Crain's Cleveland Business

VOL. 37, NO. 43

OCTOBER 24 - 30, 2016

Source Lunch

Focus on Manufacturing

Ian Schwarber is one of Akron’s biggest backers.

Pages 19-24

Page 28

CLEVELAND BUSINESS EDUCATION

Crowded landscape is tricky for Akron educators

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

Between the turmoil at the University of Akron and Stark State College announcing its plans to open a location in the Rubber City, Akron has been part of a number of higher-education headlines in the past year.

So what do these changes mean for institutions in a region that’s already facing a shrinking high school population? For many, it means finding ways to differentiate themselves from the competition, as well as looking for ways to work together.

“The environment is too strong, too tough to go it on your own here,” said Tim Bryan, chief of staff at Malone University in Canton.

In Summit, Stark and Portage counties, there are two public universities, a community college, a handful of private colleges and universities, plus the Northeast Ohio Medical University and Kent State University’s Stark Campus. And that doesn’t include any of the for-profit schools in the region.

Despite that, North Canton-based Stark State sees a need in Akron for its services. In May, the college announced plans to build an education and workforce training center in the city. It also plans to hold classes in a temporary location, starting this January, until that center is built.

Marisa Rohn, executive director of advancement, marketing and Stark State College Foundation, said about a quarter of Stark State’s students are from the Akron area, and they’ve been asking the school for a more accessible location for years. Community leaders also have been asking for a community college presence to help with workforce challenges, Rohn said.

Summit County views this as another tool to support existing employers and draw new ones to the region, said Jason Dodson, chief of staff for the Summit County executive’s office. He thinks Stark State’s presence will be a “critical” component for success in the next 10 to 20 years.

SEE AKRON, PAGE 8

LAW

Lawyers support landmark diversity initiative

SPORTS BUSINESS

Win the American League?

That’s the ticket

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

Indians’ first World Series berth since ’97 brings huge surges in seats, hotels, merch and plenty more

Francisco Lindor and Jason Kipnis celebrate the final out of the American League Championship Series in Toronto. The Tribe will host Game 1 of the World Series for the first time. (Dan Mendlik/Cleveland Indians)

By KEVIN KLEPS kkleps@crain.com @KevinKleps

New Cleveland doesn’t have to be defined by sports curses, championship droughts and happenings that are titled like ominous chapters in a book about disappointment.

New Cleveland only goes four

Entire contents © 2016 by Crain Communications Inc.

months between championship series appearances.

New Cleveland can be greedy, too.

The Indians’ improbable run to their first World Series in 19 years has been met with a very Cavs-like response.

The secondary ticket market is on a record pace, downtown hotels are at capacity, and the demand for merchandise is as strong as the Tribe’s bullpen.

The median sales price for Game 1

of the World Series on StubHub, Major League Baseball’s official secondary market, jumped from $870 on Oct. 18, the day before the Tribe clinched the American League crown with a win at Toronto, to $925 on Oct. 20. The latter number is $222 ahead of the peak price for the 2016 NBA Finals in Cleveland — $703 for the Cavs’ Game 4 loss to the Golden State Warriors.

SEE INDIANS, PAGE 26

Attorneys certainly aren’t blind to the lack of diversity in their profession persisting despite individual efforts, which are usually hard to overlook considering legal teams rarely shy away from any chance to promote their diversity and inclusion programs.

But talk is cheap. “We want to Some programs have certainly make helped individual Cleveland the legal teams kick up preeminent diversity levels, but place for there’s rather little changing through- diversity and out the industry as inclusion in a whole to reflect the legal the country’s multicultural popula- profession.” tion.

So in order to truly realize a more diverse legal market, the Cleveland Metropolitan Bar Association is asking lawyers to put their money where their mouths are.

— Majeed The CMBA is in Makhlouf, CMBA the midst of de- vice president of signing what seems diversity and to be a first-of-its- inclusion kind role in the sector, a legal inclusion director whose job will focus on recruiting diverse attorneys to Northeast Ohio, where they will, it’s hoped, find a professional home at the various firms, companies and public sector positions available here.

What’s more, the firms who compete for talent on any given day are financing the position in an otherwise rare display of legal groups joining forces for the common good of their profession and the Cleveland region itself.

“We want to make Cleveland the preeminent place for diversity and inclusion in the legal profession,” said Majeed Makhlouf, vice president of diversity and inclusion for the CMBA. “So how do we achieve that?”

It’s a seemingly straightforward question, yet one with which the legal sector has long grappled.

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LAWYERS CONTINUED FROM PAGE 1 In Cleveland alone — where census data validates the city and its various suburbs among the most diverse in the Midwest, let alone the state itself — a CMBA survey of law firms found that less than 4% of local equity and non-equity partners were attorneys of color among respondents.

While numbers of women and minorities are slightly better in public sector and in-house legal departments, white men remain the largest demographic represented throughout the legal market both nationwide and here locally, particularly at the most high-ranking and influential positions.

Makhlouf said it’s an issue generally believed would be corrected naturally over time.

But the data reflects what most already seem to know: That’s just not happening.

A recruiter representing the legal community at large, though, selling potential attorneys on the Cleveland area itself before connecting them with a potential employer reflects a paradigm shift in how the nonprofit CMBA is planning to tackle the systemic issues with diversity and inclusion, which must be more than popular buzzwords thrown around when a firm is marketing itself to clients and prospective talent. “We’ve been working on this subject for many years in Cleveland,� said Kerin Kaminski, a long-time leader in the CMBA’s diversity and inclusion committee. “But this is something that has the hope of really changing the trajectory of where we are and where we’ve been.�

Multi-phase initiative The CMBA and its diversity and inclusion committee revealed earlier this month its Cleveland Legal Inclu-

“We’ve been working on this subject for many years in Cleveland. But this is something that has the hope of really changing the trajectory of where we are and where we’ve been.�

“Part of what has been so exciting in watching these 27 different organizations (so far) build this plan is recognizing that what we have come up with is a proposal for action unlike anything else out there.�

— Kerin Kaminski, CMBA diversity and inclusion committee member

— Rebecca Ruppert McMahon , CMBA executive director

sion 2020 Collective Action Plan. The innovative, three-year, multi-phase program features specific goals that are collectively designed to shape Northeast Ohio into the country’s preeminent region for a diverse legal market through recruiting, retaining and promoting lawyers of diverse backgrounds.

The plan was preceded by the CMBA’s recent diversity study, which quantified the area’s attorney demographics. Establishing a baseline with hard numbers was the first step.

The next step is to hire that legal inclusion director.

Members of a steering committee will work on hiring this person, who will travel around the country and work with various partner organizations and the committee itself to “collectively sell Cleveland as the place to practice law,� Makhlouf said, equating to a Cleveland “brain gain� as people are recruited to the city, courted with work opportunities in the local legal market.

The potential Cleveland lawyers will of course have the freedom to work where they want, be that a law firm, the public sector or at a corporate in-house legal team.

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However, Zashin said he came around because of the potential for greater benefits to the legal community and the city at large that supporters share an implicit enthusiasm for through their participation.

He’s one of nearly 30 legal groups so far who have committed some capital to this phase of the CMBA action plan. “We need to do the right things for Cleveland and the legal community’s sake,� Zashin said. “And I believe that anything that can help the Cleveland legal community, in my mind, helps Cleveland.� “I don’t know if it will result in us becoming more diverse,� he added. “I hope it does. But I think it is just the right thing to do anyway.�

The groups pledging a financial commitment so far range from some of the city’s largest firms to small and midsize firms to Cleveland State University and Cleveland Metroparks.

More groups are expected to come on board over time. “Part of what has been so exciting in watching these 27 different organizations (so far) build this plan is recognizing that what we have come up with is a proposal for action unlike anything else out there,� said CMBA executive director Rebecca Ruppert McMahon. “We really think it will give Cleveland and the legal community a competitive advantage.�

The significance of competing legal groups banding together really shouldn’t be understated as it breathes new life into diversity initiatives in Northeast Ohio’s legal sector. “You now have multiple employers who compete daily with each other in the marketplace saying they think this is important enough to join hands and make this a reality,� Makhlouf said. “The members joining this initiative show a real genuine desire for us to be able to do this in a way to really move the needle. I’m very proud of our members’ willingness to do this experiment.�

“Once we sell them on the idea of coming to Cleveland, different employers will compete on the second step in terms of getting that candidate,� Makhlouf said.

But before that recruiter role is filled, the CMBA wants to raise at least $200,000 to finance the position, which would primarily cover salary and travel costs.

And the area’s legal teams are pitching in to cover that, indicating they’re looking to on-board new, diverse attorneys themselves as they literally buy into this initiative. “There will still be that competition for people,� Kaminski said. “But we built this to be a collective while still having that competition. It’s the design that gives us the best chance for success.�

Once the recruiter is in place, other elements of the multiyear action plan will come into play.

Working together Stephen Zashin, co-managing partner of Cleveland law firm Zashin & Rich, admits he was a little leery of the plan at first. He voiced some reasonable skepticism at a recent CMBA meeting where the action plan was unveiled.

The firm wants its staff to be more diverse as it grows, he said. However, in a competitive field where the largest law firms tend to have more recognizable brands and deeper resources to court the attorneys they want whether they’re fresh out of law school or scooped up through lateral hires, a midsize Cleveland firm of about 30 lawyers is bound to face some additional challenges in attracting and retaining the most sought-after candidates. In terms of recruitment, larger legal groups do tend to enjoy some advantages. “I was concerned by this at first because it felt like we were supporting an initiative to drive diversity at larger firms,� Zashin said, candidly. “And that wouldn’t benefit us.�

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CRAIN’S CLEVELAND BUSINESS

Q&A: Dr. Brian Harte

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A number of factors drew Dr. Brian Harte to the top post at Cleveland Clinic Akron General. It’s the single biggest part of the Clinic’s regional hospital network. It has its own residency and graduate medical education programs. It’s an urban hospital, and a key civic and business pillar of the community. “My goal here on behalf of the Cleveland Clinic is that I believe we can improve the lives of our community,” said Harte, who has been with the Clinic since 2004 and for the last three years served as president of the Clinic’s Hillcrest Hospital in Mayfield Heights. Harte has held the post just shy of a month. He arrived about a year after the Akron General Health System officially joined the Clinic system. He takes over for Dr. Thomas “Tim” Stover, who announced his immediate retirement in May. Stover’s resignation came only a few short months after the Clinic took on full ownership of Akron General. Crain’s recently sat down with Harte to talk about what he’d like to accomplish and how he’d like to see Akron General grow and evolve. — Lydia Coutré What are your immediate goals that you’d like to work on?

Immediately for me, of course, is to learn the people. I believe we have such an opportunity here to take the Cleveland Clinic’s resources, our focus on quality, our focus on patients first and really bring that level of resources to an organization which has a 102-year history of doing the same. The second thing is really build Akron General as the hub of what we call our southern region here in Northeast Ohio.

From what you’ve learned so far, what would you like to continue and improve on?

I think Akron General’s greatest strength is the people. There’s just a tremendous sense of mission and purpose here, and a sense that we can indeed improve the lives of the people in our community, in the greater Akron community. There’s a sense of credible optimism that we can grow and accomplish whatever we want to, and those are things that I want to continue.

We’re coming up on a year since the integration began. What’s done and what’s left to do?

There’s a lot of things I think we can point to as specific milestones and accomplishments. We now have Cleveland Clinic physicians practicing down here at Akron General. We have funded a $49

“Implementation of the common electronic medical record, which we have at our other Cleveland Clinic facilities, at the end of April will be an enormous accomplishment.” million emergency department.

We’re still in the final design stages of that. We’ve committed to the infrastructure necessary to implement an electronic medical record, which will be fully integrated with Cleveland Clinic’s electronic medical record throughout Northeast Ohio. We’ve brought the partnership with Select Medical to build a new rehab hospital and move the Edwin Shaw Rehab Hospital over to Bath. The work of integration is a lot of fun, in part because you can see the benefits of it, such as the examples I just gave you. But also it never ends, so there’s always great work to be done.

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Are there any remaining milestones upcoming?

Although I don’t think we have a date set, we’ve obviously cleared the land for the ED, and we have to build a retaining wall, but the formal construction of that should begin by late winter around February. And then the implementation of the common electronic medical record, which we have at our other Cleveland Clinic facilities, at the end of April will be an enormous accomplishment.

Those are the two that I’d point to next.

How will you work to maintain the local identity of Akron General?

The people make the identity. The technology and the tools simply enable us to be more effective and more efficient.

What challenges do you see going forward?

I think two of the challenges that we have here are around infrastructure, and we’re addressing those with the help of the Cleveland Clinic health system. As I mentioned before, the implementation of an electronic medical record requires really a dramatic resourcing of IT and IT infrastructure. And then building infrastructure. I mentioned Edwin Shaw and, of course, the ED. And the second is I think looking at the general needs of our community. All hospitals do a community health needs assessment, and like any urban population, we have a lot to work on in partnership with other health care resources, governments and civic leaders.

CLEVELAND BUSINESS 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113 Phone: 216-522-1383 www.crainscleveland.com Reprints: Krista Bora

212-210-0750 kbora@crain.com

Customer service and subscriptions: 877-824-9373 Volume 37, Number 43 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly at 700 West St. Clair Ave., Suite 310, Cleveland, OH 441131230. Copyright © 2016 by Crain Communications Inc. Periodicals postage paid at Cleveland, Ohio, and at additional mailing offices. Price per copy: $2.00.

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DigitalC has formed a $600,000 venture capital fund to invest in startups that align with its mission of using technology to solve community problems.

Formerly known as OneCommunity, DigitalC plans to invest between $30,000 to $50,000 per company through the new fund. Its goal is to invest in four to six companies per year for three years.

What type of companies? The definition is pretty broad, but the DigitalC Fund for the most part will fund government-focused tech companies and startups in the Big Data and Internet of Things sectors.

Companies in those sectors are often well-positioned to address community issues such as health and wellness, education, workforce development or public safety. Those companies also could have an outsized impact on local businesses, said DigitalC CEO Lev Gonick. For instance, he noted that the Internet of Things trend could have a huge impact on the way Northeast Ohio’s many manufacturers manage their machines.

“Everyone in the manufacturing economy that defines Northeast Ohio is trying to figure out how to innovate for the next generation,” he said.

DigitalC also has formed an informal relationship with Chicago-based Ekistic Ventures, a $15 million fund with a similar focus. Through that relationship, DigitalC would encourage its most promising companies to eventually seek larger follow-on investments from Ekistic Ventures.

The Cleveland Foundation contributed $300,000 to the DigitalC Fund in the form of a program-related investment and the rest came from the nonprofit, which changed its name and refocused its mission in June. As OneCommunity, it had been best known for laying fiber-optic cable and selling high-speed internet service through its Everstream subsidiary, but it sold most of those assets last year.

Gonick and DigitalC chief strategy office Jennifer Thomas said they’re already having conversations with local entrepreneurs starting companies in the civic tech, Big Data and Internet of Things sectors. For instance, one of the first entrepreneurs that DigitalC officials met with aims to commercialize a sensor system designed to help elderly people monitor their health — a system that also could ease the burden on the health care system, Gonick noted.

That company was a little too far along to be a good fit for the fund, which aims to finance startups in the earliest stages of development.

DigitalC formed the fund partly

because the nonprofit believes there isn’t enough capital available for the youngest startups in the region. But there is not a lack of entrepreneurs with ideas for solving community problems, according to Thomas.

“It’s all about deal flow,” she said.

Ekistic Ventures could help DigitalC address the capital issue.

Founders Brett Goldstein and David Spielfogel visited Cleveland in mid-October to learn about the local startup scene and meet entrepreneurs focused on urban problems — entrepreneurs who might one day seek capital from them.

Goldstein, who spent two years serving as the city of Chicago’s first chief data officer, met Gonick while speaking on a panel at Columbia University. Through that relationship, Goldstein visited Cleveland eight months ago to talk to local civic leaders about how data could be used to make cities and businesses smarter. He got a good reception.

Thus, when he and Spielfogel, who previously was a top aide to Chicago Mayor Rahm Emanuel, started Ekistic Ventures, he knew who to call.

“It was natural for me to reach out to Lev and say, ‘Hey, how can I learn more about Cleveland?’ Because while my peers in (Silicon) Valley focus on the Valley, I realize that we have a ton of talent in the Midwest.

And I’ve seen the beginnings of such talent in Cleveland,” he said.

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Designers at Cleveland-based Bialosky + Partners Architects are drawing up preliminary plans for another major mixed-use project in Northeast Ohio, this time the $130 million Rockside Crossing real estate development in Seven Hills.

LSB Seven Hills LLC, the developer, also plans to kick off some work

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soon on the property. It will demolish 13 houses that prior landowners purchased in assembling the large-scale site that have languished since 2005.

Detailed design work is underway after Seven Hills Council on Sept. 26 enacted a planned unit development zoning for the project sought by LSB Seven Hills, a joint venture of Focus Development Group and Beck Group, both of Boca Raton, Fla. The new plan drops 600,000 square feet of retail space and 100,000 square feet of office space from a

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mixed-use center proposed for the 52-acre site on the south side of Rockside Road near Crossview Road.

Paul Deutsch, principal and chief operating officer of Bialosky, said the joint venture by Beck and Focus deferred additional spending on the plan until the zoning was set. The joint venture and Bialosky will need to win preliminary and detailed design approval and secure financing to proceed, but creation of the new zoning district is a milestone in rekindling development of the site adjoining the Rockside Road office corridor.

But Deutsch said the tentative schedule is to clear the site this fall and to begin construction next year.

The current plan scales back the prior plan and replaces slow-grow retail and office space with a different approach, including earmarking onethird of the site for senior citizen housing that would be undertaken by another developer. There’s just 40,000 square feet of retail and restaurant space, which would be on the first floor of two buildings with multiple floors of apartments above them.

All told, 160 market-rate apartments would go in the two mixed-use buildings. A 120-room hotel also is planned, as well as 120 for-sale townhomes. The townhomes would have an access from Crossview Road, a fully developed street of single-family homes on the west edge of the site.

The design would be similar in terms of materials to Crocker Park in Westlake, which Bialosky also designed.

Jeffrey Graeff, president of Focus Development, said in a phone interview that the zoning vote “gave me and my partner much comfort in making such a large investment in Seven Hills.”

SEE ROCKSIDE, PAGE 7

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ROCKSIDE CONTINUED FROM PAGE 6 Graeff said he dropped the large retail component because of the topography of the site. The southern side of the site is 100 feet above the level of Rockside Road. â&#x20AC;&#x153;There is a reason itâ&#x20AC;&#x2122;s called Seven Hills,â&#x20AC;? Graeff said.

Office was also dropped because the Rockside Road market remains glutted. The townhouse component went in, he added, because he has heard from national and local builders who would be willing to undertake for-sale housing at Rockside Crossing.

The project benefits from a shortcut the well-heeled can make in real estate after the Great Recession. The bulk of the site went back to the lender in 2012, and LSB in October 2015 paid Fifth Third Bank $2.5 million for it, according to

Cuyahoga County land records.

Graeff â&#x20AC;&#x2122;s partner, Louis Beck, learned about the availability of the site while developing the recently opened SpringHill Suites in Independence, which went in on excess land at the Holiday Inn Rockside that a Beck affiliate has owned for more than 20 years.

The developers took a fundamental approach in sizing up the development site. â&#x20AC;&#x153;Seven Hills is just 10 minutes from downtown Cleveland, and itâ&#x20AC;&#x2122;s easy to reach the airport,â&#x20AC;? Graeff said. â&#x20AC;&#x153;You can have a new residence and be close to everything.â&#x20AC;?

Even office broker Rico Pietro, a principal of Independence-based Cushman Wakefield Cresco, believes itâ&#x20AC;&#x2122;s too soon to talk about more office development on Rockside Road. â&#x20AC;&#x153;However, when it comes to apartments, nothing has gone in nearby in 30 years,â&#x20AC;? said Pietro, who handled the bankâ&#x20AC;&#x2122;s sale of the property to LSB.

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AKRON CONTINUED FROM PAGE 1 And Rohn doesn’t think it will be a problem for Stark State to coexist with the schools in the Akron region; after all, it’s been doing that with the Stark County schools for quite a while.

“Our mission is just different,” she said.

It’s about collaborating to meet student needs, Rohn said. There’s not a lot of overlap in the two-year programs Akron offers, and the university is Stark State’s No. 1 transfer school. Rohn said she expects the schools to continue to collaborate.

Collaboration is key Matthew J. Wilson, president of the University of Akron, also spoke to the importance of collaboration with

Stark State and the other colleges in the region.

Wilson said UA’s strengths are in its four-year degrees, as well as the master’s and graduate-level programs.

The polymer and law programs stand out, as does the business school. And overall, the “hands-on practical skills” Akron focuses on are a differentiator, he said.

The state collects preliminary headcounts for its public colleges and universities. The University of Akron saw its enrollment drop by nearly 8.5% after a tumultuous year that ended with then-president Scott L. Scarborough stepping down.

Wilson thinks time will tell whether the region can support as many universities and colleges as it has, but that finding ways to collaborate will be the key to the success of all. He said he wants to see a collaborative process, not a competitive one, be-

“You can’t be afraid to say this is who we are.”

— Tim Bryan, chief of staff at Malone University

cause the schools are working toward the “same common goal.” The number of 18-year-olds in Ohio is decreasing, but the number of schools isn’t, he added.

Ohio has a competitive model of funding, said Holly Harris Bane, president of the Northeast Ohio Council on Higher Education. But the presidents of the universities have a sense of collaboration, she said, and a focus on how to partner and make education affordable and efficient. She thinks each school has its own niche, but each must con-

stantly assess and change its offerings to ensure it’s meeting the community’s needs.

And the region’s schools can’t just draw students from Northeast Ohio or from the 18-22 age range.

Todd Diacon, provost and senior vice president for academic affairs at Kent State University, said Northeast Ohio’s population is declining, but there are segments that haven’t historically been reached by higher education, such as older adults and veterans. The number of people without degrees is still large, he said.

Diacon said Kent hasn’t felt the pressure of regional competition because freshman enrollment has been increasing. Overall, though, the preliminary headcount for fall 2016 for the Kent campus was relatively flat compared to 2015, according to state numbers.

Diacon said the school has stayed

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true to its mission of accessibility, instead of narrowing admissions. And it has a history of top programs, like fashion design and merchandise, aviation and theater, that can be difficult to find on other campuses.

Being who you are Staying true to the school’s brand is just as important at a large state school like Kent State as it is at small schools like Hiram College, the University of Mount Union and Malone University.

“You can’t be afraid to say this is who we are,” said Bryan of Malone.

For Malone, Bryan said its Christian identity is an important factor as students choose to attend — or not. But the school can’t just focus on local high school students.

There’s “absolutely potential” in the adult market in Ohio, he said. And this year, the size of the entering class grew by 25%, Bryan said, in part because the school targeted out-of-state markets.

Hiram competes with state schools like Kent, Akron and Cleveland State University, but as a private, eclectic school, it views itself as very different from the others, said Lindajean Heller Western, vice president for enrollment. And it’s critical to help students find the school that fits them.

Public affairs officer Cristine Boyd said Hiram’s location, in northern Portage County, and size are differentiators for the college, because there aren’t a lot of distractions for students.

Western said Hiram is strong at recruiting athletes, and it has started to use that team recruiting model to draw other students. For example, this year, it used the approach for nursing, letting faculty members serve as coaches and a “cadre” of students to serve as the team. Boyd said the approach gives prospective students a chance to ask questions and get a feel for campus life.

“We’ve created that affinity environment for them, just like athletics,” Western said.

And finding a way to stand out is important in a market as competitive as Ohio’s. It can be tough to get families to even consider a private university because the upfront cost before financial aid can be a factor, said Michelle Sundstrom, vice president for enrollment management at Mount Union. Public schools have been taking more of the market, she said.

But the school doesn’t see Stark State’s entrance into Akron as a challenge. Instead, it’s an opportunity for more partnerships, said vice president for marketing Melissa Gardner.

And Mount Union is taking steps to ensure it’s offering what the community wants. The school’s board recently approved new strategic and branding plans that will allow Mount Union to develop new programs and help it attract more commuter, transfer, international and graduate students, Gardner said.

“It’s all about staying relevant as an institution,” she said.

Correction

An Oct. 17, Page One story about zoning issues on the November ballot incorrectly characterized the genesis of the rezoning of residential land along Chagrin Boulevard. The zoning plan was developed by the Moreland Hills Master Plan Review Committee. Also, the developer of the rezoned 21 acres is Omni Development Group Co., a subsidiary of Omni Construction Co.

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Minerva Dairy gets fat off its Amish butter

By DAN SHINGLER dshingler@crain.com @DanShingler

Three things you probably didn’t know about Amish butter: First, it’s not necessarily made by Amish people. Amish butter is a term used by the dairy industry, typically to denote butter that is slow churned and has more fat than regular American butter.

Second, it’s a huge hit with foodies, who of late are flocking to its rich, complex taste, especially since nutritionists and the general public have come to accept some fats as being better for people than was previously thought.

Finally, and perhaps most importantly, a Northeast Ohio company is one of the nation’s leading producers of Amish butter, and its sales are booming as a result of the food’s newfound popularity.

“You’ve seen artisanal cheese trends that have happened. … Now you’re seeing that same conversation transition over to butter,” said Adam Mueller, CEO of Minerva Dairy, which is located in its namesake village that straddles Stark, Carroll and Columbiana counties.

Amish butter, Mueller said, is about 84% butterfat — compared with about 80% butterfat for typical butter in the U.S. and about 82% for butter sold in Europe.

That extra fat means extra flavor and richness, and, as a result, Mueller is literally making butter almost as fast as he can churn it with three, 1,000-pound electric slow-churners, each of which can turn cream into butter in an hour or so.

Sales have gone up more than tenfold over the past decade and are still rising, Mueller said.

“We’re up double digits in sales,

Minerva Dairy’s sales have soared in the last decade, CEO Adam Mueller said. (Dan Shingler)

Amish butter is about 84% butterfat, which is 4% higher than typical butter in the U.S. (Dan Shingler)

year over year, and we’re getting into more and more stores. A decade ago, we were a sleepy brand,” Mueller said. “We’re in more than 4,000 stores now … and it’s all because of

demand.”

Minerva Dairy is on track to make 5 million pounds of its Amish roll butter this year, along with about 12 million pounds of cheese, he said.

Noted Cleveland chef Zack Bruell said high butterfat content matters a lot, especially in cooking and making sauces. He said he wasn’t familiar with Minerva Dairy specifically, but he is with its style of butter, which he relies on at his restaurants, including Parallax and Cowell & Hubbard.

“You’re always looking for high-content butterfat — it stays emulsified when you make sauces. It doesn’t split up, and it’s just got more flavor,” Bruell said. “Products like that, if you’ve never tasted them, you wouldn’t know the difference. But if you taste them side by side with what you’re used to, you’ll notice — and you’ll get spoiled.”

Even though Amish butter is a smaller part of Minerva Dairy’s sales by weight, butter is in the driver’s seat simply because of how milk is pro-

cessed, Mueller said.

The dairy takes in raw milk from 60 to 70 farms, most of them within a 30mile radius of Minerva’s 70,000-square-foot plant. The cream is separated from the milk and churned into butter, while the milk that’s left is used to make low-fat cheeses, which Minerva mostly sells wholesale in 40-pound wheels or shredded in bags.

Most people who eat the cheese never know it’s from Minerva Dairy because it’s used in the food-service industry or sold under store brand names. The butter, on the other hand, goes to end users via grocery stores, where it prominently carries the Minerva name and battles other brand names for shelf space.

The butter is the dairy’s artisanal flagship product, Mueller explained, but he has to have some way to use the milk that’s left over, so that becomes cheese.

“If I didn’t have my cheese operation, I could not have my butter operation,” he said.

He could just buy his cream wholesale, already separated and with no milk to deal with, but then quality would suffer.

“I can’t buy cream that is of the same quality that I get from my family farms,” he said.

Happy cows That “quality” is more than subjective, too. It really is true that happy cows produce better milk and, therefore, better butter, Mueller said. So Minerva tests the milk that it gets not only for fat, but also for somatic cells, which are an indicator of stress in the cow that produced the milk. Too many of the cells, especially over a longer time period, indicate that the cow is stressed.

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CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

In Believeland, we believe that we can win

Editorial

Make it count American elections are not perfect. There are, indeed, some cases of voter fraud. But it’s wildly irresponsible and dangerous for a presidential candidate to contend that elections are “rigged,” as Donald Trump has done, and to suggest, as Trump did in the final presidential debate last week, that he’d keep voters “in suspense” as to whether he’d accept the Nov. 8 election’s outcome.

Trump at this point is beyond embarrassing for his party and the country. Two key Ohio Republicans — Gov. John Kasich, the country’s most prominent Trump opponent, and Secretary of State Jon Husted, the state’s top elections official — did the party and the nation a big favor last week by standing up to the GOP nominee, rejecting his unfounded claims about cooked elections and asserting their commitment to preserving the integrity of the democratic process.

“To say that elections are rigged and all these votes are stolen — that’s like saying we never landed on the moon, frankly.

That’s how silly it is,” Kasich told CBS News. He added: “I don’t think it’s good for our country, for our democracy, and I don’t believe we have any massive fraud.”

Husted, on CNN, said the election system “is one of the bedrocks of American democracy. We should not question it or the legitimacy of it. It works very well. In places like Ohio, we make it easy to vote and hard to cheat.”

And for those who lament the bitter divide in the country today, Husted observed that the election system is “the only place you can find Democrats and Republicans working cooperatively together. They work that way in our election system to make sure that the integrity of our election system is upheld, and that people feel good about the process of voting.”

Trump is trying to undermine that feeling. The problem with doing so, as Kasich pointed out, is that it “does create doubt in people’s minds, and I worry about 25% of Americans who may say when the election’s over that it was stolen.”

While Trump has continued to assert that “voter fraud is very, very common,” it simply isn’t, according to numerous researchers who have studied the issue. (A good FactCheck.org

summary of the research is at bit.ly/2dR1OXH.) A Wall Street Journal story last week offered a welcome antidote to the voting paranoia pushed by Trump. The story was about parents who take their children to the polls “as a way to instill positive lessons about responsibility and honor, values that resonate even more deeply in an uncivil election season.”

One such person is Joe Cimperman, the former Cleveland City Council member who now heads the nonprofit Global Cleveland.

Cimperman, whose mother immigrated from Slovenia, routinely accompanied her when she voted here. “She thought this was the greatest country on earth and couldn’t believe that some people don’t vote,” he said. Today, Cimperman and his wife take their kids, ages 8 and 4, to vote in every election.

Make up your own mind if you want to vote, and if you do, for whom. But as responsible officials have pointed out, you can do so with confidence that your vote will be counted, and it will count.

Wilson’s way

Last week, the University of Akron stripped the “interim” tag from Matthew Wilson’s title and installed him as the 17th president of the university. We commend the former law school dean for the job he’s done since he took the reins.

In particular, he repaired many of the strained relationships that arose during Scott Scarborough’s tumultuous two-year tenure. However, in today’s crowded higher education landscape, the university must figure out how to differentiate itself — a problem not created by Scarborough.

We’re hopeful Wilson has the courage to make bold decisions to redefine the University of Akron but do so in a way that’s inclusive of the university community. Anything less could threaten the future of this great Northeast Ohio institution.

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

CLEVELAND BUSINESS

CLEVELAND BUSINESS

Managing Editor:

Scott Suttell (ssuttell@crain.com)

Sections Editor:

Timothy Magaw (tmagaw@crain.com)

Contact Crain’s:

216-522-1383

My daughter and I got our nails done last weekend.

Two weeks later, our nails still look pretty good.

That’s pretty amazing considering they endured two rounds of Major League Baseball playoffs and weren’t chewed to the nubs.

Had that been two decades ago, my nails — and the nerves of most Cleveland Indians fans — would have been gnawed. I might be down to the first knuckle.

This year is different. I’m sure you’ve noticed. Even Pedro Martinez noticed.

You might remember the Hall of Fame pitcher owned the Indians during the late ’90s and early 2000s as the ace for the Boston Red Sox. Now a TBS studio analyst, Martinez remarked after the Indians won the American League pennant last week that when he looked in the Indians’ dugout Elizabeth back in 1999 during Game 5 of the division McIntyre series, he saw fear. He saw fear in the players. And if we are being honest, the fans were filled with fear, too. After losing the World Series in 1995 and then, ever so painfully as we were one out away from the ring in 1997, we often feared the worse. And it often befell us.

In 2016, when Martinez looked into the Indians’ dugout, he saw something different. He saw confidence.

The fans have it, too. We aren’t biting nails and waiting for disaster. We’re pulling together and willing wins.

This year, Believeland is not just a slogan in Northeast Ohio.

We believe that we can win.

Thanks to the Cavaliers and LeBron James, we have shed the weight of sports futility. We already are a city of champions.

Now we are four wins away — let that sink in, four wins — from our first World Series championship in 68 years. That’s longer than most of us have been alive, and the second-longest span for a baseball team without winning the World Series.

Save for a few detractors, this displays the power of positivity.

It works in business, and it works in baseball, too. Our attitude has changed. You can see it in the players and the fans. The team is looser, and so are we. In Believeland, you can breathe deep.

During this magical postseason run, I have enjoyed texting during the games with my son, who is away at college. We celebrate every Tribe hit and cheer on every defensive gem.

“PENNANT!!!!” he wrote when Carlos Santana caught the final out, sealing the Indians’ win over Toronto for the American League Championship.

“Tribe wins!!!!” I replied.

Then I reminded him that this wouldn’t be his first brush with a World Series Indians team. Back in 1997, I was five months pregnant with Aidan. He came along to every playoff game with me that year. My friend, Susan, and I cobbled together about $600 each so that we could attend every Indians postseason game, just like we did in 1995. The playoff price tag is a bit too high for us in 2016. After all, there are 529 plans to seed now.

Susan and I bit our nails in 1995 and 1997, staying up way too late and staggering through our work days. You may remember doing the same. And we’re on that same playoff run now, but it feels so different. I couldn’t put my finger on it until I asked my son — my playoff buddy from 1997, who has now worked for the Tribe the past two years in the Kids Clubhouse — how it feels to see his team in the Fall Classic.

He texted back: “So proud to be from Cleveland.”

Aren’t we all?

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

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

Please include a telephone number for verification purposes.

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Personal View

Tax reform will help curtail Cleveland economic woes

GO TRIBE! #RallyTogether

By LYNLEE ALTMAN

administration (i.e. accountant fees) of federal taxes alone and 27% reported spending more than $10,000.

The same study also found that a majority of small Despite all the blustering from both political parties this election season on how to grow the economy — in- businesses spend more than 40 hours per year dealing cluding some promises and proposals intended to with federal taxes. And 40% reported spending in exstrengthen our current situation — we’re still not seeing cess of 80 hours per year. Put another way, close to half the growth our country needs. In the second quarter, the small businesses in this country spend at least two U.S. GDP grew at a meager rate of 1.2%, and economic full work weeks on federal taxes. expansion is now tracking at a rate of 1% for 2016, the A straightforward tax code would deliver immediate lowest in five years. financial and time savings to small A myriad of factors influence A straightforward tax business that could be invested economic growth. Some variables back into the business and grow are more difficult to change or are code would deliver the economy. In 2016, it’s difficult completely out of politicians’ to understand why our tax code is hands. Others don’t require fastid- immediate financial this inefficient.

Generally, America has some of ious analysis of the broader land- and time savings to the highest business tax rates scape and could and should be among developed nations. While enacted now. Comprehensive tax small business that there is constant debate over setreform is a prime example of the could be invested back ting latter. rates, a growing consensus is In 2000, I started Pinnacle Con- into the business and forming among both political parstruction & Development Group, a ties that businesses small and full-service design-build small grow the economy. large need tax relief. On several business specializing in one-of-aoccasions, President Obama has kind projects based in Cleveland. Over the years, called for lower individual and corporate rates — a we’ve grown to 50+ employees and have collaborated lower individual rate is important for small business on some amazing projects, including recreating the owners since most of us pay taxes on our business’s surface of Mars at NASA Glenn Research Center in earnings through personal income taxes. And back in Brook Park. I speak for everyone at Pinnacle when I June, House Republicans proposed lowering taxes say we love what we do. How could we not? across the board.

Unfortunately, even for those of us that have our Recent economic measures show we’re still strugdream job (or build things from a dream world), there gling to recover from the 2008 downturn. Granular will always be unenjoyable tasks associated with run- data also shows that fewer people are starting small ning a small business. However, nothing is more frus- businesses. It’s not every day that both political parties trating than dealing with inane, albeit required, as- and a majority of voters agree on an issue, but simplipects that ultimately inhibit me from taking Pinnacle fying the code and lowering rates for all businesses are to the next level, like our 30-year-old tax code. prime examples of those rare instances. ComprehenSmall business owners wear several hats within an sive tax reform is something Congress and the presiorganization. That is to be expected. But navigating our dent should move forward now to help turn our econcode is not something many small business owners, if omy around. any, can do on their own because it’s more than 4 million words long. According to a 2015 National Small Lynlee Altman is president of Pinnacle Construction & Business Association survey, approximately half of Development Group, a full-service design-build small small businesses spend $5,000 or more annually on the business based in Cleveland.

Letter to the Editor Choice can fix troubled schools

I’m writing in response to the Sept.

19 Crain’s editorial “Bad Profit” and to U.S. Sen. Sherrod Brown’s Oct. 3 letter on the for-profit education industry.

I agree that “profit schools” do not profit students in Ohio, except for expensive private schools. Kids in Cleveland deserve better, and we should give them an option to attend schools that they choose. Also, we should not ignore schools (i.e., public, charter, notfor-profit) that are doing everything for those students with limited funding.

I also agree with Sen. Brown and I would support his legislation to fix this. However, “school choice” should be an option for our struggling neighbors. Why are we so against school choice? Aren’t we supposed to work together for our students? Don’t we have to put students first?

We must take action to collaborate and include everyone in the conversation. Not-for-profit charter schools are public schools. Am I wrong? Let’s revisit this and see what we are not doing.

Murat Gurer, Cleveland

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

Web Talk Re: Income tax hike in Cleveland Yes, raising Clevelandâ&#x20AC;&#x2122;s income tax is the immediate action item for responding to Clevelandâ&#x20AC;&#x2122;s urgent needs, as pointed out in Crainâ&#x20AC;&#x2122;s Oct. 17 editorial, â&#x20AC;&#x153;Cash infusion.â&#x20AC;?

But electing different legislators is also essential to achieving responsive and responsible government here in Ohio, just as it is for our country.

We the voters must make thoughtful choices all the way down the ballot, and not just at the top. â&#x20AC;&#x201D; Deborah Coleman

Re: Medicaid pressures The Oct. 18 guest blog from Christine Dodd of Ice Miller, â&#x20AC;&#x153;Medicaid: The largest government health care program no one

is talking about,â&#x20AC;? was an insightful analysis.

One must think that the additional burden placed on the states will result in additional pressure on states to work on improving their cost containment strategies, and thus a continued shift to managed care organizations.

Notwithstanding that success, states are certain to face financial pressure and challenges to help manage the demands of this ever-expanding population. â&#x20AC;&#x201D; Scott

Re: New Oatey Co. HQ Compliments to Gary Oatey and the Oatey Co. for staying in the Cleveland area and for the companyâ&#x20AC;&#x2122;s 100th anniversary.

Theyâ&#x20AC;&#x2122;re great corporate citizens. â&#x20AC;&#x201D; R. Douglas Cowan

One must think that the additional burden placed on the states will result in additional pressure on states to work on improving their cost containment strategies, and thus a continued shift to managed care organizations.

Re: Future of health care in Lakewood The Cleveland Clinicâ&#x20AC;&#x2122;s best interests are not the same as those of the residents of Lakewood.

City decisionmakers also felt comfortable shutting down the possibility of another hospital leasing the property.

(A poor decision for publicly owned property.)

Without proper public input on decisions, we miss the benefits of residents voicing intelligent alternatives. That kind of discourse also can shed light on special interest agendas.

In the rush to claim community hospitals are dinosaurs, they forgot to note Southwest General is a community hospital thatâ&#x20AC;&#x2122;s doing fine. â&#x20AC;&#x201D; Pat Ballasch

CLEVELAND BUSINESS 700 W. St. Clair Ave., Suite 310, Cleveland, OH 44113-1230 Phone: (216) 522-1383 www.crainscleveland.com @CrainsCleveland

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PA G E 13

Jobs drop in September, but outlook is optimistic The ACE Report

By SCOTT SUTTELL ssuttell@crain.com @sstuttell

AHOLA. CRAIN’S. EMPLOYMENT Crain’s Cleveland Business has partnered with The Ahola Corp., a payroll and human capital management firm in Brecksville, and local economist Jack Kleinhenz to provide monthly data — and clarity — about a key factor in business decisionmaking: the size of Northeast Ohio’s workforce.

Seasonally adjusted employment numbers, Northeast Ohio MAY: 175,950 JUNE: 174,351 JULY: 1,177,724 AUGUST: 1,174,059 SEPTEMBER: 1,172,402 1,175,000

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and 3%, respectively,” Kleinhenz said.

He also found reason for optimism in the results of the Institute for Supply Management’s nonmanufacturing index. That index “rebounded strongly in September to 57.1 from 51.4 in August, well above market expectations and its highest reading since October 2015,” Kleinhenz said.

Meanwhile, he said, the ISM manufacturing index rose to 51.5 from 49.4, which “suggests a modest pickup in business activity in September.”

Kleinhenz concluded, “The improvement as measured by these indexes, though a bit uneven, holds out hope that a pickup in economic activity is underway for the remainder of 2017 and should provide the basis for future payroll gains for the Northeast Ohio region.”

WAY· a k

tember, thus making it difficult to infer that slower growth is ahead.”

He noted that while employment measures “are important, they leave out other key information (that is) included in other economic series.”

For instance, Kleinhenz said he keeps a close eye on a “coincident economic index” produced for each state by the Federal Reserve Bank of Philadelphia. The index includes four factors: employment; average hours worked in manufacturing by production workers; the unemployment rate; and wage and salaries incorporating employment.

In August, he said, the coincident index for Ohio increased 0.3%, and it has risen by 3.4% over the past 12 months. These “are favorable figures when compared to the nation’s 0.24%

1,170,000

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1,160,000

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1,155,000

UR O

The end of summer and the start of fall have not been kind to the Northeast Ohio employment market.

For the second straight month, Northeast Ohio registered a decline in the size of its payrolls, as calculated in the Ahola Crain’s Employment (ACE) Report.

In September, seasonally adjusted employment decreased by 1,657 jobs, to 1,172,402 last month from 1,174,059 in August, according to the ACE Report data. That followed a decrease of more than 3,600 jobs from July to August.

Both goods-producing and service-producing companies in Northeast Ohio shed jobs in September, the ACE Report found. Payrolls related to goods production fell by 1,539, and service-related regional payrolls fell 118.

September’s payroll number of 1,172,402 was below the region’s three-month (1,174,728) and sixmonth (1,174,286) averages, according to the ACE Report data.

However, Jack Kleinhenz, the Cleveland Heights economist who created the ACE Report model, noted that employment in Northeast Ohio “continues to remain in positive territory for the year, as there were 6,012 more jobs in the seven-county Cleveland/Akron region than the (like) month a year ago.”

Kleinhenz said in an analysis of the most recent data that there are “a lot of moving parts impacting Northeast Ohio economic activity, including seasonal forces in August and Sep-

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CRAIN’S CLEVELAND BUSINESS

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By STAN BULLARD sbullard@crain.com @CrainRltywriter

When real estate developers David Orlean and Ken Lurie were planning what stands to become a $20 million cluster home complex in Pepper Pike, they struggled for a name.

So they took a cue from when they were kids in Beachwood living next door to each other on Edgewood Drive to name the new gated community at 29450 Cedar Road as Edgewood Trace.

Comprised of 42 townhouses costing about $500,000 apiece, the project is the largest residential development in the tony East Side suburb since Forest City Enterprises Inc., now Forest City Realty Trust, launched Sterling Lakes a staggering 11 years ago. The gap in time is due to the long housing bust. But the newhome market is back and so are new developments.

“In 2008, I never would have believed things would be as vibrant as they are today,” said Lurie, who joined forces with Orlean in 2012 after Lurie’s Rysar Homes bogged down in the real estate collapse.

Moreover, Edgewood Trace is just one of multiple big-ticket development projects that Beachwood-based Orlean Co. is undertaking in the region, thanks to its financial strength as a second-generation real estate concern. The firm is also entering its fourth generation with David Orlean’s son, Cameron Orlean, serving as a vice president. While Orlean Co. has been low profile through the years, David Orlean’s sister is Susan Orlean, a well-known journalist and novelist.

David Orlean was a federal prosecutor before joining his late father, Arthur Orlean, in the family business in 1981. At that time, Orlean had moved from the home-building concern he launched with his carpenter-father, Samuel Orlean, in 1954 to constructing more than 4,000 suites

The latest for-sale residential development by Beachwood-based Orlean Co. is called Edgewood Trace. The cluster homes carry prices in the $500,000 range. (Contributed photo)

of affordable housing and market-rate apartments.

“It was a great base to build on,” David Orlean said, especially as his late father believed in paying off property debts rather than refinancing them. Over time, the company acquired The Normandy, an independent living complex for senior citizens in Rocky River, and pursued larger projects.

David Orlean credits his biggest setback, converting the former West Tech High School, 2201 W. 93rd St., Cleveland, to apartments with positioning him for the realty downturn.

Orlean had guaranteed another developer’s loans on the project and wound up taking over and finishing the 189-suite project in 2003. Orlean defaulted in 2006 on a U.S. Department of Housing and Urban Development-backed loan and was sold.

“I learned to be cautious from that experience,” David Orlean said.

Somewhat sidelined in the housing boom by West Tech, that also meant the company was ready to pick up the pieces as other builders and developers struggled in the bust.

Orlean also moved into other directions.

“When Lurie came in, he brought a ton of energy and connections,” David Orlean said, and rekindled the firm’s for-sale housing business.

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The result is a staggering array of projects.

In Rocky River, Orlean is adding 40 assisted living units and 40 memory-care units in a $25 million project to the Normandy. The additions will fill the housing gap between its independent senior living units and a nursing home at the complex, David Orlean said.

In University Circle, Orlean plans a $34 million project to rehabilitate the 144-suite Fenway Manor senior citizen apartments as its part of the planned UC3 project, a 700-apartment plan in which it partnered with Midwest Development Partners of Shaker Heights to win a city of Cleveland request for proposals granting the group control of the former Third District Police Station and Martin Luther King Jr. Public Library on Chester Avenue.

Throughout the region, Orlean is taking advantage of low interest rates to refurbish many of its assisted living apartments in projects ranging from Massillon to Lorain.

In Indianapolis, Orlean is developing a Cambria Suites hotel in its second joint venture with Westlake-based Ceres Development.

Orlean and Ceres already opened such a hotel at Marketplace of Avon, a retail center Orlean acquired during the downturn.

Orlean also surfaced recently as a partner in Chagrin Falls-based Snavely Development Group’s recently launched plan to construct 194 market-rate apartments as well as offices and retail space in a $60 million project at West 25th Street and Detroit Avenue in Ohio City.

Meantime, in Pepper Pike, contractors hired by Orlean are completing the street and infrastructure for Edgewood Trace. A total of 11 buildings are planned for the 10-acre site, each consisting of two attached cluster homes. Each home will have at least 2,400 square feet of living space and first-floor master suites, Cameron Orlean said. The units are designed for couples whose children are grown and want to downsize from Pepper Pike or adjoining cities and young professionals who desire limited-maintenance living.

There are no sales yet; selling the suites is a task that Keller Williams Greater Cleveland’s New Homes Team will begin Oct. 19.

Although Orlean bought the Edgewood Trace site from owners of four homes they demolished, the project also builds on a remnant of the housing boom. The site was rezoned for cluster homes in 2003, Cameron Orlean said, adding, “Thank goodness.”

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CRAIN’S CLEVELAND BUSINESS

Second Chance is beneficial for Ashland Federal program that aids incarcerated individuals is big reason for university’s enrollment jump RACHEL ABBEY MCCAFFERTY rmccafferty@crain.com @ramccafferty

Ashland University saw its total headcount grow by a dramatic 16% this fall — a spike that school officials said was due in large part to an experimental federal program that expands financial aid to incarcerated individuals.

The university’s enrollment grew from 5,677 students in fall 2015 to 6,583 in fall 2016, said Michael Hollenbaugh, Ashland’s vice president for enrollment management. Ashland is one of 67 schools in what’s called the Second Chance Pell pilot program that launched last year. The university is the only one in Ohio involved with the pilot and one of the largest in terms of reach.

Ashland has seen enrollment growth in other areas, too, including its high school student population and its online programs, according to Hollenbaugh and John Dowdell, director of the school’s Gill Center for Business Economic Education. But this federal pilot accounts for about 70% of this year’s growth.

(Contributed photo)

The Second Chance program allows participating institutions to offer Pell grants to eligible incarcerated individuals who are likely to be released within five years. A news release from the U.S. Department of Education cited a 2013 RAND Corp. study that found that individuals who took part in correctional education were 43% less likely to return to prison in three years, compared to prisoners who did not take part in such a program. The study was funded by the U.S. Department of Justice.

“The evidence is clear. Promoting the education and job training for incarcerated individuals makes communities safer by reducing recidivism and saves taxpayer dollars by lowering the direct and collateral costs of incarceration,” U.S. Secretary of Education John B. King Jr. said in the release.

The release stated that the majority of higher education institutions in the pilot are public two-year and four-year schools that plan to offer on-site education at the correctional facilities. Others will offer online or

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“The evidence is clear.

Promoting the education and job training for incarcerated individuals makes communities safer by reducing recidivism and saves taxpayer dollars by lowering the direct and collateral costs of incarceration.”

— U.S. Secretary of Education John B. King Jr.

hybrid programs.

But Ashland is a private school, and it’s one of the schools offering online courses for eligible students.

Dowdell said the school has a long-running correctional education program that dates back to 1964.

The coursework in the program will be delivered online, Dowdell said. A news release noted that Ashland uses “secure, corrections grade Android tablets” to deliver the coursework.

Ashland had been serving about 400 incarcerated students each semester, but through the Second Chance Pell pilot, Ashland will be able to serve an additional 1,040 students, Dowdell said. The university is in the midst of implementing the pilot, Dowdell said, and enrolled 640 of

the total 1,040 goal this fall. Dowdell said the grant expanding access is for three years. All told, the schools in the pilot will enroll about 12,000 incarcerated students in postsecondary education, the release stated.

Ashland’s program is serving institutions in Ohio, West Virginia and Louisiana.

Participating students can receive an associate of arts degree with a concentration in business.

Denise Justice, superintendent of the Ohio Central School System (the district approved by the state to serve the needs of the Ohio Department of Rehabilitation and Correction), said the program is going to allow students to build on the certificates the system already offers.

Justice said the program benefits incarcerated individuals in a few ways, referring to the study on the impact of education on recidivism rates and noting the job options that increase with training. She also said the educational programs are a productive use of time while in the correctional institutions.

Dowdell said Ashland’s participation in the Second Chance Pell program and serving underserved populations really goes back to the underpinnings of its Christian heritage — the school’s website says it was founded by Brethren Church in 1878, but was designed to be “non-sectarian.”

Hollenbaugh said the university’s goal is to provide transformational learning experiences for all the populations it serves, whether that’s traditional undergrads, those enrolled in its online programs or participants in this pilot.

“It really ties back to our mission,” Hollenbaugh said.

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CRAIN’S CLEVELAND BUSINESS

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DAIRY

PA G E 17

tersen said. “And it does help support the feed that we have to feed the cows, so it’s a win-win, and we’re really grateful they’re there.”

Mueller would like more farms, small or not, to help him keep up with demand.

Because, he said, he’s working to figure out how to sell even more butter. Minerva’s latest forays are into flavored butters — garlic and herb, pumpkin spice and, his personal favorite, smoked butter. Those are proving to be big sellers, he said, and more are on the way as a result of their popularity.

“We’re working on Sriracha and saffron flavors for next year,” Mueller said.

CONTINUED FROM PAGE 9 “Maybe they’re getting sick, maybe they’re stressed out, maybe they don’t have the proper bedding. … But we look at that to tell whether the farm is a good environment for the cows,” Mueller said. “Even an electrical problem somewhere on the farm can have an effect on them.”

The dairy then shares the test results with farmers and works with them to identify and eliminate the sources of stress.

Working closely with farmers is basically doing business the same way that Mueller’s family has done it since it started the dairy in 1894, he said. The family started the business in Wisconsin and purchased a former Pet Milk powdered milk plant in Minerva in the 1930s. By the mid1960s, the full operation had moved to Minerva.

Now 40, Mueller has been working in the dairy since he was 12. His sister, Venae Mueller Watts, is head of sales.

The family is used to working with small operations. The biggest dairy that Minerva works with has more than 200 cows, but most have fewer than 100 and some have fewer than 10.

“Our smallest farm only has four cows, but we still pick up their milk,” Mueller said with a chuckle.

At that size, dairy farming is really a lifestyle choice, he said. Dairy cows, whether there are 200 or just four, must be milked twice a day — and that includes Christmas, birthdays and days when their owners are sick.

Failing to do so results in a very loud barn full of cows that are quickly in pain and braying for the relief of a milking. It’s a sound no true dairy farmer can stand for long.

But small farms tend to take good care of their cows and to produce very good milk, so it’s worth the effort to work with them, if they're willing to keep milking, Mueller said.

Some rely on Minerva because they are too small to attract the business of larger dairies.

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Minerva Dairy CEO Adam Mueller has been working on the sixth-generation, family run business since he was 12.

(Dan Shingler)

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A lot of milk That includes one of the farms that is farthest away from Minerva — the Lake Metroparks Farmpark in Kirtland. Half working farm and half petting zoo for more than 50,000 school kids who visit each year, the Farmpark has seven dairy cows, along with 50 sheep, a yearly litter of pigs, goats and rabbits, said the farm’s livestock manager, Ann Petersen.

The cows include a Holstein, milking short-horned cattle, Guernseys, an Ayrshire and a Jersey cow, Petersen said. They are milked twice a day by machine and during the day by hand for visitor demonstrations.

Petersen said she wasn’t aware that the milk is being used to produce high-end butter, but said she’s not surprised that it has the high fat content Minerva Dairy seeks.

She also said that even a farm with just seven cows probably produces a lot more milk that most people think.

“A Holstein will produce 10 to 12 gallons of milk a day,” she said.

“When she’s in peak production, she’ll produce well over 100 pounds of milk a day.”

Having Minerva Dairy nearby and willing to take the farm’s milk is important because it not only gives the farm a place to send its milk, but also brings in some money.

“They’re the closest producer that will come and pick it up in bulk,” Pe-

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CRAIN’S CLEVELAND BUSINESS

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Focus MANUFACTURING

Strengthening a state of steel

By RACHEL ABBEY MCCAFFERTY rmccafferty@crain.com @ramccafferty

Earlier this fall, ArcelorMittal Cleveland’s Eric Hauge sent letters to U.S. Sens. Sherrod Brown and Rob Portman with a blunt assessment of the impact of foreign steelmakers on the U.S. manufacturing industry.

“As you know so well, American steel has been targeted for years by foreign steelmakers in China and other nations with illegal dumping of steel products on our shores,” Hauge, ArcelorMittal’s vice president and general manager, wrote in the letter to Portman provided to Crain’s.

“These actions have cost thousands of steelworkers’ jobs, many of whom live in Ohio.”

His tone, however, wasn’t all doom and gloom.

Hauge thanked the senators for their work with the Leveling the Play-

ing Field Act, a piece of legislation introduced in March 2015, that helped in three flat-rolled steel trade cases in which ArcelorMittal participated concerning corrosion resistant, cold-rolled and hot-rolled steel.

In those cases, the government placed anti-dumping and countervailing duties on the products, and Hauge said the cases have played a role in improving the steel market. In the letter, he said ArcelorMittal already had begun to pick up its hiring, adding 70 new employees as of Sept.

27.

The act — sponsored by Brown and co-sponsored by a bipartisan group of lawmakers, including Portman — passed as a small part of a much larger trade bill in June 2015, but it could prove to be significant for manufacturers, like steelmakers, that compete against foreign companies.

It’s not quite a silver bullet, but the act does take steps to strengthen the trade cases manufacturers can file

Recent legislation has helped local steelmakers defend themselves against foreign dumping

B’laster rebrands - Page 20 | The next generation - Page 21 | Q&A - Page 22

when they believe a foreign competitor is selling subsidized goods or goods that are below fair market value in the United States.

Fair game According to a White House fact sheet, those steps include making it easier for the U.S. Department of Commerce to get the information it needs in these cases, even if it’s from “non-cooperative foreign companies and governments.” The legislation also supports the department’s enforcement of its existing duty laws.

And it betters the U.S. International Trade Commission’s ability to assess injury caused by these imported goods to U.S. manufacturers.

Companies and unions long have argued that they have to lose jobs before they can bring a trade case.

In a testimony for a trade case related to cold-rolled flat steel products, Portman described how the Leveling the Playing Field Act changed the “material injury” clause the U.S. government has used to determine if an industry was being hurt by foreign trade. Material injury has been defined as “harm which is not inconsequential, immaterial, or unimportant,” he said, but companies have hesitated to bring trade cases forward until they had suffered serious injury.

SEE STEEL, PAGE 22

ArcelorMittal Cleveland credits the Leveling the Playing Field Act with strengthening the steel industry. (Luke Sharrett/Bloomberg)

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MANUFACTURING

B’laster shakes up its brand identity

By DOUGLAS J. GUTH clbfreelancer@crain.com

The B’laster Corp. turns 60 next year, but advanced age doesn’t mean the Valley View-based chemical company has lost its edge. If anything, the lubricant manufacturer’s long-time slogan of “It freakin’ works, man!” points to a youthful brand confidence that permeates the business’s entire culture.

For 59 years, the family-owned company has worked to innovate, creating new specialty formulas for the lubricants, penetrants and rust inhibitors it provides to the automotive, industrial, marine and hardware industries. The self-styled “Rust Belt warriors” fought for even higher ground this year with a rebranding that reflects the enterprise’s blue-collar Cleveland heritage.

A new logo and package design evokes the original product line’s durability, even as a refurbished can lends itself to a modern, clean look, said Randy Pindor, B’laster’s executive vice president of marketing. And if you’ve been following the Cleveland Indians at all this season, you’ve probably noticed B’laster’s prominent banner in left-center field and elsewhere around town.

“We are a business that works hard, and works long hours,” Pindor said.

“The rebrand is an extension of that.”

Launched in January after substantial market research, the updated brand guidelines include the tagline, “Work it Like a Pro,” reflecting professional-grade penetrants used by seasoned mechanics and weekend tinkerers alike.

“These products work in a harsh Cleveland environment, so they’re

going to work in San Diego, Chicago and Tampa, too,” Pindor said. “Look at our can’s instructions and it doesn’t say ‘Shake well.’ It says, ‘Hey, shake the can.’ Bold and overstated is who we are.”

B’laster makes 15 to 18 industrial-strength lubricants, cleansers and degreasers used to remove the squeak from a garage door or tough corrosion from a heater manifold.

Eight new products, among them a break cleaner, tire inflator and foaming engine degreaser, are set for release before end of year. Meanwhile, a food-grade silicon lubricant used for conveyer belts and other machinery is planned for November.

Included in the larger brand used is a partnership with the Teflon brand and business team. Five current B’laster items now harness the Teflon flouropolymer coating designed to protect surfaces and reduce friction and wear.

B’laster owns 65% of the penetrant market share, undergoing a double-digit revenue increase over the last decade. The company’s “ugly” Rust Belt aspect has also earned it a cult following, one that was thought to be untouchable until 2013, when Pindor orchestrated a year-long consumer research project.

The venture revealed B’laster customers weren’t averse to change, as long as the basic formula remained the same. Company leaders were glad to hear it.

“The brand we had was broken apart with cans that didn’t match each other,” Pindor said. “We didn’t have enough of an identity. The new brand has an essence to it — an emotional feeling and voice behind it.”

Naysayers said B’laster was committing financial suicide, but reaction to the shift has been almost uni-

“This was a can you’d find in garage shops.

Now it’s a very clean, very nice looking package that consumers want to pick up off the shelf.”

— Kent Houser, Cobra Plastics president

The company’s new branding reflects the enterprise’s blue-collar Cleveland heritage. (Contributed photo)

formly positive, Pindor noted.

“I lost sleep about it myself, but it’s worked out well,” he said. “Our NPD (new product development) score has been going up, while our competitors are going down.”

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Cobra Plastics in Macedonia has supplied B’laster with aerosol caps for 20-plus years. The large-scale identity change hasn’t bothered company president Kent Houser in the slightest.

“This was a can you’d find in garage shops,” Houser said. “Now it’s a very clean, very nice looking package that consumers want to pick up off the shelf.”

B’laster’s nimble business model has only enhanced what Houser deemed “the best product out there.”

“They’re a smaller company that’s been quick to react,” Houser said.

“They’ve been successful competing against bigger companies like WD-40.”

Penetrating international markets is the next goal for B’laster’s high-potency products.

Already making inroads into Mexico and Canada, the company’s next stops are Australia, South America and South Africa. While B’laster has no significant plans to celebrate its 60th anniversary, officials are looking forward to 2018, when another major product announcement is expected. Much like the current rebranding and product line, any future strategy will align with the signature grassroots style in which the company was founded.

“We’ve been in Cleveland for 60 years, and want more people to know who we are,” Pindor said. “When you walk into Home Depot, you should see B’laster and want to buy it.”

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Trade group looks to connect manufacturing’s next generation

By RACHEL ABBEY MCCAFFERTY rmccafferty@crain.com @ramccafferty

Independence-based trade association Precision Metalforming Association has cast its gaze beyond supporting just its members in recent years, starting efforts to better support women and, now, young professionals in manufacturing at large.

In 2011, the association started Women in Manufacturing to support women working in the industry that has traditionally been dominated by men; it has now become its own trade association. This past summer, PMA started a new group for millennials and Gen Xers working in or considering a career in manufacturing. The group, called MFG NXT, is aimed at all manufacturers — not just metalformers.

Allison Grealis, vice president of association services, said PMA has found that many of its member companies are going through leadership changes. Some of these newer leaders may not have spent their whole careers in manufacturing and need knowledge, and others just lack the “organic support network” they need in the industry. The main goals for MFG NXT are “supporting and connecting this next generation of manufacturing talent and leadership,” Grealis said.

“We want it to be a resource for these, especially small-to-midsize manufacturing companies as they transition leadership, as they onboard and bring on new talent.”

— Allison Grealis, PMA vice president of association services

PMA laid the framework for this group years ago, creating a seat on its national board of directors to represent the interests of the next generation, Grealis said. Andrew Bader

joined the board recently to fill that position, which is now being called the MFG NXT board position. Bader is the marketing manager at OGS Industries in Akron.

Bader said, especially with small, family-owned manufacturers, offering the kind of connection where young professionals can share advice on things like succession planning is important. Grealis agreed.

“We want manufacturing companies to thrive,” Grealis said. “I mean, we want them to not go out of business. And I think that for that continuity to happen, we want it to be a resource for these, especially smallto-mid-size manufacturing companies as they transition leadership, as they onboard and bring on new talent. We want to be able to be a resource that they can suggest to their millennial and Gen X employees.”

One key difference the group has from Women in Manufacturing: Grealis said PMA does not see MFG NXT as its own organization. Grealis is also the president of Women in Manufacturing. MFG NXT is an industry group or initiative, she said, and the association would love to see it becoming an umbrella under which other industry partners could join.

The first MFG NXT meeting was marketed through social media and direct email marketing, and Bader said about 20 to 25 people attended.

SEE NXT, PAGE 24

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MANUFACTURING

STEEL CONTINUED FROM PAGE 19

This isn’t going to end well.

You wouldn’t have a dog operate a forklift in your factory. So why would you roll out a new manufacturing system without proper IT review and support?

System downtimes due to IT failures occur an average of 7 times a year, costing manufacturing operations nearly $17,000 per failure. Partner with Ashton Technology Solutions today to make sure your manufacturing technology is properly managed and enhanced to avoid major downtimes and errors. With our co-managed and outsourcing IT management options, Ashton will ensure your manufacturing systems can lead you to success.

Call Ashton at 216.397.4080 or visit ashtonsolutions.com for more information.

HOW BAD IS THAT LEAK?

The Leveling the Playing Field Act clarifies that the International Trade Commission can’t use the fact that an industry is profitable as evidence that there’s no harm, Portman said in his testimony.

“There may be many cases — particularly in periods of strong demand — where a domestic industry remains somewhat profitable, even though its profitability is diminished by the harmful impact of unfair trade.

This new provision makes clear what was, in my view, already present in the law: that domestic producers do not have to wait until they are losing money and jobs and market share to seek, and obtain, trade relief,” he said.

The act also encouraged the commission to consider a variety of economic data when determining harm to an industry, including net profits and investment in research and development, Portman said in his testi-

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Low-cost imports, whether it’s because those products are being subsidized by their governments or because they’re being sold at a very low price, can drive down prices for domestic producers, too. That clearly hurts companies’ bottom lines — and the longer it goes on, the more harm it causes.

In an interview with Crain’s, Hauge said trade cases are still slow, but that the act has sped up the process and allowed companies to make significant progress. When companies have to show serious harm, plants end up shutting down and jobs are lost.

ArcelorMittal has benefited from strength in the automotive and appliance industries as other segments have struggled, Hauge said, but the company could still be harmed by unfair trade.

“Hopefully, we can get in front of that before it can happen,” he said.

Portman’s testimony, made before the final determination on the case,

Smoke rises from from towers as ArcelorMittal signage is displayed at the company’s steel mill complex in Cleveland.

(Luke Sharrett/Bloomberg)

3D Digital Design & Manufacturing Technology Program, Cuyahoga Community College With degrees in history, urban planning and architecture and a deep background in mathematics, it might seem unusual — at least on paper — that Alethea Ganaway has a passion for spreading the gospel of additive manufacturing, or as it’s more commonly known, 3D printing. In fact, because of her background in architecture, she has a deep understanding of the engineering principles involved with 3D printing. Ganaway oversees Cuyahoga Community College’s 3D printing/additive manufacturing program in the college’s Manufacturing Center of Excellence. Crain’s recently chatted with Ganaway about the rise of additive manufacturing and about Tri C’s new Ideation Station — a new 2,400-square-foot fabrication laboratory coming online at its Metropolitan Campus that is open to students, faculty and the community. — Timothy Magaw

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What’s your sales pitch to prospective students?

Additive manufacturing is the industry of the future.

Manufacturing is changing – what we do and how we do it. When I go out and talk to people, I tell them that employers need people who understand design and development and how to use a 3D printer. And it doesn’t just have to be in manufacturing. You can be an artist, a person who works in the medical or dental fields. That’s why people need to care about this.

What’s a misunderstood component of additive manufacturing?

That there’s actually engineering principles involved with the software and the materials you can use. It’s more involved than what we see on TV. We don’t often hear about the engineering part of the definition of ‘additive.’ It’s called ‘additive’ because you add layers of material on top of each other.

What is your favorite part of this field?

The flexibility of being able to print just about anything. It’s new, it’s growing. It’s exciting. There are so many advancements being made.

Anyone can come from our program.

Art majors who want to learn to use additive manufacturing to express their art through different mediums.

About the Ideation Station Location: Tri C’s Metropolitan Campus Size: 2,400 square feet Open to: Students, faculty, community members, employers, etc.

Equipment: Epilog laser cutter, ShopBot 4x8 router, Roland vinyl/ circuit cutter, other industrial-grade fabrication equipment and electrical tools, and open source software.

Contact: ideationstation@tri-c.edu; 216-987-2769 We also teach realistic applications.

In the capstone course, students are designing prosthetics for veterans.

These are real-world applications — not just theory.

What an interesting project you worked on with a 3D printer?

Well, I’m involved with the ACE Mentoring program, which works with students inspiring them to pursue careers in design and architecture. We were working with students from the Cleveland Metropolitan School District to create a gate for the cultural gardens. We helped the class print symbols for the gate with a 3D printer. That was a real world application.

What was the thinking behind Tri-C’s new fab lab?

The closest thing we have to the fab lab would be Case Western Reserve University’s [think]box and Cleveland Public Library has a few 3D printers.

This is a digital fabrication laboratory designed to promote innovation, creativity and collaboration. It’s a maker space where community members, faculty and students can design, prototype and brainstorm.

We want everyone to be a to produce a physical, 3D-printed object. They can also laser engrave objects, create a piece of furniture or manufacture a product.

What do you hope to inspire with this space?

We want to be a springboard for entrepreneurship in the community.

Any community organization — like the Boys and Girls Club or the Girl Scouts — that has a want or need to use a fab lab can use this space. We also want to integrate it with other programs throughout the college — not just the manufacturing program, but also arts or even theater. Maybe they can print a set design. We believe that having these tools available to our students will help them and inspire them to be more creative and innovative. That’s what employers are looking for. We want to make sure our students as prepared as students at other schools.

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â&#x20AC;&#x153;In the world of trade litigation, justice delayed is justice denied,â&#x20AC;? he said. â&#x20AC;&#x153;Trade relief can be effective, and we are already seeing signs that following the Commerce Departmentâ&#x20AC;&#x2122;s preliminary determination the cases before you are making a difference for U.S. mills. But trade relief cannot bring back the profits that were already lost due to unfair trade.

It cannot bring back the income workers lose when they are laid off, or the costs companies must pay when idling a plant. It cannot make up for the investments companies are unable to make, or the products they cannot develop, while waiting for relief to occur. And often trade relief cannot bring back the jobs that are lost.â&#x20AC;?

In an emailed statement, Brown said the act has made a â&#x20AC;&#x153;critical differenceâ&#x20AC;? in fighting unfair trade but that enforcement alone canâ&#x20AC;&#x2122;t protect U.S. jobs. â&#x20AC;&#x153;We need an all-around trade policy that prioritizes American workers, not just corporate profits,â&#x20AC;? Brown said.

The law has only been in place for

about a year, so time will tell what kind of impact it has long term. But it appears to be making a difference.

Brown in news releases has attributed recent success in three related steel cases â&#x20AC;&#x201D; for hot-rolled steel, cold-rolled steel and corrosion-resistant steel being imported from a variety of countries â&#x20AC;&#x201D; in part to the changes in the Leveling the Playing Field Act. There were four companies with Ohio plants in the cases: ArcelorMittal, Nucor, AK Steel Corp. and United States Steel Corp. â&#x20AC;&#x153;The legislative changes to our trade laws assisted, in part, with the affirmative results we received in all three of our recent flat-rolled steel cases,â&#x20AC;? said Suzanne Rich Folsom, general counsel, chief compliance officer and senior vice president of government affairs for U.S. Steel, in a statement. â&#x20AC;&#x153;In each of the three cases, the International Trade Commission applied the new injury standard included in the legislation, and it required the ITC to do a more thorough evaluation of the impact foreign imports had on the domestic industry.â&#x20AC;?

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EXP3RT1S3 Here, itâ&#x20AC;&#x2122;s about more than just numbers.

Our expertise in the manufacturing industry enhances the high-quality financial, tax, and business advisory services our professional team delivers. When you work with us, you can feel confident that youâ&#x20AC;&#x2122;ll get the highest level of attention. Most importantly, youâ&#x20AC;&#x2122;ll get expert guidance specific to your industry to help you achieve your definition of success.

Adviser: James Komos

Pitfalls lurk amid succession planning for your business As a CPA working with closely held businesses, over the years I have witnessed numerous business transitions. Some are well planned out and progress in an orderly manner. Others are thrown together with little real thought of the consequences.

The majority of transitions fall in the middle of these two extremes.

Management makes a sincere effort to do what is right. But, mistakes in the process lead to problems. Over time, I have seen a number of common mistakes being made in the planning process. You may be able to use this list to aid in either your business transition, or that of someone you know.

Mistake #1: Starting too late Procrastination is a major obstacle in the succession planning process.

Delaying the process leads to rash decisions, inadequate training and limited options. Proper planning cannot begin too early. From day one, you should be evaluating and recruiting talent, training potential successors and planning for a smooth transition. At the minimum, start five years before your planned exit.

Starting early, also allows you to take advantage of favorable conditions. For example, recent IRS proposed regulations clearly signal the U.S. Treasury Departmentâ&#x20AC;&#x2122;s intent to severely curtail the use of valuation discounts in family-owned entity transfers. These rules are only months away from becoming effective. If you are well along in the planning process, you may be able to complete the transfers prior to the effective date of these new rules. If not, it is probably too late to complete your transfers on time.

Mistake #2: Keeping the process a secret When the time is right, share your plan with everyone who is af-

James Komos is the partner-incharge of Ciuni & Panichiâ&#x20AC;&#x2122;s tax department.

fected by it, including your employees. Secrets result in unpleasant surprises and an unprepared team.

If you are planning to transfer the business to the next generation, make sure your designated family members know of your desire and share your commitment to the business. Donâ&#x20AC;&#x2122;t assume it. I have been in meetings where the parents proudly announce that they intend to transfer the business to their children, only to be told that one of the children is not interested.

You also need to communicate your plans so that everyone can prepare for the transition. Once announced, you can begin training your successor for your role. Talk about your vision for the company, its employees and its growth. Understand that your successor may have different ideas. Make sure he or she is prepared for the task. Plan together any management and staff changes.

And clearly define what your role will be after the transition, if any.

Mistake #3: Dividing the business evenly among your heirs Hereâ&#x20AC;&#x2122;s a scary story. A business owner divided the business evenly among his four children. Turns out, each child had a different perception of running the business, the benefits and its challenges. They could not agree on key business decisions, and no one sibling was in charge. Four years later, the siblings are estranged and the business is gone.

Your business is not the place to either test sibling relationships or

demonstrate your equal loyalty to each child. Based on our experience, a business needs a dominant leader, so we encourage our clients to name one leader and define his or her role clearly. Another option is to give equal shares to each child but have an agreement that one child has management control and can only be overridden for specific actions. This gives the parents the comfort that the business will succeed for the benefit of all the children.

Mistake #4: Setting a proper value on your business When selling your business, knowledge is key to achieving a successful transaction for all parties. For many business buyers, expanding their customer base is the primary acquisition objective. Itâ&#x20AC;&#x2122;s important to recognize the potential buyersâ&#x20AC;&#x2122; objectives and future expansion plans.

This information will help you communicate the value of purchasing your company. For example, an international company that wants to make a savvy geographic move. In this case, you could emphasize your long-term relationships with U.S. customers who might otherwise be wary of buying foreign goods. Donâ&#x20AC;&#x2122;t make the mistake of valuing your company from your current point of view. Position your company to appeal to the buyer.

Mistake #5: Planning on your own Succession planning is not an individual sport. It affects your family members, your employees and your legacy. It requires consideration of all of them. It is a critical life event for the company. It requires the consultation and advice of experts in this area. It should be a team project, including consultation with your attorney, accountant, appraisers and others who can lend critical advice to the process.

Where Relationships Count.

216.831.7171 Ć&#x201D; cp-advisors.com

To subscribe to Crainâ&#x20AC;&#x2122;s Cleveland Business call toll­free at 1­877­824­9373  or on­line @ CrainsCleveland.com/Subscribe.

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MANUFACTURING

NXT CONTINUED FROM PAGE 21 The first group will help shape the group’s initial offerings and will help MFG NXT spread the word about the new organization.

Like Women in Manufacturing, MFG NXT is not just a local initiative, but a national one. Grealis noted that while many of the attendees at the first meeting were from Ohio, people did drive and even fly in to take part.

“So we know there’s an appetite, and we know there’s a need,” Grealis said.

Brett Hofer, safety and training coordinator at Batesville Tool and Die Inc., made the five-hour drive from Batesville, Ind., for the first meeting.

The metalforming company sent four people, he said, because they think “it can be a great program.” The 31-year-old said he wants to advance in his career and the idea of talking about what future leaders need to know sounded like a good idea. It’s much easier to learn from other’s

mistakes, he said, and he plans to stay involved with MFG NXT. Jonathan Sweeney is part of the fourth generation at Avon-based metalforming company A.J. Rose Manufacturing Co. He’s 25 now, and a production specialist, but one day he’ll step into a leadership role. He was invited to MFG NXT and said it was a good way to build connections and relationships. He also plans to stay involved, and said the group was on the same page in terms of concerns, such as an aging population.

Overall, there’s a “hunger for information and for resources,” Grealis said.

The key now for MFG NXT will be finding the best ways to connect the interested parties. The group already has a private email list up-and-running so members can communicate with one another. Plans to offer virtual learning courses are underway, Grealis said. The goal is to have the first available in the first quarter of 2017.

And Grealis said the next in-person meeting, which is open for registration, will be held Nov. 16 at the FABTECH conference in Las Vegas.

Ohio manufacturing workers getting older The number of younger people working in the manufacturing industry is slowly declining, while the number of older workers is on the rise. As such, there’s a growing effort to recruit more millennials and Gen Xers into the fold.

35-44 years old 2001: 279,985

300,000

55-64

250,000

2015: 155,659

200,000

35-44

2015: 144,242

25-34

2001: 201,896

150,000

100,000

25-34

55-64

2015: 122,616

2001: 120,857 50,000

2000

2005

2010

2015

SOURCE: U.S. Census Bureau

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Bill Von Alt named Chief Financial Officer at Recovery Resources, Cleveland OH. Bill brings a wealth of experience from within the not-for-profit and behavioral health world. Previously, Bill served as the CFO at Northcoast Behavioral Healthcare and prior to that as the Director of Financial Services at Cleveland Foundation. He has his Green Belt in Lean Six Sigma from Case Western Reserve University and was appointed to the City of Seven Hills’ Civil Service Commission by the Mayor.

Jason Joyce named Sr. Dir. of Clinical Programs at Recovery Resources. Jason is a Licensed Clinical Counselor and Independent Chemical Dependency Counselor. His areas of clinical interest include behavioral disorders, PTSD, co-occurring disorders, and developmental psychopathology.

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Eric Friedman, founder, chairman and CEO of Edward Holdings LLC, an early stage funds and advisory company to socially responsible enterprises, has been appointed to the Board of Directors of Esperanza, Inc. The mission of Esperanza is to improve the academic achievement of Hispanics in Greater Cleveland by supporting students to graduate high school and promoting post-secondary educational attainment. Eric will play a key role in the implementation of Esperanza’s new strategic plan.

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Shamrock, a leading integrated marketing and enterprise solutions provider, has expanded through acquisition of De Garmo Marketing and enhanced its management team by hiring Bob De Garmo as Shamrock President. A 30 year industry veteran, De Garmo worked for Shamrock for a decade before starting his own marketing company in 2011.

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Bialosky Cleveland congratulates Partner & Chief Operating Officer, Paul Deutsch, AIA, LEED AP on joining the Board of Trustees for Midtown Cleveland. Deutsch has been instrumental in expanding the A/E firm, notably in its move to Midtown. He currently serves as Board Chairman of the South Russell Architectural Board of Review, and is past Chairman of the Northern Ohio Chapter of the ALS Association. He presently leads as Principal-in-Charge of the highly-anticipated Van Aken & Centric Projects.

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Of Counsel

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Critchfield, Critchfield & Johnston

Bialosky Cleveland proudly names Chelsey Finnimore, AIGA as Director of Social Media. Finnimore directed and designed a powerful head-to-toe rebranding for the Cleveland-based architectural firm, garnering national recognition. Bialosky’s new website was also overseen by Finnimore, as she managed the creative direction, ensuring a remarkable presence through all print and digital channels. She was recently named to Crain’s Cleveland 2016 Class of Twenty in their 20s.

Eric T. Michener has joined the law firm of Critchfield, Critchfield & Johnston, Ltd. A veteran litigator, Michener will advise the firm’s clients on litigation matters. He served as a law clerk for a federal judge in Tennessee before entering private practice as a civil litigator. He spent several years as a criminal prosecutor and most recently served as Assistant Attorney General in Special Prosecutions for Ohio Attorney General Michael DeWine.

52

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Critchfield, Critchfield & Johnston

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Jacob E. Dean, a tax and corporate attorney, has joined the law firm of Critchfield, Critchfield & Johnston, Ltd. Dean will advise the firm’s clients on a variety of corporate, tax and related matters. Dean has worked in the corporate tax department for the Procter & Gamble Company and as a law clerk for the Honorable Albert G. Lauber, of the United States Tax Court in Washington, D.C. Most recently, Dean was an associate attorney at Caplin & Drysdale, Chartered, in Washington, D.C.

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Critchfield, Critchfield & Johnston Attorney Ann E. Salek has joined the law firm Critchfield, Critchfield & Johnston, Ltd. Salek, who is certified by the Ohio State Bar Association as a Specialist in Estate Planning, Trust and Probate Law, will advise the firm’s clients in her areas of certification. She will serve clients throughout the firm, working primarily from CCJ’s Medina office.

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INDIANS CONTINUED FROM PAGE 1 Another secondary-market giant, SeatGeek, said the average resale price as of Oct. 20 for the four potential World Series games in Cleveland ranged from $1,065 for Game 2 to $1,685 for Game 7. The largest average sale for the last two NBA Finals at Quicken Loans Arena was $1,216, for Game 4 in 2015.

The secondary market usually reaches its apex in the hours after a team does something special — in the Tribe’s case, a World Series berth despite a litany of injuries. But, StubHub communications manager Cameron Papp said, “Prices tend to drop as more inventory comes to the market and we get closer to the event.”

Brokers expect that to happen for

CRAIN’S CLEVELAND BUSINESS

“People in Chicago are buying up hotel rooms and tickets now.”

World Series tickets at Progressive Field. But with the Cubs — whose span between championships is at a record 108 years — looming as a potential Fall Classic opponent for the Indians, there’s a good chance this World Series will produce some of the largest sales prices since StubHub and SeatGeek started analyzing the secondary market.

SeatGeek content analyst Chris Leyden told Crain’s that if the Indians head into Game 6 on Nov. 1 with a chance to win their first title in 68 years, it likely will be “the most in-demand event we have ever seen in the state of Ohio since we started tracking the secondary market in 2010.”

— Scott Merk, owner of Merk’s Tickets

Windy City push Local brokers also said the secondary market for the World Series has been very strong, because of a combination of the Indians’ domina-

From left, Trevor Bauer, Jason Kipnis and the Indians have won seven of their first eight postseason games. (Dan Mendlik/Cleveland Indians)

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tion of the American League, increased face values of the seats and huge interest from Chicago fans who have been willing to gamble that their beloved Cubs would get past the Los Angeles Dodgers in the National League Championship Series.

(The Cubs entered Game 6 on Oct. 22 with a 3-2 series lead.)

Scott Merk, owner of Merk’s Tickets in Brook Park, said he believes the World Series prices could “double” if the Cubs were to face the Tribe. That would seem unlikely, since the list prices were already so considerable — Merk’s cheapest Game 1 prices as of Oct. 20 were $980 for six standing-room-only tickets — but there’s little doubt a Cubs-Indians matchup would only add to the intrigue.

“People in Chicago are buying up hotel rooms and tickets now,” Merk said.

Mark Klang, who owns Amazing Tickets in Mayfield Village, said the wild World Series marketplace is getting a significant boost from Cubs fans who “gobbled up” the standing-room-only seats when Chicago’s NLCS fate was still very much in doubt.

The face values of the World Series tickets, which are set by Major League Baseball, have also contributed to the huge prices on the secondary market. Standing-room-only tickets were sold for $100, and seats in the upper deck started at $205.

Lower-box tickets started at $450, and field-box seats ranged from $505 to $650.

All of that has resulted in the Cavs’ regular-season opener on Oct. 25 — the night LeBron James and his teammates will get their rings and The Q will unfurl its first NBA championship banner — coming in a distant second to the World Series opener next door.

The get-in price on Flash Seats for the Cavs-Knicks game was down to $125 on Oct. 20, and the average resale price on SeatGeek had dropped 22%, to $440, in a 10-day span.

That’s still a heck of a demand for a regular-season game, but it’s clear that baseball is Cleveland’s sport of choice for at least this month.

As of Oct. 20, five days before Cleveland was set to be the center of the sports universe, downtown hotels reported no openings.

The night before, the team shop at Progressive Field stayed open well past its normal closing time as fans celebrated the Indians’ five-game win over the Blue Jays. Several Dick’s Sporting Goods in Northeast Ohio stayed open late on Oct. 19, then welcomed more customers at 6 the next morning.

Greg Vlosich, co-owner of Lakewood-based GV Art and Design, said the demand for Tribe gear has rivaled the response to the Cavs’ title.

“I was not expecting nearly this many orders until they won it (all),” Vlosich said.

The Tribe isn’t there yet, but the fact that it’s even close shows how much the local sports conversation has changed.

“Has Cleveland ever had a more historical year?” Cavs CEO Len Komoroski said. “Incredible.”

One that comes to mind is 1948 — the year of the Indians’ last championship, and the only one in which two Cleveland teams (the Browns and Indians) won major sports championships.

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Business of Life

Video game events company aims to do more than entertain Games Done Legit uses games to spice up parties, team building events, fundraisers

By CHUCK SODER csoder@crain.com @ChuckSoder

Chris Hatala admits he was an awkward, introverted kid. But he did know of one good way to make friends.

Turns out, he was pretty good at video games, especially fighting games like Street Fighter II. By hanging out at arcades and playing in video game competitions, Hatala got to know “people of every race, every creed, every socio-economic status.” Despite the fact that, on screen, they were trying to beat the daylights out of each other.

Those early experiences convinced him that people are naturally inclined to bond with one another while playing video games.

He watched that same phenomenon play out with students at Euclid High School in 2013, when Games Done Legit hosted its first video game event.

The jocks were playing with the bookworms.

A student with autism won one of the tournaments. And everyone seemed to have a good time, he said.

“Video games can really bring people together,” Hatala said.

Today, his company sets up video game consoles and virtual reality systems at all kinds of events. Some of his clients just want to entertain their guests, and Hatala is happy to oblige.

But Games Done Legit also does corporate events, fundraisers and other events that use the company’s services for a higher purpose.

At corporate events, Games Done Legit uses video games to run ice breakers and team building exercises. For instance, Hatala will sometimes have two employees play Super Mario Bros. with the same controller: One person holds the directional pad that makes Mario run left and right while the other controls the “jump” and “run” buttons.

Or maybe he’ll have a group of employees team up against one of their managers in a four-player Nintendo GameCube game called Pac-Man Vs. The manager controls Pac-Man on a handheld device while the employees control the ghosts tasked with hunting him down on a TV screen that doesn’t reveal the entire maze.

Afterward, the employees and the manager will analyze the team’s performance, Hatala said.

“Are they working together? Are they talking to each other?” he said.

At fundraisers, Games Done Legit might set up a game called Just Dance, where players dance to hit songs, mimicking the moves they see on the screen. Want someone at the party to bust out some hilarious moves? Make a donation.

“You can make the CEO dance to Lady Gaga,” he said.

Of course, sometimes games are just for fun.

For instance, on Oct. 15, he set up shop at Cleveland Magazine’s Best of Cleveland party at Public Auditorium. At his booth, party-goers played classic games like NBA Jam and Mario Kart 64, but the virtual reality games were the

Chris Hatala believes “video games can really bring people together.”

From left, Henry Reed, Luke Pliakis and Nathan Swift compete in a game.

Amy Williams, left, and JoAnna Kazmierczak play a video game during Cleveland Magazine’s Best of Cleveland party at Public Auditorium. (McKinley Wiley for Crain’s)

Chris Hatala’s favorite games Lunar: The Silver Star: A well-written role-playing game “about love, friendship and justice.”

Marvel vs. Capcom II: A high-speed fighting game. It might as well be a sport, Hatala says.

Metal Gear Solid: An action series that touches on weighty topics like “the rise of China as a superpower; Russia’s post-Soviet struggle between freedom and order ... and the effects of the atomic bomb on Japan.”

Games Done Legit founder Chris Hatala watches as a guest plays a game during the Cleveland Magazine event.

big draw. Several people walked away in amazement after donning the HTC Vive headset and trying to hit virtual baseballs and shoot virtual basketballs.

One of them, Anthony Buccilli, said the experience was “absolutely insane.”

“I actually forgot I was in this building,” he said.

Hatala said he’d eventually like to use virtual reality for training and education purposes, noting that you can use a virtual headset to tour the surface of Mars or King Tut’s tomb.

For now, however, he’s working on growing his business, slowly but surely.

Hatala was not new to running events when he started Games Done Legit. He previously spent six years organizing an annual fighting game competition called Season’s Beatings. He also spent a year working for Executive Caterers in Mayfield Heights.

He’s been running the company full time for more than two years, often with the help of an events team that he pays on a per-gig basis. He is thinking about hiring his first part-time employee (he’s training one of those event team members to help out with sales), but he’s happy to grow the business at his own pace.

Why? Consider that his favorite Street Fighter character is Ryu. He’s regarded as a “boring” character, but Hatala said he’s great for a player with a low-risk, highly controlled fighting style.

“That’s how I play fighting games. ... That’s how I run the business,” he said.

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BUSINESS OF LIFE

Source Lunch Ian Schwarber has a lot of passion, for a lot of things.

First, there’s music. He spent more than 10 years playing professionally, as both a solo performer and as a frontman for his bands Caroline and Flashing Blue Light. There’s also travel. Schwarber has lived in Athens, Ga., and Bath, England, among other places. In fact, if you’ve not heard of his music, it might because he’s more famous in other places than he is at home, due to his travels and tours.

There’s anything British. An Anglophile, Schwarber loves the culture of the Brits, especially their comedy. There’s politics, too. So far, Schwarber has not run for office, but he loves to follow politics, and he has a bachelor’s in political science and a master’s in applied politics from the University of Akron. But there are two things that get Schwarber fired up more than any others: Akron and entrepreneurship. He loves them both, which he says is why he has spent the last year working to get the University of Akron's Experiential Learning Center for Entrepreneurship & Civic Engagement, where he is the resource director, up and running. — Dan Shingler

So, you’ve got a lot of interests.

How would you describe what you like to do most?

I like to be massively involved in the community I live in. I like to be very creative and try to take advantage of the fact that I have a lot of energy and a lot of desire to make an impact in the place that I call home and have called home for my entire life — Akron.

More specifically, I like to work with groups to build and make things more accessible for people who might not have all of the advantages that I had growing up.

Why do you say you had a lot of opportunities?

I grew up here in a rather upper middle class home. I had a phenomenal education, from St. Vincent’s elementary to Archbishop Hoban High. … Not to say that we were wealthy, but I wanted for nothing, educationally.

I got to spend a year in England to study and I’ve just had a lot of really cool opportunities that I think most folks don’t get. When you get those opportunities, I think you have to do something for the world.

Is your career focused on issues surrounding entrepreneurialism?

Very much so. Entrepreneurialism and entrepreneurial thinking is what will fortify any economic community. From an Akron point of view, having our young people, from juniors and seniors in high school, maybe even younger, as they consider their next steps they

should be doing that with a critical thinking process … the economy we’re going into is not one where everyone can just get a good job at Goodyear.

Did watching your parents foster this kind of thinking in you?

I think so. I was rare in my circle of friends in that I had two parents that worked. I think because of that combined effort, we had a pretty good chance in life.

You were a standout high school football player until an injury ended your career. Did that have an effect on you?

Big time. A lot of people were like “Oh my god, Ian's going to get so depressed, he can’t play football.”

That was probably a probability, but I didn’t take it that way. I always took it as an opportunity to be better at other things and to find a different calling. … But to be fair, I wasn’t a complete jock. I was also in all of the musicals.

Did you keep your fellow thespians from getting picked on?

Absolutely. They always knew one big guy had their backs!

How did you get involved in the EXL Center at Akron?

I was student body president the last year of my master's program, and I created a speakers series where I was bringing in CEOs to talk to graduate sudents. … Jeff Hoffman came in and gave a speech about entrepreneurialism, and I

Ian Schwarber

made sure our former university president was there to hear it. …. It turned into me throwing this lob out there saying, “Hey, what if he ran a center at the university?” And it worked.

And the center, did it work?

It did work. It worked against the wind, too. A serious amount of resources were promised in the beginning, and we ended up getting a shoestring. But we took that shoestring and built new space in the library and then did a lot of programming very effectively. … The university is just in really tough financial times.

How do you know it worked?

Well, we launched it in March of this year, and by June a program we did was being honored at the White House. That’s one measure. But also, 2,500 people were engaged or involved with the EXL Center by the beginning of August.

You’ve recently announced you're leaving the EXL Center, and also said you don’t have your next job lined up yet. Do you think you’ll continue to work with young people and entrepreneurship?

Without a shadow of a doubt. It’s where I think the future of Greater Akron will be found, and I think that’s where the future of every city or market will be in the 21st century. Entepreneurship is where all the new jobs are found. When you’re talking about small business, you’re talking about entrepreneurship.

HIGHER EDUCATION

Five Things: FAVORITE PLACES IN AKRON The Akron Family Restaurant and Rockne's

FAVORITE NEWISH BAND The National. I have all their albums.

FAVORITE LIVE MUSIC SPOT Musica in Akron — Tony Troppe's place.

FAVORITE PLACE, OTHER THAN AKRON Bath, England

MOST INFLUENTIAL ROLE MODEL The late Summit County Executive Russ Pry. He had an incredible influence on me that was sadly crystalized when he passed away on the last day of July. ... He always made sure everyone was heard, respected and made to feel truly important.

Lunch Spot The Akron Family Restaurant 250 W. Market St. 330-376-0600

The meal

Ham and cheese omlette, toast and Pepsi for one.

The other: eggs, bacon and hashbrowns, with toast and coffee

The vibe

Akron Family is a fairly unassuming spot on West Market Street just on the edge of downtown. But inside, diners not only will find one of the city's best breakfasts, but also usually a large number of civic and governmental leaders.

Interim County Executive Ilene Shapiro was dining at a nearby table when we talked with Schwarber.

The bill

$24.09 with tip

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The Week: Oct. 17-23, 2016 THE BIG STORY

Private equity group Aterian Investment Partners bought toy maker Step2 LLC of Streetsboro in a move it says will make the “largest outdoor toy company in North America.” Aterian already owns Backyard Discovery, a maker and designer of backyard swing sets, playhouses and home and garden products. Step2 CEO Chris Quinn said in a statement, “With the support of Aterian and Backyard Discovery, we plan to grow the business and its product offerings with a continued focus on quality and safety.” Quinn and David Thornhill, CEO of Backyard Discovery, will remain with the company.

STICK AROUND

It's official: Matthew J. Wilson is the University of Akron's new president. The university's board of

trustees held a special meeting on Oct. 19 and voted to remove the “interim” part of Wilson’s title, effective immediately. He will serve through June 30, 2019. Wilson was named interim president in July. At the time, the appointment was for 18 months, and his annual base salary was set at $370,000. His salary and benefits will remain the same in his role as president.

THE SMELL OF SUCCESS

A laundry detergent company in Beachwood raised $5 million with help from two investment firms tied to the Los Angeles Dodgers. Renegade Brands USA Inc. raised the money after participating in a business accelerator sponsored by the Dodgers over the past few months. The investment round was led by Eldridge Industries, a Connecticut-based investment firm led by

Dodgers co-owner Todd Boehly. Renegade Brands also raised capital from Elysian Park Ventures, the private investment arm of the Dodgers’ ownership group. The company's Sweat X laundry detergent already is used by dozens of sports teams, including the Dodgers, the Cleveland Cavaliers, the Cleveland Indians and the New York Yankees. The product uses nanotechnology to remove “foul odors and the toughest stains” from athletic gear, the company says.

attractions for visitors. The organization has a new website for Holden Forests & Gardens, at holdenfg.org. The name Holden Forests & Gardens “is an outgrowth of our recently completed strategic plan,” said Clem Hamilton, president and CEO of the combined organization. The combination took place in September 2014.

ISN'T THAT SPECIAL?

Shareholders of Cleveland-based TransDigm Group Inc. are about to receive another special BRANCH OPERATIONS dividend from the company. The maker of aircraft Two years after combining their operations, the components announced that its board of Holden Arboretum and Cleveland Botanical directors has declared a special cash dividend of Garden have a new name for the overall organiza$24 per share. Payment will be made on Nov. 1 to tion: Holden Forests & Gardens. Both the Holden shareholders of record as of Oct. 24. The special CLEVELAND BUSINESS OCTOBER 2016 to μ PAGE 29 Arboretum and Cleveland Botanical GardenCRAIN'S will dividend amounts to aμ$1.3 billion24, payout retain their individual names, as both are distinct shareholders.

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IN THE INTEREST OF JONATHAN R. COLON CASE NO. 16TP22 VIVIAN A. COLON CASE NO 16TP24 CHEYENNE A. COLON CASE NO 16TP25 To: Joel R. Colon 4106 E. 79th Street Cleveland, OH 44105 Or other unknown address And any unknown parent at unknown address.

Additional identifying information: Jonathan R. Colon Date of conception: 6/13/2005 to 8/12/2005 Place of conception: Unknown Date of birth: April 10, 2006 Place of birth: Cleveland, OH Vivian A. Colon Date of conception: 3/6/2004 to 5/5/2004 Place of conception: Unknown Date of birth: January 1, 2005 Place of birth: Cleveland, OH Cheyenne A. Colon Date of conception: 2/16/2002 to 4/17/2002 Place of conception: Unknown Date of birth: December 14, 2002 Place of birth: Cleveland, OH IT IS ORDERED: This notice be published advising you that a petition for termination of your parental rights to the above named children be heard at the Eau Claire County Courthouse, Eau Claire Wisconsin, Rm./Br.-address 721 Oxford Avenue, Branch IV, Eau Claire, Wisconsin, on (date) Wednesday, November 2, 2016, at (time) 3:30 p.m.

You have the right to have an attorney present. If you desire to contest the matter and cannot afford an attorney, the state public defender may appoint an attorney to represent you.

If you fail to appear and the court terminates your parental rights, either a motion to seek relief from the judgment or a notice of intent to pursue relief from the judgment must be filed in the trial court within 30 days after the judgment is entered, in order to preserve the right to pursue such relief.

If you need help in this matter because of a disability, please call (715) 839-4823.

BY THE COURT: _____________________________ Circuit Court Judge Honorable Jon M. Theisen October 14, 2016

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CRAIN’S CLEVELAND BUSINESS

World Synergy lands what it’s looking for in Beachwood move

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World Synergy LLC, an integrated marketing firm, couldn’t find the new office space it wanted to stay in Solon, so it’s bound for Beachwood after finding the right combination of office space and incentives.

The 24-person company has received an incentive agreement from the city of Beachwood providing it the ability to receive a check annually from the suburb equal to 30% of the city income tax paid by its employees. The incentive would be in place for three years. The firm’s application said it plans to expand its payroll with another 22 jobs over the next three years, which would take its payroll to $2.85 million annually from $1.6 million in 2015, the first full year it’s scheduled to be in Beachwood.

Glenn Smith, founder and CEO of World Synergy, said the company needs room to grow.

“We’re literally sitting on each other’s desks here,” Smith said in a phone interview. Over the past 11 years, the firm grew to its current size in a 3,000-square-foot office at 6830 Cochran Road. The 5,500 square feet that it has agreed to take at 3700 Park East Drive, which is known by its address, will give the firm room to expand and accommodate additional hires it forecasts making, Smith said.

Moreover, owners of 3700 Park East, an affiliate of Beachwood-based ORG Portfolio Management, agreed to make additional space available if the company needs it.

World Synergy had its tenant rep, the Cleveland office of Avison Young, scour the market for opportunities before it settled on the Beachwood location, Smith said. The company ruled out a move to downtown Cleveland because it did not want to burden its employees with additional drive times, Smith said, and “not a lot of our clients are downtown, although it was an exciting idea.”

Smith founded World Synergy 18 years ago with the idea of combining both web, and later mobile, technology services with other more traditional marketing services so clients did not need to hire multiple vendors.

“Then it was like a boxing match between the right brain and left brain,” Smith said of the idea of combining programming capabilities with more traditional marketing skills such as email marketing. “Once they began communicating, it was refreshing.”

World Synergy has forecast its gross sales at $3 million in 2016, a 27% increase from last year. Its clients are primarily middle market companies in manufacturing, distribution and professional services.

When World Synergy settles into Park East this December, it will occupy space on the building’s third floor that was formerly occupied by Brandmuscle, a technology services firm that outgrew the space to move downtown.

“There’s a good vibe there,” Smith said.

Edward Schwartz, an ORG principal, confirmed the owners of the building are doing a deal with World Synergy.

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LARGEST ACCOUNTING FIRMS

Ranked by Number of Local CPAs

NUMBER OF LOCAL CPAS 8/31/ 2016

8/31/ 2015

LOCAL DEGREED FULL-TIME LOCAL PROFESSIONALS EMPLOYEES % 8/31/2016 CHANGE 8/31/2016

PRACTICE PERSONNEL ENGAGED IN AUDITACCOUNTING TAX

CONSULTING OTHER

TOP LOCAL EXECUTIVE TITLE

1

Ernst & Young LLP 950 Main Ave., Cleveland 44113 (216) 861-5000/www.ey.com

300

299

0.3%

1,193

1,311

367

168

197

579

Julie Boland, Cleveland office managing partner; Jerry Gootee, Akron office managing partner

2

PwC LLP 200 Public Square, 18th floor, Cleveland 44114 (216) 875-3000/www.pwc.com

155

170

-8.8%

NA

394

173

95

77

49

Mark Ross Lake Erie market managing partner

3

Cohen & Co. 1350 Euclid Ave., Suite 800, Cleveland 44115 (216) 579-1040/www.cohencpa.com

143

129

10.9%

266

274

108

87

8

81

Randall S. Myeroff president, CEO

4

BDO 32125 Solon Road, Cleveland 44139 (440) 248-8787/www.bdo.com

104

101

3.0%

201

234

72

78

40

0

Robert M. Littman Ohio managing partner

5

Deloitte LLP and its subsidiaries 127 Public Square, Suite 3300, Cleveland 44114 (216) 589-1300/www.deloitte.com

100

91

9.9%

427

427

163

75

157

32

Paul Wellener Northeast Ohio managing principal

6

KPMG LLP 1375 E. Ninth St., Suite 2600, Cleveland 44114 (216) 696-9100/www.us.kpmg.com

95

100

-5.0%

170

180

50

16

97

17

John S. MacIntosh managing partner

7

RSM US LLP 1001 Lakeside Ave., Suite 200, Cleveland 44114 (216) 523-1900/www.rsmus.com

89

78

14.1%

132

145

83

32

12

18

John Zalick Ohio managing partner

8

Meaden & Moore LLP 1100 Superior Ave., Suite 1100, Cleveland 44114 (216) 241-3272/www.meadenmoore.com

78

80

-2.5%

133

148

55

46

22

25

James P. Carulas CEO

8

Skoda Minotti 6685 Beta Drive, Mayfield Village 44143 (440) 449-6800/www.skodaminotti.com

78

78

0.0%

195

225

56

40

101

28

Gregory J. Skoda chairman

10

Maloney + Novotny LLC 1111 Superior Ave., Suite 700, Cleveland 44114 (216) 363-0100/www.maloneynovotny.com

73

72

1.4%

108

126

69

29

9

19

Matthew J. Maloney managing shareholder

11

Bober, Markey, Fedorovich & Co. 3421 Ridgewood Road, Suite 300, Akron 44333 (330) 762-9785/www.bmfcpa.com

55

52

5.8%

88

102

48

34

7

13

Richard C. Fedorovich CEO, managing partner

12

Grant Thornton LLP 1375 E. Ninth St., Suite 1500, Cleveland 44114 (216) 771-1400/www.grantthornton.com

52

51

2.0%

94

111

46

29

19

17

Thomas P. Freeman office managing partner

13

HBK CPAs & Consultants 6603 Summit Drive, Canfield 44406 (330) 758-8613/www.hbkcpa.com

42

40

5.0%

80

99

42

42

42

42

Phillip L. Wilson COO

14

HW&Co. 23240 Chagrin Blvd., Cleveland 44122 (216) 831-1200/www.hwco.com

41

39

5.1%

73

81

26

17

22

8

John P. Fleischer president, CEO

15

Barnes Wendling CPAs Inc. 1350 Euclid Ave., Suite 1400, Cleveland 44115 (216) 566-9000/www.barneswendling.com

38

38

0.0%

61

68

26

21

17

4

Jeffrey D. Neuman president, director

16

Walthall LLP 6300 Rockside Road, Suite 100, Cleveland 44131 (216) 573-2330/www.walthall.com

37

39

-5.1%

47

54

15

29

0

10

Richard T. Lash chairman

17

CBIZ Inc. 6050 Oak Tree Blvd. S., Suite 500, Cleveland 44131 (216) 447-9000/www.cbiz.com

35

41

-14.6%

157

256

19

21

49

167

Jerome P. Grisko president, CEO

The Siegfried Group LLP 950 Main Ave., Suite 600, Cleveland 44113 (216) 912-1342/www.siegfriedgroup.com

31

25

24.0%

35

35

31

0

31

31

Brian D. Seidner managing director, Lake Erie markets-Cleveland, Columbus, Pittsburgh, Toledo

18

Sikich LLP 1735 Merriman Road, Akron 44313 (330) 864-6661/www.sikich.com

31

29

6.9%

62

90

15

34

34

18

David A. Brockman partner-in-charge, Akron

20

Pease & Associates LLC 1422 Euclid Ave., Suite 400, Cleveland 44115 (216) 348-9600/www.peasecpa.com

30

26

15.4%

47

57

13

31

4

9

Joseph V. Pease Jr. chairman

21

Ciuni & Panichi Inc. 25201 Chagrin Blvd., Suite 200, Cleveland 44122 (216) 831-7171/www.cp-advisors.com

29

29

0.0%

53

58

30

13

8

7

Brian D. Marita president

22

Hobe & Lucas CPAs Inc. 4807 Rockside Road, Suite 510, Independence 44131 (216) 524-8900/www.hobe.com

26

24

8.3%

31

33

26

3

3

1

James P. Gero, chairman William F. Wildenheim president, CFO

22

Plante Moran PLLC 1111 Superior Ave., Suite 1250, Cleveland 44114 (216) 523-1010/www.plantemoran.com

26

24

8.3%

49

54

24

14

11

5

Daniel P. Hursh office managing partner

24

Apple Growth Partners 1540 W. Market St., Akron 44313 (330) 867-7350/www.applegrowth.com

25

27

-7.4%

59

63

14

26

9

12

Charles Mullin chairman

24

Corrigan Krause 2055 Crocker Road, Suite 300, Westlake 44145 (440) 471-0800/www.corrigankrause.com

25

25

0.0%

40

46

18

16

12

0

Thomas L. Harrison managing partner

24

Four-Fifteen Group 4100 Holiday St., Canton 44718 (330) 492-0094/www.415group.com

25

21

19.0%

46

49

13

24

7

5

Frank J. Monaco managing partner

18

RESEARCHED BY CHUCK SODER Information is supplied by the companies unless footnoted. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. We welcome all responses to our lists and will include omitted information or clarifications in coming issues. Individual lists and The Book of Lists are available for purchase at www.crainscleveland.com.

VOL. 37, NO. 43

OCTOBER 24 - 30, 2016

AKRON EDITION

Source Lunch Ian Schwarber is one of Akron’s biggest backers.

Focus on Manufacturing Pages 19-24

Page 28

CLEVELAND BUSINESS EDUCATION

Crowded landscape is tricky for Akron educators

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

Between the turmoil at the University of Akron and Stark State College announcing its plans to open a location in the Rubber City, Akron has been part of a number of higher-education headlines in the past year.

So what do these changes mean for institutions in a region that’s already facing a shrinking high school population? For many, it means finding ways to differentiate themselves from the competition, as well as looking for ways to work together.

“The environment is too strong, too tough to go it on your own here,” said Tim Bryan, chief of staff at Malone University in Canton.

In Summit, Stark and Portage counties, there are two public universities, a community college, a handful of private colleges and universities, plus the Northeast Ohio Medical University and Kent State University’s Stark Campus. And that doesn’t include any of the for-profit schools in the region.

Despite that, North Canton-based Stark State sees a need in Akron for its services. In May, the college announced plans to build an education and workforce training center in the city. It also plans to hold classes in a temporary location, starting this January, until that center is built.

Marisa Rohn, executive director of advancement, marketing and Stark State College Foundation, said about a quarter of Stark State’s students are from the Akron area, and they’ve been asking the school for a more accessible location for years. Community leaders also have been asking for a community college presence to help with workforce challenges, Rohn said.

Summit County views this as another tool to support existing employers and draw new ones to the region, said Jason Dodson, chief of staff for the Summit County executive’s office. He thinks Stark State’s presence will be a “critical” component for success in the next 10 to 20 years.

SEE AKRON, PAGE 8

LAW

Lawyers support landmark diversity initiative

SPORTS BUSINESS

Win the American League?

That’s the ticket

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

Indians’ first World Series berth since ’97 brings huge surges in seats, hotels, merch and plenty more

Francisco Lindor and Jason Kipnis celebrate the final out of the American League Championship Series in Toronto. The Tribe will host Game 1 of the World Series for the first time. (Dan Mendlik/Cleveland Indians)

By KEVIN KLEPS kkleps@crain.com @KevinKleps

New Cleveland doesn’t have to be defined by sports curses, championship droughts and happenings that are titled like ominous chapters in a book about disappointment.

New Cleveland only goes four

Entire contents © 2016 by Crain Communications Inc.

months between championship series appearances.

New Cleveland can be greedy, too.

The Indians’ improbable run to their first World Series in 19 years has been met with a very Cavs-like response.

The secondary ticket market is on a record pace, downtown hotels are at capacity, and the demand for merchandise is as strong as the Tribe’s bullpen.

The median sales price for Game 1

of the World Series on StubHub, Major League Baseball’s official secondary market, jumped from $870 on Oct. 18, the day before the Tribe clinched the American League crown with a win at Toronto, to $925 on Oct. 20. The latter number is $222 ahead of the peak price for the 2016 NBA Finals in Cleveland — $703 for the Cavs’ Game 4 loss to the Golden State Warriors.

SEE INDIANS, PAGE 26

Attorneys certainly aren’t blind to the lack of diversity in their profession persisting despite individual efforts, which are usually hard to overlook considering legal teams rarely shy away from any chance to promote their diversity and inclusion programs.

But talk is cheap. “We want to Some programs have certainly make helped individual Cleveland the legal teams kick up preeminent diversity levels, but place for there’s rather little changing through- diversity and out the industry as inclusion in a whole to reflect the legal the country’s multicultural popula- profession.” tion.

So in order to truly realize a more diverse legal market, the Cleveland Metropolitan Bar Association is asking lawyers to put their money where their mouths are.

— Majeed The CMBA is in Makhlouf, CMBA the midst of de- vice president of signing what seems diversity and to be a first-of-its- inclusion kind role in the sector, a legal inclusion director whose job will focus on recruiting diverse attorneys to Northeast Ohio, where they will, it’s hoped, find a professional home at the various firms, companies and public sector positions available here.

What’s more, the firms who compete for talent on any given day are financing the position in an otherwise rare display of legal groups joining forces for the common good of their profession and the Cleveland region itself.

“We want to make Cleveland the preeminent place for diversity and inclusion in the legal profession,” said Majeed Makhlouf, vice president of diversity and inclusion for the CMBA. “So how do we achieve that?”

It’s a seemingly straightforward question, yet one with which the legal sector has long grappled.

SEE LAWYERS, PAGE 3

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Tobin Buckner

Metro RTA

Raising money is a big concern for startups: Here’s a guide.

The system’s overhaul plans have hit some delays. Page A-2

Page A-7

AKRON BUSINESS

Startups Flight conference to land in Akron. Page A-3

Signet Jewelers hopes to shine again this holiday season after a bad year $8.25 Signet’s 2016 earnings per share as predicted by analysts.

$7.25 Signet’s August forecast for 2016 earnings per share.

By DAN SHINGLER dshingler@crain.com @DanShingler

Perhaps no one is hoping for a generous Santa this holiday season more than the folks at Signet Jewelers Ltd. The company — based in Bermuda, on paper, but it and its Sterling Jewelers subsidiary maintain their physical headquarters and executive offices on Ghent Road in Akron — has had a challenging year and is under the gun to improve its sales and profitability. Its fate and fortunes are a big deal to the Akron area. Signet, with $6.6 billion in annual sales and more than 3,600 retail stores, owns Kay Jewelers, Zales and Jared the Galleria of Jewelry stores and employs more than 3,500 Northeast Ohioans, including nearly 3,000 at its

West Akron store support center.

A year ago, the company was gleaming like a diamond itself, with its stock at an all-time high and briefly popping above $150 per share in late October 2015. By the end of September of this year, it had fallen by half, dipping briefly below $75 per share before it recently rose again to above $80 after a company buyback of stock apparently began to take hold.

What happened? What didn’t?

A continuing downturn in the oil and gas industry hit the company in some big markets, like Texas and Canada, where folks make their liv-

ing from drilling and processing oil and gas, and curb their spending when those sectors tank and jobs become tight.

Accusations of ring-swapping by customers who alleged the company ripped them off during repair work — though never proven and adamantly denied — hurt the reputation and likely the sales of the company’s big Kay Jewelers subsidiary.

Perhaps as a result of both of those factors, combined with weakness in the jewelry business in general — Tiffany & Co. has also seen its stock slump in 2016 — Signet twice disappointed investors with consecutive earnings reports this year. It did that most recently in August, when it cut its full-year earnings outlook by a dollar per share, from the $8.25 per share that analysts had been predicting to the $7.25 Signet said would be its likely minimum result.

That’s still an improvement over the $6.86 per share that Signet earned in its fiscal year ended Jan. 30. But, as noted in Barron’s and other investor-influencing publications, Signet also in August reported a slight decline in its same-store sales, whereas investors had been looking for an uptick to reverse the company’s fortunes.

Finally, on this list at least, the company came under scrutiny for its lending practices that some investors, notably short sellers, said was becoming too big of a part of Signet’s business and bringing too much risk with it.

SEE SIGNET, PAGE A-6

$150 Signet’s price per share in late October 2015.

$80 Signet’s price per share in late September 2016.

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CRAIN’S CLEVELAND BUSINESS

AKRON

The Robert K. Pfaff Transit Center downtown is Akron Metro RTA’s main hub, where buses from different neighborhoods converge. (Contributed Photo)

Roadblocks slow Metro RTA overhaul

By JUDY STRINGER clbfreelancer@crain.com

Akron Metro RTA has hit a few bumps in the road to its system-wide makeover.

The third series of public meetings — the ones expected to provide a “preferred alternative” of new bus routes and schedules — were supposed to take place in September and October. A leadership transition and problems securing locations for proposed neighborhood transit hubs, however, have delayed those meetings, according to Metro RTA interim

planning and development director Alex Harnocz.

“I would not say [the public meetings] are on the immediate horizon,” Harnocz said, “because we are working on those alternatives and really trying to identify what’s realistic for next year.”

Next year, or more specifically Aug. 27, 2017, is when Metro RTA said it will roll out the changes. Harnocz expects to make that deadline. How “impactful” those changes will be, he is less certain. And Harnocz wants the business community — from whom he’s heard limited feedback — to know that it’s not too late to join the discussion, especially for those

companies in locations near current routes.

“We are always trying to maximize what we are doing when it comes to adjusting times,” he said.

Formally dubbed “Driving Metro Forward,” the redesign of Akron’s bus system began last fall after Harnocz — the transit service planner at the time — and former Metro RTA director of planning and development Kris Liljeblad approached the board about increasing the span and frequency of its two most productive routes, No. 1 on West Market Street and No. 2 South Arlington Street, as a way to grow service. Harnocz said the trustees told

them that with ridership flagging overall, it was time to “think bigger.”

The goal behind the system reboot is to increase service to customers without increasing the cost to the transit line. One way to do that, Harnocz said, is to rebalance service so that buses run more often in areas of higher demand and less often, or not at all, in places with little use, especially costly outlying suburban areas.

Another key is to reduce much of the route duplication, where buses coming from different neighborhoods converge to run near or on the same street to and from the Robert K. Pfaff Transit Center in downtown Akron.

Following its first series of public meetings in April, Metro RTA released a set of proposals in June that included longer hours and more frequent stops for core urban routes and reductions in suburban service.

The proposals also included the addition of transfer hubs at Portage Crossing in Cuyahoga Falls, the East End development in Akron, Wallhaven Circle in Akron and McLain Park in Akron so that bus lines around those neighborhoods wouldn’t continue into the downtown center. The last proposal has been the biggest sticking point.

SEE METRO, PAGE A-4

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CRAIN’S CLEVELAND BUSINESS

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Flight looks to land Akron on startup map

By SUE WALTON swalton@crain.com @SueWalton_Bolts

Launch League is hoping to put Akron in the national spotlight as host of a regional startup conference.

This December, the nonprofit group will launch Flight, “a conference for those who build, fund and support scalable startups.”

Flight has set its sites on great heights, according to Launch League interim director Courtney Gras. Launch League wants to make Flight its signature event and “THE conference for startups in the Midwest,” she said. The group is spreading its reach to include startup players in Cleveland, Columbus, Youngstown, Pittsburgh and Detroit as well as Akron.

“Our goal is to make it an annual, nationally recognized event,” said Launch League co-founder and chairman Nicholas Petroski.

Startup and tech conferences are abundant in Silicon Valley and California, Gras said, but a lot of new companies don’t have the money to make the trip to the West Coast.

Flight will be more accessible for them. And it’s a way to show off Akron’s collaborative startup and entrepreneurial community.

Akron is uniquely positioned to make this a success and garner national attention, organizers said.

The cooperation within the startup community is what’s helping the conference come together, according to both Gras and Petroski.

Like Launch League itself, whose mission is to help Akron’s scalable startups, Flight sort of evolved. In 2013, Petroski started OSC Tech Lab, a coworking space in downtown Akron.

With an interest in startups, he saw the space as a way to get closer to that community and create more collaboration. “I didn’t have it in my head that I wanted to create this entity (Launch League) ... I just wanted the community to be there.”

Petroski began hosting all sorts of networking events. In 2014, Richard Stockburger, who had community building experience in the civic arena, became a member of the tech lab.

Soon he and Petroski worked out a structure, and Launch League was born.

“One of the things we made sure with Launch League when we started was that we were going to break down any silos that existed and we will not let them form again,” Petroski said.

With the start of Launch League, the seeds of Flight were planted.

“We always wanted to do something big,” Petroski said.

First, Launch League spearheaded the precursor to Flight: NEXTOhio, a conference for Internet-focused startups held in 2015 and 2016. The latest drew about 275 people, Gras said.

Flight is taking NEXTOhio to the

next level, Petroski said, and organizers set a conservative estimate of 300 attendees for the Dec. 1-2 event at the John S. Knight Center.

The right place Gras said Akron — centrally located in the region — is the perfect place to launch a Midwest startup conference.

“As Jeff Hoffman (founder of the University of Akron’s EXL Center) says, ‘In Akron, we are small enough to get things done but big enough to have an impact,’ ” she said.

It’s that community of collaborators that Launch League is approaching to help get Flight off the ground. As of early October, the group was halfway to its goal in terms of lining up sponsors for the conference, she said.

JumpStart Inc. is lending its support and is enthusiastic about Flight.

The Cleveland-based group not only is a sponsor, but is helping with programming.

“I immediately said that this is the kind of thing we want to be involved with,” Tobin Buckner, JumpStart’s Akron community entrepreneurial manager, said.

He continued, “We’re always looking for opportunities to touch more people than just Akron, and this is a time that it looks like a good thing for us to do.”

Plus, Gras, a founder of her own startup called Design Flux Technologies, has fanned out to an array of re-

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gional groups and many are onboard: the city of Akron, Akron Global Business Accelerator, OSC Tech Lab, the Bit Factory, the Youngstown Business Incubator, the Greater Akron Chamber, the Northcoast Opportunity Technology Fund and the Fund for our Economic Future.

Local universities — the University of Akron, Cleveland State University, Case Western Reserve University, Kent State University and the College of Wooster — also have weighed in with their support.

And investor groups are committed, too, such as North Coast Angel Fund, Akron ARCHAngels, Bad Girl Ventures and Mutual Capital Partners. VentureOhio is distributing information to its network, too, Gras said, to help Launch League reach different startup communities around the state.

“It’s kind of an easy sell because everyone gets a benefit ... I’m selling something that is very different,” she said.

Gras is reaching out to her counterparts in Columbus, Youngstown, Detroit and Pittsburgh as well.

A ‘one-stop shop’ Flight will be a “one-stop shop” for everything a founder needs: information and workshops, plus access to investors and service businesses.

Organizers took their experiences running other conferences, like NEX-

TOhio, and surveyed the startup community, Gras said. They then customized the content according to that feedback.

Flight will feature a day filled with about 21 speakers and panelists in a variety of workshops and sessions, covering front-end development, user experience and user interface design, hardware development, marketing, startup operations, investing, fundraising and more.

Networking is a huge draw for many attendees, Gras said, so Flight will feature a showcase of 40 startup companies, plus another exhibition space for about 30 service and support organizations.

While Flight offers a lot to founders, it does have a particular audience it wants to attract, namely startups that are not in their infancy, but instead those that have gotten off the ground a bit.

“We are targeting the folks that are further along,” Gras said.

To that end, Flight will charge a fee of about $200 for the day. Attending a VIP party the night before at Chop and Swizzle and an after-party at the Akron Art Museum will add to the cost, but substantial discounts are available for early registrants.

“The Akron community is 110% committed to making Akron, Ohio, the place to build and scale a startup ... Launch League just wants to bring it all together in one venue to put Akron, Ohio, on the map,” Gras said.

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CRAIN’S CLEVELAND BUSINESS

AKRON

My1HR give brokers a link to federal marketplaces

By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre

ON VIEW THROUGH JAN. 15, 2017 ARTISTS’ DIALOGUE: Anne Lindberg, John Newman, Andrea Myers, Kate Budd OCT. 20, 6:30 pm

One South High I Akron, OH 44308 I 330.376.9186 I AkronArtMuseum.org

A nationwide search for software that could help his company during health insurance enrollment season led Dave Keller to a company based in Akron, just minutes from where he grew up.

Keller, chief sales and marketing officer for IHC Specialty Benefits in Minneapolis, said the hometown tie (he grew up in Mogadore) helped finalize IHC’s decision to partner with Akron-based My1HR to use its software that helps insurance brokers connect to the federally facilitated insurance marketplaces.

IHC, an insurance organization that underwrites, administers and distributes various insurance plans, announced the partnership last month after looking for a web-based entity to ease and improve the process for the producers throughout the country it contracts with to sell its insurance plans.

Scott Klonowski, CEO of My1HR, said the company developed the INSXCloud software in 2013. Essentially, it allows insurance producers, brokers and agents to quote and enroll clients into healthcare.gov and track their applications, allowing for efficiency and better customer service.

The company name, My1HR, is a relic from its initial objective to create software for human resources.

Upon hearing about the challenges that insurance companies faced in establishing connectivity with healthcare.gov, Klonowski shifted gears, began developing enrollment software and “really never turned back,” he said.

“We wanted a repeatable product that we could make inexpensive that

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“When we look, in the short term, for a place on the street where two or three, sometimes four, buses can sit for a few minutes, transfer their passengers and then be on their way, we’ve got some push back from municipalities, from traffic engineers, from folks like that, because it’s not something that we’re currently doing,” Harnocz said. “Right now our buses come through, and they more or less keep going until they get downtown.”

Longer term, he said, the agency would like to find off-the-street locations where it can possibly build shelters and turnarounds. The inability to quickly find short-term solutions, however, coupled with Liljeblad’s recent retirement, which has limited Harnocz’s time on Driving Metro Forward, has slowed the selection of more detailed plans.

“At some point we will have to say, ‘OK, the case is closed for Aug. 27, 2017, and this is what we are going to be able to do.’ When we get to that point, we will share the preferred alternative.”

Where the jobs are While the final details are yet to be hammered out, city and business leaders say they are pleased with the

we could get into lots and lots of insurance brokers’ hands,” said Klonowski, who has spent more than 20 years in the health insurance industry. “There’s a lot of brokers that sat on the sidelines during the initial open enrollment of healthcare.gov because it was far, far too difficult for them to navigate.”

Web-based entity (WBE) enrollment sites are certified by the Centers for Medicare and Medicaid services and help connect consumers and insurance brokers to the marketplaces. Klonowski said INSXCloud was one of the first successfully implemented WBEs. Competition has grown since, with more than 50 web brokers registered with CMS. IHC sells ancillary plans, such as dental, telemedicine and gap plans, which help consumers pay their deductibles. It contracts with roughly 8,000 people who sell those plans.

And now, those who use INSXCloud to access the marketplace will also see IHC’s plans and options. Before, those selling IHC plans would have to go to a separate site to get information and enroll consumers.

“This is kind of allowing you to have one-stop shopping for consumers that have a need,” Keller said. “It still doesn’t prevent them from going somewhere else for their dental plan, but it certainly gives them an option to see what the dental plans look like right there on the INSXCloud site, and make it easier for the agent and for the consumer.”

Jason Farro, CEO of Independence-based Lighthouse Insurance Group, has been using INSXCloud for the past several years. He said he initially began looking at INSXCloud because it was a local company, but upon looking closely, he found it to be more cost effective and simpler to use.

It pulls information out of the marketplace in real time, with accurate quotes for different insurance carriers, allowing agents to relay that information to the customer, Farro said. It also allows Lighthouse to track the information it submits so agents can follow up with customers and better manage their accounts.

The gained efficiency means that agents can get the customer a quote more quickly, allowing for more sales.

“I would say that by using this technology, it’s probably giving us another 20% to 35% increase in sales,” Farro said.

Klonowski estimated that there are about 2,500 brokers who use the software but expects that number to reach as get as high as 4,000 by Nov. 1.

Klonowski said he works with some larger agencies with regional plans, but the smaller mom-and-pop brokers with a handful of employees have become “our bread and butter.”

In its first enrollment season, INSXCloud assisted in enrolling about 30,000 consumers for the 2014 coverage year. It reached 95,000 consumers the following year and jumped to 170,000 for the 2016 effective year.

Thanks in part to the additional market reached through the partnership with IHC, Klonowski said that reaching 300,000 consumers applying for coverage for 2017 is an achievable target.

“The complexity of health insurance is such that it still needs to be explained, it still needs to be sold and that’s something that I think has been proven out,” he said. “And that’s I think also why there’s been such a high level of cooperation from healthcare.gov in the last two years to really extend their broker relationships, build their broker relationships. They see the value, too.”

direction of the transit makeover. Increasing service in the urban core fits nicely with Mayor Dan Horrigan’s “fresh look” at downtown housing and business districts, said Jason Segedy, director of planning and urban development for the city of Akron, particularly the administration’s drive to make sure zoning codes allow for mixed use (i.e. live, work and play) developments in key Akron corridors.

Richard Rebadow, executive vice president of the Greater Akron Chamber, agrees. He said with the demand for downtown living and working on the rise, transit authorities are wise to get ahead of the curve in developing routes that support such growth.

That’s all down the road. For now, many Akronites still leave the city to work, Segedy said, and transit routes to areas many of them commute to, such as Montrose and along the Arlington Road corridor, are among the ones slated for reduced wait times and longer service hours.

An analysis by Metro RTA found the proposed changes would provide 20-minute commute times to 65,800 of the 190,000 jobs in the county and commutes of 40 minutes or less to 54%, or 100,000 jobs. Today, Metro RTA has no 20-minute all-day service, and about 46% of the county’s jobs are on routes that run at 30- or 40-minute frequency.

The picture may not be as rosy for those commuting to jobs in outlying areas, such as industrial parks in Northfield, Twinsburg and Green, where service may be reduced.

“We are trying to get ahead of those concerns by identifying what sort of shifts do these companies work on and how we can hit the most people with a limited amount of trips,” Harnocz said, adding that the agency sent out surveys to more than 150 suburban employers earlier this year and got responses back from about 20%.

“Even given the small dataset, you get a good impression of who is on eight-hour shifts, who is on 12, etc.,” he said, “but we welcome more feedback from employers.”

Rebadow said the challenge of ensuring talent can get to Summit County’s growing industries, such as technology and manufacturing, wherever they are, is an ongoing issue of concern for the chamber.

Still, a more efficient transit system — that provides better access to downtown and its cultural amenities as well as better service to populations in need — benefits all, he said, even if there are some kinks to work out once the new schedule comes online.

“Is it going to be 100% perfect?

No. But, it’s going to be efficient, and it’s got to be operational,” Rebadow said.

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Ball Corp. finds a place to grow in Canton

By DAN SHINGLER dshingler@crain.com @DanShingler

Canton is fully living up to its name, thanks to Colorado-based Ball Corp.

Ball — known to cooks everywhere for its home-canning supplies and to food and consumer-product makers as a major packaging company — is doubling the size of its plant on Warner Road in Canton and more than quadrupling its staff to over 100.

The plant is making stuff for folks who pack up a lot more food and other things than anyone in a home kitchen. Specifically, it makes the ends of cans — by the million. And, as a result of its recent and ongoing expansion, it now also cuts metal that will be made into cans at plants owned by Ball and its customers across the U.S. The expansion represents an investment of more than $30 million that has brought some business to local contractors and is starting to provide more jobs to area residents, which civic leaders hope will be a lasting effect.

The Canton Regional Chamber of Commerce said it devoted the efforts of its vice president of economic development, Michael Gill, toward helping Ball with its expansion.

Gill said in an email that the plant expansion “is a great addition to our

Ball Corp. runs two press lines at its Warner Road plant and makes about 1.4 million can ends per day. (Contributed photo)

Canton manufacturing marketplace.

We are indeed delighted to see an expansion of production and warehousing space by an existing national company. The increase in employment tells a great story of the capabilities of our local workforce.”

The company received a 50% tax credit on the project, lasting six years, from the Ohio Tax Credit Authority, and the city gave the company a 10year exemption on 75% of its property taxes.

As a result, Ball is moving jobs to Canton from West Virginia, where it’s closing a plant, and making a major investment in the Canton plant that it

purchased in 2015.

“Before we started the project, we had approximately 23 hourly people, and about 97,000 square feet of manufacturing for easy-open ends,” said plant manager Steve Hersher.

Easy-open ends are the ones with the pull-ring, allowing the user to peel off the top without a can opener.

“Now that we’ve completed the expansion, we’re probably two-thirds of the way through hiring and we have 70 people now. And we’ve added an additional 90,000 square feet,” Hersher said.

For Ball’s original staff of 23, life won’t be much different, Hersher

said. They’ll continue to make can ends — and lots of them.

“We’re making about 550 ends a minute (per line). We run two press lines, and we make about 1.4 million ends a day,” Hersher said. “We’ll make a little over 300 million ends this year.

That’s what the 23 people do.”

For work in the new part of the plant, Hersher’s still hiring.

“We have probably between 30 and 40 more people to go,” he said, adding that he’s been very pleased with the workers he’s been able to find so far.

The new part of the plant cuts metal coils, creating blanks from which cans are made elsewhere. The plant also does lithographic printing of whatever graphics a customer wants.

That Bush’s Baked Beans can that caught an eye in the supermarket likely was printed in Canton, for instance.

The work doesn’t require a college degree, but some basic mechanical skills help. And experience working with machinery or printing equipment is a big plus, Hersher said.

Ball chose Canton for its expansion, in part, because of the plant’s location. It owns another plant in Canton that's not part of the current expansion.

“With our two existing plants and dedicated employee base in Canton, as well as the city’s proximity to our customers, suppliers and other Midwestern manufacturing facilities, our

investment in the Warner Road facility expansion was the perfect solution for our business,” Ball chief operating officer Jim Peterson said in unveiling the plant on Oct. 5.

But Canton’s also a great place to expand because of the available labor, Hersher said, and the help it’s been able to get from local contractors — companies that do electrical work, install equipment or make specialized parts needed to bring a production line to work.

“There’s a wealth of contractors around this area. There are a lot of machine shops in Canton, and good ones,” Hersher said.

Now, it’s all just about up and running, he said. The second of two lithographic printing lines will be running by the end of October, and lines that coat metal can stock will be running by the end of the month.

Hersher was bringing a slitter line up, to cut metal stock, when he spoke to Crain’s on Oct. 11. Before the end of the year, the plant will be fully updated and shipping regularly to four or five other Ball plants, where its products will be rolled and welded into cans, married with regular can ends from other plants, and eventually shipped to the makers of everything from aerosol hairspray to holiday treats.

“There’s a lot of things that goes into making a can,” Hersher says.

And a lot of what makes up a can, it turns out, comes from Canton.

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

AKRON

SIGNET CONTINUED FROM PAGE A-1 With $1.7 billion in loans on its books, generated by financing customersâ&#x20AC;&#x2122; jewelry purchases, Signet is a significant consumer-finance company, in addition to being one of the nationâ&#x20AC;&#x2122;s largest jewelers.

Against this backdrop, Signet CFO Michele Santana sounds remarkably unworried. â&#x20AC;&#x153;We have successfully navigated through uncertain times in the past and we absolutely will again,â&#x20AC;? she said.

â&#x20AC;&#x2DC;Locked and loadedâ&#x20AC;&#x2122; One reason for her calm demeanor might be that Santana said the com-

pany has initiatives in place to address Signetâ&#x20AC;&#x2122;s challenges, or at least the ones over which the company has some influence.

Most importantly, Santana said, Signet is focused on improving its internal operations and securing crucial strong holiday sales in the coming months. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re very locked and loaded, and focused on Signetâ&#x20AC;&#x2122;s future, and most importantly the upcoming holiday selling season,â&#x20AC;? Santana said. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s where our focus is right now.â&#x20AC;?

She said the company has several reasons to be optimistic. Several products that did well last year are returning, including the Vera Wang collection of jewelry that Signet picked up with its $1.4 billion acquisition of Zales in 2014, and the

Ever Us collection of two-stone jewelry that Signet introduced last year at Zales and Kay Jewelers stores.

Such product lines tend to do better in their second year, Santana said.

Signet also will offer what itâ&#x20AC;&#x2122;s calling Chosen Diamonds, Santana said, which will be traceable and show customers the stonesâ&#x20AC;&#x2122; entire paths, from the mine to the ring, necklace or earrings.

Signetâ&#x20AC;&#x2122;s hopes its strong sales force will get some help from an improvement in the general environment, too. â&#x20AC;&#x153;There are some things in the macroenvironment that will sort itself out that could have a positive impact,â&#x20AC;?

Santana said. Chief among them, she said, is a presidential election that is not exactly instilling confidence in

the American consumer.

The company will continue its heavy rotation of advertising to support sales efforts, Santana said, adding that the company still has significant market share to gain in the nationâ&#x20AC;&#x2122;s overall jewelry market.

The business of lending In addition to whatever boost Signet is able to garner in sales, it also has some savings left to get from its continued integration of Zalesâ&#x20AC;&#x2122; operations, Santana said.

As for its lending business, which Signet is evaluating with help from Goldman Sachs, thatâ&#x20AC;&#x2122;s a bit of an open question. Santana said the company has not yet decided whether it will sell its loan portfolio

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in some manner and turn to a third-party finance company to help customers with purchases, or whether it will keep the lending business in house. Jared and Kay work through Signetâ&#x20AC;&#x2122;s own finance company, while Zales continues to use a third party as it did before it was acquired. So, Signet sees both sides of that coin, Santana said. â&#x20AC;&#x153;Our credit really has been a positive contributor to our financial performance for more than 30 years. Itâ&#x20AC;&#x2122;s really an integral part of our business and builds customer loyalty,â&#x20AC;? Santana said. â&#x20AC;&#x153;We continue to see growth in our portfolio.â&#x20AC;?

About 4% of the companyâ&#x20AC;&#x2122;s borrowers are behind on their loans.

That's about twice the average delinquency rate for consumer credit in the U.S. as a whole, according to Federal Reserve Bank data. But it's not necessarily an alarming number, and Santana said people have an emotional attachment to jewelry, so they tend to pay back their loans.

With regards to the claims of ring swapping, Santana said the company has investigated it and continues to believe the accusations are not true.

Nonetheless, it will put additional security measures to work monitoring its repair business, she said.

Will all of this be enough to get Signetâ&#x20AC;&#x2122;s share price back to its once lofty levels? Only time, and particularly time over the holidays, will tell.

A $625 million boost Signet doesnâ&#x20AC;&#x2122;t currently need to access the stock market for capital, Santana said â&#x20AC;&#x201D; and it just got a $625 million investment by the Los Angeles private equity firm Leonard Green & Partners.

Signet has begun using that money to buy back its stock on the open market, while Leonard Green will get a 5% dividend on its investment and the ability to convert its preferred shares to 8% of Signetâ&#x20AC;&#x2122;s common stock.

Signet also now gets management and advisory help from Leonard Green, which Santana said is a worldclass investor in the retail realm.

Signet also might get something else with the investment.

As Wall Street Journal â&#x20AC;&#x153;Dealpolitikâ&#x20AC;? blogger Ronald Barusch noted in an August column, the terms of Leonard Greenâ&#x20AC;&#x2122;s investment includes a provision that might come in handy for a company with a beleaguered stock price.

Specifically, Barusch noted, â&#x20AC;&#x153;Leonard Greenâ&#x20AC;&#x2122;s voting power will be subject to an agreement that requires it to vote for managementâ&#x20AC;&#x2122;s board nominees and as the board recommends with respect to any proposed business combination.

Perhaps most remarkably, Leonard Green also has agreed to vote in favor of any executive compensation proposal put to shareholders.â&#x20AC;?

As for Signetâ&#x20AC;&#x2122;s Akron operations, Santana said the company remains committed to the community â&#x20AC;&#x201D; where it supports a host of endeavors, including the LeBron James Family Foundation and the Cleveland Clinic Akron General Hospital.

She would not, when pressed hard, rule out the possibility of cuts at the companyâ&#x20AC;&#x2122;s corporate operations â&#x20AC;&#x201D; but, to be fair, few CFOs would. â&#x20AC;&#x153;Youâ&#x20AC;&#x2122;re always continuously looking to improve,â&#x20AC;? Santana said.

Improving its own performance would likely be the best gift that Signet could give this year, to both its investors and its employees.

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Entrepreneurship: Tobin Buckner

Sometimes, entrepreneurship is all about raising funds There used to be a reality television show hosted by a certain 2016 presidential candidate called “The Apprentice.” The theme song for that show was “For the Love of Money” by Canton’s own hit-making R&B group, The O’Jays.

Politics and reality TV aside, money is a necessary part of entrepreneurship. I’ve had many conversations with entrepreneurs about what they need to move their company forward, and the answer almost always includes financing of some sort.

Cash money. Dollar bills. Papes.

Clearly, raising money is one of the chief concerns for a startup. So, here’s a quick guide to help you get started — beginning with a breakdown of three primary types of funding.

Debt : Debt financing involves borrowing money, typically in the form of a loan from a financial institution or from commercial finance companies, to fund your business. If you decide to go this route, be fairly certain that you will have the cash flow to repay the debt in a timely fashion. Typically, this type of financing requires good credit and solid financials.

Tobin Buckner is JumpStart’s Akron entrepreneurial community manager and writes a blog about entrepreneurship in Northeast Ohio.

ready to expand further but cannot access traditional bank financing.

The organization is supported by JumpStart and works with small

I’ve had so many conversations with budding entrepreneurs about what they need to move their company forward, and the answer almost always includes financing of some sort. Cash money. Dollar bills. Papes. businesses it believes can create meaningful-wage jobs and make an economic impact, especially in low-income neighborhoods.

J North Coast Angel Fund (NCAF) is also supported by JumpStart and invests in early stage, technology-based

ventures. The typical NCAF initial investment is $250,000, with $200,000 held in reserve for possible follow-on investment. Most deals take the form of preferred equity securities and involve an NCAF member serving on the board.

J Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs offer government grants to businesses focused on science or research. Recipients are required to meet federal research and development goals, and have a high potential for commercialization.

J The Akron Regional Change Angel (ARCHAngel) Network is a regional forum that meets quarterly to introduce tech-based entrepreneurs to investors in Northeast Ohio, particularly within the Greater Akron area.

This moment brought to you by you.

Equity: Equity financing involves bringing in investors or partners who provide capital in exchange for a share of ownership in the business.

These investors or partners generally invest because they expect to make a profit when the business becomes successful. Unlike with a loan, if you don’t make a profit, you usually aren’t required to pay them back. The absence of monthly loan payments can free up significant working capital for the business, at the cost of giving up a small piece of ownership in it.

Crowdfunding: Crowdfunding — raising small monetary contributions from a large number of people — can be a great option for startups, just be sure to do your research about the likelihood of your type of product or business idea being funded and at what amount. Also, it helps to know which crowdfunding platform is best suited for your type of ask.

Where to Look J The Economic Community Development Institute (ECDI) provides loans for startups up to $75,000 and up to $350,000 for existing for-profit businesses. It has Northeast Ohio offices in Cleveland and Akron.

J Great Lakes Innovation & Development Enterprise (GLIDE) administers the Innovation Fund, Northeast Ohio’s pre-seed fund founded by the Lorain County Community College Foundation that supports technology-based entrepreneurial companies.

It awards capital to businesses in Northeast Ohio and has two levels of funding — up to $25,000 to help validate technology and up to $100,000 to help validate business models.

J JumpStart Inc. currently operates three separate venture capital funds that invest in Ohio startups: the Evergreen Fund, the NEXT Fund and the Focus Fund. Akron-based 7signal Solutions, along with seven other Ohio startups, recently received an investment from the NEXT Fund.

J Growth Opportunity Partners pairs lending with coaching and mentoring, focusing on businesses that are already healthy, thriving and

Caring isn’t just reserved for doctors and nurses. Akron Children’s Hospital is able to improve the lives of children like Jordan because of caring people like you.

Every gift, regardless of its size, makes a positive impact on our patients.

What moment will you help make possible? Please give at akronchildrens.org/donate.

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CRAIN’S CLEVELAND BUSINESS

AKRON The Main Course: Jennifer Karpus-Romain

For First Watch, Cuyahoga Falls is a sweet spot When the brass at the First Watch saw the Portage Crossing development in Cuyahoga Falls, they knew it was time to set up shop there.

The shopping development on Portage Trail that opened in 2015 fit almost every category the company looks for: the demographics of the neighborhood, a busy area, near a grocery store.

While its corporate headquarters are based in Florida, the “daytime café” chain made its first foray into Ohio in 1991 — it has a location in Summit Mall and in Macedonia, among its 32 locations in the state — and focuses on finding “great neighborhoods where we (think) our concept would be well-received,” said Chris Tomasso, president.

And they were eager to get into Cuyahoga Falls.

The company, which is leasing a building in Portage Crossing near Starbucks, set up the location in just nine months, when it normally takes about a year.

“We’re just excited to be there,” Tomasso said.

Todd Derr, director of operations

for all eight of First Watch’s Northeast Ohio locations, has been working with the restaurant chain for nearly 20 years. He has been overseeing the Northeast Ohio market for four years.

“I’ve opened a lot of First Watches in my career,” he said, but the Portage Crossing location is “without a doubt” one of the best locations to date.

“It’s been going outstanding. …

We’ve hired an incredible staff,” Derr added. “We’ve been as busy as we can handle.”

When setting up the Portage Crossing location, the company put in place an updated look that keeps with the “farm fresh” theme it hopes its food exemplifies. The Summit Mall location is expected to get a remodel in the same vein in the near future.

The 3,500 square-foot Cuyahoga Falls location has a modern-rustic, community feel with natural light shining in. It features reclaimed barn wood, and the wood tables were made in Cleveland. Additionally, there is an open kitchen so customers can see what is going on behind the scenes. The location also has a patio for those who enjoy al fresco

First Watch, at a glance Where: 2051 Portage Trail, Cuyahoga Falls.

Hours: 7 a.m.-2:30 p.m. daily.

The vibe: Modern-rustic feel.

Reclaimed barn wood goes into every restaurant as part of its décor.

Wooden tables with an open kitchen area. The restaurant has a strong community feel with natural lighting.

First Watch officials said the Portage Crossing site ticked about every box in what it looks for in a location. (Shane Wynn for Crain’s)

dining.

First Watch, which serves breakfast and lunch and closes by midafternoon, wants its hallmark to be freshness. While the menu spans from healthy to indulgent, you won’t see a heat lamp or microwave anywhere on site.

Customers give First Watch a lot of

United Way of Summit County

WHAT THIS PLACE NEEDS IS PATHWAYS OUT OF POVERTY. Building a pathway to financial stability for the 82,000 Summit County residents who live in poverty helps everyone in the local community by strengthening the local workforce and creating a more prosperous and sustainable economy.

United Way’s Bridges Summit County initiative offers workshops throughout the year, training corporate leaders and staff to recognize the causes and effects of generational poverty and helping them provide better service to clients, employees and their community.

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credit for the healthy items on the menu, Tomasso said, but “you can be pretty indulgent at our restaurants, too.”

Everything we make is fresh,” Derr said, which is “distinguishably different than what our competition is.”

Some of the most popular items on the menu include lemon ricotta pancakes, avocado toast and the pesto chicken quinoa bowl, which won a MenuMasters award. Derr said the avocado toast started out as a special item that was brought into the yearround menu about 18 months ago because of high demand.

Seasonal specials for fall will run through the end of October and the winter menu will begin in November.

Fall specialty items include butternut squash and wild mushroom frittata, fig and prosciutto toast, pumpkin pancakes and butternut squash bisque.

Specialties: Lemon ricotta pancakes, avocado toast, and pesto chicken quinoa bowl are some of the most popular items. Plus seasonal menus.

A juice bar feature daily blends and seasonal offerings.

Menu: Fresh ingredients are the key, whether in the healthful or indulgent dishes.

Beyond food, First Watch offers a fresh juice bar, including a kale tonic, with kale, Fuji apple, English cucumber and lemon; and the Day Glow, with carrot, orange, lemon and organic ginger. There are seasonal juices, too.

First Watch declined to release financial information but officials are happy with the success of its Northeast Ohio locations. The Akron-area restaurants have proven very successful thus far. While the company has no immediate plans for its next location, officials are optimistic that more First Watch stores will populate the Buckeye State.

Each café, Cuyahoga Falls included, employs 25 to 30 people, mainly on a full-time basis. There are 3,700 employees in nearly 200 locations.