the U.S. New hires are required to take diversity and inclusion training, and ongoing instructor-led trainings are offered. Additionally, the Clinic Pride Employee Resource Group regularly examines internal employment policies and offers suggestions and recommendations. “We’re constantly looking to reflect what a respectful and inclusive culture will look like here,” said Donna Skurzak, director of diversity and inclusion for the Cleveland Clinic.

There’s help out there For employers seeking educational resources and advice, the nonprofit organization Plexus, where Tomallo serves as board president, considers itself the LGBT chamber of commerce in Northeast Ohio. Plexus offers companies and organizations a wealth of resources around employment policies and provides consulting services to local businesses. The EEOC also provides companies with guidelines and support for effective policies. Kimberly Smith-Brown, director of communications for the EEOC, advised businesses to be proactive on the issue. “Yes indeed, employers should recognize that discrimination against LGBT employees may be actionable as sex discrimination,” she said. “They should take steps accordingly and train their front line managers to make sure they’re aware of the law.”

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■ Abuse: Do not accept vague or incomplete certifications. Utilize medical certification, recertification and second/third opinions to combat suspected abuse. Employers can also enforce the notice requirements for foreseeable and non-foreseeable leave and require employees to comply with the employer’s customary call-off requirements.

minimum duration expires before requesting a recertification (for example, if the medical certification states that the employee is unable to work for 45 days, then the employer must wait 45 days before requesting recertification.) However, employers can require recertification every six months, even if the minimum duration of the condition is longer than six months. Conversely, an employer may request recertification in less than 30 days if the circumstances of the original certification have changed. For example, if the medical certification stated the employee would need intermittent FMLA one to two days a month and the employee started missing five or six days a month, then the increased frequency might constitute a significant change in circumstances, allowing the employer to request a recertification in less than 30 days. Additionally, an employer may request recertification in less than 30 days if the employer receives information that casts doubt upon the employee’s stated reason for the absence or the continuing validity of the certification.

■ Recertification: Recertification rules can be confusing. If the medical certification indicates that the minimum duration of the condition is more than 30 days, an employer must wait until that

■ ADA intersection: Many FMLA leaves also rise to the level of a disability under the ADA. Requiring employees to return to work with “no restrictions” or “100% healed” after returning from FMLA leave often violates the Americans

caring for a covered service member), because it prevents employees from “stacking” two 12week FMLA periods on top of each other. ■ Intermittent leave: The FMLA permits employees to take leave on an intermittent basis or to work a reduced schedule under certain circumstances. Given its nature, advance notice is often not possible. FMLA leave may be taken in periods of whole weeks, single days, hours and even less. An employer must calculate FMLA leave increments to the smallest period of time the employer uses to account for other forms of leave, provided that it is not greater than one hour (often 15 minutes).

with Disabilities Act, particularly for employees who may be able to perform the essential functions of their position with a reasonable accommodation. In such cases, companies are advised to perform individualized assessments of an employee’s ability to return to work with or without a reasonable accommodation to satisfy the ADA, companies are also reminded that if the employee cannot return to work after the 12 weeks of FMLA leave, a reasonable accommodation may be additional leave. ■ Same-sex spouses: Employers are reminded that the Department of Labor rules state that FMLA leave covers same-sex spouses if the marriage occurred in a state that recognizes same-sex marriage and requires FMLA benefits even in states that do not recognize same-sex marriage. Therefore, even though Ohio does not recognize same-sex marriage, Ohio companies must provide FMLA leave for employees who married in a state that does recognize same sex marriage. Two final words of warning: First, unlike the Americans with Disabilities Act, the FMLA does not recognize any hardship that employers experience as a result of the FMLA leave. Second, employers are reminded that they cannot count FMLA absences under the company’s no-fault attendance policy.

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Adoption Network Cleveland looks to take efforts statewide By KIMBERLY BONVISSUTO clbfreelancer@crain.com

Betsie Norris’ phone has been ringing off the hook since Gov. John Kasich signed substitute Senate Bill 23 into law in 2013. The law gave 400,000 adult adoptees in Ohio access to their original birth certificates. Norris, the founder and executive director of Adoption Network Cleveland, said she and her staff are “tripping over ourselves� to start offering services in other parts of the state after the law went into effect March 20. The new law, essentially, replaces a three-tiered system of access to original birth certificates for adult adoptees, depending on their birth year. The new law unseals the adoption records of those whose adoptions were finalized between 1964 and 1996. Those whose adoptions were finalized in Ohio before 1964 already had access. Anyone adopted after Sept. 18, 1996, also had access, unless their birthparents asked to be excluded. According to the Ohio Depart-

ment of Health, 2,646 individuals requested their birth certificates in March, followed by 1,406 in April and 563 in May. SB 23 was the capstone to 25 years of advocacy by the adoption community to allow adult adoptees to have access to their original birth certificates, said Aaron Ockerman, director of state and local government affairs at McDonald Hopkins LLC law firm in Cleveland and legislative agent for Adoption Network Cleveland. Ockerman works with the organization to advocate for better adoption laws and funding. Ockerman called the access to birth certificates the “Big Kahuna� of adoption law. “This was a great social injustice that needed to be rectified,� Ockerman said. “It’s a big policy shift that affects a lot of people. This is the legislature coming back and undoing something they had done 40 to 50 years ago.� Norris said there was a real learning curve for lawmakers not personally affected by adoption. She said SB 23 gives birth parents a voice they didn’t have before, al-

Norris

lowing them to fill out a form indicating whether they want to be contacted, as well as providing the option of indicating why they don’t want to be contacted. “Law often lags behind social attitudes,� Norris said. “Adoption, historically, was shrouded in secrecy and had a stigma attached. The era of adoption we’re dealing with in this bill goes back to when women were sent to unwed moth-

er’s homes. There was a huge stigma around having out-of-wedlock pregnancy and place a child up for adoption.� Norris, an adoptee herself, has an even more personal tie to the original 1964 law that originally closed access to those birth certificates. Her adoptive father, former attorney William B. Norris, had a hand in writing that bill that closed adoption records. His intention, she said, was not to close access to adoptees, but to shield adoptive families from public scrutiny. “He always supported me in my search and completely supported the legislation,� Norris said, adding that her father testified on her behalf 20 years ago. “This has a huge, personal significance for me as my father’s daughter — someone thousands of adopted turned to for assistance over the last 27 years. It’s very gratifying. “This is the culmination of a lifetime of work.� Now that records access has been restored, Norris is turning her sights to taking Adoption Network

Cleveland statewide. Norris said there is a need for support and advocacy statewide that no other group in Ohio offers to adoptees, adoptive parents and birth parents. Norris said she and her staff are fielding calls on everything from basic information about requesting records to preparing to contact a birth parent or child. “Many want search assistance to walk through the search with them,� Norris said. “Many adoptees find when they get the envelope in the mail, it’s much more emotional than they thought it would be and they want support.� Norris said with the Internet, people often can find who they are looking for quickly. They are overwhelmed, she said, with determining how to make contact. “I always encourage someone to slow down, be thoughtful about it. It’s a major life event. Don’t barrel into it unprepared,� she said. “It’s not so much of a right or wrong answer, but helping someone to explore their feelings and needs, and those of the person they are searching for.�

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EFFICIENCY continued from page 1

chance to make their mark. Mayfield Heights-based Parker Hannifin Corp. already offers its RunWise hybrid drive system for heavy-duty refuse vehicles and plans to offer similar systems for other vehicles like buses starting next year, said Shane Terblanche, general manager of Parkerâ&#x20AC;&#x2122;s Hybrid Drive Systems. The products are well-aligned with the federal agenciesâ&#x20AC;&#x2122; proposals, Terblanche said, as it offers engine manufacturers a bolt-on solution that helps with fuel efficiency instead of requiring new infrastructure, like alternative fuel systems. The RunWise system uses stored kinetic energy from the vehicleâ&#x20AC;&#x2122;s brakes to power the engine, which is why itâ&#x20AC;&#x2122;s designed for vehicles that make lots of stops and starts like garbage trucks. Parker has been making this product since 2011 as a reaction to rising fuel prices. The existing system allows fleets to save up to 50% on their fuel consumption, Terblanche said. â&#x20AC;&#x153;And thatâ&#x20AC;&#x2122;s pretty significant,â&#x20AC;? he said, adding that refuse trucks burn

about five gallons of fuel per hour. New York-based Alcoa Inc. makes products locally that could see a boost from the proposal. â&#x20AC;&#x153;The proposed legislation will drive new innovations to reduce greenhouse gases through lightweighting and improved aerodynamics,â&#x20AC;? said Tim Myers, president of Alcoa Wheel & Transportation Products, in an emailed statement. â&#x20AC;&#x153;At Alcoa, we offer lightweighting technologies across the entire truck and trailer, which increase fuel efficiency,â&#x20AC;? Myers said. â&#x20AC;&#x153;Together, our innovations can help trucks shed up to 2,700 pounds â&#x20AC;&#x201D; from frames, fasteners, and brackets to the aluminum wheels and fifth wheels made by our 1,300 employees right here in Cleveland and Barberton.â&#x20AC;? Eaton, which is based in Dublin, Ireland, but has U.S. headquarters in Beachwood, already offers customers advanced transmissions to help save fuel, as well as stronger engine-transmission connections. â&#x20AC;&#x153;Fleets are always looking to save operational costs,â&#x20AC;? said Chris Hess, director of public affairs at Eaton. And Eatonâ&#x20AC;&#x2122;s always looking for ways to help with that goal, he said.

CONTRIBUTED PHOTO

Eatonâ&#x20AC;&#x2122;s SmartAdvantage Powertrain ISX15 engine can improve fuel efficiency by as much as 6%, the company said. The company already has plans to introduce products like engineboosting technology, but the new regulations will offer some additional consistency to the market demand, rather than relying solely on fuel costs for customer motivation. Hess said he thinks more manufacturers will put a greater portion of their research and development budgets toward products that help with fuel use reductions. Spears of the EPA said the standards update in increments under the proposal, which helps manufacturers plan their investments and make sure their products are ready for the marketplace. The standards

would give regulatory certainty to companies, but also flexibility, as manufacturers can over-comply in early years and bank credits â&#x20AC;&#x201D; or use them to offset vehicles or engines that arenâ&#x20AC;&#x2122;t up to the standards, according to an EPA fact sheet. David Friedman, deputy administrator for NHTSA, said companies also could sell credits to other companies in the same size class or use them to make up a previous deficit. The proposal also gives companies flexibility in the types of technologies they can implement, since phase two would be performance based, like phase one. â&#x20AC;&#x153;We really tried to make sure the standards work well with what happens in the marketplace,â&#x20AC;? Spears said.

Fuel to the fire The sweeping nature of the federal proposal opens up opportunities for a variety of different types of products, from alternative fuels to aerodynamic designs, said Kevin Dickey, general manager of Twinsburg-based AFV Natural Gas Fuel Systems, officially called SSP AFV

LLC. The natural gas industry is still immature, Dickey said, but heâ&#x20AC;&#x2122;s hoping this proposal helps move it along. AFV makes bent tubes and hoses for those kinds of systems. He said itâ&#x20AC;&#x2122;s hard to tell if the first phase of fuel economy regulations made a difference in the natural gas industry, because the drop in prices for diesel and gas fuel made fleet operators hesitant to switch. But there are more businesses in the industry now, he said, and AFV has had more prototyping business this year than ever before. Itâ&#x20AC;&#x2122;s hard to make money on prototypes, Dickey said, but itâ&#x20AC;&#x2122;s a good sign the industry is moving forward. The proposal, which was just signed June 19, is in its early stages, and there will still be plenty of time for feedback. The agencies have already held more than 200 meetings with stakeholders and plan to hold two public meetings, which Spears said will likely be announced in July. There will also be a 60-day comment period once the proposal is published in the Federal Register. Friedman said the rule will likely be finalized in about a year.

THANK YOU! June 16, 2015 marked Crainâ&#x20AC;&#x2122;s first-ever Family Business Forum. Held at Tri-C Corporate College East, the day focused on insightful discussions pertaining to the key issues family businesses face today. A big thank you goes out to all of our sponsors and speakers for making the first-time event such a success.

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parking as the development kicked in had developed over time. Costs for such studies are mounting. “We’ve spent hundreds of thousands of dollars on it already,” Pace said, adding that the developers will assume the cost of environmental cleanup of the site.

Risk — with big ‘upside’ Although the apartments would receive the city’s standard tax abatements for new housing, Pace said the developers plan to ask for no other incentives. That’s because the city will assume the cost for installing streets and sidewalks and other infrastructure on the project, Pace said. A significant one is 60 feet of intense landscaping on the project’s north side to buffer it from the lake’s winds and wintry weather. The developers created the phasing plan for the project. Pace said Trammell Crow could build the entire project at once, but putting the

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not have is a lot of restaurants and, as we all know, it’s freaking cold in the winter there.”

1,000 apartments on the market at once would glut the market. Instead, the developers will take down parcels as they are ready to undertake each phase. “The strategy is to generate retail as infill around the harbor to create more of a sense of place,” Pace said. “The first three-story building will have some retail, 50,000 square feet of office and eight penthouse apartments. All those will be pre-leased. It’s almost a market test for the entire project.” Robert Simons, a real estate expert and urban studies professor at Cleveland State University’s Maxine Goodman Levin College of Urban Affairs, described the longsought lakefront project as “risky.” However, “It’s also a high-upside project,” Simons said. “The developers get a chance to tie down a premium location for a long time without putting their capital at risk,” he said. “The lakefront location would be superior in many ways to others in the city with a lake view and cachet. What it does

Denise Donaldson (216) 522-1383 (216) 694-4264 DDonaldson@crain.com

Chain reaction Joseph Marinucci, president of the Downtown Cleveland Alliance that operates the city’s business improvement district, said moving forward with the project is “very important to the community. It provides us with more development in a way that also provides more access for the public to the waterfront.” Marinucci said DCA studies have shown enough demand for more apartments in the city besides those already in the planning stages. Although Pace has sought to provide more use for downtown’s waterfront for years, his most recent experience as a developer has also come into play. Since leasing the retail space at Colonial Marketplace downtown two years ago, he has transformed mostly vacant

CONTRIBUTED PHOTO

This rendering shows a waterfront restaurant that Richard Pace and his team have planned as part of their Lake Erie development project. storefronts below the Residence Inn hotel into a lively place with an eclectic mix of craft, art and foodor service-oriented shops. “I’m convinced you can fill a large amount of retail space with local retailers,” Pace said. “Some of what’s at Fifth Street can be extended down there. You don’t have to go to a chain.” As an architect, Pace also contributed at various levels to other projects proposed for the lakefront that came to naught since his first

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THE WEEK JUNE 22 - 28 The big story: The Cleveland Foundation’s board signed off on a $5.5 million grant — its largest this year — to support a burgeoning partnership between Cleveland State University and Northeast Ohio Medical University aimed at training physicians to deliver primary care in urban strongholds. It’s a significant funding boost — the biggest to date — for the relatively young program known officially as the NEOMED-CSU Partnership for Urban Health. Including this grant, the foundation has pumped $7.25 million into the effort. In 2010, the foundation provided a one-year planning grant of $250,000 and followed up with $1.5 million in 2011 to bring the partnership online.

They’ll take two: Steris Corp., the Mentorbased maker of infection prevention, contamination control, surgical and critical care products, disclosed in a regulatory filing that it agreed to buy General Econopak Inc. of Philadelphia for $175 million. General Econopak makes sterility maintenance, barrier protection and sterile cleanroom products for pharmaceutical, biotechnology and veterinary customers. Additionally, Steris disclosed it acquired a California company, Black Diamond Video Inc., for $51 million. BDV develops operating room integration systems.

Good thinking: Three well-known grantmaking bodies committed a combined $2 million toward Case Western Reserve University’s $35 million think(box) effort — a so-called “innovation space” where students and others can create prototypes that could eventually turn into fullfledged products. The Lubrizol Foundation, the nonprofit arm of the Wickliffe-based specialty chemical company, awarded $1 million, with The Kent H. Smith Charitable Trust and the Kelvin and Eleanor Smith Foundation each contributing $500,000. In recognition of their backing, the university will name the fourth level of the facility The Lubrizol and Kent and Kelvin Smith Foundations Floor.

At home: The Detroit Shoreway Community Development Organization and Cleveland Housing Network plan to undertake housing projects in Cleveland after receiving allocations of U.S. low-income housing tax credits administered by the Ohio Housing Finance Agency. Detroit Shoreway and Cleveland Housing Network announced separately they received allocations that will allow them to undertake, respectively, a $9 million conversion of the former Lion Knitting Mills Building, on West 25th Street at Meyer Avenue, and to construct an apartment for the elderly dubbed “Heritage Housing” on a site on East 97th Street north of Chester Avenue.

Mobile banking’s winning: Fifth Third Bancorp, the seventh-largest bank in Northeast Ohio ranked by local deposits, said it expects to “consolidate or sell” about 100 branches and about 30 other properties that it previously bought for future branch expansion. The company did not identify specific locations that will be consolidated or sold. It said the changes in the branch network are part of an effort “to improve efficiency, competitiveness and the quality of customers’ experience.” Fifth Third will incur $75 million to $85 million in charges.

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REPORTERS’ NOTEBOOK BEHIND THE NEWS WITH CRAIN’S WRITERS

The GOP convention also is a homecoming Clevelanders will have a familiar face to deal with as they prepare for the 2016 Republican National Convention, as former Ohio Republican Party executive director Chris McNulty has returned to town to help organize the event. McNulty moved back during the week of June 15, said Jo Ann Davidson, chairwoman for the Republican Committee on Arrangements, which will control most of the party’s spending on the convention. McNulty, a Vermilion native and graduate of John Carroll University, had been working for the Republican National Committee in Washington, D.C., since 2013. “He’s going to be working with me to ensure that there’s someone around that you know, who’s from Ohio … that you can communicate with,” Cleveland 2016 Host Committee executive Diane Downing told an audience of minority business owners, all seeking to do business with the convention, at a June 24 meeting. McNulty will join Davidson’s local staff, which she is building in Cleveland and works in the former Halle Building downtown. “We’re beginning to build the staff of Committee on Arrangements, so you’re going to have some people who will be permanent residents here for the next 13 months,” she said.

THERAPY continued from page 1

fourth floor at 6555 Carnegie Ave., which is part of the MidTown Tech Park Campus. It aims eventually to manufacture its own drugs there. Gene therapy is an incredibly hot industry right now. The western world’s first gene therapy product, Glybera, is about to hit the European market. More are on the way. And gene therapy companies are raising huge amounts of cash from investors. There’s a reason for all the excitement: Many of the drugs have performed well in clinical trials, according to Kurt Rote, CEO of Western Oncolytics of Westlake. Those successes have helped his company raise capital. It just raised $2.5 million, which will help the company to finish animal tests on its gene therapy for cancer. “These technologies are really starting to get results,” he said. Milo Biotechnology fits into that category. Results from a six-patient clinical trial suggest that the Cleveland company’s new drug might be able to reverse the effects of Becker muscular dystrophy. Four of the patients appeared to get significantly stronger after being injected with the drug one time. Existing drugs can slow down the disease, but they can’t reverse it. The treatment also appears to be “exceptionally safe,” according to a peer-reviewed paper published last year by Molecular Therapy. Safety issues were a problem when scientists started experimenting with gene therapies in the 1990s. At the time, they delivered the genes using adenoviruses, which are best known for causing people to catch colds. But research into those therapies ground to a halt after the death of a patient, whose immune system attacked the virus, causing inflammation.

Global view:

Akron-based Goodyear Tire & Rubber Co. announced it would shut down its Wolverhampton, England, manufacturing plant and transfer production to its Europe, the Middle East and Africa (EMEA) segment to cut costs. Goodyear also said it would transfer consumer tire production from its plant in Wittlich, Germany, to the EMEA region. The plans could result in between 360 and 390 jobs being cut, the tiremaker said.

JUNE 29 - JULY 5, 2015

Understandable risks Now, however, Milo, Abeona and many other companies use adeno-associated viruses, which show up next to adenoviruses in sick people but don’t appear to trigger much of an immune response. To guard against such a response, Milo gives patients prednisone, a drug that is commonly used to suppress inflammation. The benefits of gene therapy drugs will of-

McNulty has a long history with Republican politics, especially in his home state. Prior to serving as political director of the Republican National Committee for a little over two years, he was the Midwest regional political director for the committee from 2007 to 2011. Before that, he served as executive director of the Ohio Republican Party from 1995 to 2007. — Dan Shingler

Ohio’s makers make the grade A new report gives Ohio a passing grade in factors that affect manufacturing and logistics, with especially high marks in the state’s logistics industry and in its global reach. The 2015 Manufacturing and Logistics National Report ranks and then grades states on factors including worker benefit costs and productivity and innovation. The report is prepared by Ball State University’s Center for Business and Economic Research for Indiana’s advanced manufacturing initiative, Conexus Indiana. Overall, Ohio received “A” grades in logistics and global reach, and “B” grades in manufacturing and productivity and innovation. The grade in productivity and innovation was an improvement from 2014, when the state received a “C,” but its grade in manufacturing had dropped a bit from a “B+.” It received grades of “C” (as well as a “C+” and

a “C-“) in the other categories like human capital and tax climate. — Rachel Abbey McCafferty

Interlake steams forward with fleet modernization Interlake Steamship Co. has been working to make its namesake fleet more environmentally friendly. The Middleburg Heights-based shipping company earlier this month announced plans to repower its final steamship to a diesel system. This is the last phase of a 10year, $100 million project to modernize its fleet, according to a news release. The steam-to-diesel conversion is expected to start in mid-December. Interlake president Mark Barker said the company will be able to share who will be repowering the ship in the coming weeks. The company is more than 100 years old, Barker said. And while its existing ships aren’t quite as old, freshwater fleets do have long lifespans. Oceangoing ships are more likely to rot before the internal equipment gets old, he said. The company in 2006 decided to work to lower its environmental footprint, Barker said. According to the release, the repowering of the 56-year-old S.S. Herbert C. Jackson will be the fourth steam-to-diesel conversion since then and the fifth major ship overhaul. — Rachel Abbey McCafferty

IT WAS VERY NICE TO MEET YOU It’s a good thing that Al Hawkins and Tim Miller went to that neighborhood party. By chance, the founders of Abeona Therapeutics — a local gene therapy company with aggressive expansion plans — used to live on the same street, Delaware Drive, near the Nighttown jazz club in Cleveland Heights. They might have met before, but they didn’t really know each other until they got to talking at the party. Oddly enough, they were both interested in gene therapy. That relationship came in handy. A few years ago, Hawkins learned about a promising gene therapy for a fatal group of diseases called Sanfilippo syndrome. He wanted to license it from Nationwide Children’s Hospital in Columbus and build a company around it. But Hawkins was busy running his own gene therapy company, Milo Biotechnology, while working at another local drug development firm called BioMotiv. Luckily, Hawkins knew a guy who had previously worked for “the only three gene therapy companies in Cleveland” — Copernicus, Juventas and SironRX. Now Miller is now CEO of Abeona. “We lived on the same street. I liked him already. … I was like, ‘He’s tailor-made for this. This — Chuck Soder is a perfect fit,’ ” Hawkins said. ten outweigh any side effects that might crop up, given that many of the drugs are used to treat fatal diseases, according to Milo CEO Al Hawkins. “If you’re dealing with kids who are going to die when they’re 8 to 10 years old, you’re going to tolerate certain safety risks,” he said. Not every clinical trial has gone well, however. A few companies, such as Celladon of San Diego, have seen their stock prices tank after their clinical trials failed to deliver strong results. That company, however, is trying to treat patients with heart failure, a complex condition caused by multiple factors. Companies like Milo and Abeona may have better odds, because they seek to inject cells with a single gene designed to fill in for another gene that isn’t working properly, Hawkins said. Western Oncolytics has a different strategy. It uses a genetically altered version of the vaccinia virus — the vaccine that eradicated smallpox. The virus is designed to replicate in a wide variety of cancer cells and kill them. It also includes genes that activate cancer-fighting T-cells, increase the body’s immune response at the site of the tumor and prevent the body from getting rid of the virus too quickly A company news release claims that the drug could “extend the lives of, or outright cure, patients across a wide range of cancer types while avoiding” severe side effects.

Get to know them So let’s say these companies do succeed. Will they remain in Northeast Ohio? The region doesn’t have a large pharmaceutical in-

dustry. So when a startup raises significant capital or gets acquired, there often isn’t a strong incentive for the company to remain here. For instance, Western Oncolytics doesn’t have strong ties to the region. Rote is the company’s only local employee. It relies on out-of-state contractors to make its drug and run its animal trials. Plus, Rote said it was hard to raise capital locally. His latest round came from a private investment fund in Jacksonville, Fla. “I can’t tell you how many times I’ve pitched this company to Clevelanders and I just get a cold response,” he said, adding that local investors “just don’t know” the industry. However, Abeona’s aggressive expansion plans could make Cleveland a more desirable place for gene therapy companies. Miller — who previously worked for three local nonviral gene therapy companies, Copernicus, Juventas and SironRX — estimates that only eight to 10 companies worldwide have the ability to manufacture viral gene therapy drugs, which is a complex process. Abeona eventually aims to become one of them. The company should be able to make enough drugs to run eight to 12 clinical trials each year. If Abeona doesn’t use all of that capacity, it could become a contract manufacturer for Milo and other gene therapy companies. Abeona already is helping to build a local gene therapy industry by licensing more technologies from research institutions and hiring more people, Hawkins said. Milo could eventually do the same thing, he added. “Tim and I both want to do more and more and more,” he said.

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