CRAINSCLEVELAND.COM I MARCH 16, 2020
HEALTH CARE
COVID-19 COMES TO OHIO Disease forces temporary switch to remote learning
For colleges, a lot goes into the move BY RACHEL ABBEY MCCAFFERTY
Over the next few weeks, Northeast Ohio’s college classrooms will largely stand empty, as faculty and students temporarily switch to remote learning in an attempt to slow the spread of COVID-19. On Monday, March 9, Gov. Mike DeWine announced that three individuals in Ohio had tested positive for the disease caused by a new coronavirus. By Thursday, March 11, at the governor’s urging, Northeast Ohio’s colleges and universities — public
and private, two-year and four-year — had announced plans to temporarily switch to remote learning. In general, the schools already had the tools in place to switch in-person classes to remote learning in a crisis. But don’t expect universities to go all virtual any time soon. On the faculty side, it’s not just about knowing the content. There’s a lot of work that goes into intentionally creating an online class, making sure it’s flexible and engaging. Kent State University has already seen both sides of this. Typically, about 47% of its approximately 37,400 students take some fully online courses, said interim senior associate provost for academic affairs Mandy Munro-Stasiuk. More than 5% are in completely online programs. Those classes are flexible, allowing students to fit learning into their schedule.
TO OUR READERS: If you get Crain’s at the office but are stuck working at home, access our subscriberonly digital edition at https://www. crainscleveland.com/this-week-issue. It’s the same great Crain’s content you are used to in print, accessible via desktop browser or mobile device. Crain’s has also lifted the paywall on all coronavirus coverage on crainscleveland.com. Sign up for our free daily newsletter rounding up the latest news on the pandemic at https://bit.ly/2QdZhft
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Organizations are adjusting approach BY LYDIA COUTRÉ
As the state takes steps to mitigate risks and slow the spread of COVID-19, a disease caused by a new coronavirus, nonprofit agencies are taking their own precautions and preparing for a potential change or influx of need. Now designated as a pandemic by the World Health Organization, COVID-19 is causing major disruptions across the globe. Ohio announced a series of actions, including establishing a three-week spring
CRAIN’S CLEVELAND ILLUSTRATION
See ONLINE on Page 21
FOCUS | REAL ESTATE
Nonprofits haven’t ‘seen anything’ like this
break for K-12 students, banning mass gatherings of more than 100 people, recommending remote learning for colleges and universities and other steps. The disease itself as well as some of these state restrictions are bound to change how nonprofits must approach their work. “I’ve been working in nonprofits and in food banking for over 20 years, and I’ve never seen anything quite like this,” said Julie ChaseMorefield, president and CEO of the Second Harvest Food Bank of North Central Ohio. Nonprofits in the area are urging their staff, volunteers and clients to heed the guidance from the U.S. Centers for Disease Control and Prevention and local and state health departments. They’re also taking stock of their supplies, processes and the needs of their clients. See NONPROFITS on Page 21
FOOD
Catering to demand
Gordon Square’s Spice to expand with catering site, canning kitchen BY KAREN FARKAS
Ben Bebenroth’s Spice conglomerate, which includes a restaurant, catering company and farm, is expanding in Cleveland’s Gordon Square. Spice Catering Co., which operates out of the kitchen of Spice Kitchen + Bar, is relocating to a former cabinet factory a short walk from the Detroit Avenue restaurant. The building on Tillman Avenue will include a production kitchen, tasting room and sales offices. Be-
Spice owner Ben Bebenroth is developing a permanent base for his already-thriving catering business. | GENEVIEVE NISLY
benroth also is developing Spice Pantry, a canning kitchen to launch a line of boutique food products, at the space. Bebenroth, who had spent several years looking throughout the city for a proper space, said the discovery of the building was not only serendipitous, but also led to an exclusive catering contract with Gordon Green, an event space opening this year in a Detroit Avenue building kitty-corner to the Tillman Avenue property. See SPICE on Page 18
3/13/2020 4:53:57 PM
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REAL ESTATE
ICP stakes a big claim in Parma
SQF CERTIFIED
A long-unused rail line may be put back into service in Parma by Industrial Commercial Properties as part of the updating of a former transmission factory at 5520 Chevrolet Blvd. | STAN BULLARD
Solon real estate owner and developer buys onetime GM plant BY STAN BULLARD
terminals. Although the new terminal deprives the 1970-vintage factory of visibility from the street, it also has changed its context. “It’s a multimillion-dollar investment,” Semarjian said of the truck terminal. “Between that and the adjoining Parma Commerce Center (an industrial park with seven contemporary buildings), we can make the investment to aim higher with this property. It’s a great property due to its location. It has rail service to the building that we can make available once again.” Semarjian declined to disclose the proposed budget for the improvements or comment on the price disclosed in the Feb. 27 sale, according
ates broker and an investor in the prior ownership, did not return three phone calls and an email from Reuse of the former General MoCrain’s Cleveland Business about the tors Corp. transmission plant in Parsale. ma is switching gears. Parma mayor Tim DeGeeter said Through Parma Chevrolet LLC, the in a phone interview that the city had Industrial Commercial Properties not met with ICP by March 10, but he LLC (ICP) real estate firm has puris encouraged by the company’s repchased the massive building at 5520 utation. Chevrolet Blvd. for $9.2 million and “We’re excited by this investment is undertaking a top-to-bottom rein Parma,” DeGeeter said, “and look fresh of the property. It sounds more forward to working with ICP to bring like a scene from an HGTV home more jobs to the city to support our reno show than what’s typical for tax base.” converting a former manufacturing Typically in the 1980s, when plant for new industrial and wareNortheast Ohio was peppered with house users. mammoth, empty factories from “We’re really excited about this,” Mentor to Lorain, industrial developChris Semarjian, ICP owner, said in a ers would invest sparingly in them, phone interview. “When we’re done, primarily adding you will think you walls to slice are walking in a “WHEN WE’RE DONE, YOU WILL THINK YOU ARE WALKING IN them up for mulnew building. tiple tenants We’re painting the A NEW BUILDING. WE’RE PAINTING THE EXTERIOR. WE’RE along with office exterior. We’re re- REMOVING THE OVERHEAD PIPES. WE’RE REPLACING THE space and restmoving the overrooms. Semarjihead pipes. We’re PLUMBING. WE’LL RECONDITION THE FLOORS. WE’RE GOING replacing the TO RAISE THE (QUALITY) OF THE BUILDING A LEVEL OR MORE.” an said that was the way he and plumbing. We’ll — Chris Semarjian, ICP owner frequent partner recondition the floors. We’re going to raise the (quality) to Cuyahoga County records. The Stuart Lichter of Los Angeles-based $9.7 million ICP paid for the property Industrial Realty Group approached of the building a level or more.” Semarjian said ICP bought the is significantly more than the $4.7 buildings throughout Ohio in the 575,000-square-foot building, which million market value the county as- early 1980s. “However, the longer I have been includes 50,000 square feet of office signed to it for property taxes. The ICP purchase was an unex- at this,” Semarjian said, “the more I space on the second floor, because demand is outpacing supply on the pected play because the property see that marketing of a building will city’s West Side as well as throughout was already in the hands of a redevel- be challenged if you do not invest in opment concern. it up front. Industrial and warehouse most of the region. Terry Coyne, a Newmark Knight operators are increasingly seeking “There’s a real lack of product on the West Side,” Semarjian said. Frank brokerage vice chairman who ‘antiseptic’ space in today’s market.” “We’ve had so much good luck at the heads the industrial unit of its Cleve- Semarjian said ICP acquired the Parformer American Greetings property land office, said, “This is one devel- ma plant alone but continues to do (in Brooklyn), where we’ve leased oper buying from another developer. deals with IRG when it’s the best way to approach a deal. most of the warehouse space, that we You never see that.” Coyne agreed with Semarjian’s asA joint venture by ICP and IRG acwanted to continue the process.” The property has been owned by sessment of the industrial market, quired the former Randall Park Mall 54 Chevrolet LLC, a Pepper Pike- which is expanding rapidly as devel- in North Randall, which was replaced based investor group, since 2011, but opers construct huge warehouses to two years ago by an Amazon wareremains half-empty. (GM continues capture a surge of demand, largely to house. ICP has done a lot of solo to operate the Parma Metal Center serve the needs of growing online re- deals more recently, ranging from tailers. NKF estimated industrial va- the former Sears and Dillard’s stores next door at 5400 Chevrolet.) In a significant development, the cancy at 5.4% in its most recent re- at Midway Mall in Elyria to former Walmart and Kmart stores in Bedford prior owners sold 18 acres that for- port at the end of 2019. Insiders say the property was not and Garfield Heights, respectively. merly served as a parking lot for the factory. That became the site for a for sale and ICP approached the ICP also has other prospects in the hopper, including a stab at part of the truck terminal that is nearing com- owner about a deal. Semarjian said the company has former Geauga Lake land in Bainpletion for PITT OHIO, a Pittsburgh-based trucking company that done that several times over the past bridge Township that Semarjian dehas a substantial Parma presence. few years “when we have a different clined to discuss. The building features design ele- idea of a property’s worth than its ments such as architectural brick and current owners.” Stan Bullard: sbullard@crain.com, Joseph Greenberg, a Lee & Associ- (216) 771-5228, @CrainRltywriter solar panels that are atypical for such
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For Gene Sigel, who’s managed grape crops for 26 years at Debonné Vineyards in Madison, climate change means the potential for stronger polar vortexes like the one that decimated plants in the winter of 2014-15. The science suggests shifting climate and weather patterns will likely make those sorts of events more common, though they’ll remain difficult to predict or plan for. More extreme winters are among many factors here being brought on by shifting climate and weather patterns. “We are in a cool climate growing region,” Sigel said. “That means in the fall we tend to ripen slowly without the intensity of heat that might be in, say, irrigated regions of California. We have potential to maintain greater aromatics and fruitiness on the vines. “But it’s our Achilles’ heel, too,” he added. “With the climate changing, we have to think about how this could affect our ripening, among other things.” Ohio is in a region expected to become wetter and warmer in the coming years, which will create additional issues with pests, flooding and mold, according to research by Aaron Wilson, an atmospheric scientist with the Byrd Polar and Climate Research Center at Ohio State University. “The mentality (for many farmers) is it’s chaotic, but things will go back to normal,” Wilson said. “But what is normal? And how long do I, as a farmer, think that as I get hammered
every single year? This is something to pay attention to. The question is what can be done to prepare.” Climate change will challenge grape farmers, potentially squeezing their margins and placing pressure downstream on the supply chain, including manufacturers who buy their fruit. That eventually could be passed on to consumers in the form of higher prices as crop management becomes more intensive and business capital chases solutions to the surrounding issues. According to a 2019 report commissioned by ProWein, an international trade fair for wine and spirits in Germany, those impacts are already being felt in the wine industry globally. Vineyards facing climate change may need to invest in new varieties of grapes, especially hybrids that can do well in changing climates — a heavy expense of time and money considering it costs about $25,000 per acre to develop new vine systems from seed to harvest, which could take five to six years, according to Debonné owner Tony Debevc. Adapting to the weather is not new. But with climate change happening faster, and contributing to more extreme weather events, adapting today might be easier said than done. For family-owned farms and small businesses that make up the Ohio wine industry, however, attempting to stay ahead of those weather and climate trends isn’t really an option. “I don’t think we can afford to ignore what’s happening to our weath-
Assistant farm manager Tina Fowler prunes vines at Debonné Vineyards in Northeast Ohio’s Grand River Valley. | CONTRIBUTED
er,” Sigel said. “I don’t spend time thinking about the politics, or how that’s going to guide our nation. I have to guide our farm. So we have to consider what’s happening.”
The downside Climate change presents pros and cons for the Ohio wine industry. On the downside are the factors that would harm a business’s ability to produce not just enough fruit, but enough of it of a certain quality. That’s what vineyard managers like Sigel have done their whole careers. But that is going to get a bit trickier, which could translate to additional
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expense. “The biggest grower concerns related to climate change for grape production in Ohio is increased chance of damaging polar vortex events, increased fluctuations and variability
of winter temperatures that can also create issues with bud injury or cause early bud break, and increase spring frost risk, as well as high precipitation and its challenge to disease/ weed management,” said Maria Smith, a viticulture outreach specialist with the College of Food Agricultural and Environmental Sciences at The Ohio State University. The last polar vortex cost millions of dollars in crop damage and lost revenue across the wine industry, which underscores the calculated gambles vineyards must often make in terms of how they treat vines and fruit. There’s a “magic amount” of fruit to leave on the vines, Sigel said, and it’s harder to know exactly what that is. See WINERIES on Page 24
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In 2015, RhinoSystems Inc., the Brooklyn seller of Navage, a nasal irrigation system, trademarked the phrase, “Nasal Hygiene will be to the 21st Century what Oral Hygiene was to the 20th!” The catchphrase even is plastered over the entrance to the company’s offices and manufacturing facility in Brooklyn. And company president Martin Hoke is seeing signs — unexpectedly including the arrival of the novel coronavirus and COVID-19 — that his trademark might be prophetic, as well as signs that sales of his patented device will continue to grow. The Navage is a nasal irrigator with powered suction that pulls a saline solution, using a patented salt pod, 10/7/19 12:47 PM through the nasal cavity to rinse debris or mucus generated by colds and allergies that can carry viruses and bacteria from nasal cavities. The traditional nasal irrigator, the neti pot, has been used for centuries to rinse nasal cavities. A number of products on the market update that method of nasal irrigation. Most involve tilting your head to one side to run a saline solution through your top nostril, letting the solution drain through your bottom nostril. Hoke, of course, came up with the idea for his product long before COVID-19 came along, and he linked the phrase more to the populariza-
tion of the neti pot by television celebrities Oprah Winfrey and Dr. Mehmet Oz, which began in 2005, as a way to bring relief of sinus pain and congestion without the use of medications. Hoke’s idea for the Navage, which uses battery-powered suction, was a response to his own case of sinusitis, a condition caused by allergies, the common cold and viral infections. He found the existing products unappealing, since they needed gravity to clear nasal passages. “The problem with the neti pot is it’s messy and you have to do it over the sink,” he said. “And it doesn’t feel good while you’re doing it.” The serial entrepreneur began working on an alternative in 2007. Before this venture, he’d started Red Carpet Airport Car Care in 1981, offering auto care services at Cleveland Hopkins International Airport. In 1985, Hoke launched Red Carpet Cellular, an independent cellular distributor that he sold three years later. He also served in the U.S. Congress, winning elections as a Republican in 1992 and 1994. Hoke would not disclose sales figures, but said RhinoSystems has sold 1.2 million devices since the summer of 2015, when the company started selling the Navage system on its own website and then added an Amazon sales channel before the end of that year. The company recently raised $10.4
Nasal irrigation system Navage is hitting its stride just as health concerns are at the forefront of the nation. | CRAIN’S CLEVELAND BUSINESS
million privately, in a preferred stock sale, to finance further research and development, purchase new equipment to make salt pods and for marketing. According to a 2018 market research report by Sheer Analytics & Insights Pvt. Ltd., a Kolkata, India, market research firm, the global nasal irrigation market is expected to grow rapidly, at a 24.6% compound annual growth rate from 2018 to 2025, propelled by continuing industrialization and urbanization coupled with changing lifestyles. Dr. Paul Little, a physician and professor of medicine at the University of Southampton in Great Britain, researched the market for the Sheer Analytics report.
Ohio unemployment benefit programs cou
SharedWork could provide short-term relief BY KIM PALMER
The full fallout of the COVID-19 global pandemic and its consequences for Northeast Ohio remain to be seen. SharedWork Ohio, a state program developed as part of the Federal Layoff Prevention Act of 2012 and crafted to assist employers to retain skilled labor during economic slowdowns, might be a short-term fix. Managed by Ohio Department of Jobs and Family Services (ODJFS), the voluntary layoff-aversion program allows workers to receive partial unemployment benefits if a company is forced to reduce employee hours. The program is designed to help businesses that need to hold on to skilled labor during a recession or other business disruption. “Employers might be in a position where they want to shut down a couple days a week or shut down a certain department,” explained Zach Schiller, research director at Policy Matters Ohio. “They can take advantage of the program and keep some semblance of normalcy, maintain the workforce until the reason for the slowdown ultimately goes away.” Under a SharedWork plan, ODJFS will provide proportionate compensation for up to 50% of hours not paid by an employer.
“Sounds like just the antidote we may need,” said Ethan Karp, CEO of the Magnet manufacturing advocacy organization. Karp said he is concerned about workers being sent home and going without a paycheck for an extended amount of time. “We do not know how long COVID will last and sick-time will eventually run out,” he noted. Like traditional unemployment benefits, an employee must qualify according to state rules. WorkShare does not apply to employees who work on a seasonal, temporary or intermittent basis. Unlike regular unemployment, employees in the SharedWork program aren’t required to apply for other jobs to receive benefits. “Since the program launched in 2015, there have been about 160 participating employers and more than 11,500 employees impacted,” said ODJFS spokesman Bret Crow. While SharedWork could assist employers that want to comply with the Centers for Disease Control and Prevention’s social-distancing recommendations, the program does have some limitations. SharedWork, Crow said, allows for reduction of an employee’s normal weekly hours, but will not work if COVID-19 requires a full workforce stoppage.
“Clearly, this is an evolving situation,” he said, “so any assessment will include a broad range of factors.” In addition to the SharedWork program, Ohio law has a provision allowing the ODJFS to waive the job-seeking requirement if an employer intends to rehire the employee back within six months. The program, Schiller said, originates from the need for some companies and plants to shut down assembly lines or, in the case of car companies, to change over to a new model line. “It makes sense for workers who know they have a job to come back to and employers who need that skilled labor back,” Schiller said. If workers are sent home because of the COVID-19 outbreak, the state could treat that work interruption in the same way. If the outbreak lasts for an extended period, there is a federal program, called disaster unemployment assistance, that extends unemployment benefits beyond 52 weeks. “There is a provision for disaster unemployment where if the president declares an area a disaster zone, self-employed people and regular employees who have exhausted unemployment benefits can apply for additional disaster unemployment assistance benefits,” Schiller said. The COVID-19 outbreak might
6 | CRAIN’S CLEVELAND BUSINESS | MARCH 16, 2020
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“I would certainly try nasal irrigation,” Little said in the report, when asked about his suggestions for patients with consistent nasal infections. “Most people in our study found it helpful.” The major industry players in the global nasal irrigation market include companies such as Neilmed Pharmaceuticals Inc. of Santa Rosa, Calif., and Health Solutions Medical Products Corp. of Los Angeles. Selling for about $90 on Amazon and elsewhere, the Navage system is a premium product. Most products in the category sell for under $30. Still, it’s received high marks in a number of reviews of nasal products, with New York magazine calling it the best nasal irrigation system
on the market. It gets 4.3 stars out of five on Amazon, with 69% of 2,223 reviewers rating it five stars. The product is made in China and then warehoused at RhinoSystems’ 65,000-square-foot facility in Brooklyn, in a building that formerly printed and warehoused products for American Greetings Corp. The salt pods are filled in Brooklyn and added to the product package. Hoke said the production line is running three shifts a day during the week and one shift each on Saturday and Sunday. The company employs more than 100 people. Hoke used his own money, as well as nearly $2 million in angel investing, largely from private investors, to develop and refine his product for seven years before it was ready for sale to consumers. Among RhinoSystems’ early investors and supporters was the Innovation Fund of Northeast Ohio, which provided $100,000 in support in 2008, and its business incubator, the Great Lakes Innovation and Development Enterprise (GLIDE) Center at Lorain County Community College. Then, in 2018, the Ohio Tax Credit Authority awarded RhinoSystems an eight-year, 1.527% tax credit for its move into the former American Greetings space from a smaller space in Brooklyn Heights. Though it is currently sold only in the United States and Canada, the product has patents and trademarks registered around the world. Hoke’s wife, Maria, who serves as company vice president and general counsel, is an intellectual property attorney with experience at the former Squire, Sanders & Dempsey law firm in Cleveland. She also did patent and trademark work at PolyOne Corp. in Avon Lake. During a tour of the facility with a reporter, a staffer came up to Martin and Maria Hoke to say that the first week in March was the best-ever
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“IT MAKES SENSE FOR WORKERS WHO KNOW THEY HAVE A JOB TO COME BACK TO AND EMPLOYERS WHO NEED THAT SKILLED LABOR BACK. ” — Zach Schiller, research director at Policy Matters Ohio
stress the economy enough that state government would dip into Ohio’s revenue reserves. In 2019, tax revenue exceeded estimates by nearly $40 million, and more than $100 million in February. The state is almost a quarter billion dollars ahead of forecasts for the 2020 fiscal
year, according to preliminary data for the month from the Ohio Office of Budget and Management. There is also a Budget Stabilization Fund, aka the Rainy Day Fund, which stands at nearly $2.7 billion — up from the 89 cents the account had after 2008 and nearly twice as much as its total five years ago. Those funds could be used to expand the unemployment benefit program to include what is expected to be the hardest-hit sector: service, hospitality and gig economy employees. “Ohio has among the most stringent earnings tests for unemployment in the country,” Schiller noted. “You have to earn $269 a week, on average, over a 20-week period. That means if you are a minimum-wage employee, you can work 30 hours a week and you won’t qualify for benefits.” With construction season about to ramp up, David Wondolowski, executive secretary of the Cleveland Building and Construction Trades Council, said unemployment benefits are critical to his members if construction work is shut down. “Even two weeks out of work is going to hurt,” he said. “We do think there is motivation on both sides of the aisle to see some type of relief if things get bad. No one wants to see people lose their homes.” Kim Palmer: kpalmer@crain.com, (216) 771-5384, @kimfouroffive
sales week for Navage at Bed Bath & Beyond. The national housewares firm sold 2,089 units of the system in the week ending March 7. At first, RhinoSystems began sales in Canada only, because the U.S. Food and Drug Administration was slow to approve sale in the United States. “The bottom line is that we just ran into a brick wall at the FDA, so we said, ‘Well, that’s enough of that,’ ” Hoke recalled. “After paying lawyers and wasting an incredible amount of time, I said, ‘We’ll start in Canada.’ ” The slowness of the FDA process has frustrated device-makers in Northeast Ohio and elsewhere for a long time. Studies have shown it
takes from three to seven years to bring a medical device to market in the U.S. The Navage first made it to drugstores, in the CVS chain, in December 2016. Just after the new year, the Hokes returned to the office to find a rush order from CVS for 40,000 units. “That was a real problem, but a good problem to have,” Martin Hoke said. “We had to ship by air from China, we had to stop selling on Amazon for six weeks, we ran out of salt pods” to fill the order. Since then, RhinoSystems has sold the product to the other big pharmacy chains, Rite Aid and Walgreens. Hoke said Target will start
Mayor Martin S. Horwitz •Mayor@BeachwoodOhio.com •216.292.1901
selling the product in April, and he’s hoping a pitch to get the product on Walmart shelves — it’s already on Walmart.com — will be successful. He said waiting to approach brickand-mortar retailers made sense. “Starting off online has a lot of the advantages — it’s definitely lower-cost than going directly into retail,” Maria Hoke said. “You have a more direct relationship with your customer and you learn more about your customer. You get to refine your messaging and learn about the market in a much lower-risk way.” Jay Miller: jmiller@crain.com, (216) 771-5362, @millerjh
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NOMINATIONS
NOW OPEN Each year, Crain's Cleveland Business gathers 40 of the community's best and brightest who have made a mark before their 40th birthday. To be considered, honorees must reside in Northeast Ohio and be 39 or younger as of Sept. 14, 2020. The 2020 class will be profiled that day in an issue of Crain’s Cleveland Business and honored at a November awards reception.
DEADLINE TO NOMINATE: June 12 NOMINATE TODAY: CrainsCleveland.com/nominate MARCH 16, 2020 | CRAIN’S CLEVELAND BUSINESS | 7
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SPORTS BUSINESS
New CSU coach is making the rounds, off to promising start Gates vows to know ‘every hallway’ on campus; men’s hoops attendance jumps 35% in ’19-20 BY KEVIN KLEPS
Dennis Gates remembers holding handmade signs while sitting in the front row at women’s volleyball games during his days at the University of California, Berkeley. A former three-year captain of the basketball team at Cal, Gates said he’s always made a point of supporting other athletic programs at each of his stops as a player and coach. That might not be something a university typically looks for in a head coach, but it was a must for Cleveland State president Harlan Sands and director of athletics Scott Garrett as the pair have tried to figure out how to revitalize the Vikings’ men’s basketball program. As the face of the university’s most prominent athletic program, CSU’s relatively new leadership believed the basketball coach and his players needed to be more present on campus and in the community. And from a marketing standpoint, the Vikings needed all the help they could get after a four-year stretch in which the hoops team won a combined 40 games and posted its three worst seasons at the gate in the history of the Wolstein Center. The 40-year-old Gates, a Chicago native who had spent the previous eight years as an assistant at Florida State, assumed that role in late July, a couple of
Cleveland State’s Dennis Gates shared Horizon League Coach of the Year honors in 2020. | CLEVELAND STATE UNIVERSITY
weeks after CSU fired Dennis Felton. And you could say he was plenty visible. Garrett, who was hired last April after spending the previous nine years in revenue-focused roles at Kansas State, was at a volleyball practice when he got a call from Gates, who then showed up and spoke with the team. The coach visited the student center early in his tenure and sat down with anyone who was willing to chat. Then there was Feb. 1, when Gates, in the hours before the men’s hoops team played the University of Illinois at Chicago, went with some of his players to a few of the events on a hectic day of sports on campus. “He was out there to a degree that I don’t think I’ve ever seen in over 16
years in the business,” Garrett said. Gates said he would be making the rounds even if CSU’s president and AD hadn’t stressed that it was something they wanted from the head coach. “If I’m not knowing what every corner and every hallway or step looks like on campus, how can we actually get a recruit to appreciate it?” Gates said. “How can we narrate the campus story to someone who doesn’t know it? I have random days where my cellphone is my office and I just go walking on campus and knock on random doors and start introducing myself.”
‘So much more to do’ No matter how gregarious a coach is, though, it won’t matter as much to a university if the results aren’t there. Gates did OK there, too, earning co-Coach of the Year honors in the Horizon League after leading the Vikings — who had a slew of players transfer or enter the transfer portal after a 10-21 season in 2018-19 — to seven league victories in his debut campaign. The Vikings, with a roster that was cobbled together much later than is typical, posted their best conference record in five years. “It’s in the infant stages, but I don’t like where we ended,” Gates said of an overall record of 11-21 that clinched CSU’s fifth consecutive sea-
son with 20-plus losses. “I’m not satisfied with whatever others may look at as accomplishments. I have bigger hopes and dreams for this program to one day cut down nets.” That, the coach said, could be for an NIT championship, a regular-season league crown or even a Final Four berth. But first, he wants his players to “win championships daily,” a motto that covers what he calls the three Cs: classroom, court and community. Is that just coach-speak? Garrett would tell you it isn’t. CSU’s director of athletics said Gates has “a genuine, natural understanding of how prominent and visible that role is on campus and the type of impact you can make if you utilize it the right way.” The bar for the first-year tandem of Gates and Garrett was pretty low, since the Vikings were coming off a season in which the average attendance for the men’s basketball team at the Wolstein Center was 1,115. That norm was the worst for the program since at least 1977-78, which is the last year for which the NCAA has attendance data for individual schools. The 2019-20 Vikings, who were picked to finish last in the 10-team Horizon League, drew an average of 1,501 fans per game. That ranked seventh in the league, after a seven-year stretch in which CSU was last in all
but one season, and marked a 35% improvement from 2018-19. A free-ticket promotion drew a season-best crowd of 3,533 for the home opener on Nov. 9, and CSU’s home finale on Feb. 22 generated a gate of 2,169. The Vikings also moved up the start time of their Saturday games to 3 p.m., and the seven men’s basketball contests on those days had an average attendance of 1,723. “That helped attract the kind of crowd we want: younger families with kids looking for things to do on the weekends,” Garrett said. CSU is also trying to do a better job of promoting the program to the students who live in the residence halls, plus those who reside in nearby apartments. Another focus, the AD said, is “telling our story,” which can be done via social media and other digital avenues. Since Garrett took over 11 months ago, the Vikings have hired six head coaches and turned over more than 30 of the athletic department’s 70 staffers. The biggest hire, Gates, is off to a promising start, but neither the coach nor the AD is doing victory laps over an 11-win season. “We’ve got so much more to do, I guess, is the ultimate takeaway,” Garrett said. Kevin Kleps: kkleps@crain.com, (216) 771-5256, @KevinKleps
N O M I N AT I O N S N O W O P E N !
ARE YOU A HEALTH CARE DISRUPTOR? Crain’s Cleveland Business is saluting the dedication, leadership and innovative achievements of Northeast Ohio’s health care community. This special feature will focus on disruptors – those promoting radical change and adaptation – and is designed to recognize individuals and teams affecting patient care, the community and health care sector.
This year’s section will be published in the June 1 issue of Crain’s Cleveland Business. Finalists and winners will receive recognition at the Crain’s Health Care Forum. NOMINATION CATEGORIES: ■ Public health ■ Technology and data ■ Patient care ■ Research ■ Payment
NOMINATION DEADLINE: April 10 • NOMINATE TODAY: CrainsCleveland.com/nominate 8 | CRAIN’S CLEVELAND BUSINESS | MARCH 16, 2020
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FINANCE
Mortgage demand is so high that lenders turn away borrowers With rates near historic lows as the coronavirus upsets the market, lenders are swamped BY BLOOMBERG
Homeowners looking to refinance their mortgages better have their paperwork in order. And it helps to be nice. These days, with rates near historic lows as the coronavirus roils markets, lenders are swamped with business from homeowners seeking to take advantage of cheaper borrowing costs. Demand for home loans is so hot that some firms aren’t picking up the phone. They’re raising rates to discourage customers, pumping the brakes on marketing campaigns and capping the amount loan officers can lend. Good luck getting someone on the phone — especially if you’re not courteous. “If you’re difficult, a negotiator or a grinder, they’re probably not going to call you back,” said Brian Koss, executive vice president at Massachusetts-based Mortgage Network Inc., whose firm received more applications in four days last week than it typically receives in a month. “We’re sorting calls by who are my best customers, who’s on top of it, engaged and giving me all their documents up front.” As banks tried to curb the onslaught of new business, 30-year mortgage rates actually ticked up in recent days, reaching 3.36% after dipping to a record low of 3.29% last week. The historically low rates have fueled unprecedented demand, making the industry a bright spot as the U.S. economy is battered by the expanding outbreak. Loan application records are being shattered at lenders such as United Wholesale Mortgage, Guild Mortgage and Quicken Loans Inc., the nation’s largest mortgage lender. Internet searches for refinancing this month spiked to their highest levels in data going back to 2004, according to Google Trends data. Last week, a measure of U.S. home-refinancing applications soared to the highest level since April 2009. Refinancing, which puts money back in the pockets of American homeowners, could help boost an economy that appears to be on the brink of recession. For a typical 30-year, fixed-rate $250,000 mortgage, borrowers could save about $150 a month if they refinanced at 3.25% compared with what they were paying last year, said Tendayi Kapfidze, chief economist at online marketplace LendingTree. Michigan-based United Wholesale has approved numerous 30-year fixed-rate loans at 2.75%, said Alex Elezaj, its chief strategy officer. “There isn’t an owner in America who shouldn’t be refinancing right now,” said Mat Ishbia, United Wholesale’s chief executive officer. The trouble now is getting the application through. Mortgage Network is so swamped that it’s struggling to return calls from customers looking to refinance. Instead, the firm is prioritizing mortgages for purchases. San Diego-based Guild, meanwhile, has stopped soliciting new refi clients. At JPMorgan Chase & Co., mortgage application volume three times above average overwhelmed the bank’s systems last week, forcing the company to work through the weekend to deploy new computer servers
TY WRIGHT/BLOOMBERG NEWS
to improve capacity and speed, according to a memo seen by Bloomberg and a person briefed on the matter. Managers apologized to home lending staff Friday for “slowness.” The bank has shifted workers to its mortgage group to deal with the extraordinary volume and is offering employees $5,000 for every new mortgage worker they can recruit, according to people familiar with the matter. And while other lenders have also gone on hiring sprees, some are now searching for ways to slow the business down.
Some are asking borrowers to wait twice as long to close their loans, said David Battany, an executive vice president at Guild Mortgage. The firm’s application volume has doubled. At large banks, he said, customers are waiting two hours on the phone to talk to a loan officer. Some lenders have stopped accepting refinance applications altogether, while others are telling their employees to not make more than two loans per day, according to Elezaj. His firm has kept processing times at about 12 business days.
“A lot of the market isn’t set up to handle this increase,” he said. Most mortgages eventually are sold to government-backed lenders, such as Fannie Mae and Freddie Mac, which then package those loans into bonds sold to investors. There’s a limit to investors’ appetite to own 30year fixed-rate mortgages yielding 3% or less, said Koss. “Everyone’s happy to see rates move higher because they can’t take any more applications,” Koss said. “We can’t even come close to returning all the calls.”
NOMINATIONS NOW OPEN! Every year, Crain’s Cleveland Business salutes a group of inspiring women whose dedication and achievements enrich Northeast Ohio, its institutions and its people.
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FROM THE EDITOR
RICH WILLIAMS FOR CRAIN’S CLEVELAND BUSINESS
Priority is slowing spread of virus
EDITORIAL
In it together I
t became clear last week that American society is coming to something of a halt, for a time period we still do not know, and that our lives are about to change significantly due to the threat posed by the coronavirus pandemic. That threat can (and must) be met with a combination of political leadership, a focus on science and medicine, and conscientious actions — with good choices and attention to our behaviors — from all citizens, with a recognition that some of the normal trappings of life will change. Are we up to the challenge? Ohio Gov. Mike DeWine set an excellent example last week by making clear, precise statements about the state’s response to the crisis, and by deferring to experts, most prominently Dr. Amy Acton, director of the Ohio Department of Health, on critical medical questions. In their briefings, both DeWine and Acton carefully laid out the strategies needed to combat the spread of coronavirus, in particular the practice of “social distancing.” DeWine on Thursday, March 12, announced an order prohibiting (with some exceptions) mass gatherings of 100 or more people — a critical step at a time when we have no vaccine or treatment THE COVID-19 THREAT CAN (though work is ongoing rectify that) and when (AND MUST) BE MET WITH A to we need to curtail the COMBINATION OF POLITICAL number of people who are sick at a given time so LEADERSHIP, A FOCUS ON the health system isn’t SCIENCE AND MEDICINE, AND overburdened. We found the goverCONSCIENTIOUS ACTIONS nor to be calm, reassurFROM ALL CITIZENS. ing and factual — attributes not in abundance from DeWine’s fellow Republican in the White House. This isn’t a partisan issue. It’s simply an observation that the quality of leadership from Columbus vastly exceeded that of Washington. What comes next? Testing capacity, for one, has to ramp up fast. The inability to test people with symptoms, quickly, compromises our ability to isolate disease. On a policy level, we have to be open to all sorts of possibilities, depending on how serious this situation gets. House Democrats proposed a package of economic measures that
included $2 billion to bolster state unemployment insurance programs; more than $1 billion in nutritional aid; a new paid leave benefit for employees affected by the outbreak; and a guarantee of free coronavirus testing. That’s an expensive proposition with some burdens for employers, but the alternative isn’t appealing, either. And action should come sooner rather than later. As K-12 schools start closing, huge numbers of parents face a real problem, since only about 75% of private-sector workers have access to paid sick leave. The figure gets dramatically smaller as you move down the wage scale, and hourly workers generally don’t get paid if they stay home with kids. This is a clear case where only the government can fill the gap. Businesses will have to be nimble, too, taking actions that include reviewing workforce locations and travel; examining crisis and continuity plans; and altering work processes to allow for more remote work. Personal decisions matter a lot. Be thoughtful. Obviously, wash your hands frequently. Stay home if you’re sick, assuming you’re fortunate enough to have that option. Social distancing isn’t about panic. It’s about being a good citizen and should be practiced in places large and small to curtail the flow of disease through social networks. Most social gatherings, parties, networking events, etc., should be postponed for the immediate future. If you’re lucky enough to be considered low-risk during this outbreak, think about and help neighbors who aren’t, perhaps by offering to pick up items from the grocery store or the pharmacy. Don’t pass along rumors and conspiracy theories. Seek out credible information and stick to the facts. The state of Ohio has set up a website, coronavirus.ohio.gov, that is easy to use and provides excellent, updated information. Use it and encourage others to do the same. Our three big health systems — Cleveland Clinic, MetroHealth and University Hospitals — all have set up excellent sites. It’s easy to say “don’t panic” in a time like this, and of course, you shouldn’t panic. But you should be worried. And vigilant. Be smart and act with common sense. We’re all in this together.
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
Two days after the first cases of COVID-19, the disease caused by the novel coronavirus, were reported in Ohio last week, Crain’s Cleveland Business joined dozens of other Northeast Ohio organizations in postponing upcoming events. On Wednesday, March 11, we announced we would be rescheduling our March 25 Newsmaker Awards and our Elizabeth April 22 Real Estate Forum. McINTYRE That same day, the Cleveland’s St. Patrick’s Day Parade and the Cleveland International Film Festival were canceled, this after the Mid-American Conference and the Ohio High School Athletic Association decided to go on with scheduled basketball games, but with only family members in the stands. By Thursday, the OHSAA said it was suspending games, something the NBA had announced it was doing the night before, and the MAC canceled the remainder of its basketball tournaments. Meanwhile, colleges all across Ohio announced they were switching from in-person classroom sessions to online learning. Many students are back home. And grades K-12 are on a three-week “spring break” beginning at the close of school on March 16. In an effort to stem the community spread of the virus, Ohio Gov. Mike DeWine on Thursday said the state was banning gatherings of more than 100 people in a single THE FACTS ARE room or single space. “Ohioans have to under- HITTING HOME stand what the facts are, that any gathering of people in WITH DISRUPTIONS close proximity to each other LIKE WE HAVE NEVER is dangerous,” he said. The facts are hitting home SEEN. with disruptions like we have never seen. The kind of planning that goes into events, tournaments and seasons is massive. The decision to cancel or suspend them is wrenching. There are some who say all of this is an overreaction to a “bug” or the “flu.” Public health professionals will tell you those people are wrong. So will one look at Italy, where the pandemic has resulted in a nationwide shutdown, businesses included. As we note in this week’s editorial, DeWine has displayed quick and decisive actions since the first cases emerged in Ohio. The Ohio Department of Health director, Dr. Amy Acton, who has been a rock star, has also provided clear facts and straightforward advice, something needed in the midst of crisis. DeWine has managed to convey the urgency with which we need to act and the serious threats the pandemic poses, while offering steady reassurance. “We will get through this,” he said. But it will get much worse before it gets better. “These are long days ahead,” Acton said Thursday. And so we urge you to heed her advice, and that of other public health professionals and the governor. At Crain’s, we will continue to bring you coverage of the impact of the coronavirus on businesses and the economy in our community. We’re making all of that digital content available free. And because information is key in battling this pandemic, we have launched a coronavirus newsletter that you can have delivered to your email inbox Monday through Friday. Sign up to receive the newsletter at https://bit.ly/2IJxQ9s. As the governor has said, each of us, individuals and organizations, can take actions that can slow the spread of the coronavirus and ultimately save lives. And that doesn’t just mean canceling events. It means being flexible with employees who are feeling sick, caring for family members, or having to take care of children who are now staying home from school. For now, that has to be our first priority.
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.
10 | CRAIN’S CLEVELAND BUSINESS | MARCH 16, 2020
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OPINION
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Positive employment trends are hiding in plain sight Cuyahoga employment and 12-month moving average (Dec. 2007 - Dec. 2019) 640,000
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580,000
560,000
540,000 D ’07
D ’08
D ’09
D ’10
D ’11
D ’12
D ’13
D ’14
D ’15
D ’16
D ’17
D ’18
D ’19
SOURCE: BLS, local area unemployment statistics. Not seasonally adjusted. Dec. 2019 is preliminary.
BY JAMES M. TRUTKO
For the past two decades, many Clevelanders have experienced real economic losses, leading them to develop a pessimistic outlook about future prospects for the Northeast Ohio economy. However, in the past two years, there appears to be real economic improvement in jobs and unemployment that has perhaps gone unnoticed, and certainly large- Trutko is an ly unreported, by local media. economist and The positive news is buried in em- market research ployment and unemployment re- professional. ports about Cuyahoga County resi- The lifelong dents prepared monthly by the Cuyahoga Bureau of Labor Statistics. Because County resident the local employment data on lives in Rocky Cuyahoga County and local cities is River. presented without adjustment for seasonal variations, normal summer and winter differences make it very difficult to see what is happening. This arguably explains the lack of local press interest. But there is a statistical technique that allows one to decode the data and see some remarkably positive news about local job growth and real improvement in unemployment since 2017. Using a 12-month moving average smooths out seasonal variations and shows the underlying positive pattern that began in 2018. Looking at the employment history of Cuyahoga County, one can see clearly the 38,200 drop in employment in the 2008-11 recession, followed by virtually no rebound from 2011 to the end of 2017. Since the beginning of 2018, Cuyahoga County has seen steady employment growth of 10,400. When one considers the unusual annual rate of growth, the recent employment change is especially newsworthy. In December 2017, Cuyahoga County
Cuyahoga annual change in employment 15,000
7,853
Annual change in employment
10,000
1,538
5,000
8,229 2,195
0 (5,000)
(252) (150) (1,808)
(10,000) (15,000) (20,000) (25,000) (30,000) (35,000) (40,000)
(33,068)
D’07 D’08 D’09 D’10 D’11 D’12 D’13 D’14 D’15 D’16 D’17 D’18 D’19 SOURCE: BLS, local area unemployment statistics. Dec. 2019 is preliminary. Annual change is based on 12-month moving average.
residents were losing jobs at an annual rate of -1,800. By December 2019, the annual rate of employment gains had surged to about 8,200, a rate that exceeded the recessionary rebound of 2011-12. In fact, Cuyahoga County had not seen levels of annual job growth this high since 1998, more than two decades ago. Cuyahoga County’s recent job growth is both unusual and significant when placed in a regional context. Expressed in percentage terms, Cuyahoga County’s annual growth rate in late 2019 exceeded that of the Midwest region for the first time since 2011. Prior to the brief one-year recessionary rebound, Cuyahoga County’s annual growth rate had been lower than the Midwest since at least 1990. At the same time, there has been a widespread improvement in the unemployment situation in Cuyahoga County. Unemployment decreased significantly after the severe 2008-10 recession before it began to increase after mid-2015. It increased by more than 5,000 before it began to drop in late 2017. Since December 2017, unemployment has dropped by almost 9,000 (-25%). The last time the number of unemployed people in Cuyahoga County was this low was in 2002. A further illustration of how unusual the unemployment situation is can be seen by looking at the widespread decrease in unemployment in Cuyahoga County’s major cities. The number of unemployed residents has decreased by 22% to 29% since December 2017 in every major city in the county (Cleveland, Cleveland Heights, Euclid, Garfield Heights, Lakewood, Maple Heights, North Olmsted, North Royalton, Parma, Shaker Heights, South Euclid, Strongsville and Westlake). In many of these cities, the unemployment rate is at historically low levels. It’s not clear what has caused these major improvements in the local job market and unemployment situation, but it’s possibly the result of three major factors. First, over the past three years, local health care has grown significantly in Cuyahoga County and is likely a major factor. A second local factor may be the change in the national image of Greater Cleveland, which has led to growth of the local tourist, food and entertainment sector. A third factor has been the national economic expansion kicked off by tax cuts and the deregulation policies of the Trump administration. This nonlocal factor has undoubtedly helped strengthen the local manufacturing sector. There may be other factors which have contributed to the dramatic improvement in job growth and the reduction of unemployment in Cuyahoga County. If local policymakers can recognize the trend, identify the underlying causes and align local economic development policies to support further improvement, Clevelanders may be able to replace their pessimism with some realistic optimism.
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REAL ESTATE
The Irishtown Bend project involves slope stabilization, water and sewer rehab, and creation of a new park above the Cuyahoga River. | RENDERING COURTESY OF CMG, MICHAEL BAKER INTERNATIONAL
RISING TO MULTIPLE CHALLENGES Osborn Engineering’s design, engineering prowess is bolstered by people skills and a Midwest work ethic || BY JEFF BARGE
Osborn is the executive engineer for the $1 billion expansion of the MetroHealth System.
WITH ANNUAL REVENUE SOARING from $12.8 million in 2015 to $30 million today, Osborn Engineering, a full-service Cleveland-based engineering firm, is riding the rising national tide of prosperity pretty nicely. Over the past five years, the firm has bolstered its 20% annual growth rate by opening Florida offices in Fort Lauderdale, Orlando, St. Petersburg and Tampa. It’s also opened offices in Nashville, Tenn., and Detroit. “Three of the fastest-growing cities in the U.S. are in Florida, and we’re in all of them,” Osborn president Doug Lancashire said. With well-known expertise in sports and medical buildings — Osborn counts Cleveland
Clinic, University Hospitals and MetroHealth as clients and is viewed as the local leader in the health care field — the firm has added additional revenue in the fields of life safety (PNC Bank is a nationwide client), broadcast, traffic engineering, lighting de- Lancashire sign and concrete restoration. All of the new branches except one were grown organically, through local hires and transfers from other cities. In Fort Lauderdale, Osborn acquired an existing seven-member
firm to meet the expansion needs there of Cleveland Clinic and other clients. The geographic growth has brought the firm fresh opportunities outside of health care, such as a new 12-story mixed-use project in Miami. Stull “We have 33 people in Florida, with a goal of doubling that,” said Jennifer Stull, vice president and director of business development. “Our clients down there admire the Mid-
west work ethic," Lancashire said. "They have more of a transitive economy down there, and they don’t get the employee longevity.” The company also has 15 employees in Akron and is doubling its office space there. In the Cleveland market, Osborn just scored the engineering contract for University Hospitals' Ahuja Medical Center Phase 2 expansion. The project consists of a new pavilion and a sports medicine and rehab complex. The new building is about 295,000 square feet, with an approved budget in excess of $200 million. See OSBORN on Page 17
12 | CRAIN’S CLEVELAND BUSINESS | March 16, 2020
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FOCUS | REAL ESTATE
Vocon extends architecture with XR Extended reality catches issues early to prevent costly changes later BBY LEE CHILCOTE
Cleveland-based architecture and interior design firm Vocon Inc. recently shipped 15 virtual-reality headsets to San Francisco so a client company could preview its new office. Within minutes of opening the packages, employees were able to don the headsets and get a realistic tour of their soonto-be-built office space. That gave them a chance to raise questions and concerns for the company's change management team before they even moved into the space. This is just one example of how extended reality or XR — a term that groups together virtual reality, augmented reality and mixed reality under a single banner — is quickly becoming a mainstream tool architects can use to foster a collaborative design process. Using this new technology, customers can get a realistic sense of what their spaces will look and feel like before a shovel ever hits the dirt, potentially saving time and money over the long term. “To be competitive in the marketplace, if you do not have some sort of lab or team exploring these options, you’re missing an opportunity to engage with the client,” said Brandon Dorsey, technology director at Vocon. “Clients are asking questions about this early on.” When Vocon, which also has offices in Los Angeles and New York, dramatically renovated and expanded its offices on Prospect Avenue in Midtown a few years ago, following a flood that caused damage, the 180-person company placed its XR technology in a centrally located
A state-of-the-art virtual-reality room is a key component of Vocon’s renovated and expanded Cleveland headquarters. | MATTHEW CARBONE
first-floor room. Previously, the firm’s virtual-reality technology had been tucked away in a crowded back conference room. Today, it’s a key space where clients are brought for tours or meetings. “It’s an executive briefing room that’s designed around allowing the client to collaborate with us, and VR is a tool that’s in that room,” Dorsey said. “It’s a selling point.” XR has become more mainstream in architecture recently, in part be-
cause the technology has improved so quickly. Cloud computing now allows much faster processing speeds, and the software that architects use for design today is already embedded with XR technology. “It’s already part of the workflow with the click of a button,” Dorsey said. The days when users were tethered to a cord and only experienced low-resolution graphics are gone. Today’s XR systems produce high-reso-
lution images and are typically wireless. They also allow for multiple users, and architects can make changes in real time to gauge clients’ reactions. Haptic technology or 3D touch even adds sensory details to the user experience. With XR taking off, it’s become a must-have for architectural firms, especially those like Vocon that have a national and international client base. “It’s time and money that we’re seeing a big ROI on,” Dorsey said. He cited two examples that illustrate how XR can save a client time and money. In the past, where they sometimes ordered multiple versions of furniture just to see how they looked in the completed space, now they can eliminate those extra costs by viewing options ahead of time using XR. The technology can also give clients a realistic feel for the difference between, say, an 8-foot and a 9-foot ceiling, allowing them to avoid potentially costly change orders after construction starts. “Typically, you wouldn’t hear about that till afterwards, and then you’d have a retrofit change order to deal with,” Dorsey said. “Now, we’re taking care of it earlier through virtual reality.” Collaboration is another benefit. “Better hardware allows a multi-user VR experience,” Dorsey said. “It allows all of the users to come together and actually be in the same space together and walk around together.” Finally, the technology gives clients and firms greater ability to plan and meet with one another remotely, rather than having to travel frequently for face-to-face meetings, some-
Contact Lee Chilcote: clbfreelancer@crain.com
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thing that could become increasingly useful as the coronavirus spreads and upends travel plans. Although XR isn’t cheap — systems like Vocon’s can cost many tens of thousands of dollars — the tech is a necessity. “It’s becoming part of an investment you have to make, just like you’d make an investment in a new PC, a better monitor or a new cellphone,” Dorsey said. By selling clients on the fact that XR can help them avoid costly lastminute changes, architects can build some costs into their proposals, increasing the firm’s ability to recoup its investment. Dorsey heads up a three-member research-and-development team that explores how Vocon can use new technologies to serve clients, advance its practice and grow the business. The company offers regular lunchand-learn training in order to bring employees up to speed. “If you’re going to invest in R&D, then you have to be willing to invest in training; otherwise the tools won’t get adopted and they won’t get used,” Dorsey said. “You have to invest equally in both ends.” In the end, XR technology can be a net benefit for architects and their clients, he said. “Historically, the design process had a low number, but change orders had a heavy cost associated with them because of all the things that were not caught early on in the design process,” he noted. “Now, we’re flipping it digitally, and spending more time up front to prevent changes later.”
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FOCUS | REAL ESTATE
Dimit Architects a small shop for big jobs Lakewood firm ‘one of the premier architects for multifamily in Northeast Ohio’ BY MARY VANAC
When Chris Goodrich and his partners in One University Circle needed an architectural firm to design their 20-story, luxury apartment building, they asked Lakewood architect Scott Dimit for a hand. First Interstate Properties Co. of Lyndhurst, for which Goodrich is executive vice president, had already asked architectural firms nationwide to submit their qualifications for designing the tallest new residential building in Northeast Ohio in 40 years. “Locally, we knew that Scott had done a lot of work with multifamily (buildings), and we liked his work,” Goodrich said. So, First Interstate asked Dimit to review submissions from the other architectural firms to help select the best one for the job. “I quickly learned that Scott had as much if not more talent than these national architectural firms that had vast staffs, and he also knew the local market,” Goodrich said. “So, we stopped our national search and contracted with Scott as the architect of record for our building.” One University Circle, which is arced to echo the trolley turnaround for which its Cleveland neighborhood is named, features apartments with hardwood floors, quartz countertops, Shaker-style cabinets and up to 12-foot ceilings; a fully appointed fitness center; a dog-wash station and run; and a rooftop swimming pool. The $94.3 million, 533,000square-foot building opened in May 2018 to critical acclaim, winning an Ohio Design Award from the Ohio
Above: The Mitchell’s Ice Cream store in Shaker Heights is one of nine designed by Scott Dimit. | CONTRIBUTED
Scott Dimit
Left: The view of downtown from the Sky Lounge balcony in the Dimit-designed One University Circle. | FIRST
Analia Dimit
chapter of the American Institute of Architects. “Dimit Architects is one of the premier architects for multifamily in Northeast Ohio,” Goodrich said. It all started in fall 2004, when Scott Dimit left the former GSI Architects Inc. in Cleveland, then the largest architectural firm in Northeast Ohio, to open Dimit Architects LLC. Dimit, 58, a Pittsburgh native, grew up in Mahoning and Columbiana counties in Ohio and graduated with a bachelor’s degree in architecture degree from Virginia Polytechnic and
INTERSTATE PROPERITES
State University in 1985. Before going to work for GSI in 1996, he had worked in Chicago and spent much of his career on projects outside the United States. He also worked in Paris for four years for Spanish postmodernist Ricardo Bofill. At GSI, Dimit met and married fellow architect Analia Nanni.
Analia Dimit, 47, a native of Azul, Argentina, and a tennis player for the U.S. Tennis Association, graduated with a degree in architecture and urban design from La Plata National University in Argentina in 1998, working with several architectural and planning firms before moving to Cleveland.
Analia manages the interiors team at Dimit Architects as director of interior architecture, while Scott manages the design of most of the firm’s residential and restoration projects as chief design principal. The Dimits employ 20 certified architects, interior designers and support staff. Their firm specializes in multi- and single-family residential, interior, commercial and restoration projects. It’s a small shop for the big work it does. “Analia and I consider ourselves extremely blessed to be able to practice the craft of architecture on a daily basis in this city with clients who share, encourage and challenge our creative vision,” Scott Dimit said in an email. “We approach every project as a unique challenge with new goals, opportunities and objectives evolved in the earliest phases of work.” Dimit Architects’ portfolio includes historic renovations; interiors; single- and multifamily residential, hospitality and mixed-use buildings; and urban design and master planning projects. In addition to One University Circle, recent projects for the firm include the Flats East Bank Apartments, Harbor Verandas and Nuevo Modern Mexican & Tequila Bar in Cleveland aswell as Mitchell’s Homemade Ice Cream in Shaker Heights. The Mitchell’s store in Van Aken District is clad in mostly glass, so it rises like a jewel from neutral-toned concrete pavers, said Mike Mitchell, co-owner of the Ohio City-based ice cream maker and retailer. See DIMIT on Page 16
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FOCUS | REAL ESTATE | ADVISER
Don’t be surprised by Qualified Opportunity Zones BY DAVID LUM
Qualified Opportunity Zones (QOZs) were created to drive economic investment and job creation in distressed areas to spur economic growth. The tax incentives given to invest in QOZs include deferral and reduction of capital gains tax, as well as a possible tax exemption on the growth of the QOZ investment — both of which constitute powerful tax benefits to the investor. Though QOZ investments must be located within a properly designated Opportunity Zone, the investments are not limited to real estate, which gives investors flexibility in structuring their specific QOZ deal. However, there are very specific and complex rules that must be followed in order to qualify for the QOZ tax benefits. Due to the potential deferral of tax on capital gains and because they are often tied to real estate, QOZ invest-
ments may be confused with §1031 Like-Kind Exchanges, which allow a taxpayer to sell a piece of investment real property and defer tax on the capital gains if the Lum is a sale proceeds are principal at the in Cleveland-based reinvested “like-kind” real law firm of McCarthy, Lebit, property in a timely fashion. Crystal & Like QOZs, §1031 Liffman. transactions are subject to very precise rules. The §1031 tax deferral allows a real estate investor’s investment to grow from one property to the next without the investor immediately paying capital gain tax along the way. In a §1031 transaction, the investment must be in real estate but can be, and
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usually is, structured as a very lowrisk, passive investment for the investor-landlord (e.g., via a triple-net lease under which the tenant pays all taxes, maintenance and insurance on the property, in addition to rent). Though there are similarities between QOZ deals and §1031 transactions, they are not the same. For example, a QOZ business investment must be an “active” trade or business. A §1031 transaction, on the other hand, can qualify for its intended tax benefits if the investor-landlord swaps one passive triple-net leased property for another. That type of passive real estate investment cannot qualify for QOZ benefits, though, because standard triple-net leases, by themselves, do not qualify as an active trade or business. After all, the intent behind QOZs is to spur economic development and job growth, not to reward passive portfolio income with additional tax benefits. Despite potential roadblocks, the tax benefits of QOZ investments have led many real estate investors to try to fit a typical triple-net real estate deal into the QOZ framework. Creative advisers are pushed to find ways to structure the deal to qualify as a QOZ investment that still achieves the investor’s desired economic outcome. The overarching idea to keep in mind is that the investment should be an active trade or business, not just a passive investment, and that the investor should have some risk. Recently issued IRS regulations have indicated that triple-net leases, in and of themselves, will not qualify as a QOZ investment. That’s because in a triple-net lease, all of the risk is pushed onto the tenant. While that’s obviously
desirable from an economic standpoint for the landlord-investor, it is not considered an active trade or business from the IRS’s perspective. One way to try to capture the economic value of a triple-net lease, but still leave some risk with the landlord, might be to gross-up the project’s rent but have the landlord pay for some or all of the typical triple-net pass-through items. For example, rather than charging tenants $15 per square foot triple net, charge them $22 per square foot and have the landlord-investor pay for taxes, maintenance and insurance. That way, the landlord-investor has the risk/reward if those triple-net costs are higher or lower than the $7 increase in rent. In addition, to further bolster the concept that the landlord-investor is in an active trade or business, consider creating a consulting/strategic advisory role for the landlord in the tenant’s business. If these roles are legitimate and structured the right way, they may be sufficient to demonstrate the QOZ investment is not a typical passive real estate investment and is truly an active trade or business that is spurring economic growth and development within the QOZ. Unfortunately, QOZs are still new and have yet to face significant IRS scrutiny such that reliable guidance is available to demonstrate the IRS’s position on these (and other) ideas. Investors weighing their options between a §1031 transaction and a QOZ project should consult with competent advisers to make sure they get the right deal with the proper economic structure that maximizes the associated tax benefits.
DIMIT
From Page 15
“It’s a beautiful space,” said Mitchell, whose flagship store, corporate office and ice cream plant are in the former Rialto Theatre on West 25th Street — one of the Dimits’ historic renovations. “It’s unique. I don’t think there are any buildings like it on the inside or the outside in the Cleveland area,” Mitchell said of his Shaker Heights store, which won a People’s Choice Award from the Cleveland chapter of the American Institute of Architects. “It’s a piece of art that we use and live in.” Scott Dimit designed nine of the 10 Mitchell’s stores in the last 16 years. “I believe I was Scott’s first client” after he opened Dimit Architects, Mitchell said. The Dimit-designed stores all are different. “Each one is its own artistic conception of a space. It fits the spirit of the place,” Mitchell said. He added that designing, building and renovating a unique space for each store is harder and more expensive than employing a cookie-cutter approach, but it’s worth it. “We’re not a slick operation,” Mitchell said of the business that he and his brother, Pete, started in 1999. “We want to build something that makes the life of the community better, richer, more beautiful.” Dimit Architects is working on The College Club renovation and townhome project in the Euclid Heights Historic District in Cleveland Heights. The project adapts a Garfield and Meade-designed, 1904 mansion and car-
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FOCUS | REAL ESTATE
OSBORN
From Page 12
“There are many local, regional and national firms that have demonstrated experience on a project of the size and complexity of Ahuja Phase 2, but we specifically were looking for strong individuals on the team, with each participant committed to the entire duration of the project,” said Richard Meyer, senior director, construction services, for Sodexo USA/University Hospitals. “Successful projects are carried by the composite makeup of the team, and the Ahuja Phase 2 design team, led by HKS Architects Inc., is gifted in strong competencies, which are enhanced by strong team chemistry and individual character."
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Dimit’s renovation of the historic College Club in Cleveland Heights will adapt a 1904 mansion into apartments and new townhomes. | CONTRIBUTED RENDERING
riage house as 14 apartments and adds 13 modern townhomes, Scott Dimit said. His firm also is working with Paran Management Co. and The Gateway Group to convert the former University Club in Akron, built in 1918, into the Martin House boutique hotel, which will include 74 hotel rooms, a restaurant, coffee shop, meeting space, event space, historic ballroom and fitness center. Dimit also was commissioned to craft potential designs for an education and events destination in Cleveland’s Rockefeller Park Cultural Gardens. “A oneof-a-kind park needs a one-of-akind visitor education center,” University Circle Inc. president Chris Ronayne said in a tweet sharing Dimit Architects’ renderings.
“We work closely with our clients, community stakeholders, such as block clubs, community development organizations and other groups, to ensure that our projects reflect the desires of the community,” Dimit said. An example of that is the Dexter Apartments, which are under construction in Ohio City. A public foot passageway that better connects pedestrians to the soon-tobe-restored Franklin Circle is part of the project. Dimit Architects is “a great firm with a good vision and the heartbeat of Cleveland,” First Interstate’s Goodrich said. “Blended together, these things create a successful project for a developer and a city.” Contact Mary Vanac: clbfreelancer@crain.com
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People skills While there is a lot of competition for major projects, that doesn't foster any animosity among those bidding. “Our competitors are friendly competitors,” said Osborn executive vice president Scott Vura. “We often team with them. Your team partner is also your competitor.” Navigating such arrangements calls for diplomacy and social acuity, not just engineering know-how. “I think it is especially important in a for-profit engineering consulting business that the engineers representing the firm to your clients possess the right people skills to complement their high level of technical skill," Vura said. “The design process needs good communication for the individual projects and the business as a whole to be successful.” Osborne fought off bids from several national engineering firms for the Irishtown Bend stabilization and rehabilitation project, which will prevent a major hillside along the Cuya-
hoga River below West 25th Street from falling into the river, blocking ship traffic. That $36 million project includes slope stabilization, water and sewer rehab, and master planning and development of a new park. “Irishtown Bend requires the coordination of multiple stakeholders that require a high level of engineering solution sophistication and project management,” Stull said. The Osborn team will have to coordinate with the Cleveland-Cuyahoga County Port Authority, Ohio City Inc., Cleveland Metroparks, Riverbed West LLC and the city of Cleveland, among others. The company competed against five to 10 different firms for the project. “We put out a request for qualifications and Osborn came back with a very strong team that included a lot of expertise specific to the stability of hills,” said Linda Sternheimer, director of urban planning and development for the Port of Cleveland. “They were very easy to work with and seemed to understand the complexity involved.” And that brings up one of the biggest misconceptions about engineers: “That we’re all nerds,” Lancashire said. “That engineers aren’t progressive thinkers.” On the contrary, the practice of engineering project management is so complex these days that people skills are critical. When working on the renovation of Cleveland's Public Square, Osborn had to interact with 23 different electric and telecommunication companies. “We used every discipline in that project,” Vura said. “I think it is especially important in a for-profit engineering consulting business that the engineers representing the firm to your clients possess the right people skills to complement their high level of technical skill," he added. “The design process needs good communication for the individual projects and the business as a whole to be successful.”
'Team Osborn' In the sports sector, Osborn, which has been around since 1892, has had a hand in many sports complexes over its long history, including at the University of Michigan, the University of Notre Dame, Wrigley Field, Fenway Park and Yankee Stadium. “Everyone in mechanical engineering tries to move here,” Vura said. “What draws them is the health care.” An example is the recently announced $1 billion MetroHealth campus expansion, for which Osborn is the executive engineer. The company attributes its low turnover to the fact that it is employee-owned, with ownership opportunities extending even to support staff. Of its 212 employees — up from 112 in 2015 — 115 are shareholders. Shares are purchased at book-value price and grow in worth as the company grows. Share value is anticipated to grow 10% this year. “We approach it a couple of different ways,” Lancashire said. “We set up a bonus program for employees, offering substantial opportunities for a bonus on metrics put in place.” Those metrics include sales goals, performance on a project and even hiring goals. That’s all part of what the firm calls its “Team Osborn” internal mission statement. “We want everyone to know we’re in this together,” Lancashire said. To that end, the firm has what it calls “neighborhoods" rather than remote offices. As for the latest major project announced for downtown Cleveland, the Sherwin-Williams Co.'s new headquarters, Lancashire offered a grin. “We’re hoping to get a piece of that, too,” he said. Contact Jeff Barge: clbfreelancer@crain.com
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FOCUS | REAL ESTATE
New Gordon Green event venue to open this summer
SPICE
From Page 1
West Side space has already booked nearly 30 events for 2020 “WE WANTED TO CREATE A REHABBED SPACE TO BE A LITTLE MORE MODERNTRADITIONAL, SOMETHING OF A DEPARTURE FROM THE STANDARD INDUSTRIAL SPACES.”
BBY KAREN FARKAS
When Gordon Green opens in June, it will fulfill the vision of four men who thought a venue for weddings, corporate and social events was needed on Cleveland’s West Side. So far, 29 events have been booked for 2020, said Jacob Holland, who handles sales and marketing for the 12,000-square-foot space. Bookings have come from throughout Cuyahoga and Summit counties, with the first event scheduled for July. Holland, who has been an event planning professional for 15 years, joined his friends, real estate developers K.C. Stitak and Kyle and John Lawrence, about three years ago to find a building that could serve as an entertainment venue. “We wanted to create a rehabbed space to be a little more modern-traditional, something of a departure from the standard industrial spaces,” Holland said. In 2018, the partners found the former Saigon Plaza at 5400 Detroit Ave. The building, which originally was a furniture showroom, had been vacant for more than a decade. They negotiated a sale with Hawken School, which had decided not to build an early childhood center there but had not been looking for a buyer, Holland said. He would not say how much has
——Jacob Holland, sales and marketing, Gordon Green
Gordon Green, a 12,000-square-foot event space, is under renovation on Detroit Avenue at West 54th Street in Cleveland. | PEGGY TURBETT FOR CRAIN’S CLEVELAND BUSINESS
An architect’s rendering of the interior of Gordon Green. | CONTRIBUTED
been spent on renovations, but said it was substantial. “We took everything down to the original studs and discovered that renovations had covered up the original windows, doorways and skylights,” he said. The new owners are restoring many of the original details. The facility will include a full kitchen and full-service bar. The event space can seat up to 350 or offer standing room for 500 people, Holland said. It will also have an outdoor courtyard. Ben Bebenroth’s Spice Catering Co. will be the exclusive catering partner for Gordon Green and provide all catering staff and servers. “We are so excited to be a part of the community and are just ecstatic to give people an elegant space to celebrate,” Holland said. Contact Karen Farkas: clbfreelancer@crain.com
Both buildings were sold by Hawken School, which had planned to open an early childhood center in the building at West 54th Street and Detroit Avenue. “It was manifest destiny,” Bebenroth said. Bebenroth, a chef who is committed to sustainability and sourcing food from farms, founded Spice Catering Co. about six years before opening his restaurant at 5800 Detroit Ave. in 2012. “Our two businesses have been fighting for resources and space for five years,” he said. “They exist in the same restaurant kitchen. We had been looking all over the city for a production kitchen space for five years.” In August 2018, he met with Jacob Holland, K.C. Stitak and Kyle Lawrence, who were interested in purchasing the former Saigon Plaza at 5400 Detroit Ave. The building and adjoining property were sold in 2017 to Hawken School for $1.2 million. Bebenroth said he had done a consulting project with Hawken a few years earlier and the three men wondered if he could broker a relationship with the school, which had decided not to go forward with the childhood center. “They told me that they wanted to develop an event center and make us the exclusive catering partner,” Bebenroth said. “And there was a building on the plot of land that was the perfect space for a production kitchen.” Holland and his business partners
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FOCUS | REAL ESTATE LIST ANALYSIS
Architecture firms on list describe rare specialties The 10,000-square-foot building for Spice Catering is undergoing about $1.7 million in renovations. | DIMIT ARCHITECTS LLC RENDERING
formed JEL Law Properties LLC and paid $1.34 million in the spring of 2019 to purchase the parcels owned by Hawken, which extended from Detroit Avenue to Tillman Avenue, according to county records. The partnership sold the building at 5601 Tillman for $447,000 to Tillman Partners LLC, a company formed by Bebenroth and his investors. The 10,000-square-foot building for Spice Catering is undergoing about $1.7 million in renovations. Bebenroth, who hired an architect for the project, said it is his first design/build project. The catering kitchen, tasting room and offices are expected to open in September, and he plans to add about seven full-time positions. The canning kitchen, which requires approval from the Ohio Department of Agriculture, is a work in progress. Bebenroth grows crops at Spice Acres, his 13-acre farm in the Cuyahoga Valley National Park in Brecksville. In 2014, he reached an agreement with the National Park Service to take over the lease of the farm and moved his family there.
Spice Acres hosts on-site workshops and events. While he and his staff have created a number of products for the restaurant and catering company, including hot sauce, pickles and curry paste, Bebenroth said he needs advice on what could be commercially viable. He is going to work with Magnet’s Iterator, which helps startups and entrepreneurs turn ideas into business. “We will identify which products to go to market with, with a beta test by the holidays,” Bebenroth said. “They take you under their wing. It is a totally different world. I am always in a learning role and super eager to learn. I have a lot on the line and need professional assistance to make educational decisions.” As he develops the canning line, Bebenroth is scaling up his catering business. Spice employs about 34 between the restaurant and catering business, plus about 80 part-time catering staff members who work events, a spokeswoman said. Gordon Green, the new event space, opens in June. Bebenroth said he plans to hire up to 50 more servers. “We are almost in contract with another exclusive venue,” he said.
“Once we get that locked down, we will be fulfilling our pro forma goals. It is pretty amazing.” Catering contracts with venues would ease the seasonality of his current catering business, which primarily has been outdoors from Memorial Day to Labor Day, he said. Bebenroth, 42, said it is hard to believe how his business has evolved since he began in 2006 in his grandmother’s basement. He said he has moved well beyond drawing up ideas on the back of napkins and relies on the expertise of accountants, attorneys and financial consultants. And he doesn’t mind spending less time in the kitchen. “It excites me more to create opportunities for the people on my team than it does to create new dishes,” he said. “I have transitioned out of the role of chef/owner. And I don’t want to ruin the mystique that I write every menu and garnish every salad, but I have an amazing team of dedicated culinarians. I’m really motivated. I want to create opportunities to grow.” Contact Karen Farkas: clbfreelancer@crain.com
Niches include libraries, zoos, passive houses BBY CHUCK SODER
If you’re looking for an architect who can design a library — or a justice center or a zoo — check out the Architectural Firms list on page 20. The companies on the list display a wide range of specialties — some general, some highly specific. For instance, HBM Architects, No. 18 on the list, does work in multiple industries, but the Cleveland company has a big focus on library planning and design. That’s clear from looking at the list of specialties and projects in the print version of the list, but it’s even more apparent when you check out the full Excel version. That version includes 44 companies and extra data, including a “rare specialties” column. HBM’s rare specialties? “Maker spaces; research/rare book and special collection libraries.” Now those are some rare specialties. A few other firms on the list also have interesting niches. The Westlake office of DLR Group|Westlake Reed Leskosky, No. 2 on the list just
behind GPD Group of Akron, is known for its work in the theater world. It listed audiovisual, lighting and acoustics among their rare specialties. Richard L. Bowen + Associates, No. 10 on the list, notes its expertise in justice centers. It’s currently working on four such projects. And not one but two companies — Hasenstab Architects, No. 5, and Van Auken Akins Architects, No. 26 — listed zoos among their rare specialties. You’ll find lots of firms on the list that focus on broad categories like corporate offices, health care, education and multifamily housing. But within those categories some firms have developed expertise in some interesting niches. In the health care category, Hasenstab specializes in high-risk operating environments. RDL Architects of Shaker Heights, No. 11 on the list, does a lot of work in housing. It listed passive houses as one of its rare specialties. Chuck Soder: csoder@crain.com, (216) 771-5374, @ChuckSoder
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March 16, 2020 | CRAIN’S CLEVELAND BUSINESS | 19
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THE LIST
Architectural Firms
Ranked by local registered architects LOCAL REGISTERED ARCHITECTS 1-1-2020
1-1-2019
TOTAL LOCAL STAFF
SPECIALTIES
CURRENT PROJECTS
TOP LOCAL EXECUTIVE(S)
1
GPD Group 520 S. Main St., Suite 2531, Akron 330-572-2100/gpdgroup.com
51
48
610
Schools, municipal and county buildings, retail, health care
Highland Local Schools, Meijer, Chipotle, Sunrise Senior Living
Darrin Kotecki, president
2
DLR Group|Westlake Reed Leskosky 1422 Euclid Ave., Suite 300, Cleveland 216-522-1350/dlrgroup.com
36
36
89
Architecture, interiors, engineering, technologies, planning, cultural, health care, education, hospitality, workplace, housing
Cleveland Museum of Natural History expansion, Cleveland Clinic, Ohio State University Medical Campus/Arts District
Matthew Janiak, principal, Northeast region leader
3
Vocon 3142 Prospect Ave., Cleveland 216-588-0800/vocon.com
35
33
120
Workplace strategy, interior design, architecture, experiential brand design
KeyBank, Swagelok, PwC
Deborah V. Donley Paul M. Voinovich, principals
4
ThenDesign Architecture (TDA) 4135 Erie St., Willoughby 440-269-2266/thendesign.com
31
29
57
Architecture, planning, interior design, construction administration
Geauga County office facilities, Fremont Ross High School, Union Village (Willoughby South High School, senior center and YMCA)
Christopher D. Smith, president Robert A. Fiala, founder, executive chair
5
Hasenstab Architects Inc. 190 N. Union St., Suite 400, Akron 330-434-4464/hasenstabinc.com
28
27
55
Health care design, educational design, laboratory/research design, office design, interior design
OhioMHAS Twin Valley replacement hospital; Ohio State University Wooster lab building; TrustedSec headquarters
Dennis M. Check, president
6
Perspectus Architecture 13212 Shaker Square, Cleveland 216-752-1800/perspectusarch.com
28
29
46
Design for health care, senior living, education, government, historic architecture, hospitality, corporate, laboratory/technology
UH Parma surgery addition, Summa Health Behavioral Health Hospital, Firelands Regional Medical Center Primary Care Center of Excellence
William Ayars Michael Lipowski Salvatore Rini, managing principals
7
Onyx Creative 25001 Emery Road, Suite 400, Warrensville Hts. 216-223-3200/onyxcreative.com
22
22
83
Design, architecture, interior design, branding, graphics; electrical, mechanical and structural engineering
Golden Gate Plaza, Mayfield Heights; Hearthside Grove, Geneva; Grand River Rubber, Ashtabula; BioLife, Lifestance locations
Mike Crislip, president Carole Sanderson, CFO
8
Bialosky Cleveland 6555 Carnegie Ave., Cleveland 216-752-8750/bialosky.com
22
23
58
Higher education, workplace, mixed-use, multifamily housing, libraries, culinary, religious, nonprofits, master plans
Belle Oaks, Library Lofts, Medical Mutual (multiple offices)
Jack Alan Bialosky Jr., senior and managing principal
9
Bostwick Design Partnership 2729 Prospect Ave., Cleveland 216-621-7900/bostwickdesign.com
15
16
28
Health/wellness, medical planning, higher education, library, civic, corporate offices, interior design
Cleveland Clinic Mentor Hospital, Cleveland Public Library Woodland Branch, OSU Spectrum of Care Clinic
Robert Lewis Bostwick, president, director of design
10
Richard L. Bowen + Associates Inc. 2019 Center St., Suite 500, Cleveland 216-491-9300/rlba.com
13
13
56
Commercial, justice, transportation, multifamily housing, education
Four police/justice centers, Central Ohio Transit Authority facilities, Hanover Crossing
Allan L. Renzi, president
11
RDL Architects Inc. 16102 Chagrin Blvd., Shaker Heights 216-752-4300/rdlarchitects.com
13
12
43
Placemaking, interiors, all housing markets, senior living life care communities, retail, commercial
One Lakewood Place, Lakewood; Pinstripes, Orange; Brethren Care Wellness Center, Ashland
Ron Lloyd, president, founder
12
NELSON Worldwide LLC 6000 Lombardo Center, Suite 500, Seven Hills 216-781-9144/nelsonworldwide.com
13
15
28
Tenant planning, workplace, legal workplace, health care, hospitality, industrial, retail, mixeduse, multifamily
JACK Cleveland Casino/Thistledown Racino renovations; Sears redevelopment, Canton; River Ridge redevelopment/expansion, Lynchburg, Va.
John G. Burk, managing director, Cleveland office
13
Prime AE Group Inc. 540 White Pond Drive, Suite E, Akron 330-864-7755/primeeng.com
11
10
34
Higher education, hospitality, federal, religious, K-12, historic preservation, office, municipal, recreation, multifamily
Johnson Controls Hall of Fame Village, Broadview Heights Recreation Center, Kent State University practice facility
Dana S. Mitchell, senior vice president, architecture and engineering
14
Sandvick Architects Inc. 1265 W. 6th St., Cleveland 216-621-8055/sandvickarchitects.org
11
11
30
Historic preservation and adaptive reuse specializing in achieving Historic Tax Credits
The Athlon at the Cleveland Athletic Club, The Centennial at 925 Euclid, Dayton Arcade
Jonathan Sandvick, president
15
City Architecture Inc. 3200 Euclid Ave., Cleveland 216-881-2444/cityarch.com
11
9
21
Urban design, planning, mixed-use developments, civic, residential, corporate, restoration, preservation
121 Larchmere, Tri-C Metro Campus, Woodhill Transformation Plan
August Fluker Alex Pesta John Wagner, principals
16
CBLH Design Inc. 7850 Freeway Circle, Middleburg Heights 440-243-2000/cblhdesign.com
11
11
18
Health care, higher education, libraries, interior design
University Hospitals, VA medical centers, Geauga County and Elyria public libraries
Michael D. Liezert Marc B. Bittinger Jeffrey Valus, principals
17
Dimit Architects 14414 Detroit Ave., Suite 306, Lakewood 216-221-9021/dimitarchitects.com
10
10
22
Architecture, interiors and urban design, multifamily, planning, mixed-use retail, office, hospitality
The Dexter, Martin House, Trinity Church
Scott M. Dimit, managing principal Analia Nanni Dimit, principal, director of interior architecture
18
HBM Architects LLC 1382 W. 9th St., Suite 300, Cleveland 216-421-1100/hbmarchitects.com
10
10
20
Public, academic and medical libraries and other design-driven projects for civic and cultural institutions
Library branches in Bay Village, Baltimore, Jackson, Ohio, and Chesapeake Beach, Md.
Peter J. Bolek, president, director of design; James Shook, principal Kevin Kennedy, principal
19
Makovich & Pusti Architects 111 Front St., Berea 440-891-8910/mparc.com
10
10
18
Health care, higher education, public projects
Oberlin College facility assessment and master plan, Lorain County VA Outpatient Clinic, Baldwin Wallace residence hall renovation
Donald Rerko, principal
20
AECOM 1300 E. 9th St., Suite 500, Cleveland 216-622-2300/aecom.com
8
9
220
Education, federal services, health care, laboratory technologies, architecture, interior design, landscape design/planning
St. Joseph Academy - Fitzmaurice Hall and makerspace renovation; Lakeland Community College - Health and Innovation Center
Molly E. Page, vice president
21
K2M Design 3121 Bridge Ave., Cleveland 216-357-2794/k2mdesign.com
8
8
25
Architecture, engineering, interior design, facility asset management
Crown Plaza Columbus renovation, Indianapolis Community Justice Center, College of Florida Keys, Key Largo Campus
Scott C. Maloney, president
22
Domokur Architects 4651 Medina Road, Akron 330-666-7878/domokur.com
8
11
17
Architecture, landscape architecture, planning, interior design, construction management
Kent State Design Innovation Hub, Pere Marquette State Park (Illinois), phase 3 development at Deerfoot Lodge Blue Ridge (North Carolina)
Michael Domokur, owner
23
Strollo Architects 201 W. Federal St., Youngstown 330-743-1177/strolloarchitects.com
8
8
16
Health care architecture, government, education, recreation, corrections, assisted living
Campus Lofts at YSU, Briarfield, Reidland Primary Care clinic in Paducah, Ky.
Gregg Strollo, principal
24
DS Architecture LLC 1020 Huron Road E., Suite 101, Cleveland 216-771-0010/dsarchitecture.com
8
8
15
Hospitality, public safety, civic architecture, higher education, adaptive preservation, health care
Tri-C Public Safety Simulation Village, Westlake Community Center, Tri-C East Education Center
Jeffrey G. Meyers, CEO, owner
25
The Austin Co. 6095 Parkland Blvd., Mayfield Heights 440-544-2600/theaustin.com
7
5
116
Architectural design for industrial production facilities
Project Palladium (confidential), Project Emerald (confidential)
Michael G. Pierce, president
26
Van Auken Akins Architects LLC 1422 Euclid Ave., Suite 1010, Cleveland 216-241-2220/vaakins.com
7
7
25
Architectural design and planning, construction management and interior design
Cleveland Metroparks Zoo Asian Highlands, Cleveland Metropolitan School District Sunbeam
Jill Van Auken, principal
27
LDA Architects Inc. 5000 Euclid Ave., Suite 104, Cleveland 216-932-1890/ldaarchitecture.com
7
6
24
Market-rate and affordable multifamily residential, historic preservation, interior design, landscape design
Church+State, Electric Gardens, Akron Civic Theater/ Bowery, BridgeWorks Apartments, East 90th Apartments
Dominick Durante Jr., president
28
Robert P Madison International Inc. 1215 Superior Ave., Suite 110, Cleveland 216-861-8195/rpmadison.com
7
7
15
Architecture, interior design, space planning, historic preservation, building envelope analysis, code analysis
Karamu House, Cleveland Public Library Walz Branch, Tamir Rice Afrocentric Cultural Center
Sandra L. Madison, chairperson, CEO
RANK
COMPANY LOCAL OFFICE
RESEARCHED BY CHUCK SODER: CSODER@CRAIN.COM
Get all 44 firms in Excel format and more executive names. Become a Data Member: CrainsCleveland.com/data To prevent ties, firms with the same number of architects are then ranked by total staff size. Information is supplied by the companies. Send feedback to Chuck Soder: csoder@crain.com.
20 | CRAIN’S CLEVELAND BUSINESS | March 16, 2020
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ONLINE
From Page 1
Starting March 16, Kent State will hold all of its classes remotely due to coronavirus concerns. The measure will be in place for the rest of the semester. The university has already had the chance to test-drive this crisis plan, as the virus cut short its students’ study-abroad program in Florence, Italy. As the new coronavirus began spreading rapidly in that country, the university suspended on-ground teaching and brought back those more than 200 students. The program includes almost 70 courses taught by 37 faculty members in Florence. The university decided to use remote learning to complete them. To deliver that education, Kent State is using Blackboard, the learning management system faculty can already use to share syllabi and post assignments, even if their class is typically taught face-to-face. To prepare for the switch, Munro-Stasiuk said, Kent State created Blackboard courses for all the Florence faculty not already using the system and conducted remote training. Using the system, faculty are able to livestream their lectures and conduct class that way, or they can get more creative and add other options. A film class will be watching movies online, while one focused on art will be viewing works online and emailing their papers, she said. Munro-Stasiuk said the switch went smoothly, and that’s the model the university will implement in the coming weeks. As of March 10, almost all classes already had shells set up in Blackboard, with the appropriate tools in place. “Because we knew what we did before in Florence and we anticipated what was coming, that’s been done and we’re ready to go,” Munro-Stasiuk said. The remote learning in the weeks to come won’t be held to the same quality standards as Kent State’s typical online courses, Munro-Stasiuk noted. It’s just a stopgap measure to allow in-person courses to continue during the crisis. Krystina Zeit, an instructional designer at Ursuline College in Pepper Pike, said continuity plans can be
NONPROFITS
From Page 1
“We realize we’re going to have to adapt and very quickly on a day-today basis,” said Alex Lakin, marketing and community relations officer for EDEN, which provides housing solutions to those facing housing insecurities and homelessness. Chase-Morefield and her team are looking at how they can continue to feed the people in need and supply the food pantries, hot meal programs and shelters the food bank distributes to, while protecting the volunteers and clients. As the leader of an organization that relies heavily on volunteers to pack boxes to distribute to tens of thousands of people a month, she is also cognizant of the fact that some may opt to stay home for their own health. She worries about having a smaller team at a time when the need may be growing. “I think our main concern right now is a lot of the volunteers that run the food pantries are older,” she said. “They’re in that group that we’re hearing is the most vulnerable, the
Kent State will practice remote education for the remainder of the spring semester. | RAMI DAUD/KENT STATE UNIVERSITY
About 47% of Kent State’s students take a fully online course. | KENT STATE UNIVERSITY
complicated because the learners who would typically be in an in-person class don’t live in a vacuum. They may be adult learners with children who, in this situation, also need to use the computer for classes, or they may not have internet access at home. Ursuline will be switching to an online format from March 18 until March 30 in response to the crisis. There’s a big difference between an
intentionally planned online course and a contingency plan put in place because of a calamity, Zeit said, speaking before Ursuline announced its official plan. The latter is about translating in-person activities to an online format. For example, a faculty member may choose to take planned group work to a discussion board instead. At Notre Dame College in South Euclid, faculty are required to go
over 60. So that’s a critical concern. … We’re trying to plan around how are we actively recruiting younger volunteers who may not have that susceptibility. I think even for us and for all the food banks, that’s going to be a primary concern as people are just trying to protect their own health.” The Cleveland Food Bank has had multiple groups cancel on scheduled volunteer opportunities in the past week, citing coronavirus concerns. Karen Pozna, director of communications for the Cleveland Food Bank, said the organization is in need of volunteers to help maintain our operations. “We’re trying to encourage following all of the guidelines of the health officials,” she said. “At the same time, if you are healthy and willing to volunteer, then we would be happy to have you.” Given Gov. Mike DeWine’s announcement that K-12 schools will be going on a three-week spring break, nonprofits are also looking at what that will mean to children who rely on schools for their main meals. Others are facing the possibility of having to be more flexible with their staffing as parents may need to stay
home with children. The Cleveland Food Bank also is monitoring the disease closely and is committed to ensuring access to food for those it serves. “We are currently working with our partner programs just to ensure
“WE’RE TRYING TO ENCOURAGE FOLLOWING ALL OF THE GUIDELINES OF THE HEALTH OFFICIALS. AT THE SAME TIME, IF YOU ARE HEALTHY AND WILLING TO VOLUNTEER, THEN WE WOULD BE HAPPY TO HAVE YOU.” ——Karen Pozna, director of communications for the Cleveland Food Bank
the children have the food they need over the next several weeks,” Pozna said. “We’re really in the planning stage and we’re in contact with our many partner programs ... trying to determine what’s the most effective way to distribute food to these children in a safe and efficient manner.” Chase-Morefield said Second Har-
through an orientation before creating an online course. They have academic freedom over the content of the class, but work with an instructional designer to make sure they’re applying best practices for online programs, said Florentine Hoelker, dean of online and graduate programs. For example, Hoelker said, faculty may want to put time limits on assessments to minimize the opportunity for cheating. Or they might try to simulate the conversations that take place in a classroom through a weekly online discussion group. Starting March 30, Notre Dame will use its online learning platform to deliver classes, due to coronavirus concerns. The college is currently on an extended spring break. One of the critical parts of intentional online learning is “getting creative with student engagement,” said Mario A. Owens, senior facilitator for instructional technology innovation and accessibility at Lakeland Community College in Kirtland. Lakeland has been offering distance learning for more than 20 years, as it has a large population of nontraditional students who might want or need more flexible scheduling. Because of COVID-19, Lakeland vest will continue its school pantry — a direct distribution model to families — because there’s going to be a lot of need within the community. Second Harvest has put out guidance to its food pantries encouraging a no-touch model as much as possible, meaning everything will be preboxed and pre-bagged and handed to the individual rather than letting them choose their own products like normal. It is also shifting its hot meal programs to offering to-go meals so as to avoid people congregating. Chase-Morefield said ordering the supplies for to-go containers for locations serving hundreds of meals at a time does come at an added cost, but it’s worth it. As stores’ inventories of cleaning supplies are wiped out, the food bank has been fielding phone calls from programs it works with asking where to get hand sanitizer; she has to tell them they have limited access as well. Major Evan Hickman, divisional commander for Salvation Army of Northeast Ohio, said the organization is prepared to serve in a mass sheltering or mass feeding situation if the governor would call on it for
is suspending in-person classes until March 21, and switching to remote learning at that time. Lakeland and other schools reported that in-person and online faculty often have access to the same learning management system and technology tools. At the University of Mount Union in Alliance, all online and in-person classes already have shells in the university’s learning management system, which means that the university can “flip the switch if we need to,” said Bryan Boatright, assistant vice president for academic affairs and university registrar, speaking before the university’s plan was announced. Many faculty members use the system to share grades or additional resources. Mount Union will use what it called “alternative delivery formats” from March 18 through at least April 3, ceasing in-person education. Outside of continuity plans like the one needed for COVID-19, Mount Union tries to keep its residential campus identity at the forefront when creating online learning options, Boatright said. It looks at online options as a supplement for undergraduates to help them graduate early or on time. Online options also help the university offer more classes without adding more rooms or buildings, Boatright explained. That lets Mount Union expand its available classes while keeping costs down. Ultimately, colleges and universities need to be thinking about all the different ways they can deliver education, said Ben Vinson, provost and executive vice president at Case Western Reserve University. The university will use remote learning for its classes from March 18 through April 6. Outside of the current situation, many institutions are taking a comprehensive “yes, this and” approach to online learning, Vinson said. CWRU, which has long offered online courses, is currently examining its approach, and an action committee has submitted a preliminary report to the provost. There are certainly positives to in-person education, but Vinson said it’s important to look at all the options. “We have to understand what works best for our students,” he said. Rachel Abbey McCafferty: (216) 771-5379, rmccafferty@crain.com that, but as of now, they’re making similar adjustments and taking precautions to keep their clients, volunteers and staff safe. “We’re wanting to stay open and prepared to serve as much as we can,” Hickman said. “We’re taking health department feeding precautions under advisement and preparing a lot of pickup and go meals rather than sit-down family style gathering meals, to try to prevent spread.” Considering that COVID-19 is a situation that evolves by the hour, nonprofits’ response plans also are evolving. “The safety of the people that we serve and our employees are front of mind,” said Nicolle Racey, marketing and communications director for Volunteers of America Ohio & Indiana. “Why reinvent the wheel? The CDC is the expert in this; so are our local health departments. So we’re using their lead and their line of recommendations and in turn seeing how we can apply those to keep everyone safe.” Lydia Coutré: lcoutre@crain.com, (216) 771-5228, @LydiaCoutre
March 16, 2020 | CRAIN’S CLEVELAND BUSINESS | 21
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AKRON DEVELOPMENT
REA
Summit Lake improvements eyed as economic catalyst
B
Plan aims to pour money into a civic asset with the goal of boosting the surrounding area
Fr
BBY JUDY STRINGER
BBY D
Can a canoe livery resurrect the beleaguered Summit Lake neighborhood? Yes, the question is absurdly simplistic, omitting other facets of a fledging “vision plan” to attract people to the shores of Summit Lake, a 100-acre waterhole in south Akron, and, thereby, forge a more positive perception of the lake and adjacent communities. It does, however, capture the essence of what the city of Akron and its partners are trying to do: catalyze economic activity through an investment in public spaces. “More often than not, public space is the afterthought, right? We make a developer put it in a park or some benches for the neighborhood,” said James Hardy, Akron’s deputy mayor for integrated development. “We’re flipping that notion here.” Instead of baking modest public amenities into a large infrastructure investment, the Summit Lake Vision Plan aims to pour money into a civic asset — the lake — with the goal of boosting investment in the surrounding area. Along with a livery, the $10 million plan features a loop trail that will extend public access all the way around the lake. Currently, the Ohio & Erie Canalway Towpath Trail runs along its eastern shoreline. The proposal also includes an outdoor amphitheater, a boat launch ramp, art installations, new lighting, visibility improvements and several shelters and play areas. “We are going to create a dynamic, truly exceptional public realm, which is first and foremost to serve the residents,” Hardy said. “But we believe that because it’s going to compete on par with really any other recreational and natural resource that we have in Northeast Ohio, it will attract revenue to the neighborhood and hopefully economic development.” Akron City Council greenlighted the Summit Lake Vision Plan earlier this year, committing $3 million from the city over the next three years. Organizers will seek another $1.7 million from the state of Ohio, as well as a $500,000 grant from Ohio Department of Natural Resources, according to project lead Dan Rice, presi-
Along with a canoe livery, the $10 million plan features a loop trail that will extend public access all the way around Summit Lake, seen here. | SHANE WYNN FOR CRAIN’S
dent and CEO for the Ohio & Erie Canalway Coalition. The remaining cost, Rice said, will be raised from foundations and corporate and individual donors. “In 2020, our focus is on our fundraising campaign and planning, design and engineering plans,” he said. “We anticipate construction to start in 2021.” Hardy and Rice argue that the reason civic investment is a fitting response to the ills of Summit Lake has a lot to do with how the neighborhood has been treated in the past. Both cited a long history of things being done “to” Summit Lake. Once known as Akron’s “milliondollar playground,” the community was home to Summit Lake Beach Park in the early part of the 20th century, when people would flock to the recreational retreat. The lake — located along the Ohio & Erie Canal — fell victim to industrial pollution, however. By midcentury, the neighborhood had become a low-income borough as redlining and urban sprawl contributed to population shifts.
In the decades that followed, construction of the Interstate 76/77 corridor essentially isolated the already vulnerable residents, Rice said, and its neighborhood schools shuttered. Today, Summit Lake is a community of 533, where nearly 70% of children live in poverty and the average annual household income is $8,600, according to the Akron Metropolitan Housing Authority, which manages Summit Lake Apartments. Hardy said Summit Lake is also one of Akron’s hardest-hit neighborhoods in terms of foreclosures and home demolitions. “We really shouldn’t be surprised a neighborhood goes through this type of transition when it has a legacy of things done to it,” Rice said. “So, yes, all we are really trying to do is to reverse the legacy of things being done to and not with, things promised and not delivered.” Rice said the Summit Lake Vision Plan itself is a product of the “resident-led” Reimagining the Civic Commons project that dates back to 2016. Early on, he said, community
members expressed concerns about a lack of things to do at the lake. They wanted places to gather and positively interact with Summit Lake. “We partnered with a lot of agencies — the city was a major player — and Summit Metro Parks to create kind of a beachfront area with places to sit and grill,” Rice said. “We also began to provide guided canoe trips, every Tuesday from June until October, to introduce residents to the lake in a very safe way.” The vision plan is meant to continue that resident-lake engagement and foster “pride of place” among people who live there, according to Rice, but it’s designed to attract visitors from outside the community, too — and not just those who might be looking to grab a cup of coffee or sandwich on their way to enjoying Summit Lake’s recreational opportunities, but those who will take root in the neighborhood. “Everything that we’re trying to do is informed by, and in many cases designed and requested by, those who live there now,” Hardy said, “but we also do it with intentionality that we want to invite new residents and new investment.” A cup of coffee, however, is not a bad place to start. That’s because right now, residents have to leave the Summit Lake neighborhood to find a coffeehouse or a gas station, café, bank, barbershop, pharmacy or even a “decent” grocery store, for that matter, according to residents Grace Hudson and Sandy Saulsberry. “We are looking at some types of economic development that would bring some of these things into the neighborhood and also put the neighborhood people to work,” said Hudson, who is on the Summit Lake Community Development Corp. board. Saulsberry is particularly keen on the prospect of a “family-friendly” café. “There are residents in our neighborhood who don’t drive, but they know how to cook,” she said. “It would be nice to see some jobs where they can walk to work and not worry about how the buses run to get to there.” Hardy and others are quick to point out that nearby communities — most notably Kenmore, which sits just west of the lake — would also
benefit from improvements in and around Summit Lake. Tina Boyes, executive director of the Kenmore Neighborhood Alliance, said a dedicated bike lane from Summit Lake to Kenmore Boulevard already allows cyclists to access Kenmore’s commercial amenities, such as a newly opened café and coffee shop and existing hobby and music businesses. With the loop trail and other lakeside amenities, she anticipates an increase in recreation-driven traffic. “One of the things we learned during the Summit Lake Vision Plan process, particularly through the retail study, is that revitalization efforts should view Kenmore Boulevard as a shared main street for the east and west sides of the lake,” Boyes said. “Sure, a livery or boat rental makes sense on Summit Lake, but restaurants and shops? We’ve already got the buildings up the street, and we’ve also got a group in Kenmore Neighborhood Alliance that’s working to create an environment where they can succeed.” Hardy said the vision plan also sets aside a parcel of land near Summit Lake’s northwest shore, formerly the Margaret Park Elementary site, for future economic development “to serve the residents on both sides of the lake.” If and when the vision plan will produce meaningful economic impact is still uncertain. Yet the process itself has resulted in some promising early fallout. On Feb. 14, AMHA became one of nine public housing agencies in the country to be awarded the U.S. Department of Housing and Urban Development (HUD) Jobs Plus Program grant. HUD will provide $2.3 million to help residents at Summit Lake Apartments increase their earned income and become self-sufficient. While executive director Brian Gage was reluctant to credit AHMA’s selection to the recent spotlight on Summit Lake’s prosperity, he admitted it was a factor in his decision to seek such a grant. “All the momentum that has been going on there inspired us to look deeper at how the housing authority could contribute,” he said, “at what could we do to additionally leverage resources into that community.” Contact Judy Stringer: clbfreelancer@crain.com
MANUFACTURING
Eagle Elastomer looks to automation to improve efficiency BBY CHRIS SWEENEY RUBBER & PLASTICS NEWS
Eagle Elastomer Inc. is constantly looking for ways to improve its efficiency. The Peninsula custom mixer has found success by employing automation in a variety of areas throughout its operation, which also includes an extrusion and sheet products business. Eagle operates out of a 41,200-square-foot site with 47 fulltime employees. Its business is focused on fluoroelastomer products with more than 600 formulations in its library. “We also do a lot of different batch-
es,” Eagle president Regan McHale said during a tour of the firm’s facility for the Association for Rubber Products Manufacturers. “There could be five or six different compounds in a given day that are running through the mixer.” That is one of the reasons why the company looks so closely at how often its lines — both on the mixing and the extrusion side — change compounds. Eagle tries to minimize those changeovers to be as efficient as possible, grouping as many like-compounded jobs together so they can run continuously. “You lose your efficiency if you’re
“YOU LOSE YOUR EFFICIENCY IF YOU’RE TRYING TO DO A LOT OF DIFFERENT COMPOUNDS.” —— Neil McHale, vice president of operations, Eagle Elastomer Inc.
trying to do a lot of different compounds,” said Neil McHale, vice president of operations. “We try to make sure we minimize the amount of compound changes. If we have work orders all for one compound, we try to run those at the same time before we go to the next one. Otherwise you’re going back and forth, and you lose efficiency.” The way it keeps tabs on those changeovers is through its daily op-
erations monitoring reports, which are designed for the tooling and production staffs to monitor and plan Eagle’s production process. Neil McHale said previously, this process was tedious and required multiple reports to be compiled together. It was limited in its ability, not user-friendly and information often wasn’t readily available. So Eagle decided to enhance and automate it.
The program now runs after hours and doesn’t require any printing, which saves paper. It generates one report in an easy-to-use format that outlines the company’s key operational metrics: efficiency and utilization of production lines, status of production work orders, late deliveries from vendors, supplies and raw materials, and daily scrap. “Automatic daily reports were much timelier,” Neil McHale said. “It consolidated information from all databases into one report that’s easy to use and improved the production staff’s visibility of attentions.” See EAGLE on Page 23
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AKRON REAL ESTATE
Busy developer has more in store for downtown Fresh off launching his hotel, Tony Troppe tees up two new loft projects BBY DAN SHINGLER
Akron developer Tony Troppe has some encores planned in his corner of downtown Akron, where he opened the Blu-tique hotel on New Year’s Eve. The self-proclaimed mayor of the downtown arts district, which Troppe calls the Blu Zone, said he’s preparing to unveil two new loft developments in the neighborhood, followed by a new restaurant, and already is planning to expand his new hotel at Main and Market streets. Currently, he’s focused on finishing loft projects in the Everett and Summit buildings, at 39 E. Market St. and 46 S. Summit St., respectively. “Those two will both be available in the next four to six months,” Troppe said. The first to come online will be the Everett Lofts, the larger of the two, which will have 20 apartments, ranging in size from 850 to 1,000 square feet, and rents from $675 to $1,300 a month, Troppe said. The 38,000-square-foot building dates to the 1870s. It will be mixed use, and Troppe said it also will include remodeled office space. It already houses several businesses, including the Oswald Cos. insurance brokerage and Amp Strategy, a marketing and communications firm. Eventually, Troppe said he hopes to add 36 more units by adding to the back of the Everett, which faces Maiden Lane. He’s begun construction of new elevator shafts that will serve the building’s six floors and enable that expansion. All told, Troppe figured he’s invested about $3.5 million in the building’s recent renovation, for which he was awarded about $1 million in state and federal historic tax credits. He said he plans to invest about the same amount on the future expansion. Like Blu-tique and nearly all of Troppe’s developments, Everett Lofts will be carved from a historic building for which the developer has great affection. He seemed to see friendly ghosts during a recent tour of the building. “This used to be the Academy of Music. Sarah Bernhardt performed here,” Troppe noted. “Buffalo Bill performed here, too.” The Summit Lofts is a smaller project and likely will be finished this summer at a cost of about $700,000, Troppe said. That project will offer four loft apartments and a rooftop deck in the 13,000-square-foot, three-story building that also houses the Botanist, a medical marijuana dispensary. Troppe said he also plans to open a new restaurant, the Bistro at Blu, with the help of chef John Taylor in April. Taylor helped develop restaurants at the Blu-tique and the Lock 15 Brewing Co. at another of Troppe’s urban loft developments on West North Street. Bistro at Blu will replace Troppe’s former Blu Plate bistro next to his Blu Jazz+ club on East Market Street. All of this comes against a backdrop of much larger developments downtown, including the $42 million Bowery Project and the conversion of the Law Building from office to mixed
The Everett Building is one of two downtown Akron sites that Tony Troppe is turning into loft apartments. Troppe, a longtime Akron developer, gravitates toward revitalizing historic buildings. | DAN SHINGLER
Tony Troppe is often described as a creative developer and one who’s willing to take on projects others would shy away from. | SUE WALTON
use at an expected cost of up to $30 million. Both are just a few blocks down Main Street from Troppe’s developments, and each is bringing about 100 of their own new apartments to market. Troppe said he’s concentrating his work in and around the arts district because the thinks “knowledge workers” will play a large role in the city’s future and be his customers and tenants. He points to Smithers, a technical and business consulting group that’s redeveloping the Austen BioInnovation Institute nearby on North Main Street to house 200 employees. “We’re preparing a pedestrian corridor that will connect Market Street to the Smithers Group,” Troppe said. Eventually, he added, he hopes to close Maiden Lane to traffic, making it a pedestrian walkway, though he’s not yet asked the city to do that. Troppe said his newest venture, the 71-room Blu-tique, is doing well.
“We had two sold-out nights last weekend,” he reported in late February, noting that bookings at the hotel seemed to mirror attendance at the Blu Jazz+ club across the street. Patrons often want to spend the night after a show and some want to stay longer. So Troppe plans to make some lofts at the Everett available for extended-stay guests. As for expanding the hotel, Troppe purchased an adjoining lot on East Market Street from the city late last year and said he hopes to purchase another just south of the hotel on Main Street to give him room to expand with an additional 85 rooms. That’s likely years away, though, he said. But Troppe, who is often described as a creative developer and sometimes runs behind schedule on his projects, tends to finish his long-term plans. He points to two stone pillars on the city-owned lot next to the Blutique. They used to be part of Akron’s historic Anthony Wayne Hotel, which was torn down in 1997 to make room for Canal Park, home of the Akron RubberDucks. “I put them here in 2000, when I first planned to build the Blu-tique hotel. … They were once part of one important downtown hotel, and now they’ll be part of another,” Troppe said. City officials see Troppe as a developer who’s willing to take on projects others would shy away from, usually in treasured historic buildings, said Adele Dorfner Roth, director of development for Akron’s Office of Integrated Development. He can also be challenging to deal with at times, she conceded. For example, take those stone pillars. “Nobody gave him permission to put them there!” Dorfner Roth said. “That’s the reason I love Tony Troppe and also why I can be frustrated by him. He’s one of the most creative developers we have in this area. He
does beautiful spaces, and he tackles really hard projects that no one else would take … but even people with good intentions need permits.” However, Troppe is an asset to the city, Dorfner Roth said, and is committed to his work. She cited the Everett as a good example. Troppe first brought that building back to life in 1997, only to fill it with business tenants and then see it damaged by a fire in late 2016. “Some developers would have looked at that and said, ‘I’m just going to take this insurance check and walk away from this disaster.’ Tony said, ‘I’m just going to reinvent this building into something new.’ And that’s what he did,” Dorfner Roth said. Troppe said he spent about $3 million making those repairs. Troppe’s efforts dovetail with Mayor Dan Horrigan’s goals of bringing residents and businesses back to downtown, Dorfner Roth said, but the city will need more information before it signs off on some of the developer’s plans. Take the idea of closing Maiden Lane. The city might agree with that concept in principle, but will have to examine things such as utility lines and public infrastructure to see how they’d be affected. As for the lot next to the Blu-tique that Troppe is eyeing, Dorfner Roth said the city currently has no plans to sell it. If that changes, Troppe could buy it, but the city would have to look at bids from other interested parties, she noted. Dorfner Roth said the city’s been pleased with what Troppe has achieved. “There’s so much going on there,” she said of the Market and Main area. “If you live right there, there’s just a ton of things to do within a few hundred feet. … When you visit a city, you don’t remember strip malls, but you remember the cool places in every town you visit, and Tony’s helping to create those places.” Dan Shingler: dshingler@crain.com, (216) 771-5290, @DanShingler
EAGLE
From Page 22
For its mixing business, the report also includes the number of batches run, the amount of compound produced in pounds, the time it takes to run/daily machine time and number of compound changes. Its extrusion report tracks the number of work orders run, number of parts run, quantity/unit of measure of pans extruded, the average time per pan that was run in feet per minute, daily total runtime in hours and the number of compound changes. “If we have too many orders on one specific extrusion line, it gives us the opportunity to rebalance those lines,” Neil McHale said. The company also applied automation to its invoicing process. Eagle’s manufacturing process also integrated automation to enhance efficiencies, namely in its extrusion capabilities. Brian Chandler, process development manager for extruded products, outlined a project in which the company was able to reduce the amount of labor on its extruded products lines. Eagle made sure that the operators performing the work were involved with the project from the beginning. The first generation of its automated machines was built in 2011; it’s now on a third generation and looking to enhance the process further for future generations. Chandler stressed, however, that even though the project created a labor savings for Eagle, the company did not implement it with the intent of reducing its workforce. “What we found that was very successful was to just be upfront with them,” Chandler said. “We were crystal clear with what our intentions were. We didn’t have any intentions of replacing people. When we started this project, we had people in line for retirement over the next few years, so our plan was not to have to replace those people.” Rubber & Plastics News is a sister publication of Crain’s Cleveland Business.
Advertising Section
CLASSIFIEDS To place your listing in Crain’s Cleveland Classifieds, contact Suzanne Janik at 313-446-0455 or email sjanik@crain.com BUSINESS OPPORTUNITY
Industrial Media Change Out, Water Blasting and Vacuum Company For Sale Sales $2.0M mike@empirebusinesses.com www.empirebusinesses.com 440-461-2202
LIST YOUR RETAIL SPACE HERE! MARCH 16, 2020 | CRAIN’S CLEVELAND BUSINESS | 23
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Vineyard manager Gene Sigel harvests grapes at Debonné Vineyards in Madison. |
Advertising Section
PEOPLE ON THE MOVE
To place your listing, visit www.crainscleveland.com/people-on-the-move or, for more information, please call Debora Stein at (917) 226-5470 or email dstein@crain.com.
ADVERTISING / MARKETING
CONSTRUCTION
STAFFING & SERVICES
WRL Advertising
Rudolph Libbe Group
TalentLaunch
Jon Molnar of WRL Advertising was promoted to Director of New Business Development. Molnar previously worked as an account executive Molnar and food styling specialist with WRL. In his new role, Molnar will promote agency growth through new business development, oversee and expand the sales department as well as develop new client partnership programs. Kevin Stillwell joins WRL Advertising as the newest full-time Account Executive at the agency. Stillwell Stillwell started at WRL in January as a sales intern/junior account executive and showed initiative and business acumen, thus earning a full-time position as an account executive. In his expanded role, Stillwell will work on cultivating new business and implementing sales and marketing strategies.
Dave Boyer has been promoted to regional vice president for the Rudolph Libbe Group’s northeast Ohio operations. Boyer has worked in the northeast Ohio construction industry for 26 years joining the Rudolph Libbe Group in 2004 as a project manager. Two years later, he started the company’s Cleveland-area operations, which are now located in North Ridgeville and employ 150 associates. He is a member of Vistage International and the Association for Iron & Steel Technology (AIST).
TalentLaunch, a nationwide network of independently operated staffing and recruitment firms, recently announced the addition of Scott Engel as Senior VP of Finance and Administration. In his role as a member of the Executive Team, Scott is responsible for the TalentLaunch Services business unit that is tasked with providing exceptional service to the network of companies. Previously, Scott was Chief Financial Officer of Vertical Knowledge.
TECHNOLOGY NONPROFITS
Ashbrook Center Jeffrey Sikkenga, Ph.D., a prominent political scientist, has been named executive director of the Ashbrook Center at Ashland University. Sikkenga, who has been affiliated with the nonprofit educational organization for more than 20 years, had been serving as Ashbrook’s interim director. Prior to that, he served as co-director of Ashbrook’s undergraduate honors program and assistant chair of Ashland University’s Department of History and Political Science.
CONSTRUCTION
MCPc MCPc, a global data protection company, hires Ganpat “Gunner” Wagh as a Security Prinicpal. Wagh brings more than 30 years of combined U.S. Law Enforcement, Intelligence Community, U.S. Military, cyber operations, and digital information technology experience to MCPc. His extensive knowledge from working with the FBI’s cyber and intel unit will be an asset to MCPc’s clients. Wagh will be focused on helping clients protect data, mitigate cyber and business risk, and achieve SecurityCertainty(SM).
Dunbar Mechanical, Inc.
REAL ESTATE
Weber Wood Medinger Weber Wood Medinger (WWM) is proud to announce the promotion of Kevin G. Joseph as our firm’s newest Partner. Kevin has been a valuable member of the WWM team since 2017 and has added tremendous value to our firm’s growth and national reputation. Since 2017, Kevin has led the firm’s technology initiatives and has contributed to the growth of our Capital Markets Real Estate Practice. His expertise includes private equity services, family office advisory and investment real estate.
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C O N TA C T
Erik S. Dunbar, J.D., a Cleveland-Marshall College of Law graduate, is now a partner in Dunbar Mechanical, Inc., making the firm 100% familyowned for the first time in 20 years. Erik was named Dunbar’s General Counsel in 2007, Chief Operations Officer in 2014 and President in 2019. Serving Northeast Ohio from their Cleveland Office, Dunbar is headquartered in Toledo. Dunbar is a $75+ million-dollar mechanical contractor and one of the 100 largest full-service mechanical contractors in the U.S.
Laura Picariello Reprints Sales Manager lpicariello@crain.com (732) 723-0569
CONTRIBUTED
WINERIES
From Page 4
“We are constantly reading this curve of do we have too much or not enough in the vineyard, given what’s coming with the weather,” Sigel said. “We are watching our crop size a lot more careful now than we were even 10 years ago, because we realize the change in weather can be dramatic. One wrong thing happens and we’ll never ripen that. Or maybe it gets really hot. We can’t take as many gambles as we used to with the weather.” Wilson’s research shows that by 2030, Ohio’s summers likely will feel more like southern Illinois’ climate today, and more like Arkansas’ by 2095. Winters here will feel more like Virginia/West Virginia by 2030, and more like North Carolina in 2095. Then there are the tangential impacts of climate change and globalization, including “increased prevalence of herbicide-drift injury as spring rains push back row-crop planting dates and the introduction of new pests that favor grapes,” Smith said, like the spotted lanternfly.
And the upside However, Ohio likely will remain hospitable growing territory for the foreseeable future. A generation ago, vinifera — largely considered the primary winemaking grape as it’s commonly used in Pinot Noir, Cabernet Sauvignon and similar dark reds — wasn’t a common variety in Ohio. But changing weather patterns and development of hybrids with vine systems that can tolerate the harsh winters of the Midwest have led to its cultivation here. Different weather patterns could allow planting of other grape varieties. Also, science is helping develop heartier plants. Combined with the moist and temperate region here, that means Ohio will remain effective grape-growing territory. While more than 80% of all wine made in the U.S. is produced in California, that region has greatly suffered from heat, droughts and wildfires — and conditions are only expected to get worse. That could spur interest in wines made elsewhere, supported by vineyards in regions like Ohio that will remain hospitable in addition to having a reliable water supply. The ProWein report alluded to this: “All around the grape-growing world we can see the impact of a changing climate. Several wine companies have taken major commercial decisions on the basis of climate-related risks and opportunities, including divesting or acquiring vineyards based on their altitude, latitude and/or access to water resources,” emphasizes Dr. Dan Johnson, managing director, The Australian Wine Research Institute. “I truly believe California will start looking at this Great Lakes region as a
potential hedge against global warming,” Debevc said. Gladys Horiuchi, a spokeswoman for the Wine Institute, a trade group that exclusively represents the California wine industry, dismissed the notion that California wine concerns would acquire land or business in Midwest regions to diversify in light of climate change. She emphasized vineyards there are equally engaged with adapting to new weather patterns. Ohio has also garnered a reputation as a “sweet” wine state, noted Ed Trebets, owner of Urban Vintner of Willoughby and director of the wine degree program at Kent State University’s Ashtabula campus. So while the region is garnering more respect — and its wines are earning more awards — that reputation is something that could make western wine snobs turn up their noses. Yet there’s no question there could be compelling business opportunities in the Buckeye State that might appeal to wineries motivated to diversify their operations. Opportunity is what brought Mikael Sneward to Firelands Winery in Sandusky. After working as a wine and spirits salesperson and consultant in California for the past 18 years, Sneward agreed to join Firelands as president when it was acquired by Schiff Capital Group of Columbus last fall. Several unique features at Firelands appealed to Sneward, such as the licenses that come with the business. There’s plenty of money to be made in Firelands’ import operation, he said, on top of the existing vineyard. So the operation’s Ohio location wasn’t necessarily a driving factor in his decision to come here. But he suggested it’s quite likely this region could one day appeal to western wineries looking to diversify. “Considering how expensive it is for land in California,” Sneward said, “if someone out there decided there is some value in the Midwest — which there is — and they were to invest and get the right hybrids and say, ‘This is a underdeveloped area, and we can make a national presence out of it’ — if you’ve got the resources to do it, it’s not that far of stretch.” In turn, Ohio wines’ reputation could continue to grow, which would elevate the industry here as a whole. Reasons like that prompt Debevc to see the wine glass as half full in an uncertain future. “Now that global warming is coming up, the wine industry could eventually end up moving back here to the East,” he said. “There is a lot of opportunity for us in this area as we get a little bit warmer. We may not be as concerned as someone in Texas or Arizona or anywhere else extremely hot and arid, where water won’t help them anyway because the sun will burn them up. It’s going to be a long time before the sun burns up Cleveland.” Jeremy Nobile: jnobile@crain.com, (216) 771-5362, @JeremyNobile
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Postponed W
ith recent news regarding COVID-19 in the Northeast Ohio area, we have decided to reschedule our Newsmaker Awards and Real Estate Forum events, originally planned for March 25 and April 22. The health and safety of our panelists, event attendees and their families are our first priority. We appreciate your support and understanding during this time as we work to solidify new dates for these events and editorial features. More information will be available in print and online as soon as possible.
Visit CrainsCleveland.com/postponed to hear from our publisher, Elizabeth McIntyre, on the news of the postponement. If you have questions for our events team, email us at clevents@crain.com.
CRAIN’S CLEVELAND LOOK BACK | HOSPITAL CONSOLIDATION
’90s hospital merger mania still ripples in NEO In the mid-1990s, the for-profit hospital chain Columbia/HCA Healthcare entered the Cleveland market, looking to build a broad base of operations in Northeast Ohio. Though the venture was ultimately unsuccessful and Columbia/HCA exited the market in 1999, it proved to be a catalyst for Cleveland Clinic and University Hospitals to begin picking partners for fear of losing ground to an out-of-state hospital chain. After the merger mania of the 1990s, the region has seen a revival of the hospital arms race, as UH and the Clinic have brought more independent hospitals into their families in the past decade. — Lydia Coutré
``THE HISTORY
``IN THEIR OWN WORDS
In 1995, Columbia/HCA entered Northeast Ohio by agreeing to buy half the assets of what was then the four-hospital Sisters of Charity of St. Augustine Health System. The chain appeared unable to convince other local hospitals to join, including the four-hospital Meridia Health System, whose decision to remain a nonprofit entity perhaps sealed Columbia’s ultimate fate in the market. Meridia merged with the Clinic in 1997. Today, its facilities are the Clinic’s Euclid, South Pointe and Hillcrest hospitals. (The fourth former Meridia hospital, Huron Hospital, closed in 2011.) Also after Columbia/HCA’s entry, the Clinic acquired community hospitals such as Fairview, Lutheran and Lakewood hospitals. Before all these, Marymount was the first community hospital to become a member of the Clinic in 1995. Meanwhile, UH also brought several hospitals into its network in the 1990s. By the time Columbia/HCA arrived, UH had already acquired Geauga Community Hospital and Bedford Community Hospital. UH also began merging in the ’90s with community hospitals in Conneaut, Geneva and Richmond. Though the ’90s represented a significant wave of mergers, the arms race between the Clinic and UH has continued with another major push in the past several years. In 2014 and 2015, UH acquired five hospitals: UH Elyria, Parma, Portage, Samaritan and St. John medical centers. As smaller hospitals face increasing regulatory challenges and financial pressures, independent facilities have been looking to join systems to find efficiencies. Currently, the Clinic and Sisters of Charity Health System are undertaking due diligence to explore the possibility of Mercy Medical Center in Canton joining the Clinic.
“You can’t say the market wasn’t going to change over time, but it’s very fair to say that Columbia was the catalyst for major changes in the health care landscape in this town.” ——David Kantor, a former president of Meridia Huron Hospital, told Crain’s in 2000. (Meridia Health System became part of the Cleveland Clinic in 1997. Huron Hospital closed in 2011.)
“Every year, the government reimbursement seems to go down and the costs keep going up, so it’s just very, very difficult for a small hospital to survive.” The arms race between University Hospitals, which acquired five hospitals in 2014 and ’15, and the Cleveland Clinic has continued this century. | HANSON PHOTOGRAPHIC
``WHY IT MATTERS TODAY Today, Northeast Ohio has few remaining independent hospitals, and the reality for those that do remain is challenging: the health care industry is undergoing drastic changes in how it is paid for and delivered, prompting community hospitals and even smaller-sized health systems to look for partners for economies of scale, technology support, clinical standardization, supplychain efficiencies and more. Lake Health System announced in March that it would begin a search for a strategic partner. Following months of due diligence, Summa Health signed a definitive agreement with Beaumont Health at the start of this year, taking the Akron system one step closer to becoming a subsidiary of the Southfield, Mich.-based health system. Hospital leaders are quick to point out what’s gained in the re-
gion’s consolidation of hospitals. For one, the moves may prevent independent hospitals from being forced to cut back service lines or even, in some cases, shut their doors. Patients often gain access to more integrated electronic health records as a larger system is able to bring its technology resources to bear. The systems may also add service lines, physicians and clinical expertise to communities. Industry observers question what is lost as a community once dotted with independent hospitals transitions to one dominated by massive health care systems. For instance, insurance companies that negotiate with health care providers lose leverage when hospitals consolidate, which research has shown increases costs. Northeast Ohio is by no means alone in facing this phenomenon. Hospital consolidation, partnerships and mergers have swept across the country and are likely to continue.
——Richard W. Pogue, a retired member of the UH board of directors who served 41 years, told Crain’s in 2016.
“While you still have money in the bank, you can choose your own dance partner. You don’t have to wait to be the last one picked. So that was realistically what we did while we were still economically viable, while we would be attractive to other players.” ——Union CEO Bruce James told Crain’s in 2017
“We have a variety of forms by which we partner with other likeminded organizations, and I expect that will just continue.” ——Ann Huston, Cleveland Clinic’s former chief strategy officer said in 2017, after Union Hospital chose the Clinic as its partner.
THE WEEK VIRAL RESPONSE: Ohio banned mass gatherings in the state as part of a massive effort to combat the coronavirus pandemic. Mass gatherings are defined as any event “that brings together 100 or more persons in a single room or single space at the same time such as an auditorium, stadium, arena, large conference room, meeting hall, theater or any other confined indoor or outdoor space.” Excluded are “normal operations” of airports, bus and train stations, medical facilities, libraries, shopping centers or other spaces where 100 or more people may be in transit.
The Mid-American Conference men’s and women’s basketball tournaments at Rocket Mortgage FieldHouse were canceled. | FRANK JANSKY/ICON SPORTSWIRE
NEW NORMAL: Many of the trappings of normal life have stopped or been significantly curtailed. Many companies are instructing employees to work remotely, where possible. The NBA sus-
pended its season; the NCAA men’s basketball tournament (which was to have had games in Cleveland), the Mid-American Conference men’s and women’s basketball tournaments and
Auditorium. Major League Baseball’s season will not start on time. CLASS STRUCTURE: Gov. Mike DeWine announced that all K-12 schools in Ohio — public, private and charter — will close effective Monday, March 16, until April 3. The closures do not include child care facilities. Meantime, colleges and universities in the region and throughout the state have canceled face-to-face classes and switched entirely to remote learning.
the Cleveland International Film Festival were canceled; and the Rock & Roll Hall of Fame postponed the induction ceremony that was set to take place on Saturday, May 2, at Public
WHAT’S NEXT: There were 13 Ohioans diagnosed with COVID-19, the disease caused by the novel coronavirus, as of Friday afternoon, March 13, but that number will go much higher. Cleveland Clinic and University Hospitals are about to start testing patients in-house.
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