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FINANCE

Jon Pinney, co-founder of TurnCap

Real estate investment company is ready to go live, targets debt fund of $50M. PAGE 3

3D printing company unveils new series. PAGE 3

CRAINSCLEVELAND.COM I MARCH 2, 2020

MANUFACTURING

TimkenSteel fortifies itself for the future Canton company could be at a turning point SPORTS BUSINESS

DOWN, NOT OUT “We’ve learned a lot from other teams,” said Tim Salcer, the Tribe’s vice president of sales and service. “They might have sold a lot more season-ticket holders into plans that might not have been the best fit for them, and they saw a dramatic dropoff in their FSEs.” The Tribe’s full-season equivalents, fueled by a World Series run in 2016, rose 3,600, or 41%, to 12,300 in 2017.

When TimkenSteel became an independent public company in 2014, spinning off from Timken Co., business was good. The automakers and energy companies it served were doing well, with strong sales for the former and fracking on the rise for the latter. That quickly changed. Today, Canton-based TimkenSteel, a maker of carbon and alloy steel products, faces a number of external challenges, including a low rig count and soft automotive demand, and internal changes such as a leadership shakeup and sharp cost-cutting measures. TimkenSteel declined to comment for this story, but recent news releases and comments from analysts offer some insight into the changes. TimkenSteel is in a “state of flux,” said Phil Gibbs, director, senior equity analyst at KeyBanc Capital Markets. “Certainly, when the company spun off, in hindsight, that was as good as it gets,” Gibbs said. The company recently closed a particularly challenging year. In 2019, TimkenSteel lost $110 million, $100 million more than it lost in 2018. Even adjusted, the net loss was $47 million for the full year, according to a recent earnings news release. And TimkenSteel’s stock price has dropped dramatically during its years as an independent company.

See INDIANS on Page 20

See TIMKENSTEEL on Page 22

The Indians’ 11,000 full-season equivalents are down 2,000 from last year, but are 3,200 ahead of the club’s average in the 2010-16 seasons. | JOE ROBBINS/GETTY IMAGES

Indians’ season-ticket base has slipped, but key metrics have stayed solid BY KEVIN KLEPS

Relief pitcher Emmanuel Clase, the key return in a trade in which the Cleveland Indians gave up former ace Corey Kluber, is out for at least a couple months with a back injury. Mike Clevinger, one of the Tribe’s top starters, recently had knee surgery. Payroll cuts, which have followed a 93-win season that wasn’t good enough for a fourth consecutive playoff appearance, have frustrated fans.

Barring the unexpected (a contract extension or a trade), Francisco Lindor’s future with the franchise will hover over everything the club does. You could say the Indians have had better offseasons. The team is also dealing with a decline in its season-ticket base — from 13,000 to 11,000 full-season equivalents — that is sizable, but predictable. The failed postseason run in 2019 and frustrations about payroll are

obvious reasons for the drop in a core customer group that the Tribe has consistently said is the most important part of its business. Also a factor is that the Indians are coming off a season in which Cleveland hosted the MLB All-Star Game. Access to the annual showcase gave the Tribe a season-ticket boost the last two years, and the Indians’ studies of other clubs that have hosted the festivities have shown that a significant season-ticket decline can be common the following year.

BY RACHEL ABBEY MCCAFFERTY

REAL ESTATE

FOCUS

PEACEFUL PUSH Socent Studios designs a video game to inspire political and social action. PAGE 10

NEWSPAPER

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Here comes the neighborhood

Nine-story development is set to rise across from the West Side Market BY KIM PALMER

It has taken nearly a decade of discussion and planning to find a suitable development for the property across from the West Side Market. Development firm Harbor Bay understands those expectations and plans to surpass them. “There are a lot of people who have zeroed in on that site for a number of reasons,” said Tom McNair, executive director of Ohio City Inc. He said the Market Plaza property, the one-story strip mall built in the early 1980s

across from the West Side Market, is underused and does not match the scale of the rest of the neighborhood. “Having this one land-use form that did not fit all the others made it an obvious conversation,” he added. In 2011, McNair’s organization used grant money to hire consultants who re-evaluated the property. They suggested ways it could take greater advantage of its proximity to public transit and better fit in with the surrounding buildings, most of which were constructed before 1930. There was a lot of interest in the

nearly two-acre property, so setting expectations was key, McNair said. “Over those years, there has probably been more than $200,000 invested in the planning of what was appropriate and what the possibilities were,” he said. About five years ago, Illinois-based Harbor Bay Real Estate Advisors, led by vice president of design and development and Cleveland native Dan Whalen, approached the city with a plan to develop the site. See DEVELOPMENT on Page 21

2/28/2020 2:29:38 PM

FINANCE

MANUFACTURING

TurnCap targets inaugural debt fund of $50 million

Printer maker JuggerBot 3D puts focus on production applications

Firm aims to tap underserved market BY JEREMY NOBILE

A new real estate investment company, launched in partnership with some executives from Cleveland-based mortgage banking outfit Bellwether Enterprise, looks to tap into what it feels is an underserved area of the investor market — one that may be poised for significant growth. Beachwood-based TurnCap was formed last spring, but is now ready to go live. Its management features five internal partners including Bellwether president Ned Huffman and Kohrman Jackson & Krantz managing partner Jon Pinney, TurnCap’s co-founders, and Bellwether principal Jim Doyle, the new firm’s managing partner. They are currently working to build up an inaugural debt fund with a target size of approximately $50 million. With some committed investors already on board and several potential deals already in the works, that’s expected to happen pretty quickly. TurnCap will target a variety of debt and equity investments, Pinney said, but with a focus on less-conventional deals such as bridge and mezzanine loans, preferred equity investments, note purchases, debt buybacks and acquisitions out of foreclosure. Its strategy for standing out in a crowded real estate investment market flush with capital is to close deals as quickly as appropriate, possibly within a week or less. The “turn” piece of the TurnCap name alludes to that. Pinney cited KJK’s work in real estate deals, some of which the firm has directly invested in itself, and the expertise from Bellwether for TurnCap’s capacity for those quick turns. "This new fund allows investors to participate nationally in the rapidly growing debt lending space, while providing a new source of

capital for our area and beyond,” Huffman said in a statement. “We’re most excited about the unique partnership between Bellwether Enterprise and KJK, which will power TurnCap’s ability to originate, underwrite and close deals quickly.” Its target size for deals will be in the lower end of the middle market. Pinney said the fund’s ”sweet spot” will be for deals in the $1 million to $10 million range. “It fills a gap in the market because there is not a lot of lenders focused in that area,” Doyle said. “This is a need clients have. They’ve been asking for this.” The institutional real estate investment industry tends to pursue deals starting at $20 million. Something as low as $10 million or less is unlikely to draw much attention from larger investment outfits. With Bellwether’s network of about 300 employees in 28 production offices across the U.S., the expectation is that business will float some deal opportunities TurnCap’s way. That business has grown significantly in recent years, some of it fostered by its partnership with Maryland-based Enterprise Community Investment Inc., which acquired a 55% stake in Bellwether in 2012. That firm expanded in downtown Cleveland in February. It was Pinney who approached Huffman and Doyle to launch this business. “I thought their structure and network capabilities would make for a great partnership with a fund like this,” Pinney said. Besides a perceived need in the market, the country’s economic outlook today, which is trending downward for a number of reasons — from the impact of coronavirus to the expectation among some that the current economic See TURNCAP on Page 6

Latest machine will use pellets instead of filaments BY RACHEL ABBEY MCCAFFERTY

When Dan Fernback and Zac DiVencenzo were looking to start a business, the Youngstown State University graduates thought they’d want a 3D printer in their toolbox. But they saw a “huge gap” between smaller, desktop 3D printers for hobbyists and expensive, industrial-scale models for big companies. “That’s how we identified the pain point,” Fernback said. “That’s how we identified the problem.” So, in 2014, Fernback and DiVencenzo founded JuggerBot 3D LLC. Fernback serves as the company’s vice president and DiVencenzo is its president. Today, the additive manufacturing machine maker is still small, with just five full-time employees, but it has big ambitions. This spring, the company will launch its latest product, the P3-44, which will use pellets as a raw material for 3D printing instead of filaments. The P3-44 is designed to be the first in what the company is calling its Tradesman Series. Though the product will officially launch in April, JuggerBot has already sold two machines to customers. Additive manufacturing often has been focused on prototyping, said Heather Hall, entrepreneur-in-residence for software and IT at JumpStart Inc. But JuggerBot stands out in that space because of its focus on production, particularly considering the different types of materials customers will be able to use with the company’s new equipment. “This is real rubber-meets-theroad type of activity here,” Hall said. Hall works throughout JumpStart’s entrepreneurial service provider network, including with Youngstown Business Incubator portfolio companies like JuggerBot. She doesn’t see a ton of direct competition for JuggerBot; instead, the biggest challenge

From left, JuggerBot 3D team members Brian Zellers, Ben Kilar, Kevin Clapsadle and company co-founder Zac DiVencenzo stand in front of the Tradesman Series P3-44 after installing the first machine at a customer earlier this year. | CONTRIBUTED PHOTO

the company faces is convincing potential customers, many of which are traditional manufacturers, to adopt the new technology. Fernback said JuggerBot sees a lot of production applications for its new machine, such as creating molds or patterns. It’s designed to complement or replace traditional CNC machining centers, making the process more efficient. “We’re not asking people to make a philosophical change in how they are seeing their business opportunities or building their business, because at the end of the day, they’re just using a different tool to build the

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same thing,” he said. JuggerBot’s first machine, a smallformat, filament-based additive manufacturing machine, was commercialized in 2018. Today, the company also offers a large-format filament-based machine. In addition to its branded equipment, the company also makes custom machines and 3D-prints products for customers. JuggerBot does all the design work, as well as the final assembly and inspection, Fernback said. It primarily works with Ohio-based companies for its subassemblies and parts. See 3D on Page 6

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Geon Performance Solutions mixes ‘legacy brand’ with startup ideas BY FRANK ESPOSITO

In the words of Tracy Garrison, Geon Performance Solutions is an old company that’s a new startup. Garrison is the CEO of Geon PS, founded by investment firm SK Capital Partners when it acquired the Performance Products and Solutions business of PolyOne Corp. for $775 million in October. What he means by that turn of phrase is that although Geon only officially opened its doors a few months ago, its namesake brand of PVC compounds has been around for almost 100 years. “We’re a global leader with a legacy brand,” Garrison said in an interview at the Geon PS headquarters in Avon Lake. Later this year, the firm will move into new offices in Westlake. Geon PS has annual sales of about $800 million and includes one of North America’s largest PVC compounding businesses. The business also makes polypropylenebased compounds and provides contract manufacturing. It sells mainly into North American construction and automotive end markets. “We’re working hard for our global brand,” said Garrison, who has more than 25 years of industry experience, most recently as president and CEO of Hexpol Compounding Americas. “We have the flexibility and agility that we didn’t have as a public company. We’re empowered to run fast and grow.” New York-based SK also owns nylon maker Ascend Performance Ma-

Garrison

Shaw

terials and additives supplier SI Group. “SK steps in with a laser focus on chemicals,” Garrison said. “They want to make an ecosystem of great companies all in the same space.” The Geon PS product mix features Geon-brand PVC compounds, which first were made by rubber supplier B.F. Goodrich. Goodrich launched production of PVC resin and related compounds and end products in the 1920s and began selling the materials to outside customers in the 1940s. In 1993, Goodrich spun off Geon as a separate business, with the firm later divesting its PVC resin business. Geon then merged with Cleveland-based M.A. Hanna Co. — a longtime mining firm that had transitioned into plastics — in 2000 to form PolyOne. Geon PS now employs 1,100 at 11 production sites: seven in the U.S., two in Canada and single sites in Mexico and China. Garrison said these locations allow the firm to be close to customers while also targeting new applications. “We’ve got a well-invested footprint,” he added. “And with new appli-

cations and innovation, we can build on other chemistries and markets.” Chief commercial officer Larry Shaw said Geon PS “has been invested in R&D and will continue to be.” Shaw, who joined PolyOne in 2015 and spent 28 years with Dow, said being able to offer polypropylene and other resins outside of PVC is an advantage for the firm in automotive and other markets. Sustainability also is important to the new Geon. “We have a mandate to make sure (sustainability) is a core competency,” Garrison said. “We want to connect to other companies and be right there with them on safety and quality.” Shaw pointed out that PVC and PP are recycled, and that the firm’s bioplasticizers also play a role in sustainability. In addition to sharing office space with PolyOne for the time being, PolyOne’s distribution unit will continue to carry Geon compounds. Geon PS also will continue to do toll compounding for PolyOne. “This relationship will be good for both organizations,” Garrison said. For 2020, Garrison said, Geon PS “is cautiously optimistic and bullish on some markets.” “We should see sales growth of GDP or slightly more. We have a lot in the pipeline.” Frank Esposito is a senior reporter with Plastics News, a sister publication of Crain’s Cleveland Business.

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March 2, 2020

www.ClevelandFoundation.org/Purpose

Turning Passion Into Purpose W I T H T H E C L E V E L A N D F O U N D AT I O N

The End of the Stretch IRA

Charitable IRA Rollovers The SECUR E Act still allows individuals to make Qualified Charitable Distributions (QCDs) up to $100,000 a year beginning at age 70 ½. (It remains to be seen if Congress will adjust this age to 72 in alignment with the RMD change.) This is called a Charitable IR A Rollover and remains an effective philanthropic, estate planning and tax strategy. QCDs count toward fulfilling the RMD but do not count as income for tax purposes. Continuing with an annual Charitable IR A Rollover would allow the account holder to strategically reduce the value of this taxable asset before passing it to heirs.

CHARITABLE SOLUTIONS AFTER THE SECURE ACT by Kaye M. Ridolfi, Senior Vice President, Advancement, Cleveland Foundation & Ginger F. Mlakar, General Counsel & Senior Director, Donor Relations, Cleveland Foundation

Baby boomers are reported to have the largest retirement savings of any American

generation, and IRAs – or Individual Retirement Accounts – are one of the most common retirement savings vehicles. These taxwise tools come in many forms and grow either tax-

free or tax-deferred. Whether Traditional, Roth, Simple or SEP, IRAs are also inheritable assets that owners can leave behind to their spouses, children and other beneficiaries. The SECURE Act, which became law at the end of December, includes major implications for affluent retirees with IRAs in their estate. Chief among these developments is the requ irement that benef iciaries, other than spouses and other limited groups identified by the law, must Kaye M. Ridolfi spend the full b a l a nc e of their inherited IRA within 10 years. This effectively ends the “Stretch IRA” for many a s a strategy whereby Ginger F. Mlakar benef iciaries would stretch out the required minimum distribution (RMD) over their lifetimes – minimizing how much is counted as income, the upward pressure on a person’s income tax bracket and the overall amount paid in income taxes. With the new law’s required 10-year payout, financial planning professionals are projecting that roughly a third of an IRA’s value may be payable to the IRS. Still, strategies remain for those who were hoping to leave more of their IRA to children and other heirs, such as utilizing the charitable remainder trust.

Charitable Remainder Trust A charitable remainder trust (CRT) can be established with an organization like the Cleveland Foundation and offers an immediate upfront income tax deduction while providing ongoing income to its beneficiaries. These trusts come in two flavors: the charitable remainder unitrust (CRUT) and the charitable remainder annuity trust (CRAT). Payments from a unitrust are based on a percentage (at least 5% or more) of the trust assets valued annually, and payments from an annuity trust are a fixed sum based on the initial value of the trust. In either case, at maturity, which is either life or a term of years, the remainder of the trust assets are designated for charity. This tool is fondly called a “give it twice trust” as illustrated at right. If an IRA owner names a CRT as its beneficiary, then it is possible to effectively bring back the stretch across the CRT’s beneficiaries’ lifetimes. It’s important to note that the CRT is tax-exempt, so no income taxes are paid when the IRA assets are added to it. In certain cases, CRT income to the beneficiaries may also be counted as capital gains, which is taxed at a lower rate than ordinary income.

Other Changes Generally, the SECURE Act was intended to make it easier for more Americans to save for retirement by removing some barriers that prevented employers and individuals from previously accessing these plans.

The legislation also: • increased the age at which account holders must begin taking the annual RMD from 70 ½ to 72 years old.

Another strategy for beneficiaries facing the 10-year draw-down

The “Give It Twice Trust” IRA owner names Charitable Remainder Trust (CRT) as beneficiary

Direct to Children or Other Heirs

5% CRT Named as Beneficiary

$2,000,000

Federal income tax (est. 22% bracket)

$440,000

Net outright to children or other heirs

$1,560,000

Total income payments from CRT (est.)

$3,442,647 (PV @ 4%: $2,069,634)

Total benefit to children or heirs (est.)

$1,560,000

$2,069,634

Total benefit to charity (est.)

$4,065,588 (PV @ 4%: $1,586,073)

Total benefit to children and charity (est.)

$1,560,000

$3,655,707

It’s recommended that those passing on significant IRA assets to children or other heirs should contact their tax or financial planning professional for a consultation regarding the SECURE Act. We stand ready to help assist professional advisors and their clients with a philanthropic strategy in light of this new law and continue to provide a number of charitable vehicles for retirement, estate and tax planning. Please contact us via kRidolfi@clevefdn.org and gMlakar@clevefdn.org for further information.

through grantmaking and providing leadership on vital issues.

assets of $2.6 billion and 2019 grants of more than $111

economic and workforce development, education, environment,

counties by building community endowment, addressing needs

vs.

Transfer from IRA

Established in 1914, the Cleveland Foundation is the world’s

improves the lives of residents of Cuyahoga, Lake and Geauga

The balance left to charity is equal to or more than the initial net balance of the IRA

CRT makes lifelong or term payments to children or other heirs as beneficiaries

GROWING WITH PURPOSE FOR 106 YEARS million. Through the generosity of donors, the foundation

W hile DA Fs are not eligible to rec eive QCDs, t he y a re a fa nta stic tool for ongoing charitable deductions and provide grantmaking joy for years to come. Contributions to a DAF, and the tax write-off that comes with it, could also help an IR A beneficiary better target his or her tax bracket throughout the 10 years.

The Role of Donor Advised Funds

• eliminated the maximum age for contributions – account holders can continue to add to their IRA even as they take the RMD.

To learn more about giving through the Cleveland Foundation, please call 877-554-5054.

first community foundation and one of the largest today, with

could be to withdraw, annually for nine years, just under the amount that would elevate them to the next tax bracket and then withdraw the balance in year 10. Assuming this is the largest withdrawal, the child or other heir could also make a sizable charitable gift in the same tax year, such as setting up a donor advised fund (DAF) or other instrument that allows an income tax deduction, which would help offset the tax impact of the withdrawal.

The foundation’s program areas include: arts and culture,

neighborhoods, and youth development and social services. For

more information, visit www.ClevelandFoundation.org and follow

us on Facebook, Twitter and Instagram.

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To make a more accessible additive manufacturing product, JuggerBot focused on the materials customers could use. JuggerBot’s products are designed to run more functional, performance materials rather than those typically used for prototypes, Fernback said. They also run third-party materials, which means customers aren’t bound to a particular seller for their raw materials. The P3-44 will take that approach even further. Customers won’t have to use filaments as the raw material, as is typical for 3D printers. Instead, they will be able to use thermoplastic pellets, which they may already use in other applications.

JuggerBot 3D co-founders Zac DiVencenzo, left, and Dan Fernback. | CONTRIBUTED PHOTO

In addition, Fernback said the P344 is faster than traditional 3D printers: about 200 times faster, he esti-

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expansion is getting too long in the tooth to continue much longer — is just another factor behind why launching TurnCap now makes so much sense. And that’s despite some headwinds a business like this would face, such as the falling interest rate environment that could challenge a fund’s ability to achieve strong returns. Some groups, like bond investors, expect the Federal Reserve to drop rates further this year in response to global economic challenges. “It’s very appropriate right now, with what’s happening in the stock market and economy. We definitely feel we are a little long in the cycle,” Pinney said. “We think there will be some distressed opportunities and (TurnCap’s product) will be in high demand.”

Huffman

The fund duration should be about three to five years. Even if a recession doesn’t immediately set in, the odds of that eventually happening increase with time. That could lead to more deal opportunities for the debt fund. Other investments could include preferred-equity deals. Pinney pointed to the strength of the multifamily market — which is the main focus of Cleveland-based real estate investment trust Citymark Capital, which reported market-beating gains last summer and is currently

Rachel Abbey McCafferty: (216) 7715379, rmccafferty@crain.comW investing out of a fund that carried a target size of $250 million — in the Cleveland area and elsewhere as an area in which TurnCap is interested. Pinney TurnCap will be agnostic in terms of geographies, asset classes and real estate sectors. It’s motivated by good debt deals above any other factors. But Pinney praised Citymark’s approach and highlighted it as a group TurnCap would “hope” to one day partner with. “Hopefully, we can facilitate some growth and some deals,” Pinney said. “We are excited to move forward.” Jeremy Nobile: jnobile@crain.com, (216) 771-5362, @JeremyNobile

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mated. Larger pellet extruders can print products even faster, but JuggerBot is aiming to scale that down for a less expensive machine. With the P3-44, customers will be able to print products that are 3 feet wide, 4 feet tall and 4 feet long. And JuggerBot plans to keep growing. In 2020, Fernback said, JuggerBot intends to build out its national sales network, with a goal of expanding distribution support for its customers outside the local region in 2021. Ultimately, the company wants to serve as the “premier 3D printing partner for manufacturers,” he said. That will mean adding more products and more technology offerings to the Youngstown-based company’s portfolio.

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EDITORIAL

Stay calm I

nvestors were plenty worried last week about the potential harm to worldwide economic growth from the coronavirus outbreak. The Dow closed down 1,191 points, or 4.4%, last Thursday, Feb. 27, the worst one-day point drop in history. The index had lost 3,226 points through Thursday, and U.S. futures on Friday morning pointed to a continuing selloff on Wall Street. The S&P 500 was off more than 12% over the course of six consecutive days of losses that wiped out $3.4 trillion in market value. Shares of manufacturers, banks and utilities alike have dropped by double digits. Stocks are getting hammered because investors FOLLOW THE DIRECTION fear a drop in economic acOF HEALTH OFFICIALS. tivity, from supply-chain disruption and demand PAY ATTENTION TO compression, that central UPDATES FROM bankers can’t fix. The coronavirus outbreak CREDIBLE SOURCES. poses serious health and economic threats to the United States, but as Dr. Tedros Adhanom Ghebreyesus, the director general of the World Health Organization, said last week, “This is not a time for fear.” It is a time for the federal government to fully deploy its resources to respond to the threat, and to make sure that proper isolation units, medical supplies and other vital equipment are available. This is, first and foremost, a health issue. Stay calm. Follow the direction of health officials. Pay attention to updates from credible sources. Don't spread bad information. Help be part of doing the right things to fight the virus.

Incentive structure

e're only a couple of months into 2020, but it's already shaping up to be the year of the tax incentive. Bendix Commercial Vehicle Systems LLC is receiving more than $25 million in estimated incentives to move to Avon from an outdated facility in Elyria. Cleveland City Council has introduced legislation that would commit

up to $100 million in incentives to help The Sherwin-Williams Co. build a new downtown headquarters, while Brecksville, where Sherwin-Williams intends put a new R&D facility, has created an incentive package of a similar size. Incentives have become a standard part of expansion projects of even modest scale. Each project has to be evaluated on its own merits. But it's helpful to know whether these incentives actually work. The evidence, based on a report issued last week by Ohio Attorney General Dave Yost, is mixed. In reviewing awards issued by the Ohio Development Services Agency (DSA) for terms ending in 2018, the report found "only 50% of Economic Development Loan Awards closed out in 2018 had substantially complied with the terms of the loans." The noncompliant awardees "received a total of $13.9 million in loans," according to the report. (The state considers project completion, job creation, job retention and payroll commitments in determining compliance. It accepts 90% compliance with terms of the agreement as being compliant; your mileage may vary on whether that should be the standard.) Of the 81 tax credit awards closed out in 2018, a third — 27 of them — were substantially noncompliant, with the value of those awards totaling $4.8 million to date. And none of 34 roadwork development grants had firm job creation or retention requirements. Yost had some sensible suggestions to make sure the public’s dollars are being wisely spent. Among them: "DSA should be required by statute to provide a hybrid list of JobsOhio economic award recipients to the entity conducting this review in future years." Also, he said modification of agreement terms after entering into award agreements "seems like adjusting terms to means. If lower targets were sufficient to justify the deal, it would seem that those targets would be adopted originally. If it is in the public interest to change terms post facto, those changes ought to at least be reviewed by an independent authority prior to making the modification." Those are good places to start, and the General Assembly should pursue them immediately. It's critical to tighten up controls on state incentives to make sure the projects they assist are generating a fair return on the public's investment.

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

In my line of work, I hear a lot about employers who want to find more skilled workers, who want to reduce turnover and keep those employees on the payroll once they do find them. I have a suggestion: Offer paid parental leave. I just got back from 12 weeks of maternity leave after having my first Rachel Abbey daughter. (Yes, she is very cute; thank McCAFFERTY you in advance.) I have always been someone who values my work and someone who, for better or worse, has her identity shaped by it. But I’ll be honest: Without maternity leave in those early weeks, I would have been a terrible employee. I did not have the emotional or mental capacity for anything but my family at that time. How could I when my daughter was adjusting to the world, when she had no concept of the difference between day and night, when she had to eat literally every hour? I — and my husband, who was able to take six weeks of paternity leave — needed that time away from work to bond, to get to know one another and to settle into some routines. Now, three months later, I have the mental space to bring my work back into my life. But my family is lucky, far luckier than most, that my husband and I were both able to take time off. In March 2018, just 16% of workers in private industry had paid family leave, according to data from the Bureau of Labor Statistics. Eighty-eight percent had access to unpaid I’LL BE HONEST: family leave. Those percentages increase to 25% for paid WITHOUT MATERNITY leave and 94% for unpaid LEAVE IN THOSE leave for state and local government employees. The EARLY WEEKS, I numbers don’t add up to 100% WOULD HAVE BEEN A in any of the categories because some workers, like me, TERRIBLE EMPLOYEE. have access to both paid and unpaid leave. Family leave includes more than just parental leave, but it’s a close comparison. And, really, the offer of protecting someone’s job while they welcome a new member of their family or care for a loved one should just be the starting point for employers looking to increase employee retention and satisfaction. My generation, the much-maligned millennials, came of age during the Great Recession. Like the generations that came before us, plenty of us would like to be loyal to a company that treats us well. But how we define that is a bit different. We saw our parents and our peers get laid off in droves. We struggled to find stable jobs. It taught us that while work is important, it shouldn’t be the most important thing. We want to be paid fair wages for our work, but we also want flexibility that lets us balance work with our lives. Paid parental leave is part of that. So are employers who don’t micromanage sick days, or managers who don’t expect after-hours answers to emails. I have so much more appreciation for an employer who recognizes that a job is part of my life rather than the whole thing. That makes me want to give it my all when I am at work. So I suppose this column is a bit of a thank-you to my employer, and a (strong) suggestion to others. Even if I never need paid parental leave for myself again, I’d never want to work somewhere it wasn’t offered. I suspect I’m not alone. And let me offer just one piece of unsolicited advice to anyone about to become a parent: If you have paid parental leave available, take it. Enjoy that time with your newly expanded family. Your work will be there when you get back.

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

Sound off: Send a Personal View for the opinion page to emcintyre@crain.com. Please include a telephone number for verification purposes.

8 | CRAIN’S CLEVELAND BUSINESS | March 2, 2020

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OPINION

LETTERS TO THE EDITOR

Against the Issue 33 HHS levy I was just wondering if before you enthusiastically endorsed another tax increase you bothered to look at what we pay now. If you take a minute to look at per-capita county spending for Franklin and Hamilton counties, and compare them to Cuyahoga County, it is shocking. Also, when they did a reappraisal of everyone’s property last year, didn’t that result in a big revenue increase? A third point: Take a look at some of our neighboring counties and their development. To the west, you can literally move two blocks to another county and cut your tax bill in half. And I haven’t even bothered to mention the ongoing investigations in our county. The tax rate in Cuyahoga County is unsustainable. Michael J. Gordon Sr. Tendon Manufacturing Inc. Warrensville Heights

those whose resources are used (or forcibly taken) to cover the costs. Second, when something is portrayed as “free,” human nature tends to devalue that item. When that same item has a cost associated with it (especially to the consumer of that item), it holds greater value. It receives greater care. The next four years will be (and should be) difficult for these young people. I hope the educators at KSU will push and challenge them far beyond what these young people ever thought themselves capable. The prospect of losing what they (or someone else) generously invested will serve as motivation to press on and become who we all hope they will be. We do them no favors by telling them their precious, expensive education is “free.” Tom Polasky Aurora

‘Free’ isn’t free

Chad Livengood’s Feb. 17 interview with Dan Gilbert, “The day everything changed,” hit home. I had a stroke on Aug. 14, 2016. I was then a senior executive, in great shape; I had never even thought of a stroke. Like Dan, I was fortunate to have been rushed to the hospital; it could have been much worse. Yet, much has changed. My wife, Eileen, has been my main advocate. She suggested that I attend SpeakEasy meetings at the Cleveland Hearing and Speech Center. Designed for stroke victims and their caregivers, SpeakEasy has been a godsend for many. I hope you never have a stroke, but it can come without notice. It can be debilitating, humbling and terrifying. I wish the best to Dan and all stroke survivors. We are a strong community. Joe Brady Westlake

The move by the LeBron James Family Foundation’s I Promise Network and Kent State University to cover four years of tuition and a year of room and board for eligible students is a generous act on the part of Mr. James and KSU. They are to be applauded. But please stop calling it free. It is not free. The KSU professors are being paid, KSU food services will still receive an invoice from their suppliers, and the gas and electric bills will arrive at KSU and be paid. These students are receiving the benefits of someone else’s hard work. To call something “free” devalues it. This is a gift of education, the cost of which will be borne by someone else (Mr. James). The distinction between “gift” and “free” is important for two reasons. First, we have politicians promoting a similar “free” education. It’s a lie, and disrespectful to

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DISRUPTIVE TECHNOLOGIES

MAKING A PLAY FOR PEACE LOCAL GAMING STARTUP SOCENT STUDIOS WANTS ITS VIDEO GAME TO INSPIRE POLITICAL, SOCIAL ACTION

| BY JUDY STRINGER

Often associated with antisocial behaviors like violence and aggression, video games are not typically viewed as vehicles for positive social change. A Cleveland entrepreneur is among a pioneering contingent of game developers seeking to change that narrative. Justin Bastian is founder and CEO of Cleveland-based Socent Studios, a 4-year-old digital production startup that aims to mobilize players into joining the fight for conflict-free consumer electronics. Bastian said his video game — tentatively titled “The Deadliest War: A World Game of Peace” — is “production-ready” and will educate gamers on the link between conflict minerals found in their tech gadgets and the brutal war in the Democratic Republic of Congo.

will get the funding, but I know this: I am never giving up on this project,” he said. “This game will happen, and it will influence the world toward peace in Congo.” “I IMMEDIATELY RECOGNIZED THAT MY It was 2016 PASSION FOR ELECTRONICS AND GAMES when a “Navy WAS DIRECTLY FINANCING AND FUELING SEAL friend” first exposed Bastian THE WORLD’S DEADLIEST WAR SINCE to a film about conflict minerals, WORLD WAR II, THAT I WAS A DIRECT which are extractCONTRIBUTOR TO THE GREATEST ed from militiaHUMANITARIAN CRISIS ON OUR PLANET.” controlled mines in eastern Congo — Justin Bastian, founder and CEO, Socent Studios and then sold for highlight promising early-stage in- use in consumer electronics such as vestments that bring with them po- cellphones, laptops and game contential tax incentives. According to soles. The trade of these minerals fiBastian, it soon may also be featured nances rebel armies in the African on a platform focused on social im- nation and contributes to widepact investing and is in serious spread human-rights abuses. At the time, Bastian said he was funding talks with the foundation of producing “H-Hour,” a video game a prominent media publisher. “I can’t say as of right now when I to succeed Sony’s popular “SOLate in February, the nascent company went live as one of 21 featured on Opportunity CLE’s project exchange, which is designed to

COM: U.S. Navy SEALs” as part of his first indie game startup, SOF Studios. The longtime techie hadn’t heard about conflict minerals, nor could he locate Congo on a map, but the documentary struck a nerve. “I immediately recognized that my passion for electronics and games was directly financing and fueling the world’s deadliest war since World War II, that I was a direct contributor to the greatest humanitarian crisis on our planet. It was absolutely crushing,” Bastian said. He soon surmised, however, that video-game enthusiasts like him represent a largely untapped change agent in conflict electronics. Bastian claimed there are 153 million “highly politically active” online gamers in the U.S., including roughly 50 million who are “prosocial,” meaning they are inclined to act — politically or otherwise — when they know it will benefit others. He added that gamers also happen to be

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AI NEEDS PEOPLE Artificial intelligence startups hope to augment the workforce, not replace it. PAGE 12

“the most passionate electronics consumers in the world.” “So, we decided to build a video game to share the hope, story and beauty of Congo with millions of passionate, prosocial, politically active online gamers,” he said. Armed with $175,000 from two early Socent investors, Bastian and Netflix-distributed filmmaker Mike Ramsdell journeyed overseas in 2017 to immerse themselves in the peace effort. The duo built relationships with prominent local leaders and generated several short films based on their monthlong visit, including one that was screened at The Oxford Union by American actress Robin Wright and Congolese nonviolence activist Fred Bauma. In addition to the films, Socent has produced graphic novels in four languages to both inform freedom fighters in eastern Congo and develop a prerelease “Deadliest War” audience here in the U.S.,

Bastian said. He’s also recruited writers, game developers and franchise creators from the likes of Sony, Marvel and DC Comics and completed the video game’s preproduction designs, storylines and intellectual-property protection. “Now, we are just awaiting funding,” he said. Socent is seeking $500,000 in seed financing to produce a “playable” PC-based prototype, according to Bastian, and cultivate an engaged community of 30,000-50,000 early users. After that, he estimated the company will need another $3.5 million to fully build out its PC release and scale “Deadliest War” for Xbox and PlayStation systems, which could be available as soon as 18 months after the seed round. “Deadliest War,” a narrative-driven, first-person game, will put players in the shoes of a young Congolese boy who has witnessed violence at the hands of armed militants and must fight inner demons that threaten to consume his goodness. Along the way, vignettes and other game features will open players' eyes to the “unbelievable beauty” of the African nation and its people, Bastian said, and educate them about the mining and trade of conflict minerals. Players also will be linked to Left: Justin a petition deBastian (center) manding elecduring his 2017 tronic manufactrip to eastern turers stop using Congo. Inset: conflict minerBastian poses als, and Socent’s with Congolese freedom fighters. online gaming platform will en| CONTRIBUTED PHOTOS able gamers to connect directly to government websites at the local, state and federal level, giving them easy access to their representatives. Bastian said geolocation features will enable users to identify likeminded gamers in their community and beyond, ideally to spark peaceful political actions such as discussions, protests and assemblies. Ultimately, Bastian said he hopes to leverage the game into a “World Game of Peace” franchise, which will script follow-up installments on humanitarian crises in other countries. While the $138 billion video-game market is highly competitive, he said “Deadliest War” and its successors will fall into the fledgling, culture-focused “world game” space, which is sparsely populated but not untested. World game pioneer “Never Alone,” inspired by Alaskan Native communities, brought in $40 million on a $3 million production budget even before being ported over from PCs to consoles, according to Bastian. “We know the market is there,” he said. “We know that there are 50 million gamers in the U.S. alone who are going to care a great deal about our cause and want to take political action with us to put an end to conflict electronics in our supply chain.” Contact Judy Stringer: clbfreelancer@crain.com

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MARCH 2, 2020 | CRAIN’S CLEVELAND BUSINESS | 11

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FOCUS | DISRUPTIVE TECHNOLOGIES

AI needs people

REACH for new m

Artificial intelligence startups hope to augment the workforce, not replace it

Nottingham Spirk prog

BY LEE CHILCOTE

BY DOUGLAS J. GUTH

The Cleveland startup LIFTR uses artificial intelligence (AI) to help companies model how audiences will engage with ads, saving businesses the time and money of traditional A/B testing. Although it just released its first product in January, the company has already attracted a number of significant clients, said co-founder Ted Troxell. Still, as he looks ahead to the next stage of growth, he’s worried about attracting talent. “The difficulty we have establishing an AI company in Northeast Ohio is expanding our talent pool,” he said. “There are lots of people who want to learn AI here, but to really see success, we need buy-in from all the stakeholders.” Brendan Mulcahy, a software developer who co-chairs the Cleveland AI meetup group with Troxell, said he believes Troxell is right. He said that Cleveland needs more tech talent who understand AI in order to unlock the full business potential of the technology. “There are a lot of opportunities where companies could

Troxell

Hall

be using these technologies, but because there aren’t a lot of people who know how to do it, they’re not taking advantage of it,” he noted. Nonetheless, these tech leaders say that the success of the AI meetup group, which regularly attracts 70 or more people to its free, open sessions, is a good sign. They also run an online study group called Fast AI that has been regularly attracting 50 or more people. As more people are trained in AI and more businesses tap into machine learning, Northeast Ohio’s tech talent pool will grow, they say. Heather Hall, entrepreneur-in-residence for software and IT with the Jumpstart Inc. business accelerator,

said her organization is seeing more and more AI startups in Northeast Ohio. “I’ve been in this role for 16 months, and the number of AI companies I have now versus this time last year, it has grown exponentially,” she said. Fnding people well-versed in AI is also not just a Cleveland challenge. Tech leaders say there’s a global AI skills shortage. “All of these companies have been told for years that data is the answer, and now that they have all this data, they don’t have anyone to analyze it,” Troxell said. While companies on the coasts vacuum up top talent by offering higher salaries and better incentive packages, Cleveland’s cost of living, amenities and entrepreneurial ecosystem make it attractive, too. Those factors are very attractive, said Austin Murray, CEO of Prophit. ai, a company that uses machine learning to help businesses avoid paying indirect tax on items they’ve purchased. “From a startup perspective, you’ve got a lot of really exciting resources here,” he said. “We’ve felt

COMBINED STRENGTH

very much like we’re getting a handson approach from every expert.” Prophit.ai has found a niche by focusing on manufacturing companies in Ohio and the Midwest. States offer a lot of favorable exemptions for these industries in order to keep them here and incentivize growth. Murray previously worked as a tax attorney, where he saw many manufacturers paying high legal and accounting costs to avoid unnecessary taxes. He started Prophit.ai in order to help solve that business problem through machine learning technology. Troxell said the entire community needs to get behind AI in order for it to realize its full potential in Northeast Ohio. “It needs to be a community effort, not just from the AI community or the tech or entrepreneurial community,” he said. “This is something that could really help us grow. “If we’re able to come together and grow the talent pool here, it really sets us up for a lot of success,” he added. Some of the resistance to AI stems from a false notion that it will take away good jobs. “We spend a lot of time explaining that AI is not what science fiction makes it out to be,” said Murray. “I think the way AI should be implemented is for augmentation rather than automation. You use the technology to enable existing professionals to do the work more quickly and professionally.” “It’s not a thing where we want to get rid of all of the jobs,” Mulcahey added. “We just want to get rid of the jobs that are really boring.” Hall said that as startups like LIFTR and Prophit.ai continue to develop, she’d like to see more Northeast Ohio businesses using their technologies. “The technology needs to be adopted by companies big or small, either through piloting or purchasing these solutions and starting to apply them,” she said. “It’s that rising tide that lifts all boats. Companies coming in behind startups and putting it into practice is what we really need to drive growth.”

A company’s year-to-year growth depends on its ability to innovate, with successful efforts tied to creating new markets that displace established products or brands. Though this type of “disruptive innovation” isn’t novel, chief executives must keep their core offerings fresh in the minds of client companies, retailers and consumers. How to approach innovation tactically is the big question, one that Cleveland product design firm Nottingham Spirk aims to answer through a newly introduced vetting process. Known as REACH — from Readiness Evaluation and Category Horizon — the program provides a market appraisal of either an existing product concept or a competitor’s offering, backed by an investment impact report. Introduced in December 2019, REACH assesses whether an idea has legs to meaningfully unsettle a market before a significant expenditure of time and money is made. “The majority of our clients come to us for this exact reason,” said Vikki Nowak, Nottingham Spirk vice president of strategy. “They would rather disrupt themselves than be disrupted.” Firms pursue innovation to enhance core products, leverage something they do well into a new space or serve brand-new markets and customer needs. A struggling company may seek to pursue more high-risk initiatives to dramatically alter its growth curve and shake up the market., in much the same way that Apple, beginning in the late 1990s, created a tsunami-sized splash via several transformational initiatives, including its iTunes music platform. Early-stage enterprises, meanwhile, may put disproportional dollars into a game-changing innovation, with the goal of

Contact Lee Chilcote: clbfreelancer@crain.com

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12 | CRAIN’S CLEVELAND BUSINESS | MARCH 2, 2020

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attracting media attention, customers and investors. As a rule of thumb, companies that outperform their peers abide by a 70-20-10 breakdown of investment, with 70% of activity dedicated to core initiatives, 20% to adjacent ones and 10% to transformative ones. The “golden ratio” — as coined by Harvard Business Review — has a flip side in which bold innovation contributes to 70% of a company’s bottom line. Together, Nowak said, these findings illuminate the importance of managing innovation deliberately and closely. “The pain point for clients is trying to figure out what’s most successful for them,” she said. “Our goal with REACH is to de-risk an investment. The other benefit is shining a light on gaps for success, so if a company moves forward (on an innovation), they know what they need to address in development.”

Moving the needle During the four-week REACH program, Nottingham’s team helps optimize a client’s product concept while identifying prospects for market differentiation. The effort’s first two participants are a large medical device manufacturer and a compa-

Among other things, REACH is designed to assess obstacles for clients entering a new market space. For example, if a paint company wanted to sell vacuum cleaners, Nottingham would determine market gaps, functionality and the needs of end users. The firm also establishes risk factors such as marketing spend, concurrently considering retractable cords and other differentiation points for our theoretical vacuum. “Who are the other players in the market and what are they doing?,” Nowak asked. “Do your products have features that stand out as unique?” Innovation may be a buzzword in business, but it also symbolizes the danger of missed opportunities. Nowak noted that Kodak’s inability to recognize digital photography as a disruptive technology is the stuff of legend, and a cautionary tale for companies busy aligning their internal priorities. “Staff might be focused on the core product, so that transition is hard,” she said. “We help companies understand the risks before we get started. Let’s go into this with our eyes wide open.”

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Contact Douglas J. Guth: clbfreelancer@crain.com

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ny centered on fitness (because of nondisclosure agreements, the companies can’t be identified any further, as it might reveal their Nowak next moves to competitors). Nottingham is evaluating a product for the medical maker. For the fitness company, the firm is focused on an emerging technology concept, with future plans to get the product in front of focus groups. Nottingham engages companies of all sizes, although it’s larger entities that often struggle with prioritizing innovation in the face of global competitive pressure. Nowak said she understands this tension as a former online service director at a major insurer, where she spent nearly a decade establishing user best practices for the company’s various service platforms. “You’re vying for a product or idea and having to prove your concept is going to move the needle,” Nowak said. “An independent third party can give an outside perspective, saying this product is needed and an opportunity is there.”

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usan Beech, manager of the Cleveland Metropolitan Conference Center at One Cleveland Center, calls the venue a “hidden gem in plain sight.” The conference space, formerly known as the Forum, is managed by the Cleveland Metropolitan Bar Association and has 10 separate meeting spaces — from the basic 10-person boardroom with tables and executive chairs to a 400seat theater-style auditorium. The Bar Association took over the space in 2014 as a way to avoid paying outside rental fees for its internal meetings and events. “It’s the perfect venue for anyone who needs a space that is reasonably priced and professional. It’s a great space downtown,” Beech said. “Not only do we have fantastic rooms and an auditorium, but we also have a second-floor balcony that overlooks the lobby. At night you can put a bar out there with hightop tables. It’s a nice place for all-day conferences to offer a cocktail hour to finish off the day — somewhere where people can socialize and network.” She adds that the ambiance created by the glass is spectacular. Global Cleveland utilized the space for its annual meeting and its InterCLE event, welcoming international studies students. Global Cleveland president Joe Cimperman called the conference center “one of the jewels of downtown,” saying the space is fresh and has an amazing staff that catered to his organization’s every need. “We had a lot of needs, to be able to communicate a lot of different things on screens and mobile. We needed breakout areas. There wasn’t one thing we found that they were not able to provide,” Cimperman said. “They were so willing

CONTINUED FROM PAGE 14

programs and event apps cut paper waste, the planners said, while livestreaming is becoming an increasingly common way to reduce the number of people who travel long distances and add to an event’s carbon footprint. Other trends of note include a continued emphasis on branding and closer attention to diversity and inclusion. Organizers and sponsors want their brand on just about every aspect of the event from display monitors greeting guests to paper sleeves for their coffee

to work with us. It wasn’t a one-size-fitsall. It wasn’t $39.50 per person where they serve you old bagels. They were amazing and their technology was superior. “We really felt like it was a real partnership. They made everything happen.” The space also has been used for expositions and competitions, shareholder meetings, continuing education classes, lunch and learns, business dinners, cocktail parties, holiday parties, baby showers, family reunions, memorial services, graduation ceremonies, town hall meetings, magic shows and movie premieres. “No one knows we’re here. We’re in that silver bullet-shaped building no one knows the name of,” Beech said. “We’re hidden, but we’re here.” All of the rooms are flexible, and the center includes use of audio-visual equipment as part of the rental price, including projectors, 70-inch televisions, laptops, microphones, podiums, microphones, video conferencing and Wi-Fi. The facility also offers access to linens and security, and catering is available from Sausalito on Ninth, which is located directly across the street. Medical Mutual built the facility in 1983, intending for it to be its headquarters, but the company never occupied the space and sold it before it was completed. The Forum Conference Center took it over and used it as a conference center for several years, before Sammy’s moved in to use it as a catering facility. Six years ago, the Bar Association moved in and decided to utilize it as rental space when not holding its own meetings and events. “We’re really trying to reach out beyond the legal community to other groups and let them know we have this fantastic rental space available,” said Beech, adding that the facility also has attached parking. “Just another benefit of our amazing location.”

cups. They also want to ensure they are getting the most diverse set of voices possible with women and people of color represented among their speakers and presenters, as well as in their audiences. Partnering with clients to meet these emerging demands can be a challenge, said Beech of the Cleveland Metropolitan Conference Center, but it’s also what makes the job fun. “We love it when we get someone who wants to do something new and interesting,” she said. “It’s about personalizing your event and making it standout. And that is what we do best.”

2/24/20 2:23 PM 2/27/2020 7:46:35 AM

THE LIST

Conference Centers Ranked by meeting space

RANK CONFERENCE CENTER

MEETING SPACE (SQ. FT.)

LARGEST # ROOM MEETING CAPACITY ROOMS AMENITIES/SERVICES

SALES CONTACT

CATERING CONTACT

International Exposition (I-X) Center One I-X Center Drive, Cleveland 44135 216-265-2612/ixcenter.com

1,050,000

32,000

Over 1 million square feet of space, including exhibit space, meeting rooms and a grand ballroom; 7,200 parking spots on site

Lisa Reau lreau@ixcenter.com

Tony Minelli tminelli@ixcenter.com

Huntington Convention Center of Cleveland 1 St. Clair Ave. N.E., Cleveland 44114 216-928-1600/clevelandconventions.com

350,000

15,000

225,000-square-foot exhibit hall, 32,200-squarefoot grand ballroom; attached to Global Center and Hilton Cleveland Downtown

Travis Poppell tpoppell@clevelandconventions.com

Matt Del Regno mdelregno@levyrestaurants.com

The University of Akron Conference Services 135 E. Mill St., Akron 44325 330-972-8215/uakron.edu/dining/catering/index.dot

250,000

2,000

Space at multiple locations including the Student Union, InfoCision Stadium, E.J. Thomas Hall and Quaker Square; on-premise catering, AV and printing services

Margo Ohlson uaconference@uakron.edu

Kalahari Resort & Convention Center 7000 Kalahari Drive, Sandusky 44870 877-642-6847/kalaharimeetings.com

215,000

4,800

890-room hotel, conference and waterpark resort; team building activities, 10 restaurants/bars, business center, free parking/internet, shops, spa

Jerry Simon jsimon@kalahariresorts.com

Leslie Meyer lmeyer@kalahariresorts.com

Corporate College East 4400 Richmond Road, Warrensville Heights 44128 216-987-2938/corporatecollege.com

107,000

350

Meeting room rental packages include projectors or touchscreens, AV media station, wireless internet, parking; team-building kitchen added in 2020

Joan O'Connor joan.o'connor@tri-c.edu

Beth Noll elizabeth.noll@tri-c.edu

LCCC Conference & Dining Services 1005 N. Abbe Road, Elyria 44035 440-366-4100/lorainccc.edu/spitzer

100,841

350

Free WiFi, free parking, onsite catering, video conferencing, video recording, ARS Software, data projectors with VGA and HDMI capabilities

Dean Johnson djohnson1@lorainccc.edu

Rocket Mortgage FieldHouse 1 Center Court, Cleveland 44115 216-420-2000/rocketmortgagefieldhouse.com

100,449

19,300

AV services, internet access, video conferencing, inhouse food and beverage service, tours

Eric Clouse

Cydney Bowman cbowman@cavs.com Shari Lindenbaum slindenbaum@cavs.com

Cleveland Public Auditorium & Conference Center 500 Lakeside Ave., Cleveland 44114 216-348-2211/city.cleveland.oh.us

91,596

10,000

Historic venue with spacious, flexible meeting rooms and amenities including catering, floral, decor and AV technology

Melissa Marik mmarik@executivecaterers.com

Emily Hinde ehinde@executivecaterers.com

Nautica Waterfront District 2000 Sycamore St., Cleveland 44113 216-862-1618/nauticaflats.com

75,000

1,000

Waterfront property, includes Windows on the River, Greater Cleveland Aquarium, Nautica Queen dining ship and Jacobs Pavilion - west bank of the Flats

Mary Horoszko mhoroszko@bhwk.com

FirstEnergy Stadium 100 Alfred Lerner Way, Cleveland 44114 440-824-3523/cbhospitality.com

70,424

800

Most amenities provided in house; limited AV, limited tables and chairs, linens, catering, cleaning and security

Casey Hodgkiss info@cbhospitality.com

Renaissance Cleveland Hotel 24 Public Square, Cleveland 44113 216-696-5600/renaissancecleveland.com

64,000

2,950

Executive boardrooms, AV services, business center, high-speed internet, event service professionals, 22,000-square-foot grand ballroom

Carrie Corrigan carrie.corrigan@renaissancehotels.com

Jennifer Gleba jen.gleba@renaissancehotels.com

OSU Wooster Campus Conference Center 1680 Madison Ave., OSU Wooster Campus, Wooster 44691 330-263-5500/woostervenues.osu.edu/home

60,000

1,000

Ergonomic furniture, communications technology, dedicated conference planners, complete catering services, 1,000-seat auditorium, free parking

Debbie Shaffer shaffer.271@osu.edu

John S. Knight Center 77 E. Mill St., Akron 44308 330-374-8900/johnsknightcenter.org

58,000

5,000

In-house culinary department, AV and communication services, expansive dock area, parking deck via skywalk, adjacent parking

Dirk Breiding dbreiding@visitakron-summit.org

Ron Dorsey rdorsey@visitakron-summit.org

Hilton Cleveland Downtown 100 Lakeside Ave. E., Cleveland 44114 216-413-5000/hiltonclevelanddowntown.com

50,000

2,016

New LEED certified building connected to the Huntington Convention Center and Global Center; restaurant, 32nd floor bar, lakefront views

Julia Austin

House of Blues 308 Euclid Ave., Cleveland 44114 216-274-3353/houseofblues.com/cleveland

45,000

1,200

Catering, dining, entertainment

Julie Woyma juliewoyma@livenation.com

Wolstein Center 2000 Prospect Ave., Cleveland 44115 216-687-9292/wolsteincenter.com

43,676

2,000

Conference center and arena space that transforms into a grand ballroom space; AV services, in-house catering and parking

Michelle Schilling m.l.schilling@csuohio.edu

Joe Paoletta j.paoletta3@csuohio.edu

Cleveland Campus of Indiana Wesleyan University 4100 Rockside Road, Independence 44131 216-525-6160/indwes.edu/cleveland

40,000

120

Classroom and meeting spaces with technology stations, free WiFi, beverage service catering available, outside catering allowed

Vaso Suhodolsky vaso.suhodolsky@indwes.edu

Cleveland Metroparks Zoo - events 3900 Wildlife Way, Cleveland 44109 216-635-3304/clevelandmetroparks.com/rentals

37,280

800

Stillwater Place available year-round for up to 300 guests; various exhibit buildings available with timing restrictions; AV services available

Stacy DeChant slb@clevelandmetroparks.com

Sawmill Creek by Cedar Point Resorts (1) 400 Sawmill Creek Drive, Huron 44839 419-433-3800/sawmillcreekresort.com

36,000

2,000

Indoor/outdoor pools, beach, shops, restaurants, golf course, meeting space, marina

Cathy Razzante cathy.razzante@cedarpoint.com

Jennifer Esposito jennifer.esposito@cedarpoint.com Jessica Jordan jessica.jordan@cedarpoint.com

InterContinental Cleveland 9801 Carnegie Ave., Cleveland 44106 216-707-4100/intercontinentalcleveland.com

35,000

600

Table 45 for lunch and dinner, Northcoast Cafe for breakfast and lunch, 24-hour in-room dining, business center, fitness center, amphitheater

Terri Kufel terri.kufel@ihg.com

Kent Student Center - Kent State University P.O. Box 5190, Kent 44242 330-672-3202/kent.edu

35,000

900

AV services, food service, summer housing, guest WiFi, internet, recreation center, gymnasium, fashion museum

Ann Myers aday@kent.edu

The NEW Center at NEOMED 4211 Ohio Route 44, Rootstown 44272 330-325-6173/newcenterevents.com

35,000

725

Modern design, executive chef/catering staff, inhouse event planners, AV services, easy access from Interstate 76, free parking

Andy Malitz, amalitz@signetre.com Amanda Senn amanda@newcenterevents.com

Sheryl Loftus sloftus@neomed.edu

Cleveland Metropolitan Conference Center (2) 1375 E. 9th St., Cleveland 44114 216-539-3709/clemetroconference.com

30,000

400

Located in heart of downtown, 10 room facility with 400-seat auditorium, no food or beverage minimum

Susan Beech sbeech@clemetrobar.org

Landerhaven 6111 Landerhaven Drive, Mayfield Heights 44124 440-449-0700/landerhaven.com

27,000

1,200

Event venue, indoor and outdoor spaces, unique menus, decor and floral design, AV, WiFi, valet parking, adjacent hotel

Melissa Marik mmarik@executivecaterers.com

Sam Umina sumina@executivecaterers.com

LaCentre Conference & Banquet Facility 25777 Detroit Road, Westlake 44145 440-250-2000/lacentre.com

26,000

800

Professional catering and event planning; multimedia services with lighting and production operated by in-house technology company

Beatriz Lopez, blopez@lacentre.com Jennifer Gilmore jgilmore@lacentre.com

The Conference Center, Kent State University at Stark 6000 Frank Ave. N.W., North Canton 44720 330-244-3300/kent.edu/stark/cucc

24,200

600

Spaces suitable for corporate meetings, training, videoconferencing, trade shows, conferences; equipment and professional services available

Janet Capocci jcapocci@kent.edu

Bertram Inn & Conference Center 600 N. Aurora Road, Aurora 44202 330-995-0200/thebertraminn.com

24,000

700

Leopard restaurant, Paws restaurant-lounge, sushi bar, outdoor pool, free parking, game room, business center, WiFi

Frank Doctor

Alex Shaffer ashaffer@thebertraminn.com

RESEARCHED BY CHUCK SODER: CSODER@CRAIN.COM

Get 50 facilities and more executive names/email addresses. Become a Data Member: CrainsCleveland.com/data Information is provided by the companies. Send all feedback to Chuck Soder: csoder@crain.com. (1) Sawmill Creek is closed for renovations; part of the resort is scheduled to reopen on July 3. The resort was acquired by Cedar Fair on July 3, 2019 and will soon change its website to sawmillcreekbycedarpointresorts.com. (2) This entry is highlighted as part of an advertising package.

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CRAIN’S CLEVELAND BUSINESS

S E P T E M B E R 3 - 9 , 2 018

PA G E 21

AKRON SMALL BUSINESS

Akron entrepreneurs launch luxury, unisex clothing line BY KAREN FARKAS

If Alexandre Marr’s luxury fashion label doesn’t succeed, he can always pursue a career as a classical pianist. Marr, 27, plans to excel at both. He and two business partners recently launched the Anantvir clothing line, a collection of 14 unisex pieces, including jackets, tops and pants. The label fuses Indian silhouettes and silks with monochromatic and Western aesthetics, Marr said. The black clothing, with simple ivory embroidery, was designed by Marr and manufactured in Kolkata, India. Prices range from $180 for harem pants or top, to $850 for a long gown with embroidery. An executive at a company in India that manufactures colorful silk clothing with elaborate embroidery was so convinced that similar items in black silk with minimal embroidery could be successful in the United States that he became Anantvir’s sole investor. “We will make every effort to be successful online and in brick and mortar,” Marr said. “We have something to prove to him.” Marr’s interest in fashion began at a young age. He was encouraged by his grandmother, who worked as a seamstress at Jo-Ann Fabric and brought home material and sewing

machines. The self-taught designer was soon making custom pieces for himself and his family. He was also excelling in piano, which he began at age 10. He enrolled at Case Western Reserve University and the Cleveland Institute of Music. But he transferred after his freshman year to Kent State University and graduated in 2014 with a degree in fashion merchandising. He spent a year designing leather and nylon products for dogs at Coastal Pet Products in Alliance, then took a job at American Greetings Corp. in Westlake, where he was on the innovation team, which developed everything but greeting cards. Marr and his partner, Dominic Iudiciani, a graphic designer and freelance photographer, also designed austere and monochromatic clothing and furniture for themselves and clients. In the spring of 2018, Marr was searching the internet for clothing inspirations when he came across photos of traditional Indian men’s silk suits in royal blue. “It was an inspiring moment,” Marr said. “I reached out to the manufacturer through Facebook.” He got in touch with Anantveer Agarwal, who works with his mother, Anju Agarwal, at the company she founded, Smriti Apparels in Kolkata,

Anantvir principals, from left, Chad Lally, Alexandre Marr and Dominic Iudiciani wear some of their company’s creations as they walk down the runway to close out the label’s show at Fashion Week Columbus 2018. | CONTRIBUTED PHOTO

India. Marr made an unconventional proposal. “I wanted them to create something similar for me with design

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modifications, monochrome and with an architectural silhouette,” he said. “I wanted to modernize it.” After Marr received his custom-ordered black clothing, he, Iudiciani and Chad Lally, who has a computer engineering degree and is an expert in social media, got on the phone with Anantveer Agarwal. “We pitched the idea to create a brand and rather than tweak his silhouettes, we would create new items,” Marr said. “He was intrigued by my request and the more we spoke, we decided I could create something, a collection, taking traditional Indian Eastern menswear and making it avant-garde. He was on board and became our business partner and investor.” The three U.S. partners created Anantvir, a slight change of Agarwal’s first name. Over the summer, Marr sketched clothing and emailed the designs to Agarwal. The samples were manufactured in India and mailed to Akron, where Marr would make tweaks to the design, fabric and embroidery. “Each piece took months,” he said.

Marr was invited to Columbus Fashion Week and the samples appeared on the runway in October 2018. “We got two big pieces of feedback,” Marr said. “One was that the clothing would work well as formal-wear. The other was that it could be unisex. And people thought the price point was great.” Female models wore them at a pop-up fashion show on Jan. 25 at Wonderball 2020 at the Columbus Museum of Art. Marr said he thinks the clothing is appropriate for men and women of all ages. Iudiciani oversees the photography and graphics, and Lally handles the website and social media. Agarwal will receive a percentage of the net sales. “He is very perplexed by the whole project,” Marr said. “He trusts us that we have the markets. It would not take off in India, but that is the whole point.” Marr is planning on one collection per year. “This is year one, and if it goes well we’ll have year two,” he said. Equally important is his career as a pianist. In addition to performing at private events and giving lessons, he is the music director and pianist for the Church of the Western Reserve in Pepper Pike and at Temple Israel in Akron. In 2017, he and Merissa Coleman launched The Cabaret Project in partnership with Akron’s Blu Jazz +. It has been so successful they recently incorporated, he said. He is pursuing a master’s degree in piano performance at Kent State, where he is also a graduate assistant. He returned to Kent State last fall, a few months after American Greetings disbanded the innovation team. While at Kent State, he plans to share his story of how he created Anantvir with students in the school of fashion. Northeast Ohio offers great opportunities in music and fashion, he said. “I have no desire to go anywhere,” he said. Contact Karen Farkas: clbfreelancer@crain.com

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AKRON HEALTH CARE

Guide4Care gets traction as a new employee benefit Startup wants to help workers navigate health care system for themselves and families BY KAREN FARKAS

Employee benefits have evolved from standard health, dental and vision insurance to child care coverage, tuition reimbursement and wellness programs. Christine Dodd wants businesses to consider another benefit — one that helps workers navigate the health care system for themselves and their families. Dodd developed Akron startup Guide4Care, which counsels employees on health issues, including identifying doctors, resolving medical bills, researching clinical trials and assisting with elderly parents. Employees also can receive help to enroll in Medicare and Medicaid. “The health care system is fragmented,” Dodd said. “I want to help people figure it out.” Dodd said benefit costs are negotiated with the employer. The “basic” plan includes five annual one-hour phone/video consultations with a patient navigator. The “premium” plan includes 10 annual consultations. Her first client, the Jewish Community Board of Akron, signed on in late December. Services began Feb. 17. Dodd, 49, said she believes her ca-

reer and life experiences led to Guide4Care. “I have always been a health advocate,” she said. An attorney, she has extensive experience in health care law, Dodd lobbying and grant-writing. She worked at large law firms, in the federal government and for IBM. She lived in Washington, D.C., until 2010. She returned to Northeast Ohio to be closer to her family. She took a job as director of government relations and development at Akron’s Austen BioInnovation Institute, then joined a law firm to write grants for federal funding and lobby on health care policy and government affairs. When the firm closed its Cleveland office in 2017, she formed gHealth Solutions to provide health care consulting and government relations. When her father was diagnosed with pancreatic cancer in June 2018, she became his full-time advocate and caregiver. He had myriad complications that required many medical decisions.

“I know health care and hospitals, but the decisions were stressful,” she said. “I felt the system was so complex.” Her father died three months after his diagnosis. Dodd decided to focus on helping caregivers and developed a business called Elder Navigator. “I planned to help people with parents having health issues,” she said. She met with community leaders and employers and formed an advisory board of business and health care experts to help her market Elder Navigator as an employee benefit. However, she realized her proposed benefit would be more effective if she expanded her business model. “I listen really closely to the advisory board,” she said. “There were lots of discussions about changing from elder care to Guide4Care and whether it should be business-to-business or business-to-consumer.” She focused on businesses, meeting with CEOs and contacting officials she knew in the legal and health care fields. Nearly all understood the concept of Guide4Care, she said. “Everyone has a personal story” of dealing with the health care system, she noted. “And they want employees to be happy and healthy at work.” Todd Polikoff, CEO of the Jewish

Community Board of Akron, agrees. Guide4Care is available to the 100 full- and part-time workers at the board, the Shaw Jewish Community Center of Akron and the Lippman School. “Studies have shown that if people are happy where they work, they are more productive,” he said. “They are more productive when they know the place cares about them in the office and when they are not in the office. The benefit to our team far outweighs the cost of the program.” Polikoff said he expects to use the benefit himself as he handles the care of his elderly parents. He added he was unaware of any benefit similar to Guide4Care. Guide4Care sounds like a different spin on health advocates, a service offered through a company’s health insurance benefits broker that provides assistance to employees and their families, said Suzanne Goulden, director of total rewards for the Society of Human Resource Management, a professional HR membership association in Alexandria, Va. She explained that an advocate can provide resources to help employees deal with claims, doctors and medical conditions. “Guide4Care sounds like it is giv-

ing a more personal touch, like a concierge service,” she added. And providing help applying for Medicare and Medicaid would be unique and not offered elsewhere, Goulden said. Dodd, who is working in the Bounce Innovation Hub in Akron, is in negotiations with several potential clients. While there has been interest from investors, she said she wants to see how Guide4Care evolves before deciding if she wants to bring others into the business. She and her single employee currently are the patient navigators. She is also developing an app that would provide information to employees in the program. In the future, she would like to set up a nonprofit Guide4Care to provide services for “dual eligibles” — people on Medicare and Medicaid. Dodd said she may not have become as passionate about helping people navigate the health care system if her father had not become ill. “It happened for a reason,” she said about the trajectory of her career. “And I hope something good comes out of my dad’s death.” Contact Karen Farkas: clbfreelancer@crain.com

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INDIANS

From Page 1

The tally got as high as 13,800 in 2018, sparked by a franchise-record winning streak and 102 victories the year before. (For accounting purposes, four 20-game ticket packages count as one FSE, since the club has 81 home games to sell.) The current tally of 11,000 is almost 3,200 above the Indians’ FSE average from 2010-16, and it puts the Tribe on pace to rank about 17th in baseball, Salcer said. (The Indians were 13th last season.) Salcer and other Tribe executives often point to the “strong support” the club has received from its fans the past few years, though the attendance totals don’t reflect those sentiments as well as other metrics do. The Tribe’s TV ratings on SportsTime Ohio have ranked in the top three in MLB in each of the last three seasons, and the club led all of baseball with a prime-time norm of 7.18 in 2019. The Indians also topped baseball in Twitter engagements for the most recent one-year period. The All-Star Game, meanwhile, contributed to a record year for corporate partnerships, and the Indians have had double-digit increases in the category for three consecutive years. This year, which started with the club announcing a new mortgage partner (Union Home Mortgage), the Indians could match or slightly increase their partnership revenue, which Salcer said would be “a huge success” because of All-Star-generat-

The Indians have added three home-plate boxes to Progressive Field. The open suites have room for eight fans and are being sold as part of the club’s season-ticket packages. | CLEVELAND INDIANS

ed business that didn’t return. Corporate partnerships are topped only by season tickets in importance to the club’s nonbroadcast revenues, and the driver in the Indians getting back to average, or better, in FSEs has been a surge in popularity of 20game plans. The Indians are third in baseball in partial ticket plans. Of their 6,600 season-ticket accounts, 4,200 (64%) are tied to 20-game packages. The Indians’ group sales — which primarily target local companies, organizations, schools and universities — are up 19%. “We’ve had really strong growth,” Salcer said.

‘Really engaged’ Tickets to the Indians’ premium regular-season draw — the home opener — went on sale to the general public on Monday, Feb. 24. As of press time on Friday, Feb. 28, tickets still remained for a contest that in the past often sold out within the first hour that the last remaining seats were made available. Salcer attributed that in part to the early date for the 2020 opener: March 26, just the second time the Tribe has had its first home game in March and five days earlier than the previous franchise record. The Tribe VP also said he thinks the club’s crackdown

on secondary-market sales is a factor, since fans who in the past might have tried to make a quick profit on Opening Day know they could have their tickets revoked. “Those are all behaviors that we think are best for our fans, and we’ve been very diligent in making sure that we protect our fan base,” Salcer said. “We want our fans to get tickets at fair prices and face value.” There’s little question, however, that the Indians’ less-than-scintillating offseason, including a second straight year of payroll cuts, have played a part in the unusually slow response to the home opener. Still, the Tribe has passed the

1-million mark in tickets sold for 2020, and it believes another season of playoff contention, combined with other new promotions and attractions, can win some fans back. The Indians for the first time are making special promotional items, such as caps featuring the branding of local high schools and universities, and mascot-themed bobbleheads, available for single-game ticket purchases. In the past, the promotions were tied to group sales, Salcer said. The Indians have also added home-plate boxes — three eight-person areas that follow an open-suite concept that has gained popularity in sports — to the first-base side of the Lexus Home Plate Club. The boxes, with four-seat first rows and four bar stools with drink rails in the back, have all-inclusive food and beverage offerings and are being sold as part of the club’s season-ticket packages. It’s all part of a concerted effort by the club’s business team to gain every edge it can. “Why aren’t the fans coming? I think they are,” Salcer said. “I think they’re really engaged. There just aren’t as many people in the Cleveland metropolitan area.” Market size is always a factor in the Tribe attendance debate, as is onfield performance, fan sentiment, weather, the draw and ease of the athome viewing experience, plus plenty of other variables. Winning, though, has proven to be the Indians’ best hope at the gate, and beyond. Kevin Kleps: kkleps@crain.com, (216) 771-5256, @KevinKleps

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DEVELOPMENT

From Page 1

The project, recently named Intro, finally will break ground in midMarch. It will be a nine-story mixeduse building with about 36,000 square feet of retail and 300 apartments “priced near the top of the market,” according to Whalen. “They are going to have a lot of studio apartments, a large chunk of one-bedroom, some three-bedroom units. We are marketed to young millennials and empty-nesters,” Whalen said. The $140 million-plus project, when completed, will be the largest mass timber frame building in the United States, according to Whalen.

Framing a different approach

The Intro project will break ground in mid-March across from the West Side Market. The nine-story building will have about 36,000 square feet of retail space and 300 apartments. | CONTRIBUTED RENDERING

Mass timber is an engineered wood product with the structural rigidity and integrity of steel and concrete. It has been widely used in Europe and Australia, but has been rare in the United States, though its use is rising in response to climate change. The product combines layers of lumber, eliminating the waste of traditional timber processing, according to Harbor Bay CEO Mark Bell. The mass timber is used to frame out the building and is then left exposed, so interior spaces do not require drywall or particle board, Bell said. “We are not just using this material for its sustainable nature; it is beautiful, and we worked hard to expose as

much of the wood as possible,” he said. The engineered wood is more fire-resistant and has thermodynamic properties that require less energy to heat and cool. It’s so new that the company had to work with Cleveland for 15 months to update city building codes. Union construction workers also had to travel out of state to learn how to work with the material. The nature of mass timber means a faster build timeline than reinforced concrete, which needs time to dry and set. The mass timber used for Intro will be prefabricated with the plumbing and wiring specs included, which means the approximately 500,000-

square-foot building is expected to be completed in 12 to 18 months, saving money. The mass timber will come directly from the Austrian-based company Binderholz GmbH to Ohio City through the Port of Cleveland. Shipping the building materials directly reduces the carbon footprint and opens a possible new trade relationship for the port.

Financing and tax incentives Issues with general building costs almost derailed the project when the city pushed back on a possible Ohio sustainable tax credit from the state

agency that provides financial aid for air-quality projects. Harbor Bay eventually dropped that request for a 30-year tax abatement, and the Port of Cleveland, city and state worked to create a new capital stack in its place. The Port will provide up to $130 million in taxable lease bonds for construction, a loan to be repaid by the revenue from apartment and retail rents. The project will also receive a $2 million deferred loan from the city of Cleveland and a $10.8 million loan from the state through the Ohio Development Services Agency. The developers are contributing more than $30 million, and Intro will receive a 15-year tax abatement and

a tax-increment financing that applies to new taxes, but not to taxes for Cleveland schools. Beyond use of sustainable building materials and economic development potential for the Port of Cleveland, Intro is an example of the trend toward walkable neighborhoods and development around public transportation. The project has underground parking — a requirement in Cleveland — but because of Intro’s proximity to the West 25th Street Greater Cleveland Rapid Transit Authority stop and multiple bus lines (including two that run 24 hours a day), Bell said he hopes residents might consider ditching their cars altogether. “We are really going to emphasize in our design to educate a consumer base to really think urban, to encourage them to say, ‘Why have a car?’ ” he said. “The RTA gets you to the airport in 20 minutes, you can be downtown in five minutes — what is the purpose for a car?” Harbor Bay paid $10.5 million and worked on relocating the Market Plaza strips’s businesses, providing construction and financing services to assist in rehabbing abandoned buildings for them in the Ohio City area. “Most developers are focused on getting the site cleared as quickly as possible,” Whalen said. “But, for me, having lived in the area before, it was important to work with everyone to achieve a sustainable solution for the neighborhood.” Kim Palmer: kpalmer@crain.com, (216) 771-5384, @kimfouroffive

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1980s

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TIMKENSTEEL

From Page 1

For example, on Feb. 25, 2015, the stock closed at $29.48. Five years later, on Feb. 25, 2020, it closed at $5.31. “We continue to take significant steps to improve the company’s cost structure and manage working capital efficiency while we simplify the organization, focus on serving our customers and improve safety across the company,” interim CEO and president Terry L. Dunlap said in the earnings release, highlighting a 14% reduction in salaried workforce, the divestment of assets and the freezing of some long-term benefit plans. Dunlap took on the interim leadership role in October 2019, when Ward J. “Tim” Timken Jr. stepped down as president and CEO of the company bearing his family's name. In a news release, Timken said the change was “an effort to revitalize both the nearterm performance and long-term potential of TimkenSteel.” Timken had served as the company’s leader since its spinoff from Timken Co. in 2014. Dunlap, who spent more than 30 years with specialty

metals company Allegheny Technologies Inc., had been a TimkenSteel director since August 2015. The release noted that he had experience in “sales, marketing, manufacturing and operations, supply chain, procurement and information technology.” Justin Bergner, research analyst for G. Research, said that under Timken’s leadership, the company may not have identified and acted on new revenue streams and cost-cutting measures as quickly as possible, but that Dunlap might have a more “commercial mindset.” Gibbs said he thinks Dunlap is working to simplify the business, taking steps to align costs with revenue and “re-establish credibility” in order to get the company to stand on its own or to be sold. Tyler Kenyon, equity research analyst at Cowen, said that he also got the sense that “all options are on the table” at TimkenSteel, which could include a sale of the business. Kenyon said he expects TimkenSteel to recover as rig count — which indicates how many oil and gas drilling systems are active — stabilizes, industrial destocking slows and auto industry demand recovers.

PEOPLE ON THE MOVE

The company’s recent cost reductions could also contribute to a recovery, he added. In a recent news release, TimkenSteel estimated that such measures saved about $40 million in 2019, and were expected to add up to $70 million in annualized savings in the future.

“IF WE DON’T GET OIL PRICES TO GO UP, THE RIG COUNT WON’T GO UP, AND THEN THEY WON’T BE BUYING THE STEEL THEY NEED.” ——Theodore O’Neill, senior equity analyst at Litchfield Hills Research, on TimkenSteel

Bergner said TimkenSteel has faced a “triple whammy of challenging end markets” in energy, automotive and industrial. It has done a good job winning new contracts in the automotive sector, Bergner added, but production numbers in that space are still flat or down, and contracts have been resetting at low prices. The industrial market has been challenged by imports. And the energy market has been “decimated” by falling oil prices. All that means the company’s melt

capacity has fallen below 50%, Bergner said. If it can’t win new business and increase its melt utilization, he said another option would be selling to a larger company that could better leverage its assets. Theodore O’Neill, senior equity analyst at Litchfield Hills Research, attributed the company’s shortcomings in recent quarters primarily to external drivers such as a low rig count, and he doesn’t think there will be a turnaround until those factors improve. “If we don’t get oil prices to go up, the rig count won’t go up, and then they won’t be buying the steel they need,” O’Neill said. However, not everyone attributes the company’s stock price challenges solely to outside factors. Until a few quarters ago, the markets TimkenSteel serves were still in good shape, and there was strong end-market demand. Even so, the company struggled to meet its own expectations and the expectations of the market, Gibbs said. It shook investors’ belief in the guidance the company was putting out. Gibbs said a particular quarter stands out in his mind. Leading up to that quarter’s results being released, TimkenSteel put out guidance well

above what the markets were expecting. Stock prices increased and investors waited for the official results. Before those results were released, the company came back with new guidance, now below the market’s original expectations. That made it look like TimkenSteel didn’t know its own business, Gibbs said, which helped turn some investors off the stock. “I’ve been doing this for a long time,” he said. “You shouldn’t be missing your own expectations.” With the new leadership, Gibbs said he thinks the bar has been reset and expectations have been lowered. The new management team is there to try to “right the ship,” and people tend to be understanding during that process, he noted. For the first quarter of 2020, TimkenSteel is expecting shipments to increase. It’s already taken on more cost-cutting measures as the year has begun, divesting a scrap processing facility in Akron and closing a material services facility in Houston. Now, it’s time to see if the changes the company is making will pay off. Rachel Abbey McCafferty: rmccafferty@crain.com, (216) 771-5379, @ramccafferty

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Johnson Investment Counsel is pleased to announce the addition of Portfolio Manager, James Wineland, CIMA®, AIF®. James holds the Certified Investment Management (CIMA®) designation, The Accredited Investment Fiduciary (AIF®) Designation and is a CFP© candidate. James brings nearly a decade of experience in the financial industry. With more than $13 billion in assets under management, Johnson Investment Counsel is one of Ohio’s largest independent investment advisory firms.

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The Jewish Federation of Cleveland is proud to announce that Rachel Lappen has been named its chief development officer. She brings nearly 20 years of experience in the Jewish community and the arts to this role. She comes to Federation from The Cleveland Orchestra, where she was the senior director of development. She received a BA in Biblical Studies from the Jewish Theological Seminary and a BA in Music from Barnard College. She earned an MA in Arts Administration from Columbia University.

Jackson Lewis P.C. Jackson Lewis P.C. is pleased to announce that Vincent J. Tersigni has been appointed as Office Managing Principal in Cleveland. In addition to his role as Office Managing Principal, Mr. Tersigni also serves as the Cleveland Office Litigation Manager. He focuses his practice on representing employers in both the public and private sectors in labor and employment law matters.

Redwood Living, Inc. Developer and owner of single-family apartment homes, Redwood Living, Inc., has named real estate industry veteran Kevin Kwiatkowski as Vice President of Acquisitions. He will immediately integrate into Redwood’s portfolio of rental properties in Ohio, Michigan, Indiana, Iowa, North Carolina and South Carolina, working with land brokers and helping to propel Redwood’s expansion plans into new markets. He brings 20+ years of experience in real estate acquisition, entitlement and land development.

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CRAIN’S CLEVELAND LOOK BACK | GATEWAY PROJECT

A Gateway to a reimagined downtown By the early 1980s, 50-year-old Cleveland Municipal Stadium was showing its age. It had never possessed the charm of Boston’s 1912 Fenway Park or Chicago’s 1914 Wrigley Field, two baseball fields beloved by their fans. Instead, it was born of a compromise that dictated it be a multipurpose building. In the end, it was comfortable for neither baseball nor football fans. It also was the first publicly owned major sports facility. The push for a new stadium began in earnest in 1983, when the estate of F.J. “Steve” O’Neill put the Indians up for sale. Then, on the night of March 12, 1984, in Baltimore, moving vans pulled up to the training facility of the Colts and picked up all of the helmets, shoulder pads, footballs and other property of the NFL team and headed west to Indianapolis. The concern suddenly became: Would the Indians be the next team to pull up stakes? — Jay Miller

``THE HISTORY

``WHY IT MATTERS TODAY

In 1984, Cuyahoga County commissioner Vincent Campanella proposed a $150 million domed stadium south of Public Square. On May 9 of that year, voters rejected a proposal to pay for the domed stadium with an addition to the sales tax. But by 1989, Michael R. White was mayor of Cleveland, and he and the Cuyahoga County commissioners came up with a plan for a baseballonly stadium to satisfy the Jacobs brothers. At White’s insistence, the plan would include an arena to bring the Cleveland Cavaliers back to the city from Richfield’s Coliseum, which Cavs owner Nick Mileti had privately built for $17 million in 1972. The Gateway financing plan was based on a new tax that came to be called the “sin tax.” It was designed to provide half of the cost of the complex, on a 28-acre site that had been home to the Central Market and food-related retailers. The 15-year tax would add 1.9 cents to the cost of a 12-ounce beer, 1.7 cents to a 5-ounce glass of wine, 3.7 cents per shot of liquor and 5 cents to a pack of cigarettes. The rest of the cost would be borne by private sources, including the teams, or by the buildings’ users, in the form of licenses for loges and premium seating. On May 8, 1990, 51.7% of county voters approved Issue 2. The Gateway Economic Development Corp. was created, and planning for the two facilities could move ahead. The cost was expected to be $344 million, though it didn’t quite work out that way — because of changes, delays and rising costs, the final tab would be in the neighborhood of $425 million, with the public picking up the excess. On April 4, 1994, President Bill Clinton threw out the ceremonial first pitch at Jacobs Field; the baseball team owners had paid for naming rights. It took 11 innings for the Indians to defeat the Seattle Mariners 4-3 before a sellout crowd of 41,459.

Though it was never a strong selling point at the time the sin tax was up for a vote, the role the Gateway project has played in the development of downtown Cleveland has been significant. The Gateway footprint at the time encompassed a hodgepodge of aging buildings, including the Central Market, an Army-Navy store and storefronts that sold hats, wigs, shoes and clothing. On its last legs, too, was Record Rendezvous, the record store owned by Leo Mintz that sponsored the first ever rock and roll concert. That concert, and Mintz’s store, were key to Cleveland landing the Rock & Roll Hall of Fame. Gateway changed the area’s trajectory. Meeting a reporter at the corner of East Fourth Street and Prospect Avenue in the late 1980s, when development of sports facilities was still a dream, then-Cleveland city planning director Hunter Morrison, looking first at the Central Market (where Gateway would be built) and then back toward Euclid Avenue, envisioned a redeveloped East Fourth, along with further development on Prospect Avenue and even along Euclid Avenue to the north, if a way could be found to build a new sports complex. “There’s a mythology that it didn’t deliver, and it really did deliver,” said Thomas Yablonsky, currently executive vice president of the Downtown Cleveland Alliance, who has been active in the development of the Gateway area since 1995. “It took a part of downtown that had had been woefully underinvested in — Euclid Avenue, East Fourth Street and Lower Prospect — and gave it a whole new life. I’ve charted that since 1994. Eight hotels have opened there, close to 30 residential buildings and, the last time I counted them, just about 60 full-service restaurants.”

The first event at Gateway was a Pittsburgh Pirates-Cleveland Indians exhibition game on April 2, 1994. Two days later, the Indians opened the regular season by defeating the Seattle Mariners 4-3 before 41,459 fans. | JEFF HAYNES/AFP VIA GETTY IMAGES

``IN THEIR OWN WORDS “Should this facility not be available in Cleveland, should the vote (to create the sin tax) be a negative one, we may find ourselves confronting a subject we want to avoid.” ——Fay Vincent, commissioner of Major League Baseball, in front of Cleveland City Council shortly before the vote on May 8, 1990, raising the subject of Cleveland losing its baseball team if the vote to create the sin tax failed.

“If you want that quality of life that having sports teams provide, you have to subsidize it, and it is better to subsidize the venue than to subsidize the teams. And then you get the economic development discussion.” ——Thomas V. Chema, executive director of the Gateway Economic Development Corp. from its inception in 1990 until June 1995.

“Mayor White ... enacted a public land protective district to prevent demolition of older buildings by would-be parking operators. This action, combined with the year-round activity ensured by building an arena next to a ballpark, led to the redevelopment of East Fourth Street and adjacent areas into thriving urban entertainment districts.” ——Ken Silliman, executive assistant to Mayor White from 1995 to 2002, at the time of Gateway’s planning and development, and now a member of the board of the Gateway Economic Development Corp.

THE WEEK GETTING STRONGER: Cleveland Clinic in 2019 reported strong financials, improved patient safety measures, having served more patients than ever and continued expansion of its footprint, said president and CEO Dr. Tom Mihaljevic in his annual State of the Clinic address. The Clinic had $390 million in operating income — up 47% from 2018 — on $10.6 billion in operating revenue, up 18.7% from 2018. Mihaljevic credited caring for more patients, a strong economy and expansion in Florida for that growth, which followed a 19% dip in 2018 operating income. Finances in 2019 were bolstered by a $261 million gift from the Lord Foundation of Ohio.

Dr. Tom Mihaljevic, Cleveland Clinic president and CEO, delivers the State of the Clinic address Wednesday, Feb. 26. | CONTRIBUTED PHOTO

HUB OF ACTIVITY: United Way of Greater Cleveland plans to create a concentrated network of public, private and

nonprofit sector partners to help people living in the deepest poverty across Cleveland. Known as the Community

ty by targeting specific, measurable goals and outcomes. The Hub’s network of partners will set realistic, meaningful goals over the next decade. About 51% of children in Cleveland live in poverty, the highest rate in the U.S.

Hub for Basic Needs, the effort supports United Way’s strategic plan to maximize its impact in the communi-

FIBER FILL: Cleveland company Everstream continued its Midwestern expansion with the purchase of Rocket Fiber of Detroit, a broadband internet provider. Rocket Fiber was founded in 2014 with financial backing from Detroit billionaire/Cavs owner Dan Gilbert. The deal, set to close this spring, gives Everstream access to the Detroit company’s 41 route miles of fiber network in downtown Detroit and provides Southeast Michigan clients a direct connection to Everstream’s growing fiber network in the Midwest.

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