Crain's Cleveland Business

VOL. 40, NO. 6

FEBRUARY 11 - 17, 2019

Source Lunch

Akron

Yael Ron, Ritz-Carlton Cleveland general manager

Akron-Canton Airport hoping smooth skies are ahead. Page 24

Page 27

The List

CLEVELAND BUSINESS

Largest commercial property sales Page 15

REAL ESTATE

Cleveland apartment vacancy stands out

By Stan Bullard

Centric occupies a University Circle site on Mayfield Road near Little Italy. The building’s exterior colors are designed to reflect the palette of the nearby ethnic neighborhood.

(Stan Bullard)

sbullard@crain.com @CrainRltyWriter

Amid a building spurt, apartment vacancy in the Cleveland region ticked up to 6% at the end of 2018, from 5.8% a year earlier. The data from the Marcus & Millichap investment real estate brokerage also put the Metropolitan Statistical Area in a spot it rarely sees in good economic times, as the fourth-highest in the firm’s rankings of markets nationally.

That company includes San Antonio, which leads the nation with a 6.8% vacancy rate, followed by Houston with 6.4% and St. Louis at 6.1%.

Even though vacancies are up thanks to lots of new suites hitting the market — by Cleveland standards — there’s no perceptible whining from insiders.

In an oft-repeated phrase among multifamily owners and developers, Ari Maron, spokesman for the Cleveland-based MRN realty company, which produced the East Fourth Neighborhood and Uptown retail/ multifamily properties, said he’s bullish about the region’s apartment market.

“The market seems very strong,” Maron said in a phone interview as he discussed the company’s project to open: the 25-suite Market District Lofts in part of an Ohio City office building. At Uptown, 11471 Euclid Ave., MRN’s complex with first-floor retail and upper-level apartments at University Circle, occupancy is almost 100%. And that’s after the nearby One University Circle and Centric projects opened the doors to a total of 548 suites last year. Each is barely less than half a year into its rent-up period.

SEE VACANCIES, PAGE 25

Cleveland, U.S. apartment vacancy rates 6%

Cleveland

U.S. average

Cleveland

6.0%

U.S. average

$1,500

5.1%

$900

3%

$1,400

6.0%

$1,242

$1,200

$940

$874

$600 $300

0

2016

2017

2018

2019

SOURCE: Marcus & Millichap 2019 Multifamily North American forecast

FOCUS: MIDDLE MARKET

MobilityWorks plans expansion Richfield-based dealer of accessible vehicles aims for 40 new locations in four years.

Page 10 Entire contents © 2019 by Crain Communications Inc.

0

2016

2017

2018

2019

SOURCE: Marcus & Millichap 2019 Multifamily North American forecast

Crain’s graphic

HEALTH CARE

Regenerative medicine growing strong in region and elsewhere

By Lydia Coutré lcoutre@crain.com @LydiaCoutre

Biotech company CavoGene LifeSciences has licensed a novel investigational gene therapy from the University of California San Diego and brought the technology across the country to Cleveland, where the six-month-old firm will be headquartered.

The move — facilitated by Cleveland’s health care and bioscience business accelerator, BioEnterprise

P001_CL_20190211.indd 1

Effective monthly rates

— comes as the regenerative medicine industry is seeing a surge in investment, promising clinical trials and strong partnering opportunities.

In 2018, financing for regenerative medicine — which includes cell therapies, gene therapies and tissue-engineering products — reached $13.3 billion, topping the amount raised in 2015, an industry spike that had been seen as the year to beat, according to officials with the Alliance for Regenerative Medicine (ARM), a D.C.-based alliance of stakeholders interested in advancing the therapies around the world.

In 2015, the industry attracted a dramatic $9.4 billion in investment. After a couple of years that fell off from that peak, 2018’s numbers surpassed it.

“A lot of investment is being made in the sector,” said Janet Lynch Lambert, CEO of ARM. “And that in turn is driving company growth and more clinical trials and more work in this space. So the overall story for the sector in 2018 was a very good-news story. A lot of advancement in the science and in the commercialization of these technologies in the U.S. and abroad.”

SEE MEDICINE, PAGE 24

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Centers-Circle Health is beneficial pairing

By Lydia Coutré lcoutre@crain.com @LydiaCoutre

Since their affiliation in late 2017, Circle Health and The Centers for Families and Children have been able to get more patients access to integrated care and to insurance coverage.

At the start of 2017, The Centers launched a new strategic plan, part of which included finding a partner to help improve the organization’s integrated care. While The Centers worked to support clients and help stabilize their mental health, it was the physical aspects of their health care that were often going unaddressed.

“We want to have a model that we can scale at all of our locations, and to do that, we really needed to join forces with a federally qualified health center,” said Elizabeth Newman, who serves as president and CEO of both The Centers and Circle Health (formerly known as The Free Clinic of Greater Cleveland). “It just so happened that at around that same time, Circle Health was also looking for a partner, and sort of, the stars aligned.”

They joined forces in November 2017. Though the two organizations effectively operate as one entity — with a shared leadership team and integrated operational and administrative infrastructure — they each maintained their distinct legal identities, in large part due to the fact that Circle Health’s status as a federally qualified health center meant it cannot merge with other organizations.

“It benefits both organizations,” said Marianella Napolitano, chief of health care programs. “We were able to provide additional behavioral health services for that entity, for Circle Health, and then we were also

Newman Circle Health’s partnership with The Centers for Families and Children has resulted in an additional 600 individuals getting access to primary care.

(Contributed photo)

able to gain primary care as a result of that.”

In 2018, the consolidated financials for both organizations totaled $61.6 million in revenue. Together, they employ 600 people across 17 locations.

A little over a year into the affiliation, they report numbers that reflect improved access, added coverage and more integrated care for patients.

The Centers was able to help those served by Circle Health gain access to specialized and individual benefits counseling and case management services, resulting in a decrease of uninsured patients from 45% in 2017 to 29% in 2018 for Circle Health clients.

Together, they serve more than 15,000 people each year with health care services alone. In total, they serve more than 30,000 people across

all service lines: health care, early learning and family services and workforce and workplace development. These other services are a key part of what The Centers does.

Newman said when she started speaking with Circle Health, she expected them to need behavioral health services for their clients, but just as critical were needs for workforce training.

“The more services that we can provide under one roof, the better it is for them,” Napolitano said. “So if you come in here to get your primary care visit, and then you can see your counselor and then you can see the dentist, and potentially if you are unemployed, right, your medical team can say, ‘Hey, we have a workforce development program that you could be potentially joining.’ So the comprehensiveness of all the different services was key.”

In the first year, the focus was on increasing access and coordinating care. While both of those efforts continue, entering year two of the affiliation, Newman said they’re examining specialty programs — such as Circle Health’s work supporting people living with HIV and its syringe exchange program — to see how they can support and strengthen these programs for people across the whole organization who may need that support.

“There’s a lot of opportunity there,” Newman said. “We’re just kind of exploring that right now, and we’ve already seen some good support and good growth in the last year. ... How do we connect the dots so it will be meaningful for the people we serve and the community.”

In the past two years, The Centers has also been investing in increasing addiction and substance abuse services and in January launched a

Medication-Assisted Treatment pilot that they hope to eventually replicate.

The affiliation provides an opportunity for the two to pursue a model with access to new types of funding and to begin to think about what’s possible if you can provide in one setting behavioral health care, primary care, dental care and an onsite pharmacy.

“Can we move the needle on the health outcomes for this population that has complex needs, and that, for whatever reason, has not been well served by more traditional systems, or is getting their care in the wrong setting?” Newman said.

Before the affiliation, Circle Health was providing behavioral health services to about 850 clients annually, but since the two have come together, Circle Health sees more than 5,000 people each year for behavioral health services, thanks to the strong behavioral health client base of The Centers.

Also before the affiliation, Circle Health provided primary care services to more than 4,000 people annually. An additional 600 individuals from The Centers have been able to access primary care as a result of the partnership — a number that continues growing as the organizations integrate care into additional sites.

Going forward, Newman said she’d like to see how The Centers and Circle Health can better connect with other organizations doing similar or complementary work.

“I think there’s opportunity here for us to continue to work with others across the community and develop those partnerships,” Newman said.

“And we’re really excited to see what’s possible while we continue to work through getting on one system and trying to improve coordination of care and trying to increase capacity.”

GCP launching CIO forum to drive tech-sector growth

By Jay Miller jmiller@crain.com @millerjh

While health care and manufacturing are considered key to the growth of the Northeast Ohio economy and have strong organizations advocating for their sectors, information technology, which underpins all industries, may now be getting an advocate of its own.

The Greater Cleveland Partnership (GCP), through OHTec, its technology support program, is developing what's being described as a chief information officer (CIO) forum, a place where CIOs and other technology executives can meet and work to raise the profile, and drive the growth, of the region’s tech sector. Last fall, OHTec hired Douglas Wenger, formerly chief information officer at Beachwood-based Omnova Solutions Inc., as executive-in-residence to drive the creation of a CIO organization.

“It’s long overdue,” Wenger said in an interview at GCP’s Playhouse Square office. “Most of the people that I’ve talked to believe that there needs to be a consistent and unified voice for technology in Northeast Ohio. As I look to the future, I can envision opportunities for these chief information officers and the leaders of technology companies to get together from time to time to better align our longer-term needs as a CIO community.”

Bill Blausey, senior vice president

P003_CL_20190211.indd 3

and CIO of Eaton Corp., is one of the early organizers of the group. He said the region has about 100 companies with chief information officers, and OHTec was able to attract 60 of them to its first meeting at Eaton’s Beachwood headquarters in January.

“I’m really excited about it,” he said. “This is something we’ve talked about for a couple years with former regimes at OHTec: the fact that we don’t have this connected CIO community in the region here.”

Blausey said that first meeting was an opportunity to “think about how we can help the region as much as our own companies and our own technology teams.”

Wenger said he sees the as-yet-unnamed organization having an agenda focused on identifying and promoting IT best practices, attracting talent, promoting tech events and developing an identity for the growing regional tech community to help attract technology businesses here.

Promoting the region as a place to make an IT career will be a key role of the organization so job candidates will know that if they move to Northeast Ohio for a job and it doesn’t work out, or if they outgrow it, there are other opportunities. Wenger said companies across all industries have IT talent needs but the region also has companies that create technology, such as Hyland Software Inc., TMW Systems Inc. and OnShift Inc., that need candidates with similar skills.

“That’s one of the things that struck

“We want to attract people to come to Northeast Ohio and be able to say, ‘I can have a career here in technology.’ ” — Douglas Wenger, OHTec executive-in-residence

me about all this is that, because on the one hand you have chief information officers for all different kinds of companies and you have tech companies,” he said. “I’m sure it’s not the same exact pool of labor, but is there a (significant) distinction?”

Down the road, the organization may want to create a jobs board for Northeast Ohio tech jobs to show job seekers the breadth and depth of opportunities here.

“We want to attract people to come to Northeast Ohio and be able to say, ‘I can have a career here in technology,’ ” Wenger said.

The group may also be the vehicle that sponsors what Wegner described as “meaningful events on services to the tech sector in the region.” OHTec already offers a series of programs in April under the umbrella of Tech Week, which includes a group of Best in Tech awards.

Blausey said he believes the group will also be a place for CIOs and leaders of companies that create infor-

mation technology to gather to discuss common problems.

“It can be a great way for us to leverage each other to learn and share and help each other with challenges we all have that are very similar,” he said. “This could be a great forum to say, ‘Here’s an area I had a problem with,’ like building security.

You can say, ‘Who’s done what and how can you help me?’ ” Helping brand the region as fertile ground for building new tech companies is another goal of the nascent organization.

“We have so much power together collectively as an IT leadership group that I think we can have an impact on how this region is viewed from a technology perspective,” Blausey said.

“What are the technologies for Northeast Ohio to wrap its brand around?

We need this group engaged, helping.

We can make a difference.”

This is the start of a redirection for OHTec, although what the new direction will be is not yet settled. The organization was founded in 1998 as the Northeast Ohio Software Association, but outgrew that name. Its members are a subset of the membership of the Council of Smaller Enterprises, the GCP small business arm.

Wenger was hired last September to replace executive director Dean Brainard, though his title, executive-in-residence, reflects the unresolved focus of the organization.

In addition, in January, GCP invested in RITE, a nonprofit formerly

called the Regional Information Technology Engagement Board. It was based at Lorain County Community College and focused on building the region’s tech workforce. RITE’s executive director, Courtney DeOreo, now is based at GCP’s headquarters.

In an emailed statement, Joe Roman, president and CEO of GCP, said Wenger was hired to position the organization as a tech convener and economic development engine in Northeast Ohio.

“The OHTec board (of advisers) decided that an executive-in-residence role filled by someone who had experience and a reputation in the tech industry was the right kind of leader for OHTec moving forward, rather than a program manager who may be skilled at creating events and programs, but may not have the ability to create strong relationships and connections with tech leaders,” he wrote. “Doug was tasked with developing and implementing the go-forward strategy (and) will stay on in this capacity throughout 2019. as the structure is working well for both us and Doug.”

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2/8/19 10:48 AM

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Holster-maker is drawn to Ohio’s workforce

By Rachel Abbey McCafferty rmccafferty@crain.com @ramccafferty

Blade-Tech Industries Inc. had been in Washington state since the holster-maker was founded more than two decades ago.

This fall, it moved to Ohio, seeking a skilled workforce, shorter shipping times and friendlier gun laws.

Blade-Tech got its start in the late 1980s, when CEO Bryce Wegner’s father, Tim Wegner, started making plastic knife sheaths in his kitchen.

That hobby turned into a business, and he officially incorporated in 1995.

Over the years, the company moved out of the Wegner home and into a series of facilities in Washington.

The name, Blade-Tech, stuck even as the company’s product shifted from a focus on knife sheaths to firearm holsters and accessories. Today, about 90% of the company’s products are in that space, Wegner said.

Blade-Tech’s products serve the military and law enforcement in different countries, in addition to being commercially available. It also provides gear for the movies, with its products appearing in franchises such as “John Wick� and “The Hunger Games,� according to Wegner.

Wegner, who became CEO in 2012, also is one of two owners of the company. The company does not disclose annual revenue.

Wegner said manufacturers didn’t often use plastic for holsters when his father started Blade-Tech; the more commonly used material then was leather. But leather wears over time and, at least when it comes to knives, a blade can cut through it.

For holsters, the plastic material allows companies to build in safeguards. For example, a plastic holster can be built to grip a gun so it’s tough for someone to pull it from the holster.

Today, the industry has primarily moved to plastics, said Jarett Peterson, chief operating officer, so BladeTech has had to find other ways to differentiate itself. One has been by offering attachments for its holsters and sheaths, like those that allow police officers to attach body cams.

Washington had begun seeing an

The Total Eclipse is one of the more popular holsters Blade-Tech produces. (Contributed photo)

influx of tech jobs, like those at Amazon, Wegner said. That drove wages up, making it difficult for Blade-Tech to compete to hire assembly workers.

At the same time, the state began passing more restrictive gun laws, which also concerned Wegner. He was particularly concerned about a Washington law that defined when firearms could be transferred without background checks, as a company that sometimes uses firearms as part of its process. Ultimately, Wegner thought it was time to look into moving the company.

Ohio ended up being a good fit, chosen over other states where Blade-Tech looked, such as Tennessee and Texas. Wegner perceives the gun laws as friendlier, and he said people were positive about what it was like to do business here.

Much of the company’s work is injection molding, and Wegner said he found a skilled workforce in Northeast Ohio. “Back in Washington, there’s very few plastic molders, engineers, suppliers — you know, all of the above,�

Wegner said. “Around here, there’s an abundance.�

In the fall, Blade-Tech posted three openings for jobs in Ohio, Wegner said. More than 160 people applied in fewer than 24 hours. Peterson said everyone the company has hired had at least two years of experience.

In addition, the company’s plastics suppliers already are Ohio-based, and Wegner said about 60% of BladeTech’s U.S. customers are on the East

Coast. As the company competes more and more with online sales, it made sense to locate somewhere that would shorten delivery times.

Before making the move in late October, Blade-Tech produced six months of inventory, Peterson said.

The company wanted to first establish customer experience operations and packing and shipping in Ohio before setting up production.

Its plant in Streetsboro is still a work in progress, but equipment is being set up and some light assembly is taking place. At the moment, there’s about two to three months of inventory being stored there.

The plant at 10125 Wellman Road is about 30,000 square feet, Wegner said.

About one-third of that is office space, which the company had been looking for as it expands its marketing and sales.

At one point in Washington, BladeTech had more than 85 employees, Wegner said. But in the past two to three years, as the company struggled to find employees, it began outsourcing more of its work and relying more on its supply chain. Before the move, it was down to about 35 employees, the majority of whom did not come to Ohio.

Currently, Blade-Tech has about 20 employees, only three of whom — including Wegner and Peterson — relocated from Washington to Streetsboro.

(Two members of the management team are not located in Ohio.)

In the next three to six months, Wegner said the company plans to hire another 10 to 15 employees.

At least to start in Ohio, Blade-Tech plans to work closely with suppliers as it did in Washington. Wegner said the company will evaluate whether it can bring more work back in-house in the coming years.

Thogus in Avon Lake is one of the companies Blade-Tech will be working with locally. CEO Matt Hlavin said Thogus will mold some of BladeTech’s holsters and other accessories, as well as work with them to design new products and new materials for their product portfolio.

The outdoors and firearms sectors are growing, Hlavin said, and companies in those spaces, such as BladeTech and others, require more sophistication in the supply chain.

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Bellwether Enterprise expands downtown

By Stan Bullard sbullard@crain.com @CrainRltyWriter

Bellwether Enterprise, a commercial realty mortgage banking concern that was launched with only seven staffers in 2008, just moved to a new national headquarters on the 24th floor of One Cleveland Center, 1375 East Ninth St., to gain some room to grow.

The firm now has 80 employees here and national reach, with a total of 28 production offices around the country and 300 total employees. The move to a full floor also allowed the company to put all of its Cleveland staff in one building as its unit for mortgage brokers serving Northeast Ohio had moved earlier to One Cleveland Center’s 23rd floor. That earlier move provided short-term relief to workers in its former suites across the street at IMG Center, 1360 E. Ninth St. The new move boosts its floor space from 16,000 square feet to 20,000 square feet.

Ned Huffman, president of Bellwether Enterprise, said in a Jan. 30 interview that rapid growth had led to doubling up in some of its offices. The move enables the firm to expand on the lower floor should it need to do so.

With Huffman’s plans to keep expanding the business, the physical expansion might be necessary. He said the company’s continuing to extend its reach with additional offices to fill “some gaps” in covering the country, growing some offices focused on affordable housing to provide more services to commercial customers for office, retail, industrial and market-rate multifamily, building and even new loan products.

Moving to the bright, sleek, new contemporary office with fabulous Lake Erie views also comes after a stellar year for the company.

“Our headquarters are a reflection of how much we have accomplished, as well as of our renewed commitment to our work and to our home city of Cleveland,” Huffman said.

The firm’s total loan volume climbed 17% in 2018, to $7 billion over the prior year, as Bellwether closed more than 750 loans for commercial and multifamily properties. Its servicing portfolio — collecting loan pay-

ments for lenders and associated services — climbed to $22.5 billion.

“We’ve benefited from good market conditions, but we’ve also outperformed the market,” Huffman said.

A milestone in the firm’s growth came in 2012, when Bellwether’s ownership sold a 55% stake to Columbia, Md.-based Enterprise Community Investment Inc., the financial arm of the nonprofit launched by the late real estate developer James Rouse to promote economic development to combat poverty and housing insecurity in the United States.

When Bellwether joined Enterprise, their combined loan volume was $1.2 billion with 10 offices — seven from Bellwether and three operated by Enterprise — that primarily focused on lending for affordable housing. The servicing portfolio stood at $4.5 billion.

Enterprise also brought with it a busy apartment business, with an emphasis on affordable housing, that included a rare — because they are no longer issued — Fannie Mae Delegated Underwriting & Servicing license. That license opened the door for Bellwether to move from its historic office, industrial and retail base to apartments — just in time for a huge run-up in multifamily values and development after the residential single-family housing bust.

Did Huffman expect multifamily to expand the way it has over the past few years?

“I’d like to say so,” Huffman said, but no. As important, he added, was that the combination allowed Bellwether to learn the multifamily business, particularly the affordable housing business.

“Multifamily has expanded with a lot of Class A developments, but affordable housing just gets worse. You can’t build it without federal tax credits,” he said. “It’s such a need in every part of the country. And it made us more of a full-service business.”

Moreover, Bellwether Enterprise sends a substantial portion of its profits to Enterprise’s operations, a cause Huffman said the staff strongly embraces. He declined to say how much that figure is annually. The combination also gave the combined firms a focus reflected by its saying that it provides “capital with a cause.”

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LIST ANALYSIS

Racino, multifamily deals loom large on commercial sales list

By Chuck Soder csoder@crain.com @ChuckSoder

First, let’s address the racehorse in the room.

The enormous deal at the top of our list ranking the largest commercial property sales of 2018, which appears on Page 15, isn’t really your standard real estate sale.

In July, MGM Growth Properties bought the Hard Rock Rocksino Northfield Park for more than $1 billion.

That deal towers over any deal we’ve ever included on this list since we started producing it annually in 2013.

But let’s be fair. MGM didn’t just buy the building. It bought the entire operation — the slot machines, the horse racetrack and the licenses to operate them — when it acquired Northfield Park Associates LLC. The entire value of the operation is included in the number.

Two months later, however, MGM Growth Properties struck a deal to sell the facility’s operating assets to MGM Resorts for about $275 million.

There are 56 deals worth at least $10 million on the full digital list, which is built mainly with data from the CoStar real estate data service and Alec Pacella, president of NAI Pleasant Valley real estate brokerage.

Most of the listed deal prices were confirmed by CoStar, NAI Pleasant Valley, county records or media outlets. When we couldn’t get a confirmed price, we noted whether the listed price is the appraised value, an estimate or, in the case of deals involving multiple properties, an allocated price. Allocated means that the price was estimated based on the total value of all properties in the deal.

If you add up the prices on the full digital list, you get $2.47 billion. If you remove the Rocksino deal, the total is 8.3% lower than the $1.53 billion total from 2017 — which included the sale

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of Key Tower and overall was a big year for local real estate deals, compared to previous lists. (One caveat: This is the first year we received data from CoStar for this list; in previous years, much of the data came from Real Capital Analytics.)

A large number of apartment sales gave this year’s list a boost. There are 18 multifamily properties on the full digital list.

Six of them were part of one big deal: They were among the 15 affordable housing properties that Fairstead Affordable, an affiliate of Fairstead Capital of New York, bought from California-based GHC Housing Partners in April 2018.

Four multifamily sales made the top 10, including deals for Sphere and Statler Arms Apartments in downtown Cleveland. The Province in Kent also changed hands when Blackstone Real Estate Income Trust acquired a 95% stake in 21 student housing properties from Education Realty Trust for $1.1 billion. Based on that total price, CoStar assigned The Province a price of $63.36 million, good enough for No. 3 on the list.

The No. 2 spot went to 200 Public Square. The iconic downtown Cleveland skyscraper was acquired by a joint venture including DRA Advisors and local developer Scott Wolstein for $187 million, according to an October 2018 Crain’s story.

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CRAIN’S CLEVELAND BUSINESS

Opinion Personal View

Focus, alignment, accountability are core to economy

By Bill Koehler

Editorial

It’s time Gov. Mike DeWine did the right thing when he appointed a task force to study Ohio’s transportation infrastructure needs.

We hope moss doesn’t grow under the feet of the members of the Advisory Committee on Transportation Infrastructure, because it’s fairly obvious that our highways, roads and bridges need attention, and that the state’s gas tax — unchanged at 28 cents a gallon since 2005 — should be increased to pay for it.

Money from the Ohio Turnpike bond program, launched under former Gov. John Kasich to pay for non-turnpike repairs and construction, is depleted. As a result, for the fiscal year beginning July 1, the Ohio Department of Transportation is projected to spend $1.7 billion on road work — down sharply from $2.4 billion in 2014. That’s not a formula for maintaining high-quality roads or for being able to pursue multimodal strategies required to keep the state economically competitive.

Ohio’s gas tax at present is about 6 cents below the national average and is less than four of our five neighboring states. (The exception is Kentucky, at 26 cents. Pennsylvania is more than double Ohio, at 58.7 cents.) Hiking the gas tax by even 1 cent would raise an estimated $70 million, so the increase wouldn’t need to be all that large to have a big impact.

Nobody likes a tax increase, of course, but in this case, there’s a strong economic case for it. About 60% of the U.S. population lives within a 600-mile radius of Ohio, which makes the state a key logistics hub. The nonpartisan Fix Our Roads Ohio group that’s advocating for transportation improvements says Ohio has the third-highest freight volume in the United States, and as such, the “economy and quality of life are directly tied to the quality of our transportation system.” The group also notes that Ohio has the nation’s second-largest inventory of bridges and the fourth-largest interstate road system, so if Ohio is to raise its game in attracting and retaining businesses and workers, it must make a commitment to preserve and expand existing resources.

There’s another piece to the puzzle here, and it involves public transit. Gas-tax money can’t be used for transit, the

result of a 1947 amendment to the Ohio constitution. But it makes little sense to address the need for upgrading transportation infrastructure without also finding ways to bolster transit, which has been significantly underfunded in Ohio.

There are no transit representatives on the infrastructure advisory panel, which is a significant omission. It makes sense to us for the Legislature to pursue a measure to roll back that amendment, though if that’s not possible, it’s incumbent on the advisory panel to look at new, dedicated funding sources for transit.

Vigilance needed

Another item on Gov. Mike DeWine’s economic to-do-list, we hope, is the tightening up of state economic development awards.

Crain’s Jay Miller on Feb. 4 reported that 22% — 41 of 186, of companies big and small — of awards reviewed in a year-end 2018 report by the Ohio Attorney General’s office were considered noncompliant in meeting the job-creation and other goals that companies agreed to. The 78% success rate was down slightly from 78.3% in 2017, and quite a bit from the 84.8% success rate in projects reviewed in 2016.

Much as we’d like to see a compliance rate at or near 100%, it would be unreasonable to expect that. Still, the trend is heading in the wrong direction.

It was DeWine, as attorney general, who issued the report, so he should be quite aware of its conclusions. Academic research on the value of incentives suggests that in many cases, they don’t influence companies’ relocation or expansion decisions nearly as much states assume/claim, so diminishing returns on the incentives that are handed out is problematic, to say the least. If the state is to stay in the economic incentives game, it has to be vigilant about making sure that the promised payoff is as close to a slam dunk as possible.

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

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Over the past few months, Team Northeast Ohio has participated in efforts throughout Northeast Ohio, such as Blockland, Strengthening Stark, Elevate Akron and December’s Appreciative Inquiry session, all designed to advance the impact of local economic development work within the 18-county region we serve. In these important conversations about changing the trajectory of Northeast Ohio’s economy, I see common themes, including: building strategies for growth and shared prosperity; creating complementary capabilities; improving collaboration and inclusion in a culture of greater trust; and focusing on outcomes. Simply stated, it’s about building “connected teams” focused on enhancing the lives of residents, attracting people to our community and increasKoehler ing business investment through meaningful economic development practices.

At the same time, I have been consistently challenged by community leaders seeking a deeper understanding about our economy’s performance, the economic development system’s effectiveness in driving improved results, and Team NEO’s role in all of it. All are important questions as we drive Team NEO’s initiatives forward.

My perspectives are rooted in my roles as CEO of Team NEO and as an experienced business leader for 25-plus years, who has served on not-for-profit boards in leadership roles and lived in Northeast Ohio for most of my life. I am impressed with the vast capabilities in our community, as well as the passion among our private sector, public sector, philanthropic and other civic leaders. I also understand and respect the frustration being shared among community leaders and funders who believe we can and must do better. These factors, in part, drove me to join Team NEO three-and-a-half years ago.

Our community seeks greater clarity from our economic development system about what we are doing to help the Northeast Ohio economy grow. Team NEO will be exploring that issue throughout 2019 in a nine-month custom content series published in Crain’s Cleveland Business that will offer our view of how our economic development system is working for the benefit of Northeast Ohio. Our perspective is that three simple words — focus, alignment and accountability — must become commonly shared values if we, as a system, wish to create the more competitive, prosperous and vibrant economy everyone seeks.

Focus Some have been calling for a new economic development strategy in Greater Cleveland. Team NEO’s work has been grounded in strategies embedded in the Regional Economic Competitiveness Strategy (RECS), completed in 2015 with the help of approximately 150 business leaders, influential members of the philanthropic community and other civic leaders.

Our strategies focus on developing core industries, creating a more robust innovation culture, building a deeper inventory of competitive sites, and advancing workforce development capabilities, and they are consistent with those being employed by JobsOhio to drive economic growth throughout the state. In my mind, other good strategies have been developed, such as those represented in the Fund for Our Economic Future’s “Two Tomorrows” report, Vibrant NEO and the TechStars study, and each offers consistent or complementary perspectives that guide our economic development efforts.

SEE ECONOMY, PAGE 9

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2/8/19 1:18 PM

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Personal View

Cleveland: Imagining a modern renaissance

By Ben Vinson III

When I arrived in Cleveland to take a new job as provost of Case Western Reserve University in July, I was both surprised and impressed by what I found. I am a historian, and from what I quickly learned, one of the few humanists who have undertaken the role of the university’s chief academic officer since the 1960s.

What immediately surprised me were the rich conversations taking place on campus about the future, particularly the search for meaning in our technological world from a distinctly human perspective.

Our medical, dental and nursing schools have physicians and scientists uncompromisingly interrogating technology to find out how new discoveries can heal us, not just physically, but mentally — restoring our health, our states of mind, our values and our connections to community.

Our school of engineering is asking how technology can stretch our innate abilities. In their labs, machines are returning feeling to our bodies, devices are improving how we interact with each other and how we understand our world.

Our schools of arts and sciences, business, social work and law are investigating the ethical, moral, entrepreneurial, social and legal dimensions of technology.

We are making signal advances in how we can better deploy technology to be more human and to expand what it is to be human. We are inventing new aesthetic forms and blending those into the fields of

ECONOMY CONTINUED FROM PAGE 8

However, it seems that none of these strategies are fully understood or coordinated sufficiently to properly guide economic development work throughout the region. Lack of focus inhibits effective collaboration among economic development organizations and hinders our ability to optimize returns. An important step in our civic dialogue should include a thorough review of these and other strategies to understand what we can build upon. That is exactly what is happening in Stark County and Greater Akron through their emerging economic development initiatives, and we’re very encouraged by what we’re seeing there.

Alignment Greater focus provides the basis for important discussions about alignment of activities, capabilities and resources. We have many capable, well-intended economic development organizations in Northeast Ohio, but our missions and capabilities overlap without a clear understanding of how each organization contributes to overall economic success and how that success is measured. As leaders, we need to embrace deeper dialogue about specific enablers of economic performance, empower the right organizations to provide necessary capabilities and build accountable organizations focused on achieving outcomes. Success requires that we focus on the things we each do well, de-emphasize activities others are better-positioned to perform, and embrace effective collaboration. That takes strong leadership, trust, communication and cooperation.

Accountability Focusing and aligning our strategies effectively as a region will put us in the best position to drive economic growth. However, execution is a critically important determinant of success. Building organizational relationships required to align strategies, develop comple-

P009_CL_20190211.indd 9

medicine and engineering, for instance.

As a newcomer to Cleveland, I am slowly coming to understand the broader impact of this robust activity for our city. Like the Renaissance, which was a distinct moment in history where human society renewed itself by recovering ancient knowledge in the serVinson vice of modern concerns, today we stand at a new Renaissance.

In our world of unknowns, swirling in technology, we are patiently recovering many of the elemental concerns of humanity to guide us, questions that some say have gotten lost in the fast-paced shuffle of scientific advances. Who are we, why are we here, what is it that we do?

I now realize that Cleveland is one of the epicenters of these questions, and that our university and community can embark upon answering them together.

And the unique twist in this modern renaissance is that as we jointly search for answers to these human concerns, we are continually asking: What is the next evolution of the human condition and society and how do we align our assets and strengths to realize our full potential, arm in arm with cutting-edge science and technology?

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Vinson is provost and executive vice president at Case Western Reserve University. mentary capabilities, engage in economic inclusion, measure progress objectively and drive outcomes in a culture of accountability is hard work. It takes a smart, dedicated and cooperative effort to drive strategies and build infrastructure that support increased business investment in Northeast Ohio. This is the core “blocking and tackling” of economic development that leads to improved performance if done well.

The boards of our economic development organizations have an important role in all of this. Doing the little things necessary for success is not easy, especially when doing it across organizations with similar, though slightly different, missions. Our business leaders and other funder organizations see every day how focus, alignment and accountability play a critical role in the success of their own organizations. Board members must demand this of the economic development organizations they fund consistently and serve faithfully.

The most successful teams execute focused strategies, align around common vision and goals, and measure performance objectively in search of continuous improvement — all bolstered by strong, collaborative and well-intended leaders. The objective is to create a vibrant regional economy in Northeast Ohio where growth and shared prosperity is a reality for all. The core of RECS is solid and enhanced by complementary recommendations in other strategies advanced since 2015. Leveraging the best of these strategies and committing to work effectively in a culture of focus, alignment and accountability will guide community economic development efforts to greater impact.

It is time to do the “blocking and tackling” of economic development and hold each other accountable for our collective success.

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Koehler is CEO of Team NEO, the regional economic development nonprofit.

EDITOR’S NOTE: The Team NEO “Growth by Design” custom content series will be produced by Crain Content Studio-Cleveland, the marketing storytelling arm of Crain’s Cleveland Business. The Crain’s Cleveland Business newsroom is not involved in creating Crain Content Studio-Cleveland content.

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Focus MIDDLE MARKET

WHERE EMPATHY AND ECONOMICS MEET

In addition to selling minivans with wheelchair lifts or ramps, MobilityWorks converts vehicles for wheelchair or scooter loading. (Contributed photo)

MobilityWorks is wheeling ‘accessibility for all’ into new markets

By Douglas J. Guth clbfreelancer@crain.com

M

obilityWorks’ slogan is “accessibility for all,” a phrase that continues to take on new meaning as the Richfield-based dealer of wheelchair-accessible vehicles expands across the country.

Currently, MobilityWorks has 77 consumer locations in 24 states and two-thirds of the nation’s largest metros. A fleet of accessible vans, cars and trucks aids tens of thousands of clients annually, a figure the company plans to grow thanks to an investment deal signed last fall with Flexpoint Ford LLC, a Chicago equity firm.

MobilityWorks’ founder and CEO Bill Koeblitz said the cash infusion buoys an ongoing expansion strategy set to add another 40 locations to the company portfolio over the next four years. Flexpoint’s expertise in financial services and health care — a significant portion of the firm’s $2.3 billion in capital investments stems from those sectors — indicates accelerated development for a business already employing 1,200 people and making $500 million in annual sales.

“Flexpoint can provide us capital and identify the best locations for us to service the most people,” said Koeblitz. “It’s another level of being the clear national leader in this industry.”

“I saw my dad struggle to get into a car, and his world got smaller and smaller because of that. What we’re doing is making that process really easy instead of incredibly complex if people want to go to the store or see their grandkids.”

Empathy is important In the next few years, MobilityWorks seeks to add its presence to — among other untapped markets — Houston, Denver, Seattle and Portland, Ore. The business in 2017 acquired San Antonio-headquartered Alamo Mobility, boosting operations in Texas, where it also has van showrooms and service centers in Dallas, Fort Worth, Austin and Waco. In early 2018, MobilityWorks bought Access Mobility Center of

Concord, N.C., complementing an operation the establishment runs in Charlotte.

Company leaders are in “multiple discussions” with potential partners in large cities, said Koeblitz. While most acquisitions top out at about four locations, a 2015 merger with HASCO Medical Inc.— parent company of the Ride Away and Mobility Freedom wheelchair van dealerships — brought MobilityWorks 21 new locations along the East Coast.

Koeblitz said he runs his business on a core value of compassion, with employees and investment partners alike expected to focus on outstanding care for clients with disabilities.

“Empathy is very important,” he said. “Every day you’re feeling good about what you’re doing and what services you’re providing.”

Although MobilityWorks mostly offers crash-tested minivans modified with wheelchair-friendly ramps or lifts, the business also converts unmodified SUVs and other vehicles to help clients more easily load a scooter or wheelchair inside. Its TransitWorks division manufactures and distributes commercial wheelchair-accessible vehicles for nursing homes and rideshare enterprises.

SEE MOBILITY, PAGE 14

— Bill Koeblitz, MobilityWorks’ founder and CEO

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MIDDLE MARKET

Fanatics deal part of Jakprints’ growth plan

By Douglas J. Guth clbfreelancer@crain.com

From the start of the NFL playoffs until after the Super Bowl is crazy season for sports apparel merchandising.

Cleveland-based custom-printing business Jakprints spent the month of January in the middle of the storm, supporting production of conference-championship T-shirts and replica podium jackets traditionally given out to winners of the big game.

While company officials are a bit frazzled in the aftermath, they also couldn’t be more pleased.

Jakprints is supply-chain partner to the biggest brands in sports and entertainment, a roster of heavy hitters that includes major professional sports leagues as well as behemoths such as Nike, Disney and Universal Music Group.

Steady growth in its apparel retail sector in 2018 also allowed Jakprints to ink a long-term partnership deal with Fanatics — the world’s largest distributor of licensed sports merchandise — and expand its printing and shipping operations to a 140,000-square-foot building at 34440 Vine St. in Eastlake.

Although football season ended weeks ago, the Jakprints team doesn’t have much time to breathe. A snag in the Eastlake move delayed opening of the facility from summer until October — in retail terms, the 11th hour before the holiday rush. Jakprints

Seifert A new location in Eastlake will let Jakprints expand capacity and streamline operations.

(Contributed photo)

co-owner and head of business development Jed Seifert said the company is still transitioning $7 million worth of direct-to-garment and screen-printing equipment to Eastlake, a process that should be completed by May. The move is expected to create full-time positions in packaging, servicing and other manufacturing-related areas, adding to the 250 workers Jakprints currently employs between its Midtown headquarters and a small screen-printing facility in Oceanside, Calif. The company’s paper production business — consist-

ing of stickers, catalogs and other items — will remain in Cleveland, along with its administrative offices.

Some Cleveland employees have been transplanted to Eastlake, revving up production following Jakprints’ new five-year agreement with Fanatics, announced in December. The deal expands the company’s existing relationship with the apparel supplier, which holds fan gear licenses with all major sports leagues and hundreds of professional and collegiate partners, incorporating a variety of production capabilities including screen-printing, full-color

transfers, embroidery and made-to-order digital printing. Jakprints will also continue to distribute Fanatics merch across its burgeoning direct-to-consumer and wholesale operation.

“We’re going to be growing the partnership by a multiplier very quickly,” Seifert said. “We want to do at least double the business we did with them last year. Fanatics has been a great partner of ours, and as with any great partnership, you want to build it to be as great as it can be.”

Room to grow Fanatics has been a valued partner of Jakprints for three years, with the new contract ideally permitting both entities to complete their mutual expansion plans, Fanatics chief operating officer Jim Hardy said in a December press release.

“This strategy is built on delivering manufacturing agility and speed to market,” Hardy said. “We are proud to continue partnering with Jakprints to exceed our fans’ expectations on quality and speed.”

Cementing the Fanatics deal necessitated adding equipment and space, even for a company already boasting 20,000 active clients and $26 million in annual revenue. While Jakprints’ multifloor Midtown building was never an ideal production hub, the new Eastlake location offers an open manufacturing space filled with natural light. Company officials wanted a facility that allowed printers to see apparel in the same man-

ner consumers do, and have enough room to move equipment as needed.

Literally breaking down walls has a potential added impact of improving communication and teamwork between departments, Seifert said.

“It’s going to let us do things from an operational and logistics standpoint we haven’t been able to do because of space requirements,” he said. “We’ll be streamlining our operations and expanding capacity with additional space for growth.”

Jakprints initially planned to operate from the space last summer, but didn’t get the keys for the former Walmart until the fall, resulting in a scramble to launch the location as quickly as possible.

“A retail business trying to open a new facility in October is borderline crazy,” Seifert said, “but our amazing team pulled off quite the Hail Mary and we were fully functional within three weeks.”

Uniting with the biggest player in sports apparel will only add to Jakprints’ busy workload. Alongside new hires, the company will add full-color transfer to its on-demand program in 2019. The post-holiday breathing room may be limited, but Seifert is eager for Jakprints to further establish itself as the nation’s “pro’s pro” printer.

“We live by the philosophy that if you’re not growing, you’re dying,” he said. “Getting national recognition with Fanatics is really exciting for the company, and we’re excited for more people to take notice.”

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Adviser: Kate Hubben

‘Retire? Not me’: HR and the aging workforce The fastest-growing population of employees is the “older worker.”

I know, I’m offended by the term, too, but the good news is I’m not alone: I have a lot of friends over 50 who plan to work for a long time.

By 2024, one in four U.S. workers will be 55 or older, more than double the rate from 1994, when 55-plus workers accounted for just 12% of the workforce, according to the U.S. Department of Labor.

Older workers often have a deep knowledge of their industry, long relationships with customers and a loyalty to their employer, all of which make them valuable employees.

The 2018 Willis Towers Watson Longer Working Careers Survey found that 83% of employers report a significant number of employees at or approaching retirement age. However, only a quarter of those employers feel they have found an effective approach for dealing with this inevitability.

Other research also shows a lack of employer urgency to develop strategies to accommodate older workers.

The Society for Human Resource Management found 35% of U.S. companies have analyzed the near-term impact of the departure of older workers and only 17% have considered longer-term implications over the next decade.

The lack of a strategy to address the needs of older workers may stem from employer perceptions about employees. According to our re-

Hubben is a client advocate at insurance brokerage and advisory firm Willis Towers Watson.

search, just one in five employers think their employees want to retire as soon as they qualify for retirement benefits, and 77% expect most of their employees won’t need to work into their 70s for financial reasons.

On the flip side, the same survey found that 55% of employees want to retire as soon as they can afford retirement, and more than a third expect to retire after age 70 for financial reasons.

When older workers delay retirement, employers face financial challenges such as higher benefit, wage and salary costs. However, when we asked companies what worried them the most about the aging workforce, we found that transfer of knowledge and workforce productivity were greater concerns than financial costs, which ranked third.

While employers may not have plans to address the issues of older workers, researchers are offering innovative ideas to address some of the costs.

Linda Fried, dean of the Mailman School of Public Health at Columbia University, has proposed changing

Medicare’s rules to accept older workers, allowing them to shift away from employer health plans. Other researchers have proposed incentivizing employers by creating a 40-year cap on the total years of work requiring payroll tax contributions to Social Security.

With reforms of Medicare and Social Security unlikely, employers need to create strategies to address their growing population of older workers. Approaches to consider include:  Offering phased retirement programs  Creating flexible employment options like shorter work weeks, parttime employment or even part-year employment  Engaging former employees as contingent workers or consultants  Providing workplace training programs for older workers  Establishing reverse-mentoring programs for knowledge transfer The Longer Working Careers Survey found many older workers are enthusiastic to downshift management positions and start working as individual contributors, but only 9% of firms in the survey offer phased retirement.

With nearly 18% of people in Northeast Ohio at age 65 and older, according to the Census Bureau, local employers have a real opportunity to embrace the aging workforce and be early adopters of progressive policies and innovative ideas. Let’s not miss this chance.

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2/7/19 3:36 PM

CRAIN’S CLEVELAND BUSINESS

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F E B R U A RY 11 - 17, 2 019

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PA G E 13

MIDDLE MARKET

Focus on continuous improvement pays off

By Rachel Abbey McCafferty rmccafferty@crain.com @ramccafferty

Midwest Precision is growing.

And the Eastlake company plans to continue that trend in 2019 — but it needs more people to hire.

Midwest Precision makes precision components in all kinds of metals, primarily for the defense and aerospace sectors. Demand for the type of work it does has been growing, said President Wayne Foley.

“So we’ve been fortunate to have very good customers that we’re growing with that have had high expectations that we’ve lived up to, which has given us more opportunity,” Foley said. “And, you know, the future looks very good.”

Foley has been with Midwest Precision since 2010, when an investor group to which he belongs purchased the company. Founded in the ’50s, the company was originally known as Midwest Screw Products and, later, Midwest Machining Solutions, said program manager Russ Mulh.

The most recent name change took place around the time of the acquisition to better fit the work the company was performing. The parts Midwest Precision makes are often complex, Foley explained, held to strict tolerances and requirements.

About three quarters of the company’s business is in the defense and aerospace sector, Mulh said. The re-

Eastlake’s Midwest Precision has tripled its revenue and more than doubled its employee base over the past eight years. (Contributed photo)

mainder is highly engineered products for sectors including energy and health/safety.

Over the past eight years, Midwest Precision has tripled its revenue and more than doubled its employee base, Foley said. He declined to share specific revenue numbers, but said the company has between 100 and 125 employees today.

For the most part, Midwest Precision has grown with its existing customer base. It’s been lucky enough to be part of “projects and programs that are growing,” Foley said.

Last year in particular was a strong

one for Midwest Precision. The company grew revenue by double-digit percentages year-over-year, Foley said. He expects 2019 to be strong, as well.

He intends for Midwest Precision to hire more machinists and other shop-floor employees, in addition to people in areas such as engineering and program management.

“The biggest problem is finding the people,” Foley said.

The company has focused more on continuous improvement in recent years, making its processes more efficient. It’s added robotic loading to its

Upcoming Special Section

MEETING AND EVENT PLANNER

lathes and mills, and “cooling and coolant technology” have allowed it to reduce cycle times, a news release said. The company was always known for quality, Mulh noted, but there’s been a stronger focus on continuous improvement since 2010.

“And I think it’s really helped us become a better company,” he added.

Foley said he and some others at Midwest Precision who came from larger companies have tried to implement best practices they’d learned. For example, the company has worked to add more unattended

manufacturing, which means equipment can keep running between shifts or on weekends. That’s made a big difference in the company’s competitiveness, he noted.

“We look at a lot of things,” Foley said. “We sweat the details.”

There’s also been a lot of investment in the building in recent years, Mulh said. The release highlighted the addition of inspection and CNC equipment.

Midwest Precision has a sister company, actuation systems firm Kyntronics, that’s now located in Solon. The two had been co-located in Eastlake, but Kyntronics moved out in the fall to give Midwest Precision more room to grow, Foley said. The facility at 34700 Lakeland Blvd. is about 40,000 square feet.

Moving Kyntronics gave Midwest Precision room for some new equipment, and the release also mentioned an expected facility expansion in the future.

Midwest Precision has continued to grow and hire over the years, said Eastlake mayor and safety director Dennis Morley. It brings people into the city, he added, and having the growing company is a boon for tax revenue.

Ultimately, manufacturing is the biggest tax driver for Eastlake, Morley said. Companies have been moving into the city, while those already located there have been expanding.

“Manufacturing in our city keeps growing,” he said.

As the popularity of Cleveland continues to rise, so does the competition for venues and conference centers. STAND OUT AMONG THE COMPETITION! Spotlight your organization through this unique marketing opportunity – in print and online.

LIST: Conference Centers

VOL. 39, NO. 37

SEPTEMBER 10 - 16, 2018

Source Lunch

Akron LeafFilter grows into diverse Kaulig Companies. Page 20

CLEVELAND BUSINESS

Finance chair Kevin Jacques, Baldwin Wallace University Page 23

The List Northeast Ohio’s largest caterers Page 19 MEDICAL MARIJUANA

Legal, but no medical marijuana to buy

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

MEETINGS AND EVENTS

A CUTTING EDGE TEAM-BUILDING EXPERIENCE Cleveland Axe Throwing general manager Matt Dixon demonstrates the proper technique of tossing a steel blade. (Ken Blaze for Crain’s)

Ax throwing allows employees to build trust while bonding over a new skill

By DOUGLAS J. GUTH clbfreelancer@crain.com

Corporate team-building experiences are a mainstay for most organizations, engaging employees in an activity that ideally creates bonds between individuals and departments

alike. Rather than the usual lunch or happy hour event, however, a growing number of Cleveland companies are letting staff toss a sharpened length of wood and metal in the spirit of good-natured, camaraderie-building competition.

Businesses with an ax to grind are realizing their lumberjack dreams at

Entire contents © 2018 by Crain Communications Inc.

P013_CL_20190211.indd 13

Cleveland Axe Throwing, located in an office building in Valley View down the road from the Cinemark movie theater.

Since opening in March 2017, Cleveland Axe Throwing has hosted 90 area companies — including repeat customers Swagelok, Cintas and Hyland Software — for corporate outings. Recently, Phoenix Coffee brought in 40 guests who chucked axes at wooden targets set up at the range’s six chainedoff throwing lanes.

SEE AXE, PAGE 21

On paper, Ohio’s medical marijuana control program began Saturday, Sept. 8, but there won’t be a single bud, tincture or edible sold for at least a few months.

Business owners in the surrounding marijuana industry have been expecting and planning for delays. Other states, like Maryland, have seen setbacks in their own programs for various reasons. Meanwhile, Ohio’s system for licensing cultivators, processors, dispensaries, doctors and testing labs is one of the most rigorous and heavily regulated in the United States and has faced its own setbacks since HB 523, the law establishing the program, was passed in fall 2016.

Cultivation licenses were slow to roll out in 2017. And some aspiring marijuana growers denied licenses have sued the state over its process for scoring applications. All that began pushing back building timelines for grow ops and the licensing of the other operations. Potrepreneurs reading the tea leaves sensed at that time the industry and its supply chain would come together slower than originally anticipated.

“Most of these business owners are sympathetic and have factored those delays into their budgets,” said Kevin Patrick Murphy, a Walter | Haverfield attorney working with several local marijuana enterprises. “In any state that you have ever seen this, you have delays. No one has ever had a process that has adhered to the timeline.”

“But obviously, folks who’ve invested tens of millions of dollars into selling these products are working to make things happen as fast as possible,” said Thomas Rosenberger, executive director of the National Cannabis Industry Association of Ohio.

ISSUE DATE: March 4 | AD CLOSE: Feb. 21 For more information, contact Lisa Rudy at lrudy@crain.com

SEE MARIJUANA, PAGE 6

Focus: Meetings and events << Event

pros are in demand, but the job isn’t for the faint of heart. Page 12

Unique is key in event planning. Page 14 Q&A: I-X Center executive vice president Lisa Vo Page 16

2/7/19 3:33 PM

PA G E 14

|

F E B R U A RY 11 - 17, 2 019 |

CRAIN’S CLEVELAND BUSINESS

MIDDLE MARKET

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It’s tax time for most business owners, so it’s time to crunch the numbers on the new tax benefits and limitations introduced in the Tax Cuts and Jobs Act of 2017 (TCJA). The TCJA brought significant tax breaks for business owners, including the qualified business income deduction and bonus depreciation. It also brought new limitations, such as the limitation on the deduction of business interest.

If you haven't already done so, spend some extra time with your tax adviser this year to review the new rules. The analysis can be complicated and interrelated, but worthwhile.

Here are two items that affect many businesses.

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Adjusted taxable income for this purpose is not reduced for net operating losses, the new pass-through income deduction or — before 2022 — depreciation, amortization or depletion. In effect, if you take advantage of bonus depreciation before 2022, this won't further limit your deduction of business interest.

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MOBILITY

CONTINUED FROM PAGE 10

MobilityWorks serviced 30,000 customers in 2018, supplying them modified vans or alterations to a preowned vehicle. Clients face arthritis, stroke and other infirmities that affect their mobility and prohibit them from driving or even entering a regularly equipped vehicle. Koeblitz witnessed the life-altering effect a modified vehicle had on his father, Bill, who had Parkinson’s disease.

“I saw my dad struggle to get into a car, and his world got smaller and smaller because of that,” Koeblitz said. “(An accessible vehicle) helped him go out and stay active. What we’re doing is making that process really easy instead of incredibly complex if people want to go to the store or see their grandkids.”

A community asset Koeblitz entered the accessibility field in 1997, after selling off a chain of urgent-care centers he owned. He and late business partner Taylor Clark bought New Era Mobility — later renamed MobilityWorks — after becoming intrigued by the small company that modified vehicles for

Grassi is chairman of McDonald Hopkins LLC.

In the case of partnerships and S corporations, the limitation is calculated at the entity level, but special rules apply to pass-through of certain items to the owners to prevent double-counting of income, and a special rule applies to carry-forwards by partnerships. Extensive Treasury regulations have been proposed describing these calculations.

An intriguing election is available to real property trades or businesses and farming businesses. These businesses can elect out of the business interest deduction limitation, but if they do, they're required to forgo bonus depreciation and use the alternative depreciation system. Fortunately, the proposed Treasury regulations don't require recapturing bonus depreciation taken in earlier years for property that is already in service at the time of the election.

The regulations are extensive and detailed. They provide guidance on what constitutes a “real property trade or business” and describe how the election is made. The election is made on the company’s tax return and is irrevocable, so crunch those numbers and weigh the cost of the deduction limitation against the value of accelerated depreciation.

New guidance on the qualified business income deduction for real estate enterprises

Since tax reform was passed, many business owners have wondered what

“[Bill’s] focused on improving the product so disabled individuals have the same thing that everyone else has.

It’s not a magic elixir, but it’s normalizing their lives.”

— William Shivers, president of Huntington Bank’s Canton/ Mahoning Valley region

the elderly and disabled.

Studying the industry revealed an overall lack of quality oversight, with most competitors being inexperienced garage shops. Those conditions resulted in unsafe vehicles for a population that Koeblitz recognized as vulnerable.

MobilityWorks soon differentiated itself through better quality and service, which dovetailed with new qualifications required for dealers to sell accessible vehicles. The industry also made room for minivans, adjusting door height and interior space to accommodate wheelchairs. Today, lowered-floor minivans comprise 80% of the consumer-accessible van

real estate activities constitute a “trade or business” since an activity must be a trade or business to be eligible for the 20% deduction on qualified business income. While questions remain, the IRS recently announced a safe harbor under which a rental real estate enterprise will be treated as a trade or business if several factors are satisfied, including:  Separate books and records are maintained for each rental real estate enterprise.  250 or more hours of rental services are performed per year with respect to the rental enterprise. After 2022, a five-year testing period applies.  Contemporaneous records are kept to document the services. This requirement doesn't apply to taxable years beginning prior to Jan. 1, 2019.

Rental services include advertising; negotiating and executing leases; verifying information on tenant applications; collecting rent; daily operation, maintenance and repair; and management and supervision.

Rental services don't include financial or investment management activities. Real estate used by the taxpayer as a residence for any part of the year isn't eligible for this safe harbor. Real estate rented or leased under a triple net lease is also not eligible.

The guidance requires a written statement to be filed with the tax return to qualify for the safe harbor. If your real estate enterprise doesn't satisfy all the requirements of the safe harbor, it could still be a trade or business eligible for the qualified business income deduction.

As with any tax law changes, there are many exceptions to the general rules to coordinate them with existing rules and curb perceived abuses, so a case-by-case analysis is needed. market, Koeblitz said.

William Shivers, president of Huntington Bank’s Canton/Mahoning Valley region, has been supporting MobilityWorks’ acquisitions since 2008. Shivers said he’s pleased to promote an asset strengthening the community through a valuable and much-needed service.

“It was a natural fit for us,” said Shivers. “I’ve seen people’s happiness and relief at becoming mobile.

It’s exciting for Bill’s customers.”

Koeblitz’s deep industry knowledge and calm demeanor are additional assets to the ongoing partnership, Shivers said.

“You may get a client that gets upset about something, but Bill has never taken that position,” he said.

“He’s focused on improving the product so disabled individuals have the same thing that everyone else has. It’s not a magic elixir, but it’s normalizing their lives.”

The significance of MobilityWorks’ accessible solutions is evident in customer surveys, Koeblitz said. Simply helping clients regaine their independence is a source of enormous pride for him.

“I saw a career of helping out and doing something of value,” Koeblitz said. “It makes you feel good when you go home at night.”

2/7/19 3:41 PM

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

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F E B R U A RY 11 - 17, 2 019

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PA G E 15

THE LIST

Largest Commercial Property Sales of 2018 Ranked by price THIS YEAR PROPERTY (1)

PROPERTY TYPE

PRICES/ESTIMATES PRICE QUALIFIER (2)

SQUARE FEET OR # OF UNITS

PRICE PER SQ. FT. OR PER UNIT

DATE

BUYER

SELLER

1

Hard Rock Rocksino Northfield Park 10705 Northfield Road, Northfield

Sports & Entertainment

$1,062,500,000 (3) Confirmed

200,000

$5,300

7/6/2018

MGM Growth Properties LLC

Milstein Entertainment LLC

2

200 Public Square 200 Public Square, Cleveland

Office

$187,000,000 Reported (4)

1,270,204

$147.22

10/4/2018

DRA Advisors LLC

Harbor Group International LLC

The Province 609 S. Lincoln St., Kent

Multifamily

$64,361,927 Allocated

259,795

$247.74

9/20/2018

Blackstone Real Estate Income Trust Inc. (95%); Greystar (5%)

Education Realty Trust Inc.

4

Marketplace at Four Corners 7100 Market Place Drive, Aurora

Retail

$55,675,000 Confirmed

525,700

$106

1/15/2018

Rubin Realty

MPG Development

5

1111 Superior Ave. 1111 Superior Ave., Cleveland

Office

$55,000,000 Confirmed

597,442

$92.06

10/10/2018

Zamir Equities

American Landmark Properties Ltd.

6

Sphere 1801 E. 12th St., Cleveland

Multifamily

$46,500,000 Estimated

407 units

$114,251

4/15/2018

Marlin Spring

Metropolitan Properties

7

Richmond Park 444 Richmond Park East, Richmond Heights

Multifamily

$41,300,000 Appraised value

548,194

$75.34

6/19/2018

E&M Associates

NM Residential

8

Statler Arms Apartments 1127 Euclid Ave., Cleveland

Multifamily

$40,000,000 Confirmed

310,043

$129.01

1/30/2018

The Millennia Cos.

California State Teachers Retirement System, LCOR

8

The Centennial 925 Euclid Ave., Cleveland

Office

$40,000,000 Confirmed

1,360,000

$29.41

5/4/2018

The Millennia Cos.

Hudson Holdings

10

Anderson-DuBose Distribution Center 5300 Tod Ave. S.W., Lordstown

Industrial

$39,700,000 Confirmed

210,497

$188.60

6/14/2018

Broadstone Net Lease Inc.

U.S. Realty Advisors LLC

11

AECOM Centre 1300 E. 9th St., Cleveland

Office

$36,875,000 Confirmed

575,000

$64.13

6/29/2018

Rugby Realty Co. Inc.

Optima Ventures

12

DeVille Apartments 23305 Chagrin Blvd., Beachwood

Multifamily

$30,000,000 Estimated

246 units

$121,951

4/9/2018

Albion Residential

Morgan Communities

13

Euclid Hill Villa 100 Richmond Road, Cleveland

Multifamily

$29,870,000 Appraised value

358,547

$83.31

4/5/2018

Fairstead

GHC Housing Partners

14

Euclid Beach Villa Apartments 125 E. 156th St., Cleveland

Multifamily

$29,710,000 Appraised value

314,963

$94.33

4/5/2018

Fairstead

GHC Housing Partners

15

One Park West One Park West Blvd., Akron

Office

$29,600,000 Confirmed

94,660

$312.70

10/15/2018

MB Real Estate Services Inc.

Monticito Medical Real Estate

16

345 Flats 345 S. Depeyster St., Kent

Multifamily

$27,500,000 Confirmed

145,000

$189.66

11/29/2018

NB Private Capital LLC

Newbrook Partners

17

The Village at Mayfield 919 Aintree Park Drive, Mayfield

Multifamily

$27,150,000 Confirmed

275,328

$98.61

6/29/2018

Stoneweg U.S LLC

RCP General Inc.

18

Diamond Business Park 30339 Diamond Parkway, Glenwillow

Industrial

$27,000,000 Confirmed

400,000

$67.50

9/27/2018

Plymouth Industrial REIT

Weston, Geis Cos.

19

Forest Hill Apartments 14030 Terrace Road, Cleveland

Multifamily

$25,400,000 Appraised value

316,967

$80.13

4/5/2018

Fairstead

GHC Housing Partners

20

Ellacott Parkway 21170 Ellacott Parkway, Warrensville Heights

Multifamily

$23,300,000 Appraised value

287,384

$81.08

8/27/2018

Ernest Tschannen

RCP General Inc.

21

Pikewood Manor mobile home park, land 1800 Lorain Blvd., Elyria

Multifamily

$23,000,000 Confirmed

NA

NA

11/30/2018

UMH Properties Inc.

Sommer & Sons

22

Northern Ohio Medical Specialists 2500 W. Strub St., Sandusky

Office

$22,200,000 Confirmed

104,700

$212.03

10/31/2018

The Davis Group

NOMS Healthcare

23

3009 Gilchrist Road 3009 Gilchrist Road, Akron

Industrial

$21,376,099 Confirmed

668,592

$31.97

7/27/2018

Global Net Lease Inc.

Insite Real Estate LLC

24

Giant Eagle 7939 Day Drive, Parma

Retail

$21,086,000 Confirmed

92,628

$227.64

6/7/2018

Athene Asset Management LLC

H&R REIT

25

ContiTech USA office 703 S. Cleveland Massillon Road, Fairlawn

Office

$20,800,000 Confirmed

97,845

$212.58

4/2/2018

Ellis Enterprises

Ritenour Group

26

Rockside Distribution Center 16625 Granite Road, Maple Heights

Industrial

$19,135,000 Confirmed

351,553

$54.43

8/17/2018

AIC Ventures

Sherwood Food Distributors

27

Parma Commerce Center 1 and 2 5565-5575 Venture Drive, Parma

Industrial

$18,500,000 Allocated

251,195

$73.65

11/15/2018

Arcapita, Weston

Biynah Industrial Partners

28

Owl's Nest Apartments 2020 Taylor Road, East Cleveland

Multifamily

$18,300,000 Appraised value

255,204

$71.71

4/5/2018

Fairstead

GHC Housing Partners

29

Tower at Erieview and Galleria 1301 E. 9th St., Cleveland

Office

$17,714,760 Confirmed

830,250

$21.34

8/18/2018

James Kassouf-led investor group

RAIT Financial Trust

30

Colonial Oaks Manufactured Home Park 10425 Middle Ave., Elyria

Multifamily

$17,105,000 Confirmed

10,608

$1,612

6/12/2018

Meritus Communities LLC

Dettore Group

31

Wadsworth Crossing 1161 Williams Reserve Blvd., Wadsworth

Retail

$16,000,000 Confirmed

118,145

$135.43

11/26/2018

Tabani Group

Brixmo Property Group

32

Marketplace at Four Corners - phase II 7705 Market Place Drive, Aurora

Retail

$15,800,000 Confirmed

116,436

$135.70

3/5/2018

RE Aurora Ohio

Pebb Enterprises

33

Gardens at Cuyahoga Falls 45 Chart Road, Cuyahoga Falls

Health care

$15,600,000 Confirmed

69,963

$222.98

8/22/2018

Inspirit Senior Living

Richard Piekarski

34

Twinsburg Business Campus 1 and 2 2477-2479 Edison Blvd., Twinsburg

Industrial

$15,500,000 Allocated

234,037

$74.26

11/9/2018

Arcapita, Weston

Biynah Industrial Partners

35

Home Depot 8199 Pearl Road, Strongsville

Retail

$15,329,300 Confirmed

116,000

$132.15

6/7/2018

Athene Asset Management LLC

H&R REIT

3

RESEARCHED BY CHUCK SODER (CSODER@CRAIN.COM)

Get all 56 deals and detailed transaction notes. Become a Data Member: CrainsCleveland.com/data

Crain's does not independently verify all information and there is no guarantee these listings are complete or accurate. Send all feedback to Chuck Soder: csoder@crain.com.

(1) Source: Costar and Alec Pacella, president, NAI Pleasant Valley. Additional research by Crain's. (2) Allocated means the price was estimated from the total price paid for multiple properties. Confirmed means the price has been confirmed by Costar, NAI Pleasant Valley, county records, Crain's or other media outlets. Some prices include business value in addition to real estate. (3) Includes business value; MGM Growth Properties in September 2018 struck a deal to sell the facility's operating assets to MGM Resorts for about $275 million. (4) This figure was reported in a Crain's story citing unnamed sources but was not confirmed by parties involved.

P015_CL_20190211.indd 15

2/7/19 3:53 PM

S P O N S O R E D

S1 February 11, 2019

c O N t E N t

Building on more than 90 years of networking, education S

ales & Marketing Executives (SME) of Cleveland has been supporting sales and marketing professionals for more than 90 years through networking, education and leadership opportunities.

With 255 members, 38 corporate members and five corporate sponsors, SME Cleveland focuses on assisting members in reaching their sales and marketing goals, and improving their skills through networking luncheons, educational workshops, Business After Hours networking events, sales training programs and four Business Connection (BizCon) Lead Exchange Groups.

SME’s Distinguished Marketing and Sales Awards (DMSA), says

SME Cleveland executive director Mary Margaret Lavelle, is the best networking opportunity of the year.

CEOs, presidents, vice presidents and sales managers — the decision makers at Cleveland’s top companies — are available for networking and sharing best practices.

The 58th annual DMSA banquet is the profession’s premier honor to acknowledge excellence and provide recognition for outstanding sales and marketing achievement. The awards will be presented this year on Feb. 28 at Executive Caterers at Landerhaven and will honor 2019 Business Executive of the Year Carl J. Grassi, chairman of McDonald Hopkins LLC law firm in Cleveland, as well as the area’s elite business professionals.

Selection criteria are based on the demonstration of the highest business, professional and ethical standards.

Lavelle says the Business Executive of the Year award recognizes a top leader who has contributed significantly to the profession and the Greater Cleveland community and is given solely on merit.

“Things that make Carl worthy of this include the fact that he’s very active in the community and also involved in many public service endeavors,” Lavelle says. “SME Cleveland is honored to be able to present Carl with the Business Executive of the Year award for 2019.”

The Business Executive of the Year was first awarded in 1962 to Elmer Lindseth, chairman of the Cleveland Electric Illuminating Company. It is the longest running and oldest award recognizing pillars of the Northeast Ohio community.

Lavelle says the DMSA continues SME Cleveland’s mission of being active in the industry and promoting the successes of individuals in the sales and marketing profession. SME Cleveland works to enrich the careers of its members by connecting them to industry professionals and providing opportunities to grow their networks.

No matter where someone is in their career, Lavelle says members can walk away with new ideas and information from meaningful presentations, educational opportunities or networking luncheons.

We make what matters work.*

*

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That’s why we’re dedicated to improving people’s lives and the environment with power management technologies that are more efficient, safe and reliable. Because that’s what really matters. And we’re here to make sure it works.

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This advertising-supported section is produced by Crain Content Studio-Cleveland, the marketing storytelling arm of Crain’s Cleveland Business. The Crain’s Cleveland Business newsroom is not involved in creating Crain Content Studio-Cleveland content.

P016_P023_CL_20190211.indd 16

2/7/19 9:35 AM

S P O N S O R E D

c O N t E N t

February 11, 2019 S2

carl Grassi: 2019 Business Executive of the Year

D

riven to succeed.

That phrase succinctly captures the essence of Carl J. Grassi, chairman of the McDonald Hopkins LLC law firm in Cleveland.

Grassi is 2019 Business Executive of the Year, an annual honor given by Sales & Marketing Executives of Cleveland.

The award recognizes a top leader who contributes significantly to the profession and the Greater Cleveland community, says SME Cleveland executive director Mary Margaret Lavelle. Honorees demonstrate outstanding leadership, vision and creativity.

“Carl is active in public service to the community and very active in the business community,” Lavelle says. “He has extensive experience in assisting clients in complex mergers and acquisitions, business succession planning, executive compensation and tax planning.”

Along with his role as a corporate counsel and business adviser, Grassi is an author and speaker on business planning related topics. He is a member of the American and Federal bar associations, the International Lawyers Network and a Life Fellow of the American Bar Foundation.

In the community, Grassi is chairman of the Greater Cleveland

Sports Commission and chairman of the board for Regional Brands Inc. He is a past director of the Cleveland chapter of ORT America, a Jewish nonprofit for education, and a past board member of Business Volunteers Unlimited, Easterseals Northern Ohio, Greater Cleveland Film Commission and Lake Erie College.

Shawn Riley, who succeeded Grassi as president at McDonald Hopkins, says Grassi is “driven to success in all aspects of his life, and unwilling to

Managing editor, custom and special projects: Amy Ann Stoessel, astoessel@crain.com Writer: Kimberly Bonvissuto

settle for anything less than success.”

“Carl became president of our firm at a difficult time – our president had died suddenly,” Riley says. “Upon taking over, he stabilized the firm through a strong, steady example, and thereafter led the firm to even greater success.”

Fred DiSanto, chairman and CEO of Ancora Advisors LLC, and the 2017 Business Executive of the Year, says his history with Grassi dates to their two grandfathers – best friends who left Italy together and settled in Cleveland.

“Carl is not only a great business partner in a number of different ventures, but also one of my dearest and closest friends,” DiSanto says. “His ability to look at a situation and figure out a solution should there be a problem is one of the best I’ve ever seen.”

DiSanto says Grassi’s success lies in the fact that he not only is an attorney,

but a business adviser and problem solver who is driven and goal oriented.

“He is one of those guys who has a sense of urgency in everything he does. That’s critical to not only the success he’s had professionally and personally, but it permeates down through McDonald Hopkins,” DiSanto says. “During Carl’s tenure, he built that infrastructure at McDonald Hopkins that Shawn Riley is taking to the next level.”

David Gilbert, president and CEO of the Greater Cleveland Sports Commission, and the 2016 Business Executive of the Year, calls Grassi a “wonderful leader, mentor and friend.”

“I have learned so much from him in watching how he has grown and managed McDonald Hopkins and his businesses,” Gilbert says. “His guidance and leadership as chairman of

WE’RE

the Sports Commission Board over the past four years has made an impactful difference to our organization, this community and to me personally.”

Grassi says he is humbled by the award.

“I’m really humbled looking at some of the past honorees and their accomplishments and contributions,” Grassi says. “For the firm and myself, it’s a recognition of what we’ve tried to accomplish at McDonald Hopkins as we continue to build the firm, its stature in the community, our clients and friends of the firm.”

The Business Executive of the Year first was awarded in 1962 to Elmer Lindseth, chairman of the Cleveland Electric Illuminating Company. It is the longest running and oldest award recognizing pillars of the Northeast Ohio community.

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Good things come to those who make a difference.

S P O N S O R E D c O N t E N t

2019 DMSA RECIPIENTS

Congratulations to all 2019 Distinguished Marketing and Sales Awards honorees.

Nimitt Adhvaryu

We especially want to recognize our KeyBank colleague Matt Chaney, Vice President, Marketing Technology Manager, for this outstanding achievement. You exemplify our values of teamwork, respect, accountability, integrity, and leadership. For that, you make us very proud.

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Director of strategic alliances MAGNET ©2019 KeyCorp. KeyBank is Member FDIC.

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S P O N S O R E D c O N t E N t

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Congratulations to Ethan Hendrickx for being honored with the Distinguished Marketing & Sales Award.

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Congratulations, Amanda Todorovich, for being a 2019 Distinguished Marketing and Sales Award Recipient.

Thank you for demonstrating business, professional and ethical standards in the community.

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S P O N S O R E D

c O N t E N t

February 11, 2019 S6

Amanda todorovich Senior director, content and creative services Cleveland Clinic

chris tran

Vice president, senior business development officer Bank of America

Patricia LoPresti Executive director The First Tee of Cleveland

Honoring

Carl Grassi

DMSA 2019 Business Executive of the Year Sandra Madison

CEO and chairperson Robert P. Madison International, Inc.

Bill Major

VP sales and marketing Everstream

In celebration of our Chairman, Carl Grassi, and all DMSA honorees, we thank you for your inspiration, leadership, and achievements in our community.

Ellen Moriarty Director of marketing and creative services The Shamrock Companies

mcdonaldhopkins.com Chicago | Cleveland | Columbus | Detroit | Miami | West Palm Beach

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S7 February 11, 2019

S P O N S O R E D

c O N t E N t

Zari Venhaus

Director, corporate marketing communications Eaton

Shauna Wilson

Director of communications Rock and Roll Hall of Fame and Museum

Congratulations We are proud to sponsor SME Cleveland and congratulate Carl J. Grassi and all 2019 DMSA recipients for their achievements.

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Congratulations on your rock star performance!

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DISTINGUISHED MARKETING & SALES AWARD RECIPIENT

DEBBIE HARRY; BLONDIE Class of 1995

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Photo by James Shive

More Than a Game

CONSIDER THIS OUR VERSION OF A HIGH FIVE, STANDING “O” AND CHEST BUMP ALL IN ONE. We'd like to congratulate the SME Award recipients and nominees for their hard work, dedication and talent. And for making our community that much better.

The First Tee of Cleveland congratulates

Patricia LoPresti Executive Director 2019 DMSA Award Recipient We’re grateful for your passionate leadership and dedication to local youth.

You embody The FirstTee’s Nine CoreValues™

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Honesty Integrity Respect Confidence Courtesy Judgment

Sportsmanship Responsibility Perseverance

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S P O N S O R E D

c O N t E N t

February 11, 2019 S8

PaSt buSiNESS ExEcutivES Of thE yEaR 2018 tom and jeFF heinen, Heinen’s 2017 Fred diSanto, Ancora Advisors

1989 jameS m. biGGar, Nestle Enterprises, Inc./The Stouffer Corp.

2016 david Gilbert, Greater Cleveland Sports Commission & Destination Cleveland

1988 robert b. horton, BP America, Inc.

2015 dr. marc Gillinov, Cleveland Clinic

1986 john G. breen, The SherwinWilliams Co.

2014 bernie moreno, The Collection Auto Group 2013 len KomoroSKi, The Cleveland Cavaliers and Quicken Loans Arena 2012 Paul matSen, cleveland clinic 2011 jared chaney, Medical Mutual of Ohio Family of Companies 2010 joSePh m. Scaminace, OM Group, Inc. (OMG)

1987 j. richard KelSo, The East Ohio Gas Co.

1985 roy h. holdt, White Consolidated Industries, Inc. 1984 arthur b. modell, Cleveland Browns Football 1983 m. brocK weir, Ameritrust Corp.

1982 william e. macdonald, The Ohio Bell Telephone Co. 1981 ruben F. mettler, TRW Inc.

2009 terry Stewart, Rock and Roll Hall of Fame and Museum

1980 william j. de lancey, Republic Steel Corp.

2008 Sandy cutler, Eaton Corp.

1979 claude m. blair, National City Bank

2007 toby coSGrove, Cleveland Clinic

1978 FranciS a. coy, The May Co.

2006 Glenn renwicK, The Progressive Corp.

1977 charleS e. SPahr, The Standard Oil Co. (Ohio)

2005 chriStoPher m. connor, SherwinWilliams

1976 thomaS vail, The Plain Dealer

2004 david a. daberKo, National City Corp.

2003 K. michael benz, United Way Services 2002 Kent w. claPP, Medical Mutual Ohio 2001 william b. SummerS jr., McDonald Investments, Inc., A KeyCorp Co. 2000 richard w. PoGue, Dix & Eaton 1999 Farah m. walterS, University Hospitals Health Systems 1998 irvinG i. Stone/ morry weiSS, American Greetings, Corp.

1997 alex machaSKee, The Plain Dealer 1996 william n. hulett, Rock and Roll Hall of Fame and Museum 1995 edward brandon, National City Corp.

1994 marK h. mccormacK, International Management Group 1993 joSePh t. Gorman, TRW Inc. 1992 robert GilleSPie, Society Corp./ Society National Bank 1991 morton l. mandel, Premier Industrial Corp.

1990 jameS r. Stover, Eaton Corp.

1975 herbert e. StrawbridGe, The Higbee Co. 1974 Semon e. KnudSen, White Motor Corp.

1973 e.m. de windt, The Eaton Corp.

1972 G.j. tanKerSley, The East Ohio Gas Co. 1971 FranciS a. coy, The May Co. 1970 j.G. bell, jeSS a. bell, Bonne Bell, Inc. 1969 hon. carl b. StoKeS, City of Cleveland 1968 GeorGe j. Grabner, The Weatherhead Co. 1967 ralPh m. beSSe, Cleveland Electric Illuminating Co. 1966 jameS j. nance, Central National Bank of Cleveland 1965 randall m. ruhlman, Cleveland Chamber of Commerce 1964 louiS b. Seltzer, The Cleveland Press 1963 harold t. clarK, Leonard C. Hanna Jr. Fund 1962 elmer l. lindSeth, Cleveland Electric Illuminating Co.

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F E B R U A RY 11 - 17, 2 019

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CRAIN’S CLEVELAND BUSINESS

AKRON

CAK fighting headwinds but is optimistic

By Dan Shingler

Green and Jackson Township that have grown their populations, key industries and attractions.

For example, he said, the Pro Football Hall of Fame Village is expected to draw more people to Canton. Plus, the oil and gas fracking that has taken place in and around Canton drives a need to get people to and from places like Houston, where United recently started flying from CAK. Meanwhile, corporate stalwarts in the area — such as Diebold Nixdorf, Timken, TimkenSteel, J.M. Smucker Co. and Goodyear — continue to support the airport and are still its biggest sources of business traffic, Camacho said.

In Green, Mayor Gerard Neugebauer said his city enjoys a symbiotic relationship with the airport: The city uses CAK to help attract new businesses and residents, while the air-

port relies on the city for some of its traffic.

Neugebauer also thinks the improvements will help the airport come back, with some help from continued growth in Green.

Like Camacho and others, Neugebauer said CAK is struggling not because of problems with its management or location, but because of airline consolidation. That trend is largely blamed for CAK losing Southwest Airlines to Cleveland Hopkins at the beginning in 2017, a move that hit passenger traffic at the smaller airport hard.

“Really, their struggles have been directly attributable to those mergers,” Neugebauer said.

But he added he thinks the recent improvements at the airport will drive new growth.

“I’m optimistic. I believe the way you approach things sets the tone for what will happen. And I believe in the product that they have and the location that they have, and that they will rebound and grow,” the mayor said.

He also said the airport should benefit from an increasing number of businesses and residents in Green.

“We’re growing. … Our business growth has been exceptional. Just over the last year we’ve had a 5% increase in income tax,” he noted.

With the airport’s new development, Green also has about 150 acres of industrial park land at the airport it can develop, and new city roads are already going in, Neugebauer said.

Steven Potoczak, a Rocky River-based project manager for Virginia’s Delta Airport Consultants, has worked with CAK, Hopkins and other airports in the region. He, too, said Akron-Canton has the right ingredients in place to regain some lost traffic.

The smaller airport may never have the number of flights that its big sibling in Cleveland does, but it also doesn’t need that level of activity to succeed. Potoczak said CAK has something few other airports with its flight schedule can offer: ease of access and use, with passengers often able to park and get to their gates in just a few minutes.

“It’s holding its own simply because of the amenities, and access to the airport is the main one,” Potoczak said. “If you’ve got good service and good access, people will go there. …

That’s why people have always wanted to fly out of CAK.” Potoczak also noted that for Akron-Canton, there’s more than just passenger service.

“That airport has a lot of business aircraft that travel in and out of it, and a lot of general aviation that’s based out of there. It has a really nice cross-section of aircraft and operations and that helps them out,” he said.

The larger industry challenges remain, however, and CAK’s long-term success is anything but guaranteed.

For one thing, analysts say it’s tougher to attract new airlines or secure new flights from existing carriers than it once was. Industry consolidation means all airlines are watching

2017, she said, noting that tissue-engineering have products been in the market quite a bit longer than that.

In Cleveland, CavoGene is looking to raise Lambert about $10 million this year to fund manufacturing and studies with nonhuman primates, said Scott Fisher, CEO of CavoGene and an executive-in-residence at BioEnterprise.

Fisher credits BioEnterprise for its ability to bring to Cleveland the technology, which is a novel and neuron-specific gene therapy licensed from the University of California San Diego and the laboratory of Brian P. Head.

BioEnterprise is “kind of a differentiated incubator,” he said. “So it’s really an amazing ecosystem for entrepreneurs. You kind of have everything in one place. We have all the key talent across the specturm of biotech.”

Years ago, Fisher was involved in Juventas Therapeutics, a Cleveland-based, clinical-stage biotech company developing novel nonviral gene therapies. Late last year, Juventas entered into an agreement with Japanese pharmaceutical company Astellas. The agreement grants Astellas a license to conduct research and to develop Juventas’ lead product candidate, JVS-100, through Phase 2a clinical trials with an option to acquire it from Juventas for further development and commercialization, according to a news release.

Athersys Inc., headed by chairman and CEO Gil Van Bokkelen, recently announced positive summary results from its exploratory clinical study that looked at the use of its cell therapy MultiStem to treat patients suffering from acute respiratory distress syndrome. In addition to this study, Athersys is conducting ongoing studies in ischemic stroke (MASTERS-2 Phase 3 study) and acute myocardial infarction, according to a release. The company is also planning a study to treat severe trauma patients and is

supporting studies in Japan being conducted by Healios.

“There’s a lot of momentum in the area right now because, more and more, we’re seeing evidence of promising therapies that are being developed; there’s more and more investment that’s going into the sector; there’s more and more partnering activity going into the sector,” Van Bokkelen said. “The point is that there’s a lot of indicators that are pointing in the right direction. I think that’s pretty exciting. I think it provides tangible evidence and further testament to the fact that the field is progressing in a way that is quite exciting.”

Milo Biotechnology, a spinout of Nationwide Children’s Hospital, is also working on regenerative medicine therapies here in Cleveland, with a gene therapy that improves muscle strength or prevents muscle loss and muscle wasting. Al Hawkins, CEO and co-founder of Milo, said the regenerative medicine space in Cleveland is a small group but with a strong core.

Companies like Juventas and Athersys brought in or cultivated strong exper-

dshingler@crain.com @DanShingler

Early next year, Akron-Canton Airport will wrap up $110 million in improvements that it began 10 years ago.

But once it’s all dressed up, will it have enough places to go?

Airport officials and at least some backers and industry consultants say Akron-Canton (CAK) is positioned to grow thanks to its new facilities and amenities. They concede, though, that it will have to buck the current trend that favors large hubs over small and midsized airports.

“We’re in a little bit of a lull right now in terms of passengers,” said Akron-Canton CEO Ren Camacho, who left as chief of planning and engineering at Cleveland Hopkins Airport for his new post in October.

To be fair, he’s sugarcoating it. Passenger traffic is down about 40% from 2014, to fewer than a million people in 2018.

But Camacho said he’s confident Akron-Canton will come back.

“We are positioned to rebound, and when we do, we think it’s going to be a sharp rebound. And we need to be ready,” Camacho said, referring to the $34 million gate modernization and expansion that will be completed early this year as the last piece of the airport’s CAK 2018 renovation plan.

That plan is fueling Camacho’s optimism, he said, because airports live and die by the service they provide to both passengers and carriers. Akron-Canton’s new gates, runway, covered parking facilities, ticket wing and TSA screening area all mean that the airport can better serve both constituencies to fuel its growth, he reasoned.

The new gates alone will do a lot to bring the airport up to date.

“It will obviously provide additional amenities to enhance the customer experience. We had gates from the 1960s … and those gates are long past their useful life,” he said.

But new gates mean nothing without new customers to impress. For those, Camacho said, he’s relying on the communities around his airport — places like Canton, North Canton,

MEDICINE CONTINUED FROM PAGE 1

In 2018, gene and gene-modified cell therapy attracted $9.7 billion in investment; cell therapy attracted $7.6 billion; and tissue engineering attracted $936.9 million.

“I think the second spike means that the outlook is very, very bright for this sector,” Lambert said. “And when you look at the chart that shows the indications that are covered, it’s really a significant number of indications. So there’s obviously a lot of work in oncology, in cancer, and a lot of work in cardiovascular, but there’s also a great deal of exciting work in rare disease, in neuromuscular, in ophthalmological — you know, one of the first products on the market relates to an inherited vision disorder.”

These therapies have been in development for decades, but are just now reaching the first wave of commercialization for cell and gene therapy, Lambert said. The first three products were approved in the U.S. in

P024_CL_20190211.indd 24

margins more closely than ever and distributing flights very carefully, said Bob Mann, CEO of R.W. Mann & Co., an airline industry consulting firm in Port Washington, NY. “This is the problem that a lot of these secondary and smaller airports experience. They had service in the ’80s, they had service in the ’90s and some of them even had service in the 2000s. But subject to consolidation, a lot of this secondary and tertiary service went away,” Mann said.

But he added he’s impressed that Akron-Canton has been able to keep some of the big carriers and direct flights it still has. American, Delta and United still offer nonstop flights from CAK to hubs such as Chicago, Houston and Atlanta, and those flights likely will be critical to proving the airport’s continued viability to carriers and securing future flights, Mann said.

“Airlines are slaves to the data that already exists,” Mann said, adding that they use that data to drive virtually all of their decisions.

If Akron-Canton can keep its existing flights full — and its load factor is actually better than average for U.S. airports — it has a chance of regaining more flights and more passengers, and then perhaps more flights still, he said.

“It’s a case of keeping enough revenue flowing to keep the carriers who are there profitable,” Mann said.

That, he noted, will depend on the airport’s ability to market itself and maintain or amp up service levels. It also relies on how the surrounding area builds up its economy and establishes ties to other regions to create more viable flight destinations.

As for keeping the existing airlines happy, Camacho said things are going well. The two newest nonstop flights, to New Jersey and Houston, have been very successful, he said.

Less than a year after it began the route, United increased the size of the jets it flies from CAK to Houston to accommodate more passengers, he said.

The airport is chasing new flights, too, he added.

“We’ve been in discussions with American for Dallas-Fort Worth — very positive discussions — about potential service there in the next two or three years,” Camacho said. tise that has gone on to lead other companies in the area, he added.

Hawkins himself was co-founder and initial chairman at Abeona Therapeutics, a local company focused on developing novel gene- and cell-therapy approaches for the potential treatment of certain rare diseases.

“There have been some great successes in the field and people are starting to realize that these approaches are safe, and that they’re scalable for larger patient trials and then ultimately commercialization,” Hawkins said.

Right now, the regenerative medicine industry has more than 1,000 ongoing trials globally, 92 of which are in Phase 3, according to ARM. In 2018, the industry saw more than $20 billion in upfront payments for mergers and acquisitions, up from $13 billion the year prior.

“I think what the infusion of investment in this sector means is that the outlook is bright, that we’ll be able to touch more patients across more indications and more geographies than we might have imagined just a few years ago,” Lambert said.

2/8/19 3:28 PM

CRAIN’S CLEVELAND BUSINESS

VACANCIES CONTINUED FROM PAGE 1

Steve Rubin, a principal at Little Italy-based Midwest Development Partners, which led a partnership that produced Centric, with 272 suites at 1999 Circle Drive, said 42% of its suites are leased and the building is signing new leases at a double-digit pace weekly.

“We’re doing well,” Rubin said.

“We’re ahead of schedule. We’re very bullish on University Circle.” To prove it, he pointed out the company is continuing to pursue a long-range plan to build nearby Circle Square, also known as UC3, which will have seven buildings.

Rubin said Centric opened after the leasing season in the fall, but he noted it’s not long until next month’s Match Day, when medical school graduates learn about residencies and other appointments, which brings a flock of new prospects to the market.

At the 20-story One University Circle, Mitchell Schneider, who developed the property with Sam Petros, said the 276-suite building at 10730 Euclid Ave. is 70% leased.

“We’re getting better rent per square foot than we expected and feel the building is gaining momentum,” Schneider said. Reflecting the influx of a large number of new suites, CoStar, the online realty data provider, estimates there’s 10% vacancy in the University Circle area, double the five-year average.

More apartments also have gone on the market this year in the eastern suburbs. Pinecrest, the retail-office-residential project in Orange Vil-

SSIFIEDS

One University Circle’s arching footprint honors the circle’s historic trolley turnaround. The design emphasizes the ability for suites to overlook the nearby reflecting pool at the Cleveland Museum of Art. (Stan Bullard)

lage, added 87 units, and Van Aken ects have opened in that area and acDistrict in Shaker Heights added 103. counts for much of the region’s vaThe largest source of new is at The As- cancy. That’s a big change from ter, which opened 206 units on Park multiple years of several apartment East Drive in Beachwood and is 55% projects opening in downtown Cleveland. leased, according to CoStar.

The largest project to open downAdam Fishman, a principal at Cleveland-based Fairmount Proper- town last year was the Halle Building, ties, one of the developers of 1228 Euclid Ave., which Doug Price, Pinecrest, said, “We’ve been thrilled CEO of Willoughby-based K&D with the response. People are really Group, said is fully leased. Besides getting the work-live-play environ- substantial holdings downtown, the ment we created here.” He was non- company owns thousands of suites in plussed by the region’s rising vacan- the eastern suburbs. Its portfolio has cy, as he believes such new-breed, about 3% vacancy, and that is concenmixed-use projects are a different trated in its high-rise buildings.

Advertising Section “This winter is much better than product from typical apartment-only winter was,” Price said. “We’re buildings.

To place your listing, contact Kate last Rozek at The East Side action is the first seeing the number of tenants moving 313-446-0485 or email krozek@crain.com time in four years that multiple proj- out as they buy houses continuing to www.clevelandbusiness.com/classifieds

decline.” CoStar puts downtown vacancy at 9% as of last Thursday, Feb. 7, but it does not provide prior-year figures.

Other factors show that despite the uptick in vacancy, the market remains strong. The typical concession on the East Side’s new properties is one month without paying rent for the winter months, while such deals are scarce downtown.

Dan Burkons, an Independence-based senior director of Marcus & Millichap, said that while other regions may have lower vacancy rates, concessions in those markets are more prevalent. Employment is continuing to grow in the Cleveland region, especially on the East Side, and new household formation remains strong, he said.

“I still know of people who are living at home,” Burkons added.

Michael Barron, a Marcus & Millichap senior managing director also based in Independence, observed that current construction rates are the strongest in decades.

“Yes, it’s moving the needle on vacancy,” he said, but it is a growth period in the sector that Cleveland has not seen since the 1990s, which this period eclipses. He also pointed out that the 2,000 suites completed in 2018 in the Cleveland MSA is lower than opened in either Columbus or Cincinnati. Moreover, the Cleveland figure pales compared to 12,000 suites in Houston and 16,000 in San CRAIN’S CLEVELAND BUSINESS | Antonio.

Marcus & Millichap forecasts vacancy may dip to 5.8% at the end of this year as fewer projects are under construction and 1,600 units are scheduled for completion in 2019 in

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PA G E 2 5

the region, including new buildings in downtown Cleveland and Ohio City.

Ralph McGreevy, executive vice president of the Northern Ohio Apartment Association trade group, said, “Everyone I talk to in the apartment business is excited about the market. This is our season to expand our marketplace when there have been other times we have not been able to do so.”

Moreover, 6% is not a bad number, he added, as the market has seen higher vacancy figures in the past during downturns. And that was when no new units were going up.

For example, in Marcus & Millichap’s 2010 report, the Cleveland MSA had vacancy of 7% at the end of 2009 and just 56 units were added in the region.

“We have to take advantage of when the market is hot,” McGreevy said. “It’s the right thing to do for our community to add new product. No one is looking at the Marcus & Millichap report with doom and gloom.

It’s an exciting time.”

Don’t expect the climbing vacancy to reduce the appetite for more multifamily projects here.

Mark Vogel, a mortgage broker and senior managing director of Berkadia’s Cleveland office, said climbing vacancy alone won’t make it more difficult to get financing for new developments so long as other metrics remain strong.

S E P T E M B E R 3 - 9 , 2 018 | PA G E 4 0 “Lenders typically estimate 5% vacancy when they analyze applications for new projects,” Vogel said.

“Moreover, and more important, lenders are extremely interested in making multifamily loans.”

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#5 Top Producer

Chris Seelig, CCIM Senior Vice President | Principal

Thomas Gustafson, CCIM

Russell P. Rogers, SIOR Senior Vice President | Principal

Katie Watts First Vice President

Gary Cooper, CCIM, JD Senior Vice President | Principal

National Director of Self Storage Group

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Broker Associate Award

President’s Award

Rookie of the Year Award

REMS Award of Excellence

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Spirit Award

Mark S. Abood, Esq. Senior Vice President | Principal

Amy J. Zmecek, CPMC Marketing Specialist

Matt Davis Senior Associate

David Ostoich, RPA, FMA Senior Property Manager

Joe Greer Maintenance Technician

Kris Walsh Marketing Specialist

COLLIERS INTERNATIONAL | CLEVELAND-AKRON 200 Public Square | Suite 1200 Cleveland, OH 44114 216 239 5060

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CRAIN’S CLEVELAND BUSINESS

Advertising Section

PEOPLE ON THE MOVE

To place your listing, visit www.crainscleveland.com/people-on-the-move or for more information, please call Debora Stein at (917) 226-5470 or email dstein@crain.com.

BANKING

COLLEGES

LAW

LAW

LAW

S&T Bank

Baldwin Wallace University

Walter | Haverfield

Walter | Haverfield

Walter | Haverfield

Sean Dockery has been promoted to senior vice president, regional business banking team leader and has been on the team for over five years. In his expanded role, Sean will call on new prospects and maintain a network of referral professionals to enhance business development and relationships within the expanding Ohio market. Sean attended Kent State University, Cuyahoga Community College, and completed the Ohio Bankers League Leadership program.

With a strong background in leadership, community service and client relations, Christie Davenport brings an valuable skill set to her Davenport new role as Director of Alumni Engagement at Baldwin Wallace.

Her impressive experience will assist her in developing strategic, innovative engagement opportunities for BW constituents spanning alumni, families, community leaders and business associates.

Carmen Castro-Rivera, MBA, GCDF, is the new Director of Graduate Business Admissions.

She will manage all aspects of business development, Rivera recruitment and admissions for graduate programs in the BW School of Business. She brings to the position leadership expertise in career development and strong professional ties to the Northeast Ohio business community.

Walter | Haverfield is pleased to announce that Megan Zaidan has been elected to the partnership with the firm. A member of Walter | Haverfield’s Real Estate and Corporate Transactions groups, Zaidan represents clients in a broad range of commercial real estate matters, including the acquisition and disposition of commercial properties, retail, industrial, and office leasing, and real estate finance. For more information, visit www.walterhav. com.

Walter | Haverfield is pleased to announce that Rina Russo has been elected to the partnership with the firm. Russo represents private and public sector employers in a wide range of labor and employment issues. That includes allegations of discrimination and harassment, matters involving failure to accommodate and wage/hour violations. For more information, visit www.walterhav. com.

Walter | Haverfield is pleased to announce that Josh Hurtuk has been elected to the partnership with the firm. Hurtuk’s practice encompasses a broad range of real estate matters, including development, redevelopment, acquisition and disposition of commercial properties, and leasing of retail, office, warehouse and industrial space. He has represented both lenders and borrowers in complex real estate financing transactions. For more information, visit www.walterhav. com.

HOSPITALITY & TOURISM

International Exposition (I-X) Center The I-X Center is pleased to announce Lisa Reau has been appointed to Director of Business Development and Events. Reau will be responsible for all sales initiatives while developing business relationships that drive growth and maximize all revenue streams. Prior to this role, Reau served as an Event Manager where she successfully planned and executed events like the Ceramics Expo and National Sports Collectors Convention.

We look forward to utilizing her business experience in this position.

LAW

Kohrman Jackson & Krantz KJK is pleased to announce the addition of new Estate Planning Partner Kevin J. Lenhard to our team.

Contact Kevin at kjl@ kjk.com or at 216.736.7226.

NONPROFIT

The Lakeland Foundation LAW

Benesch Jennifer Stapleton has joined Benesch as a partner in the Corporate & Securities Practice Group. She has 15 years of experience as a lead lawyer and strategic partner, using sound legal judgment, smart business acumen, and deep operational expertise to counsel public and privately held companies, large private equity platforms, and venture capital firms through complex, high stakes, multidimensional business transactions.

Gregory L. Sanders has joined Lakeland Community College as vice president for institutional advancement and executive director of The Lakeland Foundation.

Sanders brings more than 20 years of experience in development and fundraising.

Previously, he served as executive director for the Lake Health Foundation. He was also a development director in various roles for MetroHealth Medical Center, Cleveland Clinic and University Settlement.

Sanders holds a Bachelor of Science degree in education from Kent State University and an Associate of Arts degree from Lakeland Community College.

MANUFACTURING

Agrana Fruit US, Inc. Congratulations to Carl P. Bock who has been promoted to the position of President and CEO of Agrana Fruit US, Inc. Carl joined Agrana in 2004 as Director Finance & IT and consecutively was promoted to CFO / Vice-President Finance in 2009 due to his continuous professional work and dedication to the company.

Agrana Fruit US, Inc. is a leading supplier of innovative and customized fruit solutions for the Bakery, Ice Cream and Dairy Markets.

NEW GIG?

Preserve your career change for years to come.

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Plaques • Crystal Keepsakes • Frames • Other Promotional Items

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CRAIN’S CLEVELAND BUSINESS

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SOURCE LUNCH

Yael Ron

CLEVELAND BUSINESS

General manager, Ritz-Carlton Cleveland Hotel general managers typically have seen a lot of places during their careers before they make a stop in Cleveland. However, even among that set, Yael Ron is well traveled. ¶ In addition to her native Israel, she spent stints in Guatemala, Iran and Thailand while growing up. She has an MBA and served as a captain in the Israeli Army. ¶ Speaking five languages has helped in her hotel career, much of it spent in Israel but also including work in Switzerland and Macau. Besides the Ritz-Carlton, Ron has worked for Hilton and Intercontinental Hotels Group. ¶ She arrived here two years ago, in time to work with her team on the concept for the hotel’s lobby-restaurant as part of the Ritz-Carlton’s major renovation project.

That required her to size up the city and its people with an outsider’s eye. Ron is upbeat about Cleveland and its hotel prospects. — Stan Bullard

The Ron file Favorite place in Cleveland?

Edgewater Beach

How do you relax?

I love listening to jazz.

Do you miss Israel?

I fly home every chance I can to spend time with my family.

Do you live downtown?

Detroit-Shoreway, so I have a lake view. I have a five-minute commute to downtown.

Lunch spot TURN at Ritz-Carlton Cleveland 1515 West Third St., Cleveland

The meal Both had bowls of hot spicy Tom Yum Goong soup, Pellegrino water and coffee. One had short ribs with mashed potatoes, the other had grilled salmon.

The vibe The restaurant and bar have a fresh, contemporary design. Busy but not noisy at lunchtime, with great sixth-floor city views.

The bill $119.88, plus tip

What was your response when you came up with a job opportunity in Cleveland?

I did not know the city. I started listening to Cleveland radio stations and following the sports teams to get a sense of what Cleveland is like.

I came here with an open mind. We had just taken down the wall in the lobby when I got here (for the new lobby-restaurant). I got to come up with the design and theme for the hotel. Standards are consistent at Ritz-Carlton, but what I call the “scenography” of each city is different. It’s not Tokyo, San Francisco or New York. I got here in June and spent the first two weeks talking to people on the street to get a sense of the city. A lot of people talk about the bridges in the city, but I think the people define the place. I found a lot of pride here. We came up with the idea of character welded by steel. We used TURN as the theme because we all make changes in our lives. We have an old-fashioned steam whistle at the bar, which is a nod to Cleveland’s industrial history.

The mixologists sound it at 5 p.m. daily to signal that the hard work of the day has ended.

Why did you decide to come here?

I was previously an assistant general manager, and this was my chance to be a general manager and run the entire hotel. When I discussed it with my children, they said I had to go for it because I had always been there for them while they were growing up.

I helped open the first Ritz-Carlton in Israel and establish the brand there, and I helped open the first Ritz-Carlton in Macau. I’ve been in hospitality for 30 years and helped open four

Holiday Inns in Israel. When I decided to apply for this job, I knew many people were going for it. I had 10 interviews to get it. It gave you a better feeling, and a greater sense of responsibility, to land the job than if you had one interview and the boss said, “The job’s yours.” You feel it’s an honor to get the job. This is one of the reasons turnover is lower at Ritz-Carlton than other chains.

Besides the redesign, did you make any big changes at the Ritz-Carlton here?

There is a substantial Jewish population in Northeast Ohio. We established a kosher kitchen. We brought in two expert chefs from Tel Aviv to teach our culinary team how to cook kosher. It was a learning curve for our team. We also created several events associated with Jewish holidays. We have a kosher bagel we bake for breakfast that I love to eat every day. It’s been very successful.

How did you get into the hospitality business?

When I was leaving the Israeli Army, my commander asked what I wanted to do next. I told him I have always wanted to be an ambassador. My father worked on irrigation for the World Bank, so we traveled and I went to international schools and became multilingual. The commander said he thought I would do well in diplomacy and there was an opportunity in Washington, D.C., and one in Switzerland. I decided to pursue the opportunity in Switzerland because Washington was so far away. I later got a job working at the front desk of a Hilton and worked nights at a

restaurant, and then started working in hotel sales and marketing. If I had taken the job in Washington, I’m sure I would have wound up following a path in politics. Everything would have been different. We all have different opportunities to pursue. It has worked out well.

Military services is compulsory in Israel. What was it like to serve in the Israeli army?

It was a great opportunity. Everyone starts out as a private. No one (among recruits) is superior. It does not matter who you are or what neighborhood you are from. It’s how you deal with what’s going on. I wound up as a captain doing coordination for the chief of staff.

It’s a country that believes survival is part of its strategy. If you are 18 or 19 and are not in the army, people look at you as if to ask, “What’s wrong with you?” When people finish their two-year commitment, they are still young adults who want to enjoy life, but they are more disciplined. In our world there are so many choices that it pays to have different skills.

What is your business philosophy?

As a leader, you have to drive change.

Otherwise, you wind up having to catch up before it drives you.

Are there other things Cleveland and the region need to do to make this a better destination for conventions and visitors?

Cleveland offers world-class experiences and has the opportunity to go after groups that can no longer afford big cities. We have the culture, the sports, the entertainment, the dining and the history.

700 W. St. Clair Ave., Suite 310 Cleveland, OH 44113-1230 Phone: (216) 522-1383 www.crainscleveland.com Twitter: @CrainsCleveland Publisher/editor Elizabeth McIntyre Group publisher Mary Kramer Managing editor Scott Suttell Sections editor Michael von Glahn Creative director David Kordalski Web editor Damon Sims Associate editor/Akron Sue Walton Assistant editor Kevin Kleps Senior reporter Stan Bullard, Real estate/construction Reporters Jay Miller, Government Dan Shingler, Energy/steel/auto/Akron Rachel McCafferty, Manufacturing/ energy/education Jeremy Nobile, Finance Lydia Coutré, Health care/nonprofits Senior data editor Chuck Soder Cartoonist Rich Williams Events manager Ashley Ramsey Marketing coordinator Megan Lemke Integrated marketing manager Michelle Sustar Managing editor custom/special projects Amy Ann Stoessel Associate publisher/ Director of advertising sales Lisa Rudy Senior account executive Dawn Donegan Account executives Laura Kulber Mintz, Loren Breen Office coordinator Denise Donaldson Pre-press and digital production Craig L. Mackey Media services manager Nicole Spell Billing YahNica Crawford Credit Thomas Hanovich Crain’s Cleveland Business is published by Crain Communications Inc.

Chairman Keith E. Crain Vice chairman Mary Kay Crain President KC Crain Senior executive VP Chris Crain Secretary Lexie Crain Armstrong CFO Robert Recchia G.D. Crain Jr., Founder (1885-1973) Mrs. G.D. Crain Jr., Chairman (1911-1996) Reprints: Laura Picariello, 732-723-0569 or lpicariello@crain.com Customer service and subscriptions: 877-824-9373 Volume 40, Number 6 Crain’s Cleveland Business (ISSN 0197-2375) is published weekly, except for the last week of December, at 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113-1230.

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THE WEEK That’s how they roll Bridgestone Americas Inc. announced it will build a plant in Akron to produce Firestone-brand racing tires.

The plant will be across the street from the company’s Bridgestone Americas Technical Center, at 10 E. Firestone Blvd. The company currently produces its race-tire lines at its Bridgestone Advanced Technology Workshop. Bridgestone leases that space, at the former Firestone Tire and Co. headquarters, from the city of Akron.

Plans are in the early stages.

Bridgestone this summer will disclose more information about the size and cost of the plant.

What’s in store?

Things Remembered Inc., the Highland Heights-based chain of

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Remembered filed for Chapter 11 bankruptcy protection.

Enesco said it “intends to operate the Things Remembered online, direct mail and B2B retail businesses,” as well as some stores. It said the deal “will preserve many jobs,” but did not offer details.

Things Remembered has about 400 stores and 2,700 employees.

By the numbers

Highland Heights-based Things Remembered has agreed to sell most of its business to Enesco LLC. (Crain’s file photo)

personalized gift retail stores, said it will sell most of its business to Enesco, an Itasca, Ill.-based company that

specializes in the giftware and home and garden décor industries.

To facilitate the agreement, Things

The business retention and attraction efforts of Team Northeast Ohio helped bring 6,329 jobs and $2.34 billion in capital investment to the 18 counties of Northeast Ohio in 2018, the regional partner of JobsOhio reported.

Among its recent big wins was the decision by BWX Technologies Inc. of Lynchburg, Va., to invest $130 million

in operations in Barberton and Euclid. The plants make components for naval nuclear reactors.

He’s the boss Hudson-based JoAnn Stores said Wade Miquelon, who has led the company on an interim basis since October, will continue in the roles of president and CEO on a perMiquelon manent basis.

Miquelon was named interim CEO when then-president and CEO Jill Soltau resigned on Oct. 2 to take the top job at JCPenney Co. Miquelon was serving as JoAnn’s executive vice president and chief financial officer.

2/8/19 10:43 AM

32% say their budgets have been cut.

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In our 2018 survey of in-house counsel and senior executives at 176 companies, 32 percent said they are operating with reduced budgets.

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