Crain's Cleveland Business, January 15, 2024

CRAINSCLEVELAND.COM I JANUARY 15, 2024

R. Shea Brewing pursues alternate paths to survival Owner pursuing selling, merging after underwhelming GoFundMe campaign

By Jeremy Nobile

A crowdfunding campaign designed to save R. Shea Brewing from shutting down amid growing expenses and flat-todown sales is on pace to come up far short of its goal.

However, owner and CEO Ron Shea said that he’s making progress exploring some other alternatives for keeping the Akron craft brewery in business.

“The doors are still open.

We’ve got several months (of working capital left) that we are working through,” he said. “I’m highly encouraged on some possibilities that have come from the fundraiser.”

Shea said he’s in some “seri-

An Adrenaline Monkey indoor adventure and ninja course opened at Spire Institute & Academy in 2023. | SPIRE INSTITUTE & ACADEMY

Spire aims to build facilities, community What’s new and what’s coming for the sports-centric facility

By Joe Scalzo

Adrenaline Monkey touts itself as an “innovative family adventure park” that is designed for all ages, sizes and abilities.

Last summer, Jeff Orloff decided to put that to the test.

Orloff, the (redacted)-year-old president of Spire Institute & Academy in Geneva, gathered some staff members together for a walkthrough soon after Adren-

aline Monkey opened a location on the second floor of Spire’s Fields and Courts building.

“They were taking video and I was like, ‘If we’re going to do this, we need to do it right,’” Orloff said.

So, he donned the costume for Spire’s mascot, Sparky, and decided to run up a ramp wall, climb aboard the platform and slide down a nearby pole.

See SPIRE on Page 16

VOL. 45, NO. 2 l COPYRIGHT 2024 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED

“We want people to feel a sense of a belonging ...

So when they’re here, they want to come back.”

— Jeff Orloff, president of Spire Institute & Academy

ous” talks with various parties about selling, merging or otherwise securing an injection of capital to keep the business alive.

With nothing close to settled at this time, though, he declined to disclose details.

R. Shea launched its lofty $2.3 million GoFundMe in the fall to save the company amid an increasingly dire financial situation.

At the time, that campaign was expected to run through at least the end of the year. Now, Shea said that the fundraiser likely will continue through sometime in February.

See R. SHEA on Page 17

Cleveland is betting on tax revenue to fund big infrastructure upgrades Plan estimated to raise up to $7.5B over 40 years

By Kim Palmer

Legislation to create a largescale tax increment financing (TIF) district as part of Mayor Justin Bibb’s “Shore-to-Coreto-Shore” redevelopment strategy is now in the hands of Cleveland City Council.

If the administration’s plan goes forward, the measure which was introduced Monday, Jan. 8, to council and involves the simultaneous development of both the river and lakefront will be funded, in part, by tax revenue generated from increases in property values within the proposed TIF district.

The strategy to use these tax increases, collected over decades, to pay for and help finance large infrastructure improvements is unique to Cleveland but has been used in other large cities, including Columbus, around the state.

“This particular kind of TIF can only be used for public infrastructure,” said Jeff Epstein, Cleveland’s chief of integrated development. “Other, more traditional, project TIFs can be used for private development subsidies, but not this one. It can only be used for public infrastructure.”

See UPGRADES on Page 17

COMPLEX PLAN Blue Abyss buys Brook Park land for sea, space training facility.

HEY, VENUS NASA Glenn scientist nets grant for flights to sister planet.

CONNECTIONS State makes $10 million grant to Cleveland broadband effort.

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New owners check in at Brooklyn, North Olmsted Extended Stay America hotels

By Stan Bullard

Sales of Extended Stay America hotels auctioned last fall are beginning to fall into place. Two hotels that were part of a portfolio of eight properties in the region have been sold off by affiliates of Singerman Real Estate of Chicago.

The 92-room Extended Stay hotel at 25801 Country Club Blvd. in North Olmsted sold to Daramshala LLC of Cleveland for $4.5 million on Jan. 10, according to Cuyahoga County land records.

And the 104-room Extended Stay hotel at 10300 Cascade Crossing in Brooklyn sold for $6.6 million on Dec. 20, 2023, county land records show. The buyer is CC Brooklyn LLC of Tustin, California.

More deals are in the process of closing, as the bulk mortgage on the properties—through Wells Fargo and PNC—that Singerman and its affiliates used to buy the properties was satisfied as of Jan. 3, according to county records.

The individual loan documents do not disclose the size of the loan involved. Industry observers say all eight properties sold at auction and will close at different times.

New owners are individuals or small hotel investor groups, insiders say.

Daramshala LLC, the new owner of the Extended Stay America Cleveland Great Northern, 25801 Country Club Blvd. in

North Olmsted, is an investor group led by Charlie Patel, a partner in Tony's Convenient Store, 3114 Clark Ave., in Cleveland's Clark-Fulton neighborhood.

Asked in a phone interview why the North Olmsted hotel attracted him, Patel said, "We live here. And it's the American Dream to own businesses to seek financial freedom."

It's the first time Patel has ventured into the lodging business, but he said one of his investors has hotel experience.

Patel said the investor group he leads also plans to buy the Extended Stay hotel in Middleburg Heights. However, that deal has not closed yet. He declined to share the particulars of the transaction for the hotel at 17552 Rosbough Blvd., which has 71 rooms.

Both hotels will remain in the Extended Stay system, Patel said.

Meantime, a spokesman for CC Brooklyn LLC, who declined to be identified, said in a phone interview that the California investor group is getting bids for contemplated updates to the Brooklyn hotel. The spokesman said it was a solo hotel buy and the new owner has hotel experience. The property also will remain an Extended Stay hotel.

The properties traded for indicated prices of $58,000 a room in North Olmsted and $65,000 a room in Brooklyn.

The new owner of the Extended Stay America hotel in Brooklyn, Ohio, is looking at some updates but plans to leave the property’s flag unchanged. | COSTAR GROUP

David Sangree, president of the Hotel & Leisure Advisors consultancy in Lakewood, described the prices for the Brooklyn and North Olmsted hotels as "respectable" for Cleveland-area hotels.

"That's very much in the middle of the range for what these properties should sell for in Northeast Ohio," he said.

Singerman, the selling private equity and realty firm, has not returned calls about the portfolio it has owned since 2018. It fared well in the deals given the tumult that COVID-19 dealt the lodging industry.

Through various company names, Singerman paid $2.45 million for the North Olmsted

property and $2.95 million for the Brooklyn property, so both properties gained value.

Sangree said limited-service hotels remain the "hottest area" of the lodging industry because they have benefited from highway travel during and since the pandemic. The seller likely would have benefited by buying all eight hotels in a portfolio in 2018 and from selling them separately now.

The other hotels that Singerman auctioned last October and listed with Paramount Lodging Advisors of Chicago are as follows: ◗ ESA Akron Copley East, 185 Montrose West Ave. ◗ ESA Akron Copley West, 170

Montrose West Ave. ◗ ESA Cleveland Beachwood, 3820 S. Orange Place ◗ ESA Cleveland Airport, 24851 Country Club Blvd., North Olmsted ◗ ESA Cleveland Westlake, 30360 Clemens Road.

Industry observers say it's likely that Singerman sought to exit the portfolio following a typical fiveyear property hold for investment funds.

Sales of hotels have been on the rise because many owners and ownership groups are baby boomers looking to move. Some hoteliers also are seeking to sell inns before they have to invest in them for routine updating that was likely delayed during the lean pandemic years.

Cleveland Fed’s Mester: March is likely too early for a rate cut

By Catarina Saraiva, Bloomberg

Federal Reserve Bank of Cleveland President and CEO Loretta Mester said it was premature to consider cutting interest rates as soon as the U.S. central bank’s March meeting, emphasizing that fresh inflation data suggests policymakers have more work to do.

“I think March is probably too early in my estimate for a rate decline because I think we need to see some more evidence,” Mester, who votes on interest-rate decisions this year, said Thursday, Jan. 11, in an interview with Michael McKee on Bloomberg TV. “I think the December CPI report just shows there’s more work to do, and that work is going to take restrictive monetary policy.”

As policymakers see more evidence inflation is on a sustainable path to 2%, “we’ll have that conversation,” she added, also citing inflation expectations as an important factor.

Government data released Thursday showed inflation picked up in the year through December, reflecting higher 2 | CRAIN’S CLEVELAND BUSINESS | JANUARY 15, 2024

housing costs and an unexpected increase in used vehicle prices. The consumer price index rose 3.4% from a year earlier, the most in three months, while prices excluding food and energy cooled only slightly less than forecast to 3.9%.

Mester said the latest figures reinforced her view that policy is in a good position to assess incoming data on prices and employment.

“Obviously we don’t want to see the progress in inflation stall out but I don’t think this report suggests that’s happening,” she said.

“It just suggests we have more work to do, and we’re committed to doing it.”

Fed officials raised rates to a range of 5.25% to 5.5% in July, a 22-year high, but have left policy unchanged since then as inflation has continued to cool. None of the 19 policymakers see rates moving higher, according to economic forecasts released following their December meeting, signaling the next policy move is likely a rate cut.

Markets rallied after the apparent policy pivot, and investors

Federal Reserve Bank of Cleveland President and CEO Loretta Mester I BLOOMBERG

continue to see the first rate cut coming as early as March.

Dual mandate Mester was among officials who in December forecast three rate cuts in 2024, she told the Financial Times in an interview published Dec. 18. At the time, she said markets were “a little bit ahead” of where policymakers saw rates

headed this year.

The Cleveland Fed chief said Thursday that while she continues to expect a soft landing — where inflation cools but the economy still grows and unemployment remains low — there are risks to that scenario.

“This year is going to be more about looking at the balance now between both parts of our man-

date,” she said. “I certainly will be focused on making sure that we continue to get inflation on a sustainable and timely path back to 2% while we can maintain healthy labor-market conditions.”

Mester also said it’d be appropriate for the Fed to begin discussing when to slow the pace of its balance-sheet runoff, known as quantitative tightening, this year.

Several policymakers raised the issue at the Fed’s December meeting, and Dallas Fed president Lorie Logan Saturday outlined benchmarks the Fed could use to guide its decision.

“We still have a lot of reserves in the system so we don’t have to do that imminently at all, I think there’s time,” Mester said. “I’m sure this year will be when we start having the conversations and what that plan would look like.”

A vocal supporter of boosting interest rates over the past two years, Mester will vote on this year’s Federal Open Market Committee until she steps down as president and CEO of the bank in June, when her tenure ends.

Vitamin maker buys Streetsboro building for $10.4 million

By Stan Bullard

Rights of first refusal are more discussed than used in commercial real estate, but the sale of the 2005 vintage building at 630 Mondial Parkway in Streetsboro provides a case of one in action.

PipingRock Health Products, a Bohemia, New York, producer and distributor of natural health products such as vitamins, on Dec. 20, 2023, closed on the purchase of the 169,000-square-foot warehouse and office building it has occupied since it leased the structure in 2020. It paid $10.4 million for the property.

The Streetsboro location was a natural fit for PipingRock as it has operated a manufacturing and warehouse facility since 2019 on Lena Drive in Aurora.

The company negotiated a right of first refusal for the property if the owner, Cinquest Enterprises, a Brunswick-based investor group, decided to sell it.

“We had the opportunity to buy the building, so we did,” said Irene Fisher, an executive vice president at the privately held PipingRock. She said the company leased the space because it needed additional room for warehouse operations due to sales growth.

The Streetsboro location was a natural fit for PipingRock as it has operated a manufacturing and warehouse facility since

2019 on Lena Drive in Aurora.

Fisher declined to say how many employees work at the Streetsboro property or how it fits into the company's national operations.

"We think Ohio is a great place to operate," she said. "It has a solid workforce."

David Stecker, a managing director at the JLL brokerage's Cleveland office, represented the building owner in the deal. He said in a phone interview that the busy industrial market over the past few years made buying the property a more compelling opportunity than it might have been.

"It was a market deal when the lease with purchase option went in place," Stecker said. "Today the (purchase price) is 20% below market."

Rights of first refusal and lease with purchase situations are not common, said Mike Sikora, managing partner of Sikora Law, which has offices in Cleveland and Columbus.

"We see a greater frequency of rights of first refusal negotiated by tenants when interest rates are high, economic conditions are challenging, and/or supply is tight," Sikora said in an email.

"During those times, certain tenants that would prefer to own are simply unable to do so, but they would like the peace of mind to at least provide for that future right to purchase."

Such transactions require careful negotiations and contract drafting.

"There are often disputes over terms," Sikora wrote. He added that tenants typically push for the provisions, while landlords would prefer not to have property tied up and leaving their options for the future.

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PipingRock Health Products of Bohemia, N.Y., is the new owner of the industrial building at 630 Mondial Parkway in Streetsboro, which it has leased since 2020. The vitamin producer paid $10.4 million for the property. | COSTAR JANUARY 15, 2024 | CRAIN’S CLEVELAND BUSINESS | 3

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Welser-Möst to exit as Cleveland Orchestra director in 2027

By Scott Suttell

Cleveland Orchestra music director Franz Welser-Möst announced he will conclude his tenure in the job in June 2027, when his current contract ends.

At that time, he will be the longest-serving musical leader in the storied orchestra's history.

“I am immensely grateful for the extraordinary journey that I have had with the Cleveland Orchestra since I first came to Severance more than 30 years ago,” said Welser-Möst, who holds the Kelvin Smith Family Endowed Chair, in a statement issued Thursday, Jan 11.

“It is both a special and an emotional moment as I reflect on what we have accomplished together," he said. "But perhaps what matters most to me is the shared passion, the inspiring creativity, and the lasting friendships that I have had the privilege of building with our musi-

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ganization "has been internationally recognized for its inventive artistic programming, innovative opera presentations, extensive educational and community engagement initiatives, and dedication to commissioning and supporting new music." Since 2002, Welser-Möst has appointed 52 of the 105 current members of the orchestra.

Richard K. Smucker, the orchestra's board chairman, said of Welser-Möst, “The stability of his artistic leadership throughout his tenure has been unparalleled, and his deep love and dedication to Cleveland and its citizens have inspired so many of us.”The orchestra announced last fall that Welser-Möst had a cancerous tumor removed and would undergo treatment between his conducting engagements which led him to miss some performances. The orchestra said his doctors "are confident of a full recovery."

Ohio House overrides veto on bill banning gender-affirming care

By Kim Palmer

Connecting Talent with Opportunity.

cians, audiences, and fans around the world. The city of Cleveland, its people, and especially this wonderful orchestra will forever hold a special place in my heart.”

André Gremillet, the orchestra’s president and CEO, said Welser-Möst's announcement marked "a bittersweet day" for the organization.

“While we reflect upon and begin to celebrate the incredible artistry and legacy of Franz Welser-Möst, a great musician, a dear friend, and the chief architect of the Cleveland Sound in the 21st century, we recognize that we will deeply miss his passion, intellect, curiosity, and profound musicianship," Gremillet said. He said Welser-Möst "has transformed this organization, instilling a flexibility and lyricism to the Cleveland Sound that is instantly recognizable.”

Welser-Möst has been music director since 2002. The orchestra said that during his tenure, the or-

Members of the Republican-dominated Ohio House successfully voted, 65 to 28, to override Gov. Mike DeWine’s veto of House Bill 68 during a Wednesday, Jan. 10, session.

The bill that deals with gender-affirming care for minors was vetoed

by DeWine, a Republican, on Dec. 29, 2023, saying parents rather than the government should decide if children should receive critical care from medical providers.

A week after issuing the veto, the governor signed an executive order banning all gender transition surgeries for minors in the state. He also began the process of creating new mental health and data reporting rules and oversight against “pop-up” clinics by the state’s Department of Health and its Mental Health and Addiction Services.

During the House discussion, women Democratic members of the House wore rainbow earrings to show support for the state's LGBTQ+ community and spoke against an

override. Other supporters wore similar pins.

House minority whip, State Rep. Jessica Miranda (D-Forest Park) criticized the move to override the veto, warning that it would make families with young children not want to come to or remain in Ohio.

“I hope the decision-makers are watching this over at Intel,” Miranda said referring to the new facility under construction outside of Columbus.

Proponents of the override, including the bill’s sponsor Rep. Gary Click (R-Vickery), took the floor and thanked those voting against the veto, praising the executive order and reporting policies by DeWine as “not meaningless.”

“I believe our governor has good intentions,” Click said. “But good intentions do not save lives or protect women.”

House Bill 68, also known as the Ohio Saving Adolescents from Experimentation (or SAFE) Act, includes a ban on transgender girls and women from competing in single-sex female sports in the

state’s high schools and colleges.

After the vote, DeWine issued a statement. "I continue to believe it is in the best interests of children for these medical decisions to be made by the child’s parents and not by the government," he said.

The override vote now goes to the state Senate which is not scheduled to meet until Jan. 24.

Ohio Senate President Matt Huffman (R-Lima) told reporters he did not agree with DeWine’s reasoning for vetoing the bill.

Ohio Sen. Nickie Antonio of Lakewood, the Democratic Minority Leader, released a statement warning that the decision to override the veto would jeopardize the health and well-being of children in the state.

“Ohioans have consistently made it clear they do not want politicians interfering with their personal, private medical decisions, but Republicans in the General Assembly continue to ignore the will of the people in pursuit of their hateful agenda,” the Lakewood senator said in her statement.

Most Northeast Ohio hospitals keep masking optional Health systems in several states have reinstated mandates Infection rates remain high in Ohio during the peak season for many respiratory viruses.

Seasonal virus activity is spiking as COVID-19, influenza and respiratory syncytial virus (RSV) rates remain elevated in most areas of the U.S., according to the Centers for Disease Control and Prevention.

“We’re trending the same on the local level as we are across the country,” Cleveland Department of Public Health director Dr. David Margolius said.

Ohio has seen a steady rise in COVID-19 cases since October, though numbers have fluctuated in January. The state reported 12,481 new cases last week compared to 15,046 new cases the week prior, according to the latest data from the State Department of Health’s reporting dashboard.

Cuyahoga County reported 102 new hospital admissions of confirmed COVID-19 during the week of Dec. 17-23, according to data from the Centers for Disease Control and Prevention.

That’s a rate of 6.2 per 100,000 population, putting the county

UNSPLASH

By Paige Bennett

start to decline. Flu season typically peaks between December and February, according to the CDC, but it has been more difficult to predict since the pandemic.

“The rising cases of seasonal respiratory illnesses is concerning and flu, COVID-19, and RSV are three distinct infections with similar symptoms,” Ohio Hospital Association spokesperson John Palmer said in a statement to Crain’s.

“People are encouraged to seek care from their health care provider if symptoms become severe. If you are not feeling well, staying home and safe distancing will help reduce spread. Getting vaccinated is important and services are available to provide it. We also encourage appropriate use of preventative measures including masking, safe distancing, and hand washing.”

Only about 10.1% of Ohio’s population has received the updated COVID-19 vaccine, which was rolled out in September, according to data from the Ohio Department of Health.

Amid the spike in respiratory cases, health systems in several states — including Illinois, Massachusetts, North Carolina, Washington, California and Wisconsin — have reinstated mask requirements, ABC News reported. Some New Jersey hospitals brought back mask mandates in light of high infection rates, according to NorthJersey.com.

In October, the Cleveland Clinic announced that it would be asking caregivers and visitors to wear masks when entering an inpatient unit to help reduce the spread of illnesses amid respiratory virus season.

The health system also recommends those who are immunocompromised, at high risk for complications from respiratory viruses or experiencing symptoms of a respiratory virus to

“We’re trending the same on the local level as we are across the country.”

— Dr. David Margolius, Cleveland Department of Public Health director in the low category for new hospital admissions.

The CDC estimates there have been at least 7.1 million flu illnesses, 73,000 hospitalizations and 4,500 deaths nationwide this season so far. The agency lists Ohio in the “high” category for respiratory virus activity levels between Dec. 23-28. That level is based on the percentage of visits to enrolled outpatient health care providers or emergency departments for fever, cough or sore reported to the agency’s influenza-like illness surveillance network.

Meanwhile, the Ohio Department of Health’s online flu tracker shows the regions with the most hospitalizations for influenza are northeast (121) and north central (116) as of the week ending Dec. 30. The state reported its first fluassociated pediatric death of the season on Dec. 29.

COVID-19, influenza and RSV are the main drivers behind seasonal virus activity, but other lesser-known respiratory illnesses also contribute to seasonal illness, Margolius said.

Although illnesses are on the rise, recent numbers are consistent with the five-year average in Ohio, he said. Margolius said he’s hopeful that cases are plateauing and will eventually

mask up.

University Hospitals adopted its current masking policy on May 15.

Masks are optional for patients, visitors and caregivers in patient care areas, except for anyone with COVID-19 symptoms, exposed to someone with COVID-19 or returning to work after COVID-19 or anyone with a respiratory illness. Masking is required in areas where caregivers work with highly vulnerable patients, which are indicated by posted signs. Masks and respirators continue to be required for

caregivers performing procedures where there is an increased risk of airborne COVID-19 spread as part of infection control precautions.

At MetroHealth, masking is optional for patients, visitors and employees, except for in the blood and marrow transplant unit, where masking is required upon entry due to the vulnerability of patients.

MetroHealth also highly recommends masks for those with respiratory symptoms or who have been in close contact with someone with COVID-19.

As of Dec. 21, Summa Health notified its employees that masking is highly recommended in patient-facing settings, a spokesperson confirmed. The Akron-based health system requires employees to wear masks for more than 15 minutes of exposure without the use of a mask to someone diagnosed with COVID-19. Masks are also required in clinical areas per standard and transmission-based precautions, the spokesperson said.

At Akron Children’s Hospital, masking remains optional for all patients, families and visitors, a spokesperson said in an email.

The hospital requires employees to wear masks for patient-facing interactions in critical care units, including special care nurseries, hematology/oncology, the pediatric intensive care unit, the burn center and the neonatal intensive care unit. Masking is recommended but not required for all other patient-facing encounters.

The University of Cincinnati Health reimplemented a mask mandate for employees and clinicians when interacting with patients in November as a result of the increase in respiratory virus cases.

Margolius said people experiencing symptoms like sneezing and coughing are probably contagious and should avoid getting others sick. They should also stay up to date on their vaccines. Flu and COVID-19 vaccines are available at many health care providers’ offices, local health departments and retail pharmacies.

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Tony Troppe to redevelop Beacon Journal building

By Dan Shingler

Akron developer Tony Troppe says he’s going to turn the former Akron Beacon Journal building and an adjacent parcel into a mixeduse development consisting of nearly 200 residential units, food purveyors and other businesses.

In December, Troppe won $5.3 million in state tax credits for the project, which the state says will have a total cost of $52.2 million, based on Troppe’s application for the credits. Troppe said he has negotiated the purchase of the property from Alabama’s Capstone Development and is in the process of closing the transaction.

Troppe said he’s working on securing some additional government financing and hopes to begin construction late this summer and then complete the project in 2025.

“We’re working through a variety of things,” Troppe said. “FHA and HUD seem to be delighted with this project, so we’re moving ahead there. The construction company is giving me a timeline of 18-22 months, and we probably won’t start until late summer.”

newsroom and offices above.

Not to mention the fact that the project would be the largest yet in terms of residential development in downtown Akron. The city’s Bowery District, which opened in 2018, encompassed six big, abandoned buildings, but it cost about $40 million and has about 100 apartments. The Bowery project encompassed about 104,000 square feet of space, while the Beacon Journal building has approximately 260,000 square feet of space on its three floors.

Troppe’s tax credit application shows he plans to build 197 apartment units on the site, which includes the existing Beacon Journal building and an adjacent piece of land that was formerly the site’s parking deck. Troppe said he’ll put part of the project in the existing building and build the rest on the parking deck site.

“We’re exceeding 130 units in the main building,” Troppe said. “I envision, where that old parking deck was, putting in a new podium with multiple floors.”

The upper floors would be loft units, with apartments below and on the street level, along with restaurants, bars and other vendors would take up retail space at street level, according to Troppe and his tax-credit application.

“It will accommodate multiple layers for people to live, people to work, people to shop. The building is set up very strategically for deliveries, distribution, and a retail component,” Troppe said. “It’s truly a mixed-use building that lends itself to a variety of ways to serve the community.”

Troppe said the city needs new residences, and also more places for people to shop, eat and drink.

“Downtown’s a food desert, so we have to look for more opportunities … (for) places that are easily accessible to more people

Troppe will have to preserve the building’s historic façades and some other features, because of the historic tax credits he’ll be using.

Troppe said he has hired Pride One Construction, the Medinabased company that also has done work for developer Stuart Lichter in town, to do the work on the Beacon Journal building.

The price tag is high, in part, because the building is large and was purpose-built to serve as the home to the city’s long-time daily newspaper, sturdy enough to hold the paper’s huge printing presses with loading docks and a distribution center on the lower levels and the

The Akron Beacon Journal building in downtown Akron | STATE OF OHIO

and easily available for the disruption of goods and services,” Troppe said.

One of the tenants Troppe said he’s courting is a coffee company that, if all goes as he hopes, would operate from the Beacon Journal building and use its loading docks to distribute its product regionally or nationally.

Troppe will also have to preserve the building’s historic façades and some other features, because of the historic tax credits he’ll be using.

Toward that end, Troppe said he’ll be keeping and relighting the building’s famous time and temperature sign, which for many years was a downtown landmark.

“I grew up on Grant Street overlooking the big time and temperature sign ... having that time and temp flash in my room,” Troppe said. “I think it’s significant to revisit that amenity . . . we’ve got to get that thing back lit up.”

The project could be done without the tax credits, though, and Troppe waited for them to be approved before he agreed to close on his purchase of the building.

Rent in the new units will be

between $1,300 and $1,500 per month for units that are 600 to 700 square feet in size, with larger units up to 900 square feet renting for more, Troppe said.

That’s not cheap, but downtown Akron has proven its ability to attract renters willing to pay higher rents to be close to places of work, such as nearby hospitals and the University of Akron, and to be in a downtown environment.

“The market is absorbing that,” Troppe said. “People are buying more interesting spaces.”

Troppe already has about 100 residential units in downtown Akron at other buildings he has redeveloped. He said he has noticed that newcomers, graduate students, empty nesters and other prospective tenants are often looking for smaller spaces than they did years ago, and are focused on amenities and location, so he’s confident he’ll have tenants.

Don Taylor, head of the Welty Building Co. and the city’s Bowery District, said he thinks Troppe will succeed—even if Taylor was frustrated to lose out to Troppe in competing for the tax credits. Taylor had been hoping to win the

credits for his planned redevelopment of the City Center office building in downtown Akron into 117 apartments at a cost of $25 million to $30 million.

That said, Taylor said he hopes Troppe succeeds. He said he’s also glad the building won’t be torn down, as was proposed by its previous owners in a request denied by the city.

“My compliments to Tony Troppe for figuring out to make it work, because I was all for not seeing the Beacon Journal building torn down,” Taylor said.

If and when Troppe gets the Beacon Journal building project done, Taylor predicts he’ll have little trouble finding residential tenants; the Bowery has been full since nearly the day it opened.

“I believe there is demand,” Taylor said. “I’m still bullish on downtown apartments.”

Taylor also thinks Troppe is snagging a nice piece of downtown in picking up the new building.

“It’s in a great location,” Taylor said. “It’s adjacent to the university, and as the university does better, any housing nearby will do well and gain value.”

SEC seeks $45 million from bankrupt Lordstown Motors

By Scott Suttell

The U.S. Securities and Exchange Commission wants the bankrupt Lordstown Motors Corp. to pay $45 million — an amount the government said represents "monetary remedies for violations of federal securities laws."

Lordstown Motors, an electric vehicle manufacturer that was at the vanguard of the EV movement but ran into huge problems and produced few vehicles, disclosed the SEC "proof of claim" in a regulatory filing this week. The claim was filed Jan. 4 with the U.S. Bank6 | CRAIN’S CLEVELAND BUSINESS | JANUARY 15, 2024

ruptcy Court in Delaware, one day before a court-set deadline for the filing of such claims.

"The debtors continue to discuss a potential resolution with the SEC, but to the extent a resolution is not reached, dispute the SEC’s claim," the company said in the regulatory filing. It added, “Any recovery by the SEC will reduce recoveries to the company’s stockholders, if any.”

An email to Lordstown Motors wasn't immediately returned.

Lordstown Motors on June 27, 2023, filed for Chapter 11 bankruptcy protection. The company

said in the SEC filing that it's "seeking to use the tools of Chapter 11 to fully, finally and efficiently resolve its contingent and other liabilities."

But virtually nothing with respect to Lordstown Motors is simple.

TechCrunch noted that the SEC "first started probing Lordstown Motors in 2021, just days after short-selling research firm Hindenburg Research published a report laying out a number of allegations of fraud. One of Hindenburg’s central claims was that Lordstown had lied to investors about the number of pre-orders it had se-

cured for its electric pickup truck."

Lordstown Motors' filing this week noted that, as previously disclosed, it had received two SEC subpoenas "for the production of documents and information, including relating to the merger between DiamondPeak and Legacy Lordstown and pre-orders of vehicles." (DiamondPeak Holdings Corp. is a blank-check company that took Lordstown Motors public in October 2020.)

In June 2021, then Lordstown Motors CEO Steve Burns and then chief financial officer Julio Rodriguez resigned after the company's

board said it found evidence of inaccurate statements related to pre-orders of the company's Endurance pickup truck.

In October of last year, though, Burns returned, as his investment company, LAS Capital LLC, bought Lordstown Motors’ manufacturing assets out of bankruptcy court for $10.2 million.

TechCrunch reported that if the SEC moves forward with the $45 million fine, "it would be the biggest penalty for an EV startup since hydrogen trucking company Nikola settled its own case for $125 million in 2021."

Athersys files for bankruptcy, plans to sell assets

Maia Hansen, the company’s chief operating officer, effective Dec. 31.

The company since then has not responded to emailed or phone requests for interviews.

An Athersys spokesperson in

October 2023 told Crain’s that the company had about 20 employees. In the Dec. 22 SEC filing, Athersys estimated it will incur about $360,000 in “one-time, pretax cash charges related to the employee terminations, consist-

ing of employee severance and other one-time termination benefits.”

Athersys in June 2022 cut about 70% of its workforce and made changes to its executive team in a restructuring designed to reduce costs and prioritize its lead clinical programs.

Athersys since the mid-1990s has been developing a therapy called MultiStem, derived from adult stem cells, to treat stroke, acute respiratory distress syndrome (ARDS) and patients with traumatic injuries. However, it has been under financial pressure for some time.

Major financial and operational challenges began in May 2022, after the company revealed MultiStem failed to meet the primary endpoint of a phase 2/3 stroke trial conducted by Healios, which is based in Japan.

Athersys on Oct. 16 announced it had hired an investment banking firm, Outcome Capital, to help evaluate strategic alternatives that could include “a possible merger, business combination, investment into the company, or a purchase, license or other acquisition of assets.”

Boston-based Outcome Capital specializes in working with companies in the life sciences and health care industries.

In that announcement, Athersys said that if it was “unable to enter into a strategic transaction or obtain adequate financing, it expects to have to file for protection under the bankruptcy laws to allow the company to conduct an orderly wind down of operations.”

his holdings by $1.2 billion if the Tennessee-based billionaire choses to sell Buffett his remaining stake.

As part of the case, Buffett’s lawyers accused Haslam of bribing Pilot Travel executives with promises of millions in bonuses to allegedly influence their short-term business decisions. Buffett says those promises were made in

hopes of juicing quarterly earnings in order to pump up the value of his 20% stake. Federal prosecutors in Manhattan are investigating whether Haslam’s promised payments amount to bribes that violate federal law.

Buffett’s attorneys said Haslam admitted in pre-trial depositions to making promises about payments out of his own pocket to

more than 15 Pilot Travel senior executives, along with some managers in the truck-stop chain’s fuel division. Berkshire noted in earlier court filings that decisions made by gas and diesel buyers could have a major effect on short-term earnings.

The case is Pilot Corp. v. Abel, 2023-1068, Delaware Chancery Court (Wilmington).

By Scott Suttell

Cell therapy and regenerative medicine company Athersys Inc. of Cleveland has filed for Chapter 11 bankruptcy protection and has signed an agreement to sell its assets to a company that has, over the years, been a key research and business partner.

Athersys said in a filing made Jan. 8 with the U.S. Securities and Exchange Commission that it filed for bankruptcy on Jan. 5, along with four direct and indirect subsidiaries: ABT Holding Co., Advanced Biotherapeutics Inc., ReGenesys LLC and ReGenesys BVBA. The filing was made in the U.S. Bankruptcy Court for the Northern District of Ohio.

Additionally, Athersys said it has entered into a “stalking horse” asset purchase agreement with Healios K.K. in which it will sell “substantially all” of its assets, including “contracts, personal property, inventory, intellectual property, intangible property, accounts receivable, permits and approvals, studies, documents and claims,” for $2 million in the form of a credit bid.

A stalking horse bid is “an initial bid on the assets of a bankrupt company,” according to Investopedia. In such a bid, the bankrupt company “will choose an entity from a pool of bidders who will make the first bid on the firm’s remaining assets. The stalking horse sets the low-end bidding bar so that other bidders can’t underbid the purchase price.”

The Cleveland headquarters of biotech firm Athersys Inc. The company has filed for Chapter 11 bankruptcy protection and has signed an agreement to sell its assets to Healios K.K., a company that has been a key research and business partner. | CONTRIBUTED

The bankruptcy and planned asset sale follow a regulatory filing on Dec. 22 in which Athersys indicated it intended to terminate its remaining employees, including Daniel A. Camardo, the company’s chief executive officer, and

Berkshire Hathaway settles Pilot Travel sale claims on eve of trial

By Jef Feeley, Bloomberg

Warren Buffett’s Berkshire Hathaway has avoided trial by settling allegations it violated the terms of its buyout of the Haslam family’s Pilot Travel Centers truck stop chain by changing the accounting methods used to value the last part of the deal.

Although details of the settlement haven’t yet been made public, the deal is likely to clear the way for Buffett to purchase the remaining 20% of Pilot Travel from Haslam later this month under terms of the original acquisition.

The accord means both sides will dismiss all claims against each other, according to spokespeople for both billionaires.

A docket filing in Delaware Chancery Court said the trial, scheduled for Monday, Jan. 8, in Wilmington before Judge Morgan Zurn, had been canceled.

Haslam, the owner of the NFL’s Cleveland Browns, was expected to testify live in the trial, but Buffett was not.

The settlement resolves a case that set up a bitter legal battle between the two billionaires. Haslam contends Pilot Travel executives installed by Buffett changed quarterly-earning accounting methods in a way that will cut the value of

Berkshire — which acquired an 80% stake in Pilot Travel for more than $10 billion from billionaire Jimmy Haslam — was accused of improperly changing the accounting methods to short charge the Haslam family out of their remaining 20%. The two parties reached a settlement on the eve of the trial, representatives of both Haslam and Buffett confirmed.

BLOOMBERG

The deal is likely to clear the way for Buffett to purchase the remaining 20% of Pilot Travel from Haslam later this month.

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Blue Abyss completes purchase of Brook Park land for training complex

By Crain's Staff

Blue Abyss, a U.K.-based company, has finally completed the purchase of roughly 12 acres in Brook Park on which it plans to build a deep sea and space training facility, including a giant training pool.

The purchase was announced Monday, Jan. 8, in a joint release from the company and Brook Park city officials.

The land sits along Aerospace Parkway, near Ruple Parkway, at the western end of Cleveland Hopkins International Airport, near NASA’s Glenn Research facility. The announcement says the complex will include “a state-ofthe-art extreme environment research, development and training center, and hotel.”

According to paperwork filed with Cuyahoga County, the deed was signed over Dec. 28 and filed the following day. The cost of the deal was not disclosed.

Last spring, Crain’s reported the purchase contract shows that Blue Abyss agreed to pay $783,750 for four parcels, with $716,250 flowing to the city after broker commission fees.

According to Blue Abyss, the facility will boast “the world’s largest and deepest R&D pool,”

Renderings above and below show Blue Abyss’ training pool, which will be built at the Brook Park complex. | BLUE ABYSS

“As we step into 2024, this exciting milestone in our partnership with the state of Ohio and the city of Brook Park signifies a shared commitment towards realizing a visionary Blue Abyss center.”

— Blue Abyss CEO John Vickers, in a release which will hold 42,000 cubic meters of water. The company is currently building a similar pool in Cornwall, England.

Other aspects of the complex will includ the following: ◗ Human Centrifuge, to enable

training and physiology research at high G. ◗ Hypobaric and Hyperbaric Chambers, enabling training and research in hypoxic and pressurized environments. ◗ Blue Abyss Parabolic Flight 2.0,

enabling microgravity research, training and public discovery.

The statement also quotes an economic impact study conducted by Kent State University that projects the construction

phase of the facility will add nearly 1,800 full-time equivalent jobs and will produce a total spending impact of $316 million.

In the release announcing the completion of the deal, Blue Abyss CEO John Vickers said, “As we step into 2024, this exciting milestone in our partnership with the state of Ohio and the city of Brook Park signifies a shared commitment towards realizing a visionary Blue Abyss center. This facility will stand as a beacon of innovation and a cornerstone of regional and national infrastructure, fostering economic growth, and job creation, leaving an enduring legacy for Brook Park, Ohio, and the global community.”

Brook Park Mayor Edward Orcutt also commented, saying, “Blue Abyss investing in Brook Park for this ground-breaking facility is a clear sign of our unlimited potential and bright future and continues the great legacy of innovation by NASA Glenn and the Ohio Aerospace Institute, both located in Brook Park. We’re eager to collaborate, leveraging their expertise to boost our local economy, generate jobs, and create a lasting legacy for our community and Northeast Ohio.”

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Goodyear unveils plans for EV future with new tires

By Tope Alake, Bloomberg

Enterprise Place in Beachwood is being marketed for sale by Cooper Commercial Investment Group of Mayfield Heights. | COSTAR

Enterprise Place hits market with $15.5M asking price Goldberg Cos. has put Enterprise Medical & Professional Center, best known by its original name, Enterprise Place, on the market at an asking price of $15.5 million with Cooper Commercial Investment Group.

Goldberg, a Northeast Ohio apartment and office building owner known more for holding than selling, has owned the Beachwood property since 1998.

Dan Cooper, president/broker of Cooper Commercial, said the owner wants to shed the fivefloor building to yield equity for out-of-town apartment projects.

“This is a once-in-a-lifetime opportunity,” Cooper said, because of the building’s key location near the I-271/Chagrin Boulevard interchange and its visibility from the highway.

The other distinguishing characteristic is its square pancake design by The Architects Collaborative, an internationally known group of architects based in Cambridge, Massachusetts.

The structure, dating from 1985, is the epitome of the office-building boom of the 1980s because it has multiple corner offices to accommodate multiple executives or business owners.

The prior sale price was not recorded publicly.

However, Cuyahoga County values the building at $13 million for property tax purposes. Cooper’s firm is based locally but is known for handling building sales throughout the nation.

Enterprise Place, 3401 Enterprise Parkway, was developed by the late Frank Porter, the Cleveland real estate developer, philanthropist and Cadillac dealer who launched east suburban office development of scale with Tower East in Shaker Heights in 1968.

Tower East also was designed

by The Architects Collaborative and was the work of the famed, late Walter Gropius. Cooper said Enterprise has 76% occupancy so it can provide the next owner some upside and boasts a roster of tenants with an average of five years left on their leases.

The offering of Enterprise Place fits in with Goldberg’s larger strategy.

In an emailed statement, Norman Glazer, Goldberg’s vice president for investments, wrote that the company “has been concentrating on its multifamily portfolio in Ohio and the southeast US over the past several years. Its current pipeline of development and construction sites totals nearly 4,000 units across 11 properties, and selling Enterprise Place furthers the company’s targeted deployment of capital into its primary growth markets.”

Geoffrey Coyle, executive director of strategy and operations at the NAI Pleasant Valley brokerage of Independence, said the building “has always been held in high regard, both because of who built it and who designed it.”

However, Rico Pietro, a principal at the Cushman & Wakefield Cresco brokerage in Independence, said the property is likely to have a “limited prospective pool of buyers.” He said family offices and private equity investors will be the primary bidders, as other groups will have difficulty lining up a loan for the purchase given the woes of the office market post-pandemic.

Moreover, Pietro noted that the cash to get a loan for the purchase to finance such a purchase has doubled since 2019, which also reduces the number of prospective buyers. He said lenders have so little appetite for office buildings that it may be hard to find a willing lender for it.

“However, suburban offices

are more attractive than downtown office buildings for lenders,” Pietro said.

Plus, he said, the building has notable construction quality and could be sold for less than the replacement cost The structure incorporates about 125,000 square feet of office and support space.

BLOOMBERG

By Stan Bullard

The Goodyear Tire & Rubber Co. is developing a product for electric vehicles that it says will help ease something that’s hampered their competitiveness against gas-powered vehicles: tire duration.

EVs weigh more than their internal combustion counterparts owing to their heavy battery packs, putting more wear and tear on tires. Akron-based Goodyear sought to extend EVs’ tire mileage with its new ElectricDrive 2 product that it revealed Tuesday, Jan. 9, at CES in Las Vegas.

The first iteration of the tire came with a 60,000-mile warranty.

The average EV tire typically needs to be replaced after 30,000 to 40,000 miles, according to Kelley Blue Book.

Goodyear expects the tires to be commercially available in North America starting in May, joining two other EV-specific offerings, according to chief technology officer Chris Helsel. Goodyear also

released the Urban Max BSA tire line last June, which is specifically designed for electric buses.

The ElectricDrive 2 series will be produced in 17 sizes — the company’s largest line for EVs, Helsel said — that will serve vehicle models including the Tesla Model Y, Ford Mustang Mach-E and Chevy Bolt. He declined to specify the cost of the ElectricDrive 2 line of tires and planned production quantities.

The company’s new EV product is expected to feature materials including soybean oil used in the tire’s construction, sustainably sourced natural rubber, and high-quality rice husk ash silica, a byproduct when rice is processed.

Tire pollution is a growing concern for the industry, both at the end of their life and the pollution they leave on the road in the form of tiny particles that can include microplastics, volatile organic compounds and other chemicals that pose a risk to the environment.

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NASA Glenn scientist nets grant for proposed flights to Venus Apart from its size and rocky structure, the planet is very different from Earth.

Its temperatures are over 800 degrees.

Venus looks pretty cool, but it’s not — the planet’s greenhouse gases have made it inhospitable to life as we know it. | NASA

By Dan Shingler

NASA’s not content to fly around the earth, or between our little blue rock and other planets. It wants to fly around on Venus — and to come back with some goodies.

At least one local NASA engineer thinks it’s a good and feasible idea, and now he’s been nationally recognized for his efforts by NASA as part of the agency’s 2024 Phase I awards.

Those awards are part of the NASA Innovative Advanced Concepts program that the agency says aims “to fund ideas that could innovate for the benefit of all and transform future agency missions.” They range from ideas dealing with low-earth orbit to farflung missions to Venus and beyond.

The awards provide recipients up to $175,000 in grants to evaluate the technologies they’ve put forth.

In Cleveland, the award is going to Geoffrey Landis, a scientist at NASA Glenn Research Center who has worked on work dealing with missions to Mars and other cutting-edge space programs.

Long a hot topic among space nerds, Venus is also a focus of NASA, which plans missions to Earth’s rocky solar system sister over the next decade.

But getting there is only part of the challenge. Once there, scientists would like to learn as much about the planet as they can, and even bring back samples from Venus.

Beyond their size and rocky structure, Venus and Earth are very different places.

Venus is hot — it’s what many say is a prime example of what happens when global warming runs wild. Temperatures on Venus are about 450 degrees Celsius, which is 842 degrees Fahrenheit.

There’s a lot of pressure too. Venus runs at about 92 atmospheres of pressure or, in other words, 92 times the amount of pressure experienced on Earth at sea level, on average.

Needless to say, you’re not going to hop down to the surface of Venus in your average airliner.

Landis has some thoughts on this idea — enough to win the recent NASA award, at least.

The space agency isn’t giving a lot of details on how Landis might tackle the problem, though — at least not in terms that would mean much to most folks.

“This project will pioneer a new approach to return a sample from the surface of Venus,” NASA said in its awards announcement.

“The approach will merge an innovative carbon monoxide rocket technology to make propellant from the Venus atmosphere with innovations in high-temperature surface systems and solar aircraft.”

Heady stuff. For most people, at least, but less so for Landis.

The scientist has nine patents to his name and has authored or co-authored more than 300 published scientific papers dealing with astronautics and photovoltaics.

It also might come as no surprise to those familiar with Landis that he has the imagination and knowledge to come up with such ideas. He is, after all, also a noted

science fiction author who has received two Hugo awards and a Nebula Award for his writing.

Landis’ work received one of 13 Awards from NASA in the latest round of grants and was one of three the agency highlighted in its release about this year’s winners.

Not all of them will come to fruition, but they are all important, the agency said.

“The daring missions NASA undertakes for the benefit of humanity all begin as just an idea, and NIAC is responsible for inspiring many of those ideas,” said NASA Associate Administrator Jim Free in a release. “The Ingenuity helicopter flying on Mars and instruments on the MarCO deep space CubeSats can trace their lineage back to NIAC, proving there is a path from creative idea to mission success.”

By Scott Suttell

New-vehicle dealers in Northern Ohio had a much smoother ride in 2023 than they did in 2022.

The Greater Cleveland Automobile Dealers’ Association on Jan. 5 reported that dealers in 21 counties of the region sold 210,789 new vehicles in 2023, an increase of 6.9% from sales of 197,164 the prior year.

Sales during most of 2023 were up on a year-over-year basis from 2022. The increase in December, though, was modest, with sales rising 1.1% to 15,968 new cars,

trucks and SUVs compared with the like month a year earlier.

In some cases, dealer inventory was lower at the end of the year due to the fall’s targeted United Auto Workers strikes.

Association president Louis A. Vitantonio said that while high interest rates “are hindering sales activity,” some “more lucrative incentives have arrived, which help offset the payment increases.” He added, “In 2024, we expect similar sales activity as the market corrects itself from the past two years.”

Vitantonio noted that used vehicle sales struggled in 2023, fall-

ing 5.3% to 211,438 from the levels of 2022. In December, sales of used cars, trucks and SUVs were down by 10.4% from the like month in 2022.

Retail sales figures are based on vehicle registration reports from the Ohio Bureau of Motor Vehicles. The association’s sales data includes all dealers in the following 21 counties: Ashland, Ashtabula, Carroll, Columbiana, Coshocton, Cuyahoga, Erie, Geauga, Holmes, Huron, Lake, Lorain, Mahoning, Medina, Portage, Richland, Stark, Summit, Trumbull, Tuscarawas and Wayne.

BLOOMBERG

Auto dealers had a strong 2023, despite interest-rate challenges

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1/10/24 4:19 PM

OVER CRAIN’S CLEVELAND BUSINESS 2024 Know a business leader over the age of 80 who is still working tirelessly to advance Northeast Ohio and its residents?

Nominate them for 8 Over 80.

Nominate by February 9 CrainsCleveland.com/80sNoms

CR

Audacy’s stations include The Fan 92.3 FM and Q104 FM

By Christine Burke and Amelia Pollard, Bloomberg

Audacy Inc., the radio and podcast company that counts New York’s 1010 WINS among its stations, filed for Chapter 11 bankruptcy protection in Texas after reaching a pact with creditors that would hand them ownership in exchange for slashing $1.6 billion of debt.

The Philadelphia-based broadcaster said in a statement that its publicly traded shares would be wiped out in the deal, which if approved by a judge in Houston, would reduce its outstanding bonds and loans to about $350 million from $1.9 billion.

Audacy currently owns several popular Cleveland radio stations: The Fan 92.3 FM, Q104 FM, 98.5 FM WNCX and Star 102 FM. A “perfect storm of sustained

macroeconomic challenges over the past four years facing the traditional advertising market has led to a sharp reduction of several billion dollars in cumulative radio ad spending,” Audacy President and Chief Executive Officer David J. Field said in the statement. “These market factors have severely impacted our financial condition and necessitated our balance sheet restructuring.”

The company has also launched a website to outline the current situation and look toward its future.

In a statement on that site, the company explained its filing thusly: “Audacy has taken actions to capitalize on our strategic transformation into a scaled, multi-platform audio content and entertainment company with compelling growth opportunities.”

The restructuring pact was approved by a “supermajority” of creditors, Audacy said, allowing it to file a so-called prepackaged bankruptcy that could help to speed court proceedings. The company said it doesn’t expect

BLOOMBERG

Radio company files for bankruptcy protection

any operational impact from the restructuring and said that trade and other unsecured creditors won’t be impaired.

In the federal bankruptcy court petition filed in the Southern District of Texas, Audacy listed total debt of $2.66 billion and assets of

$2.79 billion.

Some existing lenders committed to provide $57 million of debtor-in-possession financing, which helps to fund operations during the restructuring process, the company said.

The company has struggled re-

cently as advertising revenue for broadcast radio remains weak, S&P Global Ratings said in a May note lowering Audacy’s credit rating.

Crain’s Cleveland Business contributed to this report.

Cleveland’s MIM Software to be acquired by GE HealthCare “This is a huge industry. We sell hardware into that space. And we noticed that MIM was quite active and successful at working with customers on the software side.”

By Paige Bennett

MIM Software, a Cleveland-based company that sells medical imaging analysis and artificial intelligence solutions for radiation oncology, diagnostic imaging and other treatments, has entered an agreement to be acquired by Chicago-based GE HealthCare.

GE HealthCare, a global medical technology and pharmaceutical diagnostics company, did not disclose the financial details of the transaction, which was announced on Monday, Jan. 8. The company plans to fund the transaction with cash on hand.

Jan Makela, president and CEO of imaging at GE HealthCare, said discussions between the companies occurred over many months, and that GE HealthCare felt MIM Software fit well with the company’s strategy.

“Most cancer patients at some point will go to radiation oncology, which is where they get external beam therapy to hit the cancer,” Makela said in an interview with Crain’s. “This is a huge industry. We sell hardware into that space. And we noticed that MIM was quite active and successful at working with customers on the software side.”

MIM’s portfolio of imaging solutions includes integrating diagnostic images from multiple modalities into treatment plans; automating to reduce repetitive tasks and manual interventions and advanced processes in diagnostic imaging and nuclear medicine to determine therapy response. It also includes a platform that assists with Thera-

— Jan Makela, president and CEO of imaging at GE HealthCare

GE HealthCare has agreed to acquire Cleveland-based MIM Software, which sells medical imaging analysis and AI solutions. | CONTRIBUTED

nostics imaging and dosimetry.

GE HealthCare plans to integrate these solutions into “its advanced visualization offerings to facilitate AI-based segmentation and contouring as well as dosimetry analysis for patients across their treatment journeys and in the growing fields of radiology, molecular imaging and radiation oncology,” the company says.

MIM Software, founded in 2003, has additional offices in

China and Belgium.

“We are excited by the prospect of joining GE HealthCare and thrilled to share this exciting news,” MIM Software CEO Andrew Nelson said in the deal announcements. “Over the past two decades, we have worked to develop innovative vendor-agnostic products and deliver quality services to earn the trust of our customers — this will not change. As a part of GE Health-

Care, we anticipate developing new and increasingly integrated digital solutions to meet our customers’ most complex and pressing needs, today and into the future. Together, we will build upon our shared legacies of enhancing patient care.”

GE HealthCare is a $18.3 billion business with more than 50,000 employees, according to the company. It spun out from General Electric in 2023 and

trades on Nasdaq under “GEHC.” It previously acquired Caption Health, Inc., an AI health care company, and IMACTIS, a France-based company in the field of computed tomography interventional guidance.

“We are committed to providing comprehensive, connected devices and digital solutions that enable providers to improve patient care across multiple specialties,” said Peter Arduini, president and CEO at GE HealthCare, in a statement. “We expect our efforts to bring these two complementary organizations and innovative product portfolios together to strengthen our capabilities as a leading provider of integrated imaging systems, analytics, and advanced digital workflows across several care areas and pathways — including Theranostics, radiation oncology, urology, neurology and cardiology. Now and in the future, we are working to transform patient care.”

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Diebold Nixdorf leaving Hudson to consolidate business “Like a lot of other companies, we thought the world was going to return to the way things were preCOVID … but then we discovered we don’t need all this space.”

Company is moving its headquarters to North Canton

By Dan Shingler

Hudson can blame the pandemic and the lingering after-effect of remote work for the loss of a major corporation.

Diebold Nixdorf says it no longer needs its 70,000-square-foot headquarters building in town and is moving the company’s headquarters to North Canton, where it already has a substantial presence in the Hoover District, said senior director of corporate communications Mike Jacobson.

“We’re consolidating everything in North Canton,” Jacobson said.

“I’ve been with the company 30 years now, and this is the first time we’ve been able to consolidate our local operations in one place.”

Diebold, founded in Canton in 1872, has gone from making safes to dominating the ATM market to become what is primarily a technology company working on point-of-sale and security products.

Along the way, it’s had operations in Canton, North Canton, Hudson, Mogadore, Seville, New-

— Mike Jacobson, senior director of corporate communications

Diebold Nixdorf is moving the company’s headquarters to its facilities in North Canton. | DIEBOLD NIXDORF

ark and other locations, Jacobson said.

It only began its move to Hudson in October of 2021, but that move was planned before anyone at the company, or most anywhere else, knew what the post-pandemic

work environment would be like.

In other words, Diebold took more space than it now needs.

“That wasn’t the initial intent at all,” Jacobson said of the pending move. “But we didn’t have the benefit of hindsight when we were

doing that planning, and we were doing that planning during COVID. Like a lot of other companies, we thought the world was going to return to the way things were pre-COVID … but then we discovered we don’t need all this

space.”

Jacobson said he didn’t have a specific headcount for the headquarters but conceded it was in the hundreds.

Their cubicles and offices will be replaced by about 60 workstations in North Canton, where Diebold has about 347,000 square feet of space, including 164,000 square feet it added last year.

That’s more than enough to absorb the headquarters staff—most of whom will work at least part of the time from home — and to accommodate any growth the staff might have, Jacobson said.

Diebold said it will have its people in place in North Canton by March 1.

Glenmede welcomes

Bethany Bryant as Regional Director of the Cleveland, Ohio office Through our continued commitment to the Cleveland community, we are pleased to welcome Bethany to the Glenmede team.

“It’s been an honor to lead the Cleveland team for over a decade and I cannot think of a more experienced and client-focused leader than Bethany to take our region to the next level and beyond.”

– Larry Hatch, Senior Relationship Strategist

Glenmede 216-378-2900 | www.glenmede.com Highland Centre 3900 Park East Drive, Suite 100 Beachwood, OH 44122-4344 PRW-ADV-023-Z01

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State makes $10M grant to Cleveland broadband effort In 2019 Cleveland was named the worstconnected large city in America by the National Digital Inclusion Alliance.

By Crain’s Staff

The state of Ohio is giving a boost to broadband in Cleveland.

Gov. Mike DeWine and Lt. Gov. Jon Husted on Tuesday, Jan. 9, announced the Ohio Department of Development’s BroadbandOhio initiative is partnering with the city of Cleveland and Cleveland nonprofit DigitalC to create a broadband network that will offer high-speed, low-cost internet service across the city.

At an event in Cleveland, they were joined by Mayor Justin M. Bibb, City Council President Blaine Griffin and DigitalC CEO Joshua Edmonds.

There’s real money behind the push to improve broadband in Cleveland, which in 2019 was named the worst-connected large city in America by the National Digital Inclusion Alliance.

The state announced BroadbandOhio is supplying $10 million in grant funding for the citywide broadband project. The city of Cleveland itself is providing up to $20 million. The state said contributions from the Jack, Joseph, and Morton Mandel Supporting Foundation, the David and Inez Myers Foundation, and other sources will aid the project, which has an estimated price tag of $53 million.

Broadband “has become nearly as essential as electricity,”

Gov. Mike DeWine on Tuesday, Jan. 9, announced support for citywide broadband expansion in Cleveland. | GOV. MIKE DEWINE

DeWine said. He added, “We are committed to closing the digital divide in Ohio — not just in rural parts of the state, but also . . . in urban centers like Cleveland where affordability can be more of an obstacle than access.”

DigitalC plans to break ground on the broadband expansion later this month. The goal: give all of Cleveland’s 170,000 households access to low-cost broadband by mid-2025.

Access to the network will be

locked in at a cost of $18 per month for at least five years. After that, there could be increases to account for inflation.

Bibb said the partnership with the state “will help us accomplish our vision of ensuring ev-

ery single Clevelander will have access to an affordable, powerful internet plan.”

Edmonds added that the BroadbandOhio support, “in conjunction with trailblazing contributions from a coalition of public, private, and philanthropic partners, will propel this stateof-the-art citywide network forward and ensure an equitable digital future for our city.”

In conjunction with the broadband expansion, DigitalC will offer basic coaching and digital literacy training to Cleveland residents.

The state said that since BroadbandOhio was established more than three years ago, the effort “has dedicated $245 million to connecting more than 135,000 homes to reliable and affordable high-speed internet.”

Included in that: nearly $10 million in grants awarded in July 2022 to help nonprofit PCs for People expand internet access to about 25,000 Cuyahoga County households.

Oswald Cos. acquires Brieden Consulting Group of Michigan

By Jeremy Nobile

Oswald Cos. has announced the acquisition of Brieden Consulting Group, a small employee benefit management company specializing in group services, in a deal that builds on Oswald’s offerings and presence in Michigan. Financial terms of the transaction were not disclosed.

ployee benefits,” said Brieden president Hans Brieden in a statement. “Oswald is the perfect fit.”

Brieden’s offerings build on Oswald’s suite of services that include risk management in property and casualty insurance, employee benefits, life insurance and retirement planning. “Oswald already provides a full slate of risk management services to our clients throughout Michigan,” said Oswald chairman and CEO Robert Klonk. “With the addition of Brieden, we are bringing to life our goal of investing even more in the state for the benefit of our clients.” Oswald is an anchor company under the umbrella of Cleveland’s Unison Risk Advisors Inc., which was formed in December 2020 with the merger of Oswald and RCM&D of Baltimore. In March 2022, Oswald sold a 30% stake in its business to Canadian private equity firm Peloton Capital Management. URA officials said at the time that capital from that deal would help support its indepen-

“With the addition of Brieden, we are bringing to life our goal of investing even more in (Michigan) for the benefit of our clients.”

— Robert Klonk, Oswald chairman and CEO Brieden, founded in 2013, includes six employees who join Oswald in the deal. While the business is based in Grosse Pointe, Michigan, which is near Oswald’s existing Michigan location in Bloomfield Hills, the former will continue to operate out of its existing office. “We’ve been looking for a partner that understood how to keep the client first, and to inspire the connection between the employer investment and the em-

14 | CRAIN’S CLEVELAND BUSINESS | JANUARY 15, 2024

The Oswald Centre office building in downtown Cleveland | UNISON RISK ADVISORS

dence and accelerate growth, including through strategic acquisitions.

Its last deal before Brieden involved the roll up of NSI Insurance Group of Florida. In total, URA now features approximately 750

employees across 19 U.S. offices.

Besides its Cleveland headquarters and Michigan locations, Oswald itself includes offices in Akron, Cincinnati, Columbus, Medina, Toledo and Pittsburgh.

Oswald is preparing to relocate its

local headquarters to Cleveland’s North Pointe Tower. Formerly known as the EY Tower, that building will be renamed Oswald Tower as the business completes its move there sometime this summer.

SPIRE

Then in December, Ehrenfeld Companies reopened the nearby Chops Grille & Tap House sports bar after an extensive remodel.

Spire has partnered with Ohio sportsbook operator Prime Sports, which launched an online sportsbook in September and plans to add a small retail sportsbook inside Chops sometime this year.

“They redid the whole thing and it’s definitely a step up,” Orloff said of Chops. “It’s been packed since it opened, which is nice. There’s not a lot of places like that out here, especially one that’s open all week long, all year round.”

Coming soon are Pizza Roto, a fast-fire pizza restaurant unaffiliated with Spire, and Geneva’s first Chipotle, which will be located near Starbucks and will likely open in late 2024 or early 2025.

From Page 1

“The thing about the costume is, you have no hands and, really, no feet,” he said. “So there’s no way to get any traction (on the ramp) and, when you have the mascot head on, you can’t see.”

Orloff got about halfway up before needing a boost. Then, after sliding down the pole, he collapsed on a gym mat.

“It was fairly entertaining to our folks,” he said, laughing.

This might be a good time to mention that the Ashtabula County Medical Center — an affiliate of the Cleveland Clinic — recently located its Geneva Family Health Center to Spire’s campus.

“So if you do any damage, we can help you,” Orloff said, chuckling.

Unlike Sparky, Orloff and his staff have managed to navigate the biggest obstacles to Spire’s success, particularly since the 750,000-sq. ft. complex was purchased by Ehrenfeld Companies in 2019.

Spire, which was once losing $1 million a year, has seen continued growth in academy enrollment, camp attendance and event revenue. It’s also adding more programming (like ninja courses for kids and pickleball for kids-atheart), more amenities (on and off campus) and more housing.

But the end goal isn’t just to build facilities, Orloff said.

It’s to build community.

“In my opinion, that’s a big part of what we do here — create a sense of community,” said Orloff, a longtime IMG executive who came to Spire in 2010. “We want people to feel a sense of a belonging, where the food’s good, the internet’s good, it’s easy to get around and they have a good time.

So when they’re here, they want to come back.”

Here’s what’s new at Spire — and what’s on tap for 2024.

Spire Institute & Academy recently replaced its indoor track. | PHOTOS BY JOE SCALZO

Lodging

The renovated Chops Grille & Tap House reopened in December of 2023, just off campus from Spire Institute & Academy.

Programming

Participation Although Spire hosts a litany of events and camps, its core business is the academy. The sports-centered boarding school has more than 130 students from more than 25 countries, a significant increase from 2020-21 (when it had 35 students) and even last year (when it had 82).

Next year, the aim is to have more than 225 students, with the goal of enrolling between 500 and 700 high school and postgraduate students within 10 years.

Spire recently partnered with Grand River Academy in nearby Austinburg, offering a college preparatory, accredited project-based curriculum. There are plans for Spire to become a chartered non-public school in Ohio by the fall and to partner with local colleges on classes to bolster its postgraduate offerings. Spire eventually wants to offer non-sports majors in areas like exercise science and media/broadcasting.

“We’re seeing good growth, not just by numbers but we’re growing the financial piece of it,” said Phil Darrin, who was hired as the Academy’s Head of School last

Spire recently added four multi-story dormitories on campus, offering 100 additional beds to accommodate the academy’s growth. A new two-story, 40-bed dorm house — the largest Spire has ever built — is scheduled to open in this year’s third quarter.

Also, work is nearly finished on an 89-room, 55,000-square-foot Marriott TownePlace Suites hotel, which will open in the next few weeks near Starbucks. The extended-stay hotel will offer rooms with a fully equipped kitchen, something that will help Spire stay competitive in its bids for NCAA events that feature out-of-town competitors and their families.

Spire has also started work on a new hotel across the street from campus, where a Motel 6 was located. The 53-room boutique hotel will be branded Spire House by Wyndham and is set to open in this year’s third quarter.

Marriott will open a 89-room TownePlace Suites hotel near Spire Insitute & Academy in the next few weeks.

summer. “To go along with that, we’re offering better programming. Our postgraduate program has big potential for us.”

Camp-wise, Spire offers programming for eight different sports as well as performance training and extended training, and the institute has “basically doubled our numbers from last year,” Orloff.

16 | CRAIN’S CLEVELAND BUSINESS | JANUARY 15, 2024

Event attendance, meanwhile, is up between 15% and 20%, Orloff said.

“We need to add to that, but in this economy and this situation, we’re happy,” he said.

Food and beverage Spire’s on-site cafeteria can seat up to 700 people, which can be a

nice revenue stream during events and camps. But the most notable additions have come just off campus.

First, Geneva’s first Starbucks opened in August on Spire Circle, not far from Spire’s Fields and Courts building.

“It’s doing well,” Orloff said. “It doesn’t matter when I come (to work) or when I go, it’s always busy.”

The academy added a women’s wrestling program in September and will launch high school and postgraduate teams in girls’/women’s soccer this fall. To bolster its soccer offerings, Spire will add a FIFA-sized grass field that can be divided into two smaller grass fields.

There are also plans to add a high school girls’ volleyball program later this year.

Spire has also added adult leagues in pickleball and basketball, and Spire will again host the Big Ten indoor track and field championships next month on its newly-resurfaced indoor track, one of many events on the calendar.

“We’ve had one of the fastest tracks in the world,” Orloff said, “and we wanted to make sure that continued.”

Spire also wants its growth to stay on a fast track, and it’s willing to look at creative ways to do it, from bringing a (non-animal) circus to campus this year, to (possibly) hosting an MMA show to (probably) adding programming around April’s eclipse.

“The idea is to keep staying on the edge,” Orloff said. “We’ll expand as we go.”

R. SHEA From Page 1

Nonetheless, Shea is accepting that the posted goal is unlikely to be reached.

As of Tuesday, Jan. 9, the company has raised just $24,137 from 168 donors—or barely 1% of its target.

“Obviously, the crowdfunding did not do what I would like it to,” Shea said.

“What came out of it was a lot of comments,” he added. “The general craft beer drinker just does not realize that there is a decline in craft beer. That was the overwhelming complaint.”

According to the Brewers Association, total sales in the craft beer sector were flat in 2022. And as of midyear 2023, sales were trending down by approximately 2% industrywide.

While that may not sound like a massive drop, the contraction comes as businesses simultaneously grapple with higher costs for materials and labor.

Debt also is more expensive due to higher interest rates, which is contributing to challenges for companies like R. Shea that took out big loans before the COVID-19 pandemic.

R. Shea’s flagship brewpub in Merriman Valley opened in 2015, as the craft beer industry was enjoying steady growth. Capitalizing on the momentum, the company expanded to Canal Place with a 60,000-square-foot brewery, tap-

R. Shea Brewing’s Canal Place facility. That location was financed with a Small Business Administration loan that is becoming more expensive for the business amid rising interest rates, which is one of a number of challenges impacting the craft brewery. | R. SHEA BREWING

room and restaurant that opened in 2019.

That $2 million project was financed primarily by a U.S. Small Business Administration loan. The interest rate on that has grown from 7% to 11%, which increases the business’ monthly service on that debt from approximately $22,000 to $30,000.

With costs going up, debt payments increasing, taproom sales flat and off-premise sales down around 30%, R. Shea has been

burning through cash, which it can only do for so long. This is what prompted the crowdfunding campaign.

Should that $2.3 million target somehow be met, Shea said that he would pay off the SBA loan plus some other high-interest debt and apply anything left over to working capital.

While that goal is unlikely to be reached, Shea said it’s not all bad news as the campaign has spurred conversations around other alter-

native paths to viability.

“It raised awareness that there is a problem. I’m continuing with some very good conversations with some other companies and breweries to possibly do something to keep the brand alive, to be able to handle the working capital, restructure,” he said. “I can’t say anything now. But so far, I’m optimistic that a solution can be found to keep the brand going and have a company that is better funded to grow and handle stuff like this.”

UPGRADES From Page 1

He added, “This is also an effort to grow the pie and to change the trajectory of our city and region through catalytic public infrastructure investments.”

The TIF shore-to-core-to-shore district, which includes downtown and portions of the near West Side, accounts for about 18% of the assessed value—the dollar value assigned to a piece of real estate for property tax purposes—of the city of Cleveland and about 3.5% of assessed value in Cuyahoga County.

The city is estimating an annual tax revenue increase in the TIF district of between 3.5% and 5.5% as improvements to the area are made, bringing in an estimated $3.5 to $7.5 billion over 42 years.

Those big numbers will be needed for the ambitious development that city and civic leaders are planning to activate for Cleveland’s long-neglected double shorelines.

The legislation the council will vote on does not outline how any of the money actually would be spent; it would only create the district and begin collecting the tax revenue. Any spending would have to be vetted by council, Epstein said, but the strategy is to use the funds for “catalytic projects” including the proposed land bridge, the North Coast Master plan, and infrastructure needed to enable the Bedrock riverfront projects.

Epstein described the TIF dis-

The TIF shore-to-core-to-shore district includes downtown and portions of the near West Side. | DAN SHINGLER

trict as a creative approach to meeting some of the big strategic needs in the city without stressing Cleveland’s general fund.

“The funds come from property owners within the TIF district, not from resident taxpayers in our neighborhoods,” Epstein said.

He stressed that the TIF allocates only revenue generated from the appreciated value of property located within the district, and there are no subsidies for private developer financing, as with more traditional TIFs. Those funds will

go into a discreet fund and will not include the taxes owed to the school district.

Also, as part of the TIF, no funds are permitted to be used “to pay the costs of improvements at professional sports stadiums,” according to the measure’s language.

The goal is to make the kind of public investments that will drive more growth and leverage private investment, Epstein said. The TIF revenue also is designed to spur private investment and provide

any matching funds needed to bring in competitive federal grants.

“We have seen historically in Cleveland when there are major public infrastructure investments, like Opportunity Corridor or the HealthLine, that work drives substantial private investment,” Epstein said.

According to the city, areas with high infrastructure investment see significantly improved market values. The renovation of the Capitol Theatre in Detroit Shoreway, for

While there has been some positive comments and kind words from supporters, Shea laments that the fundraiser has brought out some trolls who have criticized the company for asking the public for help to stay afloat.

“Essentially, we’ve tried to educate people. The whole reason we did the Canal Place expansion, and why we are in this trouble now, is that was conceived in 2017 when the craft beer market was doing great,” Shea said. “No one thought there would be a pandemic shutdown. There was no inflation. Banks believed in it and got behind us. But then COVID hit and changed the entire premise of Canal Place. It made it irrelevant.”

“The only thing I could be at fault with is I can’t predict the future,” he added. “If I could, Canal Place would’ve been a bad bet.”

To anyone “miffed or irritated” that R. Shea has asked the public for financial support, “I do apologize,” Shea said.

“It was a big-ticket item,” he said. “But when your house is collateral, you’re going to try everything you can, whether it’s a good idea or bad idea. I know it left a bad taste in some people’s mouths.”

Shea emphasized that none of the money raised in the GoFundMe campaign has been used yet and won’t be unless there’s a clear path to survival charted out.

“If we can’t guarantee the brand is going to stay alive, then (donors) will get refunded,” he said. instance, helped total land market value rise by 8.2%. The creation of the Opportunity Corridor resulted in a 34% land value increase, and there was a nearly 84% land value surge with the development of the Euclid Corridor.

“It is kind of a virtuous cycle,” Epstein said. “We make the public improvements, that brings in more private investment, value increases and the TIF proceeds and increases, which then allows us to make more public investments.”

The TIF district revenue would be available to back municipal bonds and could provide critical local matching funds to access federal or state competitive grants.

Funding from state and federal departments of transportation, which is expected to be used for the land bridge capping the shoreway, often requires anywhere from 10% to 40% in matching funds.

“The hope is that if we are going to generate a couple billion dollars over 40 years then we can use that to generate $20 billion or $30 billion in matching funds,” Epstein said. “This is only successful if it drives of investment and value growth downtown because that, that is what we’re relying on to generate the proceeds.”

The TIF district legislation is set to be reviewed by the city’s planning commission, as well as the economic development, finance, and law departments, before it goes to council’s development planning and sustainability, and finance diversity equity and inclusion committees for hearings.

Those are expected to take place this month.

JANUARY 15, 2024 | CRAIN’S CLEVELAND BUSINESS | 17

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18 | CRAIN’S CLEVELAND BUSINESS | JANUARY 15, 2024

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Dr. Elena Yanchar was appointed Chief of Psychiatry. Doubleboarded in Psychiatry and Family Medicine, Yanchar she previously served as Medical Director of Specialized Behavioral Health Services and led the development of the Assertive Community Treatment (ACT) team and STARS & FIRST schizophrenia programs. She has significantly advanced the agency’s addiction medicine services and homeless street outreach.

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