Crain's Cleveland Business

CLIMATE CHANGE: Tackling the crisis is a critical part of doing business today. PAGE 10

TRADE SHOWS Can industry return to pre-pandemic levels?

PAGE 7

CRAINSCLEVELAND.COM I JANUARY 10, 2022

THE RISKS AND REWARDS

OF REMOTE WORK

BY DAN SHINGLER Once upon a time, employees lived within driving distance of their work and were usually only looking for jobs that were, say, within half an hour or 45 minutes of their homes. You may remember this time: it was 2019.

Today, an employer here looking for a good IT person or back-office administrator might hire someone out of town or even out of state, without ever expecting to see them in the office. Likewise, they might find out their own valued employees are taking jobs with firms on the coasts, getting higher wages without having to leave home.

It’s all having effects, good and bad, on local companies seeking to attract and manage talent and for job seekers.

Many jobs still require face-to-face meetings, but in terms of computing professionals, back-office workers, some engineers and other professionals, employers are finding

remote workers give them a larger talent pool to fish from, while job applicants see more opportunities available than ever.

Some big employers here that can afford to compete for talent nationally see costs, but also benefits, in the new landscape.

“It’s clear that the remote work (trend) ignited a workforce reset. We’re competing for talent with companies we never would have before, and it’s created a unique and dynamic opportunity for us,” said Aaron Swartz, who in November was promoted to managing partner for the Akron office of the giant EY accounting and consulting firm.

GETTY IMAGES/ISTOCK PHOTO

See REMOTE WORK on Page 18

Developer has big plans for Elyria Local businesses find they Esports hub, offices and housing part of $35M plan for downtown

can save money with solar

BY MICHELLE JARBOE

BY JAY MILLER

Kevin Flanigan started buying up real estate in downtown Elyria in 2015, with a vision of transforming a central business district sorely in need of a boost.

But in early 2021, the Lorain County businessman almost walked away.

That’s when a fire tore through a

former nightclub complex off Broad Street, just north of the city’s central square. That 122-year-old building, known as Uncle Vic’s, was a centerpiece of Flanigan’s plans to turn historic properties into apartments, offices and a retail-lined alley.

Between the fire damage and demolition costs, he was out more than $1 million — and forced to re-

NEWSPAPER

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design his entire project. He considered giving up. Then doubled down instead.

“That’s kind of Elyria’s story: Going through tough times and not allowing it to define us, but drawing strength from it,” said Frank Whitfield, mayor of this city of just over 52,600 people.

See ELYRIA on Page 20

THE

Even though, especially in winter, the sun can disappear for days from the Northeast Ohio sky, property-owning businesses here are finding they can save money by bringing solar-generated electricity onto their properties.

At Progressive Corp.’s Campus 2 office complex in Mayfield Village,

LAND SCAPE

a vast solar-panel array is saving the company 20% on the electric bill at the complex, which includes four, four-story office buildings and a parking garage. The Progressive array, which is visible from Interstate 271, is made up of 4,186 photovoltaic solar panels covering 8.4 acres.

It produces 2.3 gigawatts of See SOLAR POWER on Page 17

A CRAIN’S CLEVELAND PODCAST

1/7/2022 11:45:33 AM

SPORTS BUSINESS

Boxing manager VanNewhouse eyes solo success

BY JOE SCALZO

The first fighter Tim VanNewhouse learned how to manage was a kid who lived in just about every bad neighborhood on Cleveland’s West Side.

A kid who decided he wanted to be a champion, not a statistic.

A kid who was given a puncher’s chance to escape the streets — and took it.

VanNewhouse was that kid. In many ways, he still is.

“I think that’s what separates me from other managers in this sport,” said VanNewhouse, who fought more than 100 times as an amateur. “They don’t see fighters and understand them the way that I do. I lived that life for the majority of my life, and I found the boxing ring.

“That’s what changed my life.”

After nearly six years with Split-T Management, the 35-year-old VanNewhouse recently broke off to form his own management company, Newhouse Management Group. He plans to open up a Cleveland office at 1360 West Ninth St. in the same building as his accountant, Anthony Rinaldi.

VanNewhouse already has signed six fighters and has high hopes for his company, with plans to leverage his eye for talent, his contacts in the industry and his love for boxing to lead a new generation of fighters to the top of the sport.

“I’ve done deals with every major promoter in the sport; I’m friendly with every major fight broker in the business,” he said. “But Split-T Management, it wasn’t mine.

“In order to really grow, this is what I needed to do.”

Trainer Joe Delguyd, world title challenger Antonio Nieves and boxing manager Tim VanNewhouse.

Boxing background VanNewhouse began fighting in 1999 at Cleveland’s famed Kronk Gym and quickly impressed his trainers with his movement, his jab, his vision and his ring IQ. A boxer/puncher, he won several amateur titles, including the Cleveland Golden Gloves, and emerged as one of the nation’s top featherweights in the men’s under-19 rankings. He moved to Las Vegas in 2005 to train at Bob Arum’s Top Rank Boxing gym, but he put off his professional dreams in hopes of earning a spot in the 2008 Olympics.

“I always wanted to be a champion,” he said. “Boxing gave me a sense of hope that I could have a better life.

That promise kept me on track when a lot of my friends and peers were on the wrong track. I was on airplanes, flying across the country, meeting new people and getting exposed to a whole new social class. I was looking at different people, seeing how they

Top Rank Boxing chairman Bob Arum talks to Tim VanNewhouse at a boxing event. | PHOTOS PROVIDED BY TIM VANNEWHOUSE

opted to turn pro under the guidance of his Cleveland manager and trainer, Joe Delguyd.

He won his first — and only — professional fight on Oct. 7, 2007, then made what he calls a rash decision by “BOXING GAVE ME A SENSE OF HOPE joining the Air Force THAT I COULD HAVE A BETTER LIFE. to provide financial security for himself THAT PROMISE KEPT ME ON TRACK and his girlfriend, WHEN A LOT OF MY FRIENDS AND PEERS who was pregnant with their daughter.

WERE ON THE WRONG TRACK.” “We were living in — Tim VanNewhouse her mother’s house, and I was catching dressed and how they talked and the bus back and forth to college and sitting there thinking to myself, ‘What how they conducted themselves.”

His dreams changed quickly. After am I going to do with my future?’” he losing a split decision to lightweight said. “I needed more security, so I prospect Mason Menard at an Olym- joined the Air Force. I was sad every pic Trials qualifier, VanNewhouse day in there, really crying. I wanted to

get back to the boxing ring. I left behind everything I had worked my whole life for.”

He spent two years as a medic at the Air Force Academy in Colorado Springs, then returned home as confused about his future as ever. He still loved boxing and tried returning to the ring, but his timing wasn’t there.

Neither was his old hunger and drive.

“I was wondering, ‘How do I take all my experiences and translate them into making a living in something I’m extremely passionate about, which is boxing?’” he said.

He decided to try promoting, “and I just started hustling,” he said.

Climbing the ladder He started Newhouse Promotions in 2009, producing some successful

club shows and helping to revive Cleveland’s boxing scene. In 2012, the company entered a co-promotional deal with Leon Margules and Luis DeCubas to promote undefeated rising prospects Mark Davis Jr. and Antonio Nieves.

A year later, he entered the managerial realm, negotiating two multifight deals with rapper Curtis “50 Cent” Jackson for Davis and amateur standout Ryan “Blue-Chip” Martin to serve as their lead promoter.

“He’s in a very rare situation, because most managers have never laced up a pair of gloves in their life,” said Delguyd, who also is an attorney and serves as VanNewhouse’s chief legal counsel. “You see these managers who come from the banking industry or the restaurant and

bar industry or auto sales and you think, ‘Do you even know what you’re looking at?’ There are good managers who have never boxed, but there’s a huge learning curve.

From Day 1, Tim knew the sport and the business. What he’s asking these guys to do, he’s done himself.”

In 2016, VanNewhouse joined Split-T as the company’s executive boxing agent and, over the next five years, he signed some of the sport’s top talent and brokered fights with boxing’s biggest names on boxing’s biggest networks.

Sean Gibbons, the president of Manny Pacquiao Promotions, started working with VanNewhouse in 2012, and the two have worked together on everything from developing fighters to lobbying for them at world sanctioning body conventions to matchmaking.

“There are few managers in the sport today that have an eye like Tim does,” Gibbons wrote in an email. “He sees fighters differently than most. He knows what to look for in a young fighter and many of the sports promoters know this about him.”

Stephen Espinoza, the president of Sports and Event Programming at Showtime, agreed, saying VanNewhouse is at the forefront of a new generation of boxing managers.

“He understands not only how to develop fighters and progress their careers, but also how to work with broadcasters to achieve the best result for his clients,” Espinoza wrote in an email. “But what separates Tim from the rest of the pack is his keen eye for talent and his ability to identify the potential future stars at the very earliest stages of their careers.”

VanNewhouse’s current roster of fighters includes 2020 Olympian Darrelle Valsaint, a 19-year-old super welterweight from Orlando, Florida; Thomas Wu, a 21-year-old welterweight from Los Angeles; Jan Paul Rivera, a 20-year-old super featherweight from Puerto Rico; Najee Lopez, a 21-year-old cruiserweight from Atlanta; Daniel Blancas, a 20-year-old super middleweight from Milwaukee; and Ferris Dixon Jr., an 18-year-old super lightweight from Detroit.

All are young, talented and hungry. It’s VanNewhouse’s job to maximize that talent, advancing their careers at the right pace and against the right opponents.

“I’m really focused on the stable (of fighters) right now and their development,” VanNewhouse said.

“Some of the bigger-name fighters will come. Once you have that roster established with guys that have championship potential, everything else comes into place.”

VanNewhouse has come a long way since he first walked into a gym.

He and his wife live in Bay Village now, raising kids in a middle-class neighborhood. But at his core, he’s still a fighter, one who understands the type of kid who is drawn to the ring and who understands what the ring can do for those kids.

“I’m a success story and a lot of kids, they aspire to be a success story themselves,” he said. “It’s my job to help them get there.”

Joe Scalzo: joe.scalzo@crain.com, (216) 771-5256, @JoeScalzo01

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HEALTH CARE

University Hospitals rolls out mission-related investment strategy

BY LYDIA COUTRÉ

In a new community benefit strategy, University Hospitals has committed to shifting some assets it would otherwise invest in vehicles like stocks and bonds to make them available for mission-related investing in under-resourced areas of Greater Cleveland.

As its first investment under this model, UH committed $1.2 million to the Lead Safe Cleveland Coalition, a public-private partnership formed to address and prevent lead poisoning.

Mission-related investments (MRIs) are “a mechanism that allows us to use our endowment funds to invest for good purposes like this, and receive a return on investment that may not be interest, dividends or stock price appreciation,” said Bradley Bond, vice president of treasury for UH. “The return might be better health for our community, and we count that amongst our investment returns.”

The UH funds will go to the Lead Safe Home Fund, a pool of resources to help property owners make their homes lead safe. It stands at $47.3 million.

Of UH’s commitment, $200,000 is a grant that will support property owners, lead safe worker training and/or community engagement. The rest represents the new strategy: a $1 million investment into the coalition’s loan fund that finances low-interest loans to qualifying landlords and homeowners.

MRIs (also known as impact investing, place-based investing or social

impact investing) is an opportunity to provide flexible, low-cost capital to help solve a social need within a community, said David Zuckerman, president and founder of Healthcare Anchor Network (HAN). The nonprofit promotes a framework for health systems, as mission-driven anchor institutions, to leverage their everyday business practices — from hiring to purchasing to investing — to complement their efforts to improve community health.

“Grant dollars are few and far between,” he said. “So having the ability to bring other dollars into these much-needed investments in the community, it allows these dollars to go father because they can be recycled into new projects.”

UH’s contribution will cap the coalition’s initial $20 million target for the loan portion of its Home Fund. In September, Cleveland Clinic contributed $2.5 million to the Lead Safe Home Fund, $1 million of which was directed into the loan portion of the fund as well.

Though the Clinic’s loan contribution to the Lead Safe Home Fund is an example of this investing mechanism, the system doesn’t currently have a specific policy around shifting funds from traditional investments to MRIs. Rather, its community support model is focused more on community benefit, where traditional grant dollars or funds don’t earn direct financial returns, as well as using its purchasing power to support its mission.

The Lead Safe Cleveland commit-

ment represents just the first initiative under UH’s new community benefit strategy.

It will use data on social determinants of health and community needs to guide future investments.

MRIs are a new way to partner with the community on health and economic Bond development opportunities, said Heidi Gartland, UH chief government and community relations officer. It helps the system impact health further upstream outside the walls of the hospital, she said.

“We know that preventing lead exposure is so much more important than Bole testing,” she said, “and of course testing is important, but we would much prefer the kids to not have exposure to begin with.”

Historically, the model has been largely used by Catholic health systems, but it’s gained traction among other health systems in the past couple of years, Zuckerman said.

The Sisters of Charity Foundation of Cleveland, a ministry of the Sisters of Charity Health System, in 2020 finished a five-year social impact investment in the Cuyahoga Partnering for Family Success initiative. Although the investment didn’t generate returns, it achieved housing stability, reunification of children with their parents and other mission-aligned initiatives, ac-

cording to the foundation‘s president Susanna Krey.

HAN encourages systems to consider allocating at least 1% of their investment portfolio for MRIs over a five-year period to build it into their policy in a sustainable way, Zuckerman said.

UH declined to share specifics, but a spokesperson said it is committing “well over” 1% of its endowment for its MRI strategy overall.

Lead Safe is just the first step.

UH developed the MRI portion of its investment policy in 2016, and it was formally adopted by the board the following year, Bond said. So far, UH has used the tool in the biopharma space through its Harrington Discovery Institute, which partnered with Morgan Stanley and venture investor Advent Life Sciences to launch the Advent-Harrington Impact Fund, profits from which are shared with Harrington.

The biopharma investments aim to help bridge the “valley of death,” where discoveries often meet their demise during the time-consuming, costly path to commercialization. By nature of that goal, these investments are riskier and can take more than a decade to generate returns, Bond said.

Now, the health system is deploying the investing approach within its community benefit work to address social

determinants of health, which he said was part of the vision when initially developing the policy in 2016. The investment into the Lead Safe Fund however holds less risk and will generate a faster return, which Bond said he expects to be up to 3%, although that is tangential to the health of the community, he said.

“I would rather have homes remediated and a lower investment return than the opposite,” Bond said.

Lead exposure is a completely preventable, incredibly important environmental health problem for children with effects that can last well into adulthood, said Dr. Aparna Bole, associate professor of pediatrics at UH Rainbow Babies and Children’s Hospital and Case Western Reserve University.

A return on investment can come in the form of the potential benefits of preventing lead exposure, like avoided educational interventions, higher academic performance and productivity, and decreased risk for interaction with the criminal justice system, she said. Depending on how broad they cast this net, studies have calculated from primary prevention of lead (preventing exposure before it happens) as anywhere from $17 to more than $200 for every dollar invested.

“Even at the lower end, the most conservative estimate, that’s a pretty impressive return,” Bole said. “It benefits our society, not to mention, of course, that it’s the right thing to do.”

Lydia Coutré: lcoutre@crain.com, (216) 771-5479, @LydiaCoutre

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Case Western Reserve University president Eric Kaler, Cleveland State University president Harlan Sands, Mayor Justin Bibb, and Cuyahoga Community College president Alex Johnson met in late 2021. | CLEVELAND STATE UNIVERSITY

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The city of Cleveland is many things, including home to three different types of higher education institutions. There’s the two-year public Cuyahoga Community College, four-year public Cleveland State University and private Case Western Reserve University.

All have their own goals and serve their own constituents. Yet a commonality is how the institutions’ successes are closely intertwined with the city in which they sit. Each are the rising tides and the boats concurrently.

So having a new mayor for the first time in 16 years, of course, is a big deal. Justin Bibb ran and won on a platform of bringing new ideas to his hometown.

The mayoral transition comes at a pivotal point in Northeast Ohio’s higher education landscape. The COVID-19 pandemic amplified already existing enrollment struggles at many schools. Many college students are dealing with issues outside the classroom that can impact what happens inside it. And the state of Ohio has an ambitious goal of having 65% of its residents earn a certificate, credential or degree by 2025.

As the city begins a fresh chapter with Bibb at the helm, leaders at the three colleges are feeling optimistic about the impact collaboration can have on their institutions, as well as the region.

Then-Mayor-elect Bibb arranged a meeting with Tri-C’s Alex Johnson, CSU’s Harlan Sands and Case’s Eric Kaler in late November. The meeting has been summarized as a debrief of sorts, a brainstorming session at a 30,000-foot view. No concrete initiatives stemming from the meeting have yet emerged.

“Higher education is the path to good paying jobs, and we have topnotch options and partners in Cleveland,” Bibb said in a statement to Crain’s Cleveland Business.

“During the meeting with the three college presidents, we discussed our commitment to work together to build a lasting partnership that moves our entire region forward.”

Bibb is an alumnus of Case Western Reserve University. The University Circle institution is under relatively new leadership, too, as Kaler took over CWRU’s top spot in July 2021. He arrived at Case from the University of Minnesota. His eightyear stint as president there resulted in a reported research boom, and he said he plans to do the same at Case.

“For Cleveland to be a great city, we have the obligation at Case Western to be a great American research university,” Kaler said. “And we are, and we’re going to get bigger and better. But that’s critical to the success of the city.”

Successful town-gown partnerships, he said, hinge on two things: a shared vision and open communication. Having a city leader who is interested in economic development and developing an entrepreneurial culture is key to growth.

One of the biggest comparisons on this front is the city of Pittsburgh.

Higher education institutions have played a big part in that city’s renaissance. A 2021 report from Cleveland State compared the economic growth of the two cities, including how Pittsburgh built a “more robust tradeable higher ed economy.”

In Ohio, there’s been a recent uptick of various types of collaborations involving higher ed.

The list includes plans for the Cleveland Innovation District. It’s a $565 million public-private partnership intended to spark economic growth and innovation. Both Cleveland State and CWRU are participating, along with the region’s hospital systems.

The initiative comes with real metrics institutions need to hit to succeed, according to Harlan Sands, president of Cleveland State. It won’t be the type of model, Sands said, “where we pray for it to happen.”

“That’s the large scale, big idea, big benefit, big ROI kind of thing that we really need to do if we’re going to move the needle, if we want to have a story to tell like other cities, ” he said of the project.

Faculty and students at CSU’s Levin College of Urban Affairs were tapped to volunteer to help with the

Bibb administration’s transition.

Only one of the presidents, Tri-C’s Johnson, was appointed to a transition committee focusing on education. The education section of then-candidate Bibb’s website focused more on ideas related to K-12 students.

In an interview with Crain’s, Johnson was careful to note his work with that committee was separate. He didn’t want to get ahead of any agenda that the committee may release.

Bibb will be the fourth mayor Johnson has worked with in Cleveland, as well as the last in his current role. Johnson plans to retire in June.

At the November meeting, Johnson said the presidents stressed how there should be a seamless K-16 transition between the city’s public school system and higher education. And as Cleveland looks to the future, he said there needs to be more engagement at a meaningful level, particularly with the city’s core communities.

“Introducing them to the power and the value of a post-secondary experience and what it can mean, ultimately, to their economic and personal growth,” he said.

The pandemic and its myriad effects on the city and its residents continue. A third of Cleveland’s residents don’t have access to the internet. The city is one of America’s poorest.

When it comes to higher education, it remains to be seen how platitudes could turn into policies or programs. It’s just days into the administration. Several of Bibb’s recently announced hires, though, do have ties to the sector.

Chief communications officer Sarah Johnson spent several years working in marketing at CWRU. New planning commission chair Lillian Kuri consulted on plans to develop the Greater University Circle Initiative while at the Cleveland Foundation. And Paul Patton, Bibb’s chief human resources officer, was a senior adviser to Ohio State University’s president.

Amy Morona: amy.morona@crain. com, (216) 771-5229, @AmyMorona

4 | CRAIN’S CLEVELAND BUSINESS | JANUARY 10, 2022

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Zanite Acquisition Corp., the special purpose acquisition company (SPAC) that launched in Cleveland in 2020 with the goal of merging with and taking public a promising aviation business, derives its name from a variation on tanzanite, a rare gemstone.

After evaluating some 200 companies over the past year, Zanite’s founders are confident they’ve discovered the jewel they’ve been searching for.

On Dec. 21, 2021, Zanite, which raised $232 million in a November 2020 initial public offering, announced a combination with Eve, which is described as an urban air mobility (UAM) business.

Spun out of global Brazilian aerospace manufacturer Embraer S.A. in fall 2020, Eve’s focus is the development of environmentally friendly electric vertical take-off and landing (eVTOL) vehicles that could have an array of uses in shorter-distance commercial and personal air travel.

The sleek, sophisticated aircrafts Eve is developing are powered by rechargeable batteries and look like a blending of technology pulled from helicopters, airplanes and drones.

A piloted version could seat four passengers. A future autonomous concept could seat six. A 20-mile ride in the former could cost an estimated $47 per seat, according to an investor presentation.

Zanite is led by coCEOs Steven Rosen, who founded Cleveland private equity firm Resil- Rosen ience Capital Partners in 2001, and Kenneth Ricci, a principal of Directional Aviation Capital of Cleveland, which owns several companies. The Directional Aviation portfolio includes firms such as Corporate Wings, Flexjet and Nextant Aerospace.

“This is going to be a very, very large market. Whether it comes two or three or four or more years from now, it’s coming,” Rosen said.

“These (eVTOLs) are quiet, less disruptive to communities and cities and much, much safer than traditional helicopters in many ways.”

Rosen sees electric aircraft like what Eve is developing as the next evolution in electric vehicles. He said there were skeptics — “call them naysayers” — of those before Tesla took root in the marketplace.

But just as Tesla became a first-mover in that space, and traditional car companies raced to catch up, Rosen is betting Eve, with its backing by Embraer — which will be an 82% shareholder of Eve post-merger — could make a meteoric impact in the eVTOL sector.

“This is a huge addressable market. Studies by firms like KPMG show a three-quarters-ofa-trillion-dollars market between now and 2040,” said Jerry DeMuro, co-CEO of Eve. “It addresses some societal needs in terms of saving people their asset of time and ad-

dressing congestion in urban environments. Those factors make this market very attractive.”

The technology, social imperatives and economics of it have all converged at this point in time to create a compelling proposition, he said.

Eve is not the only company working in this space.

Airline Weekly Corp. reports that the “nascent eVTOL market is attracting attention — and billions of dollars — from airlines, urban-mobility companies, and defense departments.”

“Innovation is happening at a record pace across every industry, and aviation is no different,” Rosen said. “It will be greener, less-polluting. If you believe that, you think about who is going to be the winners in the marketplace. And you have to think Embraer will be a significant player in the marketplace.”

The partner advantage Many of Eve’s advantages, stakeholders say, come back to its partnership with Embraer.

Per terms of the SPAC merger, Embraer will lend its manufacturing capabilities plus its engineering and aerospace workforce to Eve. It also brings with it a track record of securing needed certifications for different types of aircraft.

Getting those certifications will be one of the key necessities for this business, said Robert W. Mann Jr., an aeronautical engineer and airline industry expert who provides consulting services to the aviation sector through his firm, R.W. Mann & Co. in New York.

“This all raises a lot of questions,” Mann said. For example, who insures them? Who certifies them? Which operators will be certified to operate them? When will they be integrated into the air-traffic-control safety system?

Mann acknowledges that the backing by Embraer and the expertise on the Zanite board are some of Eve’s advantages. That board is what helped sell Eve on combining with Zanite, DeMuro said.

“What this says to me is there are very interesting ideas. But like the flying car, we are going to be talking about this 10 years from now, maybe 20 years from now. At which point do the technologies coalesce to make it all feasible?”

Mann added. “It is not ‘The Jetsons.’ But will it be feasible and cost-effective from an operator standpoint? That is the ultimate issue. Unless it is cost-effective, you can’t really create a market that makes this work.”

There are undoubtedly some hills to climb, said Mann, who predicts Eve will have a long runway ahead of it to reaching viability and may need to raise additional capital.

But flying over those humps is what Eve is positioning itself to do.

And many in the marketplace are buying into it.

The transaction with Zanite, slated to close in the second quarter, values Eve at $2.4 billion and provides more than a half-billion dollars — including $237 million in cash raised by Zanite and a $305 million PIPE (private investment in public equity) of common stock at $10 per share — to further develop Eve’s UAM vehicles. Also, at deal close, Zanite will change its name to Eve Holding Inc. and will be listed on the New York Stock Exchange under the new ticker symbols “EVEX” and “EVEXW.” The PIPE deal includes some big corporate names in the aviation space, including Azorra Aviation, BAE Systems, Bradesco BBI, Falko Regional Aircraft, Republic Airways, Rolls-Royce and SkyWest Inc. Meanwhile, Eve said it has an order pipeline of about $5.2 billion, which is “comprised of 1,735 vehicle orders, via non-binding letters of intent, from 17 launch customers, including fixed wing and helicopter operators, aircraft lessors and ride sharing platform partners.”

Time is of the essence. But according to investor materials, Eve is projecting to secure necessary certifications and see entry into service by 2026.

“This market will take some time to mature, and it will likely mature more rapidly outside of the U.S.,” DeMuro said. “But at the end of the day, I think Embraer, and Eve as the spinout, will be one of the preeminent players. They have the tools and backing of an OEM to get to the finish line.”

What’s next for Zanite?

Zanite shareholders and founders will have a combined 10% stake in Eve as the merger closes. Ricci will join the Eve board at that time as well.

Eve’s U.S. headquarters won’t be in Cleveland, Rosen said, but likely somewhere in Florida, possibly Melbourne.

While this current iteration of Zanite morphs into Eve with the merger, Rosen already is thinking about a Zanite 2.0.

“It has not been determined yet, but Zanite will continue building out in the SPAC marketplace,” Rosen said. “That will still be based in Cleveland and similar to Zanite one. We hope to build out a Zanite franchise going forward.”

That means possible raising money for a second deal at some point in the future.

In the meantime, Rosen is eager to see what plays out with Eve. “As someone who just absolutely appreciates smart, talented, innovative ideas that disrupt industries, this is as exciting as anything I’ve been involved in,” he said. “To think about being part of the future of aviation as it relates to this market is just an incredible opportunity.”

Jeremy Nobile: jnobile@crain.com, (216) 771-5362, @JeremyNobile

6 | CRAIN’S CLEVELAND BUSINESS | JANUARY 10, 2022

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EVENTS

Trade shows weigh costs of future in-person events

BY DOUGLAS J. GUTH

Like every industry, trade shows have been negatively impacted by the pandemic, with programming moved online or canceled entirely.

The Cleveland Auto Show is bouncing back after a terminated Huntington Convention Center event and a planned February return to the recently reopened I-X Center. Auto show chairman Joey Huang is happy to kick off the spring car-sales season at the auto show’s traditional home, noting the venue’s massive indoor space and prime parking availability.

“In Cleveland, the No. 1 registration month of the year is always March,” said Huang, also owner of the Great Lakes Auto Network. “People are stir crazy and ready for the sun, and this is just a big event for Northeast Ohio.”

Long a source of lead-generating new business, trade shows are determining how Huang quickly the industry can return to pre-pandemic levels. With business travel not expected to fully recover until 2024, executives are beginning to understand the hit remote networking and virtual trade shows will register on future in-person attendance. Amid finding innovative ways of getting business done, planners must also ask themselves how and when they can again gather en masse.

The 2022 Cleveland Auto Show, taking place at the I-X Center from Feb. 25 through March 6, will include an array of new vehicles alongside old favorites such as Millionaire’s Row, Ride N’ Drive and the Classic Car Show. Whether attendance matches previous happenings is another question, although Huang is confident that a public craving normalcy will return in large numbers.

However, the proliferation of coronavirus variants, such as the rapidly spreading Omicron, means keeping a close watch on case numbers and hospitalizations. Any auto show masking and vaccination requirements will hinge on CDC and Occupational Safety and Health Administration guidelines as the event draws near.

Vehicle inventory shortages and fewer patrons visiting dealerships have put additional emphasis on the 2022 auto show, noted Huang.

“Test-driving a car these days is hard, because we don’t have them in stock,” Huang said. “Customers are buying cars without even trying them, so this event will be their chance. Giving people the ability to test vehicles is one reason I think the show will be so big.”

Adjusting in the face of adversity The B2B trade show market in the U.S. was worth $15.58 billion in 2019, declining to $5.6 billion in 2020. The Marketing Artificial Intelligence Conference (MAICON) — which teaches marketing pros how to use AI in their businesses — was a virtual event in 2021 after a successful 2019

Roetzer said, “This helped generate hundreds of leads for sponsors they wouldn’t have otherwise gotten.

If your business model relies on in-person events, it’s very hard to plan ahead when you don’t know if something will disrupt your business. As a company, you need those multiple revenue streams.”

Creating a great experience

Ann Handley, chief content officer at MarketingProfs, delivering a keynote address onstage at CMWorld 2021. | WETZLER STUDIOS

The general session of the successful 2019 in-person launch of the Marketing Artificial Intelligence Conference (MAICON), which teaches marketing pros how to use AI in their businesses. It was a virtual event in 2021. | MARKETING AI INSTITUTE

in-person launch.

Last year’s fully virtual conference drew about 300 attendees, with content accessible on-demand throughout the week. The AI Academy for Marketers — a separate online education program developed in 2020 — provides members access to even more supplementary content, said Paul Roetzer, founder and CEO of the Cleveland-based Marketing AI Institute.

Adjusting to create the best possible user experience did not preclude Roetzer from missing the energy of a face-to-face event. He is already planning for next August’s in-person conference, which may include masking, vaccination requirements and on-site testing safeguards.

Roetzer is also keeping an eye on costs — even providing an app for 600 attendees to confirm their vaccination status would cost $5 apiece.

Staffing shortages and cancella-

tion-related contractual liability are additional concerns Roetzer is now considering.

Generally, trade shows are expensive to put on; according to global marketing firm Inkwell, an exhibit costs about $100 to $150 per square foot of floor

those costs personally. I’m not making people pay for something they’re not getting.”

Attendance numbers limited by distancing protocols would have a direct effect on sponsorships. For Roetzer, it’s about garnering quality

“IF YOUR BUSINESS MODEL RELIES ON IN-PERSON EVENTS, IT’S VERY HARD TO PLAN AHEAD WHEN YOU DON’T KNOW IF SOMETHING WILL DISRUPT YOUR BUSINESS. AS A COMPANY, YOU NEED THOSE MULTIPLE REVENUE STREAMS.” — Paul Roetzer, founder and CEO of the Cleveland-based Marketing AI Institute

space.

“We’ll be prepared as possible, because we’ve got a great event ops team,” Roetzer said. “There is still some ambiguity in terms of liability if we cancel the event. If people wanted their money back, I’d eat

leads in the face of potentially decreased participation. In the runup to MAICON 2021, the Marketing AI Institute created AI in Action, a free online event designed to help marketers understand and apply the technology.

Content Marketing World, which bills itself as the industry’s largest gathering of content marketing professionals, held a hybrid event in September in Cleveland that drew 800 attendees on-site and another 1,000-plus virtually.

CMWorld ordinarily attracts 3,000 to 4,000 participants, a figure that Content Marketing Institute general manager Stephanie Stahl hopes to reach upon the conference’s in-person return this fall. Follow- Stahl ing 2021’s hybrid event and a fully virtual event in 2020, Stahl expects some form of online content — on-demand sessions, live-streamed keynotes and more — to be a conference mainstay.

“We learned how to create a great virtual experience — I don’t know if that will go away for a long time,” Stahl said. “We’re not just a trade show with exhibitions; we have 1012 tracks of content daily.”

High-quality leads can be generated through clever content creation, Stahl added. Custom sponsorships showcasing sustainability are a possible future highlight, while purely fun events including flip-cup challenges and karaoke contests would further liven the proceedings.

All of this preparation illuminates how much trade shows still matter, said Michael Goldberg, a venture capitalist and entrepreneur now serving as an associate professor of design and innovation at Case Western Reserve University’s Weatherhead School of Management.

“There’s a deep desire for people to connect face-to-face,” Goldberg said. “It’s not just the content of the presentation, it’s that people-to-people connection. The power of trade shows is in the connectivity.”

Although safety continues to be a top concern for event planners, it’s unknown how much the public is willing to crowd into expo halls and breakout rooms. Auto show chief Huang is certainly hopeful, citing the difficulty of building brands digitally.

“There are some manufacturers coming to us who don’t want to do the show, but that’s a mistake from my position,” Huang said. “You can build your brand by putting (a vehicle) in front of people in a neutral atmosphere. For us in Cleveland, we’ve learned that we still need the auto show.”

Contact Douglas J. Guth: clbfreelancer@crain.com

JANUARY 10, 2022 | CRAIN’S CLEVELAND BUSINESS | 7

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PERSONAL VIEW

What does success look like?

RICH WILLIAMS FOR CRAIN’S CLEVELAND BUSINESS

BY TOM SUDOW

EDITORIAL

Always next year A

t least we were prepared.

Clevelanders, who have more than a little experience with sports teams that let them down, kicked off 2022 with official confirmation that the 2021 Browns were a massive disappointment. Playoff hopes already were gone on Jan. 3 before the Browns embarrassed themselves on Monday Night Football against, of all teams, the Pittsburgh Steelers.

We didn’t need that ugly 26-14 loss to know that a Browns season that began with legitimate Super Bowl aspirations had gone spectacularly haywire, the result of injuries, unfortunately timed COVID-19 absences, poor performance (especially from, but not limited to, the quarterback), questionable coaching decisions, and hints of infighting.

That’s how the ball bounces sometimes. Doesn’t make it any easier. The season began, ironically enough, with an entertaining and highly competitive loss to the defending AFC champion Kansas City Chiefs. It was mostly downhill from there.

There’s a lesson, though, in staying grounded about what’s really important, looking forward to fixing problems and executing a plan for next year. Like any business that runs into trouble, either foreseen or unexpected, the Browns will have opportunities to address their deficiencies and to return to playoff contention in 2022. And if you’re a business owner, be glad that your challenges don’t play out so publicly, with everyone offering their two cents about what you should do, on matters from personnel to day-to-day management.

This COVID-dominated, cold January won’t feature playoff football in Cleveland, but it does have a fun and surprisingly competitive Cavaliers team that’s already well ahead of its development schedule. The Super Bowl on Feb. 13 won’t feature the Browns, obviously, but a week later, on Feb. 20, the NBA All-Start Game will be in town, giving Cleveland a chance to shine in the national spotlight — and potentially with one or more Cavaliers on the roster.

The start of the year is time for hope. We’ll pull for the Browns to pull things back together and make the 2022 season everything (and maybe more) that we wanted from 2021.

Speaking of teams

New Cleveland Mayor Justin Bibb is off to a good start when it comes to personnel. We like and respect the people Bibb is empowering with key roles and wanted to call attention to two, in particular, whose new responsibilities are illustrative of the fresh thinking we’re counting on from the new administration.

Bibb last Wednesday, Jan. 5, appointed Lillian Kuri, an architect who is executive vice president and chief operating officer of the Cleveland Foundation, as the new chair of the Cleveland Planning Commission. Kuri, who had been vice chair, will succeed David Bowen in leading the commission.

She told Cleveland.com that her new role offers an opportunity to “increase transparency and public engagement in planning, to focus on improving the public realm to make the city more livable, and to work collaboratively with the new administration,” and that her priorities include increasing public access to waterfronts and making streetscapes more bike- and pedestrian-friendly.

The pick of Kuri is “an inspired choice,” according to New York University professor Neil Kleiman, who tweeted that the selection makes Cleveland “the place to watch for design & built-environment innovation.” The city needs it — and with federal money coming in has a chance to implement strong new visions.

Also encouraging to us is the appointment of Jessica Trivisonno as senior strategist on the West Side Market. Trivisonno, who helped with Bibb’s campaign, most recently was economic development director for the well-respected Detroit Shoreway Community Development Organization.

The administration’s team dedicated to figuring out solutions for problems at the retail landmark met with tenants last Thursday, Jan. 6, in a key first step to building trust and devising a strategy to make the landmark work for everyone. The market has some big challenges, but with energy, focus and commitment from the administration, they can be met. Trivisonno is a good point person to get that process started.

Executive Editor: Elizabeth McIntyre (emcintyre@crain.com) Managing Editor: Scott Suttell (ssuttell@crain.com) Contact Crain’s: 216-522-1383 Read Crain’s online: crainscleveland.com

What does success look like? I was recently the president of an international association and one of my good friends and former leaders at P&G would challenge me with that question as we looked to develop a new program or innovate: What does success look like? The question is asking, what do you want to accomplish? What are your goals for the program? What impact will it have? The Sudow is the question can force you to truly articulate director of the what your goals and vision are for the Burton D. particular innovation or program in a Morgan very concrete manner.

Center for Success can look much different. As Entrepreneurship an example: In baseball, a player’s vision at Ashland for the season could be to hit .300, which University. means a failure rate of 70%. In football, a quarterback who completed only 30% of his passes would be considered a failure. A basketball player who converted on 70% of his free throws is considered good but not great. So in sports, success or failure can be judged by personal statistics and, of course, wins and losses. The question to the athlete is, what do you need to improve to get to your success vision? What will it take?

As one embarks on a new plan or product or innovation, start by asking what success will look like. What is it that you hope can be accomplished — and build your efforts toward achieving that success. Is it to sell 10% more or 50% more? Is success to have 50 people come to an event or 5,000? You need to determine what is not only successful, but achievable. In doing this, you can create an actionable plan with milestones that will help you achieve your goals.

The question forces you to start from an end goal and then develop the plans and programs to achieve that goal. This engages you in a process to build a strong concept. If this is what success will look like, this is what I need to do to get to that point. Build your plan from there and know what hurdles and bumps in the road that you may encounter. Do you know who your competitors are? Can you articulate what makes your idea unique? Think about who cares and who you need to care. Or as Wendy Kennedy writes, “So what? Who cares? Why you?”

Go through a planning process that takes your concept from an early phase through to a finished one, so you can truly arrive at your concept of success. Know when to say, “This is going to work” or “This is not going to work” — and be prepared to walk away if it becomes impossible to achieve your vision of success.

Another way to frame the question is, “If Crain’s were to write a story in a year or five years, what do I hope that story says?” I have gone through the exercise to actually write that story and then to ask myself: What will it take to achieve a positive story like that?

What success looks like is not only a business question; it is one we can ask ourselves. As we begin 2022, it is a time for personal reflection. We can ask ourselves what success looks like. I was once asked if I ever thought about my obituary and what would I like it to say. So, my first response was: “Tom Sudow dies at the age of 250.” When one looks back at your life, will it be about your work? Your volunteer life? About your family and generosity? Are there things you can change today to get to the person you want to be?

In your business or personal life, asking the question of what does success look like can force us to take a step back and slow the process down to really understand our goals and objectives and to articulate in a graphic manner what it is we hope to accomplish. By doing this, we can plan accordingly to achieve what we want to accomplish.

So, I ask you: What does success look like?

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 ClevEdit@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.

8 | CRAIN’S CLEVELAND BUSINESS | JANUARY 10, 2022

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OPINION

WE’RE LOOKING FOR OUR PERFECT FIT!

PERSONAL VIEW

The middle market challenge for growth

BY JIM GILMORE

Middle market companies enjoy a uniquely advantageous position: they are small and agile enough to quickly innovate while they simultaneously have the nimble resources to effectively support growth.

Why, then, do some find themselves stalled, unsure of how best to move forward?

Sometimes, when middle market companies experience early success, they can end up believing all they need to do to succeed in the future is to replicate what has worked in the past. But these old strategies and methods often prove less effective as marketplace dynamics bring on new challenges.

One path forward for these companies is to rethink their basic relationships with customers. Businesses must understand that an abundance of opportunities exists to create value in new ways — if only they view their enterprises within the broader context of how the very nature of value creation is changing over time.

Think more richly about how and why customers value any economic offering.

First, define what’s truly valued by your customers

Peter Drucker famously said, “Customers always buy something different from what a company thinks it’s selling.”

Are you providing things for free to customers that you ought to be charging for? IBM, whose slogan used to be “IBM means service,” made a name for itself not just selling computers, but by reassuring customers that they could trust IBM to attentively service the goods it sold. For a long time, IBM offered excellent service to sell more goods, and that model worked well for them.

Until, that is, competition heightened — HP, Sony and especially Dell, with its on-demand computer-making service.

Legacy companies often are selling the means when there’s an opportunity to charge for the ends. IBM came to realize that its services were actually what its clients most valued, and it changed its business model to charge for services, sometimes even buying clients’ computer goods in exchange for extended service contracts.

Figure out what are you really offering

Here’s another example of a business whose services were valued by its customers more than goods.

At an American Booksellers conference, I was approached by a woman seeking advice for her faltering book business. She sold books to public school systems, visiting the school librarians, analyzing their collections and making specific recommendations for which books the schools should buy.

I probed further and learned she

-TIMEand RESPONSIVE, REAL charged nothing for this service, COMMUNICATIONS despite the substantial time and ef-

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fort, schools all too often took her recommendations but bought the books elsewhere. (Can you say Amazon!?) My advice: Start charging a fee for what was most valued, the diagnostic services.

Gilmore is an assistant professor of design and innovation at Case Western Reserve University’s Weatherhead School of Management.

Efficiently serve customers uniquely

Once a company realizes what is most valuable to its customers, it can look for new ways to increase value in its offerings. Often, this is best accomplished through customization.

Stan Davis, who first identified the concept of Mass Customization, once advised, in response to an inquiry about how much to customize, “You should customize as much as necessary and as little as possible.”

Every customer is unique. We should know this. Yet companies tend to seek “one best way” to offer value to customers, when opportunities abound to identify areas to customize. But be careful. Mass customization does not mean doing everything for everyone. One would go broke doing that. Rather, it’s identifying what you should customize, that if you did would yield the greatest value for your customers.

Turn services into experiences

Customize a good, and one automatically turns that good into a service. Similarly, customizing a service automatically turns that service into an experience. Those experiences are a distinct form of output, as distinct from services as services are from goods.

Goods are tangible things, and services are intangible activities, but experiences are memorable events — ones for which companies can command a fee.

Time is the currency of experiences. The delivery of goods and services often only saves customers time, while experiences offer time well spent. Finding ways to charge for such time represents the next frontier for growing revenue, introducing whole new ways to relate to customers and discover and address their unmet needs.

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As a firm providing wealth management services to clients, UBS Financial Services Inc. offers investment advisory services in its capacity as an SEC-registered investment adviser and brokerage services in its capacity as an SEC-registered broker-dealer. Investment advisory services and brokerage services are separate and distinct, differ in material ways and are governed by different laws and separate arrangements. It is important that clients understand the ways in which we conduct business, that they carefully read the agreements and disclosures that we provide to them about the products or services we offer. For more information, please review the PDF document at ubs.com/relationshipsummary. © UBS 2020. All rights reserved. UBS Financial Services Inc. is a subsidiary of UBS AG. Member FINRA/SIPC. CJ-UBS-2031105874_4 Exp.: 10/31/2021

Gilmore is co-author of “The Experience Economy.” He is also on the faculty of a new Weatherhead Executive Education program starting this month to help established middle market companies navigate change, called Leading Next Level Growth: Growth Strategies for Established Middle Market Companies.

LETTER TO THE EDITOR

In appreciation of Bishop Anthony Pilla Bishop Anthony M. Pilla was a significant figure in the history of Cleveland. He was respected and appreciated locally and nationally as a leader in the religious, cultural and Italian communities. He was a man who embraced all those he encountered, regardless of race, religion or status.

During the 1970s, population losses reduced membership in Cleveland’s ethnic parishes. Bishop Pilla began meeting with clerical and lay leaders to discuss how to preserve these vital institutions. As an Italian raised in a Catholic home and educated in Catholic schools, he understood the importance of parishes as neighborhood anchors and stabilizing forces in the community.

He demonstrated his concern by building social service facilities in Cleveland’s East Side neighborhoods, notably the St. Martin de Porres Family Center in Glenville and the Fatima Family Center in Hough. Some challenged his decision to spend Catholic dollars helping non-Catholics, fortunately to no avail. Bishop Pilla’s theology of helping the urban community became Church

in the City, which was acclaimed nationally. His courage and vision were acknowledged by the United States Conference of Catholic Bishops , which appointed him president in 1995.

Thanks to the leadership of Bishop Pilla, the Catholic Education Endowment Trust, the Alleluia Ball and other charitable resources support Catholic elementary and secondary school education in Cleveland. In 2018, the Catholic nonprofit Partnership Schools of New York expanded to Cleveland. Led capably by executive director Richard F. Clark, the Cleveland Partnership manages Archbishop Lyle and St. Thomas Aquinas elementary schools. In 2022, it will assume responsibility for Metro Catholic as well. The Catholic elementary schools in the city of Cleveland and Cleveland Central Catholic are open and operating today thanks largely to the efforts of Bishop Anthony M. Pilla. We are so very grateful for all that he has done for so many during his exemplary and holy life.

Dominic L. Ozanne Cleveland JANUARY 10, 2022 | CRAIN’S CLEVELAND BUSINESS | 9

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CLIMATE-CONSCIOUS GROWERS A Solon-based agtech business is intent on solving the interrelated challenges of climate change and food security.

the —a crui nies the cha lock A diffe com one

PAGE 12

BUSINESS AND CLIMATE CHANGE

GETTY IMAGES/ISTOCK PHOTO

'Go

‘PLANET, PROFIT AND PEOPLE’ Companies can work to reduce climate change risk and increase opportunities

BY RACHEL ABBEY MCCAFFERTY Doing whatever a company can to tackle climate

change is the “right thing to do,” said Ellis Jones, vice president and chief sustainability officer at Goodyear Tire & Rubber Co. in Akron. But it’s also just a critical component of doing business today. • There are risks to mitigate, but there are also opportunities. Innovation to mitigate the effects of climate change could lead to new business models, he said. It can lead to new products. • “The opportunities that can be unlocked when you think about climate change, I think they’re limitless,” he said. • Goodyear is working toward achieving net-zero greenhouse gas emissions by 2050, and it’s taking a variety of steps to achieve that. For example, the company has committed to transitioning its European plants to renewable energy in the next 24 months, Ellis Jones said.

 Goodyear says not only will it become a net-zero emitter by 2050, but it will enforce the standard across its supply chain, with many cuts coming by 2030.

Page 14

ment, economics and social,” she said, but she prefers to use “planet, profit and people.” And all are important to consider in a sustainability strategy.

Rachel Jones, vice president of energy and resources policy at the National Association of Manufacturers in Washington, D.C., said sustainability can be understood as a “three-legged stool.” Some people describe those legs as “environ-

Instead of just trying a new approach because it’s the latest trend, companies need to consider how it fits into their larger strategy, Rachel Jones said. For example, she often hears that workforce is a challenge for manufacturers, so it’s worth looking at whether the change they’re considering will improve

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It base has “goo Rick ronm doin ness abil avoi and mon “L bilit T env mor effo ergy rent in 2 tech rofit ficie imp ene F duc gy p 42% 50% P carb mea ene wha mak may bine new plan ene Th inte con lor sup A

FOCUS | BUSINESS AND CLIMATE CHANGE

y.

the workplace for their employees — and employees they want to recruit. On the other hand, companies need to make sure they have the workforce to implement that change first. There are a lot of interlocking factors at play.

And strategies are going to look different for different sectors and companies, she said. There’s not a one-size-fits-all approach.

GETTY IMAGES/ISTOCK PHOTO

'Good business sense' It’s important to Mayfield Heightsbased Parker Hannifin Corp., which has facilities across the globe, to be “good environmental stewards,” said Rick Taylor, vice president of environmental health and safety. But doing so also just makes “good business sense,” he said. Taking sustainability seriously helps companies avoid compliance issues, engage and attract employees and save money.

“Less waste, less cost and less liability to the company,” he said.

Taylor has been working in the environmental space at Parker for more than 30 years. The company’s efforts to significantly reduce its energy consumption — and, concurrently, its carbon footprint — began in 2010. The motion and control technology company worked to retrofit buildings with more energy-efficient lighting and HVAC systems, improve roofs and reduce areas of energy loss.

From 2010 to 2020, Parker reduced its energy intensity, the energy per unit of sales it was using, by 42%, Taylor said. For carbon, it was 50%.

Parker’s next big goal is to reach carbon neutrality by 2040. That means the company’s renewable energy credits will be able to offset whatever energy it needs to use to make products, Taylor said. Parker may do that by installing wind turbines or solar panels to generate renewable energy on-site at some plants, or by purchasing renewable energy from third parties for others.

The company’s plan focuses on internal factors Parker can directly control like electricity and fuel, Taylor said, as well as the company’s supply chain.

And while the carbon footprint is

’

Eaton has long considered sustainability part of its values. Seen here are solar panels at Eaton Center in Beachwood. | DAVID SUNDBERG/ESTO

getting the headlines, Parker’s environmental strategy stretches far behind energy usage to include factors like chemical usage and atmospheric emissions, Taylor said. At a corporate level, Taylor said the company gives employees guidelines and a “toolbox” to work toward those larg-

that engagement is critical.

“They’re our hands, feet, generators of ideas,” she said. “We can’t accomplish anything really without the participation of our employees.”

Employee engagement is an intentional part of the company’s sustainability plan. By 2030, Eaton wants to have re“THE OPPORTUNITIES THAT CAN BE duced carUNLOCKED WHEN YOU THINK ABOUT CLIMATE bon emissions from CHANGE, I THINK THEY’RE LIMITLESS.” its opera— Ellis Jones, vice president and chief sustainability officer tions by at Goodyear Tire & Rubber Co. 50%. It also wants its er goals; each of Parker’s facilities operations to be carbon neutral by has its own environmental manage- that time, for its manufacturing ment program. sites to be zero-waste-to-landfill and for 10% of its manufacturing sites to be certified as zero water Targeting employee discharge. engagement But the company’s plan also outThat localized approach works at lines the importance of engaging its global power management compa- employees, committing to volunny Eaton, too.

Eaton, which is based in Ireland but has substantial operations in Beachwood, has put a focus on engaging employees where they live and work. And that applies to its environmental measures as well.

For example, one of the company’s current goals that has resonated with employees is turning its manufacturing sites zero-waste-tolandfill, said Karen Lynn, Eaton's vice president of corporate EHS programs and sustainability. And

teer time and training and development, as well as maintaining employee engagement scores of at least 80%.

The plan includes the role Eaton can play in helping its customers achieve sustainability goals, too.

That’s key in the big picture.

Finding the right words Taylor of Parker Hannifin noted that it’s Parker’s products, and how their customers use them, that will have a big impact on the environment — more than what it can do internally. A lighter airplane part, for example, could reduce the fuel that plane needs for decades.

Goodyear’s customers are also driving changes. Some are looking for products made in zero-emission factories, said Ellis Jones, while others want zero-emission products, which also takes factors like shipping into consideration. That re-

quires working more closely with suppliers and transportation companies.

At their heart, sustainability measures are nothing new. Rachel Jones of the National Association of Manufacturers shared a story about a discussion she had with a brick manufacturer that had been around for nearly 200 years. The manufacturer, she said, didn’t think they had a sustainability plan. But after Rachel Jones started giving examples of what those plans can entail, like water and resource management, a light bulb went off. That had all been part of the company’s approach since its founding.

“I think, sometimes, the biggest challenge is finding the right words to communicate with each other and to understand each other,” Rachel Jones said.

Rachel Abbey McCafferty: (216) 771-5379, rmccafferty@crain.com

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Farmers getting paid for green-friendly practices Solon company encourages growers to sequester carbon

BY DOUGLAS J. GUTH

Getting paid to sequester carbon via green-friendly farming practices appears an easy decision for growers.

However, less than 5% of U.S. farmers are actually enrolled in carbon programs due to cost issues or ineligibility.

Smoothing this path for the nation’s cultivators is Locus Agricultural Solutions, a Solon-based agtech business intent on solving the interrelated challenges of climate change and food security. Locus AG’s carbon farming program — called CarbonNOW — already compensated farmers for engaging in carbon-reducing agricultural practices. To bring more growers on board, the company eliminated program costs and offered upfront payments that earn participants a minimum of $48 per acre over a four-year commitment.

Announced in November, the reframed CarbonNOW effort also enables eligibility for farmers using cover crops or other traditional greenhouse-gas mitigation practices.

Growers employing these methods can add Locus AG’s soil probiotics as an approved practice change, qualifying them for the carbon market and amplifying the amount of carbon pulled into the soil.

Utilizing Locus AG’s Rhizolizer or Pantego probiotic products qualifies as a new regenerative farming practice, one that improves soil health, increases yields and accelerates carbon sequestration. Whereas typical conservation efforts like livestock grazing save up to one ton of carbon dioxide per acre, the company’s probiotics sequester two to three tons of CO2 for common crops like corn. Additionally, corn yields are increased by eight to 10 bushels per acre when harnessing Locus AG’s environmentally sound innovation.

“CarbonNOW is the first farming approach that pays people up front for using technology that sequesters carbon,” said Locus AG co-founder Andrew Lefkowitz. “We launched it for row crops like corn, and have gotten a good reception.”

Farmers hesitant to join carbon-related programs often cite payments that don’t cover program fees or practice change costs. Landowners are further dissuaded by burdensome data collection requirements that Locus AG now handles at no cost. Row crop farmers also receive bonuses for additional carbon saved using the company’s soil probiotics.

“What we’ve done with our business is find pain points for farmers, then get them bio-solutions to solve those pain points,” Lefkowitz said.

Better living through biology Locus AG’s core scientific capabilities derive from parent company Locus Fermentation Solutions (Locus FS), a green technology entity with divisions around animal nutrition and safe food and cosmetics ingredients.

With 115 employees in five states,

Above: A cornfield in Nebraska being treated with Locus AG’s Rhizolizer soil probiotics.

Left: Locus AG soil probiotics utilize novel strains designed to improve soil health and root growth and increase carbon sequestration. | LOCUS AG PHOTOS

the business replaces toxic chemicals with bio-based agriculture solutions.

The firm’s problem-solving products employ biology to stimulate greenhouse-gas removal in additional industries such as livestock and fossil fuel.

Such ambitious goals are the product of a new era of agricultural biotech. Locus FS’s Rhizolizer product,

for example, was designed to increase the yield of irrigated crops.

Considering those plants soak up carbon dioxide, the company’s hightech solution also fights emissions cited as a factor in global warming.

The firm’s “better living through biology” philosophy extends to nitrous oxide emissions in agriculture.

Nitrogen-based fertilizers can leak

into bodies of water, potentially contaminating drinking water and resulting in preventable health conditions.

According to company data, nitrogen-centered fertilizers account for 79% of all nitrous oxide emissions in agriculture — not to mention 10% of all annual global greenhouse-gas output. Locus AG soil probiotics reduce these emissions by up to 77% in corn, per field trials conducted by South Dakota State University and Texas A&M University.

All this crucial work began when Lefkowitz, a career corporate attorney and entrepreneur, met a microbiologist and fermentation scientist named Sean Farmer at a California synagogue. The pair started Ganeden Biotech in 1997, then moved the firm’s operations from California to Northeast Ohio.

Lekfowitz Lefkowitz, who grew up in Orange, helped kickstart Locus Fermentation Solutions in 2014. Another operating company, Locus Bio-Energy Solutions, creates products for the oil and gas industry. For instance, a product that liquefies paraffin reduces pipeline clogging at oilwell sites and replaces the harmful chemicals previously used in the process.

Bluesource, a Utah-headquartered broker of competitive carbon credit purchases, partnered with Locus AG to assist growers interested in the CarbonNOW program. Bluesource manager of carbon solutions Isaac Smith said the two payments the program provides participants is unique within the industry.

“Similar programs offer farmers only a single payment,” Smith said in an email. “Once growers are signed

up for CarbonNOW, they’re paid upfront by the acre. They also receive a share of revenue based on individual performance after the carbon credits are verified.”

A vital pivot point As opposed to fertilizers that only supply nutrients to soil, probiotics from Locus AG enhance the soil’s physical condition through improved structure and water absorption. Pairing these products with practice changes can increase carbon sequestration in the long term.

Smith said, “This program can also drastically reduce the need for nitrogen fertilizer, which positively impacts the release of nitrous oxide to air and nitrates leached into the water table.”

The CarbonNOW program’s new parameters coincide with the USDA’s Climate-Smart Agriculture and Forestry Partnership Initiative, a pair of plans that support incentive-laden conservation projects on working lands.

Ultimately, agriculture is a vital pivot point in countering climate change, Lefkowitz said. Simply using Rhizolizer on a quarter of the 400 million acres of U.S. cropland can keep up to 818 million tons of carbon from entering the atmosphere. To that end, the company co-founder is poised to continue this work well into the future.

“We’ve got people here who are super bright, super accomplished, and attracted to the business,” Lefkowitz said. “For all of us here, there’s a legacy in what we’re doing.”

Contact Douglas J. Guth: clbfreelancer@crain.com

12 | CRAIN’S CLEVELAND BUSINESS | JANUARY 10, 2022

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FOCUS | BUSINESS AND CLIMATE CHANGE

Rubber industry ramps up sustainability efforts

BY SAM COTTRILL/RUBBER NEWS

According to the United Nations' Intergovernmental Panel on Climate Change, the Earth is 1.1°C warmer than it was in the 1800s and is "not on track to meet the Paris Agreement target to keep global temperature from exceeding 1.5°C above pre-industrial levels."

"That is considered the upper limit to avoid the worst fallout from climate change," the organization states on its website.

Recent climate reports reveal a bleak future for the planet. But manufacturers and suppliers in the rubber industry display confidence in doing their part to achieve a more sustainable future.

Players big and small in the industry have heeded the call for carbon neutrality by 2050, identifying initiatives to reduce their carbon footprints, such as using renewable energy for powering operations, seeking alternative materials for eco-friendly products, establishing a circular economy with recycled materials and even giving back to local communities.

In October, silicone supplier Elkem Co. rolled out its "road map" to sustainability that included goals to reduce CO2 emissions by 28% from 2020 to 2031 and increase the use of renewable or recycled products by 39%, aiming for net-zero emissions by 2050.

The Norwegian company followed up with news of its investment in the "world's first carbon capture pilot for (silicon) smelters."

"Elkem aims to be part of the solution to combat climate change — and to be one of the winners in the green transition," Elkem CEO Helge Aasen said in a statement, adding that the company aims to shape "a better and more sustainable future."

Testing instrument supplier Montech GmbH, which already runs its Buchen, Germany-based factory entirely with renewable energy, told Rubber News that it's seeking a 100% recycling rate. To achieve this, the firm is looking at several solutions, including minimizing process oils, reusing treated wastewater, recycling all waste material and upgrading machinery to recover energy.

Global Rubber Industries (Pvt.) Ltd., a Colombo, Sri Lanka-based specialty tire maker, rolled out several initiatives to establish an environmentally friendly manufacturing process. This includes using waste material to generate thermal energy, using solar power for electrical energy, recycling water and planting trees, reusing and reclaiming rubber, and more.

Other major tire makers, such as Continental A.G., Bridgestone Americas Inc., Michelin, Hankook Tire & Technology, Pirelli & C. S.p.A. and many more, have made similar commitments.

Conti, 150 years in the game with 21 business units and a carbon footprint of 125 million metric tons annually, seeks to be 100% carbon neutral, 100% emissions-free, achieve a 100% circular economy and obtain a 100% responsible value chain — all by 2050.

Likewise, Bridgestone and Nokian Tyres plc are harnessing the

Bridgestone said it’s targeting a reduction of total CO2 emissions by 2030 for carbon neutrality by 2050. | TORU HANAI/BLOOMBERG

As climate change impacts hevea NR harvests, the desert crop will prove to be a valuable alternative that helps "diversify the world's natural rubber supply and help establish a more sustainable and predictable business path," Thompson said.

Michelin aligned itself with the "Race to Zero" global climate campaign in the fall to support the Paris Agreement goal of limiting the global temperature growth to 1.5°C. The movement, spearheaded by several organizations including the Science Based Targets Initiative, U.N. Global Impact and We Mean Business, urges political leaders to make the limitation an attainable “AS A RENEWABLE CO2-FREE POWER goal.

SOURCE, SOLAR POWER HAS A And in April, French tire SIGNIFICANTLY SMALLER IMPACT ON THE the maker contracted ENVIRONMENT COMPARED TO OTHER with U.S. engineering firm McPOWER-GENERATION METHODS.” Dermott Interna— Andrew Thompson, director of sustainability tional Ltd., policy for Bridgestone Americas bringing it closer to its goal of producing 100% sustainable tires by solar and/or wind energy.

Nokian, which claims to be the 2050 by producing styrene from first to power a manufacturing facil- plastic waste.

In November, leaders of 10 tire ity with solar power, uses solar for its administration and manufacturing manufacturing companies — infacilities in Dayton, Tennessee, cluding Bridgestone, Goodyear, Miachieving Leadership in Energy and chelin, Kumho Tire, Pirelli SumitoEnvironmental Design (LEED) v4 mo Rubber and more — met to validate their ongoing mission of certification for the site.

The U.S. Green Building Council sustainability and to discuss the awards LEED certification to com- production of a website to detail TIP panies that exhibit some of the high- goals and progress on tire and road est levels of efficiency and sustain- wear particle research, and to share best practices for end-of-life tires. ability.

Scrap tires and recovered carbon Bridgestone and Nokian also point to a desert shrub, guayule, black have stepped to the forefront which yields a natural rubber latex of sustainability initiatives.

The U.S. Tire Manufacturers Assonearly identical to hevea NR. power of the sun to achieve their goals of carbon neutrality. Bridgestone said it's targeting a reduction of total CO2 emissions by 2030 for carbon neutrality by 2050.

"As a renewable CO2-free power source, solar power has a significantly smaller impact on the environment compared to other power-generation methods," Andrew Thompson, director of sustainability policy for Bridgestone Americas, previously told Rubber News.

And in July, Bridgestone Corp. converted four tire plants in Japan to use 100% renewable sources for electricity using hydro, geothermal,

ciation voiced its support of the approximately $1.2 trillion 2021 Infrastructure Investment and Jobs Act, signed into law by President Joe Biden on Nov. 15.

With the support of this bill, the association is pushing for the use of reclaimed scrap tires in ground and crumb rubber applications, increasing its use in asphalt and stormwater management.

"We will see a major uptick in crumb rubber going into roads," said Dick Gust, former president of national account sales and director of government affairs for Liberty Tire Recycling LLC of Pittsburgh and newly named Tire Industry Association CEO. "We have a distinct advantage with this infrastructure bill to where we can build these roads with rubber-modified asphalt. The material is less expensive, and it builds a better road."

As for carbon black, suppliers like Birla Carbon, Tokai Carbon and Cabot Corp. have made their commitments to sustainability.

Birla said in September that it plans to be carbon-free by 2050, with efforts focused on circularity with its "Sustainable Carbonaceous Materials" program.

Orion Engineered Carbons this summer launched Ecorax Nature 100, a product derived from renewable, plant-based feedstock.

In December, Cabot pledged to be carbon neutral by 2050 by following SBTI guidelines. The Boston-based company has an interim goal of reducing emissions by 20% by 2025, compared with 2005. In a Dec. 2 news release, the company said it already has realized 77% of that goal.

Cabot also completed an emissions reduction project at its Frank-

lin, Louisiana, plant last spring. The $85 million project, the company told Rubber News, will reduce daily NOx and SO2 emissions by as much as 20 tons and recover waste heat to generate about 50 megawatts of power — without creating additional emissions.

But sustainability is about more than reducing the carbon footprint.

Canadian carbon black manufacturer Cancarb Ltd. stepped up its community outreach amidst the ongoing COVID-19 pandemic by partnering with Medicine Hat Food Bank of Alberta to distribute food to residents in need. The company also purchased a greenhouse where it grows produce to donate to the food bank.

And a Philadelphia startup proved that even small businesses can make a difference, one tire at a time.

Rodney Christian, founder of tire recycling startup Recycledelphia, is investing in his neighborhood with scrap tire education, community beautification and providing opportunity to those who may be "underskilled and underemployed," Recycledelphia CEO Kimberly Mann told Rubber News.

The Philly startup has a three-year plan to educate the community on proper scrap tire disposal and to redirect as many scrap tires as it can to recycling facilities. Recycledelphia said it's aiming to obtain the licensing and equipment it needs in the next three years to recycle the tires it collects and produce its own products.

Sam Cottrill is the online content editor at Rubber News, a sister publication of Crain's Cleveland Business.

JANUARY 10, 2022 | CRAIN’S CLEVELAND BUSINESS | 13

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FOCUS | BUSINESS AND CLIMATE CHANGE

$180B green-debt boom grows faster than its impact

E

BY BLOOMBERG

BY J

The green-debt market is growing at a faster pace than the real-world projects it was created to support, thanks to some financial engineering.

While no official estimate exists for the difference between green finance and actual green business, a growing chorus of auditors, researchers and climate activists warns that the numbers provided by bankers offer an exaggerated picture of their role in fighting climate change.

“Financial institutions can paint a picture of themselves which makes their contribution to the climate transition more meaningful than it actually is,” said Stanisław Stefaniak, a sustainable finance researcher at the Warsaw-based think tank Instrat.

The concern centers on the reselling of green loans, whereby the finance industry’s contribution to an underlying project gets counted as often as the original debt is refinanced. After issuing green loans, bankers can bundle them into a green bond that can then be sold on to another financial institution.

Both can claim they are financing the climate transition.

The accounting conundrum means the amount of green financial assets on banks’ and asset managers’ balance sheets outstrips real-world green capital expenditures. In 2021, financial institutions printed a record $180 billion in green bonds, more than any other private sector.

“It is difficult to put a number on the level of double counting that will happen due to the private nature of the loan market,” said Maia Godemer, a sustainable finance analyst at BloombergNEF. The “caveat,” however, is that we risk ending up with a “brighter picture about the actual decarbonization that is enabled by credit institutions,” she said.

The repackaging and restructuring of debt is a well-established and

Concerns center on the reselling of green loans, whereby the finance industry’s contribution to an underlying project gets counted as often as the original debt is refinanced. | AMIR HAMJA/BLOOMBERG

Green boom

Global sales of green bonds from financials more than doubled last year.

2021 $178.6B 2020 $82.3B 2019 $78.6B 2018 $56.2B 2017 $37.7B 2016 $35.6B 2015 $10.9B 2014 $6.5B 2013 $1.5B SOURCE: BLOOMBERGNEF; NOTE: 2021 DATA AS OF NOVEMBER

fully legal form of financial engineering. Though there are examples to show that such models can backfire if applied without restraint

CRAIN’S CLEVELAND BUSINESS GRAPHIC

— the subprime mortgage meltdown being a case in point — rebundling debt can also add liquidity and bring more stakeholders into

a market to help it grow.

Since banks are under pressure from regulators, particularly in Europe, to make their lending greener, this kind of refinancing serves them well. But the disconnect from actual green business may complicate efforts to track their contribution to the urgent decarbonization needed to avoid a climate catastrophe.

“If the bank has a legitimate exposure that it is able to report but then sells or repackages the loan, there is a risk that the purchaser getting the credit could be viewed as benefiting from financial engineering as opposed to representing the sustainable money going into the real economy,” said Tim Conduit, a partner at Allen & Overy. “It is a question of how the different green exposures are reported.”

Policymakers are starting to counter this potential for greenwashing in the debt market. Proposed amendments to the European Union’s green bond standard

include a clause that would prevent “the creation of green bonds out of thin air” by continuous refinancing, according to Paul Tang, a lawmaker responsible for guiding the legislation through the European Parliament.

Wes Bricker, who co-leads PwC LLP’s trust solutions practice, says that if the EU’s goal is to use the green asset ratio reported by banks “to identify the volume of investment into green projects so that policymakers and society can understand if we are transitioning at a sufficiently rapid pace, we can get an inaccurate signal by inflating.”

“It depends on what we want from that number, who is using it and for what purpose,” Bricker said.

Even established asset classes such as green bonds have a questionable climate impact. They often provide money to refinance completed green projects, and the label doesn’t oblige the issuer to use the freed-up capital on another green project. And last year saw the emergence of green derivatives and repos, which regulators have warned may be prone to greenwashing as they race to design a rulebook for such products.

The EU’s regulatory packages are global in scope, and affect non-EU firms if they target clients in the bloc. The idea is to steer capital away from activities that hurt the planet and into projects that protect the environment and social justice.

Frédéric Hache, who heads the Brussels-based Green Finance Observatory, says European policymakers should be guided by the vision articulated during the climate summit in Scotland last year. He proposes that any bank refinancing its green loan book via green securities not count the loans toward its green asset ratio.

“COP26 has recently highlighted the crucial importance of avoiding the double counting of carbon credits for environmental integrity and credibility purposes,” he said.

“The same applies to green claims.”

Goodyear driving toward zero greenhouse emissions by 2050

BY DAN SHINGLER

Goodyear Tire & Rubber Co. is getting greener.

The big Akron tire and rubber company said last month that it’s set a goal of reaching “net-zero value chain greenhouse gas emissions by 2050.”

Now, you might be asking yourself, “What the heck does that mean — and is that as good as the net-zero emissions everyone always brags about?”

While a zero-emissions pledge often means that a company won’t emit greenhouse gases with its own operations, a value-chain pledge generally means that a company will control not only its own direct emissions, but those of its supply

chain as well.

Those indirect sources of pollution are often referred to as Scope 3 emissions, and according to the U.S. EPA, they often represent the majority of a company’s total greenhouse-gas emissions. Scope 1 emissions are linked to a company’s operations, and Scope 2 are emissions that result from a company’s power purchases.

Goodyear plans to cut them all, and much earlier than 2050.

“Using 2019 as a base year, Goodyear is committed to reducing its Scope 1 and 2 emissions by 46% by 2030 and relevant Scope 3 emissions by 28% over the same time frame,” the company said in a news release.

Goodyear is one of more than

1,000 companies participating in the Science Based Targets Initiative, a collaboration among the international nonprofit CDP (formerly known as the Carbon Disclosure Project), the United Nations Global Compact and the World Resources Institute.

Akron’s industrial giant will submit its specific 2030 and 2050 targets to the SBTI for validation in 2022, Goodyear said in its release.

But it’s already been taking steps to cut its emissions.

The company says it’s on track to operate with 100% renewable energy at its facilities across Europe, the Middle East and Africa by the end of this year. It also says it’s reducing emissions generally by increasing vehicle efficiency with new tire

14 | CRAIN’S CLEVELAND BUSINESS | JANUARY 10, 2022

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FOCUS | BUSINESS AND CLIMATE CHANGE

Expansion drives organic growth for Rust Belt Riders

BY JUDY STRINGER

He also said Shaker is in ongoing discussions and has pursued “various grant opportunities” that would allow the city to take a “a more circular approach to food waste,” possibly by composting community gardens and city planting beds with RBR’s soil blends that incorporate food waste from residents and businesses.

“The fire department does receive some (Tilth) in the spring for use in the garden at Fire House No. 1,” Peters said.

Daniel Brown and Michael Robinson didn’t necessarily set out to create a circular business when they launched Cleveland-based Rust Belt Riders in 2014.

The duo wanted “to be farmers,” Brown explained, and started hauling restaurant food waste — via bicycles, at first — to produce the organic compost they needed. In 2018, RBR introduced its Tilth Soil brand for other growers.

The soil mixes range from potting and raised-bed blends for home gardeners to screened compost for commercial use. Consumers can buy them online or from area Kurtz Bros Landscape Supply Centers, but the majority of sales are direct to farmers — which, Brown said, is more aligned with RBR’s mission to have a positive impact on “our food system.”

“Our focus is on serving the smallscale organic farmer who’s selling at the farmers markets and into the restaurants that we’re picking (food waste) up from,” he said. “It’s a really fun sort of closing of the loop.”

Compost to co-op

'Continuity of experience' The upstream extension made business sense, too.

“It’s a very dim view of ... razor-thin margins if all you’re doing is just collecting,” Brown added. “So the ability to manufacture value-added goods from the materials that we’re bringing in allows us to both grow access to our (waste) diversion services while also diversifying our revenue.”

Tilth sales currently account for one-third of the company’s nearly $1 million in revenue, according to Brown, and soil mix earnings are outpacing those from commercial collection or its recently expanded residential service.

In addition to 20 drop-off bins, where, for $10 per month, Northeast Ohio residents can dispose of household food scraps, RBR now provides a $30-per-month weekly curbside service for residents of Cleveland

Rust Belt Riders now provides a $30-per-month weekly curbside service for residents of Cleveland and surrounding communities.

From left: Michael Robinson, Nathan Rutz, Daniel Brown, Zoe Apistorf and Jesse Williams (on the back of the truck). | GARY YASAKI

and surrounding communities.

Brown said that while the team had “dipped its toes” into residential collection prior to the pandemic, COVID accelerated that move as more people were cooking at home and thinking about sustainable ways to dispose of food scraps.

“A lot of these people started this (composting) practice at work in offices of our commercial clients, like banks and tech companies who offer food service and catering to their

employees. Once everything transitioned to a more remote environment, we wanted to bring that continuity of experience,” he said.

Roughly 2,000 users subscribe to one of RBR’s two residential collection options. That includes about 100 Shaker Heights residents, according to Michael Peters, the city’s sustainability coordinator. Shaker is home to two of the company’s residential drop-off sites and was the first community where RBR piloted residen-

Goodyear said it’s increasing its use of more environmentally friendly raw materials, with a goal of creating a maintenance-free tire made of 100% sustainable materials by 2030. | GOODYEAR TIRE & RUBBER CO.

tial curbside collection.

Peters said partnering with Rust Belt helps Shaker “reduce the amount of waste we are sending to the landfill, which as a city we pay for.” He calculates city residents and Shaker businesses that participate in RBR’s collections diverted a total of 120,000 pounds of food scraps from landfills in 2020 alone. Results from 2021 are not yet available, but Peters expects those to be “pretty significant” as well. technology. It’s increasing its use of more environmentally friendly raw materials, with a goal of creating a maintenance-free tire made of 100% sustainable materials by 2030.

Goodyear says it formulated its new goals after completing a “comprehensive carbon-inventory assessment, which included collecting data from its operations and quantifying greenhouse gas emissions throughout its value chain.”

The company also said it plans to adopt disclosure practices aligned with the Task Force on Climate-related Financial Disclosures (chaired

by Michael Bloomberg and consisting of 32 members of the G20) to

Brown said RBR has no plans to further broaden its residential pickup coverage, which spans from Rocky River to Beachwood and as far south as Brooklyn. For now, the company will concentrate on adding customers in the areas it already serves and growing the soil business.

“We’ve unlocked a lot of the bottlenecks that we encountered in previous years and continue to try and find ways to increase availability of our soil products,” he said. “This year, we expect to see the soil business line take the lead in terms of the division that is bringing in the most revenue.

And when we think about our future growth, a lot of that lies in our soil blends.”

Late last year, RBR also finalized its long-planned transition to a worker-owned cooperative, going from the two original founder-owners to four employee-owners on Dec. 28.

Brown said another three of the company’s 20 staff members will soon be eligible to opt into ownership.

Giving employees a voice, he contends, has been part of the organization’s M.O. since inception.

“The conversion really just memorializes a lot of the ways that we have been making decisions, setting compensation, interacting with one another,” Brown said.

“It’s kind of like we put a period in place of the ellipsis.”

Contact Judy Stringer: clbfreelancer@crain.com increase its sustainability disclosures.

"Goodyear's net-zero goal and alignment to SBTi reflect our commitment to sustainability and reducing our carbon footprint," CEO and chairman Richard J. Kramer said in the release. “As one of the world's largest tire manufacturers, we are committed to doing our part to implement transformative changes that will help protect our planet for future generations and build a more sustainable business for all of our stakeholders."

Dan Shingler: dshingler@crain.com, (216) 771-5290, @DanShingler

“AS ONE OF THE WORLD’S LARGEST TIRE MANUFACTURERS, WE ARE COMMITTED TO DOING OUR PART TO IMPLEMENT TRANSFORMATIVE CHANGES THAT WILL HELP PROTECT OUR PLANET FOR FUTURE GENERATIONS AND BUILD A MORE SUSTAINABLE BUSINESS FOR ALL OF OUR STAKEHOLDERS.” — Richard J. Kramer, Goodyear CEO and chairman JANUARY 10, 2022 | CRAIN’S CLEVELAND BUSINESS | 15

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CRAIN’S

SIGNATURE EVENTS 2022 EVENT CALENDAR *

MARCH 2022

Crain’s newsroom and top executives from the big three sports teams in Cleveland will have a panel discussion on the business of sports.

JUNE 2022

Crain’s honors the dedication and achievements of Northeast Ohio’s top female business leaders who enrich our region with their professional talents and unique perspectives.

AUGUST 2022

Join Crain’s Cleveland Business as we salute the top nominated employers in NEO and beyond.

SEPTEMBER 2022

A tribute to Northeast Ohio’s leading human resources professionals who are building companies with the best people, talent, development and culture.

SEPTEMBER 2022

Industry experts will examine some of the top issues facing health care.

OCTOBER 2022

Crain’s journalists and local real estate experts will share their perspectives on the future of Cleveland’s real estate market and the economy in this morning panel discussion.

NOVEMBER 2022

A celebration to honor Northeast Ohio's best and brightest professionals who are scaling businesses to new heights, making decisions that put their organizations on the map and producing a stream of impactful work.

CrainsCleveland.com/Crains-Events *Please note all event dates are subject to change

CLEV EVENTS 2022 full.indd 1

1/5/22 1:28 PM

REAL ESTATE

A wrong righted, architects land lien rights

BY STAN BULLARD

Architects like to talk about their next project or one that’s just finished. Frequently they sound like pride-filled parents discussing their children.

However, one topic that pains them is when a real estate developer or property owner fails to pay them.

Lawsuits are few because professionals often feel the cost of legal fees would overshadow their design fees.

In addition to the traditional lawsuit to recoup fees, a lesser but significant change may help designers recoup fees from recalcitrant customers. That is because a new Ohio law is extending prized lien rights to architects, landscape architects and surveyors similar to those that construction suppliers, contractors and even real estate brokers enjoy. The lien is filed with a county recorder and is attached to a property so that when it comes time to sell or refinance a property, the owner or realty developer must deal with it.

The law became effective Sept. 30, 2021, after being signed by Gov. Mike

DeWine.

For Christopher Toddy, the proprietor of the Christopher @ Architects LLC of Cleveland, it marked the end of a quest that began in 2017 when he became a member of the AIA Ohio Payment Assurance Task Force, which lobbied for the bill through two iterations and succeeded where 1980-era efforts failed.

Toddy termed the inability for architects and surveyors to place liens on properties for unpaid fees a “national conversation and a local imperative.” Ohio was the only state in the nation that did not give architects lien rights.

He learned this first-hand in 2006 when he designed a master plan for a $40 million lakefront condominium project for a Michigan developer he knew through several projects they’d done together.

“My developer friend said, ‘I don’t feel like paying you,’” Toddy recalled. He was able to file a lien for $50,000 to cover his fees and interest.

Through arbitration his bill was whittled down to $30,000. Finally, when the properties were sold, his firm

was able to recover funds at escrow.

In Michigan, that was possible. And Toddy realized in Ohio that would not have been the case.

Ironically, architects in Ohio had lien rights granted by the state in 1915. They lost them, according to Toddy’s research, in 1931 when a court decided that an architect did not add value to a Shaker Heights home-building project the way construction contractors and material suppliers did.

After that decision, Ohio lawmakers accepted the idea that architects added no value to real property and exempted them from the state lien law.

Toddy AIA Ohio and its lobbyist took several steps to push for a law that larger building and banking groups would not oppose.

One was that architects, who often find they are not paid until after work begins, can have first position on the property, but will be superseded by liens for loans and construction that might get filed later.

“We also made the point that this is a missing link that is causing snafus in economic development,” Toddy said. “Architects take a risk to draw up projects and don’t get paid. Legislators realized the state is better off with more and better buildings, so architects assist development in the state.”

John Slagter, a real estate attorney who leads the business department of the Tucker Ellis law firm in Cleveland, said he believes the law will significantly aid architects and related professionals based on what he has seen in 30 years of law practice.

“Liens are used regularly in other construction disputes, while design professionals may lose fees that can be substantial,” Slagter said. He noted the law requires designers to have signed contracts to be able to file liens in payment disputes.

“An oral agreement will not cut it,” Slagter said.

Architects around the region say

SOLAR POWER

From Page 1

electricity a year, equal to the energy use of about 250 homes.

At the Shaker West professional building on Shaker Boulevard in Cleveland, a much smaller rooftop array has reduced building owner MAN Holdings LLC’s electric bill by 25%.

“I think a lot of people still have the misconception that we may not have enough sun,” said Nicole Stika, vice president of energy services at the Greater Cleveland Partnership. “But it’s really feasible here in Northeast Ohio.”

GCP assisted MAN Holdings through its installation at 11811 Shaker Blvd., helping it find financing for $467,000 in building improvements to the 56-year-old building that are expected to reduce the property’s energy consumption by 42%. While the rooftop solar array consumed most of the cost of the improvements, MAN Holdings also upgraded the building’s insulation and window glazing and switched over to LED lighting.

Stika said that about 80% of the buildings that GCP performs energy audits on can save money with a solar array. She acknowledges, though, that most businesses aren’t ready to swallow the upfront and financing costs for a return on investment that can take as much as a decade to pay off.

“Maybe less than 10% are going ahead at this time,” she said. “But they are working it into their budgets, and we are seeing now more than ever companies planning for solar sooner than they ever were.”

The growth in commercial solar installations slowed by 10% for the 12 months ended Sept. 30, 2021, according to research sponsored by the Solar Energy Industries Association. Overall, solar energy installations had been growing by an average of 42% annually since 2000, according to SEIA data. The pandemic and supply chain snags were behind the decline.

Still, many in the business of designing and installing solar-panel arrays are seeing growth.

“Business these days is really good,

The solar array along Interstate 271 in Mayfield Village has cut Progressive Corp.’s Campus 2 electric bill by 20%. | PROGRESSIVE CORP.

improving; we’re seeing a lot of interest now,” said Al Frasz, commercial business manager at YellowLite Inc., a Cleveland firm that designs and installs solar power systems. “The economics are working better, the cost (of installing solar panels) has come down, and the other thing that’s happening is, natural gas prices are creeping up and so electric rates, which have been stable, are starting to creep up again.”

Frasz, who has been in the industry for 13 years, working on more than 300 commercial solar projects, said that businesses are also reacting to the changing environmental concerns they see around them.

“There’s a real awakening,” he said.

“People realize that climate change is real and they see impact. So at the end of the day, businesses are responsive to that.”

In an emailed response to questions, Progressive agreed with that assessment.

“As stated in its inaugural Corporate Sustainability Report, Progressive

continues to seek ways to reduce its environmental impact,” the email said. “Progressive is committed to investing in increasingly energy efficient facilities and equipment with the goal of reducing carbon emissions and providing better environmental outcomes.”

The move to solar is also being eased by a variety of financing programs and tax advantages available to property owners.

Chief among these is a federal income tax credit. The solar ITC is currently 26% for projects that begin construction by the end of 2022. After that, the credit drops to 22% for projects that begin construction in 2023 and 10% for commercial solar projects that begin construction after 2023.

In addition to the tax credit, there’s the value of the deduction for depreciation of the capital spending involved. Frasz estimates that 50% of the cost of a project can be offset by investment tax credits and depreciation.

The cost of a system, of course, depends on the size of the facility and its use. An office building may use 20 kilowatt-hours (kWh) of electricity per square foot annually, while a typical manufacturing plant may use 95 kWh per square foot. In addition, if a property has an old roof or outdated electrical fixtures, it makes sense to upgrade to LED lighting and renew the roof before installing solar panels there.

All that adds up, but property owners can take advantage of programs designed to spur investment in renewable energy. Of particular importance is the federal Property Assessed Clean Energy, or PACE, loan program. This program allows a property owner to repay its energy upgrade improvements over a set time period, as long as 20 years, through a property assessment secured by the property and paid as an addition to the owner’s property tax bills.

Given the complexity of solar projects and the financial complexity, it makes sense for the property owner

liens will help because of the nature of real estate development. Typically, real estate developers and owners form a new company, or limited liability corporation, for each project.

If the LLC goes out of business, the individual members are not responsible for its bills.

Jonathan Sandvick, president of Sandvick Architects of Cleveland, said in an interview that he hasn’t seen nonpayment problems very often but attributes much of the issue to the nature of real estate development.

“You’re waiting for the closing to get paid, and real estate developers are putting together the sources of funds to get a project going,” Sandvick said. “That simply takes time.”

Don Rerko, president of Makovich Pusti Architects of Berea, has demonstrable, positive feelings about the new law.

“I love it,” Rerko said in an interview. “It’s disheartening to see the contractors get paid when you don’t.”

Stan Bullard: sbullard@crain.com, (216) 771-5228, @CrainRltywriter to get help to sort through the options to determine how to best structure the financing.

When it undertook its energy updates at its 49,000-square-foot Shaker West building, MAN Holdings turned to GCP’s energy services office. GCP found MAN a lender that specializes in the PACE program to finance $467,000 in building improvements through a PACE loan, as well as $10,000 in energy-efficiency rebates.

Now MAN is looking at a similar energy upgrade at a building it purchased in Euclid.

The company’s CEO, Amanda Mayan, said she believes this kind of environmental upgrade is good for MAN’s business, especially since she has tenants in the nonprofit world whose funders like to see their grantees be environmentally aware.

“I think it’s definitely good for the environment and it feels good as a business owner, and I’d say it makes moral sense and economic sense,” she said. “Also, it’s good for my tenants.”

Jon Kaplan, CEO of Pearlwind LLC, a Beachwood installer of solar arrays and other energy-efficiency equipment, sees that environmental awareness in his clients and believes it’s an important part of the decisions he sees being made to install solar panel systems.

“I think the bottom line is you’ve got to want to be sustainable, you have to have the money or at least can borrow it, and then you’ve got to be OK with a (long-term) return on investment,” Kaplan said. “You get those three together, it’s a great investment because the cost of power is going up.”

As an example of all those issues coming together, Kaplan said he has a potential client who was most of the way to a commitment several years ago but decided against installing an array. When he returned in December and pointed out that the prospect’s cost of power had gone up 10% since his last visit, the client’s interest was piqued.

Jay Miller: jmiller@crain.com, (216) 771-5362, @millerjh

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REMOTE WORK

From Page 1

“This opportunity comes with the responsibility to reinvent the employee experience through training, career development and changes to the composition of compensation,” Swartz added in an email correspondence. “The increased competition for talent and changing expectations of employees has led to wage inflation in the region and I expect that to continue until the market reaches equilibrium.”

An age of plenty Swartz is optimistic about what the changes in the workforce will bring, describing their effects the way an economist might talk about something that brings efficiency to a market.

“I think remote work and interstate competition for talent creates a great opportunity for organizations and employees, and both stand to gain an advantage,” Swartz wrote.

This increased labor-market efficiency might be coming at a good time, as the nation’s workforce is experiencing a high amount of job turnover, which some economists are attributing to the retirement, forced or otherwise, of many older workers. It’s helpful to have a large sea from which to fish, say some employers and economists.

In tech, remote work is old hat.

Many in IT industries are used to having remote workers, whether they were analysts in another state or programmers in another country.

“On the technical front, we’ve had

people in and out on remote for a long time. I built our first remote office back in 2000,” said Marling Engle, CEO of the Akron software development firm Metisentry and several software-as-a-service companies in other states. “But I do think it’s going remote more heavily now.”

He now sees remote work as a common theme when he’s interviewing new hires.

“I would say it’s every interview. I don’t think it will ever be what it was.

It was already starting, and I think we’re just accelerating what was already happening,” Engle said.

He’s also aware that while he’s scouring the country for the best talent he can find, firms in other states or even other countries are looking similarly toward other places, including Northeast Ohio.

“A lot of those (California) tech people are asking themselves, ‘Why do we want to pay a premium to hire into the San Francisco office?’ ” he said.

For IT workers, this has created an age of plenty.

“From a candidate’s perspective, the world’s your oyster now. A year or two ago if you were looking for work, you were probably limited to looking within 30 miles of your home. Not now, though,” said Bill Whitlock, business development manager for Modis, a technical consulting and talent acquisition firm with offices in Independence.

Whitlock said the current environment means that his firm and its clients can access more talent.

“Here in the Midwest, we’re a lowcost-of-living environment, and Northeast Ohio is not really a high-

tech mecca. So by going remote, that gives you the opportunity to go outside of the area to hire,” he said.

A game of musical chairs But it’s not all good, at least for employers.

“On the downside, we’re seeing firms from the coasts come here to poach people,” Whitlock said.

He described the current market as a huge game of musical chairs, in which “everyone’s hiring and they’re also losing people at the same time.

But demand for IT workers is definitely ahead of supply at this time.”

The situation is causing even some traditional industries to adapt. That includes small banks in Ohio, said Robert Palmer, CEO of the Community Bankers Association of Ohio. He said his members are hiring remote workers from the local area, as well as in other states, to perform back-office functions, such as accounting.

“I know of two or three community banks that have personnel in Minnesota, Illinois, and I think we have one in Indiana,” Palmer said. “The No. 1 reason they’re doing it is to increase the area in which they attract talent.”

Sometimes, they’re paying more for that talent — and often, they can’t afford to hire from places like the West Coast, where wages are particularly high. But Palmer said wages are already rising faster than most bankers expected locally, which he said is blunting some of the sticker shock.

And it’s worth paying more, so long as the employer gets a level of talent that provides value, Palmer said.

What the long-term effects of this will be, and whether the effects will

be long-term at all, is still a matter of debate. Many, including Engle, say there’s still value in face-to-face work, especially when interpersonal communications is a major part of the job. But he and others predict that remote work is here to stay, at least for some jobs, and will continue to grow as a trend.

But what of the impact on wages here and across the country? Remote work could have an evening effect, some say, effectively bringing wages in low-income areas and high-income areas closer together.

“I think it will have the effect of pushing up wages here. I don’t know about the effect it might have on the coasts,” Whitlock said.

‘You need the best broadband’ Edward (Ned) Hill, a former dean at Cleveland State University and now a professor of economic development at Ohio State University’s John Glenn College of Public Affairs, thinks remote work will only continue indefinitely in certain job categories, and he doesn’t think wages will be affected equally nationwide.

“I don’t think it will mean a big rate of (wage) increase in the middle of the country,” Hill said. “I think it will actually have an effect in the higher-cost markets … mostly because of entropy.”

As the labor markets shake up and convulse, there are simply more people in the rest of the nation than there are in the high-income cities, Hill said.

Hill said the current environment also makes it more important than

ever for cities to make themselves good places to work and live. One of the top things they can do right now, he said, is to ensure that they have good broadband networks in place so that people can work from home.

He applauded recent efforts in cities such as Hudson and Medina to improve their internet connectivity.

“You need the best broadband.

Without that, none of this works,” Hill said.

There’s also another factor to be considered: Ohio was already losing population before the pandemic and the remote-work trend took hold.

Will remote work enable more of them to move?

“Remote work has mixed implications for Ohio’s economy,” predicts Bill Adams, PNC Bank’s senior economist. “To the upside, workers in the region will have more job opportunities from employers in bigger cities who are looking to broaden their recruiting pool nationally. To the downside, the flow of Ohioans to the Sun Belt could accelerate if more people are able to take their jobs with them.”

That’s a prospect few Ohio cities likely want to contemplate.

For now, though, the picture is still muddy, Hill said. While he and other economists have already been studying the matter to the extent they could — Hill interviewed CEOs and plant managers about remote work doing research in 2020 and 2021 — the hard data isn’t in yet.

“I tend to think it’s going to be unsettled until summer,” Hill said.

Dan Shingler: dshingler@crain.com, (216) 771-5290, @DanShingler

THE WEEK DRIVEN TO A SALE: A Texas-based buyer has purchased the ABB office and research complex in Highland Hills in a $34.25 million transaction.

The sale closed last month, according to public records, which point to Dallas-based Lone Star Properties as the buyer. The seller was an investor group that included Ox Capital Partners, a Cleveland-area fund manager and commercial real estate consultant, and Weston Inc., the Warrensville Heights-based company that developed and initially owned the ABB project. The 145,000-squarefoot building opened in January 2018 on a former driving range at 23000 Harvard Road, in the Chagrin Highlands corporate park. The following month, Weston transferred the property to an investor partnership managed by Steve Feldman, the managing partner of Ox Capital Partners.

REVIVING A LANDMARK: A sculptor with deep ties to Cleveland’s Tremont neighborhood is the would-be buyer of Sokolowski’s University Inn, a beloved restaurant that has been sitting dark since early 2020. Giancarlo Calicchia confirmed that he signed a contract late last year to buy the 0.41-acre site. He expects to conclude the purchase in March. But the 75-year-old artist, who lives and works in Tremont, has not decided what, exactly, he’s going to hew from a piece of Cleveland culinary history.

Regardless of the use, he said, the story of the property should be showcased in some form. Sokolowski’s opened as a tavern in 1923, at the corner of University Road and West 13th Street. The family-owned business became a cafeteria-style restaurant in the late 1950s.

ON THE WATERFRONT: Since reuse of the Cleveland Flats riverfront for realty development rattled through new bars and nightspots in old buildings in the 1980s, a parking lot at 1290 Old River Road has been seen as a prime opportunity for a new building or a significant part of a larger development. However, with a nearly $3 million purchase, Cleveland Metroparks has acquired the parking lot with a very different agenda: retaining it as part of a plan to protect public access to the Cuyahoga River and to promote green space in the valley.

A Miami-based investment group that has held the property for years through 1290 LLC sold the property Dec. 29 to the Metroparks, according to Cuyahoga County land records.

Jacqueline L. Gerling, a Metroparks spokeswoman, said that under the Vision for the Valley plan, the site was identified for potential purchase because it would preserve local control

The parking lot at 1290 Old River Road, center, next to the Cuyahoga River, has been purchased by the Cleveland Metroparks. | COSTAR

of the riverfront and support public investments nearby, including the eLCee2 Water Taxi, Heritage Park and the Canal Basin Park.

BIG DEAL: The Spire Institute and Academy has made a big addition — literally. An investment group, led by Basketball Hall of Fame inductee Dikembe Mutombo, has finalized an

undisclosed investment in the massive Geneva sports complex. The 7-foot-2 Mutombo will be a strategic partner in helping Spire “continue its growth and recognition in the international community,” Spire said. Mutombo’s group will work with Spire to attract and secure international talent and expand the academy’s global reach, particularly in Africa. Mutom-

bo, who retired from the NBA in 2009, founded the Dikembe Mutombo Foundation in the Democratic Republic of Congo in 1997 and is involved in several humanitarian causes. He visited Spire in December and came away impressed with the academy’s focus on athletics and academics, said Jeff Orloff, Spire’s chief operating officer.

BOWLED OVER: ABC Technologies Holdings Inc., a Canadian holding company whose subsidiaries focus on the manufacture of automotive systems and components, announced the acquisition of North Canton-based dlhBOWLES Inc. from Cleveland private equity firm MPE Partners. The deal, valued at approximately $255 million, is slated to close in the first quarter. Founded in 1961, dlhBOWLES describes itself as a supplier of “innovative engineered plastic solutions to many of the largest corporations and most recognizable brands around the globe in the automotive and consumer products industries.” The business is based in North Canton with co-headquarters listed in Columbia, Maryland, and sales operations based in Southfield, Michigan. It has about 1,900 employees across North America and $120 million in annual revenue.

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CUSTOM PUBLISHING SECTION

WELLNESS AND THE WORKPLACE We want to hear from forward-thinking business leaders in Northeast Ohio on strategies for ensuring employees are healthy and supported.

Create your own unique topic or choose from the list: • How to reward healthy behaviors

• Catered lunches and other perks

• Best practices in building benefits packages

• How to address mental health with accessible therapy

• Ways to incentivize continuing education

• When to bring in wellness consultants and guest speakers

• Flexible PTO approaches

• “Gamifying” fitness with exercise awards and more

• Holistic insurance options (pet, renters, etc.)

• Lunch-and-learn opportunities • How to help staff maintain a work/life balance • Charity programs that let employees give back • Team-building events that strengthen bonds and break ice

• Setting aside “Wellness Wednesday” events • Planning “happy hour” occasions and other chances to unwind • Providing healthy snacks in the break room • The value of standing desks and accommodating other physical health needs

• Connecting employees with local/regional health resources • Ways to incentivize smoking cessation • Bringing flu shots and blood drives to the office • Hosting on-site clinics and other health services • The importance of regular customer surveys to learn what’s working and what’s not • Setting aside dedicated space for mindfulness, decompression and rest • Showing employees appreciation with gifts, bonuses and other rewards

ISSUE DATE: April 11 | PARTICIPATION DEADLINE: Feb. 14 | ARTICLES DUE: Feb. 25 | AD CREATIVE DUE: March 28

Contact Conner Howard at conner.howard@crain.com to learn more about these opportunities.

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ELYRIA

From Page 1

Flanigan, who controls much of three blocks on Broad Street, is cobbling together a $35 million deal. A pair of historic buildings will hold an esports venue, with offices and podcasting and broadcasting spaces upstairs. On a vacant corner to the east, at Broad and Washington Avenue, site plans call for a 51-unit apartment building — a rare ground-up construction project.

Elyria, the Lorain County seat, has been talking about downtown revival for decades.

Now public officials and Flanigan hope that new state programs will help them pull off a major development, one that could serve as a framework for other investors.

“Elyria needed something. And Elyria has a lot of potential,” said Flanigan, a 70-year-old Grafton resident with a hand in manufacturing, technology, film production and real estate.

“If this can all come together, it’s going to create an attractive, positive environment,” he added. “And I think the biggest thing to emphasize is that it will provide a safe environment for people to come down now — and not have to travel to go to a restaurant or entertainment.”

Public records show that Elyria Block Development LLC, a company owned by Flanigan and his wife, Gail, is seeking $3.4 million in competitive tax credits through a new program for so-called transformational mixed-use projects. Officials expect to announce $100 million in awards early this year. One-fifth of that pool is reserved for sites outside of major cities.

Flanigan also is pursuing up to $2 million from JobsOhio, through a grant program designed to spur development in small to mid-sized communities with high poverty rates.

JobsOhio, the state’s private economic development corporation, launched that program in 2020.

“Those are literally the key,” Flanigan said of tax credits and grants to fill the gap between development costs and rents in places like Elyria.

“Without that, we won’t be able to move forward.”

Stephanie Mercado, an economic development consultant on the project, said Flanigan plans to work with Lorain County to seek state money for site cleanup and demolition. The Ohio Department of Development recently started accepting applications for a pair of new programs aimed at revitalizing contaminated properties and clearing blighted structures.

Today, just south of a waterfall overlook along the Black River, the historic Dixon and Robinson buildings sit quiet. The only tenants are a cell-phone store and a shop that sells smoking paraphernalia.

Flanigan is tapping federal historic tax credits to restore and merge the buildings. He plans to apply for state preservation tax credits this year to help finance part of the work.

The esports facility and a restaurant will fill the first floor of the complex, called Forge 417. The competitive video-gaming venue will include a 200-plus-seat arena for tournaments, smaller game hubs for daily use and virtual reality booths.

If the financing comes together, the facility could open in mid-2023.

The new apartments might be complete in 2024.

The fast-growing esports industry

Rubble still covers the site where the former Uncle Vic’s nightclub building stood in downtown Elyria. | PHOTOS BY MICHELLE JARBOE/CRAIN’S CLEVELAND BUSINESS

Flan

Developer Kevin Flanigan has been buying buildings on Broad Street in downtown Elyria over the last few years. He’s seeking state tax credits and other aid for a multi-block project.

A ren

A pedestrian passes buildings slated for redevelopment on Broad Street in downtown Elyria, across from Ely Square.

A ren

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ject.

Flanigan’s restaurant, the Foundry, anchors one end of the three-block stretch of Broad Street that he’s trying to revive.

is drawing the attention of universities, big-name brands and Wall Street. Lorain County Community College launched a varsity esports team last year, and at least a dozen Northeast Ohio high schools have their own gaming programs.

In July, Cedar Fair Entertainment Co. announced that it was exploring the potential to develop an esports stadium at its Cedar Point Sports Center in Sandusky. The venue could seat up to 1,500 spectators. An esports hub also is in the works as part of the sprawling Hall of Fame Village development in Canton.

Flanigan “One thing that Elyria’s offering that I think is going to make it very unique is the historic rebuild of the block,” said Scott Norcross, a Cleveland attorney who specializes in esports deals.

“Tying the historic renovation to a modern technology project is going to set it apart.”

Whitfield Norcross, a partner at the KJK law firm, is consulting on the project. He and colleague Paige Rabatin also own Clesports Development LLC, which will lease and operate the Elyria venue.

Designed by Cleveland-based OSports, the space will rely on a mix of gaming and other programming, such as comedy shows, educational events and workforce-development programs. The second and third floors of the historic block are likely to hold a mix of traditional offices and co-working space, Flanigan said.

Floor plans also include a roughly 3,200-square-foot studio for audio and video production.

Public records show that Flanigan owns more than a half-dozen additional properties on Broad Street, where he and several partners opened the Foundry Kitchen and Bar CRAIN’S CLEVELAND BUSINESS

A rendering shows a reimagined block where historic buildings will become an esports and office complex called Forge 417. | OSPORTS

|

gastropub in 2016. Since then, the downtown area was designated as a tax-favored Opportunity Zone, through a federal program meant to lure private investors to low-income communities.

Flanigan, who bought a former McDonald’s restaurant west of the Foundry in September, said he’s not looking to acquire more real estate or take on additional projects. The Uncle Vic’s site, where a pile of rubble sits, will become a parking lot.

“It’s been a long process in putting this all together,” he said. “And there’s still a lot of work to be done, to say the least.”

During meetings and surveys last year about how Elyria should spend close to $18.8 million from the federal American Rescue Plan Act, residents pointed to downtown — and the ailing Midway Mall, which siphoned off stores from the heart of the city a half-century ago — as top turnaround priorities, Whitfield said.

The Elyria Community Partnership, a nonprofit development corporation focused on downtown, launched last year. The city has rolled out grants for property owners who want to rehabilitate historic buildings, and officials are talking up a little-used program to help pay for façade improvements.

Whitfield, a 34-year-old mayor who took office in early 2020, just before the onset of the coronavirus pandemic, said the only direction Elyria can go is up.

“Other people are trying to restructure and rebuild what they already had,” he said. “We were in a place that was kind of ground zero already.”

Michelle Jarboe: michelle.jarboe@ crain.com, (216) 771-5437, @mjarboe S E P T E M B E R 3 - 9 , 2 018

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PA G E 21

Advertising Section

CLASSIFIEDS To place your listing in Crain’s Cleveland Classifieds, contact Ainsley Burgess at 313-446-0455 or email ainsley.burgess@crain.com

EXECUTIVE RECRUITER POSITION AVAILABLE

Projects & Operations Manager - Feghali Brothers LLC

A rendering shows the apartment building Flanigan hopes to build at Broad Street and Washington Avenue. | MAKOVICH AND PUSTI ARCHITECTS

Required full time Projects & Operations Manager for Feghali Brothers LLC, construction & engineering company, in greater Cleveland area • Minimum 5 years’ experience in construction, BMS & home automation • BS in Mechanical/Civil engineering or equivalent • MS in industrial engineering preferred • PMP certified • Fluent in English & Arabic • GCC Experience (UAE) required • 50% travel time to other states and GCC countries (UAE) Interested candidate email CV & cover letter to: zfeghali@feghalibrothers.com Note: Due to the current situation, interviews would be conducted via skype/zoom/phone.

JANUARY 10, 2022 | CRAIN’S CLEVELAND BUSINESS | 21

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PEOPLE ON THE MOVE

Advertising Section To place your listing, visit www.crainscleveland.com/people-on-the-move or, for more information, contact Debora Stein at 917.226.5470 / dstein@crain.com

ACCOUNTING

ARCHITECTURE

LAW

LAW

LAW

Maloney + Novotny

Domokur Architects

Frantz Ward LLP

Hahn Loeser & Parks LLP

Ziegler Metzger LLP

Maloney + Novotny LLC announced that Dale Dresch, MBA, CISSP, CISA, PMP has been promoted to Shareholder. His expertise includes system design, process implementation, risk management, and IT governance & compliance. Dale earned his bachelor’s and master’s degrees from Baldwin Wallace College. He maintains yearly certification with PMI. Dale is member of the International Information System Security Certification Consortium and holds CISSP & CISA certifications with ISACA. He is a certified HITRUST Practitioner.

We are pleased to announce that Amira Ajlouni has joined our team. She holds a Master’s degree from Florida International University (FIU). She is the founder of EcoCouture, an annual fashion show supported

by FIU, where clothing is designed and created only from recycled materials. Her previous experience includes construction administration on multimillion dollar projects for Miami based Arquitectonica. Master of 3 languages, she combines communication with creative and analytical acumen.

Alan Dailide has been elected Partner. His practice consists of cradle to grave project representation, which includes advising contractors, construction managers, suppliers, owners, design professionals, & sureties in the drafting and negotiation of contracts; in claim documentation and preservation during the project; and in the resolution of all types of construction disputes. He earned his J.D., summa cum laude, from Cleveland-Marshall College of Law and his B.A. from Mercyhurst University.

Hahn Loeser welcomes back Estate Planning Partners Arthur E. Gibbs III and Erica K. Williams in Cleveland.

Gibbs is an OSBA Gibbs Board Certified Specialist in Estate Planning, Trust & Probate Law and is licensed in Ohio and Florida.

He is listed in Ohio Super Lawyers® and The Best Lawyers in America® and was Best Lawyers® 2022 Litigation Trusts & Estates “Lawyer of the Williams Year” in Cleveland. He earned his J.D. from Case Western Reserve University and B.A. from Fordham University.

Williams is an Accredited Estate Planner® (National Association of Estate Planners & Councils) and focuses her practice on estate planning, tax, and business succession planning.

She earned her J.D. from Case Western Reserve University and B.A. from Fordham University.

Ziegler Metzger LLP is pleased to announce that Brian F. Kampman became a partner with the Firm effective January 1, 2022. Brian joined the Kampman Firm as a law clerk in 2012 and is involved in a variety of practice areas, with a focus in probate and trust litigation, commercial real estate and corporate matters.

Ziegler Metzger LLP is further pleased to announce that Christopher G. Herrel Herrel has joined the firm as an associate attorney. Chris received his law degree from ClevelandMarshall College of Law and his undergraduate degree from The Ohio State University. While Chris is involved in a variety of the firm’s practice areas, his primary focus is in civil/probate litigation and real estate.

BANKING ACCOUNTING

Premier Bank

Maloney + Novotny

Premier Bank is pleased to announce that Thomas Harrington has joined the bank as Vice President, Senior Relationship Manager serving the Cleveland market. Harrington brings with him over 25 years of commercial lending experience.

In his new role, Harrington will focus on the development and growth of the bank’s commercial loan portfolio in the Cleveland market by partnering with clients to provide customized solutions for their business as well as creating new business relationships.

Maloney + Novotny LLC announced that Jeff Koons, CPA has been promoted to Shareholder. His practice focuses on providing audit, tax and consulting services for clients in a variety of industries including commercial & industrial, oil & gas, benefit plans, education and healthcare. Jeff earned his BS and Master of Accountancy from Bowling Green State University.

Jeff belongs to the American Institute of CPAs and the Ohio Society of CPAs. In addition, he is the finance chair of Family Connections.

ACCOUNTING

BANKING

Maloney + Novotny

Premier Bank

Maloney + Novotny LLC announced that Dan Tomola has been promoted to Shareholder. He has extensive experience providing individual, corporate, trust, and estate tax compliance as well as tax consulting in these fields. His client base covers a wide range of industries. Dan is a member of the Ambassador’s committee of First Tee of Cleveland. He is a graduate of The University of Mount Union and a member of the American Institute of CPAs and the Ohio Society of CPAs.

Premier Bank is pleased to announce that Jack Schneider has joined the bank as Senior Vice President, Commercial Lending Manager serving the Cleveland market. Schneider brings with him over 35 years of industry experience. In his role, Schneider leads a team of experienced commercial lenders to develop client relationships and, in turn, expand the Bank’s commercial portfolio in the Cleveland market.

22 | CRAIN’S CLEVELAND BUSINESS | JANUARY 10, 2022

LAW

Frantz Ward LLP Angie Lydon has been elected Partner.

She is an experienced litigator who represents businesses and individuals throughout the US, with a focus on commercial disputes, transportation law, business torts, products liability, and insurance issues. She handles all stages of civil litigation, including navigating discovery, dispositive briefing, trial, and appeals. She earned her J.D., magna cum laude, from Case Western Reserve University School of Law and her B.A., cum laude, from Miami University.

NONPROFITS

Dominion Energy Ohio Cleveland Eye Bank Foundation announces Antoinette Morrison as the newest member of its Board of Directors. Ms. Morrison, a Northeast Ohio native, serves as the Supervisor of Reporting & Analysis at Dominion Energy Ohio. Her expertise as the Family Chair of Foundation Fighting Blindness Cleveland Chapter will be an asset to CEBF. “Antoinette’s determination, creativity, and boundless energy will make an immediate impact in moving our mission forward,” says Debbie May-Johnson, Executive Director.

REAL ESTATE

NONPROFITS

Cleveland Water Alliance Cleveland Water Alliance welcomes Dr. Christopher Blackwood to its Board of Directors.

Christopher is a professor at Kent State University and co-director of the Environmental Science and Design Research Institute (ESDRI). Christopher’s research focuses on the critical roles of soil-plant-microbe interactions in shaping plant communities, ecosystem processes, and soil carbon dynamics. CWA has a strong partnership with Kent State University and looks forward to continuing this collaboration.

REAL ESTATE

Carnegie Companies, Inc. Carnegie Companies, Inc. is pleased to announce that Jennifer Dirrman has been named Manager, Property Administration. Jennifer joined Carnegie in 2016 in the position of Property Manager.

Sherman Valuation & Review Jeff Sherman, MAI, AI-GRS recently completed four years of service to the appraisal profession as a national officer of the Appraisal Institute including serving as its national president in 2020. Jeff has appraised real property in Ohio for more than 30 years. He plans to continue his Willoughby Hills based practice where he specializes in eminent domain appraisal and appraisal review assignments throughout northeast Ohio.

TECHNOLOGY

TrellisPoint TrellisPoint, a Microsoft Gold Partner specializing in Dynamics 365 CRM, welcomes Frank Nisenboum as Enterprise Account Lead in their Cleveland office. Frank brings over 25 years of experience in technology consulting and sales roles which he will use to guide enterprise clients through the process of integrating Microsoft’s Customer Engagement business applications into their operations.

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