Crain's Cleveland Business

LOOK BACK A contentious mayoral election ended in victory for Michael R. White.

The new hot spot for NEO esports. PAGE 6

PAGE 23 CRAINSCLEVELAND.COM I March 9, 2020

How businesses should prepare for COVID-19 Examine remote work and sick leave policies, evaluate staffing needs BBY LYDIA COUTRÉ

When a new coronavirus emerged in China, Wickliffe-based specialty chemical company Lubrizol began immediate steps to protect the health and safety of its employees there.

After ensuring employees were safe and able to get back home — many were on holiday at the time of the outbreak — the company began offering protective measures like hand sanitizer; coordinating daily check-ins and temperature monitoring; establishing modes of communication in case someone was caught in a government shutdown; and instituting travel bans, said Karrie Jethrow, Lubrizol's global director of health, safety, environment and security.

All of Lubrizol’s sites around the globe pulled out their pandemic plans and began asking questions, she said: How could the new virus affect absentees? Are there appropriate policies for remote work and sick leave? Are there processes for filling critical roles and determining who is essential and nonessential? How can the company minimize the level of employee interaction? What’s the minimal crew needed to still run? How can what they’re learning in Asia help Lubrizol as a global organization?

Though COVID-19, a disease caused by the new coronavirus, hadn’t been detected in Northeast Ohio at press time, experts said employers should prepare for its potential spread here.

“We’re going to be faced with situations in the workplace that really in my lifetime I don’t ever remember,” said Dr. Claudia Hoyen, pediatric infectious disease specialist at University Hospitals Rainbow Babies and Children’s Hospital in conjunction with the Roe Green Center for Travel Medicine and Global Health. “I think we just have to all be very flexible and fluid and work together to figure out what’s best for our community and our state and our country.”

FINANCE

BLIGHT AND WRONG

How a banking services contract looks to address neighborhood inequality BBY JEREMY NOBILE

While home values have either grown or rebounded in many communities since the Great Recession struck more than a decade ago, Maple Heights is among those that have struggled to recover.

Some new commitments for the winner of a banking contract for Cuyahoga County — where black applicants are denied mortgage loans three times more often than whites — could be baby steps in the right direction for addressing those problems.

Blighted properties in Greater Cleveland bedroom communities like Maple Heights are lingering scars of the mortgage crisis. But some who try to buy or improve those homes — particularly African Americans — struggle to get financing for a variety of reasons. It could be the market they are in, their credit-worthiness as determined by bank algorithms or the fact that some lenders flat out don’t pursue as much business in neighborhoods with

lower property values.

To the frustration of community leaders like Maple Heights mayor Annette Blackwell, some commercial banks just aren’t as interested in depressed markets where lenders tend to see borrowers with greater credit risks and where there’s simply less money to be made on a residential loan versus in a more affluent community.

See LENDING on Page 20

ILLUSTRATION BY MICHAEL HOGUE FOR CRAIN’S CLEVELAND BUSINESS

HEALTH CARE

See COVID-19 on Page 19

NEWSPAPER

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ADVISER

 GREEN SCENE

Sweeping changes are coming to digital marketing.

Green Paper Products, a distributor of eco-friendly food-service products in Highland Heights, aims for a ‘zero-waste cycle.’

PAGE 14

PAGE 12

3/6/2020 2:59:47 PM

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Step2 Discovery and Simplay3 Co. know toys.

And mailboxes. And home goods.

The two Streetsboro-based companies may evoke images of plastic play kitchens and sandboxes, but both have been growing in non-toy sectors in recent years, as well.

Both were started by Tom Murdough, who also founded Little Tikes.

Both use rotational molding to make their products in the U.S. It’s that process that has allowed them to expand beyond the toy space.

“While it’s not unheard of, it’s not very common,” Adrienne Appell, spokesperson for The Toy Association Inc. in New York, said of toymakers expanding into other product areas.

While U.S. toy sales saw a 4% dip last year, it’s still big business. Toys are a $27 billion industry in the U.S., Appell noted. Deciding to diversify usually depends on a company’s manufacturing process and its existing supply chain. It’s a matter of “what abilities exist in-house,” she said.

That’s certainly been the case at rotomolders Step2 and Simplay3.

Step2 makes plastic toys, like play kitchens or climbers and slides, as well as children’s furniture and home and garden products. Though started

by Murdough, Step2 is now part of a larger family of companies called Step2 Discovery, which is owned by private equity firm Aterian Investment Partners. Step2 Discovery also includes Backyard Discovery, which makes pergolas, pavilions and other outdoor products, and assembly company Go Configure. Step2 Discovery has more than 1,200 employees.

Both Step2 and Backyard Discovery have a history of creating new categories of products and then dominating in those markets, said Step2 Discovery CEO Anthony Ciepiel. That strength is actually why Step2 Discovery is looking to grow into other markets.

“What I found when I joined the company two years ago is that we were No. 1 in each of the categories we already played in,” Ciepiel said.

Simplay3’s “Toddler Tower” helps children use a step stool safely. | CONTRIBUTED

“It’s very hard when you’re No. 1 to grow that category. You have to invent new categories.”

Step2 Discovery has plans to expand in such areas as package delivery, home decor and pet products, Ciepiel said. The company is also growing its contract manufacturing business.

In recent years, the company added more designers and engineers, engaged in a lot of research and development and started using new forms of compounded resin, Ciepiel said. That’s allowed it to create products with a more sophisticated look that could help it expand further in the home decor space.

For example, using a new compounded resin, the company has created a mailbox that looks more like wood.

A diverse product mix was always the goal at Simplay3, which started with an intentional focus on both toy products and home and garden products due to Murdough’s experience at Step2. But a shakeup in the toy industry put that need into sharper focus.

Shortly after the company launched less than four years ago, it got a large initial order from Toys “R” Us, said Brian McDonald, vice president for sales and marketing. But just as Simplay3 started shipping, the toy

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“That really made us take a hard look at, ‘OK, where is the market going? Where can we have some success?’ ” McDonald said.

Simplay3 started hunting for other ways to use its design skills and rotational molding manufacturing process, outside of its two initial areas of focus.

The company has about 55 employees.

Toy products can quickly become commodities as similar products are released, McDonald noted. That means the market is cost-competitive, and it can be tough for a new company to find its footing. Non-toy products may face less competition.

The prevalence of online sales — more than half of Simplay3’s sales take place online, McDonald said — has made it easier for the company to create and sell products that might fall in between categories in a traditional retail setting. For example, Simplay3’s “Toddler Tower” is a stool with sides and an adjustable step. The product is designed for children, but it’s not a toy. Retailers might struggle with how to categorize it, but sales have been strong online, McDonald said.

Another product in this space for Simplay3 is its “Sharing Library,” an easily installed, weatherproof product designed for initiatives like Little Free Libraries, where people take and leave books. There are kits that let people make these types of structures, but Simplay3 didn’t see an actual product on the market, McDonald said.

“It’s a product that we saw an opportunity where we could use our process to improve what was out in the marketplace right now,” he said.

Toys are still the primary driver of sales for both Simplay3 and Step2. McDonald said about 70% of Simplay3’s business is currently in toys, a mix he expects to remain steady going forward. At Step2 Discovery, toys make up about 75% of sales. Ciepiel said he expects the non-toy share to grow to 35% to 40% in the future. Both companies declined to share annual revenue.

One of the challenges of being a toymaker with a more diverse product mix is marketing. Simplay3’s name is a combination of simple and play, McDonald pointed out. One way the company combats possible confusion is by using different taglines for the different product lines. On the toy side, the tagline is “It’s simple, play!” On the home and garden side, the company uses “Experience simple living.”

At Step2 Discovery, the company employs different brands to differentiate between its product offerings in diverse market segments. For example, the company’s Kingsley Park brand offers higher-end products like its soon-to-be-launched smart package delivery box, Ciepiel said.

The box, a partnership between Step2 Discovery and Yale Home, can be locked and unlocked using an app, protecting a customer’s deliveries while they’re away. Marketing that product under the toy-focused Step2 brand wouldn’t be a good fit.

Imagination and creativity are at the heart of Step2 and Simplay3’s toys. But it’s clear the companies employ those traits in other ways, too, using them to tackle challenges as they grow in new markets.

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

2 | CRAIN’S CLEVELAND BUSINESS | MARCH 9, 2020

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The two-and-a-half-year-old partnership between Cleveland Clinic and insurer Oscar Health illustrates an emerging, value-based business model for the health care industry aimed at lowering costs and raising care quality.

Cleveland Clinic + Oscar began offering individual health plans to people who live in Cuyahoga, Summit, Lorain, Medina and Lake counties at the beginning of 2018, then expanded its operations to Ashtabula, Geauga and Portage counties at the beginning of this year. The plans cover only care provided by Cleveland Clinic’s network.

“Together, Cleveland Clinic and Oscar Health intend to offer a different approach, one that breaks down the complexities between providers and insurers, allowing our patients to easily navigate the health care and health insurance systems, get the highest-quality care at a reasonable price and improve their overall health,” Steve Glass, the Clinic’s chief financial officer, said when the partnership was announced in June 2017.

Cleveland Clinic has traditional, fee-for-service, contractual relationships with most of its other payers, which are insurance companies or government programs like Medicare and Medicaid.

Under the fee-for-service business model, insurers pay providers for each procedure or test they perform.

The incentive — whether providers bow to it or not — is to do more procedures and tests so they get paid more money, said Tom Campanella, professor of health economics and director of Baldwin Wallace University’s health care MBA program.

The value-based model, on the other hand, pays doctors and hospitals for the quality of their services: keeping people healthy and improving the health of those who have chronic conditions in a cost-effective way that is based on evidence.

Financial and health incentives for payers and providers are misaligned in the fee-for-service model, Campanella said. For instance, he pointed out, under the fee-for-service model, providers can be paid for procedures that don’t work.

Fee-for-service payments can drive up health care costs and lower the value of care by encouraging wasteful use, especially of high-cost items and services, according to an article by the Center for American Progress, an independent, nonpartisan policy institute in Washington, D.C. By contrast, the relationship between Cleveland Clinic and Oscar is a value-based partnership model.

“In this arrangement, Oscar shares risk with Cleveland Clinic 50-50, meaning we share equally in both the profits and losses,” said Dr. Dennis Weaver, chief clinical officer for Oscar Health. “Value-based care is predicated on aligning incentives between payers and providers.”

While Cleveland Clinic has been around for 99 years, Oscar Health is only 8 years old. Josh Kushner and Mario Schlosser, now Oscar Health’s CEO, founded the company in New York City in 2012, a year after Kushner started Thrive Capital Management LLC, where he is managing partner.

Oscar Health is rooted in dissatisfaction with the health insurance industry. In 2012, when Schlosser and

Cleveland Clinic’s Dr. Peter Rasmussen conducts a virtual patient visit. | CLEVELAND CLINIC CENTER FOR MEDICAL ART AND PHOTOGRAPHY

his wife were experiencing their first pregnancy, he wanted to find out how to take care of her.

The insurance company “referred him to a website that was broken,” Weaver said, leading Schlosser to conclude that customer service among U.S. health insurers “is fundamentally broken.”

Schlosser and Kushner raised $727 million in venture capital backing and started Oscar Health in December 2012, with the aim of fixing the system, according to a 2017 article at FierceHealthcare.com. Oscar Health received an additional $165 million in investments from two of Google’s sister companies in March 2018, the article added.

“What we are trying to do is differentiate Oscar as an insurance company that says, ‘You can reach out to us, you can engage with us and you can trust us,’ ” Weaver said. “Our goal is to guide you through the health care system.”

In a May 2019 report on Oscar’s business strategy, research firm CB Insights said, “This means providing access to care when needed, helping patients navigate the complex health care system and avoiding unnecessary care and expenses.”

Guiding patients through the system lends the Clinic/Oscar partnership qualities of “concierge medicine,” which traditionally has meant a relationship between a patient and primary care physician in which the patient pays an annual fee — sometimes tens of thousands of dollars a year — for most procedures done by the physician in his or her office.

Under Cleveland Clinic + Oscar plans, beneficiaries are assigned a team of medical providers at the Clinic, including a primary care physician, physician assistants and others, according to Advisory Board, the Washington, D.C., membership organization that provides best practices and research to health care stakeholders.

Plan beneficiaries also get access to an Oscar “concierge team” of a nurse and three care guides to help them navigate the care system.

“We have worked to streamline the patient experience with Oscar and focus on a concierge level of service,” said Meghan Cassidy, senior director of managed care product, sales and marketing at Cleveland Clinic. “We tried to align with what patients want when they want it.”

For instance, Cleveland Clinic has

enhanced its scheduling function so it’s easier to set up an appointment.

“We simplified the way we register our new patients,” Cassidy said. “If you have a complex condition, the concierge team works closely to make sure you get the right level of care when you need it.”

The term concierge also marks a distinction between a partnership like the one Cleveland Clinic has with Oscar versus a contract between a provider and an insurer, which is the norm.

Take benefit design, for example.

In the fee-for-service model, the insurer designs the benefits and the provider, like the Clinic, “has to figure out how to make that design work for them. It’s not an integrated process,” Cassidy said.

But in working with Oscar, she added, “There isn’t one driver; we’re co-pilots. I would say we’re very much aligned.”

For Cleveland Clinic + Oscar, “concierge also refers to things like enhanced benefits for things that are considered a little more progressive, like virtual care,” Oscar’s Weaver said.

Oscar’s app serves as the “front door to the health system,” according to the CB Insights report. Through the app, members can access medical records and lab reports as well as medical care through virtual “televisits” and physician recommendations.

“Technology is a critical component of everything we do at Oscar. We are just as much a tech company as we are a health company,” Weaver said.

Cleveland Clinic is also a technology leader, especially in electronic health records and telemedicine. It has its own app, called My Chart. Patients can use that or the Oscar Health app to access care.

Virtual care — having a face-to-face visit with your doctor on a computer screen rather than in an office — also lowers the cost of care, Cassidy noted.

Oscar Health, which operates in 14 markets in nine states, had some hiccups early on, according to the CB Insights report.

“Participation in the individual exchanges has been far lower than initially expected, and Oscar has faced an uphill battle in the small business market,” the 2019 report said.

But as Oscar matures, it is “beginning to control its costs, generating an underwriting profit in recent years by sending members to the lowestcost care setting, bringing key functions like claims processing in house, and expanding its virtual care offerings,” CB Insights said.

In Cleveland, previous Crain’s reporting found that the Clinic-Oscar plans beat enrollment expectations in 2018, accounting for 15% of those sold on the individual market during the open enrollment period for that year, with 11,000 total enrollees, according to Kevin Sears, executive director of Cleveland Clinic Market & Network Services. Enrollment was at least 30% greater than the companies had anticipated.

Though it’s still early to assess 2019 results, “It looks like we had 22% market share last year,” the Clinic’s Cassidy said. Although she wasn’t certain of the number of Cleveland Clinic + Oscar enrollees for 2019, the plans had an 85% renewal rate for 2020.

Contact Mary Vanac: clbfreelancer@crain.com

4 | CRAIN’S CLEVELAND BUSINESS | MARCH 9, 2020

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SPORTS BUSINESS

Legion Lair has been home to gamers from such institutions as Cleveland’s public schools, Shaker Heights High School and Kent State University. |

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Facility could be region’s home for esports competitions BBY KEVIN KLEPS

Not long before its first competition in the Esports Ohio league in 2019, the Shaker Heights High School gaming club attempted to get online and couldn’t, thanks to the school’s security filters.

The team packed its belongings and used the WiFi at a neighbor’s house.

“That spring season, we were playing out of people’s kitchens and bringing 25, 30 kids with us,” said Keith Szalay, the head coach of Shaker’s esports team.

The club, which has more than 40 members, is now competing on six computers in a classroom at the high school, but the setup prevents its teams from practicing together.

That’s not the case, however, on Friday afternoons, when Shaker’s gamers head to the Cleveland Cavaliers’ new esports facility in Battery Park. Legion Lair, with 26 gaming stations and lightning-fast download speeds, gives every player — starters and substitutes — the chance to practice together, Szalay said.

Use of the 2,700-square-foot facility stems from a recent partnership the

Shaker Heights esports team struck with Cavs Legion GC — the Cavs’ entrant in the NBA 2K League. It’s a significant development for Szalay and his club, which competes in four game titles (League of Legends, Overwatch, Rocket League and Super Smash Bros.) and has quite a few students who look at esports as a potential career or a chance to earn a college scholarship.

“We have kids who are interested in doing streaming and shoutcasting (esports’ version of announcing),” Szalay said. “We don’t have the technology at the high school to do that,

CAVS LEGION GC

but we’re hoping to use the Lair facility to fill in blanks we don’t have.”

Shaker Heights added a Rocket League team because of the increased access to technology that the Lair provides. In its first two seasons in a league featuring 434 teams and 2,700 students from 200-plus schools, the club has been a runner-up in Super Smash Bros. and a champ in Overwatch.

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For ‘anyone and everyone’ Partnerships like the one with Shaker Heights are examples of what the Cavs think the Lair can be: Northeast Ohio’s home for esports competitions and development.

The facility, located at 7524 Father Frascati Drive, opened last November and hosts gamers from Kent State University, via another partnership. A pilot program with the city of Cleveland in which teenage gamers participated in an after-school program at the Lair ended in January, but the Cavs are hoping to bring it back.

The Lair is also a spot at which the organization can boost its bottom line.

The facility has hosted a pair of well-attended tournaments and nearly 30 private events since it opened.

“There’s more use cases for it than we even imagined,” said Jonathan Sumers, the Cavs’ senior director of digital partnerships and esports operations. “The premise of using gaming to reach anyone and everyone is coming to fruition.”

The Lair’s signature tenant, Cavs Legion GC, will tip off its third season in the NBA 2K League’s opening tournament on March 27. The six-player club lives in three two-bedroom apartments that are a Kevin Love outlet pass from the gaming facility.

The 2K League is up to 23 teams and is welcoming its first international club, the Gen.G Tigers of Shanghai.

The league and its teams have more than 2 million followers on Facebook, Instagram and Twitter, and the league says it has generated more than 356 million video views on its social platforms. But many of the league’s streams on Twitch only seem to get a few hundred views, and the majority of its YouTube videos have viewership tallies in the hundreds or low four figures.

Cavs Legion GC has almost 30,000 followers on Twitter, but its videos, like the league’s, don’t often seem to rack up considerable numbers.

Sumers, though, points to several factors as signs that the league, which features the players competing as unique characters in five-on-five games, will be around for the long haul.

The league, backed by the vast resources of the NBA and Take-Two Interactive Software, is debuting a 13,600-square-foot studio in Manhattan. Qualifying tournaments have been held in Hong Kong, London and South Korea; the league recently drafted its first Chinese player; and a distribution agreement was struck with Chinese multimedia giant Tencent prior to the 2019 playoffs.

The NBA has also relaxed some of the cross-marketing restrictions that limited how often its organizations, with much larger followings, could promote their 2K clubs, Sumers said.

The Cavs, with the Army and Dave & Buster’s as recent additions, are second in the league in partnership revenue, the Cavs exec said.

“I think it has stabilized itself and proven to be a league that will be here for years to come,” Sumers said.

“I don’t think there’s any question that will be the case.”

Kevin Kleps: kkleps@crain.com, (216) 771-5256, @KevinKleps

6 | CRAIN’S CLEVELAND BUSINESS | March 9, 2020

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FROM THE EDITOR

RICH WILLIAMS FOR CRAIN’S CLEVELAND BUSINESS

Breaking the poverty cycle one tie at a time

EDITORIAL

Head of the class

“F

inish what your start” is good advice in most contexts. That’s especially true, in a complex economy that demands increasing skills of workers, when it comes to completing college.

It’s gratifying, then, to look at new data from the National Student Clearinghouse Research Center showing that college completion rates are rising in almost every state. Better yet: Ohio was tied for No. 1 in the rate of increase and has a completion rate that’s better than the national average.

The center tracked college completion rates across five consecutive entering cohorts (2009-13) in 45 of the 50 states. The national six-year completion rate reached 60% in 2019 for the 2013 entering cohort, a new high since the center started tracking the data nine years ago. Ohio saw its completion rate rise to 62% from 53%, an increase of nine percentage points that was matched by only four other states: Georgia, Iowa, Michigan and Utah. The 62% completion rate put Ohio 18th nationwide, leaving room for improvement but marking a significant achievement for a state that needs more workers with degrees.

Forbes, in examining the data, noted that improvements OHIO WAS TIED FOR are the result of policies that inNO. 1 IN THE RATE OF clude “encouraging students to full-time basis when INCREASE AND HAS A enroll possible, reforming developCOLLEGE COMPLETION mental education so that more complete gateway RATE THAT’S BETTER students courses, basing state appropriTHAN THE NATIONAL ations on improved student progression, offering intrusive AVERAGE. advising to start students on a good pathway to completion, and providing financial aid to students who need it most, when it is most needed.”

And we’re not just talking about traditional four-year college degrees. The research center’s report found that over the last cohort year, “community college starters made stronger one-year gains (in completion rates) than public four-year starters.” That’s critical, given the role Ohio’s community colleges play in increasing educational attainment that leads to a larger and better-trained workforce.

Lorain County Community College recently received recognition along these lines from the Achieving the Dream Network, a venture LCCC joined in 2011, when it was named one of two winners of the 2020 Leah Meyer Austin Award for undertaking a process of improvement “that lowered barriers to student success, elevated completion outcomes and transformed the college culture.” To focus on equity and help students complete their degrees in the shortest time possible, the network said, LCCC faculty and staff “redesigned developmental education, introduced case management advising, designed academic and career pathways, and implemented other proven interventions.” As a result, LCCC’s three-year graduation rate has risen from 8% in 2011 to 30% in 2019.

That kind of pathway to improvement, playing out across two- and four-year institutions in Ohio, will go a long way toward raising the state’s economic growth potential.

Take the time H

ave big plans for Tuesday, March 17? Northeast Ohioans typically do. But we hope that whatever your agenda is for St. Patrick’s Day, it includes a stop at your local polling location to vote, if you haven’t done so already.

This election isn’t of the magnitude of November’s, of course, but there are plenty of important measures for voters to decide.

In Cuyahoga County, there’s Issue 33, a 4.7-mill health and human services levy to replace a 3.9-mill tax, an increase that would raise an additional $35 million per year. (We urged a “yes” vote on that measure.) Your local community may have a school levy or other important tax issue. And if you’re a Democrat, the party still needs your help in deciding a presidential nominee — a race that’s now down to two candidates.

On that matter, we won’t take sides other than to say this: Vote your conscience, not as a pundit trying to guess at some notion of electability. It’s a competitive contest, and you should pick the person you think would make the best president. Period.

From the presidency all the way down to issues close to home, make sure your voice is heard. And then enjoy your St. Patrick’s Day.

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

Jowan Smith has her teenage son to thank for her “a-ha” moment.

A few years ago, the single mother noticed Trayvon watching a YouTube video to learn how to tie a tie.

“I’m thinking to myself, I know he’s not the only kid that does not know this,” she said.

She wondered how many other boys and young men, especially those in the inner Elizabeth city, had not been exposed to simple job McINTYRE readiness and life skills, such as tying a tie.

“A tie might seem simple, but it’s the starting point of dressing, interviewing, communicating and networking,” she said.

That realization led Smith to create 1,000 Ties, which offers workshops where community mentors teach males ages 6 to 21 not only how to tie a newly acquired tie, but also proper dress, grooming, written and verbal skills, and “the art of being a gentleman,” as Smith describes it.

On Feb. 27, Smith presented her 1,000 Ties concept at the sixth annual Accelerate: Citizens Make Change civic pitch competition presented by the Cleveland Leadership Center and Citizens Bank.

I was on the judging panel that heard Smith make her initial pitch in the competition’s Community Change category, where five people came with great ideas to make life better here. All were inspiring, but Smith’s was awe-inspiring.

She pitched with passion and she made it clear that the path out of “A TIE MIGHT SEEM poverty started with preparing kids SIMPLE, BUT IT’S to travel it. She also announced that THE STARTING she’d already expanded her idea to POINT OF DRESSING, include sessions for girls — tie-tying, presumably, not included. And INTERVIEWING, she’d established a partnership COMMUNICATING with the Cleveland Public Library to AND NETWORKING.” host her curriculum.

——Jowan Smith, She blew the panel away, and we 1,000 Ties founder unanimously decided to send Smith to the final round, where she competed with five other presenters, with the audience of 600 attendees ultimately selecting her as the winner of the $5,000 top prize.

“I was so overcome with emotion when I won because it’s for these kids I fight so hard for,” she said.

Smith saw firsthand the impacts of generational poverty while working for five years as a caseworker in the Cuyahoga County welfare department. Much of her passion behind 1,000 Ties is her desire to help people break the cycle of poverty.

“We break that cycle by teaching them the skills so they can walk into the door and get those jobs or get into that school or get that scholarship,” she told me.

The single mother of two who grew up in Cleveland knows how important a bright post-secondary future is for youth to break the generational cycle of poverty, whether through college, trade school, the military or full-time employment.

In addition to running 1,000 Ties, Smith is the founder and CEO of Getting Our Babies to College 101, a consulting firm that works with parents and students on how to ready their children for college, apply for financial aid, find scholarships, plan a college visit and fill out an application.

1,000 Ties seemed like a natural outgrowth of the work Smith was doing with Getting Our Babies to College 101 in preparing the future generation for success. It’s about teaching the proper skills to advance in life but also creating mentorship opportunities within the business community.

There has been a lot of talk in this community about overcoming the crushing poverty that grips so much of our city.

Jowan Smith is doing something about it.

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 9, 2020

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OPINION

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Cleveland’s plan to subsidize Sherwin-Williams’ headquarters to the tune of roughly $100 million over 30 years is a shortsighted and politically motivated handout that will almost certainly cost the city and its taxpayers more than it’s worth. While the costs of these kinds of deals are very real, the supposed benefits are overwhelmingly based on the polite fiction that the incentives changed what a company was already going to do.

They don’t, and Cleveland’s business community should call for them to end.

The real-world results from decades of experience in Ohio and around the country are clear that “economic development” tax credits, subsidies and other incentives simply don’t create jobs or grow economies.

There’s no evidence that cities or states that hand out more of them do any better in any meaningful measure of economic performance, or that places that are less profligate do any worse.

just one in every 50 deals.

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Then, they talk up the importance of the tax credits in public in order to meet qualification requirements, aided by politicians who are more than happy to take credit for having “won” the jobs for their constituents.

When the incentives are big enough to change a company’s decision, there’s even some evidence that this does more harm than good to a company’s bottom line. Apparently, a business that chooses a quick in-

centive hit over long-term business fundamentals is putting itself at a long-term disadvantage in the marketplace.

For a real-world example of how even historically massive incentive offers don’t override those fundamental factors, look no further than Amazon’s famous “HQ2” search process. In the Washington, D.C. area, there were two potential sites roughly 10 miles apart: Bethesda, Md., where the county and state were offering more than $5 billion in incentives, and Arlington, Va., where the total offer was less than $1 billion.

Amazon chose the Arlington site,

leaving more than $4 billion on the table, because the fundamental business climate of tax, regulatory, environmental, land use, workforce and labor policy in Northern Virginia was more valuable to the company in the long term than the billions of dollars in incentives on offer just 10 miles away in less business-friendly Maryland. As Brian Huseman, Amazon’s vice president for public policy, explained to CNBC, “It’s not just monetary incentives, but it’s looking at the comprehensive environment to allow companies to flourish.”

If $4 billion can’t move a company like Amazon even 10 miles, then Cleveland — and any other city con-

sidering subsidizing individual businesses in the name of economic development — should redirect its attention and resources to fostering that “comprehensive environment” that truly incentivizes good businesses to create good jobs. It’s a harder and less politically advantageous job to do than throwing big deals at big companies, which is why few politicians take it on. But the reality is that economic growth rarely comes from big companies, for the simple reason that they’ve already done most of their growing. (That’s how they got to be big companies.) Meanwhile, one of the best predictors of future eco-

nomic growth is how many new companies are being formed right now, today, to be the growing companies of the future.

Cleveland won’t grow its economy by handing historically large subsidies to big corporations. It’s time for Northeast Ohio’s business community to tell its elected officials to stop wasting everyone’s tax dollars chasing groundbreaking and ribbon-cutting ceremonies and to focus instead on the nuts-and-bolts tax, regulatory, workforce and other policy issues that truly matter when a business is making a decision on whether Cleveland is the right place to call home.

LETTER TO THE EDITOR

Cuyahoga County doesn’t have $1 billion cash balance I greatly respect everyone’s right to his or her opinion, regardless if they agree with me. However, for the sake of accuracy and fairness, I simply must respond to the Feb. 17 letter, “Support for HHS levy is criticized,” that recently ran in Crain’s Cleveland Business.

The author of that letter, an elected official, opposes Issue 33 — which is a Cuyahoga County levy to raise money to pay for various health and human services for an estimated 400,000 county residents.

The writer implies the county does not need the levy because it “... has a cash balance of over $1 billion.” An objective application of the facts shows this simplistic assertion to be woefully misleading.

While the county does, at times, have public revenues of more than $1 billion on hand, the overwhelming majority of those funds — collected property taxes, for example — are simply passing through the county before they are distributed to local communities in Cuyahoga County. The majority of these funds are not the county’s to do with what it chooses: That money can only legally be used for expenses such as roads and bridges, not health and human services.

The county does have a general reserve fund of about $125 million. The county is required by law to have a reserve fund at all times equaling at least 25% of its general fund — which is roughly $491 million a year. Again, there is no subjective reason to have this fund: It is required by law. Governments are required to provide their services in good times and bad, and those strategic reserves are essential to that ability.

Bottom line: The county does not have a “cash balance” of more than $1 billion that could be used to pay for health and human services. The state and federal governments have cut funding for county health and human services programs. The need is real for the county’s neglected children, people battling addictions and senior citizens who — with this assistance — can remain in their homes instead of living in much more costly and publicly subsidized assisted living. Vote for Issue 33.

Michael Summers Former mayor of Lakewood

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ADVISER Sweeping changes to digital marketing could impact small businesses’ marketing focus and budget. PAGE 14

SMALL BUSINESS

READY FOR A GROWTH SPURT BBY ALLISON CAREY

Sugarcane bagasse, wheat straw, miscanthus grass and corn sound like the ingredients to an edgy new restaurant’s five-course meal, but they’re actually the integral materials used in making the Earth-friendly, compostable food-service products sold throughout the country by Green Paper Products of Highland Heights.

Founders Steve Saks and Harry Goodfriend started the e-commerce distribution company in April 2009. “We sell the alternative to styrofoam and other single-use products,” Saks said. “Styrofoam is difficult to recycle and in breaking down, it gets into the water supply.

Our products are made from plant materials like sugarcane bagasse — a fibrous stalk byproduct of sugarcane refining — that can be composted into soil additives and fertilizer for growing more plants.”

Steve Saks (left) and Harry Goodfriend are the co-founders of Green Paper Products in Highland Heights. Above are an array of their compostible, eco-friendly serving items.

CONTRIBUTED

Green Paper Products, a distributor of eco-friendly, compostable food-service products, set to double its space

Saks and Goodfriend met in the fourth grade at Hawken School, roomed together at Northwestern University and then went on to separate careers, Saks as a dentist, Goodfriend in the business of envelopes and other paper products. Saks retired from his dental practice in 2002, then worked in his father’s real estate company until Goodfriend suggested they do something together.

The two friends decided to create an eco-friendly e-commerce business. Things fell into place as they discovered that importers were bringing in biodegradable food-service containers of all types. Most of the products are produced in China and elsewhere in Asia — some made from corn grown in the United States. They also found compostable trash bags being made in South Dakota. Green Paper buys from the U.S. importers throughout the country that help design the products with the Asian manufacturers.

“Some of the paper products are made from plant-based pulp, formed into shapes; after the moisture is extruded, they hold their shape. It’s similar to the papermaking process,” said Saks. “Corn is used to make the clear plastic items like cold beverage cups, bowls and other containers. It’s called polylactic acid, or PLA.” Saks noted that one of the largest producers of sugarcane bagasse is in Palm Beach County, Fla. “There is some back-and-forth in the process as plant material is shipped to China, then the finished products are shipped back,” he said.

Green Paper Products sells to individuals and businesses, restaurants, caterers, schools, churches, special events and more. They offer just about everything, from cold cups in every size, hot cups with lids, clamshell containers, cutlery, plates, bowls, straws, trays and trash bags.

See PAPER on Page 15

12 | CRAIN’S CLEVELAND BUSINESS | March 9, 2020

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SMALL BUSINESS | Q&A

Marissa Matiyasic In 2008, when Marissa Matiyasic bought Reflections, an interior design business in Cleveland Heights, the 26-year-old was an up-and-coming creative with little to lose. She had been working there for four years when owner Reita Bayman decided to retire.

Matiyasic was offered an opportunity to buy the business or see it close.

She was young and single, with a small mortgage. The 30-year-old business would be her first real investment.

“The worst that could happen was that I sold my house and started over,” said the Bowling Green State University graduate.

The worst didn’t happen. Matiyasic doubled her designers to four fulltime creatives and added two full-time support staff. At the same time, Reflections doubled its billings as new clients sought its services.

Growing meant more than pacing the trends. Reflections’ 40-year-old storefront boutique, which sold lamps, decorative accessories and smaller furniture items, closed six years ago because the internet and discount retailers were filling that demand. Then, Matiyasic transitioned the Cedar/Fairmont space into a much-needed design studio with more working space and a 16foot design table for laying out ideas and materials.

“The industry has changed quite a bit,” she observed. “It’s a world of immediate gratification: You can get a whole room of furniture in an hour. But with that, you don’t get great quality or long-lasting, heirloom furniture.

“We can’t compete with the retail of that world, but we can provide the best service for our clients and that’s what keeps them coming back,” she added.

Not just coming back but also referring others and making Reflections grow.

To be the best, Matiyasic recently rebranded the company and sought professional advice to review and refine her business processes. She shared her progress. — Paris Wolfe  Why rebrand?

Rebranding allowed me to put my touch on the business. I wanted it to still feel like “Reflections” — classic and timeless — but modern and fresh at the same time. The timing was right. Over the past 10 years, I have found my soulmate,

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 What comes after rebranding?

I hired an industry coach who is helping me get our processes and systems in order. I’m restructuring and streamlining within the office so we can be more strategic and more profitable.

work begins. We source materials, create drawings and develop the overall design plan. Once the design is approved, we move forward with the construction and installation phase, where we manage the trades and implement the design.

 Why do you have an all-female team?

Honestly, it just sort of happened that way, but I’m thankful for it. I’m a mom of young kids and I know how hard it is to work outside of the home. I support my team and give them the flexibility I would want if I were working for someone else. Our babies have all been in the studio at one time or another. It’s nice to have that option.

 What dominates style today?

I think social media dominates style.

All it takes is one “influencer” to make everyone think they need a specific look. What I love the most is getting to tell my clients’ stories. I tell them to do what you want to do and what works for your home, not what style you think you should have.

 How do you approach design?

We design for our clients. People get influenced by what’s trendy. Trendy is good, but it doesn’t always last. We’re about good design that lasts. You must think about the architecture of your house, think about what’s going to do the house justice.

At our first meeting with clients, we catalog and inventory their furniture, artwork, etc. We photograph, measure and identify needs. Then, the design

 What does your house look like?

I tell people to judge my work by my website, not by my house. (laughs) I have two young kids and have a hard time designing for myself. I know what’s out there, but I’m too afraid to commit to one specific look because I like too many things.

It’s easier to design for someone else.  What advice would you give to an aspiring small-business owner?

Do it while you’re young and don’t have a family yet. Being a working mom is hard. I’d also say never settle on what

you think you know. The truth is, you’ll never know enough. I’m still learning and I’m OK with that.  How do you continue learning?

In my industry, there’s always new product, new materials, new countertops, new tiles, new fabrics, etc. I earn continuing-education units by attending lunch-and-learn presentations and industry-sponsored VIP education learning trips. I also attend Industry Market Shows to continue my professional development.  How do you see your business growing and changing?

I would like to continue to grow the scale of my business and my team. I’ve traveled for clients’ second homes and want to do more of that. My goal is to take on largerscale, luxury projects where there is more room to do what we do best.  Are you glad you bought the business?

I am glad I did it because I was able to support myself at a very young age. I set goals for myself and I achieved them. It wasn’t easy, but I continue to learn and evolve with each step.

got married and had two children. After going through changes personally, I felt it was time to re-energize Reflections and give us the rebranding we needed. We updated our logo, our website, our social media and our brand in general. After 10 years, I’m the face behind the name.

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FOCUS | SMALL BUSINESS | ADVISER

Digital marketing at the speed of change BBY JOE MOSBROOK

Mosbrook is managing partner of Acclaim Communications in Cleveland.

Digital marketing normally moves at a pretty good clip, but 2020 is witnessing sea changes that business leaders need to understand, as well how those changes might affect their marketing focus and budget.

Big Brother is watching Cell service providers collect location data on all of their customers, all of the time. This means that anywhere you go with an operating cellphone, your provider is monitoring and recording your every step based on GPS coordinates.

These data are sold to marketers, who use it for a wide variety of uses.

Here’s an example: Your local Chevy dealer buys the cellphone ID information of everyone who walks into the Ford dealership across the street. As soon as someone test-drives a new Ford, the Chevy dealer taps into a massive data-

base to match their phone information to their name, home address and email, not to mention a host of other profile information about each person.

Now that Chevy knows all of Ford’s potential customers, it can market its own cars in very competitive ways. The company not only knows who’s in the market for a new car, it can also target sale prices, incentives and the benefits of a Chevy in ways that compete directly with Ford. This can include email blasts, postcards and digital marketing ads through a network of third-party websites that those specific users frequent.

“Location marketing is taking over the digital landscape,” said Mike Ruff-

ing, a digital marketing expert with Midwest Direct in Cleveland. “Buying ads to increase awareness is one thing, but placing incentives in front of qualified, active buyers takes this technology to a completely different level.”

While location-marketing technology has been around for several years, until very recently it was cost-prohibitive for small and midsize companies to take advantage of it.

Today, for small businesses, location-data marketing has become far more approachable, accessible and cost- effective. It can be a very useful tool when trying to match elusive au-

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For many internet users, this comes as refreshing news, lessening the intrusiveness of digital marketers. Google will benefit from increased dependence on search ads, those promoted listings at the top of every search page whenever you Google anything that costs money.

Google makes most of its revenue from search ads. Eliminating the competition from its native Chrome browser will boost its bottom line.

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Facebook and Instagram have progressively altered their algorithms to the point where the vast majority of commercial posts are rarely seen. Unless your business posts are backed by some form of payment to the social media giants, they’ll be hidden from the vast majority of audiences.

Sure, most posts will see a handful of likes and comments. These typically come from those same three socially active employees, the CEO’s husband and that one customer who will do anything to support you. But for the majority of target customers — the people who know your company but have yet to drink the Kool-Aid — those posts go unseen.

The good news is that a little bit of social media money goes a long way.

For example, $50 might put your post in front of 3,500 people who have never heard of you.

There are two basic ways to buy on Facebook: ads and boosts. Boosts optimize posts in ways that engage people with your brand. Ads actively drive a sale or an action. Facebook and Instagram can draw on their own database to identify and engage people who fit your target demographic.

“Lookalike audiences” take target marketing to a new level. Send Facebook your email list and it will analyze that list to find new users within your demographic. For instance, if your list contains people who made tee times on a golf course, Facebook will find golfer enthusiasts who are unfamiliar with your company.

Since its inception, digital marketing has evolved quickly. While trends come and go, many of the changes we’re seeing now regarding search engines, data aggregation, algorithms and social media will force companies and organizations of all sizes to rethink the way they approach marketing. Although many of these changes will require larger investments, approached properly they will also provide better results in terms of reaching and engaging your target markets.

14 | CRAIN’S CLEVELAND BUSINESS | March 9, 2020

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Niche marketing for all businesses

BY DOUGLAS J. GUTH

In the early 2010s, online screening company Tenant Magic promoted its services to real estate agents, who in the wake of a poor housing market became de facto property managers for homeowners wanting to rent out their residences.

Though effective enough for the Cleveland background-check provider, it wasn’t completely efficient, as only 20% of agents at the time dealt with renters. In response, Tenant Magic co-founders Jay Apple and Wayne Rothman pivoted to landlords, who were in dire need of candidate screenings for primarily paper-based rental applications.

“Most real estate agents aren’t working with rentals, but this is what landlords do, and it’s a significant pain point for them,” said Apple. “If we can provide them qualified applicants, that’s one less thing they have to worry about.”

Targeting a specific subsector facilitated Tenant Magic’s expanding its offerings to all 50 states plus Washington, D.C., and Puerto Rico.

Tailoring messaging to a discrete audience also allowed the company to better define its services, an issue for firms both new and established.

Branding and marketing experts view this type of “niche marketing” as a means to establish customer relationships and stay abreast of what they’re saying about your business.

“The best way to look at it is targeting your marketing to an individual or unique need,” said Eddie Rice, a freelance speechwriter and content marketing manager for a B2B technology firm. “Instead of trying to spend on an advertising campaign to a general group, you’d have a set of Facebook ads that target an industry or people within a particular job title.”

As segmentation divides a target market into approachable groups, a niche approach serves as a one-sizefits-all solution for any business.

PAPER

From Page 12

It’s all mostly made with plant materials along with a few recycled materials. Everything they sell, except for a few lids, is compostable. The prices, Saks said, can be 20% to 30% higher than styrofoam products, but the benefit to the environment makes it worthwhile.

Saks added that this is only one piece of the puzzle going forward, that the compostables industry is still in its infancy. “The way that society is, at least in the U.S., we use a lot of single-use disposables and we have to get away from that. If we can’t, then we need to use disposables that can turn back into plant material to grow more plants to make more disposables. It’s a zero-waste cycle. Between climate change and the amount of trash, the Earth won’t be able to sustain a oneway route. Composting is the trend of the future and it doesn’t create greenhouse gases like landfills do.”

The statistics are staggering. According to EarthDay.org:  500 billion plastic cups are used every year.  480 billion plastic bottles were sold in 2016.  One trillion single-use plastic bags are used annually around the world.

Apple

Rice

Rice, former marketing manager at Cleveland co-working organization LaunchHouse, noted Procter & Gamble positions individual brands to specific audiences so its products secure unique positions in the market.

While startups naturally have much smaller margins than a giant corporation, they can still apply the basic principles of niche marketing. In the seminal marketing book “Positioning: The Battle for Your Mind,” authors Al Ries and Jack Trout said most brands chase the market leader rather than define their niche, with the end result often being irrelevancy.

“Small businesses that can’t play in multiple verticals should be pursuing this out of the box,” Rice said.

“Staying hyperfocused on delivering a great product to an ideal customer allows you to fine-tune with one group before making the product available to multiple audiences.”

Tenant Magic initially concentrated on landlords, expanding that focus into areas such as mobile-home parks and marinas that also require background screening services. The company now has 7,000 registrants in its database.

Laura Sheridan, president of Viva La Brand, a Cleveland-based brand and marketing strategy firm, said capturing consumer attention begins with a business knowing precisely what differentiates it from its competitors. Thorough market research analysis will keep executive fingers on the industry pulse.

Meanwhile, purchaser comments on individual products can be tracked across social media and online forums.

“Current customers are your best  500 million plastic straws are used every day worldwide. Takeout containers in the U.S. account for some 269,000 tons of plastic waste that has been dumped in our oceans.

“We have grandchildren,” said Saks.

“We’re trying to make a difference.

The supply of products is built out.

You can buy it in huge quantities, but the composting part is not yet built out as much as I wish it was. We can only control so much.” Saks added he believes more will happen in the move toward more and better composting facilities in this country when laws and mandates make it necessary.

“It’s not just us selling this stuff, it’s not just people using this stuff, it’s not just people separating it out, but then once it’s separated it has to go to a facility to be composted and the resulting fertilizer needs to be sold back to the farmers that will use it to grow more plants. Then you have the cycle,” he said.

For their part, the company seems to be on the right track. Saks reported their growth has averaged 20% to 30% year over year in sales; last year, they saw 50% growth. “We’re a privately held company, but our gross sales last year were just under $6 million,” he said. “We’re very excited about it. It’s a good business and we sell good products that people like.”

Green Paper Products’ Alpha Park

brand ambassadors,” Sheridan said. “The goal is to get more of these loyalists: people who live your brand and talk about it.”

Traditional advertising camSheridan paigns that provide potential patrons a general message are too expensive for small companies to run, observed Sheridan. What’s more, a “shotgun approach” is an antiquated concept from a byone era when brands controlled the message.

“Advertisers threw it out there and people couldn’t skip over the ad or block it from their magazine,” Sheridan said. “The model has flipped.

Consumers have the control now in terms of the ads that they see.”

All industries can benefit from a niche approach, said Cathy McPhillips, senior marketing director at Content Marketing Institute. Big retailers like Target personalize their marketing based on buyer habits, whether it’s 20-somethings furnishing their first apartment or busy parents shopping for toys. Smaller companies already have a specialized audience, so further centering on that core is logical.

“Small businesses should focus where they excel and only go broader if they have more products or services that appeal to a new niche,” McPhillips said in an email. “Look at content, design, distribution channels and microinfluencers. How can you get the right message in front of the right audience? Once you answer that question, test, test, test, especially if you’re doing email or paid media.”

Rice advised marketers to look at everything as a big experiment. The best, he said, “are always trying something new.”

THANK YOU

Jack Bacevice Mansour Gavin

Logan Broadbent GE

THANK YOU to our 2020 Cleveland’s Finest Honorees!

This group of dedicated professionals have been raising funds for cystic fibrosis over the past 12 weeks. These outstanding leaders are part of a nationwide campaign that will raise over $4.5 million to help us make CF one day stand for CURE FOUND. Thank you, Benesch Law and Kaulig Companies for being our Presenting Sponsors. Cheers to our local brewery supporters for the amazing brews to help us raise a glass to our Honorees.

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Contact Douglas J. Guth: clbfreelancer@crain.com facility is expanding. Right now, the two partners and their five employees occupy 4,500 square feet of space.

They’ll grow into a 10,500-square-foot space and add a customer service person. Saks added that his son, Aaron, a chemical engineer, is moving his family back to Cleveland to learn the business as the new general manager.

Saks, who says there would be no company without Goodfriend’s brains and experience, said he is also grateful for their excellent employees. “One thing very important to us as business owners is the morale,” he said. He also credited Jan Limpach of Key Phrase Marketing in Elyria, who has been with them since day one, and Argent Web Design and Development of North Canton.

Green Paper Products are available online at greenpaperproducts.com with free shipping for orders over $89 and volume discounts. “We also do some email marketing with special offers, but we don’t hound customers — we only do it once or twice a month at the most,” Saks said. “Also, we’ve been stocking up as much product as we can get ahold of in case the coronavirus temporarily closes some factories in China. We want to be able to fill all of our orders.”

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Contact Allison Carey: clbfreelancer@crain.com MARCH 9, 2020 | CRAIN’S CLEVELAND BUSINESS | 15

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3/5/2020 3:02:29 PM

FOCUS | SMALL BUSINESS | ADVISER

The bonus in bonus depreciation BBY JONATHAN CICCOTELLI

Local Financial Planning Firm.

National Recognition.

Forbes’ Top 250 Wealth Advisors Barron’s Top 100 Independent Financial Advisors Inaugural Barron’s Hall of Fame Advisors

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Bonus depreciation is a pro-taxpayer measure Congress enacted in the early 2000s to reward businesses for investing in new property. It allows taxpayers to immediately deduct a certain percentage of their equipment costs in the year of purchase.

In 2017, the tax reform bill known as the Tax Cuts and Jobs Act (TCJA) expanded the bonus depreciation allowance by permitting taxpayers to recover 100% of their asset costs (up from the prior-year allowance of 50%) and to apply bonus depreciation to both new and used property.

But the benefits didn’t stop there.

In September 2019, the IRS and the Treasury Department published their interpretations of the TCJA’s bonus depreciation provisions in two sets of guidance: final regulations T.D. 9874 and proposed regulations REG-106808-19. Together, these releases show that the changes made to our tax code are favorable for taxpayers in other ways.

Previously owned property Used property became eligible for bonus depreciation treatment, but only if that property had not previously been owned by the taxpayer (or their predecessor). To determine a taxpayer’s prior ownership, the IRS

instituted a lookback period of only five calendar years, which will save taxpayers the administrative headache of tracing ownership records back for decades. The IRS will also disregard prior ownership if the property was sold within 90 days of being placed in service.

The jump from 50% to 100% bonus depreciation is a big one, and businesses with construction projects in process around the time the TCJA went into effect may be able to qualify their projects for the full allowance thanks to this rule change.

Ciccotelli is vice president in the Tax Services Group at Meaden & Moore.

Third-party constructed building projects Property built by third-party contractors on behalf of the taxpayer had previously been excluded from bonus treatment. The TCJA now considers contracted builds to be self-constructed property, which allows taxpayers to take bonus depreciation if their placed-in-service date is after September 27, 2017. Contracted projects and other self-constructed property are typically considered as placed in service when significant physical work commences. When taxpayers elect into a certain safe harbor, this physical work test can be met when 10% of the construction costs have been paid or incurred.

Partnership bonuses Partnerships can now elect bonus depreciation for Section 743(b) basis adjustments, although the deduction may be limited for publicly traded partnerships. Publicly traded partnerships cannot take bonus depreciation for basis adjustments attributed to Section 704(c) built-in gains that were calculated using remedial allocation.

Another small clarification to partnership tax law can make a big difference to partnerships with tax-exempt partners. Although tax-exempt partners still cannot take bonus depreciation deductions, all other partners are eligible to take bonus allowances for their proportionate shares of eligible property costs.

Act fast Many of these pro-taxpayer changes are retroactive to 2017 or 2018. To capture the new bonus opportunities, you may need to amend a tax return or two.

Talk to your tax adviser to see if additional bonus depreciation will outweigh the cost of amending your returns.

16 | CRAIN’S CLEVELAND BUSINESS | March 9, 2020

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3/5/2020 3:03:47 PM

NOMINATIONS

NOW OPEN

LAST CHANCE!

Crain’s will single out 20 up-and-coming professionals who haven’t turned 30 yet but are already making a mark on Northeast Ohio.

DEADLINE: March 20

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THE LIST

Engineering Firms

Ranked by number of local registered engineers LOCAL ENGINEERS 1-1-2020 REGISTERED/ TOTAL

TOTAL LOCAL STAFF 1-1-2020

2019 LOCAL ENGINEERING BILLINGS (MILLIONS)

NOTEABLE 2019 PROJECTS

TOP LOCAL EXECUTIVE(S)

1

GPD Group 520 S. Main St., Suite 2531, Akron 330-572-2100/gpdgroup.com

185 290

610

$100.0

City of Cleveland general engineering services, Northeast Ohio Regional Sewer District West Creek stream restoration

Darrin Kotecki, president

2

AECOM 1300 E. 9th St., Suite 500, Cleveland 216-622-2300/aecom.com

69 115

220

$124.0

NA

Molly E. Page, vice president

2

Osborn Engineering 1100 Superior Ave., Suite 300, Cleveland 216-861-2020/osborn-eng.com

69 115

140

$18.4

Irishtown Bend, Cleveland Water water main project phase III, Medina County Courthouse expansion/renovation, Cleveland Museum of Natural History - Gateway Project design

Gary F. Hribar, CEO

4

Middough Inc. 1901 E. 13th St., Suite 400, Cleveland 216-367-6000/middough.com

46 116

152

$24.4

Miscellaneous national projects for the process, energy, industrial and facility markets

Ronald R. Ledin, chairman, CEO

5

CT Consultants Inc. 8150 Sterling Court, Mentor 440-951-9000/ctconsultants.com

45 89

162

$27.6

Ohio Turnpike reconstruction, Lakewood wastewater high-rate treatment

Dave Wiles, president

6

Thorson Baker and Associates Inc. 3030 W. Streetsboro Road, Richfield 330-659-6688/thorsonbaker.com

32 89

124

NA

Euclid City Schools, Euclid Grand, Belle Oaks, Warner Theatre, North Royalton City Schools, Green Leaf Ohio processing facility

Jeffery Miterko Donald J. Schehl Nathaniel J. Kobb, principals

7

HWH Architects Engineers Planners Inc. 600 Superior Ave. E., Cleveland 216-875-4000/hwhaep.com

29 48

69

$9.8

Manufacturing expansion projects throughout the world, domestic R&D testing facilities, renovations of industrial, commercial and government buildings

Peter P. Jancar, chairman

8

ms consultants 4608 St. Clair Ave., Cleveland 216-658-2512/msconsultants.com

28 33

71

$7.2 (1)

Mahoning County Courthouse restoration, Interstate 680/State Route 164 interchange, Canfield Comprehensive Plan

Jeanne Mosure, vice president of public affairs

9

DLZ 614 W. Superior Ave., Suite 1000, Cleveland 216-771-1090/dlz.com

25 31

62

$13.5

City of Cleveland Department of Water, ODOT District 12 bridge inspections

Vickie Wildeman, vice president

10

Karpinski Engineering 3135 Euclid Ave., Cleveland 216-391-3700/karpinskieng.com

24 78

88

$10.4

Lakewood Family Health Center, MetroHealth campus transformation, Tri-C Metro Campus Center, Dealer Tire corporate offices

James T. Cicero, president

11

The Austin Co. 6095 Parkland Blvd., Mayfield Heights 440-544-2600/theaustin.com

23 43

116

NA

Project Palladium (confidential), Project Emerald (confidential)

Michael G. Pierce, president

12

Michael Baker International 1111 Superior Ave., Cleveland 216-664-6493/mbakerintl.com

22 28

58

NA

Cleveland Airport North Airfield projects, Towpath Trail Stage 3, Irishtown Bend planning study

Jeff Broadwater, vice president, office executive

13

Environmental Design Group 450 Grant St., Akron 330-375-1390/envdesigngroup.com

21 25

67

$8.0

City of Sandusky Landing Park and Sandusky Bay Pathway, city of Akron Romig Road, ODOT District 12 Culverts

Dwayne Groll, president Lu Ann Unrue, chief strategy officer

14

E2G|The Equity Engineering Group Inc. 20600 Chagrin Blvd., Suite 1200, Shaker Heights 216-283-9519/E2G.com

20 53

102

NA

NA

David A. Osage, president, CEO

15

HDR 1100 Superior Ave. E., Suite 650, Cleveland 216-912-4240/hdrinc.com

19 29

31

NA

Bridge over the Hoover Dam, Mario Cuomo Bridge

Richard G. Atoulikian, VP, Northeast client service manager; Jennie Celik, associate VP/NE Ohio Water Section lead; Joanne Shaner, associate VP, Ohio Bridge Section manager

16

Mannik & Smith Group Inc. 20600 Chagrin Blvd., Suite 500, Shaker Heights 216-378-1490/manniksmithgroup.com

19 32

39

$4.8

ODOT Trumbull County maintenance facility, Welton's Gorge Geauga Park District, Ohio CAT headquarters, Fresenius Kidney Care dialysis center

Mark A. Smoley, senior vice president, director, principal

17

Nexus Engineering Group LLC 1422 Euclid Ave., Suite 1400, Cleveland 216-404-7867/nexusegroup.com

18 88

128

$22.2

Environmental compliance and process safety projects, two major refinery turnarounds to improve efficiency, major refinery rebuild

Jeffrey O. Herzog, president Marianne C. Corrao, executive VP

18

Chagrin Valley Engineering Ltd. 22999 Forbes Road, Suite B, Oakwood Village 440-439-1999/cvelimited.com

17 25

40

NA

Nagel Road widening, Cochran and Pettibone intersection replacement, Chester Road widening, Cook and Columbia sewer phase five

Donald F. Sheehy, president

19

Mott MacDonald LLC 18013 Cleveland Parkway, Suite 200, Cleveland 216-535-3640/mottmac.com

17 22

25

$1.5

NEORSD Westerly Storage Tunnel, auxiliary lane for I-480 Eastbound, ODOT Richmond Road bridge rehabilitation in Richmond Heights

Michael G. Vitale, senior vice president

20

R.E. Warner & Associates Inc. 25777 Detroit Road, Suite 200, Westlake 440-835-9400/rewarner.com

16 33

60

NA

Substations, transmission lines, electrical distribution systems, service/maintenance facilities, steel mills

Theodore A. Beltavski, president

21

Scheeser Buckley Mayfield LLC 1540 Corporate Woods Parkway, Uniontown 330-526-2700/sbmce.com

15 24

34

NA

KSU Design Innovation Hub, Aultman Hospital commissioning, CWRU Cryo-Electron Microscopy facility, Fernway Elementary restoration

Chris Schoonover, president

22

Euthenics Inc. 8235 Mohawk Drive, Strongsville 440-260-1555/euthenics-inc.com

13 16

23

$3.6

Memphis Road bridge replacement, Ohio 87 landslide repair, North Main Street bridge inspection

Alan R. Piatak, president

23

DLR Group|Westlake Reed Leskosky 1422 Euclid Ave., Suite 300, Cleveland 216-522-1350/dlrgroup.com

12 23

89

$9.0

Cleveland Museum of Natural History expansion, Cleveland Clinic, Ohio State University Medical Campus/Arts District

Matthew Janiak, principal, Northeast region leader

24

KS Associates Inc. 260 Burns Road, Suite 100, Elyria 440-365-4730/ksassociates.com

12 14

32

NA

Cleveland Metroparks Wendy Park pedestrian bridge, Port of Cleveland Bulk Terminal, ODOT District 12 culvert rehabilitations

Lynn S. Miggins, president

25

McHenry & Associates Inc. 25001 Emery Road, Suite 200, Warrensville Heights 216-292-4696/mchenryassociates.com

11 22

25

NA

One Lakewood Place mixed-use development, John Carroll University projects, Western Reserve Group office

Michael Bandwen, president

25

PTA Engineering Inc. 275 Springside Drive, Suite 300, Akron 330-666-3702/ptaengineering.com

11 22

30

NA

Akron Children’s Hospital Research Institute, NEOMED BioMed Science Academy, Summit County Medical Examiner building improvements

Patrick W. Klanac Michael J. Casseday, principals

27

Barber & Hoffman Inc. 2217 E. 9th St., Suite 350, Cleveland 216-875-0100/barberhoffman.com

10 14

19

NA

MetroHealth campus transformation, Tri-C Campus Center, May Company façade restoration, KSU College of Business

Michael R. Miller, president

RANK

COMPANY

RESEARCHED BY CHUCK SODER: CSODER@CRAIN.COM

Get 39 firms, more executive names and up to 10 years of data. Become a Data Member: CrainsCleveland.com/data To prevent ties, companies with the same number of local registered engineers are then ranked by total local engineers. Information is supplied by the companies. Send feedback to Chuck Soder: csoder@crain.com.

(1) Company estimate

18 | CRAIN’S CLEVELAND BUSINESS | March 9, 2020

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3/5/2020 3:04:21 PM

HEALTH CARE

Corporate response to coronavirus outbreak grounds employees

BY KIM PALMER

The cascade of conference cancellations and restrictions on business travel due to the outbreak of COVID-19, the disease caused by the coronavirus, has surged in recent weeks. Some of the largest tech companies, including Facebook, Google, Adobe and Microsoft, have all canceled, delayed or pulled out of some of the industy’s most anticipated conferences and have grounded local employees.

Ohio Gov. Mike DeWine issued an order prohibiting the sale of tickets to the public for the Arnold Sports Expo and Festival, an annual Columbus event created by Arnold Schwarzenegger. Justifying the decision to limit spectators, DeWine noted the event was predicted to bring in participants from more than 80 countries, including some affected by COVID-19.

“I want to be clear that the threat of coronavirus in Ohio and the United States remains low,” DeWine said at a press conference, “but this could change, and we have to be prepared.”

Pulling the plug on large corporate gatherings and public events is not the only way businesses are trying to ensure employee safety and limit corporate risk.

COVID-19

From Page 1

COVID-19 — a respiratory disease with symptoms including fever, cough and breathing trouble — has been detected in almost 70 locations internationally, including the United States, where the Centers for Disease Control and Prevention reports 99 cases, including those confirmed and presumed positive. The CDC has a page dedicated to guidance for businesses and employers to plan and respond to COVID-19, including encouraging sick employees to stay home, separating sick employees from others, performing routine environmental cleaning, taking certain steps before traveling and more.

Dr. Robert Wyllie, Cleveland Clinic’s chief of medical operations, said that it’s important to keep instances of COVID-19 in the U.S. in perspective compared to, say, influenza. This season, 32 million Americans have been infected with the flu and 18,000 have died, he noted.

Hoyen recommended businesses direct employees to guidance from the CDC and other reputable organizations and review their policies around teleworking and ensuring employees who stay home sick aren’t penalized. Wyllie also recommended businesses take a close look at essential travel vs. what can be postponed.

Hoyen and Wyllie both emphasize the importance of hand-washing; coughing or sneezing into an elbow or tissue; getting the influenza vaccine; avoiding touching your eyes, mouth or nose; using hand sanitizer with at least 60% alcohol; and staying home when sick.

But for many people, choosing to stay home is complex. Without access to paid sick leave, some may decide to go to work sick or send their kid to school sick because taking time off work means losing pay or even risking termination, noted Patricia Stoddard Dare, a professor of social work at Cleveland State University who has studied paid sick leave. She pointed to Bureau of Labor statistics that show

International companies including IBM, Amazon and Microsoft have not only restricted or canceled corporate travel but also requested that employees work from home for the foreseeable future.

Several tech employees working in the Cleveland area have been told to cancel trips to their out-of-state headquarters and have instructions to self-quarantine for two weeks if they recently traveled to one of the coronavirus hot spots.

NASA Glenn Research Center is participating in an agencywide telework day, something it’s done in the past to test capabilities involved with such a large-scale remote work event. but this time in response to the coronavirus outbreak.

“As always, the protection and care of our NASA team is the top priority.

As the coronavirus (COVID-19) situation continues to evolve, NASA is taking various actions to maintain preparedness,” NASA Glenn spokeswoman Jan Wittry said. “The telework day is optional but highly encouraged.”

Having most of a workforce out of the office is unthinkable for some companies, but commonplace for others.

Toptal, a global company that pro nearly a third of Americans — and 69% of part-time workers — don’t have access to paid sick leave.

CDC research estimates that lack of paid sick leave resulted in 1,500 additional deaths during the H1N1 outbreak.

Those least likely to have paid sick leave, Stoddard Dare said, include personal health care attendants, daycare and food-service workers, and cleaning staff, all of whom are at risk of getting sick and of becoming contagious in the workplace and beyond.

Often, one of these workers becoming sick aligns increased household expenses (such as doctor visits and medications) with the choice to forfeit their daily wage to stay home.

“I hope people see that paid sick leave is very much a public health issue,” Stoddard Dare said. “And you having paid sick leave benefits isn’t as meaningful if everyone doesn’t have paid sick leave benefits because, again, it’s the person who is making your sandwich, it’s the person who is taking care of your baby at daycare, it’s the person who’s taking care of your elderly parents.”

She added it’s “absolutely” probusiness to offer paid sick leave. Beyond protecting staff against a disease spreading, it gives workers an opportunity to address health concerns and become more productive.

As for the physical office space, Tim Tilton — partner at Stratus Building Solutions of Cleveland, part of a national janitorial service company — has seen increased inquiries from employers looking for advice on keeping their spaces clean. The initial line of defense, he said, is common sense: Ensure employees wash their hands properly. He recommended those cleaning the office wipe down surfaces in one direction so as not to spread germs and use color-coded cloths to keep supplies used in a bathroom or food area separate.

Heather Walter, director and associate professor in the school of communication at the University of Akron, said the messaging businesses deploy can be critical. Employers need to consider the trust their employees put

vides tech employees for long- and short-term projects, has no headquarters, no permanent office and a completely remote workforce.

Michelle Labbe, vice president of development at Toptal, which employs more than 10 remote workers across Ohio, said the company has seen the consequences of the coronavirus firsthand.

“We have had an extraordinary number of résumés come in over the last week,” she said, “with at least half

of people stating that they would like to work with us because we are fully remote — because of the coronavirus.”

Even without offices, Labbe added she’s seen a drop-off in attendance at some of the company’s employee meetups and client events.

“We had two events in Lisbon, and they were canceled. Not because there are any reports of coronavirus in Lisbon, but because people are coming from different countries and they don’t want to end up stuck or quarantined,” she said, pointing out that flights to and from some countries have been completely grounded. “It is not only safety; it is about their comfort level. If they do not want to travel, they do not have to travel.”

One benefit of having all remote workers is that they are well-versed in videoconferencing. Labbe said Toptal uses videoconferencing for all corporate meetings.

“We are set up well in this crisis, or whatever we are calling it, because we are all remote,” she said, adding that she knows some companies are not as trusting. “We all know that we are working because we work from home every day,” she said.

Toptal is not the only business uniquely prepared to respond to the

conditions created by the outbreak.

As commercial airlines cut flights by 10% to 20% in North America and cancel flights to countries hard hit by the disease, charter and shuttle airlines provide an attractive alternative.

Rick Pawlak, senior vice president of Ultimate Air Shuttle, said that his company, which services regional corporate and limited overseas travel, has not experienced any major disruption to its business.

“With the mainline carriers decreasing their routes, we are anticipating a possible pickup in our business,” he added.

Daily flights in and out — eliminating overnight stays — and Ultimate Air’s small private lounges, which are cleaned between flights, help attract customers to charter a flight or book a place on a 30-seat shuttle instead of opting for a major carrier.

“It is the large corporations you hear canceling business trips. We handle travel for small and midsize businesses,” Pawlak said. “The air shuttle business was built around the small and midsize businesses, and they have to travel.”

in them and prepare communication to lay out what is likely to happen and what expectations they’ll have if COVID-19 appears here.

“That looks like messages that say, ‘Here’s our sick leave policy; here’s how we’ll be carrying it out; here are the things that we’re encouraging you to do if you feel sick; here’s how we will encourage you not to spread the virus; how handwashing and other hygiene care is essential,’ ” Walter

said. “We want to keep everybody healthy. This is the best way to protect ourselves, protect our business, protect our clients or our customers.”

The sooner this communication happens, the better, but it’s also important to balance preparation with the reality that COVID-19 isn’t in Northeast Ohio yet, she said. Be transparent with accurate information without fostering panic.

“But more, I think, than just giving

people accurate information, it’s accurate information within the context of the place that you go every day and the company that you commit to and the people you work with,” Walter said. “It’s the accurate information as it relates to you and your family and your household and your community and the job that you do every day.”

How COVID-19 spreads Health experts are still learning the details. Currently, it is thought to spread:  Through the air by coughing and sneezing Through close personal contact, such as touching or shaking hands  By touching an object or surface with the virus on it, then touching your mouth, nose, or eyes  In rare cases, by contact with feces SOURCE: CLEVELAND DEPARTMENT OF PUBLIC HEALTH

Kim Palmer: kpalmer@crain.com, (216) 771-5384, @kimfouroffive

Lydia Coutré: lcoutre@crain.com, (216) 771-5228, @LydiaCoutre

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MARCH 9, 2020 | CRAIN’S CLEVELAND BUSINESS | 19

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FROM PAGE ONE | BLIGHT AND WRONG: NORTHEAST OHIO LENDING

LENDING

From Page 1

ting do unities.

llars or that aned

85% 84% 80% 77% 80% 75% 74% 66% 71% 68% 77% 67% 79% 83% 85% 78%

S GRAPHIC

While it might make business sense from the lender’s side to prefer loans they’ll make more money on, or to tack on higher-term rates on perceived risky customers, such behavior raises questions of whether banks could, or should, do more to support revitalization of the housing markets being left behind as those habits tend to block out needier borrowers.

But that would take some creative approaches to lending that banks are not typically required or incentivized to pursue outside of Community Benefits Agreements or the Community Reinvestment Act. The CRA, of course, was established in 1977 to combat discriminatory lending practices such as redlining, which some advocates say persists today in practice despite being outlawed in name. CRA may not go far enough, yet it could be revamped under the Trump administration to the possible detriment of low- or moderate-income (LMI) and underserved communities and to the benefit of the banking system.

“Are banks doing enough?” Blackwell asked. “Not yet.”

That sentiment could apply across the country, according to the National Community Reinvestment Coalition (NCRC).

“Despite the significant lending benefits provided by the CRA, NCRC’s research has continually and consistently shown that most communities in the United States suffer from a lack of proper investment, with the worst-off neighborhoods being the same minority and low-income neighborhoods who were redlined for several decades,” said Jesse Van Tol, CEO of NCRC, a Washington, D.C.-based nonprofit. “Although we created community benefits agreements in 2016, and have had more than $100 billion invested into communities because of these agreements, banks can and should do more to rectify their lending and investing imbalances.”

For underserved neighborhoods, those imbalances can foster a depressed market.

According to Zillow, after bottoming out in 2015, home values in Maple Heights are trending up but are still shy of what they were 10 years ago. The median home value there in February was just over $67,000, compared with $75,000 (or about 12% more) in February 2010. The median sale price there is about $75,500.

It’s a comparable trend in Cleveland proper, where median home values plummeted to $41,000 in 2013 but stand at nearly $67,000 as of last month, or about 4.6% higher than at the same point in 2010. The median sale price there is about $67,800.

Compare those to Rocky River, where home values have grown steadily over the same period and are about 43% higher today, with a median sale price of more than $262,000.

“Neither the East Side of Cleveland nor the inner-ring suburbs have recovered from the foreclosure crisis because they are dealing with residual blight and haven’t pulled themselves back up,” said Frank Ford, a senior policy adviser with the Western Reserve Land Conservancy (WRLC).

County banking partner Financial companies like KeyBank, Fifth Third Bank, Huntington Bank and community banks like Third Federal Savings & Loan — plus many others — lend across Greater Cleveland, helping borrowers buy and repair

Conventional home mortgage loan applications

by African Americans in Cuyahoga County

Euclid

This map by Mark Salling, senior fellow and research associate in Cleveland State University’s Maxine Goodman Levin College of Urban Affairs, shows where African Americans applied for conventional one-four unit home purchase loans in 2016 in Cuyahoga County. With nearly 25% of these applications denied, African Americans faced a denial rate three times greater than white applicants that year.

Bratenahl Additionally, the neighborhoods with larger black populations today largely correspond with East Side areas deemed “declining” or “hazardous” by the Home Owner’s Loan Corp. in 1938 East (i.e. redlining) and tend to be LMI communities struggling most to rebound from Cleveland the foreclosure crisis. Those depressed housing markets would likely be improved by more bank investment and deliberate lending activity, all of which is encouraged in a proposed county banking services contract.

Richmond Heights

Cleveland Rocky River

Lakewood

North Olmsted

Newburgh Heights

Linndale

Fairview Park

Olmsted Falls

Brooklyn Heights

Brook Park Parma

Middleburg Heights

Berea

SOURCES: 2010 CENSUS; 2016 HOME MORTGAGE DISCLOSURE ACT (HMDA)

homes, often in partnership with local stakeholder groups and community development financial institutions (CDFIs). To some extent, they have to.

And every financial institution is philanthropically engaged.

But people like Blackwell, Ford and Sally Martin, chair of the Greater Cleveland Reinvestment Coalition’s executive committee and the South Euclid housing director, are among advocates who have been raising questions in past months of whether regional banks flush with cash could do more to help improve Cleveland neighborhoods.

Such questions have become central today as Cuyahoga County negotiates terms for a banking provider. The process for awarding that contract provides an opportunity to press county officials and the companies bidding for its banking business to do more to support community revitalization in struggling neighborhoods.

“The pressure on banks should be to consciously reverse policies that leave black people out or behind in achieving homeownership or for competitive lending rates,” Blackwell said. “They should acknowledge institutional racism for what it is in housing and design home loan products for applicants of color.”

Positions like that have inspired new commitments by the county banking provider.

Per legislation introduced Feb. 25 and slated to be passed by April — the current contract expires at the end of March — that banking provider is Cleveland’s KeyBank, which has been significantly less active than its competitors in residential lending in its hometown suburbs, both in more depressed neighborhoods on the East Side and across the county in general.

Paul Herdeg, deputy chief economic development officer for Cuyahoga County, said the bank won in the request-for-proposal scoring

Garfield Heights

Beachwood

Hunting Valley

Woodmere Orange Warrensville Heights

Moreland Hills

Chagrin Falls

Bentleyville Solon

Glenwillow Walton Hills

Oakwood

Percent of African American population by 2010 census tract

Broadview Heights

North Royalton

Pepper Pike

Bedford

Valley View

Seven Hills

Mayfield Heights

Lyndhurst

Bedford Heights

Maple Heights

Independence

= One African American mortgage application in 2016 Strongsville Strongsville

University Heights

North Randall

Cuyahoga Heights

Brooklyn

Parma Heights Olmsted

South Euclid

Shaker Heights Highland Hills

Westlake

Mayfield Gates Mills

Cleveland Heights

Bay Village

Highland Heights

Brecksville

0.2% - 11.7%

57.6% - 82.4%

11.8% - 32.1%

82.5% - 100.0%

32.2% - 57.5%

Top 15 lenders that made home purchase loans One- to four-family homes, Cuyahoga County, 2018, by loans made

Cleveland’s KeyBank, which is expected to win the county’s banking services contract, ranked 12th. The process of negotiating that contract has led some stakeholders to question whether the banking provider should be required to do more residential lending in the Cleveland area, which could help support the languishing recovery of property values in LMI communities.

LOANS Lender (CBA Lender in red)  = bank that bid on Cuyahoga banking contract

DOLLARS

% of loans applied Loans for that applied Loans were for made made

Third Federal S&L 1,546 Howard Hanna Mortgage 1,310 Huntington Bank 1,250 Crosscountry Mortgage 1,100 First Federal S&L Lakewood 1,042 Quicken Loans 975 Fifth Third 857 551 PNC Bank Citizens Bank 503 464 Chase Bank First National Bank 375 478 KeyBank Fairway Independent Mortgage 357 American Midwest Mortgage Corp.

330 Lendus Mortgage 317 Top 15 total 11,455

1,297 1,098 960 845 821 718 624 362 340 310 297 293 283 277 264 8,789

SOURCE: WESTERN RESERVE LAND CONSERVANCY

process because of the availability of “superior” banking services. It also provides a local lockbox other banks apparently don’t offer.

Key backed out of the first-mortgage business a couple of years before the Great Recession, but returned to it in 2016, following the acquisition of First Niagara Financial Group of Buffalo.

Key officials declined to discuss the bank’s mortgage lending in detail for this piece, including research comparing lending activity among Northeast Ohio banks or some of the commitments attached to the new

84% 84% 77% 77% 79% 74% 73% 66% 68% 67% 79% 61% 79% 84% 83% 77%

Dollars applied for

Dollars loaned

263,750,000 223,845,000 229,600,000 193,700,000 205,980,000 165,330,000 155,570,000 119,155,000 202,260,000 162,605,000 139,125,000 103,780,000 130,145,000 96,430,000 88,475,000 58,300,000 76,945,000 54,690,000 87,950,000 59,780,000 79,415,000 61,465,000 87,750,000 58,745,000 47,275,000 37,495,000 42,570,000 35,315,000 40,025,000 33,940,000 1,876,835,000 1,464,575,000

% of dollars applied for that were loaned

85% 84% 80% 77% 80% 75% 74% 66% 71% 68% 77% 67% 79% 83% 85% 78%

CRAIN’S CLEVELAND BUSINESS GRAPHIC

banking contract, which has long belonged to Key. A Key representative provided this statement several weeks back, though: “In 2017, KeyBank, through our National Community Benefits Plan, provided more than $30.5 million in mortgage lending to low- to moderate-income individuals and communities in Northeast Ohio. In 2018, that number increased to $62.8 million.

Through October 2019, that number stands at more than $67.7 million and our Q4 (2019) pipeline in this area is strong. Currently, our investment in

mortgage lending since 2017 to lowto moderate-income individuals and communities in Northeast Ohio totals more than $161 million.”

Those numbers don’t mean much to communities that feel left out.

“When we look at community development in Cleveland and talk to other practitioners, we fundamentally don’t see where that investment is happening,” Martin said.

That’s where the new contract comes in.

The (new) banking contract The banking and treasury services contract before county council is valued at $3.2 million. It would run from April 1, 2020, to the end of March 2024. With that contract comes the privilege of managing $600 million in county deposits and an investment portfolio of some $850 million.

Six banks bid on the contract: Key, JPMorgan Chase Bank, Dollar Bank, Huntington Bank, PNC Bank and U.S. Bank.

For housing advocates like Martin, the hope is that whoever wins that relationship will be required to do more to support borrowers and businesses in depressed neighborhoods.

That’s what groups like GCRC, WRLC and many others have been engaged in for the past several months, raising concerns with County Executive Armond Budish and other county officials, who’ve been receptive.

Martin said communities like hers feel somewhat overlooked by banks, but especially when it comes to Key. The bank regularly touts pacing ahead of its latest CBA pledge, which calls for $16.5 billion in investments between 2017-21 in LMI communities and was developed with NCRC during Key’s acquisition of First Niagara Bank.

“The bank is saying they’ve met 80% of their (CBA) goals in a couple

20 | CRAIN’S CLEVELAND BUSINESS | March 9, 2020

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year look that nerL for c “inte CBA into Whi ther supp ing valu Th of g that mor sinc root “W mon if w said C over sult onto up f So but ucts for t offic LMI ince fees $150 prov gram and will out the whic hom gard opp mitt Sma mad by 2 tion thro erat Cen hom can not beca eno deb B “com som neb As fa cers wha beca Th date prom sequ C agre ing trac ises for r “I com I am chan Sall mun cage shou This opin kno voic R why and

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years,” said the WRLC’s Ford. “We are looking at Key and asking, ‘Where is that money in Cleveland or the inner-ring suburbs?’ ” Like Blackwell, Martin said the need for credit in her area of South Euclid is “intense” and that she longs for those CBA commitments by Key to translate into more lending in her neighborhood.

While home values are coming back up, there is pent-up demand for credit to support purchase and renovation of aging housing stock that could lift home values throughout the community.

That could help with the building of generational wealth, something that has evaded African Americans more than their white counterparts since slavery and which tends to be rooted in property ownership.

“We have to find a way to make money available to these communities if we’re ever going to stabilize them,” said Jim Rokakis, WRLC vice president.

Conversations about these issues over the past several months have resulted in new commitments tacked onto the new banking contract lined up for Key. Some of those provisions are broad, but include providing banking products for individuals who do not qualify for traditional loans; encouraging loan officers to make more home loans in LMI areas by increasing compensation incentives; reducing loan transaction fees on original loans of less than $150,000; partnering with the county in providing a series of community programs addressing financial literacy and education (at least one program will be directed toward children aging out of foster care); ongoing support of the county’s HELP Loan Program, which provides low-interest loans for home repairs; drafting legislation regarding appraisals to create additional opportunities for LMI borrowers; committing to increasing the $22 million of Small Business Administration loans made to LMI small businesses in 2019 by 20% in 2020; extending participation in the Challenge Fund program throughout the county (that fund, operated by the Home Repair Resource Center, can guarantee a bank loan on home repairs for homeowners who can afford a monthly payment but are not able to qualify for bank financing because of past credit problems, not enough equity in the house, too much debt or other reasons).

Budish stressed those items are “commitments,” not mandates. While some are specific, others are more nebulous and “aspirational,” he said.

As far as those incentives for loan officers, Budish said Key has told him what they are, but he can’t share them because they constitute trade secrets.

The county will receive regular updates about Key’s progress on those promises, but there are no built-in consequences for not meeting those goals.

County officials praise the bank for agreeing to those commitments, noting Key was primed to win the contract without them. But those promises may not have been made if not for rabble-rousers.

“I am extremely elated to see their commitment, promises in print, and I am very optimistic that things will change,” Blackwell said. “People like Sally Martin, mayors and other community leaders have been rattling the cage for quite some time now while shouting, ‘You must do better, more!’

This action on their behalf, in my opinion, is a testament that they know that we won’t stop and that our voices will only get louder.”

Reports from local researchers show why these commitments are necessary and should be followed through.

A look at lending patterns

that redlined districts of the past — or “hazardous” neighborhoods in which groups like HOLC would not lend at all, contributing to stagnating markets — have some of the region’s greatest density of African Americans today.

And the housing markets most struggling with property values are the ones that tend to be more black than white.

Looking at disparities in rising home values among different Greater Cleveland communities, it bears pointing out that Rocky River is nearly 95% white. Cleveland proper and Maple Heights, communities with languishing property values, are about 50% black and 72% black, respectively.

Ford’s research of Home Mortgage Disclosure Act data for the WRLC ranked Key 12th in a list of the county’s top 15 lenders between 2016-18 for one- to four-family homes in term of number of loans made. It approved 67% of the total dollars borrowers applied for — the second-lowest approval rate of the top 15. PNC came in at a 66% approval rate but ranked eighth by loans made.

Per the report, the top home purchase lenders countywide in the research period were Third Federal Savings & Loan — which OK’d 85% of all loan dollars applied for in the research period, approving 1,297 of 1,546 requested loans — and Howard Hanna Mortgage Services. Huntington Bank came in third.

Addressing systemic issues

EMANUEL WALLACE | EVA NOSLEN PHOTOGRAPHY

grin s

CRAIN’S CLEVELAND BUSINESS

“THE PRESSURE ON BANKS SHOULD BE TO CONSCIOUSLY REVERSE POLICIES THAT LEAVE BLACK PEOPLE OUT OR BEHIND IN ACHIEVING HOMEOWNERSHIP OR FOR COMPETITIVE LENDING RATES.” ——Annette Blackwell, mayor of Maple Heights

Huntington was the top lender among three banks in the county with CBAs — those are Huntington, Key and Fifth Third Bank, which did not bid on the contract — and the top lender overall of the banks that did bid. It OK’d 80% of all loan dollars applied for, approving 960 of 1,250 loans.

U.S. Bank and Dollar Bank did not crack the top 15 for the county’s best mortgage lenders.

On Cleveland’s East Side, where 19 of 20 neighborhoods are designated LMI, Key ranked 13th out of 15 top lenders with an approval rate of dollars applied for of 58%. The only banks with lower approval rates in the top 15 were Citizens Bank (52%) and Wells Fargo (54%).

Huntington, with an approval rate of 76% of dollars applied for, placed first.

A separate report by Cleveland State University’s Mark Salling, senior fellow and research associate in the Maxine Goodman Levin College of Urban Affairs, found that a racial divide appears when examining lending patterns: `Across ` 12 counties in Northeast Ohio, 22.7% of black applicants looking to buy a home were denied in 2016, compared to 8.3% of white applicants. ``Across all Cuyahoga County, 22.9% of black applicants were denied home loans, compared to 6.7% of whites.

Overlaying a Home Owners’ Loan Corp. map from 1938 with a 2010 census map of Cuyahoga County, Salling shows

The underlying issues with bank lending behaviors and credit access are also matters of racial equity, all of which tie back to lingering issues in struggling housing markets.

But it goes even deeper than that, as Blackwell explained: “It is more than not having the credit. (Some African Americans) don’t have the assets, the long credit history, the debt-income ratio is problematic. Why? Because black working people have historically earned lower wages in lower-paying jobs, and in order to make ends meet at times, the debt that they incur is more than 30% of their income or they can’t pay it all and it becomes delinquent credit or a charge-off. So when blacks apply for a loan, it is denied more than higher-income, credit-worthy, good debt-income ratio of a white person.

And if current homeowners attempt to refinance for a lower interest rate to achieve a lower payment, in a depressed real estate market the equity is not there and the home appreciation in these cities is significantly slower than those in more affluent communities, so that loan is also denied. So even the number of refinance loans is significantly lower for black people. This is indeed an outcome of years of redlining.”

County economic development director Ted Carter underscored the importance of aligning with housing advocates.

“Cuyahoga County agrees with advocates that banks must meet their obligation to serve the credit needs of their communities and intends to elevate its focus on this issue and engagement of banks on this issue in 2020,” Carter said. “Not only the banks where Cuyahoga County deposits its funds, but all banks doing business in Cuyahoga County should take steps to fully meet home purchase and home repair credit needs.”

Martin said the county contract is a step forward, emphasizing that getting this far has been an uphill battle. She encourages other local governments to take similar steps whenever they can, noting time will tell if these promises

by Key translate to positive change.

“The devil is in the details, but I am hopeful that this banking services contract represents an important first step in governmental entities partnering with the lending community to work strategically to ensure that community credit needs are being met,” she said.

“The county is to be applauded in taking a leadership approach in doing this. I hope that municipalities follow suit.

There are significant unmet credit needs in our communities and proposed changes to the CRA threaten to undermine incentives for banks to work in underserved areas, so these types of local negotiations are likely to become even more critical in the coming years.”

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

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PA G E 21

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CLASSIFIEDS To place your listing in Crain’s Cleveland Classifieds, contact Suzanne Janik at 313-446-0455 or email sjanik@crain.com LEGAL NOTICE UNITED STATES BANKRUPTCY COURT, NORTHERN DISTRICT OF OHIO, EASTERN DIVISION ) Chapter 11 ) Case No. 18-50757 (AMK) ) (Jointly Administered) ) Hon. Judge Alan M. Koschik NOTICE OF EFFECTIVE DATE OF EIGHTH AMENDED JOINT PLAN OF REORGANIZATION OF FIRSTENERGY SOLUTIONS CORP. AND ITS DEBTOR AFFILIATES TO ALL CREDITORS, INTEREST HOLDERS, AND OTHER PARTIES IN INTEREST, PLEASE TAKE NOTICE OF THE FOLLOWING: 1. Confirmation of the Plan. On October 16, 2019, the United States Bankruptcy Court for the Northern District of Ohio, Eastern Division (the “Bankruptcy Court”), entered the Order Confirming the Eighth Amended Joint Plan of Reorganization of FirstEnergy Solutions Corp., et al., Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 3283] (the “Confirmation Order”).

Among other things, the Confirmation Order confirmed the Eighth Amended Joint Plan of Reorganization of FirstEnergy Solutions Corp., et al., Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 3278] (as amended, modified, or supplemented from time to time, the “Plan”)2 as satisfying the requirements of the Bankruptcy Code, thereby authorizing FirstEnergy Solutions Corp. and its debtor affiliates (collectively, the “Debtors”) to implement the Plan on the Effective Date.

2. Effective Date. The Effective Date of the Plan occurred on February 27, 2020. Each of the conditions precedent to consummation of the Plan enumerated in Article IX of the Plan have been satisfied or waived in accordance with the provisions of the Plan.

3. Releases, Exculpation and Injunctions. Pursuant to the Confirmation Order, the settlement, release, injunction, exculpation and related provisions in Article VIII of the Plan are now in full effect.

4. Administrative Claims Bar Date. All requests for payment of an Administrative Claim (excluding Professional Fee Claims, any obligations arising in the ordinary course of the Debtors’ business with respect to post-petition accounts payable which by their terms become due and owing after the Effective Date, and any post-petition obligations owed to retail electricity customers or any employees, former employees, and retirees of the Debtors) that accrued on or before the Effective Date must be Filed and served on the Reorganized Debtors no later than March 30, 2020 (i.e., the first business day that is thirty (30) days after the Effective Date). Holders of Administrative Claims that are required to File and serve a request for payment of such Administrative Claims by the Administrative Claims Bar Date that do not File and serve such a request by the Administrative Claims Bar Date shall be forever barred, estopped, and enjoined from asserting such Administrative Claims against the Debtors, the Reorganized Debtors, or their respective property and such Administrative Claims shall be deemed forever discharged and released as of the Effective Date.

5. Professional Fee Claims. All final requests for Professional Fee Claims incurred during the period from the Petition Date through the Effective Date must be Filed and served on the Reorganized Debtors, the Committee and the United States Trustee no later than April 27, 2020 (i.e., the first business day that is sixty (60) days after the Effective Date). All such final requests will be subject to approval by the Bankruptcy Court after notice and a hearing in accordance with the procedures established by the Bankruptcy Code and prior orders of the Bankruptcy Court in the Chapter 11 Cases, including the Interim Compensation Order, and once approved by the Bankruptcy Court, paid promptly from the Professional Fee Escrow Account in its full Allowed amount. Notwithstanding anything to the contrary in the Plan, the provisions regarding the reimbursement of professional fees and expenses of the Supporting Creditors as set forth in the Process Support Agreement and of the Consenting Creditors as set forth in the Restructuring Support Agreement shall continue through the Effective Date and, for the avoidance of doubt, such professionals shall not be required to file any request for payment of such amounts pursuant to Article II.A.3 of the Plan or otherwise.

6. Executory Contracts and Unexpired Leases Deemed Assumed. In accordance with Article V.A of the Plan, on the Effective Date, except as otherwise provided in the Plan, all Executory Contracts or Unexpired Leases of the Debtors, not previously assumed or rejected pursuant to an order of the Bankruptcy Court, will be deemed to be Assumed Executory Contracts or Unexpired Leases, in accordance with the provisions and requirements of sections 365 and 1123 of the Bankruptcy Code, other than those Executory Contracts or Unexpired Leases that: (i) previously were assumed or rejected by the Debtors; (ii) are identified on the list of Rejected Executory Contracts or Unexpired Leases filed with the Plan Supplement; (iii) are the subject of a motion to reject an Executory Contract or Unexpired Lease that is pending on the Effective Date; or (iv) are subject to a motion to reject an Executory Contract or Unexpired Lease pursuant to which the requested effective date of such rejection is on or after the Effective Date; provided, however that to the extent an Executory Contract or Unexpired Lease is among one or more Debtors and one or more FE Non-Debtor Parties, such Executory Contract or Unexpired Lease is deemed rejected as of the Effective Date, unless such Executory Contract or Unexpired Lease (a) has been previously assumed by the Debtors or (b) is identified on the list of Assumed Executory Contracts or Unexpired Leases; and provided, further, however, to the extent that an Executory Contract or Unexpired Lease is among one or more Debtors and one or more FE Non-Debtor Parties and any such Executory Contract is not an Insurance Policy or a Surety Indemnity Agreement, the Debtor will consult with the applicable FE Non-Debtor Party and obtain the consent of the applicable FE Non-Debtor Party before including such Executory Contract or Unexpired Lease on the list of Assumed Executory Contracts or Unexpired Leases. Entry of the Confirmation Order by the Bankruptcy Court shall constitute approval of such assumptions and, to the extent applicable, assignments of the Executory Contracts and Unexpired Leases, and the rejection of the Executory Contracts or Unexpired Leases listed on the list of Rejected Executory Contracts and Unexpired Leases filed with the Plan Supplement pursuant to sections 365(a) and 1123 of the Bankruptcy Code, in each case effective as of the Effective Date.

7. Rejection Damages Claims. In accordance with Article V.B of the Plan, unless otherwise provided by a Final Order of the Bankruptcy Court, all Proofs of Claim with respect to Claims arising from the rejection of Executory Contracts or Unexpired Leases, pursuant to the Plan or the Confirmation Order, if any, must be Filed and served upon the Debtors or Reorganized Debtors, as applicable, within 30 days after the later of: (i) notice of entry of an order of the Bankruptcy Court (including the Confirmation Order) approving such rejection; and (ii) the effective date of such rejection. All counterparties to Executory Contracts or Unexpired Leases identified on the list of Rejected Executory Contracts or Unexpired Leases filed with the Plan Supplement, as amended, must file a Proof of Claim with respect to Claims arising from the rejection of Executory Contracts or Unexpired Leases by March 30, 2020 (i.e., the first business day that is thirty (30) days after the Effective Date). Any Claims arising from the rejection of an Executory Contract or Unexpired Lease not Filed and served within such time will be automatically disallowed, forever barred from assertion, and shall not be enforceable against the Debtors or the Reorganized Debtors, the Estates, or their property without the need for objection by the Reorganized Debtors or further notice to, or action, order, or approval of the Bankruptcy Court or any other Entity, and any Claim arising out of the rejection of the Executory Contract or Unexpired Lease shall be deemed fully satisfied, released, and discharged, notwithstanding anything in the Schedules or a Proof of Claim to the contrary.

8. Binding Nature of Plan and Confirmation Order. The Plan and the Confirmation Order are binding on the Debtors, their estates, any party seeking to act on behalf of, or in respect of, the Debtors or the Debtors’ estates, and any Holder of a Claim or Interest against the Debtors and such Holder’s respective successors or assigns, whether or not: (i) such Holder’s Claim or Interest is Impaired under the Plan; (ii) such Holder has accepted the Plan; (iii) such Holder failed to vote to accept or reject the Plan or voted to reject the Plan; (iv) such Holder is entitled to a distribution under the Plan; (v) such Holder will receive or retain any property or interests in property under the Plan; or (vi) such Holder has filed a Proof of Claim in the Chapter 11 Cases. You are encouraged to review the Plan and the Confirmation Order in their entirety.

9. Copies of Plan and Confirmation Order. Copies of the Plan and Confirmation Order may be examined by any party in interest during normal business hours at the Clerk of the United States Bankruptcy Court for the Northern District of Ohio, Eastern Division, 455 U.S. Courthouse, 2 South Main Street, Akron, Ohio 44308. You may also obtain copies of the Plan, Confirmation Order or of any documents filed in these chapter 11 cases for a fee via PACER at: https://ecf.ohnb.uscourts.gov/ or free of charge on the case information website of the Debtors’ Claims and Noticing Agent, Prime Clerk LLC, at https://cases. primeclerk.com/FES. Dated: February 27, 2020, Respectfully submitted, /s/ Bridget A. Franklin , BROUSE MCDOWELL LPA, Marc B. Merklin (0018195), Bridget A. Franklin (0083987), 388 South Main Street, Suite 500, Akron, OH 44311-4407, Telephone: (330) 5355711, Facsimile: (330) 253-8601, mmerklin@brouse.com, bfranklin@brouse.com -and- AKIN GUMP STRAUSS HAUER & FELD LLP, Ira Dizengoff (admitted pro hac vice), Lisa Beckerman (admitted pro hac vice), Brad Kahn (admitted pro hac vice), One Bryant Park, New York, New York 10036, Telephone: (212) 872-1000, Facsimile: (212) 872-1002, idizengoff@akingump. com, lbeckerman@akingump.com, bkahn@akingump.com -and- Scott Alberino (admitted pro hac vice), Kate Doorley (admitted pro hac vice), 2001 K Street, N.W., Washington, D.C. 20006, Telephone: (202) 887-4000, Facsimile: (202) 887-4288 salberino@ akingump.com, kdoorley@akingump.com, Counsel for Debtors and Debtors in Possession 1 The Debtors in these chapter 11 cases (the “Chapter 11 Cases”), along with the last four digits of each Debtor’s federal tax identification number, are: FE Aircraft Leasing Corp. (9245), case no. 18-50759; FirstEnergy Generation, LLC (0561), case no. 18-50762; FirstEnergy Generation Mansfield Unit 1 Corp. (5914), case no. 18-50763; FirstEnergy Nuclear Generation, LLC (6394), case no. 18-50760; FirstEnergy Nuclear Operating Company (1483), case no. 18-50761; FirstEnergy Solutions Corp.

(0186); and Norton Energy Storage LLC (6928), case no. 18-50764. The Debtors’ address is: 341 White Pond Dr., Akron, OH 44320.

2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Plan or the Confirmation Order, as applicable.

In re: FIRSTENERGY SOLUTIONS CORP., et al.,1 Debtors.

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

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Hasenstab Architects is pleased to announce the recent hire of registered architect, Natalie Shellhorn, AIA. Educated at The Ohio State University and Kent State University, Natalie brings six years of experience in architecture, including planning, design and coordination. She has designed a wide variety of healthcare projects for local and national clients. Natalie is a welcome addition to the Hasenstab Architects team.

Westfield Bank is pleased to announce that Krista Dobronos was promoted to market leader of the private banking, registered investment advisor (RIA), and mortgage lines of business. Krista led the initiative to launch RIA lending activity in 2019, and this new role will allow her to focus on growing that business. Her forward-thinking and attention to detail make her an integral part of Westfield Bank’s team.

Middlefield Bank is pleased to announce Greg Yurco has joined the team in Middlefield as Senior Vice President, Senior Commercial Lender. Greg comes to MB as an experienced Commercial Lender with over 40 years in the banking industry.

Greg takes the time to learn about your business and offer you the best solutions to assist you in achieving your goals.

Greg is a strong finance professional, having earned a Bachelor of Science majoring in Business Administration from Youngstown State University.

MPA is pleased to announce the promotion of Mike Stirling, AIA, LEED Green Assoc., to Associate. Mike joined MPA in 2002 while pursuing his Architecture and Business Degrees from Kent State. While at MPA, Mike became a registered Architect, obtained his LEED Green Assoc. credential and became NCARB certified.

Mike manages a variety of projects & specializes in Healthcare. As an Associate, Mike will continue to manage projects, work with clients, and provide mentorship to interns.

ACCOUNTING

Maloney + Novotny Maloney + Novotny (M+N) is pleased to welcome Adrina Wolf to our team. Adrina joins M+N as Director of Talent Acquisition, supporting the firm’s human capital needs and serving as a strategic partner to attract and retain top talent. In her role she manages the full lifecycle of the M+N recruiting process, finding and retaining exemplary employees in multiple markets.

She has a sharp eye for talent and a commitment to help employees find the right fit in our firm.

Maloney + Novotny (M+N) welcomes Jon Strano to our team.

Jon joins M+N as Human Resources Manager, managing the overall human resource service delivery while helping shape the culture that supports the firm’s goals. In his role, Jon guides and manages the provision of HR services, policies, and programs. Jon also leads the annual benefits program enrollment and administration function as well as managing the payroll system. Jon has experience in performance management and evaluation.

SERVICES

Westfield Bank ARCHITECTURE

Makovich & Pusti Architects, Inc. MPA is pleased to announce the promotion of Karen Huffman, IIDA to Associate. As the Director of MPA’s Interior Design Department, Karen brings more than 30 years of experience to the table. After obtaining her NCIDQ certificate in 1986, she has worked on a variety of interiors with a focus in Healthcare. Karen works closely with our clients to produce fully integrated design packages and construction documents. As an Associate, Karen will continue to lead the Interior Design Department.

ACCOUNTING

Maloney + Novotny

BANKING

Westfield Bank is proud to announce that Mike Wagar has been promoted to senior vice president, market leader, agency banking. Wagar works with independent insurance agents to provide lending solutions for mergers and acquisitions, perpetuation, and new producer financing. Wagar’s focus on developing long-term relationships with his clients has played a valuable role in Westfield Bank’s consultative approach to banking.

TestOil BANKING

Westfield Bank Westfield Bank is pleased to announce that Joe McNeill was promoted to market leader of the Akron market. McNeill’s passion for small business drives his focus on building trust, honesty, loyalty, and compassion within his market and community.

TestOil, an industry leader in oil analysis, just announced the promotion of Chief Operating Officer Mary Messuti to President. During her two years at TestOil, she instituted a Lean management program that enabled her to successfully scale the company on national and global levels, grow revenue significantly, expand product offerings, develop employee programs and cement the company’s reputation for outstanding customer service.

These are areas she will continue to focus on as President.

BANKING ARCHITECTURE

Makovich & Pusti Architects, Inc. MPA is pleased to announce the promotion of Steve Jouriles, AIA, CDP, LEED AP to Associate.

Steve joined MPA in 2017 and leads our Building Enclosure Group. He also manages MPA’s Intern Development Program. In 2019, he became an Interim Master Plans Examiner for the State of Ohio. Steve manages Higher Education, Public Sector & Building Enclosure projects. As an Associate, Steve will manage projects, coordinate project staffing, and continue fostering the Intern Development Program.

22 | CRAIN’S CLEVELAND BUSINESS | March 9, 2020

Westfield Bank Westfield Bank welcomes Erin Ploucha as chief administrative officer to the company. Erin joins Westfield Bank’s Executive Leadership Team with over 25 years of comprehensive human resource experience. In her new role, Ms. Ploucha will be responsible for ensuring that various functions are closely aligned with the teams that directly and indirectly support Westfield Bank’s clients, including the oversight of human resources, legal, facilities, and administrative functions.

CONSTRUCTION

Shook Construction Please join us in welcoming Jeffrey Engram to the role of Vice President of Business Development with Shook Construction. This role strengthens Shook Construction’s commitment to building excellence in central Ohio and beyond. A key team member of Shook Construction, Jeffrey will focus on client engagement across the organization. He brings over forty years within the Design and Construction industry in Project Management, Operations and Business Development roles to support him in this role.

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C O N TA C T

Sikich LLP, a global professional services firm specializing in accounting, advisory, technology and managed services, welcomes Margaret Jordan, J.D., M.S., as the business development director for Northeast Ohio. Margaret joins us with over 15 years’ experience in business development strategy, lead generation, project management and revenue development. In her role, she will work with key firm leaders and partners to develop revenue generation campaigns and support business development efforts.

Laura Picariello Reprints Sales Manager lpicariello@crain.com (732) 723-0569

CRAIN’S CLEVELAND LOOK BACK | THE ELECTION OF MIKE WHITE

Mayor White sought to be a uniter in first term ``IN HIS OWN WORDS “I extend my hand to all of Cleveland, whether they were with me or not. The healing begins in the morning. We shall be one city!”

——Michael White, mayor of Cleveland, in a victory speech after his 1989 election

A contentious election brought about a surprising victory for Michael R. White, a relative political newcomer who in 1989, running on a platform of uniting the city, beat his former mentor and influential power broker to become the second-youngest and second black mayor of Cleveland. During his terms (1990-2002), White oversaw an era of development accomplished through public-private partnerships and tax abatements. Under the White administration, the city invested in the Gateway Development, a $400 million-plus project that included Jacobs Field and Gund Arena, funded in part by a “sin tax” that lost the vote in Cleveland proper but passed with countywide support. His administration also oversaw the rehabilitation of the Warehouse District and building of the Great Lakes Science Center, provided $65 million for the Rock & Roll Hall of Fame and spearheaded an $80 million terminal after negotiating a deal with Continental Airlines to expand service at Cleveland Hopkins Airport. White took control of the Cleveland schools in 1998, and his administration helped pass a much-needed bond issue after previous levies had failed. — Kim Palmer

``THE HISTORY

“I did not ask to be put in charge of Cleveland schools, but could not turn my back on the children when asked to do so.”

——Mayor Michael White, from a letter he wrote to The Plain Dealer in 1997, before his administration took control of the Cleveland School District

“We can spend our money on roads and bridges and sewer systems, as we must, but we can never afford to forget that these children remain the true infrastructure of our city’s future.”

——Mayor Michael White, from his 1990 inauguration speech

“We are going to fight this fight. I can’t say we’re not going to lose, but when it’s over, the other side’s going to know they’ve been in a fight.”

——Mayor Michael White’s speech after Art Modell announced he would move the Cleveland Browns to Baltimore

Then-State Sen. Michael White at his Glenville district office in 1989. | CRAIN’S FILE PHOTO

``WHY IT MATTERS TODAY When White was elected, 40% of Cleveland’s residents lived in poverty. During his three terms, from 1990-2002, the country experienced one of its best economies since the 1970s.

White continued the Voinovich administration’s effort toward more downtown economic development, but he also wanted to focus on more social and educational development.

There are conflicting viewpoints on White’s 12-year run as Cleveland’s mayor.

His take-no-prisoners approach meant White was able to coerce local banks to commit millions to inner-city housing and businesses under the federal Community Reinvestment Act, but his unyielding personality put off private investors and public organizations over the years of his tenure.

White is credited with bringing back the Cleveland Browns in 1999, going up against the National Football League owners to retain

the team’s colors, name and historic record.

However, Browns owner Art Modell cited the mayor’s unwillingness to provide financial assistance for a new stadium as one of the reasons he moved the team to Baltimore in 1995.

There was also White’s open contempt for members of the local media whom he believed targeted him. The Plain Dealer sued the administration over public record access, which White repaid by barring the paper’s reporter from the 2001 announcement that he would not seek re-election.

White was also the target of an FBI investigation that culminated in some of his closest associates being sentenced for bribery and extortion around government projects. White himself was never indicted.

After 12 years of White, voters elected county commissioner Jane Campbell, someone considered to be a consensus builder, as mayor. She served one term and was then unseated by current Mayor Frank Jackson.

In 1989, Cleveland mayor George Voinovich created a power vacuum when he announced that, after 10 years as mayor, he would run for governor of Ohio. The primary leading up to the 1989 election pitted some of the city’s most recognizable political names against one another.

Ralph Perk Jr., Tim Hagan and George Forbes — White’s former boss and mentor and Voinovich’s right-hand man on Cleveland city council — were among the candidates.

Eventually, it would be White and Forbes going head-to-head in the general election. Forbes, a council member for nearly three decades, had the support of local black leadership and the city’s East Side residents.

White, who had served on city council from 1978-84, eventually becoming council president, and who was the Democratic minority whip in the Ohio Senate, targeted West Side voters.

White beat Forbes in the general election, getting 95% of the white vote and 30% of the black vote by using his former mentor’s nonconciliatory reputation against him.

After his defeat, Forbes refused an invitation to speak at White’s inauguration, where the theme was Cleveland unity. “We are a multicultural, multiethnic, multireligious community. It is a strength and not a weakness,” White said in his speech.

THE WEEK ALL FOR ONE: Menorah Park and Montefiore, both based in Beachwood, said they’re joining forces to form one senior care organization under the Menorah Park name. The merger, set to take effect June 30, will create an approximately $120 million nonprofit, based on each organization’s 2019 expenses. Menorah Park employs 1,400 at its 42-acre campus on Cedar Road.

Montefiore, with an adjacent campus, employs 600. James Newbrough, the CEO of Menorah Park, will continue as CEO of the combined nonprofit.

Seth Vilensky, president and CEO of Montefiore, will become vice president of business development and community services.

This rendering shows a 40,000-square-foot BigShots Golf facility that is expected to break ground in Bryan, Texas, in April. | BIGSHOTS GOLF

SEEKING A PARTNER: Lake Health is exploring the option of a strategic partnership. As the system in Lake Coun-

ty looked at its routine strategic planning process, leaders began to weigh how quickly health care was

work with the board of trustees, medical staff and hospital leadership to evaluate opportunities. Lake Health said this is an exploration of possibilities that could lead to a partnership — or could help leadership conclude the best path is the one the system already is on.

changing due to consumerism and technology advances. Management consulting firm Kaufman Hall will

TAKING THEIR SHOT: Akron could be the next city to land a golf-driven entertainment venue, and the new location is expected to be a little more than a mile away from the famed Firestone Country Club. BigShots Golf, which has constructed or is in the process of building tech-savvy facilities in three states, is planning a significant project at Raymond C. Firestone Golf Course.

The nine-hole golf course and driving range is at 600 Swartz Road in Akron, just north of Firestone.

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March 9, 2020 | CRAIN’S CLEVELAND BUSINESS | 23

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