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FEBRUARY 25 - MARCH 3, 2019

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Loretta Mester of the Federal Reserve Bank Page 8

The List The region’s largest nursing homes Page 18

ECONOMIC DEVELOPMENT

Opening new fronts on lake development

By Jay Miller jmiller@crain.com @millerjh

Beyond the usual suntan development, Cleveland’s Lake Erie waterfront may see some activity on the economic and recreational development fronts this summer.

Developer Dick Pace of Cumberland Real Estate Development told Crain’s he expects to break ground in June on land north of FirstEnergy Stadium that will be home to a school and a residential neighborhood.

At the same time, the Green Ribbon Coalition, an alliance of three citizens’ groups, is planning a twoday waterfront “summit” in August to generate ideas for development of the five miles of waterfront between the Cuyahoga River and Dike 14, the nature preserve at the city’s border with Bratenahl.

The waterfront of a city like Cleveland is considered by planners to be critical to a city’s population and economic growth. A few Midwest cities, such as Cincinnati and Pittsburgh, have been investing intensely on their own waterfronts in the last decade.

A study by Urban Land magazine found that when the city of Pittsburgh made, over 15 years, a $130 million investment in Three Rivers Park, that public investment spurred nearly $2.6 billion in private development.

SEE LAKE, PAGE 28

Local developer Dick Pace and Dallas developer Trammel Crow Co. won the rights to develop 28 acres of lakefront north of FirstEnergy Stadium and east to the foot of East Ninth Street in 2014. Pace expects to break ground on another project in June. (John Quinn for Crain’s)

REAL ESTATE

MANUFACTURING

$47M Westlake deal is in works

Activist shareholders push TransDigm on greenhouse gas

Pulte Group is on the verge of landing one of the city’s best-kept secrets. Page 7 Entire contents © 2019 by Crain Communications Inc.

By Rachel Abbey McCafferty rmccafferty@crain.com @ramccafferty

Many of today’s shareholders want to see the companies they’re investing in do more than just make money. They want them to curb greenhouse gas emissions and diversify their boards.

Large companies like Apple, Exxon Mobil and General Motors have

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faced environmental and social issue-related shareholder proposals in recent years.

It’s a relevant issue, locally, too, as aerospace component maker TransDigm Group Inc. in Cleveland is facing shareholder pressure to adopt a policy to reduce its greenhouse gas (GHG) emissions.

Activism focused on environmental, social and governance issues, or ESG, has been increasing in recent years, said Josh Black, editor-in-chief

of Activist Insight, a London-based news and data source on shareholder activism with an office in New York.

These topics have been of interest to investors for quite some time, but the 2016 presidential election and the subsequent announcement that the U.S. planned to withdraw from the Paris Agreement — a global plan to address climate change coordinated by the United Nations — put climate change at the forefront.

SEE TRANSDIGM, PAGE 8

2/22/19 4:12 PM

CONTENT

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TECH MATTERS GEN Z: ENTERING THE NEXT GENERATION OF TALENT

T

he topic of Gen Z versus millennials sparked a spirited working on multiple projects — instead of one big project — at once, remotely and in the office.” debate recently among employees at Solon-based Instead of working through lengthy emails, think about Findaway. Without revealing the general birth year integrating other modes of communication, she said, such as Slack, range of those associated as Generation Z, chief digital officer Ralph Lazaro asked his younger “Findawayers” whether to facilitate real-time communication.

Much like their older generation counterparts, culture and they identified more as Gen Z or as a millennial (there was some purpose matter among the socrossover). He found their called iGeneration. responses aligned based on “They may make widgets, but how they identified with three who are they making the widgets questions: Do you remember for? Is there a pool of money 9/11? What is your preferred being given to nonprofits?” Keefe social media channel? How do said. “They are used to a diverse you watch TV? global world, so when a company “Our Gen Zers were in is recruiting young talent, the preschool and didn’t remember company will want to sell them 9/11, while the millennials were on its culture and its people, in kindergarten, and that event rather than the company itself.” is marked in their memory,” Jenna Stahl, principal at Lazaro said. “More millennials JumpStart’s Emerging Talent use Facebook and remember Network, which helps match MySpace, whereas the Gen Zers employers with interns and are more loyal to Instagram and PHOTO PROVIDED BY JUMPSTART job candidates from Cleveland Snapchat. Millennials watch TV on streaming devices, whereas Zerrine Bailey, program leader for JumpStart’s Emerging Talent Metropolitan School District, Gen Zers use YouTube. We had Network, speaks during a recent “Hiring the Next Generation of points out that organizations Talent” event designed to give employers valuable insights into should update their policies to some fun convos here at the office working with Generation Z. reflect culture, acceptable workand laughing among the team.” life balance accommodations and communication styles.

While whimsical and nonscientific, Lazaro’s informal survey of Erica Merritt, founder and principal consultant of Equius Group his younger employees revealed some of the nuances that shape the way both millennials and Generation Z see — and work — in the and a former director of culture and strategy for CMSD, says she world. Millennials are the cohort typically born between 1981 and encourages employers to listen, engage and empower.

Certainly, these tools have a broad application when it comes 1996. Generation Z is generally defined as those individuals born in to recruiting talent, although they have particularly helpful roughly 1997 and after, according to Pew Research Center. implications for those organizations that are somewhat uncertain Next year, Generation Z will comprise about one-third of the U.S. population and represents a tidal wave in the workforce. Because on how to effectively recruit and nurture digital natives.

“The organization should ask itself why an employee would Gen Z grew up with technology, their style of communication want to work there, why people are choosing to stay, and how and work-life balance expectations are different than previous generations, says Kelly Keefe, president of ERC, which provides it values its employees,” she said. Generation Z also is going to expect diversity and inclusion in all facets, even down to pronoun training, consulting, research and human resources support associations, so organizations will have to be thoughtful about not services for organizations in Northeast Ohio. only accommodations but language and policies.

“Generation Z grew up with a cell phone in hand. They have a “The younger employees will forgo the companies that have high dependency on technology, and everything has to be available immediately,” she said. “They shift efficiently between work and not done a good job with diversity and inclusion, and will want to work for the companies where diversity and inclusion is part of the play and excel at multitasking. Organizations will need to think culture,” she said. about how to adjust because a Gen Zer may feel more comfortable

SEEKING STABILITY

Generation Z tends to have a more pragmatic outlook than millennials, influenced in part by watching their older siblings accumulate massive amounts of student debt. They are concerned about being unemployed or underemployed, according to the Society for Human Resource Management, which references an Accenture survey of 2015-17 college graduates. As such, this

CALENDAR OF

EVENTS A PRODUCT OF

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generation is interested in financial and employment security.

The survey showed a 37% increase between 2016 and 2017 in the number of U.S. college graduates wanting to work for larger companies. They also are willing to commit to three to five years with the right employer, unlike millennials, who tend to change jobs every couple years, the report said.

FIVE QUESTIONS WITH A GEN Zer

R

achel Rogala, 22, is a web designer on the creative team at Solon-based Findaway, which creates products that deliver digital content in different formats.

Rogala talks about some of the workplace expectations that come along with being a member of Generation Z.

1. What do you love about your role? As a web designer, I get to work with the in-house creative team, and help and maintain all web-related materials. I’ve worked here about six months. What I love most about working on the creative team is that I have the opportunity to work on so Rogala many projects that have a creative, immediate impact. I helped initiate the Launchpad testimonials page, which showcases libraries’ experience with one of our products.

2. Gen Zers know how to multitask. Life, work and play co-exist at all times of day. How should an employer think about adjusting to meet those needs? I think employers and workers should have mutual understanding of what multitasking means, and how it can help enable employees to balance life and work more effectively. I use my laptop and phone at work every day, but that also means employees should have the flexibility to take multiple breaks throughout the day so we don’t get burned out.

3. What job search tools are most effective for you?

When I began my search, I used some of the standard resources, such as LinkedIn. I also relied a lot on Facebook groups linked to my major. I also sought the advice of online mentors. In terms of companies engaging online with job candidates, I think personalization (in the digital age) is very important — that human connection in the life of applications. It’s nice to get a nonautomated message when you’re communicating online with a potential employer.

4. What are Gen Zers looking for in a career? We are looking for meaningful work and a purpose in our role and at the office. I have peers who have turned down opportunities because they don’t align with what the company stands for.

5. What kinds of perks and benefits matter? I think both lifestyle and traditional work benefits are important.

I expect a company to hold events and create a workplace that makes me feel comfortable. I also expect standard benefits, such as competitive pay. Myself and my peers enjoy being able to work in multiple areas, such as remotely or within the office. People also appreciate when employers accommodate employees who like to work alone with their headphones on, or with a couple people in a corner, or in an open office. Flexibility matters.

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2/20/19 2/21/19 11:00 2:44 PM AM

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PNC aims to retake lost NEO market share

By Jeremy Nobile jnobile@crain.com @JeremyNobile

Paul Clark has lost track of how many ribbon-cuttings he’s attended in his 14-odd years as PNC Bank’s Cleveland market president but jokes he’s probably added 50 pounds over that time from the abundance of chicken dinners on the gala circuit.

While Clark kids about his status as a man about town, his hobnobbing and community involvement have been no coincidence, but part of a calculated strategy in a competitive market that has made him the face of PNC Bank in the local region.

In Northeast Ohio especially, it’s Clark — with a genuine, charming, political-grade disposition — who enabled the Pittsburgh-based firm to find its identity following its acquisition of Cleveland’s ailing National City Bank a decade ago, the loss of which was a dent to civic pride.

And while PNC remains a top bank in both Cleveland and Ohio overall, it has lost some ground here over the years to competitors, particularly Ohio-based firms such as KeyBank, Huntington Bank and Fifth Third Bank.

One individual market, on its own, is not a major concern for a massive corporate financial institution with nearly $370 billion in total assets and some level of presence in virtually half the country.

Yet taking back some of that lost market share here will certainly be

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“We are very focused on serving clients, whether corporate or retail, and all our specialty clients.

And there is no taking the foot off the pedal in the community.”

— Paul Clark, PNC Bank’s Cleveland market president

the focus of Clark’s successor, Pat Pastore, who will step up as Cleveland president when Clark, 65, retires at the end of March.

“I’m certainly not going to talk about the competition,” Clark said.

“But I would say that we are very focused on growing market share. We are very focused on serving clients, whether corporate or retail, and all our specialty clients. And there is no taking the foot off the pedal in the community.”

Expect Pastore to bring to the market a dynamic similar to Clark’s but with perhaps a greater focus on regaining lost market share, particularly on the retail front.

“When you look at PNC, we view ourselves as a Main Street bank that organizes around community and customers,” Pastore said. “It’s all about building relationships. That’s where I’ve developed and where my skills are at.”

As far as his strategies for the market, Pastore declined to talk details, noting he hasn’t officially taken Clark’s post yet, though the two have been working together closely ahead of the transition.

“But we have clear tactics and

strategies to grow market share in the retail space,” he said.

Understanding PNC’s overall interest in and approach to Cleveland begins with the National City deal announced in 2008 and spurred by NCB’s overconcentration in the mortgage business and subprime lending.

“Nobody really saw the potential for a plunge in housing prices that occurred in the Great Recession. That left a lot of smart people looking foolish. Some of the senior managers and board members at National City were among them,” said Charlie Crowley, a Cleveland-based managing director at investment bank Boenning & Scattergood.

National City, Ohio’s largest bank at the time, sought TARP funds to stay afloat, but was denied. That event led to the agreement of a sale to PNC, which then received and used TARP funds denied to National City itself in the deal, a feature that created some controversy.

While any acquisition can shake up the market it affects, the National City deal was all the more jolting.

“It was a blow to egos and the community because National City had

been one of our leading lights,” Crowley said.

So it’s of little surprise that PNC became active in the corporate, philanthropic and community circles — or to see Pastore Clark so visible in the community, whether rubbing elbows with Cleveland’s elite or reading to schoolchildren.

When reflecting on work of which he’s most proud, Clark cited such programs as PNC’s Grow Up Great initiative, which has been funneling money to early childhood education since 2004, and PNC’s Fairfax Connection, a unique bank branch that opened in 2012 and doubles as a free community resource center for the surrounding low-income neighborhood.

It’s fair to say that not every bank has shown that kind of local effort after acquiring its way into a market.

New York Community Bank bought Cleveland’s troubled AmTrust Bank after it was seized by the Federal Deposit Insurance Corp. in 2009, branding the division here as Ohio Savings Bank. But it hasn’t shown the same interest in Northeast Ohio that firms like PNC have demonstrated here in the wake of their own deals.

AmTrust was largely attractive to NYCB because of the deposits that could be lent out around its growing footprint. Yet, NYCB’s total deposit market share has only decreased

since the acquisition.

PNC controls a much greater piece of the Ohio market than NYCB and has from the start because it made a larger buy.

However, PNC’s emphasis on growing in Ohio is clearly vastly different from the approach taken by NYCB — which sold its mortgage business in 2017, resulting in about 200 local layoffs.

So while a community model is at the crux of PNC’s business strategy, it’s also true that the bank has lost ground here to competitors, particularly when it comes to the battle for deposits heating up as interest rates rise.

In 2009, before National City agreed to merge into PNC, the bank controlled 25% of the Northeast Ohio deposit market and nearly 15% of the entire state, topping all other competitors.

Today, PNC ranks fourth in Ohio, with a little under 9% of the market share, and third in Northeast Ohio, with about 13% of the market.

While those are sizable chunks, the dwindling share shows that competitors are nipping at PNC’s heels.

As far as the Cleveland region goes, Pastore has big shoes to fill, and just as much competition to cut through.

“Our investment in the brand is as high as ever. Investment in the community engagement strategy is as strong or stronger than ever,” Clark said. “We have not pulled away from Cleveland — just the opposite. It’s an important, large and relevant market for PNC.”

2/22/19 12:00 PM

PA G E 4

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New owner pays $2.5M for former torpedo plant

By Stan Bullard sbullard@crain.com @CrainRltywriter

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A massive industrial building near Cleveland’s border with Euclid that started life 50 years ago as a torpedo plant ago has changed hands in a $2.5 million transaction.

The new owner, as of Feb. 14, is 18901 Euclid Avenue LLC, which takes its name from the structure’s street address.

The buyer directed that property tax bills be sent to 23600 Corbin Drive in Bedford, the address of Dynamic Metal Services, a 10-year-old specialty metals firm. The 242,000square-foot building, which sits on a 28-acre site, has housed multiple industrial concerns over the years while it served as a multitenant property owned by an affiliate of Industrial Commercial Properties, a Solon-based real estate owner and developer.

Chris Semarjian, the owner of ICP, said in a phone interview last Thursday, Feb. 21, that the building had been available for sale or lease for some time until the new owner acquired it.

“It’s good for the city of Cleveland.

We were happy to find a user that will take the property to the next level,” Semarjian said.

The sale included almost 7 acres

A Bedford metals company plans to consolidate operations in the Commerce Center One building at 18901 Euclid Ave. (CoStar)

that is not required for the current building that could be sold off for other use.

A spokesman for Dynamic Metal, who asked not to be identified, said the company gained room to grow with the new location. The building also will enable the company to consolidate four locations into one for greater efficiency.

Dynamic Metal provides specialty metals for users in the aerospace, infrastructure and stainless steel markets.

Simon Caplan, a principal of the Independence-based Cushman & Wakefield | Cresco realty brokerage who represented 18901 Euclid Avenue LLC in the purchase, sees the sale as a sign of the region’s resurgent industrial realty market.

“There’s a total shortage of (prime)

industrial buildings in Northeast Ohio,” Caplan said in a Feb. 21 phone interview. “Buildings that have been on the market for a long time because they are older or in older city neighborhoods are now starting to move.”

The structure dates from 1967 and had been used to make torpedoes for the U.S. Navy and other countries.

More than 1,000 people worked there in 1992, according to a 1997 article in Crain’s Cleveland Business. Northrop Grumman Corp. of Falls Church, Va., ceased production there in 1998, idling about 200 workers, according to a 2002 Crain’s article.

Semarjian led an investor group, Cleveland Commerce Center One LLC, that bought the structure in 2002, but online records do not show an acquisition price.

Cleveland Botanical Garden, Wade heirs to face off in court

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A legal dispute over use of a section of University Circle parkland donated by Jeptha H. Wade to the city of Cleveland is headed to trial after more than five years of legal paperwork and fruitless negotiations.

Motions for summary judgment by both sides of the dispute were filed Feb. 15 and a bench trial is set for April 29 if the issues can’t be resolved.

The legal action — the survivor of back-and-forth litigation by both sides — is over the charge of admission by the Cleveland Botanical Garden (CBG) to fenced-in outdoor gardens on land that William Garretson Wade and 29 other Jeptha Wade descendants or beneficiaries believe should be open to the public without charge.

Wade Park is part of the estate of Jeptha Wade, the founder of Western Union. He deeded a 63-acre portion of the estate to the city of Cleveland in 1882 for a public park, noting in the deed that the park should be “open at all times to the public.”

This lawsuit is the survivor of four that have been filed over the last fiveand-a-half years, three of those by Wade heirs. This surviving lawsuit was filed by CBG after several years of negotiations with Wade heirs were unsuccessful.

After the CBG suit was filed, William G. Wade of Unity, Maine, a great-great-great-grandson of Jeptha Wade, led lawsuits filed in both federal and local courts. The federal court filing was dismissed because the case lacked a federal issue. The

other suits, filed by William Wade and others, were consolidated into the surviving case.

Since the initial filings in 2013, CBG has merged with Holden Arboretum and the two are now operations of Holden Forests & Gardens.

The city of Cleveland and University Circle Inc. (UCI) are entangled in the legal action because the original Jeptha Wade land grant was made to the city, which sublet parts of it to UCI, which subleased land to CBG. Since the original Wade grant, the city also has added additional land to the park.

William Wade and the other heirs have argued that the city and UCI failed to enforce the terms of the Wade grant.

A review of the litigation details unsuccessful efforts over many years

by CBG, prior to filing this suit in 2013, to gain approval from Wade heirs to accept the fencing.

In its motion for summary judgment filed Feb. 15, CBG seeks a ruling that its use of the land “is consistent with the Park Use Restriction” in the original Wade grant allowing “the erection, maintenance and operation of facilities.” It also argues that the terms laid out in the original Wade grant constitute a restrictive covenant that may only be enforced by adjacent landowners.

The terms of Jeptha Wade’s donation of land expressly allow admissions to buildings and other similar facilities — it specifically carves out land for what would become the Cleveland Museum of Art — that might be built on the land. Beyond 8 acres set aside for the art museum, Wade’s grant directed that the rest of

the donated land “be kept without fences or other obstructions to detract from the beauty of the park.”

The Wades do not dispute any admission charge made for entrance into CBG’s Eleanor Armstrong Smith Glasshouse, a conservatory that recreates the desert of Madagascar and a Costa Rican tropical rainforest, only an outdoor garden area that is part of the 10 acres CBG controls.

CBG is the successor to the Cleveland Garden Center, considered the country’s oldest civic garden center.

The garden center opened in 1930 in a brick boathouse at Wade Park Lagoon as a place to promote gardening and horticulture. It eventually moved to nearby land that had earlier been home to the Cleveland Zoo. Jill Koski, president and CEO of Holden Forests & Gardens, declined to discuss the lawsuit. But, she said, “We advanced things initially.”

Matthew Fellerhoff, the Cincinnati attorney who has represented the Wades since the beginning of this litigation in 2013, has said his client is concerned with the charging of admission to an area of Wade Park that should be freely accessible to the public.

“It’s a very interesting case,” he said in a recent phone call. “It’s unfortunate it has not been resolved.”

Correction JJA Feb. 18, Page 15 list ranking the largest philanthropic gifts awarded locally in 2018 and a Page 14 story about the list significantly overstated the value of an anonymous gift made to the Case Alumni Foundation. The gift was worth $2.3 million.

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PA G E 7

Reducing Real Property Tax Assessments Throughout Ohio And Across The United States

Pulte Group is proposing to build a 144-unit townhouse project on wooded land on both sides of Westchester Parkway in Westlake. The 36-acre site is about half the size of Crocker Park. (Stan Bullard)

Sleggs, Danzinger & Gill, Co., LPA

Pulte Group preps townhouse project for big Westlake site

By Stan Bullard sbullard@crain.com @CrainRltywriter

Pulte Group, the publicly traded national builder with a big Northeast Ohio presence, is in the process of landing what might be termed Westlake’s best-kept secret for a $47 million residential development.

The Atlanta-based company has received approval from the city of Westlake’s planning commission and Westlake City Council to develop a 36-acre parcel on Westchester Parkway for a 144-unit for-sale townhouse project.

Jim Bedell, Westlake planning director, said the city’s planning commission recommended approval of the plan at its Feb. 11 meeting, and Westlake City Council ratified the recommendation at its Thursday, Feb. 21, meeting. Pulte has indicated it may start work on the site this year and expects to take three years to fully develop it.

Pulte proposes to erect a series of 31 buildings with multiple variations in the number of townhouses in each building. The two-story townhouses would consist of more than 1,854 square feet and include three to five bedrooms and two to four baths, with options such as installing additional space in the property owner’s suite.

The units will start at $280,000 apiece.

“This is the last large parcel available for development in Westlake,” Bedell said. “We have a few parcels of about 6 acres, but nothing else like this.”

The heavily forested site is on the north and south sides of Westchester Parkway. The parcels are immediately west of Westchester Woods and Westchester Townhomes apartments, 27652 Westchester, owned by Toronto-based Brookfield Asset Management’s Fairfield Residential unit; and Huntington Woods Care and Rehabilitation Center, 27705 Westchester.

The site has been held for additional development for years by Richmond Heights-based Associated Estates Realty Corp. Brookfield bought it in 2015.

The Westchester apartments were constructed in two phases, in 1979 and 1988, by late real estate developer Carl Milstein, whose apartment empire later became Associated Estates.

The suburb rezoned the sites from industrial to multifamily in the 1970s.

The northern parcel adjoins a cityowned Westlake composting center and park. Both parcels are surrounded on the west by a variety of industrial, office and flex office/warehouse properties, with single-family homes

P007_CL_20190225.indd 7

to the south.

Ralph McGreevy, executive vice president of the Northern Ohio Apartment Association trade group, said he has driven by the wooded sites and wondered why they had never been developed.

“It’s interesting that Brookfield is not building apartments on it for themselves,” McGreevy said. “It’s probably because it’s a very competitive apartment market there and everyone has to be on top of their game.”

However, he added that for an apartment owner and developer, selling to a homebuilder for townhouses would be preferable to selling to another apartment competitor.

Pulte’s proposal is also less dense on the site than it might have been.

Bedell said the city’s code would have permitted a total of 218 units on a site that big, but Pulte proposed 144.

As an indication of the tony suburb’s apartment market, Crocker Park is home to more than 600 suites on the mixed-use center’s upper floors, about half of them opened just two years ago. The complex’s multifamily component is more than 90% leased, according to Ezra Stark, chief operating officer of the family owned Stark Enterprises that developed the property in a joint venture.

While the proposed project is huge, analysts say demand for forsale townhomes is also huge, especially if they can be constructed in heavily developed areas.

Kristine Burdick, the Mayfield Heights-based president of Howard Hanna’s Midwest Division, said demand for for-sale townhouses is strong throughout the region and attracts a distinct group of buyers who don’t want to care for yards.

“Townhouses are attractive to firsttime homebuyers who want to own but also desire the amenities of an apartment building,” Burdick said.

“They also attract older couples whose children have left home who want to downsize. They often want to lock and leave it so they can spend the winters in a warmer climate without worrying about a single-family house.”

Cuyahoga County land records show that Pulte does not own the farm-sized site, but had to show it has site control through an option or tentative agreement to secure required reviews by the suburb.

For its part, Pulte is limiting its talk about the plan to city planners and officials. Julie Pulliam, a Pulte public relations manager, said Pulte declined comment on its Westlake plans.

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2/22/19 3:47 PM

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CRAIN’S CLEVELAND BUSINESS

Q&A: Loretta Mester President, Federal Reserve Bank of Cleveland

When it comes to the Northeast Ohio economy, there may be no better authority than Loretta Mester, president of the Federal Reserve Bank of Cleveland. Crain’s recently met with Mester, while she was in Cleveland between speeches delivered nationwide, to talk about the Northeast Ohio economy, how and why it lags the rest of the country, the region’s Blockland initiative and the overall uncertainty in an economy running rather strong but facing an unpredictable political and business landscape. (The conversation has been edited for length and clarity.) — Jeremy Nobile

Our contacts have been telling us they’re concerned about growth abroad, they’re concerned about trade and tariffs and what the policies are going to be going forward. But I would say the majority of firms say concerns have been rising, but they’re not changing business plans. They’re not letting uncertainty cloud views on what they’re doing.

Language in the recent edition of the Beige Book seems to indicate a slowing down of the regional economy. How would you characterize the state of the economy today and what are you seeing that’s promising or worrisome?

I think of our economy is pretty much looking a lot like the other districts in the sense that last year, the national economy grew at about 3% GDP growth, well above trend growth. My trend growth rate is 2%. And what we’ve seen toward the end of the year and into this year is a slowdown.

So most forecasters, including myself, are expecting growth to be lower than 3% this year.

Now that’s partly reflective of fiscal stimulus last year, and that’s going to be waning this year. We also have less accommodative financial conditions, so that’s another factor that makes most of us think the economy is going to be slowing. But even my forecast is at or a little bit above trend.

So we’re now in this mode of sort of looking at the data and gathering information from our contacts to get a sense of whether it’s slowing more than we expect or not. The stock markets and financial markets started to move down in October of last year. Since then, this year, they’ve moved back up. So really, there was this change in sentiment. I think that partly reflected uncertainty over what was going on in the trade and tariff situations.

Manufacturing here is still a larger percent of our economy than other parts of the country, so we feel that.

It always seems like Cleveland is lagging behind other areas in terms of economic growth. Is that because of our heavy reliance on the manufacturing sector?

Well, that, but also think about long-term issues here. We’ve been losing population. We’ve lost at not as great a rate over the past five years than previously, but we’re not growing population, and of course that affects your long-term growth rate. That’s made up of productivity growth, and labor-force growth is a really big part of that. So as we’re losing population, our growth rate is going to be less than in other parts of the country gaining population.

And as manufacturing has changed, it’s become more efficient, which means it has needs for fewer people.

So jobs in manufacturing have gone down even if output hasn’t gone down.

The good news is we’re less dependent on manufacturing than we used to be. Still a little bit more than the nation, but less. So that’s a good thing in that we’ve diversified, and diversification has shown to be an important factor for regions in their regional resiliency.

TRANSDIGM

the nature and timing of the goals up to the company.

“There are numerous cost-effective ways for companies to reduce GHG emissions and help protect society from the worst impacts of climate change while reaping financial benefits,” the proposal states.

TransDigm had tried to block the proposal from being included on the proxy statement, according to a news release from the New York City comptroller — an approach other companies have also taken. But the comptroller filed a lawsuit to contest TransDigm’s request to the SEC, and the parties were able to reach a settlement.

“The need for climate leadership is more urgent than ever. Yet, just when we need to speed up the pace, federal rollbacks are making polluting easier and could cause generations of damage. That’s why, as investors, we’re using our voice to pressure companies to step up and address their role in climate change,” comptroller Scott M.

CONTINUED FROM PAGE 1

“A lot of investors decided that if government wasn’t going to play a more active role in addressing climate change or social problems, then investors would have to do that,” Black said.

At TransDigm, a shareholder group made up of representatives of the New York City comptroller and five city retirement systems or pension funds is asking the company to take into consideration the recommendations of the Paris Agreement and create a policy that helps manage and track greenhouse gas emissions. The proposal in the company’s proxy statement filed with the U.S. Securities and Exchange Commission states that the shareholders’ aim isn’t to “micromanage.” Instead, it asks TransDigm to create a policy and report on achievements, leaving

P008_CL_20190225.indd 8

“The good news is we’re less dependent on manufacturing than we used to be.

Still a little bit more than the nation, but less.”

And then there’s the uncertainty with the business environment impacting the economy at large, right?

The uncertainty around trade certainly has affected us. Growth abroad in China and in Europe is slowing down, and there’s some questions around how much, so that’s putting more uncertainty around things.

So they’re worried, but not enough yet that they’re really changing their courses of action?

That’s a curious dynamic.

Well, some of the larger multinational firms have said they’re taking more of a wait-and-see attitude in their investment plans. So the real question is whether the uncertainty is going to make more firms do that or whether firms will say, “It’s an uncertain world, but we’re going to continue doing what we’re doing until something really changes out there.”

We study the economy and try to get good signals about where it’s going.

That’s going to be a key thing. It’s the same thing with the consumer side.

Are consumers going to be concerned about volatility in the stock market, stop spending and start saving more? Or are they going to continue doing what they’ve been doing, which would be consistent with the outlook for growth at or a little above trend.

So if my outlook comes to pass, it would be a great year for us. It’s just the uncertainty around that. We’re in a good spot to look at things, assess the conditions that are out there, feed that into where the economy is going and make a determination on where policy may have to go in the future.

to take actions that they didn’t want to take, but so far the majority of them said, “We’re OK. We have concerns we’re watching carefully, but we’re still on pace with our plans.”

I understand you’re familiar with the Blockland initiative. Many folks suggest that the overall goal there of building a more techcentric, startup-driven economy, one possibly fueled by blockchain, is a proper path for economic vibrancy in Cleveland.

What do you think of all that?

Getting the business leaders to think in a new way is good for the economy here. You have to think about new things. Before the financial crisis hit, there was a real downturn in the number of startups and entrepreneurship across the country, and there is a lot of research that tries to understand why that happened. We know that the ability to start a new firm and grow it and move on is a very important thing for the U.S. economy. So things that can really catalyze business leaders, those are good things. And making ourselves more nimble and to diversify is a good thing as well.

Now, when you think about doing these things, you have to think about what your supply of the labor that will do it is and the skillset. That means getting people focused on what could be the jobs available in the future and making sure the people have the ability to acquire those skillsets. That’s going to be the key thing.

You alluded earlier to financial markets, which are seemingly pricing in a recession in the somewhat near future. Are we heading toward a recession?

It’s no doubt that in the fourth quarter of last year there was a change in investor sentiment. And volatility went up, equity prices went down. I guess I would characterize that as they were more concerned about the downside risk to the outlook. I think things have stabilized since then. Financial conditions, some of that is reversed, though they’re still tighter than they were in October. But some of that has settled down a bit.

I think there is a sense the most likely outcome is we will continue to have expansion that will be at or a little bit above trend. The labor market is strong, unemployment’s low, inflation’s at 2%. But because of the uncertainty in that forecast, some of these things could play out in a more negative way. For example, if growth abroad slows too much, or if the trade situation and the uncertainty around that continues and more firms take this sort of wait-and-see attitude. Then things could turn out different.

Since you mentioned tariffs, to what extent do Fed contacts feel those are major concerns?

We had some firms that said the tariffs really disrupted their supply chain, that they had to make some changes there and they’re handling it. But if a new round of tariffs comes on, that could really hurt them. So again, it’s not that they haven’t had

That transition in jobs might apply to the more traditional manufacturing sector, right?

Right. And it’s not that manufacturing isn’t a great industry — it is. It’s just become high-tech manufacturing, and that’s a different set of skills. So how do you do that in a way that helps people move from one sector to another? That’s going to be key not just now or here, but for many places and into the future. And the fact we are still losing population, that has to be addressed. You have to be growing in order to stay vibrant.

Keeping people from the universities here, like if they come from out of the area here, has also been found in most areas to be really important.

You have to have people attracted to stay as opposed to this brain drain, where people come in, get educated here and then they go somewhere else. You have to think about how you retain the people you have.

In terms of interest rates, leading up into the fourth quarter last year, there was this sense that the markets were anticipating about three or four rate hikes in 2019. Then sentiments changed to expecting zero hikes, or maybe one or two. Is that a significant paradigm shift?

I don’t necessarily think of it as a paradigm shift. But I do think we are in transition. What we’ve been doing since end of 2015, we have been gradually removing the large-scale accommodations we put in to address the Great Recession. We started very gradually bringing interest rates back to a more normal level. Interest rates now are at the lower end of what participants on the FOMC think of as being sort of a long-run neutral rate of interest. It’s jargon, I know, but think of it as the rate of interest consistent with our dual-mandate goals and is neither stimulative or contractionary. So we are basically at that range, and there’s uncertainty about where that exactly is.

But given we are basically at the bottom of that range on interest rates, my opinion is we are neither ahead or behind the curve. We’re in a good spot with interest rates. Labor markets continue to be strong, and there’s no indication that inflation is ready to move appreciably higher.

Stringer said in the release. “Reducing greenhouse gas emissions is a moral imperative — and it’s better for business. We’ll continue to fight for shareholders’ rights and to hold companies like TransDigm to the highest standards for business and our planet.”

TransDigm’s board of directors is asking shareholders to vote against the proposal, arguing that it’s a “onesize-fits-all approach to a complicated issue.” Many of its sites already work to reduce energy use and waste, the statement said, and its processes produce limited emissions.

“A top-down approach to establishing companywide quantitative and time-bound goals related to GHG emissions that was driven at the corporate level would not be practical for the company,” TransDigm stated in the proxy statement. “Our business model uses an entrepreneurial and decentralized approach, and environment and health and safety issues are handled on a local basis. The compa-

ny’s 34 operating units, with over 65 manufacturing locations in North America, Europe and Asia, produce numerous products, have different energy needs, face varied regulatory requirements and otherwise have different strategies and characteristics.”

TransDigm’s annual meeting will be held March 12 at its headquarters in Cleveland. The company declined the opportunity to comment further on the issue.

Shareholder proposals are far from guaranteed to pass, but companies and their boards of directors are taking these investor concerns seriously, reviewing ESG issues as part of their compliance and sustainability plans, said Jurgita Ashley, a corporate and securities partner at law firm Thompson Hine LLP in Cleveland.

All companies are putting a stronger focus on environmental, social and governance issues, but companies in the energy and transportation spaces are receiving more climate

change-specific proposals, she said.

These kind of environmentally and socially focused proposals were broader when they started to become popular, noted Kris Spreen, partner and co-leader of law firm Calfee, Halter & Griswold LLP’s capital markets and securities transactions team in Cleveland. Shareholders had been asking for more general policies or reports on sustainability or philanthropy, he said. But there’s no standard set of required reporting on this kind of topic. Now, the proposals seem to be getting more specific, homing in on specific issues such as climate change.

If companies think their shareholders may have concerns around these issues, they may want to be proactive and adopt their own goals, Spreen said. If not, shareholder proposals could write those plans for them.

“I think it’s a case-by-case basis, but it’s something that everybody needs to be aware of and at least be prepared to think about,” Spreen said.

2/22/19 3:51 PM

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Opinion Personal View

Opportunity exists in city’s Campus District

By Ashley Gault

Editorial

Get moving Gov. Mike DeWine is inclined to go big when it comes to raising Ohio’s gas tax to help maintain and upgrade the state’s roads and bridges.

DeWine intends to propose an increase of 18 cents per gallon, to 46 cents from the current 28 cents. The 64% hike, if passed by the state Legislature, would be Ohio’s first gas-tax increase since 2005. It would raise an estimated $1.2 billion annually — about $725 million for the state’s highways and bridges, and about $480 million for local governments’ streets. The Columbus Dispatch crunched some numbers and de- DeWine termined that a motorist “with a vehicle that averages 30 miles a gallon who drives 15,000 miles annually would pay an extra $90 a year” if the request is approved as currently outlined.

“You have to have a gas-tax increase, there’s no doubt,” DeWine said last week. “The day of reckoning is finally here, and we have an obligation to face that.”

That’s a realistic view of the role government plays in maintaining the infrastructure of a state in which transportation and logistics is a significant driver (sorry) of economic activity.

As The Dispatch pointed out, former Gov. John Kasich and state lawmakers in 2013 “bonded against future turnpike revenue, raising $1.5 billion. The move masked the state’s gas-tax revenue deficiency, and that money essentially ran out this year.”

So now it’s time to stop kicking the can down the road.

There are certain things we don’t know yet, such as whether a gas-tax increase would be applied immediately or incrementally, and whether the tax might be indexed to inflation to prevent the state from falling behind in funding. But given that Jack Marchbanks, director of the Ohio Department of Transportation, has said the state’s road funding need is around $1 billion a year, the proposal appears to be in line with financial demands and reasonable for motorists, given that the tax hasn’t risen in 14 years.

This will need to be a fast process, since the biennial state transportation budget needs to pass the General Assembly by March 31. But the state will be addressing problems that have been festering for many years.

A report card issued last week by the Cleveland Section of the American Society of Civil Engineers gave a D+ to the infrastructure of the five northernmost counties of Northeast Ohio: Cuyahoga, Geauga, Lake, Lorain and Medina. Broken into subcategories, that grade included a C- for bridges and a D+ for both dams and roads. That’s not a stellar report card, obviously, but it wasn’t really an indictment of the region. As Crain’s government reporter Jay Miller pointed out in an article about the report, the D+ was the same grade the national ASCE gave to the United States as a whole in a 2017 survey.

The big problems, as the engineering group pointed out, are a lack of available funding at the state and federal levels, as well as the age of the regional infrastructure. Among the group’s recommendations in the report card was an increase in the state gas tax to fund needed bridge and roadway repairs, so the DeWine administration now is aligned with those goals.

A key piece of the transportation puzzle — bolstering public transit — still needs to be solved, since gas-tax money can only be used for roads and bridges. State Reps. Michael Skindell, D-Lakewood, and Terrence Upchurch, D-Cleveland, last week proposed a bill to spend $150 million a year on public transit: $50 million from flexible federal money and $100 million out of the state’s general fund. That would be a huge boost from the state’s current $40 million in spending.

It’s too early to say if that proposal is viable. But we strongly encourage lawmakers to look closely at whether increased funding for transit can fit in the budget, given the value public transportation has in reducing congestion and connecting people with job opportunities.

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

CLEVELAND BUSINESS P010_CL_20190225.indd 10

Managing Editor:

Scott Suttell (ssuttell@crain.com)

Contact Crain’s:

216-522-1383

Read Crain’s online: crainscleveland.com

A recent national report examining the more than 8,700 Opportunity Zones spanning the United States ranked the Campus District in Cleveland second for multifamily property, behind only New York City.

The Campus District is sandwiched between downtown and Midtown Cleveland.

Bounded by East18th Street and Davenport and Carnegie avenues, with Lakeside, St. Clair and Chester avenues running through the middle, it includes Cleveland State University, the Wolstein Center, Hilton Garden Inn, Plain Dealer Publishing Co. and Cuyahoga Community College district administrative offices.

Opportunity Zones, which were part of Gault President Trump’s 2017 tax overhaul, are not all created equally and have varying potential for new business and real estate investment. This leads investors to ask which Opportunity Zones have the best potential to yield the greatest returns. Locus, a national coalition of real estate developers and investors that advocates for equitable development, helps answer this question.

Locus ranked Opportunity Zones on the basis of rents for three property types: office, multifamily and retail. With Cleveland’s multifamily properties asking rents at $2.96 per square foot, Cleveland beat out other Opportunity Zones, shining at the No. 2 spot on a national scale. At the state level, Ohio ranked among the highest, boasting a large share of top-scoring Opportunity Zones. Other front-runners were New York, California, New Jersey, Maryland and Pennsylvania.

By using a bottom-line prescriptive, Locus created filters for investors to identify which Opportunity Zones should be prioritized for investment to deliver positive economic, environmental and social returns. The report applied two main filters to rank Opportunity Zones: the Smart Growth Potential Filter and the Social Equity Filter.

The Smart Growth Potential Filter measures demand for commercial and residential space. Using this filter, the report scored the Opportunity Zones using four metrics: walkability, job density, housing diversity and distance to the nearest business district. When scoring this category, the Campus District ranked No. 4, demonstrating that this Cleveland neighborhood has the bones to become a vibrant place to live, work and play.

The Social Equity Filter measures location affordability. The report also used a four-part variable to score Opportunity Zones using this filter: transit accessibility, housing and transportation affordability, diversity of housing among renters and owners, and the Centers for Disease Control’s social vulnerability index (which considers unemployment, single-parent households, poverty, multifamily housing, etc.). Using this filter, the Campus District ranked No. 9. By looking at who currently lives in Cleveland’s Campus District, the report predicted the area could absorb more investment, thereby generating a positive social return.

In conjunction with George Washington University, Locus in 2016 published the Foot Traffic Ahead Report, which studied walkable urban places in America’s largest metropolitan areas.

The report concluded that walkable urban places (defined by sidewalks, mixed-use property and emerging uses such as an apartment over a ground-floor grocery store) command a 74% price premium over their drivable suburban competition (defined by segregated real estate uses and using cars as the main transportation mode).

SEE DISTRICT, PAGE 11

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

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

Please include a telephone number for verification purposes.

2/21/19 4:06 PM

CRAIN’S CLEVELAND BUSINESS

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FOR SALE MULTI-FAMILY LAND 1627 VERNON ODOM BLVD Akron, Ohio 44320

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Personal View



Randazzo is a solid choice to lead utilities commission

By Matt Brakey

Earlier this month, Gov. Mike DeWine appointed Samuel Randazzo to serve on the Public Utilities Commission of Ohio (PUCO). DeWine also stated that Randazzo will assume the PUCO chairmanship once confirmed by the Ohio Senate. I applaud the governor’s decision and believe there is no individual more fitting to hold the position.

My company, Brakey Energy, provides comprehensive energy management services to large commercial and industrial users of energy in Ohio. These services include contracting for power and natural gas, electric bill analysis and audits, energy-efficiency solutions and assistance with regulatory Brakey issues. It is through assisting our clients with regulatory issues that my professional path crossed with Randazzo, who until recently served as general counsel to the Industrial Energy Users of Ohio (IEU).

Brakey Energy represents its clients in IEU, a trade association comprising Ohio commercial and industrial energy users. IEU’s goal is to pursue reliable energy at reasonable prices. In pursuit of this, the organization helps shape the state’s energy legislative landscape and regularly intervenes in PUCO rate cases.

The PUCO regulates providers of all kinds of utility services, including electric and natural gas companies.

More recently, the PUCO gained responsibility for facilitating competitive utility choices for Ohio consumers.

The PUCO’s mission is to assure all residential and business consumers have access to adequate, safe and reliable utility services at fair prices, while facilitating an environment that provides competitive choices.

The PUCO consists of five commissioners appointed to rotating, five-year terms by the governor. The commissioner serving as chair functions as the CEO of the organization.

In the 15 years I have represented our clients in IEU, I have worked closely with Randazzo and can share a unique perspective on what sort of PUCO chair he may be.

First, Randazzo, while always a zealous advocate for his clients, is viewed as an honest broker among allies and opponents alike. I have observed firsthand his

DISTRICT

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This suggests a high demand for walkable urban places. Further, the Foot Traffic Ahead Report finds the most walkable metropolitan areas are also the most educated (as measured by college graduates over 25 years of age), wealthy (as measured by higher GDP per capita), and socially equitable (as measured by housing costs, transportation costs, and access to employment).

According to the report, this correlation suggests that low transportation costs and better access to employment absorb the higher costs of housing.

The U.S. Treasury estimates that at least $1 trillion will be invested in Opportunity Zones over the next 10 years. According to Locus, if this figure proves to be accurate, Opportunity Zones will be the single largest community development initiative undertaken in the last 30 years. Locus predicts that opportunity funds will initially invest in real estate investment projects (as opposed to an investment in the business) given the real estate industry’s knack to pinpoint and underwrite projects quickly. Due to the demand for walkable places and the time requirements for qualified Opportunity Zone investments, Locus forecasts that the shovel-readiness of real estate projects will dictate the areas of investment. With the projected pipeline of investment from opportunity funds, Cleveland’s

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ability to work with diverse parties to achieve outcomes best for Ohio. He will undoubtedly bring this same level of integrity to the PUCO. Second, as a skilled attorney with more than 40 years of experience in the public utility field, Randazzo has shown his respect and deference for state law. I believe he will approach the position with a level of humility. He will not fall into the trap of trying to legislate as PUCO chair, but instead work to implement the will of the Legislature and balance the needs of diverse stakeholders.

Third, I know the strong reverence Randazzo has for market solutions over central economic planning. However, since many utilities are provided state-sanctioned2-25-2019 mo- SVN ad.indd nopolies, he fully recognizes the role the regulator plays in the ratemaking process. When markets are not robust and competitive forces are absent, Randazzo will not hesitate to advocate for fairness. He will ensure customers who do not have competitive options have a regulatory framework that protects them from monopoly power.

Fourth, though Randazzo recognizes the necessary role of the regulator in the ratemaking process, he also has been a champion of introducing competitive forces whenever practical. He was at the forefront of Ohio’s highly successful deregulation of natural gas and electric generation; he was instrumental in helping businesses self-direct their energy future rather than be captive to costly and burdensome mandates; and, most recently, Randazzo was able to successfully advocate for customers to again have access to market pricing for transmission service. Based on this track record, I believe Randazzo will work to broaden and nurture market forces within the PUCO’s jurisdiction.

Ohio needs a PUCO chair who will prioritize state law, be a just and reasonable regulator, protect consumers and defer to competitive markets when they are mature and robust. I believe Randazzo as chairman will deliver on these outcomes.

I urge the Senate to confirm Randazzo so he can begin his very important work for Ohio.

Utilities available

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Ben Christopher Associate Advisor Ben.christopher@svn.com 330.631.7285

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1

2/13/19 1:56 PM

Brakey is president of Brakey Energy in Chagrin Falls. paused developments of the past may be pushed into construction mode, and we could see more cranes swinging this spring.

Locus anticipates that the challenge cities like Cleveland will face will be in ensuring that future development does not displace current businesses and residents, thereby encouraging urban sprawl. By attracting diverse equity partners and pooling existing community dollars, Locus believes communities will be able to develop investable programs that create long-term housing and transportation affordability while accelerating job creation.

Locus also recommends cities like Cleveland be inclusive with development planning to ensure community buy-in. This will encourage the right mix of housing and uses near transit, which will ultimately enhance the investment’s potential to meet the social and environmental goals. Other Locus recommendations include affordability restrictions, tenant opportunity to purchase and tenant protections for current residents and businesses.

What makes Cleveland stand out among the rest?

The report recognizes Cleveland’s potential to retrofit its community and build an environment to foster equality and equitable investment into a thriving community. And with 320 Opportunity Zones in Ohio and 18 in Cleveland, that says something special about our state and city.

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Focus HEALTH CARE

Underinsured in America The fastest growing group of underinsured Americans are those covered by employer health plans

+

Illustration by z-wei

By Lydia Coutré lcoutre@crain.com @LydiaCoutre

Americans covered by employer-based health insurance are facing big medical bills, forking over a record-setting amount of money for medical care and prescription drugs.

In 2017, per-person spending on medical and pharmacy claims reached $5,641 for Americans under the age of 65 covered by employer-sponsored insurance, a new all-time high for that population and a growth of 4.2% from the prior year, according to recently released data from the Health Care Cost Institute, an independent nonprofit research institute.

A separate study found that roughly one in four people covered by employer-based insurance can be categorized as underinsured. Last year, 28% of people age 19-64 with coverage through their employers who were insured all year were underinsured, according to recently released data from the Commonwealth Fund, a nonprofit private foundation supporting independent health care research. That number has nearly tripled since 2003.

Although the people most likely to be underinsured are those who buy plans through the individual market, the greatest growth in the number of underinsured adults is among those in employer health plans.

Contributing to this trend are the ever-rising costs of health care and the proliferation of high-deductible health plans.

“I think the whole thing over, goodness, the last 10 years has been this slow drip of cost shift, cost shift, cost shift, each and every year to employees as a cost-mitigation strategy for employers,” said Eric Krieg, president of

P012_013_CL_20190225.indd 12

Underinsured defined For its analysis, The Commonwealth Fund relied on a measure of underinsurance that accounts for an insured adult’s reported out-of-pocket costs over a year (not including insurance premiums), as well as their plan deductible, and compares this with household income.

The Fund considers people insured all year to be underinsured if: Their out-of-pocket costs, excluding premiums, over the prior 12 months are equal to 10% or more of household income; or 

Their out-of-pocket costs, excluding premiums, over the prior 12 months are equal to 5% or more of household income for individuals living under 200% of the federal poverty level; or 

Their deductible constitutes 5% or more of household income. 

Source: The Commonwealth Fund

mor in th ulat ing ther thos H “agh pred ees sure H vice fits beli awa forc ploy to i thei end tus q “Th ‘Ho stea five to d out and whe don E rais high peo che don ling shif sary Hub emp statu “I rub this

Fairlawn-based Risk International Benefits Advisors. “And it’s gotten to the point that Middle America is really in a place that they are not capable of managing these kinds of costs that now become liabilities when they enter the health care system.”

Sara Collins, vice president for health care coverage and access at The Commonwealth Fund and co-author of the report, also said that increasing premiums, which employers manage by sharing more of their costs with employees, are a main driver of the growth in the underinsured population.

But the overall primary driver of premiums is health care costs, she added, noting that people’s incomes haven’t kept pace with the rate of growth in outof-pocket costs.

The Health Care Cost Institute report showed that as per-person spending has climbed, the overall use of health care services changed very little between 2013 and 2017, declining just 0.2%.

“Pretty much across the board, rising prices were driving spending growth,” said Jean Fuglesten Biniek, senior researcher at the institute and a co-author of the report. “And then the role of utilization really depended on the specific service category, but in many cases utilization had declined or stayed flat.”

Facing increasing costs on an annual basis, employers are in a “difficult position,” and can only absorb so much additional cost, Krieg said. Shifting costs to employees seems like the “path of least resistance,” he added.

“Unfortunately, I think a lot of employers have their heads in the sand.

They’re not directly hearing about employee financial pain,” Krieg said. “It’s a big financial obligation an employer has. But I would say, across the board, there aren’t a lot of employers who have truly spent the time — and the information’s available to them — to say, ‘OK, how many of my employees actually hit their out-of-pocket?’ And that out-of-pocket could be $5,000, $10,000 or

2/21/19 11:19 AM

omemiees,

F E B R U A RY 2 5 - M A R C H 3 , 2 019 |

CRAIN’S CLEVELAND BUSINESS

++ + +

+

Underinsured adults, ages 19-64

Out-of-pocket costs skyrocketing

Although the most likely people in the U.S. to be underinsured are those who buy plans on their own, the fastest growing group are those enrolled in employer health plans.

In Ohio in 2017, total potential out-of-pocket costs (employee contribution + deductible) was $6,563, a growth of 80% since 2008.

50

Individual coverage

28%

Employer-provided coverage 40

Percent of underinsured

more. And goodness, my employees in this particular segment of my population, if they had to do that, knowing what they’re paid, you know that there’s major financial stress on those people.”

He said a lot of CEOs would be “aghast” to discover the financial predicament some of their employees face due to their financial exposure in health care.

However, Greg Hubbell, senior vice president and health and benefits practice leader for Aon, said he believes employers are very much aware that elements of their workforce are tapped out financially. Employers recognize that, are sensitive to it and may be willing to change their approach, he said, but in the end, they often revert back to the status quo.

“They’re looking at this as just ‘How do I survive one more year’ instead of starting to look at three to five years out,” he said. “Be unwilling to do anything creative or new that’s out there to address these cost issues and, you know, you end up right where you were five years ago. You’ve done nothing but stay the course.”

Employers’ cost-shifting tactics — raising deductibles, shifting to high-deductible health plans, asking people to pay more out of their paycheck — can be an easy solution, but don’t address the root cause. Tackling that would require a paradigm shift, and getting creative is necessary for good benefit-plan design, Hubbell said. The vast majority of employers, however, default to the status quo.

“I mean, a lot of employers, they rub their hands: ‘Oh, we can’t afford this; can’t afford this,’ and then they

++

the manthe

|

HEALTH CARE

+

a

PA G E 13

U.S. average

$4,160 $5,088 $6,776 $7,240

U.S. % of median income 8% 10% 11% 12% 10%

10 0

’08 ’11 ’16 ’17

Ohio out-of-pocket costs $3,648 $4,930 $6,147 $6,563 Ohio % of median income 7% 10% 10% 11%

Total

30 20

’03

’05

’10

’12

’14

’16

’18

SOURCE: commonwealthfund.org

Claim spending up Per-person spending for medical and pharmacy claims reached $5,641 for Americans under 65 who were covered by employer-sponsored insurance in 2017.

Inpatient Outpatient

Professional services Prescription drugs $5,641

$6,000 $4,834 $4,000

$2,000

$0 ’13

’14

’15

’16

SOURCE: 2017 Health Care Cost and Utilization Report

’17

+ + + ++ +

don’t do anything,” he said. “They just stay in the same old box of ‘I’ll pay the premium and I’ll have the basic plan designs and I’m not going to do anything creative.’ You do have to have an element of creative and willingness to kind of put your neck out there.”

More than ever, Hubbell said, it’s imperative that employers offer choice to allow employees the options to weigh which direction they want to go with their plans.

“But you also need to be mindful of the employees’ needs around costs,” Hubbell added. “Some people in a high-deductible health plan are there because they feel that’s the only thing they can afford, and then they’re saddled with high out-ofpocket costs. Some employees (who) gravitate to high-deductible health plans are willing and able to contribute to an HSA that fits within the

high-deductible health plan parameters. ... All of that creates this mosaic that an employer needs to take into consideration when crafting their benefit strategy.”

The idea behind high-deductible health plans was to encourage consumers to be more responsible in their use of health care services; the thinking being that the more cost exposure consumers faced, the more prudently they would spend their health care dollars. But the basis for that was in higher-income populations, said J.B. Silvers, a health care finance professor at Case Western Reserve University and a former insurance executive. Lower-income populations wind up forgoing services they might need, he noted.

Striking the right balance has become a major challenge.

“When these plans were all dreamt up many years ago, all of the health care systems were afraid of this day,” Krieg said. “Because they knew that all the sudden they were going to be bill collectors with people who have insurance.”

Patients with high deductibles and out-of-pocket costs who wind up needing care they can’t afford have become a new liability for providers, he said.

The underinsured are more likely to struggle to pay bills and carry medical debt over time, leaving everybody in a bad spot: providers without payment and families in financial hardship and extreme stress, Collins said.

“But the other part of this obviously is health care costs are growing,” she said. “The reason health care costs are growing and premiums are rising is because of the cost of care, and a lot of that is driven by prices that providers charge. So there’s that aspect of this, too.”

Kreig said that ultimately, employees need to have the right kind of support and direction when they hit the health care system, such as the tools insurance companies provide. But that alone won’t solve the problem.

Solutions such as those tools are not widespread, rather disjointed and often underutilized, he said.

“You don’t want to be in position that people don’t have an incentive to do the fundamental right of taking care of themselves,” said Krieg. “So while you want to encourage that, you want to figure out how you put together the right package of solutions and support that can truly combine cost mitigation and minimizing an employee’s financial exposure.”

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2/21/19 11:28 AM

PA G E 14

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HEALTH CARE

Orangetheory is feeling fit for expansion

By Judy Stringer clbfreelancer@crain.com

Stephanie Altenburger is the first to admit consumers have no shortage of group exercise options today, with boot camp plays and cycling, barre and Pilates studios seemingly everywhere these days.

Still, she likens Orangetheory — a high-intensity workout brand — to a “multivitamin” in the fitness world, a metaphor she borrows from Orangetheory co-founder Ellen Latham.

“A lot of the studios popping up are segmented toward one type of workout,” Altenburger said. “We feel like in our space we can give everything to a lot of people, instead of it being like one thing only.”

Altenburger and her husband, Kurt, opened Northeast Ohio’s first Orangetheory Fitness Studio in Rocky River in December 2015. A little over three years later, the couple owns five Orangetheory franchises in Greater Cleveland and, as area developers, have a stake in 18 regional locations overall. Their newest studio opened in Lakewood earlier this month, following ribbon-cuttings in Beachwood, North Olmsted and Medina in 2018.

A big focus of the expansion plan to date, according to Altenburger, has been identifying where traffic at existing studios is originating. If people don’t have a studio in their own community, they tend travel to the nearest location, she said.

“Our Rocky River studio, for example, has a lot of members from Lakewood. We knew that in order to make it convenient for that community, we wanted to put a studio there,” Altenburger explained. “Our members re-

ally love the program, and they get excited when we put one right in their backyard.”

Orangetheory’s growth in Northeast Ohio is indicative of the path for the system as a whole, according to Mike Mettler, senior vice president of franchise development, who noted that the Boca Raton, Fla., company, which launched in 2010, recently surpassed the 1,000 mark for locations.

“As a brand, we opened 261 studios around the world and 215 in the U.S. in 2018,” he said. “In the month of December, we opened 44 studios worldwide and 38 in the U.S. — the most we’ve ever opened in one single month.”

In the zone Hourlong Orangetheory classes involve heart rate-monitored training with short bursts of intense exercise followed by periods of more moderate activity. Participants wear heart monitors that help them reach a target zone “that stimulates metabolism and energy,” according to the company. By staying in that target zone — known as the “orange” zone — for at least 12 minutes, Orangetheory claims, the body must work harder to restore oxygen post-workout and will burn calories for up to 36 hours following a class.

Analyst Brian Smith, managing director and a member of the Piper Jaffray consumer investment banking team, said accessibility is a big reason why Orangetheory is one of the fastest-growing franchises in the $50 billion “fitness services” industry.

“I might be running at an 8-minute-mile pace on the treadmill, while someone else is walking at a 4% in-

Stephanie Altenburger (kneeling, center) and her husband, Kurt, own five Orangetheory franchises in Greater Cleveland. (Contributed photo)

cline and another member is on the rowing machine and our heart rates are all in the same zone, so we can all get the same benefit of the workout,” Smith said. “The fact that it is heart rate-based training allows you to have what we call ‘mass customization’ and increases the overall accessibility in terms of who can do the workout.”

That means Orangetheory tends to draw men in an industry segment — boutique exercise studios — typically dominated by female membership, he said. Its membership is also more diverse in terms of fitness level.

“You walk into a class and you will see an older, more mature woman, a deconditioned man who might weigh 200 pounds plus and a worldclass athlete all working out at the same time at their own level,” Smith said.

The other driving factor in Orangetheory’s expansion is a “compelling financial return for the franchisee,” according to Smith.

The business’ latest franchise disclosure document, he said, indicates the average studio brings in more than $1 million in annual revenue and generates $300,000 to $400,000 or more for the studio owner. Area developers, such as the Altenburgers, also get a third of an 8% royalty paid by their franchisees.

‘Tailwinds’ Whatever is driving the Orangetheory fitness craze, there is no sign of it slowing down. Mettler said the company plans to open another 250 to 300 studios systemwide each year over the next couple of years and “is comfortable” in that 20%-25%

growth-rate range. He estimates Northeast Ohio will see four new studios in 2019.

Mettler, however, prefers to measure Orangetheory impact in terms of membership.

“Our goal is more lives, to help people live a longer and more vibrant life, so we are really about not the number of locations, but the number of members and the impact we can have on members’ lives,” he said.

There is plenty of growth potential by that measure. Of the roughly 325 million people in the U.S., 800,000 are currently Orangetheory members, according to Mettler.

As for Smith, he said he believes Orangetheory has what it takes to survive an impending shakeout in the saturated fitness services market, not only because of the “tailwinds” pushing the brand now, but also due to its sizable marketing budget. In each franchise, 2% of revenues are diverted to corporate for marketing.

To gauge the impact of a similar approach, one only has to turn on a TV or radio to feel the brunt of the $1 billion Planet Fitness franchise’s 2% marketing fund.

“If you are going to get off the couch and go to a gym, you are going to go to a Planet Fitness because you see the marketing and also because there is a location near you,” Smith said. “Orangetheory is probably five years behind Planet Fitness is in terms of brand awareness, but it still has the marketing budget of 2% over $1 billion systemwide revenues.

“I think it will be really hard for people to compete with that type of marketing effort as it relates to other boutique concepts.”

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CRAIN’S CLEVELAND BUSINESS

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F E B R U A RY 2 5 - M A R C H 3 , 2 019

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PA G E 15

HEALTH CARE

Hundreds of rural hospitals at risk of closure

By Alex Kacik Modern Healthcare

More than a fifth of the nation’s rural hospitals are near insolvency, according to a new report.

Twenty-one percent of rural hospitals are at high risk of closing, according to Navigant’s analysis of CMS data on 2,045 rural hospitals. That equates to 430 hospitals across 43 states that employ about 150,000 people and generate about $21.2 billion in total patient revenue a year.

Hospitals are often the economic drivers of rural communities. Percapita income falls 4% and the unemployment rate rises 1.6 percentage points when a hospital closes, a related study found. Ninety-seven rural hospitals have closed since 2010, according to the University of North Carolina Cecil G. Sheps Center for Health Services Research.

As rural populations decline, inpatient admissions fall, more beds sit vacant and the number of people covered by government-sponsored plans rises, these communities are left to grapple with the ramifications of losing a hospital, said Dr. Daniel DeBehnke, a Navigant managing director, co-author of the report and former CEO of the Omaha-based Nebraska Medicine system.

“There is a snowball effect that drives a lack of capital, which causes an inability to invest in everything from technology to electronic health records to imaging to keep up with the standard of care,” he said. “Looking at the 430 hospitals at risk, that number is significant.”

Researchers used a benchmark of an average 1.4% operating margin over the past three years, 78.5 days cash on hand and 49.8% debt-to-capitalization ratio to determine financial viability.

They also broke the impact down by state, revealing that half of Alabama’s rural hospitals are in financial distress, the highest percentage in the country. At least 36% of the hospitals in Alaska, Arkansas, Georgia, Maine and Mississippi are in financial jeopardy.

“It's probably the most fragile of situations I have seen in my 23 years at the association,” Danne Howard, chief policy officer at the Alabama Hospital Association, told Modern Healthcare in November.

A loss of acute-care beds and ultimately hospitals is inevitable, experts said. This, though, begs the thorny question: How many hospitals does the U.S. health care system need?

Navigant set out to define “essential” by weighing trauma status, proportion of Medicaid days or uncompensated care to net revenue, geographic isolation and hospital employee-to-county population. More than a third, or 153, of the 430 financially unstable hospitals are not “essential,” according to Navigant’s data.

This is not to say these hospitals aren't important to their communities, DeBehnke said.

While these metrics provide some clarity, there is no objective definition of an “essential” provider, said Christina Campos, administrator of Guadalupe County Hospital, an independent hospital in rural New Mexico.

“The contraction of hospitals may be inevitable as some hospitals merge to reduce overhead costs and as others restructure to focus on outpatient and preventive services, thus

P015_CL_20190225.indd 15

redefining themselves,” she said.

“Try telling any community, no matter how large or small, that its hospital is not ‘essential.’ ” Neighboring hospitals may find that it’s better to work together and specialize in different services by dividing inpatient and outpatient treatment, for instance, Campos added. Hospitals may choose to resize or restructure to reduce their inpatient footprint, like Guadalupe County Hospital did, which typically requires new grants or loans, or a reverse Hill-Burton financing program for improved health care infrastructure, she said.

Passing the bipartisan Rural Emergency Acute Care Hospital Act would

help, Navigant said. It would create a new Medicare classification that would allow rural hospitals to offer emergency and outpatient services but no longer have inpatient beds.

Policy experts have also urged an overhaul of the Medicare wage index.

“We want to improve quality and population health and reduce unnecessary admissions and waste, but still don’t get paid for it, at least not enough to break even,” said Campos, adding that rural hospitals’ bare-bones budgets and low staffing levels are further stretched by continued legislative and regulatory Medicare cuts.

“The greatest financial burden to many rural hospitals is supporting a

24/7 emergency department, where standby staffing costs are high, volumes are relatively low and reimbursement comes nowhere near to covering expenses.”

Telehealth is an important tool that can help rural providers maintain certain services, industry observers said. But broadband internet access and the current reimbursement model set limitations.

Many large systems support community hospitals that can share some of the lower-acuity workload, evidenced by systems like the University of Alabama at Birmingham that are taking on administrative tasks and sharing specialists with their rural

neighbors. This can often be more effective than an acquisition, DeBehnke said.

When DeBehnke was at Nebraska Medicine, he convened a rural hospital consortium. They shared best practices, revealed each facility’s challenges and opportunities, and discussed how to streamline redundant services, he said.

“The most significant impact was technology and clinical service development,” DeBehnke said.

Hospitals need to recognize they can’t provide every service under one roof, Campos said. An ability to provide safe and high-quality care is of utmost importance, she said.

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Growth by Design

CONTENT SPONSORED BY

Missed a month? Catch up on this series at www.CrainsCleveland.com/TeamNEO

Next month: How stronger regional network relationships attract new business investment

NEO’s economic development engine

JobsOhio

Private, statewide business development

Team NEO

A regional table to accelerate pace of growth and equity relating to NEO business development outcomes

STRATEGIC PARTNERSHIPS POWER PROSPERITY

By ANNIE ZALESKI

CRAIN CONTENT STUDIO-CLEVELAND

Xellia Pharmaceuticals manufactures sterile injectable drugs that treat bacterial and antibiotic resistant infections. When the Copenhagen, Denmark-based company was looking for a U.S. site to expand its operations, Northeast Ohio was interested — and it had the right combination of location, culture, talent and project execution support to make a deal happen.

Today, Xellia is thriving in the former Ben Venue Laboratories campus in Bedford. After hiring 170 people in 2015, Xellia chose to manufacture and distribute a pivotal new product line from the Northeast Ohio facility, which necessitated hiring an additional 100 employees in 2017. And, to ensure these employees are comfortable working in an FDA-regulated environment, Xellia also has partnered with Tri-C to create and deliver a customized training curriculum.

The company’s arrival and subsequent growth can be attributed to the ongoing hard work of Northeast Ohio’s economic development system — a robust network of partner organizations working together to attract businesses to the region, create jobs, nurture a talent pipeline, and provide support for existing firms.

This regional network is strengthened by collaboration.

Although these partner organizations serve different functions — including entrepreneur support and education, business services and regional promotion — they also share resources, information and expertise with each other.

The result is an inclusive system in which many partners are working hand in hand to create strategies to foster economic growth and business development.

“Economic development is a team game,” says Bill Koehler, CEO of Team NEO, a regional entity focused on accelerating the pace of growth, job creation and equity in Northeast Ohio through business development strategies. “There’s no one organization in our community that has all the unique capabilities needed to get the job done. We need to think about how we bring to the table all the organizations in the public sector, private sector and philanthropic community who offer unique insights that help companies see why they should invest here.”

Ensuring every economic development organization is on the same page, working in tandem toward the same goals, is crucial. “Having that alignment around outcomes makes the process a lot easier,” says Aram Nerpouni, president and CEO of BioEnterprise, an organization dedicated to growing bioscience companies in Northeast Ohio. “We’re all working together, because we all want to see more companies, more jobs,

more investment coming into the region.” Yet, these aligned economic development strategies look different in every locale — even within Northeast Ohio’s 18-county region — because there’s no one-size-fits-all solution to propel economic growth or prosperity.

“Different places have different value propositions,” says Aaron Pitts, senior managing director of JobsOhio, a Columbus-based organization dedicated to statewide business development. “Look to Cuyahoga County: One strategy in the core city is appropriate for that area — but maybe would be not applicable to the suburbs or the rural parts of the county around it. The challenge that any locality has is, ‘How do you create an offering that matches your strengths — and what you’re aspiring to either be, or to take advantage of?’”

Experts long have known that successful economic development occurs when municipalities — even those with disparate strategies — band together and compete as a region. That’s because economic building blocks, such as supply chains and labor pools, are regionally based. But to keep regional economic development goals aligned, it’s also important to have a regional organization such as Team NEO doing research and aggregating information in order to create and coordinate strategies — and then partnering with state and local organizations to implement them.

In fact, Northeast Ohio’s competitive advantage comes from its focus on leveraging state, regional and local resources to support companies considering business investment in the region. For example, as Xellia Pharmaceuticals was considering its move to Bedford, BioEnterprise conducted an assessment to gauge the regional talent landscape. Meanwhile, the City of Bedford worked with its school district and Cuyahoga County to modify existing property tax agreements. And both BioEnterprise and Bedford worked with other partners — including JobsOhio, Team NEO and the Greater Cleveland Partnership — to solve potential investment obstacles, largely around facility renovations and talent acquisition.

Of course, long-term growth also comes when regions incorporate the strengths of its diverse populations. The Fund for Our Economic Future last year released The Two Tomorrows report, which called on the region to focus on creating economic development strategies that provide opportunities for as many people as possible. “Many of the most forward-thinking business development organizations are dramatically upping their game on racial and economic inclusion,” says Brad Whitehead, president of the Fund for Our Economic Future. “Progress on this topic is not only sensible civic policy — the evidence suggests that it is central to economic competitiveness.”

A VIBRANT ECONOMY Team NEO’s experience and The Two Tomorrows report both suggest that a more robust set of metrics is needed to truly measure economic health and prosperity. “We said, ‘We’ve got to rethink success,’” said Bill Koehler, CEO of Team NEO. “And that’s where the notion of a vibrant economy comes from. It’s not just one that’s growing and more productive. It’s one that is creative, resilient, more educated, more diversified and inclusive. It is one where more people have an opportunity to participate in economic prosperity.”

Destination Cleveland Convention and visitors bureau focused on driving economic impact for Cleveland

Greater Cleveland Partnership Mobilizes private-sector leadership, expertise and resources to improve the region’s economic prosperity

Greater Akron Chamber Economic development entity for the Greater Akron region

Youngstown/ Warren Regional Chamber Mahoning Valley provider of economic development, advocacy + business services

Higher Education 4-year universities, community colleges JumpStart Nonprofit focused on entrepreneurs to economically transform communities

Stark Economic Development Board Stark County group focused on entrepreneurs and business growth + attraction Business Incubators Assist startup companies Community Economic Development Agencies Counties, cities, municipalities

Research Institutions

BioEnterprise Bioscience business formation, recruitment + acceleration

Federal and industry

MAGNET (Manufacturing Advocacy & Growth Network) Advocacy organization helping manufacturers grow + compete in NEO

The Fund for Our Economic Future Philanthropic collaboration dedicated to advancing economic growth + equitable access

Gears represent some of the largest regional and metro economic development organizations in Northeast Ohio.

A PRODUCT OF

P017_CL_20190225.indd 17

This advertising-supported feature 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 content.

2/21/19 2:41 PM

PA G E 18

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F E B R U A RY 2 5 - M A R C H 3 , 2 019 |

CRAIN’S CLEVELAND BUSINESS

THE LIST

Largest Nursing Homes Ranked by number of certified beds THIS YEAR

NAME (1)

CERTIFIED SKILLED BEDS

MEDICARE PROVIDER NUMBER

ASSETS

NET PATIENT REVENUE

NET INCOME/(LOSS)

# OF FTE EMPLOYEES

COST REPORT DATE

TYPE OF OWNERSHIP

1

Menorah Park 27100 Cedar Road, Beachwood 44122 (216) 831-6500/MenorahPark.org

355

365094

$9,420,235

$53,186,216

($1,977,784)

467

6/30/2017

Voluntary nonprofit, church

2

St. Augustine Health Campus 7801 Detroit Ave., Cleveland 44102 (216) 634-7400/staugministries.org

234

365883

$12,250,184

$20,057,582

($1,151,958)

186

12/31/2017

Voluntary nonprofit, church

3

Montefiore 1 David N. Myers Parkway, Beachwood 44122 (216) 360-9080/montefiorecare.org

233

365046

$29,458,063

$26,625,680

$1,017,735

247

6/30/2017

Voluntary nonprofit, other

4

Park East Center-Genesis Healthcare 3800 Park East Drive, Beachwood 44122 (216) 831-4303/genesishcc.com/ParkEast

218

365810

($7,269,623)

$9,439,523

($1,966,242)

94

12/31/2017

Proprietary, other

5

St. Luke Lutheran Community - North Canton 220 Applegrove St. N.E., North Canton 44720 (330) 499-8341/stlukelutherancommunity.org

202

365521

$23,202,287

$15,703,089

($1,439,677)

242

12/31/2017

Voluntary nonprofit, church

6

Broadview Multi-Care Center 5520 Broadview Road, Parma 44134 (216) 749-4010/broadviewmulticare.com

200

365757

$2,254,560

$16,473,851

($417,063)

196

12/31/2017

Proprietary, corporation

7

Pleasant Lake Villa 7260 Ridge Road, Parma 44129 (440) 842-2273/lhshealth.com

199

365706

$5,905,700

$21,237,168

$1,672,172

247

12/31/2017

Proprietary, corporation

8

Crandall Medical Center 800 S. 15th St., Sebring 44672 (330) 938-6126/copelandoaks.com

190

365574

$4,517,839

$14,825,778

$208,922

215

12/31/2017

Voluntary nonprofit, other

8

The Greens Care and Rehabilitation (2) 1575 Brainard Road, Lyndhurst 44124 (440) 460-1000/thegreensandfountains.com

190

366114

NA

NA

NA

NA

NA

NA

8

Westbrook Place (formerly West Bay Center) 27601 Westchester Parkway, Westlake 44145 (440) 871-5900

190

365451

$693,398

$8,893,402

($14,358,915)

90

12/31/2017

NA

11

Hanover House Nursing and Rehabilitation Center 435 Avis Ave. N.W., Massillon 44646 (330) 837-1741/communicarehealth.com

181

365292

$2,391,938

$12,944,135

$358,765

113

8/31/2017

Proprietary, corporation

12

Carington Park 2217 West Ave., Ashtabula 44004 (440) 964-8446/carington-park.net

180

365286

$2,243,731

$11,659,821

$1,062,289

140

12/31/2017

Proprietary, corporation

12

Kirtland Rehabilitation and Care 9685 Chillicothe Road, Kirtland 44094 (440) 256-8100/kirtlandrehab.com

180

365290

$2,819,736

$9,123,641

($596,241)

81

12/31/2017

Proprietary, corporation

12

Suburban Pavilion Nursing and Rehabilitation Center 20265 Emery Road, North Randall 44128 (216) 475-8880/certushc.com

180

365215

$3,799,935

$11,578,716

($1,370,170)

102

8/31/2017

Proprietary, corporation

12

Wyant Woods Care Center 200 Wyant Road, Akron 44313 (330) 836-7953/communicarehealth.com

180

365779

$2,216,016

$12,921,159

$293,753

110

3/31/2018

Proprietary, corporation

16

Parkside Villa 7040 Hepburn Road, Middleburg Heights 44130 (440) 260-7626/lhshealth.com

178

366229

$5,875,630

$20,558,482

$1,210,843

263

12/31/2017

Proprietary, corporation

17

Franklin Plaza 3600 Franklin Blvd., Cleveland 44113 (216) 651-1600/lhshealth.com

177

365388

$3,352,377

$11,308,937

$22,150

161

12/31/2017

Proprietary, corporation

18

Grande Pointe Healthcare Community 3 Merit Drive, Richmond Heights 44143 (216) 261-9600/communicarehealth.com

176

366008

$3,074,161

$14,677,575

($37,303)

124

3/31/2018

Proprietary, corporation

18

McKinley Health Care Center 800 Market Ave. N., Canton 44702 (330) 456-1014/mckinleyhc.com

176

365655

$5,859,341

$12,673,089

$933,456

94

12/31/2017

Proprietary, other

20

Jennings 10204 Granger Road, Garfield Heights 44125 (216) 581-2900/http://jenningscenter.org

174

366045

$50,808,721

$20,125,851

$1,332,116

197

12/31/2017

Voluntary nonprofit, other

21

Heartland of Willoughby 37603 Euclid Ave., Willoughby 44094 (440) 951-5551/hcr-manorcare.com

173

365305

$9,839,733

$12,610,949

($953,143)

142

5/31/2017

22

Rose Lane Health Center 5425 High Mill Ave. N.W., Massillon 44601 (330) 833-3174 /sprengerhealthcare.com

171

365289

$10,408,086

$14,232,868

$1,443,001

152

12/31/2017

Proprietary, corporation

23

Altenheim Senior Living 18627 Shurmer Road, Strongsville 44136 (440) 238-3361/altenheim.com

170

365109

$55,002,438

$14,828,300

$1,953,976

162

12/31/2017

Voluntary nonprofit, other

23

Hickory Ridge Nursing & Rehabilitation 721 Hickory St., Akron 44303 (330) 762-6486/hickory-care.net

170

365134

$2,104,693

$11,021,214

$840,755

138

12/31/2017

Proprietary, corporation

23

Wickliffe Country Place 1919 Bishop Road, Wickliffe 44092 (440) 944-9400/lhshealth.com

170

365381

$3,757,978

$14,031,887

$669,662

192

12/31/2017

Proprietary, corporation

26

Heartland of Mentor 8200 Mentor Hills Drive, Mentor 44060 (440) 256-1496/hcr-manorcare.com

167

365691

$9,108,050

$14,121,986

($3,227,020)

162

12/31/2017

NA

27

Aristocrat Berea Healthcare Center and Rehabilitation 255 Front St., Berea 44017 (440) 243-4000/certushc.com

165

365608

$3,450,293

$16,595,855

($881,612)

114

12/31/2017

Proprietary, corporation

27

Lenox Ridge (formerly ManorCare Health Services) 23225 Lorain Road, North Olmsted 44070 (440) 779-6900

165

365310

$9,723,887

$10,381,089

($1,187,451)

139

5/31/2017

NA

NA

RESEARCHED BY CHUCK SODER (CSODER@CRAIN.COM)

Want the Excel version of this list — and every other Crain's list? Become a Data Member: CrainsCleveland.com/data Certified bed figures are as of Jan. 31, 2019. Financial and employee figures are from the listed cost report date. Crain's Cleveland Business does not independently verify the information and there is no guarantee these listings are complete or accurate. Send all feedback to Chuck Soder: csoder@crain.com

(1) Information compiled by HW&Co. from CMS cost report database, Ohio Department of Medicaid cost report database and Ohio Department of Health website. Additional research by Crain's. (2) Changed ownership in late 2017; financial data not available in the most recent databases.

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Patricia A. Ackerman Title: Executive director, Chalkdust Education Foundation; president and CEO, Chalkdust Inc.; and co-founder, IndeedWeCode. Most recent education: Ph.D., Kent State University

Being retired for 19 years hasn’t slowed Patricia A. Ackerman down — if anything, she may be gaining momentum as she continues to champion education for underachievers and the underserved.

After almost 25 years as a teacher and principal, in 1990 she created the concept for the Taylor Academy alternative school for at-risk students in the Cleveland Heights-University Heights district and served as principal for 15 years until it was absorbed into Heights High.

Today, she directs the Chalkdust Education Foundation, which offers training, enrichment opportunities and other resources for parents and students in urban communities by supporting efforts such as IndeedWeCode — which Ackerman also leads — a programming camp founded in 2015 for African-American high school girls.

She brings fierce passion to her work. Noting that more than half of Ohio’s school districts don’t offer computer science at all, Ackerman stated that not making digital literacy a graduation requirement is “a crime against every student in Ohio.”

“Working with her has changed the trajectory of my life,” said IndeedWeCode co-founder Michelle D. Walton, a veteran teacher who has known and worked with Ackerman for 25 years. “When she retired, I said, ‘Whatever you do, will you please take me with you?’ And that has been a long journey.”

That journey shows no signs of slowing down. Ackerman recently joined the Blockland Cleveland blockchain tech initiative’s talent-development group.

“That’s what gets me up in the morning,” she said. “It’s so energizing to be involved in the future.”

Jill Barnholtz-Sloan Title: Professor in brain tumor research; associate director for bioinformatics/translational informatics; director of research health analytics and informatics for University Hospitals Health System; and director of Cleveland center for health outcomes research, Case Western Reserve University School of Medicine. Most recent education: Ph.D., University of Texas Health

NOTABLE WOMEN IN STEM T

he exceptional women featured in these profiles bring a broad range of skills, talent and innovations to bear on the fields of science, technology, engineering and mathematics. Thanks to their leadership, mentoring and example, young women throughout Northeast Ohio and beyond can envision and secure a future for themselves in STEM. Find the profiles on pages 19-26

Illustration by MHJ via Getty Images

Jill Barnholtz-Sloan’s collaborations with other scientists to create a new initiative in brain tumor research at CWRU has changed diagnoses globally.

“Through her leadership within the Cleveland Institute for Computational Biology, she supports clinical and biomedical researchers at regional health systems to assure that studies are conceptualized and implemented to deliver insights that improve quality and delivery of care,” said Jonathan Haines, director of the Cleveland Institute for Computational Biology.

“She couples the excitement of unraveling puzzles in cancer biology with clear, understandable descriptions of both the importance of the problem and how statistical and mathematical models work and contribute to our knowledge of fundamental biology,” said Warren Kibbe, founding member of Cancer Informatics for Cancer Centers in San Francisco.

Barnholtz-Sloan also helped launch a woman-to-woman faculty mentoring group, mentors six female medical students through a program of the local chapter American Medical Women’s Association and serves on multiple junior faculty mentoring committees. She also challenges junior colleagues, Ph.D. investigators, graduate-level researchers and high school students to deliver their best work by finding a path that most resonates with their interests.

Hazel Barton Title: Professor, director of integrated bioscience, University of Akron.

Most recent education: Ph.D., University of Colorado

Gerry Wright, director of the Michael G. DeGroote Institute for Infectious Disease Research at McMaster University in Ontario, Canada, calls Hazel Barton the Lara Croft of microbiology.

The University of Akron professor and scientific leader has gone so far as exploring glacier ice caves, underwater caves and earth caves in locations ranging from Greenland to the Yucatan Peninsula.

As director of integrated bioscience, Barton leads a team of 17 researchers.

She has restructured the program, developed a new non-thesis master’s degree and increased the number of applicants and graduation rates. She also helped generate 40% more funding for the program.

As chair of the Committee on the Status of Women in Microbiology, Barton heavily promotes the role of women in science from middle school students through undergraduates. She also is a mentor to more than 50 high school girls and young women in her own research lab.

In 2018, she earned the Alice C. Evans Award for the Advancement of Women in Science from the American Society for Microbiology (ASM). She also worked with ASM to protect attendees from sexual harassment at society meetings by helping develop an anti-harassment task force and an ASM Code of Conduct.

Christina Bloebaum

Rebecca Blice

Title: Dean and professor, College of Aeronautics and Engineering, Kent State University.

Most recent education: Ph.D., University of Florida

Title: Senior biomedical engineer, Nottingham Spirk.

Most recent education: Master of science, University of Akron

Christina Bloebaum is integral to Kent State University’s plan to increase its presence in STEM initiatives and boost science-based programming. Tasked with moving KSU from a tech focus to an engineering and research-intensive focus, in less than a year on the job Bloebaum has reorganized undergraduate programs administrative staff, and set faculty to streamlining curricula to eliminate redundancies and create a better learning experience for students.

The university already is seeing results. Applications have increased 80% and research funding has hit more than $11 million.

“Her ambition for growing the college and her vision for aeronautics, engineering and autonomous systems students’ futures will help pave their way when entering the workforce. Under her leadership, Kent State University’s CAE graduates will be change-makers in evolving industries,” said Maureen McFarland, associate dean for Kent’s College of Aeronautics and Engineering.

A longtime member of and leader in The American Institute of Aeronautics and Astronautics, Bloebaum has served as education chair and on the selection committee for AIAA fellows.

As interim director of the Iowa Space Grant Consortium, funded by NASA, she worked to develop programs and engage more with the community. As Iowa State University’s first senior female faculty member to work in Aerospace Engineering, Bloebaum appreciates the difficulties women in the field face and works to increase diversity in the industry.

As senior biomedical engineer and a project manager, Rebecca Blice translates highly technical information so even nontechnical team members for Nottingham Spirk, a consulting and product design company, can understand it.

“Becca is a stand-out program lead who balances well the needs of our client partners and the lens of the end user. She is passionate about biomedical engineering and her passion helps fuel all of her team members,” said Vikki Nowak, vice president of strategy for Nottingham Spirk.

Blice helped educate staff on the biomedical engineering process and developing products for Food and Drug Administration (FDA) approval and clinical trials and fostered a content management system that helps the company document its work and more efficiently apply for FDA approvals.

Arianna Rupp, a fellow with Great Lakes Biomimicry, called Blice an advocate for biomimicry innovation — modeling materials, systems, and structures on biological articles and practices — and a “huge supporter of women and their contributions to biomimicry.”

Blice’s work has been integral to several vertical innovation programs, such as tactile medical, a wearable innovation designed to relieve lymphedema in patients suffering from water retention, and a self-leveling walker for the Veterans Administration to improve mobility and shorten hospital stays.

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NOTABLE WOMEN IN STEM Meredith Bond

Jennifer Bugbee

Elizabeth Corbin Murphy

Kirsten Ellenbogen

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Title: Dean, College of Sciences and Health Professions, Cleveland State. Most recent education: Ph.D., University of Pennsylvania

Title: Vice president of operations, Werner G. Smith Inc. Most recent education: Bachelor of science, Baldwin Wallace University

Title: Principal, Perspectus Architecture.

Most recent education: Master of architecture, Kent State University

Title: President and CEO, Great Lakes Science Center. Most recent education: Ph.D., Vanderbilt University

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Meredith Bond is known for being a dedicated advocate for women and minorities in STEM fields.

Under her leadership, CSU’s Operation STEM, funded by the National Science Foundation, provides enhanced financial, educational and mentoring support to students. It also reveals how minority and female students can achieve at levels traditionally reserved for their higher-income peers.

Her College of Sciences and Health Professions helps retain CSU graduates in the Cleveland area. The school provides focused coaching to pre-med and other students to help them get into highly competitive health professions programs. As a result, more students are engaging in research in National Institutes of Health-funded laboratories at CSU and the Cleveland Clinic.

Also, the college’s Office of Pre-Professional Health Programs offers resume writing, mock interviews and intensive coaching for admission exams, such as the MCAT, helping 75% of participating students gain acceptance into health profession schools. These experiences not only help catapult students from all backgrounds into health careers and employment but also directly address urgent health care needs in the region.

Elizabeth Lehfeldt, dean of CSU’s Jack, Joseph and Morton Mandel Honors College, called Bond an engaged mentor for female colleagues. “She consistently amplifies their work, supports their endeavors, provides sound advice and finds ways to promote their efforts,” Lehfeldt said.

Jennifer Bugbee started 26 years ago as a lab technician at Werner G. Smith and worked her way up to her current role, where she looks for efficiencies and inventive ways to comply with industry standards.

She streamlined and revised an equipment cleaning process to reduce water usage and waste and initiated the switch to automation in some areas to manufacture client products more efficiently, resulting in higher profits for the company and its clients.

Because of her experience with vegetable oils and oxidation reactions, Bugbee was able to help troubleshoot production issues a client was experiencing with raw materials made by another company. As a result, that client is in the process of finding a new supplier.

Bugbee also collaborated with a customer to develop a product made from sustainable and renewable resources that is expected to change the targeted industry dramatically in terms of safety and efficiency.

“I don’t know where we’d be without Jennifer Bugbee,” said Werner G. Smith president D.L. Meckes. “When other companies come away from a meeting with her, they are always excited about possibilities they hadn’t previously considered. I always think of these meetings as a gathering of wizards.”

Bugbee continues to hone her skills and knowledge of the industry through membership in the Society of Tribologists and Lubrication Engineers.

Elizabeth Corbin Murphy develops processes and technologies to evaluate structures and materials so they may be authentically restored and renovated.

In addition to navigating the merger between her firm, one of the oldest women-led architectural practices in Ohio, with Perspectus Architecture, she is also a professor of practice at Kent State University College of Architecture and Environmental Design.

Kathleen Crowther, president of the Cleveland Restoration Society, said Corbin Murphy is a renowned heritage architect throughout the Midwest.

“Elizabeth is a leading advocate for excellence in urban planning, retrofitting of existing buildings, sensitivity in design so that it can lift the entire community, and, of course, the restoration, rehabilitation and preservation of historic buildings,” Crowther said.

Corbin Murphy also is known for her veracity.

In 2015, she was named Woman of the Year for Integrity by the Summit County Women’s History Project and earned the American Institute of Architects Ohio Gold Medal in 2014.

She also serves on the board of directors for the Great Trail Council, Boy Scouts of America.

“We can have confidence in the wise, thoughtful and courageous voice she brings to the often-challenging issues of the day. Her moral commitment to do good is unparalleled,” said Terry Welker, AIA fellow and chief building official for the city of Kettering.

Kirsten Ellenbogen is passionate about the impact informal science education can have on children and families.

“It has been a privilege to collaborate with Kirsten through my roles with Cleveland Metropolitan School District,” said Tim Sisson, director of Northeast Ohio STEM Ecosystem. “Her guidance and support speak to her style of leadership, vision and value of collaboration to address the issues of access and equity in STEM education. Kirsten exemplified these qualities through her early efforts to establish NEOSTEM and continued efforts supporting its work to bring diverse stakeholders together to address the needs of learners across Northeast Ohio.”

Ellenbogen’s leadership was key to Great Lakes Science Center’s five-year strategic plan and the completion of a $1.8 million, capital-improvements campaign. Overseeing a staff of 145, she launched a Cleveland Creates Zone that introduces youth to the design and engineering process and developed partnerships to enhance STEM-education opportunities for middle schoolers and their families.

She promotes STEM in other ways as well, having served as co-investigator of the Center for Advancement of Informal Science Education, in collaboration with the National Science Foundation, and is founding officer of the Informal Learning Environments Research special-interest group for the American Education Research Association.

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P019_P025_CL_20190225.indd 20

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NOTABLE WOMEN IN STEM Serpil Erzurum Title: Chair, Lerner Research Institute, Cleveland Clinic. Most recent education: Doctor of medicine, Northeast Ohio Medical University

Herbert Wiedemann, chief of staff for the Cleveland Clinic, refers to Serpil Erzurum as a triple-threat physician-scientist. A practicing clinician, researcher and educator, she is a leader in respiratory medicine and a champion of women scientists.

Erzurum, who served as president of the Association of American Physicians from 2017 to 2018, is board-certified in pulmonary disease and critical-care medicine.

At the Clinic’s Lerner Research Institute, one of the largest research institutes in the nation, with more than $260 million in annual research funding, Erzurum has increased collaboration between laboratory scientists and physician-scientists.

She combined four areas of impact — cancer, heart and vascular, neurologic and eye, and inflammation research — with areas of biomedical engineering, genomics and data sciences research. The result has been accelerated clinical trials, more government team-based grants and improved patient care.

In addition, Erzurum formed the new Center for Therapeutics Discovery and led the creation of the Populations Health Research Center, which analyzes the health of groups and communities to better serve them.

At the same time, she works to advance the careers of women in STEM. “She has actively mentored and encouraged women in STEM to take on and excel in leadership roles, as evidenced by the increase in women in leadership positions in LRI and women researchers recruited to Cleveland Clinic in recent years,” said Charis Eng, chair of the Genomic Medicine Institute.

HB salutes Science Research & Engineering Program Director

Dr. Crystal Miller and all of the 2019 Notable Women in STEM. Thank you for the enormous contributions you have made to the field, and for blazing trails for others to follow.

Buffy Filippell Title: Founder and president, TeamWork Online LLC. Most recent education: Bachelor of science, Indiana University

Buffy Filippell sees the big picture of how recruiting should and can work. She began TeamWork as an online executive search firm that she ultimately transformed into a software-licensing recruiting platform for sports and events industries.

Filippell’s company of six full-time employees and contractors located in the U.S. and abroad serves more than 1,000 clients, including 85% of pro basketball, football, baseball, hockey, golf and NASCAR organizations, and last year helped fill 15,000 sports management jobs.

“What she has done at TeamWork Online has effectively revolutionized the way sports organizations and prospective employees across America ‘find each other,’ ” said David Gilbert, president and CEO of the Greater Cleveland Sports Commission. “Besides helping thousands of individuals break into our industry and a myriad of sports organizations find qualified people, Buffy’s ‘one-of-a-kind software solution’ has enhanced Cleveland’s position as a national hub for sports and entertainment.”

Recently, Filippell introduced new features, such as a program dating services often use that enables face-to-face career fairs and a suite of Equal Employment Opportunity-related products to improve hiring of individuals from underrepresented groups.

In 2017, Filippell’s work in the sports and technology industry resulted in her being named Woman of the Year by Women in Sports and Events. This year, she is to receive the Champions Award from Sports Business Journal.

YOUR STORY. YOUR STAGE.

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Ruth Keri Title: Professor in cancer research; professor and vice chair in the Department of Pharmacology; associate director for basic research, Case Comprehensive Cancer Center, Case Western Reserve University.

Most recent education: Ph.D., Case Western Reserve University

Ruth Keri is a leading research scientist of healthy and diseased breast tissue, working to improve cancer therapy effectiveness, and a mentor who promotes the inclusion of women and other underrepresented minorities in her fields of study.

Keri generates more than $1 million yearly for her research and most of her mentees go on to acquire tenure and receive independent funding.

Her responsibilities are numerous. For the Case Comprehensive Cancer Center, she standardized the peer-review process for pilot grant proposals and helped develop the Innovation Fund, a program providing resources to early-state projects. For the Department of Pharmacology, she developed a junior faculty mentoring program and is working with a team to devise a competency-based training program for doctoral education in biomedical sciences. She also is co-founder of the Great Lakes Breast Cancer Symposium.

In addition, Keri is an associate editor for Endocrinology, a journal for the Endocrine Society, serves on the editorial board for the Journal of Biological Chemistry and often reviews grant applications for the National Institutes of Health.

“As an innovative scientist, her work in gene expression is helping guide how specific breast cancers are targeted and treated. Through her career in STEM, Dr. Keri’s work is making a true difference in people’s lives today and will for generations to come,” said Sarah Wells, executive director of the American Cancer Society, North Central Region.

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NOTABLE WOMEN IN STEM Linda Hart

Ka-Pi Hoh

Betsy Kling

Anjali Kottha

Me

Title: Vice president of information technology, Prince & Izant Co. Most recent education: Master of science, Indiana University

Title: Organizational change management director, information solutions strategy, Lubrizol Corp. Most recent education: Ph.D., Case Western Reserve University

Title: Chief meteorologist, WKYC-TV. Most recent education: Bachelor of science, Bowling Green State University

Title: Vice president, technical services, operations, GMS Registrar Ltd. Most recent education: Master of science, Cleveland State University

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Linda Hart earned two promotions in the past three years because her expertise goes beyond the basics of Prince & Izant’s enterprise resource planning (ERP) system.

The company provides precious metal and brazing alloy solutions to clients. Hart improved its ERP system by breaking down data silos, implementing system upgrades and managing the day-to-day flow of data. Her work resulted in a significant reduction in errors and duplicated work.

“Linda is an invaluable member of our team and a key leader in our organization.

Her contributions to guaranteeing the success of our systems and data are immeasurable,” said Prince & Izant CFO Brad Lindholm.

Hart also encourages young women to participate in STEM activities and pursue STEM careers as U.S. Great Lakes chapter leader of NAVUG, the Microsoft Dynamics NAV (Navision) User Group.

Ka-Pi Hoh, who was promoted in 2018 to her current position, was the first female technical manager at Lubrizol Corp.’s Hazelwood, U.K., facility, helping pave the way for other female leaders.

“Ka-Pi has always been focused on helping women in STEM — both internal and external to Lubrizol. Ka-Pi was one of the founders of the ‘Women in Technology’ group, created over 20 years ago to provide a professional forum for females in technology and science related roles at Lubrizol,” said Julie Edgar, vice president, innovation, and chief sustainability officer at Lubrizol.

Hoh established the company’s technical presence in China by designing and managing construction of the Zhuhai Research, Development Testing Laboratory from the ground up. She also recruited and developed a team of chemists, technicians and managers, which enabled Lubrizol to provide more timely technical services and support on projects and establish its technical reputation in China. Hoh is still an associate and visiting professor at Zhuhai College of Jilin University.

Back in the U.S., Hoh led a multidisciplinary, multidivisional team to redesign the company’s product commercialization process to improve overall efficiency and increase the percentage of new products.

In addition, Hoh, a member of the Society for Applied Spectroscopy and chair of the Industrial Advisory Board for the Department of Macromolecular Science and Engineering at Case Western Reserve University, is a mentor and coach to women and high school students.

About this section The women profiled in this Notable Women in STEM feature were selected by a team of Crain’s Cleveland Business editors based on their achievements in and contributions to their respective fields, as well as their community service and mentoring of young women for their own futures in STEM, as outlined in detailed online nomination forms.

Notable Women in STEM was written by Leslie D. Green. For questions about this special report, contact Michael von Glahn at (216) 771-5359 or mvonglahn@crain.com, or Elizabeth McIntyre at (216) 771-5358 or emcintyre@crain.com. For more in our Notable Women series or to nominate someone for an upcoming section, visit https://www.crainscleveland.com/nominations-0.

Betsy Kling is the first female chief meteorologist in Cleveland and one of only a few women to earn Certified Broadcast Meteorologist accreditation from the American Meteorological Society and the Seal of Approval from the National Weather Association.

She has been integral to the design and execution of various weather equipment and presentation tools used across the market and often is tapped to travel to areas threatened by severe weather to help other meteorologists.

“As the force behind WKYC’s ‘Girls in STEM’ initiative, she has profiled amazing women and girls across Northeast Ohio, and we couldn’t be prouder of her efforts and impact,” said WKYC president and general manager Micki Byrnes.

Kling has been mentoring young meteorologists in her field for more than 15 years. In 2018, WKYC-TV tapped her to launch Growing Curiosity: Girls in STEM, a multiyear initiative to encourage and promote girls and women in the field.

“Betsy Kling, who has been at the Indians’ side for assistance in helping the club make wise weather decisions, seemed like the perfect person to capture the enthusiasm of young learners prior to a ballgame,” said Dennis Lehman, executive vice president of business for the Cleveland Indians. “So, with the help of special guests from the National Weather Service and her very talented co-workers, Betsy brings science to the students right here at Progressive Field, in a fun and unique way.”

Anjali Kottha is dogged about increasing the core competencies at GMS Registrar, which provides certification services in various IT fields, environmental management, health and safety.

“Anjali Kottha has demonstrated intellect, drive and leadership in assisting in the moving forward of quality processes and models for medical devices and the technical superstructure that surrounds them,” said William DeVault, COO of BPX Technologies. “The efficiency and safety of medical devices in the United States will owe much to her vision and persistence.”

GMS promoted Kottha from controller in 2016, when she became one of the youngest lead appraisers to earn CMMI (Capability Maturity Model Integration) certification for software development. She added to her skill set in 2018 with a CMMI Medical Device Discovery Appraisal Program certification through the Food and Drug Administration.

Kottha used the certifications to leverage the staff ’s biomedical engineering backgrounds and move the company into a new avenue of business. The certifications also helped the company decrease its reliance on subcontractors and increase overall awareness among employees.

She also strives to boost competencies of school-aged children by volunteering with Junior Achievement and serving the YWCA’s leadership development education series and as a science-fair judge.

CONGRATULATIONS JANICE MORRISON Congratulations

2019 Crain’s Notable Women in STEM

Krista Steedly Crain’s 2019 Notable Women in STEM

A pioneer in STEM education who has made it her personal and professional mission — and passion — to make STEM accessible to all learners in Northeast Ohio and around the globe.

Thank you, Krista, for your leadership in developing accounting and business advisory services specifically for women entrepreneurs.

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MORE INFORMATION: Lisa Rudy • lrudy@crain.com

2/21/19 3:52 PM

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NOTABLE WOMEN IN STEM Me’lani Labat Joseph

Crystal Miller

Chelsea Monty-Bromer

Anne Noonan

Title: Director of engineering, Leonard Gelfand STEM Center, Case Western Reserve University. Most recent education: Master of arts, University of Chicago

Title: Director, Center for Science Research and Engineering, Hathaway Brown School.

Most recent education: Ph.D., Case Western Reserve University

Title: Associate professor, chemical and biomolecular engineering, University of Akron.

Most recent education: Ph.D., University of Illinois Urbana-Champaign

Title: President and CEO, Omnova Solutions Inc. Most recent education: Master of science, University College Dublin, Ireland

Me’lani Labat Joseph leads programs that create opportunities for students from elementary to high school to engage with faculty, students and staff at Case Western University and community partners in STEM. Saying she believes in an “all-hands-on-deck” approach to exposing underrepresented minorities to STEM, Labat Joseph’s initiatives often include programming, app development, web development, robotics and 3D printing.

She directs the annual Engineering Carnival, which targets pre-K through eighth-grade students, and Girls Take Flight, an annual event in partnership with NASA and Girl Scouts of North East Ohio. Last year, she launched a one-week engineering camp for ninth-grade boys who graduate the REACH Program for African-American youth at University School.

“Me’lani and I co-created the Case Anatomy Camp 10 years ago and she has been a stellar partner,” said Susanne Wish-Baratz, associate professor in the Department of Anatomy at Case Western Reserve University School of Medicine. “Her enthusiasm, commitment and passion to providing enriching STEM learning opportunities to local youth has resulted in thousands of students having unique, hands-on and life-changing experiences in the camp.”

In addition to her work with youth, Labat Joseph takes time to mentor college students and has served on a variety of boards, including the MIT Black Alumni Association and Inner City Tennis Clinics, a summer program for youth.

Crystal Miller draws on years of experience to promote STEM career fields and help Hathaway Brown students grow professionally in them.

She provides two to three years of one-on-one mentoring and instruction to about 100 high school girls, teaching them how to evaluate research fields, locate professionals and meet researchers. She also places the students in labs where they work for two or three summers and weekly during the school year and guides them in writing and publishing their findings, which can lead to them winning national awards.

“She set an extraordinary scientific standard for all junior students in my lab and was instrumental in mentoring junior Ph.D. students and undergraduates,” said Heather Broihier, an associate professor of Neurosciences at the Case Western Reserve University School of Medicine. “These scientific and interpersonal skills have translated very well to her new position as head of the HB SREP (Science Research and Engineering Program).”

Miller’s students go on to major in STEM fields and graduate college in impressive numbers. Knowing this, she conducted a study of graduates of numerous Ivy League universities as well as Marshall Scholars, physicians and an Apache attack helicopter pilot.

She plans to publish and present those findings.

Miller keeps up with STEM industries as an adjunct instructor at Case Western Reserve University and through her involvement in numerous organizations, including the American Association for the Advancement of Science, Ohio Academy of Sciences and the National Coalition of Girls’ Schools.

Chelsea Monty-Bromer’s research includes developing portable micro-scale sensors to detect toxic compounds for environmental, medical, pharmaceutical and military applications.

She co-founded RooSense LLC, a startup that develops a wearable fabric sensor that monitors hydration and lactate levels in real time. She and her business partners participated in and completed the I-Corps curriculum.

The program by the National Science Foundation has so far awarded RooSense $225,000 because researchers report a “monitor that analyzes the sodium concentration of a person’s sweat would be able to notify them before they begin suffering from exercise-induced illnesses.”

“Dr. Monty’s cutting-edge technology is a great example of the exciting innovations coming out of the University of Akron,” said Jessica Sublett, COO of business incubator Bounce Innovation Hub. Monty-Bromer, a member of the National Association of Corrosion Engineers, American Institute of Chemical Engineers and American Society of Engineering Education, earned a place as an Air Force summer fellow for her work on microbiologically influenced corrosion.

In addition to her research, she is active in STEM education, participating in the University of Akron’s kids career-day program, which introduces young girls to STEM, and has led a chemical engineering day for the school’s summer camps for middle and high school-age girls.

Anne Noonan leads 2,000 employees at Omnova Solutions, which manufactures emulsion polymers, specialty chemicals and functional and decorative surfaces for clients globally.

Under her leadership, the company has transitioned to segments that reward innovation and customer value. Focusing on specialty innovations has helped improve the profitability and growth of Omonova, enabling further investment in the people and technology needed to stay on the leading edge. For instance, Omnova’s new environmentally friendly hydrophobic platform helped its customers launch new products in construction and tapes and adhesives.

Noonan actively supports and participates in organizations that prioritize STEM initiatives. She sits on the boards of the American Chemistry Council and the Greater Cleveland Partnership, which seek to address the shortage of workers with STEM skills.

Omnova also partners with Ohio State University, the University of Akron, Rice University and secondary and elementary schools, which has led to significant investment in research-and-development efforts and positively affected the careers of Omnova team members. Noonan encourages staff to share their time and knowledge with young people through school programs and educational competitions.

“Anne operates with the knowledge that there are many people in our communities facing difficult challenges. In response, she is a strong supporter of promoting educational opportunities through the efforts of the Omnova Foundation,” said Marshall Moore, chief technology officer and senior vice president of operations for Omnova.

Well done, Gail!

Congratulations Gail Steward Thank you for your leadership and mentoring. You lead by example at Findley and in your volunteer work in the community.

A Cancer Center Designated by the National Cancer Institute

We’re very proud of you!

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NOTABLE WOMEN IN STEM Janice Morrison

Jennifer Palinchik

Karen Plaster

Svetlana Pundik

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Title: President and managing partner, TIES (Teaching Institute for Excellence in STEM).

Most recent education: Master of arts, George Washington University

Title: President, Jalex Medical LLC. Most recent education: Master of business administration, Ashland University

Title: Associate professor of practice and co-director of the Urban STEM Center, University of Akron. Most recent education: Master of science, University of Akron

Title: Director of Brain Plasticity and Neural Recovery Research Laboratory, Louis Stokes Cleveland VA Medical Center. Most recent education: Master of science, CWRU

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Janice Morrison is dedicated to transforming STEM education to make kids’ lives better, said Joe Merlino, president of the 21st Century Partnership for STEM Education.

She motivates everyone she encounters to work collaboratively on ways to transform STEM learning. She and her team have worked with the Wilson Foundation, Chevron, Siemens America, NASA, Virginia Tech, North Carolina New Schools Project, state governments and others seeking to develop STEM networks, platform schools and programs.

Her team of 30 consultants organized the Race to the Top STEM Conference that educated 30 states on the importance of STEM education and public-school transformation.

Over the years, her work has included collaborating with Cleveland visionaries to design the MC2 STEM High School, partnering with the Bay Area Discovery Museum to launch the early childhood Digital Fabrication Lab, designing the El Maadi STEM School for Girls in Egypt and participating in last year’s federal STEM Summit at the White House that resulted in a strategic plan: Charting a Course for Success: America’s Strategy for STEM Education.

“Jan believes that every student can be successful if we don’t fail them. Her genuine empathy for teachers, teaching and learning is an important core value of hers that helps shape her business model,” said Toby Bothel, owner of TAB Education Partners and director of engineering, design and fabrication for TIES.

Before Jennifer Palinchik co-founded medical device company Jalex, she performed artificial pancreas and kidney stem-cell research for animal studies and clinical trials.

A specialist in the spine industry, Palinchik expanded her knowledge to include neurology, general surgery and 3D printing. She works with the Food and Drug Administration to achieve clearance for related devices.

Jalex has seen strong year-over-year growth under Palinchik’s direction. She’s developed partnerships with other medical device companies to bring products to market as joint ventures and also expanded the company’s offerings from design engineering to regulatory affairs and quality management solutions.

“I knew she would be the one that I would work with in the future on putting an FDA submission together. I was impressed by her knowledge and expertise with the regulatory process and appreciated her understanding of a startup company’s needs,” said Karl West, director of Medical Device Solutions for the Cleveland Clinic.

About 80% of the engineers Palinchik has hired at Jalex are women. In 2018, Cleveland State University selected her as a panelist for a discussion on advancing the role of women in science, technology, engineering, the arts and math.

Possessing a rare ability to demonstrate to STEM teachers how they can maintain the attention of middle-grade and secondary students through practical-application activities, Karen Plaster took that a step further by designing and developing a course for teachers to incorporate engineering into traditional science and math programs.

“Professor Plaster … has routinely found ways to merge the interests and talents of the STEM fields at the university and channel them into her education classroom and create new methods of instruction,” said Jarrod Tudor, interim dean of the LeBron James Family Foundation College of Education.

Plaster promotes STEM through presentations about robotics, makerspaces and interactive math activities, as well as programs such as Think Tank to Shark Tank and Engineering for Educators, which guide teacher candidates and current teachers on how to best convey content and keep students motivated and focused.

The industrial engineer-turned-educator also regularly works directly with elementary through high school-age students through the Girls Who Code Club and the annual Code Girls and Code Hopper events. She directs the First Lego League science and engineering activities for fourth- to ninth-grade students.

Plaster also serves numerous community organizations, including the National Council of Teachers of Mathematics, National Science Teachers Association and Northeast Ohio Robotics Alliance (NEOHBots), which supports FIRST robotics programs in the region.

“Karen’s participation within the organization and on the NEOHBots Board has been instrumental in the pursuit of our mission and the success of our programs,” said Louis Spilker, owner of Syllogistics LLC.

The medical director of the Cleveland VA Medical Center Stroke Team does more than just treat stroke patients.

“Svetlana Pundik is a rare individual who treats stroke and other neurological disorders as a physician while also being on the cutting edge of developing new and effective rehabilitation treatments for these disorders,” said Robert Kirsch, chair of Biomedical Engineering at Case Western Reserve University.

With some 800,000 Americans suffering strokes yearly, Pundik, who is also an assistant professor of neurology at CWRU, examines ways to improve their quality of life after a stroke. Her research includes combining Transcranial (brain) Direct Current Stimulation and gait training in a treadmill-based, virtual-reality environment to help restore walking functionality.

In addition, she is a member of the American Academy of Neurology and American Society for NeuroRehabilitation, sits on the editorial board for the Journal of Restorative Neurology and Neuroscience, and is an ongoing peer reviewer for several journals, including the Journal of NeuroEngineering and Rehabilitation and Disability and Rehabilitation.

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NOMINATIONS OPEN FOR Crain’s Cleveland Business will single out 20 up-and-coming professionals who haven’t turned 30 yet. While their names might not be top of mind and they likely haven’t made their first million yet, there’s no denying these young professionals are making a mark on Northeast Ohio.

Do you know a 20-something we should know about?

NOMINATION DEADLINE: MARCH 11 | ISSUE DATE: JUNE 24

Visit CrainsCleveland.com/Nominations to nominate P019_P025_CL_20190225.indd 24

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NOTABLE WOMEN IN STEM Autumn Russell

Kathleen Sarli

Krista Steedly

Gail Steward

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Title: Executive director, Early College, Early Career (ECEC), Manufacturing Advocacy & Growth Network (Magnet). Most recent education: Ph.D., Capella University

Title: Director of planning, Northeast Ohio Areawide Coordinating Agency (NOACA).

Most recent education: Master of business administration, Lake Erie College

Title: Supervisor, audit and assurance, Apple Growth Partners.

Most recent education: Master of science, Liberty University

Title: Managing consultant, Actuarial, Findley Inc. Most recent education: Master of arts, Kent State University

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Autumn Russell develops strategy and directs an innovative pre-apprenticeship program to help inner-city and rural high school students connect to careers in manufacturing.

“Autumn is an outstanding addition to the Magnet team, taking over the ECEC program at a critical time,” said Magnet CEO Ethan Karp. “Under her guidance and leadership, the ECEC program is growing and flourishing. Through Autumn’s commitment to training Northeast Ohio’s next generation of advanced manufacturing workers, the future of our region’s manufacturing industry is in good hands.”

Prior to joining Magnet, Russell was team lead in the Office of Academic Distress Commissions and Education Reform for the Ohio Department of Education, where she assisted in development and implementation of the state’s mandated district review process for low-performing school districts.

Under her direction, Magnet’s ECEC program weaves together eight independent programs into a comprehensive career pathway.

That includes career awareness in ninth and 10th grades, earn-and-learn apprenticeships in 11th and 12th grades, college credit and manufacturing certifications, parent and educator engagement, employer tuition-reimbursement programs and mentorship support.

So far, Russell’s team of six, which works with seven high schools, has placed 79 paid interns with 10 employers.

As chief engineer of NOACA, which represents 2,890 miles of roadway, Kathleen Sarli ensures the completion of transportation and environmental projects, programs and studies.

“She has a diverse technical background that enables her to plan for the future of transportation in Northeast Ohio using various perspectives,” said Michael Kubek, transportation systems planning manager for NOACA. “Kathy empowers her employees to improve, innovate and excel. Her calm demeanor and solutions-focused approach establishes an environment to quickly and efficiently address challenges as they arise.”

Sarli, who oversees 21 planners and engineers, was instrumental in developing NOACA’s transportation asset management plan to help prioritize funding decisions. She also directs the Transportation for Livable Communities Initiative, which helps fund and implement planning studies for improvements to transportation systems and the neighborhoods they support.

Stepping into the future of transportation, Sarli is project manager for the Great Lakes Hyperloop Feasibility Study. Set to be completed this year, the study is evaluating the viability of an ultra-high-speed hyperloop passenger and freight transportation system that initially would link Cleveland and Chicago and ultimately become a network to the East Coast.

As in-house expert in employee benefit plan audits, Krista Steedly audits financial statements and acts as a consultant for clients. Specializing in accountancy and assurance for construction and real estate, manufacturing and employee benefit plans, her work showcases the power of math in the business setting to help companies achieve healthy growth.

Steedly also seeks to foster the success of other women in business. In 2018, she conceived a plan to reach out to female entrepreneurs and help them launch or further their businesses through curated services offered by women accountants.

“On the technical side of things, Krista does a great job organizing our training programs and is committed to help our group continuously improve. In addition to her work with launching the women business owner initiative, she also began co-leading our firm’s employee benefit plan niche in 2018,” said Susan Burnoski, director of assurance for Apple Growth Partners.

Steedly is actively engaged in Apple Growth’s recruitment initiatives and its charitable giving fund committee, which supports financial literacy for area nonprofits.

Her work in the community also extends to mentoring third-grade girls through the South Akron Youth Mentorship (SAYM) program. And she recently became involved with the nonprofit’s Youth Employment Program, which teaches high school students about finances, budgeting and interviewing.

“Krista Steedly has been an incredible example of consistency and steady love, not only for our girls that she mentors but the other women that are a part of our mentoring organization,” said Ron Kent, program director of SAYM.

Gail Steward leads a team of 20 actuaries and analysts in helping business leaders determine how much money they need to contribute to retirement plans and assists them in preparing frozen pension plans for termination.

She develops calculations and scenarios to determine the right time to merge pensions plans for clients with multiple plans due to acquisition. She also helps clients dissolve legacy plans and manage post-retirement medical plans.

Steward’s work doesn’t just benefit Findley clients. Her re-engineering of corporate procedures was key to a project integrating data from a company Findley acquired.

Matt Klein, principal and Ohio actuarial practice leader for Findley, called Steward a natural teacher who can communicate complex mathematical concepts to actuaries and non-actuaries alike.

To encourage and inform students about actuary careers, Steward established a relationship with a local high school that allows students to shadow members of the firm.

Outside the office, she is president of the board of directors for Malachi Center, a nonprofit serving homeless people, and provides after-school and summer programs for at-risk children.

“Gail managed Malachi Center’s financial forecasting, reporting and accountability as treasurer of the board of directors, 2014 to 2017. She was also instrumental in the renovation of the after-school program computer lab and its conversion to cloud-based operating,” said Malachi Center executive director Shauna Sanders. “In 2018, she advocated for expanding the literacy program to cover Mad Science Tuesdays and digital literacy for the after-school program.”

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NOTABLE WOMEN IN STEM Standish Stewart

Denise Su

Dawn Taylor

Meridith Witt

Title: Vice president of information technology services and the chief information officer, Cuyahoga Community College. Most recent education: Master of business administration, Cleveland State University

Title: Director of partnerships and programs and head of paleobotany and paleoecology, Cleveland Museum of Natural History.

Most recent education: Ph.D., New York University

Title: Research scientist/principal investigator, Cleveland Functional Electrical Stimulation (FES) Center of Excellence, Louis Stokes Cleveland VA Medical Center. Most recent education: Ph.D., Arizona State University

Title: Professor of physics, Baldwin Wallace University.

Most recent education: Master of science, Cleveland State University

Standish Stewart earned a promotion to her current position last year for demonstrating strengths in innovative and creative thinking, strategic planning, relationship building, project leadership and team building.

She is responsible for the strategic and operational advancement of 62 full-time employees in the areas of project management, network services, data operations, enterprise resource planning, enterprise application services, the office of safe and secure computing and desktop support.

“Standish is exacting in her quest to bring meaningful IT solutions to complex situations,” said Terri Pope, Westshore Campus president of Cuyahoga Community College.

“She was a key lead in Tri-C’s One Door initiative. This collegewide initiative used Appreciative Inquiry to streamline our college processes and create a more student-centered experience. Standish inspires confidence and is my go-to expert for new challenges.”

The One Door initiative ensures all employees have access to critical student information. Stewart also led the development of the college’s new public website.

Her team works to assist students by holding weekly Technology Tables to answer questions and offer solutions. In addition, they support the school’s High Tech Academy high school students through informative, interactive activities in STEM fields.

Throughout her professional career, Stewart has also made time to teach IT courses at Walsh University, Cleveland State University and Bryant & Stratton, helping to shape the careers of future STEM and IT leaders.

The business problems at the heart of Denise Su’s work as an expert in paleoecological reconstruction involve the challenges humankind faced millions of years ago.

Su, who leads a team of 30 educators, researchers and other staff, has been scouting Ethiopia for 5 million- to 10 millionyear-old rock exposures that will provide clues to what the environment was like before hominids diverged from their common ancestor with other primates.

“In so many ways, she demonstrates what our museum is all about, helping us connect with new audiences and to connect with existing audiences in new ways,” said Sonia Winner, president and CEO of the Cleveland Museum of Natural History. “In everything she does, she serves as an inspiration to peers and colleagues, and as a role model for future generations.”

Su also strives to encourage more girls and young women to pursue scientific careers through International Women and Girls in Science Day, which includes hands-on activities and the opportunity to meet and learn from museum scientists.

“Her knowledge and experience make her an expert guest and invaluable contributor, and her enthusiasm when it comes to introducing, incentivizing and including girls of all ages into the world of STEM is absolutely infectious,” said Micki Byrnes, president and general manager of WKYC-TV.

Dawn Taylor’s innovative research has two main focus areas.

“Dawn Taylor has been a pioneer in the development of brain-computer interfaces for 20 years and continues to make contributions to the understanding of brain function and to the development of treatments to compensate for brain injuries,” said Robert Kirsch, executive director of the Cleveland FES Center and professor, biomedical engineering, Case Western Reserve University.

Taylor’s first area of focus is developing technology to predict one’s intended movement in real time and then generate the desired movement in the person’s paralyzed limbs through brain stimulation. Recently, her lab has shown the brain can relearn how to control the muscle stimulators directly, thus greatly simplifying the algorithms and technology required to restore movement by thought.

Her second area of study is improving brain-stimulation technologies used to treat Parkinson’s disease and understanding how exercise and sensory feedback training can help reduce its symptoms.

She serves as a member of several industry groups, including the Society for Neuroscience, International Functional Electrical Stimulation Society, Brain Computer Interfacing Society, Biomedical Engineering Society and Women in Neural Engineering.

Taylor also helps advance the careers of women by mentoring and collaborating with early-stage female researchers who have been successful in establishing their own independent research careers at research companies, medical device firms, universities and clinics.

Possessing the rare ability to motivate her students to apply themselves, Meridith Witt has been instrumental in increasing the teaching of problem-solving courses at Baldwin Wallace University. As a result, BW increased the frequency with which it offers those courses.

“Meridith has brought great presence to the Department of Physics and become an essential contributor to the life of that department and to the School of Natural Sciences, Mathematics and Computing,” said James McCargar, dean of natural science, mathematics and computing at Baldwin Wallace.

Witt regularly hosts problem-solving competitions for middle and high school students. In 2018, she presented the YWCA STEM summer program for 20 girls from Warren High School. She also led a problem-solving workshop for the COO and other managers at J.P. Farley Corp., which administers employee health benefit plans.

“I had Ms. Witt for general physics and she helped me realize how much I love physics,” said former student Erika Davidson. “She taught me to be confident in my work and defend myself when I thought my answers were right even though others were telling me they were wrong. She gave me the determination I needed to work hard enough to get an A in her class and made me confident that my dream in going to medical school is something I can actually achieve.”

NOMINATIONS OPEN FOR

WOMEN OT E N F O 2019

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

NOMINATION DEADLINE: APRIL 1 | ISSUE DATE: JULY 15

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Spectrum Reach proudly welcomes Michelle Qualls as their new Sports Sales Manager for Northeast Ohio. Michelle has 20 years of media experience with previous positions at FOX Sports Ohio, Clear Channel Communications and CBS Radio. Her role at Spectrum Reach is to develop and manage new business opportunities for SportsTime Ohio and the additional sports networks Spectrum Reach represents.

Chalana Williams has been promoted to Vice President, Community Development.

Chalana’s responsibilities include increasing lending, servicing and investment opportunities in the communities in which First Federal Lakewood conducts business. She works closely with community development corporations, city officials and community stakeholders.

Chalana serves as Chairperson of the Warrensville Heights Area Chamber of Commerce and is on the board of Shoes and Clothes For Kids.

Planned Parenthood of Greater Ohio

Gallagher Sharp is pleased to announce the addition of Clark Rice as a Partner in our Cleveland office.

An experienced trial attorney, Clark represents clients in construction litigation, property damage, bodily injury, and other civil litigation. He has experience with complex construction defect claims involving the interests of contractors, subcontractors and owners. For more information, visit www. gallaghersharp.com.

Gallagher Sharp is pleased to announce the addition of Bob Koeth as a Partner in our Cleveland office.

Bob is a trial attorney who defends businesses, insurance carriers, and individuals against claims involving personal injury, property damage, and wrongful death. His experience spans several practice areas including product liability, premises liability, construction law, commercial litigation, environmental, and condo & homeowners associations. Visit www.gallaghersharp.com.

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Cavitch Familo & Durkin

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McGregor Foundation

Cavitch Familo & Durkin announces John Tullio has been elected to shareholder at the firm. John is an attorney with the firm’s Estate Planning Group. His practice covers a range of services, from planning and drafting, to trust and estate administration. He implements complex plans involving the use of multi-generational, charitable and various grantor trusts, with other advanced planning techniques. John also assists his clients with the modification/ termination of existing trust arrangements.

Cavitch Familo & Durkin announces Jennifer Loan has been elected to shareholder at the firm. Jennifer is an attorney with the firm’s Business Practice and Estate Planning Groups. Her practice focuses in the areas of federal/ state/local tax planning and controversies, estate planning, and mergers & acquisitions.

Jennifer works on tax-related matters and advises clients on multi-generational wealth preservation and transfers. She has a Master of Taxation and is a Certified Public Accountant.

Wegman, Hessler & Vanderburg

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Ms. Nicole Bush recently joined Wegman, Hessler & Vanderburg. She brings an extensive background in handling matters involving divorce, dissolution, custody disputes, and child support. Her addition to the Domestic Relations and Family Law Department is exciting for clients and colleagues, as she brings passion and energy to her role as a vigorous advocate. Nicole earned her J.D. from ClevelandMarshall College of Law and is an active member of the Cleveland Metropolitan Bar Association.

The McGregor Foundation is pleased to announce Lee Ann O’Brien’s promotion to Chief Marketing Officer from her previous role as Director, Community Relations, Special Projects & Planned Giving. With characteristic vision and ingenuity, Lee Ann has been instrumental in brand development and creative endeavors among the expansive business lines of the organization. Ms. O’Brien brings enthusiasm, integrity and a broad perspective throughout her experience in both for profit and non-profit business.

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Planned Parenthood of Greater Ohio is proud to announce that Lauren BlauveltCopelin has been named Vice President of Government Affairs and Public Advocacy. At Planned Parenthood, Ms. BlauveltCopelin is the primary legislative contact for Planned Parenthood Advocates of Ohio, Planned Parenthood of Greater Ohio, and Planned Parenthood Southwest Ohio Region, supervising Public Affairs and the State Field Organization.

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CONTINUED FROM PAGE 1

The magazine’s broader look at real estate values found that values on redeveloped waterfronts increased at nearly twice the pace of land beyond the waterfront.

The city of Cleveland has had a 50year Waterfront District Plan since 2004, and its implementation is a valued goal for Mayor Frank Jackson.

“It is extremely important to Mayor Jackson and his vision of a user-friendly, accessible, attractive lakefront for Cleveland that the activity and investment we see being made on the West Side — where Edgewater Park is the primary focus — that it expand to the East Side as well,” said Edward Rybka, the city’s chief of regional development. “The investment (Cleveland Metroparks) has made at Edgewater Park is helping to leverage some of the significant private investment taking place in the Detroit-Shoreway neighborhood.”

But execution has been slow. Still, there is movement. Rybka said the city even intends to begin looking at the future of Burke Lakefront Airport, though the city still believes aviation can survive on the 450 acres of lakefront land for now.

“I think we’re at a point now where we think it’s time to address a master plan for Burke and its properties,” Rybka said. “The thought is that we need to take a closer look at the whole thing and figure out what is this going to be in 10 years, 15 or 20 years?”

He said that a master planning process is not likely to begin until 2020, after completion of the master plan for Cleveland Hopkins International Airport, which is just beginning.

Pace, who, with Dallas developer Trammel Crow Co., won the rights to develop 28 acres of lakefront north of FirstEnergy Stadium and east to the foot of East Ninth Street in 2014, has finished a modest first phase of a plan for the land: a restaurant and a 16-unit apartment complex, Harbor Verandas. When Pace and Trammell Crow won the right to create a redevelopment plan, the city envisioned a new neighborhood with 1,000 apartments, 80,000 square feet of office space and 50,000 square feet of retail space.

Last May, Pace asked the city for a year’s extension on breaking ground for the next phase, which is on land that had been docks north of the stadium. That extension expires in June.

One stumbling block to development of the downtown lakefront has been poor access.

To make the lakefront more accessible, the city in 2014 announced plans for a quarter-mile pedestrian bridge that would link the lakefront at North Coast Harbor — near the Great Lakes Science Center and the Rock & Roll Hall of Fame — to the Mall. Cleveland pledged $10 million of city money, Cuyahoga County pledged $10 million and the state of Ohio $5 million.

That plan was abandoned last year, but nothing is in place yet to replace it, though the Green Ribbon Coalition has made a proposal. Its idea is to build what’s called a land bridge, or deck park, that would begin at the Mall and land near the Great Lakes Science Center and the Rock Hall.

The plan involves 5.3 acres of landscaped green space spanning railroad tracks and the Shoreway.

Dick Clough, chair of the group, has discussed the idea with city offi-

cials, who appear to like the idea — except for the cost, which would be far beyond the $25 million already committed.

“I shared that with the mayor,” Rybka said. “And if, you know, money was no option, I think that’s the idea we would embrace: something that is a real pedestrian-friendly place creating a connection from downtown to the lake.

The land bridge is one concept around which the coalition is building its planned summit.

“We really are going to address the notion of bringing all the stakeholders together and come away in August with at least a series of understandings about the balance between commercial and green development, as well as a funding strategy,” said Clough, who added the group has several hundred members. “And I think we want to incorporate into that a view on what the future of Burke Lakefront Airport is.”

‘Small, progressive steps’ The coalition was formed several years ago by the merger of three groups: the Cleveland Waterfront Coalition, Lakefront Development Corp. and the Cleveland Lakefront Parks Conservancy.

“We’d actually have an implementation strategy so that that summit just didn’t produce a document that gets shelved,” Clough said. “We’d actually look at projects that we could implement immediately. It could be small — you know, small, progressive steps work towards the goal.”

The coalition has developed plans for key areas along the lakefront in addition to the connection to North Coast Harbor. It's also looked at an expansion of Gordon Park at the east end of the lakefront and is working

“I think we’re at a point now where we think it’s time to address a master plan for Burke and its properties.”

— Edward Rybka, Cleveland’s chief of regional development

on plans for bike-trail enhancements and pocket parks along the lakefront, including one adjacent to the dormant Cleveland Public Power plant.

The coalition and the city are both eyeing the site that until recently was home to a FirstEnergy power plant.

The century-old power plant, on 57 acres on the south side of the East Shoreway east of East 55th Street, was closed in 2015 and demolished in 2017.

The power company did some cleanup, but the land is in a very raw state.

“The verdict is still out on what the future (of the FirstEnergy site) is going to be,” said Cleveland city planning director Freddy Collier. “We went through a planning process with FirstEnergy to really start to examine what are some of the possibilities.

Some of the thoughts that came out of that process included, obviously, green space expansion, (as well as) potential opportunities for residential, but also some possibilities around economic development and job opportunities.”

The Green Ribbon Coalition also has a bigger dream for that piece of the lakefront. It would like to see the section of the East Shoreway north of the plant moved south onto the FirstEnergy property, opening up more recreational land along the lake. That, Clough said, is an idea he’s

broached with the city.

Collier has heard the coalition’s idea, but he’s dubious about the likelihood of moving the Shoreway, given the struggle the state, which is responsible for that section of road, is having with infrastructure financing.

“As we were going through the planning process, it was not off the table,” he said. “I think there’s nothing wrong with having the ability to dream big, but we want to make sure that we are moving in a direction where we can actually execute projects and get things done.”

It’s no surprise that many of these ideas are frustrated by the East Shoreway, as well as by the railroad tracks to its north.

“The highway is a big problem. We totally messed up our lakefront in so many ways. Commuters have really been favored, and it might be time to rethink it a little,” said Angie Schmitt, a Clevelander who is an editor and blogger for Streetsblog USA, a website that focuses on urban development and transportation.

Schmitt is skeptical of the city’s plans because she believes things like moving the Shoreway are cost-prohibitive.

“I haven’t looked at the traffic studies, but moving the highway — that’s just being completely, completely impractical,” she said. “It would be a really expensive — really expensive — undertaking.”

She said she believes the city should put a greater focus on its neighborhoods.

“The biggest issue in Cleveland is we have these neighborhoods that are not doing well, and I don’t understand why investing more in in them isn’t a civic priority,” she said. “It’s what we really need now.”

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Water industry is drinking in software from Akron company

ReLink helping hospitals clear out the clutter

By Dan Shingler

clbfreelancer@crain.com

dshingler@crain.com @DanShingler

Akron’s got another software startup that appears to be gaining traction, although treading water — in a good way — might be a better way to put it.

Fontus Blue, which moved into the downtown Bounce Innovation Hub in June, doesn’t make the sort of app most people will ever use, though millions may taste its results.

The company’s offering, Decision Blue, is a subscription-based software as-a-service product that helps water-treatment plants address issues and produce water that consistently exceeds testing requirements by providing treatment formulas and regimens based on real-time modeling.

“For a little while, Fontus was a hobby. It’s no longer a hobby, with employees and payroll and all that,” said Chris Miller, a University of Akron associate professor who started the company in 2011.

A civil engineer by background and with a family history of small business ownership in his native Iowa, Miller has five employees helping him. He also contracts outside help with some of his software’s interface coding. He and his staff do all of the coding for the parts of the system that handle water and chemistry technology.

Miller’s customer count is rising fairly fast and broadly. Fontus Blue counts 25 cities or their water suppliers among its clients, including Akron and St. Louis.

“We’re actually in nine states and Canada, and soon to be also officially in Brazil,” Miller said.

Revenue is on the rise, too. Revenue was $300,000 in 2018, but already has topped $400,000 this year, Miller said. He’s projecting more growth through 2019 and beyond.

“Our goal this year is a million dollars … and I’m fairly confident we’ll get there,” he said.

The growth so far has come without focused marketing efforts, he noted. Contracts with big water companies that work for cities have helped spread his software across the U.S., while treatment equipment makers and academics familiar with Fontus Blue have introduced the company to customers in Nova Scotia, Canada and Sao Paolo, Brazil.

There are also some big trends that Miller thinks will increase demand for the system. Recent water issues such as the lead poisoning in Flint, Mich., and the shutdown of Toledo’s entire system due to algae-related toxins have made people hyperaware of water-quality issues, he said.

Those issues aren’t going away either, as pollution and other factors continue to make algae a major concern and aging infrastructure and plumbing systems continue to present risk, he said.

All of that, plus increasingly stringent testing requirements, make life challenging for treatment plants, Miller said.

Many water plants, especially in smaller cities, don’t employ their own chemists or maintain their own labs. They treat by formula and estimates, often unsure what result they’ll get from a certain chemical application, Miller said, and at least

P029_CL_20190225.indd 29

one plant operator agreed.

“It would be like me trying to figure out Chicago without my mobile phone now and no map,” Miller said.

“I’d have almost no chance.”

Miller said Decision Blue takes the guesswork out of the equation by telling operators exactly what will happen to their water quality if they apply certain chemicals in specific amounts.

It also allows them to use fewer chemicals because they aren’t overtreating the water. Miller is counting on that as a big selling point, and it’s something that will increase margins.

For example, he said, St. Louis pays about $20,000 a year for the service. The subscriptions are priced based on the size of the facility. St. Louis is the largest city using Decision Blue so far. But Miller estimates the city has reduced its chemical costs by $300,000 to $400,000 a year since it began using the software. He thinks that will carry significant weight when he raises subscription prices, something Fontus is planning but not announcing yet, he said.

George Ginnis, production manager for Aqua Ohio’s Struthers Division, said his team is using Decision Blue to treat water more economically in Poland, Ohio, just southeast of Youngstown. The software provides modeling that shows how a treatment regimen will work in advance.

He used to have to wait a day for test results after a chemical application to judge its effectiveness, he said.

Ginnis and Aqua Ohio have to stay on top of a lot of things, but harmful algae blooms are his biggest concern recently. He said Decision Blue allows him to decrease the use of expensive carbon to treat toxins from algae blooms. The system can treat and deliver as much as 5.7 million gallons of water per day to customers in the surrounding area, which it gets from a nearby lake, and has never had to issue a do-not-drink order, he said.

A 29-year industry veteran, Ginnis said he was “extremely skeptical” when Decision Blue was installed.

“It’s been accurate with regards to where we’re at with everything.

When you work with something, it takes a while to build the trust up. …

But the software is pretty accurate, and now it gives me a level of comfort,” Ginnis said.

Miller said Fontus Blue is ready to begin marketing in earnest, and he’ll likely try to raise some capital this year. So far, he’s gotten by with only a $50,000 loan from the Great Lakes Innovation and Development Enterprise at Lorain County Community College and about $100,000 from angel investors, including via the University of Akron Research Foundation’s (UARF) ARCHAngels group.

“We’ve used those to do what we need and bootstrapped so far,” he said.

He might not have much trouble raising the money. His current investors seem happy.

“Everybody at UARF has been excited to see all the progress they’ve made over the past few years and has high hopes for his continued success,” said Elyse Ball, assistant counsel and project manager at UARF. “To see them gaining all this traction and getting some much-deserved recognition is exciting.”

By Judy Stringer

Many of us — at least the 1% who have not yet “tidied up” under the spell of Netflix clutter guru Marie Kondo — can relate to the pain of storing stuff we just don’t use anymore.

Spare bedrooms and basements are littered with old recliners, boxy TV sets, rusty weight benches and forgotten instruments, records and books.

Hospitals have the same problem, according to Jeff Dalton, president and CEO of reLink Medical in Twinsburg Township.

Only “times a thousand in terms of time and value and complexity,” he said. “Some of this medical equipment is dangerous. It might be a biohazard or have environmental issues.”

Then there’s the legal obligation to safeguard patient health information, which can be stored inside electronic devices.

Partnering with his father, Ray Dalton, Jeff Dalton co-founded reLink in 2015 to help medical officials sell, scrap, recycle or otherwise safely discard retired hospital equipment. The duo previously spawned and nurtured PartsSource Inc., an Aurora medical device parts broker, which they sold in 2017.

In four years, reLink has seen triple-digit growth, according to Jeff Dalton. The 40-person company will bring in $10 million in revenue this year, and late last year, it left the 25,000-squarefoot Aurora site where it began for a 75,000-square-foot building off Enterprise Parkway in Twinsburg Township.

ReLink’s new home includes a 65,000-square-foot warehouse where incoming CAT scanners, hospital beds, infusion pumps, colonoscopy cameras, surgical headlights and about any other equipment once used for patient care is sorted, photographed, inspected and digitally cataloged. Items with little or no value are disassembled for parts that can be sold or recycled.

Everything else, about 65% of the inbound products, is assigned an aisle in the warehouse “showroom” and logged into reLink’s sales channels, which range from phone marketing and online auctions to live auctions and liquidation sales.

“Every product will go through each one of our channels, forcing it out,” Jeff Dalton said. “Even if we ultimately have to recycle an item, we will turn this entire space in less than 90 days.”

Recycling or landfilling, however, is a last resort. Because reLink works on consignment, “nobody makes money” if it can’t find a buyer for the 5,000 pieces a month it salvages from hospitals, according to the CEO. “My pitch to hospital clients is that we will try our best to get as much value out of it as we can,” he said.

“It’s like they sort of got this hidden savings account they did not know they had,” added Ray Dalton, reLink’s executive chairman and managing partner.

“We have accounts where we are giving back $300,000, $400,000, $500,000 a year to them, and it’s real money.”

The transition from selling new medical parts to used medical equipment was a natural one. Jeff Dalton said he and his father had turned over daily operations of PartsSource in 2014, recognizing they were better

Father and son Ray Dalton, left, and Jeff Dalton started reLink Medical in 2015. (Shane Wynn for Crain’s)

suited for “startup mode.” Yet, one thing they took away from working with clients during more than a decade of running PartsSource was that “hospitals did not know how to handle getting rid of their old stuff,” he said.

“They are almost paralyzed to take action because they don’t know what to do,” Jeff Dalton said. “Many hospitals, and I was really surprised by this, actually have storage facilities for excess medical equipment.”

Ray Dalton said an important part of reLink’s value proposition is the “dirty work” of collecting and managing hospital dispositions, including compliance with patient data and biomedical waste regulations, as well as internal near-zero landfill commitments.

Still, an equally big benefit is the company’s software platform. Ray Dalton said reLink has invested more than $1 million in the development of software that allows hospitals to track each item the company takes from their ownership.

“We really are more of a software company that happens to do disposition, and we have to do the disposition in order to add content to the software,” he said.

The asset-tracking platform not only tells hospital administrators what became of their retired equipment, but also which used devices are nearing disposition or need servicing. By having a better picture of

their products’ lifecycles, hospitals eventually will be able to replace equipment before it loses too much of its value and improve profitability through smarter procurement patterns, Jeff Dalton said.

Getting inside hospital buying strategies, however, is just part of reLink’s growth plans. Jeff Dalton said the company plans to have 60 employees in Twinsburg Township within the next five years and by the end of 2019 open operations in one or two regions beyond the six-hour radius serviced by its Summit County base. Prospective satellite locations include Indianapolis, Philadelphia, Atlanta and Memphis, he said.

Ray Dalton said he expects most of that remote growth to come from acquisitions or partnerships with businesses that already perform some aspect of reLink’s sales channels.

The Daltons also would like to see their startup evolve into a more buyer-centric play by, for example, renting warehouse space so that international customers — about one-quarter of its buyers — can fill large shipping containers over time rather than incurring the costs of smaller, individual shipments. Or, Jeff Dalton said, it “could create a dedicated web-based platform for regular buyers and reduce reliance on intermediaries like eBay. “Why can’t we build an Amazon for excess medical equipment?”

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CRAIN’S CLEVELAND BUSINESS

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Jason Dodson

Chief of staff, executive cabinet; Summit County You can’t cover Akron and Summit County — at least not very well — without knowing Jason Dodson. ¶ At 39, Dodson has helped two county executives navigate the challenges of their office: the current top elected official, Ilene Shapiro, and her predecessor, Russ Pry, who tragically died in office in 2016. ¶ Dodson has run for office himself, losing a city council election in 2003 but winning a seat on Mogadore’s village council in 2007. ¶ He said he prefers it behind the scenes and away from the cameras, though. Dodson enjoys combining his law degree with his passion for politics and desire for public service more than campaigning or giving speeches, he said. ¶ We caught up with him on a recent day off for a federal holiday – his is not a job with regular hours, he explained. It was the perfect opportunity for a casual lunch. Our conversation was seasoned with folks who came by the table to see Dodson and catch up on events at the county or let him know their concerns, something that’s hardly unusual for him. — Dan Shingler

The Dodson file Movie “American Gangster”

Book “1984,” by George Orwell

Sports team Browns

Weekend getaway PNC Park for a Pittsburgh Pirates game

Best person he ever met?

His wife, Stephanie

Lunch spot Ido Bar & Grill 1537 South Main St., Akron 330-773-1724

The meal One had the Kate's Cobb Salad; the other had an Ido Burger with fries.

Each had a soft drink.

The vibe The Ido has been a local burger institution for decades. It's casually homey and often filled with regulars.

It isn’t fancy; it's just a well-kept local tavern with great burgers.

The bill $23.77, plus tip

Where do you live in Akron?

Highland Square. We just moved there in July. I lived in Mogadore for 14 years prior to that.

And where are you from?

I grew up in Louisville, down in Stark County.

Did you grow up in a rural area?

Depending on who I talk to. People who grew up in or around Akron will think it’s more rural than it is. But other than one year that we lived in what most people would consider “the country,” I always lived inside the city. … I grew up with kids who lived in the city who walked to school, and I grew up with kids who got out of school and went home and farmed.

What was childhood like? Did you come from a big family?

Growing up, I had one younger sister.

Dad was a maintenance guy at a company by the name of Portage Electric and then Nickles Bakery, so I came from a union family. He was active-duty military when I was born and then was National Guard through my upbringing. … I had a stay-athome mom, but she had part-time jobs and things like that.

Where did you go to college?

University of Akron for both undergrad and law school. I went basically straight through with seven years of college. I had a political science undergrad and then got my law degree (2001 and 2004).

I have to ask: Why are you wearing a Pittsburgh Pirates sweatshirt?

My dad was from that area, kind of

like the West Virginia-Pittsburgh area. I grew up a Browns fan — I’m a season-ticket holder — and an Indians fan. But I’m also a Pirates fan … but I’m not a Steelers fan in any way shape or form. Just the Pirates.

How did you get into politics?

I was in college and was president of the University of Akron College Democrats. My junior year, instead of doing anything on spring break, I decided I wanted to work for a law firm. So I put out a bunch of résumés and I got a call from Russ (Pry, former Summit County executive), asking me to come in for an interview. … I worked for him from that point on.

People were very sad when Pry passed away in 2016. Was he someone who changed your life?

Yes, definitely. He was the definition of a mentor as anyone could ever be.

He taught me as much as anyone ever could, and I still use his guiding principles in everything I do.

Was it difficult to transition as chief of staff to work for current county executive Ilene Shapiro?

No, not at all. … One of my jobs with (Pry) was to liaison with council, which I still do today, so I’d been working with Ilene since 2007. When he fell ill in 2016, myself and a couple of other people went to her and said, “Things aren’t looking so great. We think you’re the best person to come in and take over the shop.” She did, and the rest is history.

Did you think you’d be in politics as a kid?

Yeah, I always did. And I knew I was going to be a lawyer.

Do you like the stress that comes with your job?

I think that I do relatively well in a stressful situation in terms of being able to see where the field is and how to navigate through, but I don’t know if anyone really likes stress.

You’re in a central role with the county, but behind the scenes. Do you like it that way?

For the most part, yes. … I’ve got a little bit of introvert and extrovert in me in that I don’t have any problem going into a room full of people I don’t know and trying to figure out how we’re going to accomplish what we all want to accomplish. But I’m not a credit person. When we have a press conference and it’s something we’ve worked on, I like to be in the back.

It feels like Akron and Summit County are simpatico and there’s a good spirit of cooperation. Is that the view from inside?

Yes. It’s interesting. … When we go down to Washington, D.C., and meet with the congressional delegation and we meet with folks in the administration, it is typically remarked upon. A lot of times we go down with the city and county people together … and we constantly hear how rare it is for a city and county to come down together and be in agreement on issues. We actually are a bit of an anomaly.

You alluded to this a bit earlier, but would you ever run for elected office?

My wife always reminds me to never say never, but at this point in time it’s not something I’m interested in.

CLEVELAND BUSINESS 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 8 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 Goals exceeded

pledge.

The gift to the University Heights institution comes from a graduate who is remaining anonymous and has “deep gratitude” for the Jesuits and the university’s past academic leaders.

President Michael D. Johnson said John Carroll will use the pledge “to fuel our academic programs, enrich our campus and enhance the student experience.”

Case Western Reserve University’s capital campaign surpassed not one, but two goals.

When the Forward Thinking campaign began in 2011, it had a goal of $1 billion. In 2014, that was raised to $1.5 billion, and in fall 2017, the university said it had surpassed that second goal. And on Feb. 18, the university announced the total it had raised in gifts and pledges in the campaign: $1.82 billion.

“The generosity of alumni, friends and philanthropic organizations is both extraordinary and inspiring,” said president Barbara R. Snyder.

COO for S-W

Lucky No. 20 John Carroll University on Feb. 20 received a $20 million unrestricted

P031_CL_20190225.indd 31

Case Western Reserve University’s Forward Thinking campaign has generated $1.82 billion in gifts and pledges. (Contributed photo)

Cleveland coatings giant The Sherwin-Williams Co. said David B. Sewell will become its president and chief operating officer, effective March 1.

Sewell, 50, has been president of Sherwin-Williams’ Performance Coatings Group since August 2014.

He’ll report to chairman and CEO John G. Morikis. The COO position

had been open.

In his new role, Sewell will be responsible for all of Sherwin-Williams’ operating segments.

Deal afoot?

Buyout firm Warburg Pincus is considering a sale of Consolidated Precision Products Corp. that could value the Cleveland-based aerospace parts manufacturer at more than $2 billion, Bloomberg reported.

Consolidated Precision is working with an adviser to examine strategic options, including a possible sale in the second half of the year, people with knowledge of the matter said. If Warburg pursues an auction, Consolidated Precision is likely to attract interest from other private equity firms as well strategic buyers. Consolidated Precision has about 3,000 employees.

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